NOTICE
Thi i i h f d l ki ThThis presentation may contain statements that are forward looking. Thesestatements are based on current expectations and assumptions that are subject torisks and uncertainties which may cause actual results to differ materially due tofactors discussed in this presentation, in our press release, in the Risk Factorssection of Turkcell’s most recent Form 20‐F or in other reports and filings with theUS Securities and Exchange Commission. We undertake no duty to update orrevise any forward looking statements, whether as a result of new information,future events or otherwise.f
Please note that all financial data are consolidated whereas non‐financial dataare unconsolidated unless otherwise specified.
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Turkcell Group: Strong Operational Performance Drivenby Turkcell Turkeyby Turkcell Turkey
Q2 2009 Turkcell Group Financial Summary
Consolidated (million)
TRY
YoY QoQ
$
YoY QoQ
Revenue
EBITDA2
2,204 1.1% 4.8%
709 (10.9%) (8.3%)
1,398 (20.3%) 9.0%
449 (30.0%) (5.0%)
EBITDA Margin2
Net Income
32.2% (4.3)pp (4.6)pp
389 (26.2%) (30.8%)
32.1% (4.4)pp (4.7)pp
246 (42.4%) (28.6%)
Net Income Margin 17.7% (6.6)pp (9.0)pp 17.6% (6.7)pp (9.2)pp
A TRY / US$ t 1 5801 ( )• Litigation impact: $96.2 million
Avg. TRY / US$ rate 1.5801 26.9% (3.7%)g p $
- (2.5) pp EBITDA margin
- (5.7) pp Net income margin
• Inteltek impact: (1.2) pp EBITDA
1 Changes in TRY figures in this slide are calculated based on IFRS TRY figures2 EBITDA is a non‐GAAP financial measure. See pages 13‐14 of our press release for the reconciliation of EBITDA to net cash from operating activities.
5
p ( ) ppmargin YoY
Turkcell Turkey: Strong Leadership Continued in Q2
• Revenue increase through strong usage: 3% YoY and 7% QoQ • 35% EBITDA margin achieved• ‐43K subscribers in a contracting market of 800K• 854K net postpaid subscriber addition
Market Environment
• Market penetration decreased to % f %
Turkcell Response
• Strong value propositions 88% from 90% YoY
• Unlimited and flat rate offers in all directions
St o g a ue p opos t o s
• Advanced network
• Strong response to aggressive attacks by competition
• New interconnection rates
• With 3G, market communication emphasizing new technology and its
attacks by competition
• Expanded co‐branding benefits
• Focus on data usage through bundled offers; 71% YoY increase inp g gy
benefitsbundled offers; 71% YoY increase in data revenue
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Turkcell Turkey: Operational Success
Subscribers(million)
Subscriber Composition(%)
3%
• Postpaid base increased to 24% from 19% of the
6.9 7.8 8.625%
3%
36.4 35.4 36.3
81% 79%
19% 21% 24%
total YoY despite intensecampaigns and tariffs28.5 28.6 27.7
Q208 Q109 Q209
81% 79% 76%
Q208 Q109 Q209Q208 Q109 Q209PrepaidPostpaid
Q Q QPrepaidPostpaid
MoU(minutes)
Blended ARPU
92.6107.1
127.9
18.5 17.1 18.6
TRY ARPU$ ARPU
38%1%
9%
• MoU growth in line with market dynamics
• ARPU remained flat YoYi TRY t d it
14.910.4 11.8
in TRY terms, despite competitors’ unlimited flat offers and the sharp decrease in mobile t i ti t
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Q208 Q109 Q209 Q208 Q109 Q209 termination rates
Turkcell Played a Key Role in Start of 3G: New Era
LAUNCHED LAUNCHED ON JULY ON JULY 30th30th
Well positioned to differenciate TurkcellBest Coverage, Best Speed
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Further Differentiation Through 3G
By far the best coverage and highest speed
Most diversified, innovative and user‐friendly services
Most advantageous pricing for the best technology
HSPA+ network rollout up to 30 new and innovative Strong Mobile broadband offersp21 mbps speeds
• Advanced network
• 81 cities and ~60% l ti
3G products
• Consumer & corporatesolutions
M bil b db d
g
• Monthly flat rate internet packages- 100 MB for TRY9,4
1GB for TRY29population coverage
• Roaming agreement with 185 operators in 104countries*
- Mobile broadband: VINN (USB Modem)
- Modem station for VINN
- 1GB for TRY29- 4GB for TRY39
• Video call for regular price
• Bundled 3G• Highest frequency
bandwidth license; better positioning for LTE
- 3G enabled netbooksBundled 3G device/netbook/notebook campaigns
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*As of August 5, 2009
International Operations: Macro Challenges Impacted PerformancePerformance
Ukraine: Astelit• Impact of 20% GDP drop and YoY %55 devaluation.
• Revenue decline of 22% YoY to $85 9• Revenue decline of 22% YoY to $85.9 million
• In local currency revenue increased by 21% YoY21% YoY
Fintur• $27.8 million net income contribution to Turkcell Group; Decline of 29% contribution YoYcontribution YoY
• Subscribers grew 5.7% to 12.9 million YoY
• Maintained market leadership positions
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Pleasing Performance Despite Tough Macro Climate
1,7551 283 1 398
52% 51%47%
($ million)Revenue Gross ProfitMargin 1
YoY Growth• Revenue : broadly flat YoY despite limited contribution of subsidiaries
1,283 1,398
Q208 Q109 Q209‐20%
1% TRY
$
and lower interconnection rates
• EBITDA Margin declined YoY since the
641472 449
37% 37% 32%($ million)EBITDA2
EBITDAMargin
TRY
contribution of Inteltek to EBITDA margin fell by 1.2 pp compared to last year as well as increasing operating expenses and litigation provisions
11%472 449
Q208 Q109 Q209
TRY
$
expenses and litigation provisions
• Net Income declined
‐11%
‐30%
426 344 246
24% 27% 18%($ million)Net IncomeNet IncomeMargin
26% TRY
• Lower EBITDA
• Translation Loss344 246
Q208 Q109 Q209‐42%
‐26% TRY
$
• Litigation provisions
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1 Depreciation and amortization is included2 EBITDA is a non‐GAAP financial measure. See pages 13‐14‐of our press release for the reconciliation of EBITDA to net cash from operating activities.
Net Effect of Provisions
Q209
Li i i P i i B f($ million)
Actual Litigation Provisions Before ProvisionsSCT1 Millenicom Total
1,398.0 1,398.0 Revenue
448.8 (34.7) (34.7) 483.5
32.1% (2.5)pp (2.5)pp 34.6%
EBITDA2
EBITDA Margin2Total
Provisions$96 2
(69.0) (11.5) (45.1) (56.6) (12.4)
(3.0) (4.9) (4.9) 1.9
Finance Expense
Other
Income/(Expense)
$96.2 million
(47.4) 16.0 16.0 (63.4)
245.8 (16.4) (63.9) (80.3) 326.1
Income/(Expense)
Income Tax Expense
Net Income ( ) ( ) ( ) 326.1
17.6% (1.1)pp (4.6)pp (5.7)pp 23.3%Net Income Margin
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1 Special Communication Tax2 EBITDA is a non‐GAAP financial measure. See pages 13‐14‐of our press release for the reconciliation of EBITDA to net cash from operating activities.
Higher Cost Base Due to Increasing Competition
847
48% 49% 53%($ million)Direct cost
of revenues*% of Revenue
YoY Growth• Higher direct cost of revenues as a percentage of revenue847
631 741
Q208 Q109 Q209‐13%
11% TRY
$
percentage of revenue
• Higher interconnection costs• Higher network‐relatedexpenses
73 60 64
4% 5% 5%($ million)Adm.
expenses% of Revenue
10%
• G&A expenses remained broadly flat as a percentage of revenue
60 64
Q208 Q109 Q209‐13%
10% TRY
$ • S&M expenses, as a percentage of revenue, increased slightly QoQ due to
366239 277
21% 19% 20%($ million)S&Mexpenses% of Revenue
‐4% TRY
• Higher acquisitions
• Intensified marketing campaigns
Q208 Q109 Q209‐24% $
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* Depreciation and amortization is included
Solid Cashflow
Q208 Q209
Summary Balance Sheet ($ million) Consolidated Cash Flow ($ million)
Cash & Cash Equivalents 2,876 1,963
Total Assets 8,424 7,876
1,963
169Other
Cash Balance Q209
Total Debt 638 776
Net Debt (2,238) (1,187)
T t l E it 6 106 5 273
(713)Dividend paid
Other
Total Equity 6,106 5,273
Debt/Annualized EBITDA 23% 34%6Net interest income
449
(790)
EBITDA
CAPEX
• 1.2 billion net cash as of June 30th, 2009
2,843Cash Balance Q109
• Debt/ Annualized EBITDA of 34%
1515
Summary Income Statement as per CMB1 Financials (TRY million)
Revenue
Q208 Q109 Q209Q209‐ Q208 % change
Q209‐ Q109 % change
2,181 2,103 2,204 1% 5%
Direct Cost of Revenues2
S&M
, , ,
(1,049) (1,029) (1,164) 11% 13%
(455) (392) (437) (4%) 11%S&M
G&A
EBITDA3
(455) (392) (437) (4%) 11%
(91) (98) (100) 10% 2%
796 774 710 (11%) (8%)EBITDA3
EBITDA Margin
796 774 710 (11%) (8%)
36.5% 36.8% 32.2% (4.3)pp (4.6)pp
Net Income
1 Capital Markets Board of Turkey
2 Depreciation and amortization is included
532 566 392 (26%) (31%)
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2 Depreciation and amortization is included
3 EBITDA is a non‐GAAP financial measure. See pages 14‐15 of our press release for the reconciliation of EBITDA to net cash from operating activities.
Consolidated Cash Flow ($ million)Consolidated Cash Flow ($ million)
EBITDA1
LESS:
Q208 Q109 Q209
641 472 449
Capex and LicenseTurkcellUkraine
(229) (252) (790)(99) (182) (671)(58) (42) (35)
Investment & Marketable SecuritiesNet Interest Income/Expenseh
( ) ( ) ( )
(7) (76) ‐
90 61 6 OtherNet Change in DebtDividend paidC h G t d
(198) (617) 167 (7) (4) 2 (502) ‐ (713)(213) (417) (880)Cash Generated
Cash Balance(213) (417) (880)2,876 2,843 1,963
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1 EBITDA is a non‐GAAP financial measure. See pages 14‐15 of our press release for the reconciliation of EBITDA to net cash from operating activities.
Consolidated Balance Sheet ($ million)Consolidated Balance Sheet ($ million)
Q208 Q109 Q209Q209‐Q208 %
Q209‐Q109 %
Cash & Bank
CURRENT ASSETS
Q208 Q109 Q209 Q208 % change
Q109 % change
2,876 2,843 1,963 (32%) (31%)
4 025 3 838 3 118 (23%) (19%)CURRENT ASSETS
Fixed Assets, Net
Other Long Term Assets
TOTAL NON‐CURRENT ASSETS
4,025 3,838 3,118 (23%) (19%)
3,522 3,326 4,236 20% 27%
878 488 522 (41%) 7%
4,399 3,814 4,758 8% 25%
TOTAL ASSETS
S/T Debt
TOTAL CURRENT LIABILITIES
8,424 7,652 7,876 (7%) 3%
116 606 608 424% 0%
1,653 1,805 1,940 17% 7%
L / T Debt
TOTAL NON‐CURRENT LIABILITIES
MINORITY INTEREST
Share Capital
523 171 169 (68%) (1%)
665 593 664 (0%) 12%
172 61 31 (82%) (49%)
1 636 1 636 1 636 0% 0%Share Capital
TOTAL SHAREHOLDERS' EQUITY
TOTAL EQUITY AND LIABILITIES
1,636 1,636 1,636 0% 0%
6,106 5,254 5,273 (14%) (0%)
8,424 7,652 7,876 (7%) 3%
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For further information please e‐mail [email protected]
or call Turkcell Investor Relations on
(+90 212 313 1888)
www.turkcell.com.tr