TURKCELLThi d Q t 2008Third Quarter 2008
November 6, 2008
Notice Notice
This presentation may contain statements that are forward looking. Thesestatements are based on current expectations and assumptions that are subjectto risks and uncertainties which may cause actual results to differ materially dueto risks and uncertainties which may cause actual results to differ materially dueto factors 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 withthe US Securities and Exchange Commission. We undertake no duty to updateor revise any forward looking statements, whether as a result of new information,y g , ,future events or otherwise.
Please note that all financial data are consolidated whereas non-financialdata are unconsolidated unless otherwise specified.p
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BusinessBusiness Overview
SüSü CiliCiliSüreyyaSüreyya CilivCilivCEOCEO
33
Solid results & excellent momentumSolid results & excellent momentum
Turkcell Group YoY growthTurkcell Group
Q307 Q308$
GrowthTRY*
Growth
Revenue 1 723 2 056 19% 10%
Consolidated $ million
Revenue 1,723 2,056 19% 10%
EBITDA 772 838 9% 0.3%
EBITDA Margin 44.8% 40.8% (4.0) pp
Net Income 401 604 50% 40%
Group 45 0 50 5 12%
Subscribers**(million)45.0 50.5 increase
4
* TRY figures in this slide are calculated based on IFRS TRY figures’ changes** Number of subscribers of Turkcell Turkey and each of our subsidiaries, including the number of Fintur subscribers on a pro-rata basis
4
Turkcell Turkey: Strong gains in subscribers and usageTurkcell Turkey: Strong gains in subscribers and usage
Subscribers (million)
6 2%6 9%5 7%
MoU (minutes)972K net
adds
29 1
6.3 6.9 7.235.4 34.8 36.3
6.2%6.9%5.7%
83.0 92.6109.2
18%
4%32%
adds
28.5 28.5 29.1
Q307 Q208 Q308Churn
Q307 Q208 Q308PrepaidPostpaid
32%
ChurnPrepaidPostpaid
• Highest quarterly gain in 2008 withHighest quarterly gain in 2008 with 972,500 subscribers
• Share of postpaid subscriber base improved to 20%
• MoU increased by 32% despite the full month Ramadan impact
• QoQ churn rate decreased by 0.7 pp
5Numbers in this slide are for Turkcell Turkey
Turkcell Turkey: Pleasing ARPU improvement with Turkcell Turkey: Pleasing ARPU improvement with strong usagestrong usageARPU (Blended) • High level of $ ARPU despite lower
interconnection rates:• The increase in usage
7 5% i ti f TRY i t $19.8 18.5 20.6
15.3 14.9 17.34%
13%
• 7.5% appreciation of TRY against $• Upward price adjustments
• Prepaid ARPU increased whereas post paid ARPU in TRY terms decreased by
Q307 Q208 Q308TRY ARPU $ ARPU
paid ARPU in TRY terms decreased by 2% YoY with the increase in subscriptions to incentivized tariff plans
TRY ARPU $ ARPU
ARPU (Postpaid) ARPU (Prepaid)
51.1 46.7 50.1
39.5 37.6 41.9-2%
6%
13.0 11.8 13.4
10.0 9.5 11.23%
12%
Q307 Q208 Q308TRY ARPU $ ARPU
6%
Q307 Q208 Q308TRY ARPU $ ARPU
6
TRY ARPU $ ARPU
6
$
Numbers in this slide are for Turkcell Turkey
Ukraine Operation: ContinueUkraine Operation: Continuess to grow despite macro challengesto grow despite macro challenges
• 68% YoY revenue growth• EBITDA margin improved YoY by
5 pp to 9%
pp g p gg p g
($ million)
Revenue EBITDA & EBITDA Margin
($ million)
11.3
4% 3% 9%pp
• Astelit continues to lead the net additions market and itssubscriber base reached 10.7 million 76.0
110.1127.8
2.9 3.6
Q307 Q208 Q308EBITDA EBITDA Margin
• Market share improved to 19.6% as of Q308
Q307 Q208 Q308
(Million)
ARPUSubscribers
21%($)
7.610.0 10.7
(Million)
5.8 6.3 7.021%($)
4.7 5.9 6.3
Q307 Q208 Q308Total 3-month active
3.6 3.8 4.1
Q307 Q208 Q3083-month active Total
7
Total 3-month active 3-month active Total
CIS Operations CIS Operations -- Fintur: Continued strong performanceFintur: Continued strong performance
($ million)($ million)
Consolidated Revenue
pp g pg p
Contribution to Net Income
411 446 50032
39 39
($ million)($ million)
• Total subscribers reached 12.4 million with strong 25% YoY growth
Q307 Q208 Q308 Q307 Q208 Q308• 22% YoY top-line growth
achieved in Q308
(million)
• Strong contribution to our bottom lineSubscriber
(million)
9.912.2 12.4
Q307 Q208 Q308
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Other International & Domestic OperationsOther International & Domestic Operationspp
BeSTTellcom Inteltek BeST“roll out in progress”
Tellcom“fair speed on roll out ”
Inteltek“a new business ”
• International traffic: Istanbul-Edirne (west
• 80% stake was acquired for $500 million and the deal is closed with the
t f $300 illi
• Inteltek won the new tender for sports betting (
border of Turkey) roll out was completed
• Significant progress on Ankara-Istanbul-Izmir ( t lit iti ) ll
payment of $300 million
• Consolidation started as of Q3 2008
• Turkcell’s experience in
gbusiness with the best offer of 1.4%
• The new licence is valid for 10 years and allows for new games based on(metropolitan cities) roll
out• Expected to create
synergies with Turkcell operations
• Turkcell s experience in Ukraine to be extended with strong life:) brand
• Network roll out and
for new games based on other sports
• New commission rate to be applicable starting from March 2009operations rebranding activities
started from March 2009
99
Faster with Faster with 3G: 3G: Anytime, AnywhereAnytime, Anywherey yy y
TURKCELL• 3G tender documentation received
• Tender to take place on November 28, 2008• 4 types of licenses with different bandwidths
Mi i i b t 178 285 illi EUR• Minimum prices are between 178-285 million EUR• License period will be 20 years from signing the of
Concession Agreement• Turkcell is well positioned to realize advantages p g
of 3G• Potential in High Speed Mobile Internet • New services and capabilities (convergence)
I l t ti i b i di d ith TA
KKTCell-Turkish Republic of Northern Cyprus
• Implementation issues being discussed with TA
p yp• 100% owned subsidiary KKTCell launched 3G
services in October 2008
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Outlook Outlook for 2009for 2009
Strong Balance
Market Outlook
Strong Balance Sheet & Cash
Position “determined to maintain
strong cash generation”
• Challenging global macro environment
g g
Well positioned • 3G launch p“to realize advantages
of 3G”
3G launch
Continue Leadership
“with strong brand and
• Penetration to be around 100%More active market with strong brand and
enhanced value propositions”
• More active market• MNP
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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 pressrelease for the reconciliation of EBITDA to net cash from operatingactivities.
All non-financial data are unconsolidated, prepared in accordance withIFRS and expressed in US$.
The figures used in this presentation are rounded while percentagechanges are calculated based on the figures disclosed in the Q3 2008result announcement press release.
Key FiguresKey Figures
Serkan Serkan OkandanOkandanCCFFOOCC OO
121212
Continued revenue growthContinued revenue growth
54%($ million)
Revenue Gross Profit Margin (*)
EBITDA EBITDA Margin
($ million)
54% 52%54%
19%
45%37% 41%
9%
1,723 1,755 2,056
Q307 Q208 Q308Revenues Gross Profit Margin
772 641 838
Q307 Q208 Q308EBITDA EBITDA Margin
• Revenue- 19% YoY increase despite lower interconnection rates due to:
• Growth in subscriber base• Growth in usage
Net IncomeNet Income Margin
($ million) • Growth in usage,• Appreciation of TRY• Upward price adjustment s• Contribution of our consolidated
subsidiaries.401 426 604
23% 24%29%
50%
• Net Income- 50% YoY increase mainly due to lower translation loss
401 426 604
Q307 Q208 Q308Net Income Net Income Margin
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* Depreciation and amortization is included
Cost control continuesCost control continues
($ million)
Direct Cost of Revenues (*)% of Revenue
Administrative Expenses% of Revenue
($ million)
800 847 936
46% 48% 46%17%
57 73 88
3% 4% 4%54%
800 847 936
Q307 Q208 Q308Direct Cost of Revenues % of Revenue
57 73 88
Q307 Q208 Q308Admin. Expenses % of Revenue
• Direct cost of revenues as % of revenue decreased slightly primarily because of lower depreciation and
Selling & Marketing Expenses% of Revenue
($ million)pamortization as a percentage of revenues
• 24% increase in S&M expenses stemming from
17% 21% 18%($ million)
24%g
• Higher acquisitions• Appreciation of TRY• Higher prepaid frequency usage fee
297 366 367
Q307 Q208 Q308S&M Expenses % of Revenue
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* Depreciation and amortization is included
Strong financial positionStrong financial position
Q307 Q208 Q308
2 1 2 8 6 3 1
Summary Balance Sheet ($ million)
• Cash generated during the quarter: $281 million
2008 CAPEX
Cash & Cash Equivalents 2,515 2,876 3,157
Total Assets 7,649 8,424 9,570
Total Debt 740 638 738• 2008 CAPEX:
• Turkey: approx.$600 million
• Ukraine: up to $250 million
Net Debt (1,775) (2,238) (2,419)
Total Equity 5,349 6,106 6,652
Debt/Annualized EBITDA 29% 26% 27% million
• Cash balance at the end of 3Q: US$3,157 million
Debt/Annualized EBITDA 29% 26% 27%
838 (176)
Consolidated Cash Flow ($ million)
2,876 3,157838 (176) (143) (300) 62
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2Q08
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We are an Agile Team
AppendixWe Promote Open Communication
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Summary Income Statement as per CMB* Financials (TRY million)Summary Income Statement as per CMB* Financials (TRY million)
Q3 07 Q2 08 Q3 08 Q3 08 – Q3 07% Chg.
Revenue 2,230 2,181 2,458 10 3%, 2,181 2,458 10.3%
Direct Cost of Revenue** (1,027) (1,049) (1,114) 8.5%Selling & Marketing g gExpenses (384) (455) (439) 14.3%
Administrative Expenses (74) (91) (105) 42.8%
EBITDA 999 796 1,002 0.3%
EBITDA Margin 44.8% 36 5% 40 8% (4 0)EBITDA Margin 44.8% 36.5% 40.8% (4.0) pp
Net Income 521 532 728 39.8%
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* Capital Markets Board of Turkey
** Depreciation and amortization is included
Q3 08 Q3 07
Consolidated Cash Flow ($ million)
Q3 07 Q2 08 Q3 08 Q3 08 – Q3 07 % Chg.
EBITDA 772 641 838 8.6%Less:Less:
CAPEX and License (188) (229) (176) (6.6%)
Turkcell (130) (99) (81) (38.0%)
Ukraine (26) (58) (48) 82.8%
Investment & Marketable Securities 10 (7) (300) -
Net Interest Income 58 90 102 75.5%
Other 152 (198) (256) (268.7%)
Net Change in Debt 38 (7) 73 90.6%
Dividend Paid by Turkcell - (502) - -
Cash Generated 842 (213) 281 (66.7%)Cash Balance 2,515 2,876 3,157 25.5%
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Consolidated Balance Sheet ($ million)
Q3 08 – Q3 07Q3 07 Q2 08 Q3 08 Q3 08 – Q3 07 % Chg.
Cash & Bank 2,515 2,876 3,157 25.5%CURRENT ASSETS 3,424 4,025 4,309 25.8%
Fixed Assets, Net 3,452 3,522 4,343 25.8%
Other Long Term Assets 774 877 918 18.6%
TOTAL NON-CURRENT ASSETS 4,226 4,399 5,261 24.5%
TOTAL ASSETS 7,649 8,424 9,570 25.1%
S/T Debt 600 116 587 (2.2%)
TOTAL CURRENT LIABILITIES 2,015 1,653 2,096 4.0%
L / T Debt 140 523 151 7.9%TOTAL NON-CURRENT LIABILITIES 286 665 823 187.8%MINORITY INTEREST 133 172 169 27.1%%
Share Capital 1,636 1,636 1,636 0.0%
TOTAL SHAREHOLDERS' EQUITY 5,349 6,106 6,652 24.4%TOTAL EQUITY AND LIABILITIES 7,649 8,424 9,570 25.1%
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THANK YOUTHANK YOU . . .
For further information please e mail investor relations@turkcell com trFor further information please e-mail [email protected]
or call Turkcell Investor Relations on (+90 212 313 1888)
www.turkcell.com.tr
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