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FIRST QUARTER OF 2012 May 3, 2012

Turkcell q112 presentation_final

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Page 1: Turkcell q112 presentation_final

FIRST QUARTER OF 2012 May 3, 2012

Page 2: Turkcell q112 presentation_final

NOTICE

2

This presentation may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially due to factors discussed in this presentation, in our press release, in the Risk Factors section of Turkcell’s most recent Form 20-F or in other reports and filings with the US Securities and Exchange Commission. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified.

Page 3: Turkcell q112 presentation_final

BUSINESS OVERVIEW

Süreyya Ciliv, Turkcell CEO

Page 4: Turkcell q112 presentation_final

TURKCELL GROUP FINANCIAL PERFORMANCE

CONSOLIDATED FINANCIAL RESULTS

TRY million Q1 2011 Q4 2011 Q1 2012 YoY (%) QoQ (%)

Revenue 2,118 2,446 2,382 12.4% (2.6%)

EBITDA 626 695 703 12.3% 1.2%

EBITDA Margin 29.5% 28.4% 29.5% - 1.1pp

Net Income 330 332 515 56.0% 55.2%

Avg. US$/TRY rate 1.57 1.82 1.79 13.6% (1.9%)

Double digit revenue growth YoY led by 8% growth in Turkcell Turkey and 43% growth in subsidiaries

Double digit EBITDA growth YoY

• Higher revenue

• Increased contribution of subsidiaries

4

Strong growth in net income

• Higher EBITDA

• Higher net finance income

Page 5: Turkcell q112 presentation_final

5

TURKCELL GROUP STRONG START TO THE YEAR

Turkcell Turkey Voice1

Turkcell Turkey Mobile Broadband & Services

Subsidiaries

Q1 2011

43%

25%

3%

Q1 2012

1,416 1,455

(TRY million)

529

279 398

YoY Growth

424

1 Voice revenues include outgoing, incoming, roaming and other (comprising almost 2% of Turkcell Turkey) revenues

Turkcell Superonline grew by 59%

Page 6: Turkcell q112 presentation_final

• Retaining the customer base

• Simplified tariff structure

• Responded to aggressive competition via affordable tariff plans

• Continued contracting efforts

TURKCELL TURKEY MARKET AT A GLANCE

6

• Aggressive offers & communication

• Decrease in average price per minute

• Higher incentives

• Continued focus on postpaid

9.3% 7.8%

Q1 2011 Q1 2012

Churn rate

61% 38%

Turkcell Market

Smartphone sales in total handset sales1

TURKCELL’S FOCUS MOBILE MARKET

1 Source: Gfk

• Increased smartphone sales

• 35%1 YoY growth in smartphone sales

• Fueling the mobile broadband usage

• Increased smartphone penetration

• Promoted bundled offers

• Created the need via innovation

Page 7: Turkcell q112 presentation_final

TURKCELL TURKEY SHAPING THE FUTURE WITH TECHNOLOGY & INNOVATION

High Quality Mobile Network

7

High Speed Fiber Network

• 6,000 more 2G/3G base stations compared to the closest competitor

Turkey’s first mobile technology to link patients with their

doctors… • The first and only

operator in Turkey providing 1000 mbps speed for residential segment

Personal TV experience that spans multiple

screens and on-demand content…

Tailored and on-demand cloud services for

corporate customers… • Investments to reach

84 mbps speed

Page 8: Turkcell q112 presentation_final

TURKCELL TURKEY TURKEY’S CHAMPION IN 3G DATA SPEED

8

11.91

4.90 4.55

2.37 1.75 1.40

Turkcell Avea Vodafone

Dowload Upload

RESULTS OF 3G DATA SPEED TEST (Mbps)

Test was run on a total of 59 points in 7 regions and 9 provinces in Turkey

2,136 measurements were taken

According to the independent test results of PCnet Magazine, Turkcell is the fastest in terms of 3G data speed…

Page 9: Turkcell q112 presentation_final

22.7 22.9 22.5

10.4 11.7 12.0

Q111 Q411 Q112Prepaid Postpaid

TURKCELL TURKEY MAINTAINED SUBSCRIBER BASE

9

63%

65%

Q111 Q112

Postpaid as a % of revenues Postpaid as a % of subscribers

SHARE OF POSTPAID IN REVENUES & SUBSCRIBERS

33.1 34.5 34.5

SUBSCRIBER (million)

31% 35%

Q111 Q112

SUMMARY OPERATIONAL RESULTS

Q1 2011 Q4 2011 Q1 2012 YoY (%) QoQ (%)

ARPU (TRY) -blended 18.4 19.7 19.2 4.3% (2.5%)

ARPU (TRY) -postpaid 37.9 37.5 36.5 (3.7%) (2.7%)

ARPU (TRY) -prepaid 9.8 11.0 10.1 3.1% (8.2%)

MoU 192.5 220.4 221.5 15.1% 0.5%

Page 10: Turkcell q112 presentation_final

151 229

164

173

109

127

Q111 Q112

MobileServices

SMS/MMS

MobileBroadband

424

TURKCELL TURKEY MOBILE BROADBAND DROVE NON-VOICE REVENUE GROWTH

10

MOBILE BROADBAND & SERVICE REVENUES BREAKDOWN (TRY million)

529

HIGHER SHARE OF MOBILE BROADBAND WITH INCREASING SMARTPHONE NUMBERS

↑52% YoY

2.4

3.8 4.3

8%

10%

12%

Q111 Q411 Q112

# of smartphones (million)Mobile Broadband as a % of revenues

↑ 6% YoY

↑16% YoY

↑25% YoY

↑82% YoY

Page 11: Turkcell q112 presentation_final

52% 41%

23%

30% 24%

29%

Q111 Q112

Residential

Corporate

Wholesale

11

TURKCELL SUPERONLINE FINANCIAL RESULTS

TRY million Q1 2011 Q4 2011 Q1 2012 YoY (%) QoQ (%)

Revenue 91.1 140.7 145.0 59.2% 3.1%

EBITDA 14.5 31.1 29.1 100.7% (6.4%)

EBITDA Margin 16.0% 22.1% 20.1% 4.1pp (2.0pp)

Capex 43.0 172.4 63.7 48.1% (63.1%)

REVENUE BREAKDOWN Revenue growth through continued strong growth in all segments

307K fiber subscribers in Q112

Group synergy further enhanced:

• Share of Turkcell Superonline in Turkcell’s transmission cost reached 74%

TURKCELL SUPERONLINE STRONG GROWTH IN FIBER BROADBAND

↑92% YoY

↑105% YoY

↑24% YoY

Page 12: Turkcell q112 presentation_final

UKRAINE SUSTAINED PROFITABILTY LEVELS

12

ASTELIT FINANCIAL RESULTS

$ million Q1 2011 Q4 2011 Q1 2012 YoY (%) QoQ (%)

Revenue 78.2 98.1 91.4 16.9% (6.8%)

EBITDA 18.8 24.9 24.9 32.4% -

EBITDA Margin 24.0% 25.4% 27.2% 3.2pp 1.8pp

Capex 7.4 26.6 5.3 (28.4%) (80.1%)

EBITDA & FCF MARGIN DEVELOPMENT

14.6%

21.4% 24.0%

27.2%

Q111 Q112

FCF margin EBITDA marginTurnaround strategy resulted in strong revenue and EBITDA growth YoY

• Regional focus

• 7.1 million active subscribers up by 1 million YoY

Sustained improvement in EBITDA margins

• 4th consecutive quarter with above 25% EBITDA margin levels

Page 13: Turkcell q112 presentation_final

FINANCIAL OVERVIEW

Murat Erden,

Turkcell Acting CFO

NOTICE:

Please note that all financial data are consolidated whereas non-

financial data are unconsolidated unless otherwise specified.

EBITDA is a non-GAAP financial measure. Please refer to the

press release for the reconciliation of EBITDA to net cash from

operating activities.

All non-financial data are unconsolidated, prepared in

accordance with IFRS and expressed in US$ and/or TRY.

The figures used in this presentation are rounded while

percentage changes are calculated based on the figures

disclosed in the Q1 2012 result announcement press release.

Page 14: Turkcell q112 presentation_final

2,446 2,382 (57) (1) (6)

RevenueQ411

Δ in Voice* Δ in Mobile broadband & services

Δ in Subsidiaries RevenueQ112

TURKCELL GROUP REVENUE (TRY MILLION)

14

2,118

2,382

39 105

120

RevenueQ111

Δ in Voice* Δ in Mobile broadband & services

Δ in Subsidiaries RevenueQ112

Δ in Turkcell Turkey: ∑ TRY 144mn

Δ in Turkcell Turkey: ∑ TRY (58mn)

Q1 2012 vs. Q1 2011 YoY ↑12.4%

Q1 2012 vs. Q4 2011 QoQ↓ (2.6%)

*Voice revenues include outgoing, incoming, roaming and other (comprising almost 2% of Turkcell Turkey) revenues

Page 15: Turkcell q112 presentation_final

29.5% 29.5% (2.7pp) 0.2pp

2.5pp

EBITDAQ111

Δ in Direct cost of revenues*

Δ in G&A exp.

Δ in S&M exp.

EBITDAQ112

15

28.4% 29.5% 0.3pp (0.8pp) 1.6pp

EBITDAQ411

Δ in Direct cost of revenues*

Δ in G&A exp.

Δ in S&M exp.

EBITDAQ112

TURKCELL GROUP EBITDA MARGIN (%)

* Excluding depreciation and amortization

Q1 2012 vs. Q1 2011 YoY (-)

Q1 2012 vs. Q4 2011 QoQ ↑ 1.1pp

Page 16: Turkcell q112 presentation_final

TURKCELL GROUP NET INCOME (TRY MILLION)

16

330

515

22 65 (7)

60 40 (6) 11

Net incomeQ111

Δ in EBIT Δ in Interest Inc./Exp.

Δ in Equity in Net Inc./Loss

Δ in FX Gain/Loss

Δ in Monetary Gain/Loss

Δ in Taxation Δ in Other Net incomeQ112

Q1 2012 vs. Q1 2011 YoY ↑ 56.0%

332

515 271 5 (5) 129 (233)

13 3

Net incomeQ411

Δ in EBIT Δ in Interest Inc./Exp.

Δ in Equity in Net Inc./Loss

Δ in FX Gain/Loss

Δ in Monetary Gain/Loss

Δ in Taxation Δ in Other Net incomeQ112

Q1 2012 vs. Q4 2011 QoQ ↑ 55.2% Δ in EBITDA Δ in Depreciation

8 263

Δ in EBITDA Δ in Depreciation

77 (55)

Page 17: Turkcell q112 presentation_final

TURKCELL GROUP BALANCE SHEET HIGHLIGHTS

17

Consolidated (TRY million) Q1 2011 Q4 2011 Q1 2012

Total Cash 4,916 6,3341 6,0582

Total Assets 15,151 17,187 17,157

Total Debt 2,791 3,529 3,359

Net Cash 2,125 2,805 2,699

Total Equity 9,964 10,826 11,325

Strong balance sheet maintained Subsequent event to March 31, 2012: Payment of the guaranteed loan of Euroasia amounted to USD 150 million as of April 6, 2012

1 TRY 1,596 million time deposits with a maturity longer than 3 months was recorded as Financial Investment 2 TRY 10 million time deposits with a maturity longer than 3 months was recorded as Financial Investment

Q1 2012 CAPEX SPLIT (TRY MILLION)

Turkcell Superonline

64

Turkcell Turkey

160

International 18

Other 11

Total Capex: TRY 253 million

Page 18: Turkcell q112 presentation_final

APPENDIX

Page 19: Turkcell q112 presentation_final

SUMMARY INCOME STATEMENT AS PER CMB1 FINANCIALS (TRY MILLION)

19

Summary income statement (TRY mn) Q1 2011 Q4 2011 Q1 2012 YoY (%) QoQ (%)

Revenue 2,118.4 2,445.5 2,381.8 12.4% (2.6%)

Direct Cost of Revenues2 (1,247.7) (1,790.5) (1,489.8) 19.4% (16.8%)

S&M (411.1) (451.6) (402.8) (2.0%) (10.8%)

G&A (110.3) (103.8) (118.1) 7.1% 13.8%

EBITDA 625.8 694.7 702.7 12.3% 1.2%

EBITDA Margin 29.5% 28.4% 29.5% - 1.1pp

Net Income 330.9 333.3 515.5 55.8% 54.7%

1 Capital Markets Board of Turkey 2 Depreciation and amortization is included

Page 20: Turkcell q112 presentation_final

CONSOLIDATED CASH FLOW ($ MILLION)

20

Consolidated Cash Flow($ mn) Q1 2011* Q4 2011* Q1 2012 YoY (%) QoQ (%)

EBITDA1 398 384 393 (1.3%) 2.3%

LESS:

Capex and License (117) (368) (143) 22.2% (61.1%)

Turkcell (61) (185) (90) 47.5% (51.4%)

Ukraine (7) (27) (5) (28.6%) (81.5%)

Investment & Marketable Securities 6 (847) 892 n.m. (205.3%)

Net Interest Income/Expense 39 70 70 79.5% -

Other (422) (63) (340) (19.4%) 439.7%

Net Change in Debt (31) (7) 31 (200.0%) (542.9%)

Dividend paid - - - - -

Cash Generated (127) (831) 903 (811.0%) (208.7%)

Cash Balance 3,175 2,509 3,411 7.4% 36.0%

1 EBITDA is a non-GAAP financial measure. See page 12 of our press release for the reconciliation of EBITDA to net cash from operating activities. * Changed from previously released presentation

Page 21: Turkcell q112 presentation_final

CONSOLIDATED BALANCE SHEET ($ MILLION)

21

Consolidated Balance Sheet ($ mn) Q1 2011 Q4 2011 Q1 2012 YoY (%) QoQ (%)

Cash & Bank 3,175 2,509 3,411 7.4% 36.0%

CURRENT ASSETS 4,462 4,464 4,808 7.8% 7.7%

Fixed Assets, Net 4,703 3,956 4,139 (12.0%) 4.6%

Other Long Term Assets 620 679 730 17.7% 7.5%

TOTAL NON-CURRENT ASSETS 5,323 4,635 4,869 (8.5%) 5.0%

TOTAL ASSETS 9,786 9,099 9,677 (1.1%) 6.4%

S/T Debt 375 812 1,462 289.9% 80.0%

TOTAL CURRENT LIABILITIES 1,552 2,063 2,585 66.6% 25.3%

L/T Debt 1,428 1,057 434 (69.6%) (58.9%)

TOTAL NON-CURRENT LIABILITIES 1,798 1,304 704 (60.8%) (46.0%)

MINORITY INTEREST (34) (61) (61) 79.4% 0.0%

Share Capital 1,636 1,636 1,636 0.0% 0.0%

TOTAL EQUITY 6,435 5,732 6,388 (0.7%) 11.4%

TOTAL EQUITY AND LIABILITIES 9,786 9,099 9,677 (1.1%) 6.4%

Page 22: Turkcell q112 presentation_final

THANK YOU

www.turkcell.com.tr

For further information please e-mail

[email protected] or call Turkcell Investor Relations at

(+90 212 313 1888)