TURKCELL · Turkcell | Third Quarter 2015 5 9M 2015 Growth YoY % 9,435 5.5% 3,082 8.4% 32.7% 0.9pp...

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TURKCELL

THIRD QUARTER OF 2015 October 27, 2015

Turkcell | Third Quarter 2015

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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 is consolidated, whereas non-financial data is unconsolidated unless otherwise specified.

NOTICE

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BUSINESS OVERVIEW

Kaan Terzioğlu Turkcell CEO


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Acquired largest spectrum in 4.5G auction

Upgraded to investment grade by 3 rating agencies

Raised $2.4 billion debt & issued $500 million Eurobond1

Restructured debt of BeST in Belarus1

Applied to establish consumer finance company

Completed

EXECUTION CONTINUES FOR MORE VALUE

Continued Execution in Q3 2015

1 Completed in October 2015

• Convergence of

• Sales channels

• Organizational structure

• Mobile and fixed network

• Decrease in distributor number to 2 from 5

• Increased ownership to 100% in Astelit and acquired 3G license

• Debt restructuring of Astelit


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9M 2015 Growth YoY %

9,435 5.5%

3,082 8.4%

32.7% 0.9pp

1,484 (7.7%)

1,860 15.6%

CONSOLIDATED TRY MILLION1 Q3 2015

Growth YoY %

Revenue 3,364 6.4%

EBITDA 1,161 10.5%

EBITDA Margin 34.5% 1.3pp

Net Income 630 (16.5%) Net Income excl.

non-recurring items2 707 17.8%

1 TRY figures are based on IFRS TRY figures 2 Net Income excluding FX gain/(loss) (inc tax and minority impact), monetary gain (inflation impact), interest Income on time deposit & one off items

9 MONTHS QUARTER

Highlights of the Quarter

FINANCIAL HIGHLIGHTS

All time highest revenue and EBITDA

1.3pp EBITDA margin improvement through efficiency measures & more value focus


6 1 TRY figures are based on IFRS TRY figures

TURKCELL TURKEY: STRONG GROWTH IN ALL SEGMENTS

TURKCELL TURKEY1

2,797 2,771 2,711 2,835

3,074

943 812 831 915

1,062

34%

29% 31%

32%

35%

Q314 Q414 Q115 Q215 Q315

Revenue EBITDA EBITDA Margin

9.9% YoY

120 70 71 92

130

Q314 Q414 Q115 Q215 Q315

WHOLESALE

8.5% YoY

(TRY MILLION)

4.2%

% in Turkcell Turkey

12.6% YoY

525

547 532

550 560

2,167 2,168 2,122

2,206

2,402 CONSUMER

CORPORATE

10.9% YoY

6.5% YoY

SEGMENT REVENUES

78.1%

18.2%

(TRY MILLION)


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50%

32% 10% 4% 4% TRY 3,074

mn

1 Other includes Turkcell Satış (retail store in telecommunications), Global Bilgi (call center services), Rehberlik Hizmetleri (information services) and Turkcell Teknoloji (research and development) Total may have rounding differences

TURKCELL TURKEY: DATA & SERVICES DRIVE GROWTH

YoY Growth Consumer&Corporate

Data ↑34.2%

Voice ↓2.0%

Services&Solutions ↑11.3%

Other1 ↑18.5%

Wholesale ↑8.5%

530 567 606 638 727

196 214

220 233

247

Q314 Q414 Q115 Q215 Q315

Mobil broadband Fixed broadband

34.2%

YoY

26.0%

37.2%

975

780

REVENUE BREAKDOWN Q315 DATA REVENUES TRY MILLION TRY MILLION

9.9% YoY

726

826 871


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125 136

142

156

176

Q314 Q414 Q115 Q215 Q315

1 Includes BIP 2.0 & 3.0 2 Excluding SMS revenues

TURKCELL TURKEY: FOCUS ON SERVICES CONTINUED

MOBILE SERVICES SERVICES REVENUES2

TRY MILLION

40.3% YoY

1.3M Active Users

Download 1.6M Turkcell Music

Smart Storage

Instant Messaging

Download1 1.4M

Launched in Germany & Northern Cyprus

Soon in Ukraine & Belarus!

New features: Voice & Video Call

41% of users are non-Turkcell


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62.0 57.0 64.8

172.4

82.8 110.2

Turkcell Vodafone Avea

234.4

4.5G tender

175.0

Before tender

Total

139.8 0.3

0.4 0.5

Turkcell Vodafone Avea

UNIT PRICES - per MHz per Subs FREQUENCY BREAKDOWN EUR

Largest «technology agnostic» frequency acquired

Highest speed (375 Mbps) through carrier aggregation

Only operator to provide 1Gbps speed, with supported terminals

Only operator in 2100 MHz, leader in 3G with 6 carriers

1.6 bn Euro License fee to be paid in 4 installments

4.5G services to commence in April’16

TURKCELL TURKEY: LARGEST FREQUENCY & HIGHEST SPEED


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34.7 34.6 34.3 34.0 34.2

14.8 15.2 15.5 15.9 16.1

43% 44% 45%

47% 47%

Q314 Q414 Q115 Q215 Q315

Total subscriber Postpaid subscriber

Postpaid share (%)

1,101 1,191

1,272 1,346 1,419

686 735 776 818 852

Q314 Q414 Q115 Q215 Q315

Total subscriber Fiber subscriber

MOBILE (MILLION)

TURKCELL TURKEY: ROBUST OPERATIONAL PERFORMANCE

278K QoQ

34K QoQ

FIXED (THOUSAND)

ARPU (TRY) Q314 Q414 Q115 Q215 Q315 YoY Growth

Mobile Blended 23.8 23.0 22.7 24.0 26.1 9.7%

Postpaid 39.4 38.0 36.9 38.0 40.4 2.5%

Prepaid 12.4 11.6 11.3 12.2 13.5 8.9%

Fixed Residential 47.3 48.1 47.1 47.9 49.1 3.8%

74K QoQ

271K QoQ


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44% 40% 37% 33% 30%

54% 52%

52% 51% 51%

2% 7% 12% 16% 19%

Q314 Q414 Q115 Q215 Q315

Single Play Double Play Triple Play**

TURKCELL TURKEY: FOCUS ON MULTIPLAY OFFERINGS

INCREASE IN TRIPLE PLAY TURKCELL TV+

131K QoQ net add

Q314 Q414 Q115 Q215 Q315

Turkcell TV* 116K 138K 165K 211K 342K

*Including IPTV, mobile and web subscribers **Triple play consists of fixed voice, fixed data and TV

% in fiber residential subscribers

3pp QoQ


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305

254

193 205

235

74 62 53 56

70

24.3%

24.6%

27.5% 27.2%

29.6%

Q314 Q414 Q115 Q215 Q315

Revenue EBITDA EBITDA Margin

TURKCELL INTERNATIONAL: IMPROVED PROFITABILITY

TURKCELL INTERNATIONAL

TRY MILLION

22.9% YoY

16.8%

UKRAINE

BELARUS

SEGMENT HIGHLIGHTS

UAH MILLION Q315 YoY Growth

Revenue 1,183 3.3%

EBITDA 412 14.0%


Q315 YoY Growth

Revenue 227 16.7%

EBITDA 5 26.3%


BYR BILLION

67.3%

% in Turkcell International

6.0% YoY

14.2%

NORTHERN CYPRUS Q315 YoY Growth

Revenue 33.3 (6.7%)

EBITDA 12.7 (10.6%)

EBITDA Margin 38.0% (1.8pp)

TL MILLION

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FINANCIAL OVERVIEW

Murat Erden Turkcell CFO

NOTICE:

Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified.

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 Q3 2015 result announcement press release.


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1,050

1,161 202

(83) (30) 22

EBITDAQ314

Δ in Revenues

Δ in Direct cost of

revenues*

Δ in G&A exp.

Δ in S&M exp.

EBITDAQ315

3,162

3,364 278

(70) (6)

RevenueQ314

Δ in Turkcell Turkey

Δ in Turkcell International

Δ in Other Subsidiaries

RevenueQ315

TURKCELL GROUP: REVENUE & EBITDA DEVELOPMENT

*Excluding depreciation and amortization

Margin 33.2%

Margin 34.5%

REVENUE EBITDA

TRY MILLION TRY MILLION

1.3pp EBITDA Margin

6.4% Revenue


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755

630

86 (69) 13

(43)

(48) 33 (97 )

Net incomeQ314

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 Inc/Exp.

Net incomeQ315

NET INCOME

TURKCELL GROUP: NET INCOME DEVELOPMENT

∆ in interest income (51) ∆ in interest expense (18)

TRY MILLION

Minority impact due to increase in Astelit’s

ownership (63)


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4,298 3,902

1,161 (634) 128 (955) (96)

Q215 EBITDA Capex* Netinterestincome

Netchange in

debt

Othercash flow

items

Q315

TURKCELL GROUP: BALANCE SHEET HIGHLIGHTS

Q3 2014 Q3 2015

Total Cash 8,692 3,902

Total Assets 22,699 20,579

Total Debt 3,545 3,467

Net Cash 5,147 436

Total Equity 16,223 13,798

SUMMARY BALANCE SHEET

MAJOR CASH FLOW ITEMS

Net debt repayment of TRY 955 million TL

Astelit acquisition TRY 268 million TL

Capex1 TRY634 mn

Corporate tax payment of Turkcell Iletisim TRY110 mn

Foreign currency valuation impact TRY222mn

1 Including operational and non-operational capex

TRY MILLION

CASH DEVELOPMENT


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17%

83%

Long Term Short Term

RESILIENT INVESTMENT GRADE PROFILE

ONLY TURKISH COMPANY WITH INVESTMENT GRADE FROM THREE RATING AGENCIES

BBB- Stable

BBB- Stable

Baa3 Negative

81%

19%

PRIOR PROSPECTIVE1

DEBT MATURITY

1) Club Loan –Sept 2015

US$ 500 million and EUR 445 million

CAPEX and inorganic growth opportunities

2) China Development Bank - Oct 2015

EUR 500 million – Debt restructuring

EUR 750 million - CAPEX

3) Bond - Oct 2015

US$ 500 million

4.5G payment and inorganic growth opportunities 1 In the case of 500 mn USD bond and 500 mn EUR CDB loan are utilized


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INCREMENTAL PROGRESS ON EBITDA LED TO GUIDANCE UPGRADE

33.2%

29.6%

31.1% 32.2%

34.5%

31.1% 30.9% 31.1% 31.2% ̴32%-32.5%

Q314 Q414 Q115 Q215 Q315 FY11 FY12 FY13 FY14 FY15E

CONSOLIDATED EBITDA MARGIN

REVENUE GROWTH 5.5% 6%-9% Turkcell Turkey ~10% Turkcell Group ~6%

EBITDA MARGIN 32.7% 31%-32% 32%-32.5%

OPERATIONAL CAPEX / SALES** 18% ~20% ~20%

(**) Excluding licence fees

9M15 UPDATED

2015 GUIDANCE

(*)This estimate is based on our current expectations regarding market conditions and assumption that current market conditions continue in 2015 for each of our different businesses. No assurance can be given that actual results will be consistent with such expectations. For a discussion of factors that may affect our results, see our latest Annual Report on Form 20-F filed with U.S. Securities and Exchange Commission, and in particular the risk factor section therein.

TURKCELL GROUP OLD

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THANK YOU For further information please e-mail

[email protected] or call Turkcell Investor Relations at

(+90 212 313 1888) Please download our IR app via below QR codes For Android For iOS


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FOR BUSINESS DISCUSSION & STRATEGY UPDATE SAVE THE DATE!

TURKCELL CAPITAL MARKETS DAY

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APPENDIX


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SUMMARY INCOME STATEMENT AS PER CMB1 FINANCIALS

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

Summary income statement Q3 2014 Q2 2015 Q3 2015 YoY (%) QoQ (%)

Revenue 3,162.2 3,092.9 3,363.8 6% 9%

Direct Cost of Revenues2 (1,879.0) (1,897.2) (1,987.1) 6% 5%

S&M (496.5) (458.9) (474.1) (5%) 3%

G&A (138.0) (150.4) (168.2) 22% 12%

EBITDA 1,050.4 994.8 1,160.6 10% 17%

EBITDA Margin 33.2% 32.2% 34.5% 1.3pp 2.3pp

Net Income 755.7 712.5 631.3 (16%) (11%)

(TRY MILLION)


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CONSOLIDATED BALANCE SHEET (IFRS) (TRY MILLION)

Consolidated Balance Sheet ( TRY mn) Q3 2014 Q2 2015 Q3 2015 YoY(%) QoQ (%)

Cash & Bank 8,692 4,298 3,902 (55%) (9%)

CURRENT ASSETS 12,977 9,423 9,188 (29%) (2%)

Fixed Assets, Net 7,951 9,115 9,349 18% 3%

Other Long Term Assets 1,771 2,124 2,042 15% (4%)

TOTAL NON-CURRENT ASSETS 9,722 11,238 11,391 17% 1%

TOTAL ASSETS 22,699 20,661 20,579 (9%) 0%

S/T Debt 2,444 3,402 2,884 18% (15%)

TOTAL CURRENT LIABILITIES 4,627 5,774 5,374 16% (7%)

L/T Debt 1,101 612 582 (47%) (5%)

TOTAL NON-CURRENT LIABILITIES 1,849 1,388 1,407 (24%) 1%

MINORITY INTEREST -338 -600 73 (122%) (112%)

TOTAL EQUITY 16,223 13,499 13,798 (15%) 2%

TOTAL EQUITY AND LIABILITIES 22,699 20,661 20,579 (9%) 0%


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2.31 2.54 2.90 2.92 3.18 2.35

2.94 2.82 2.98 3.42

2012 2013 2014 2Q15 3Q15

Average Period-End

CURRENCY TRENDS

USD / TRY EUR / TRY

USD / BYR USD / UAH

1.79 1.91 2.19

2.66 2.85 1.78 2.13 2.32

2.69 3.04

2012 2013 2014 2Q15 3Q15

8,326 8,883 10,255

14,801 16,428

8,570 9,510 11,850

15,346 17,703

2012 2013 2014 2Q15 3Q15

7.99 7.99 11.87

21.44 21.36

7.99 7.99

15.77

21.02 21.53

2012 2013 2014 2Q15 3Q15


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TRY MILLION

Q3 2013 Q3 2014 Q3 2015

TURKCELL GROUP 2,981 3,162 3,364

TURKCELL TURKEY1 2,588 2,797 3,074

CONSUMER 2,025 2,167 2,402

CORPORATE 471 525 560

WHOLESALE 105 120 130

TURKCELL

INTERNATIONAL 349 305 235

OTHER SUBSIDIARIES2 44 61 55

TURKCELL GROUP: HISTORICAL REVENUE BREAKDOWN

1 Turkcell Turkey revenues include eliminations 2 Other subsidiaries include information and entertainment services in Turkey and Azerbaijan and Group eliminations

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TURKCELL · Turkcell | Third Quarter 2015 5 9M 2015 Growth YoY % 9,435 5.5% 3,082 8.4% 32.7% 0.9pp...

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