TURKCELL GROUP Q3 2019 October 31, 2019 TURKCELL GZL BUSINESS - PowerPoint PPT Presentation

TURKCELL GİZLİ TURKCELL GROUP Q3 2019 October 31, 2019

TURKCELL GİZLİ BUSINESS OVERVIEW Murat Erkan Turkcell CEO

TURKCELL GİZLİ Q3 2019: SOLID PERFORMANCE ROBUST REVENUE GROWTH STRONG EBITDA TURKEY-CONSUMER 2.8 Bn TL 6.6 Bn TL 43.1% margin 15.0% YoY 13.6% YoY SOLID NET INCOME TURKEY-CORPORATE 43.3% 2-yr growth 801 Mn TL 27.9% YoY 3.3x YoY GROWING CUSTOMER BASE SOLID ARPU GROWTH CONTINUED DELEVERAGING 17.6% YoY 526K mobile net add 1.0x Net Debt/EBITDA mobile blended 19.8% YoY 503K postpaid net add 0.8x yoy improvement residential fiber 3

TURKCELL GİZLİ TURKCELL GROUP FINANCIAL HIGHLIGHTS Consolidated Q3 2019 QoQ % YoY % 9M 2019 YoY % TRY Million 1 6.4% 13.6% 17.8% 6,587 18,453 Revenue 11.2% 18.6% 17.2% 2,839 7,673 EBITDA 43.1% 41.6% 1.9pp (0.2pp) EBITDA Margin 1.8pp 1,641 27.5% 15.7% 4,031 13.6% EBIT 24.9% 4.1pp 21.8% (0.8pp) EBIT Margin 0.5pp 72.1% 231.7% 115.2% Net Income 801 2,490 15.0% (0.4pp) (0.6pp) 15.3% (0.6pp) Op.Capex/Sales 2 • Revenue growth performance in line with guidance • Strong operational profitability and bottomline 1 TRY figures are based on IFRS. 2 Excluding license fees 4

TURKCELL GİZLİ STRATEGIC PRIORITIES: Q3 UPDATES DIGITAL DIGITAL BUSINESS TECHFIN SERVICES SOLUTIONS PLATFORM • Strong revenue generation: • Financell’s step into Turkcell’s • Focus on standalone monetization corporate segment • 48% yoy growth in 9M 2019 • New Feature: BiP Web VoIP • Paycell integration with IstanbulCard • Bursa City Hospital opening & • New platform for SMEs: hesAPPlı • Agreements with key accounts; 112 Emergency Line infrastructure retailers and restaurant chains • Smartphone leasing launched for corporates 5

TURKCELL GİZLİ OPERATIONAL HIGHLIGHTS TURKEY SUBSCRIBERS (million) ARPU (TL) YoY 68.4 19.8% 66.1 19.4 56% of total 57.1 17.6% Residential fiber mobile 45.5 40.7 Mobile blended 38.7 (excl.M2M) 15.0 like-for-like * growth 20.5% 20.1% 2.2 33K Q3 18 Q2 19 Q3 19 cable 0.8 ADSL * The ARPU of mobile customers who have stayed with Turkcell for at least 14 months. MONTHLY AVERAGE MOBILE CHURN RATE 0.7 1.5 fiber 2.5% Postpaid Prepaid IPTV Fixed subscribers 0.1 pp impact due 2.2% to mandatory 2.0% Net add fiber ADSL IPTV registration requirement QoQ 503K ↑ 23K ↑ 29K ↑ 39K ↓ 30K ↑ Q3 18 Q2 19 Q3 19 6

TURKCELL GİZLİ STRONG NET ADD WITH ACCELERATING ARPU GROWTH MOBILE ARPU GROWTH vs INFLATION (%) MOBILE NET ADD (K) yoy 23 Inflection point in Q319 19.9% 3x the 503 18.0% 17.6% Mobile ARPU(excl. M2M) prepaid 215 ARPU 73 13.5% 16.6% -1 Change in CPI -155 13.4% Prepaid Q1 19 Q2 19 Q3 19 Q1 19 Q2 19 Q3 19 Postpaid FIBER RESIDENTIAL ARPU GROWTH (%) FIBER NET ADD (K) All time high Continued subscriber growth 19.8% 17.2% 29 25 12.3% 15 Q1 19 Q2 19 Q3 19 Q1 19 Q2 19 Q3 19 7

TURKCELL GİZLİ SUPERBOX: THE BRAND FOR FWA SUPERBOX SUBSCRIBER TREND (K) 2x ARPU of fixed 217 broadband 130 56 • FWA: broadband via mobile network 33 • Best solution for clients without fiber access Q4 18 Q1 19 Q2 19 Q3 19 • Providing a 5G service on our strong 4.5G network Net add 14K 23K 73K 88K • Becoming «the brand» for FWA in Turkey QoQ 8

TURKCELL GİZLİ LEADERSHIP IN QUALITY AND EXPERIENCE SMART CAMPAIGNS IN Q319 CUSTOMER EXPERIENCE Consumer Net Promoter Score (Points) Youngster Digital Services Campaign Turkcell Score 21 11 mn participant/gifts +22 Customized gifts +21 Turkcell’s «Comfortable» Tariff Model +10 +9 Hybrid (post&pre) model ~55% new to Turkcell Q2 19 Q3 19 Points over next best Points over third best AI based Social Responsibility Project 0.3 mn participants Source: Future Bright 9

TURKCELL GİZLİ GROWTH ENGINE: MOBILE DATA MOBILE DATA USAGE (Av. GB/User) 4.5G SUBSCRIPTION (million) 32.2 31.5 31.4 10.0 8.2 8.1 7.0 6.6 19.6 5.4 19.0 18.2 4.2 3.7 3.4 Q3 18 Q2 19 Q3 19 Q3 18 Q2 19 Q3 19 Non 4.5G Users 4.5G Users Total Users 4.5G subscribers 4.5G compatible smartphone 75% smartphone 85% are 4.5G 94% are 4.5G 20 million with penetration compatible SPs subscribers 4.5G compatible SPs Data consumption of a 4.5G user tapped 10 GB per user per month on average 10

TURKCELL GİZLİ TURKCELL INTERNATIONAL HIGHLIGHTS TURKCELL INT’L REVENUE BREAKDOWN Q319 5% Other 2 TRY MILLION 1 Q3 2019 YoY% 9M 2019 YoY% 10% TR Northern Cyprus Belarus 19% • 10% yoy revenue growth in local currency 525 23.8% 1,442 39.3% Revenue Ukraine 236 57.1% 660 80.5% EBITDA • 12% yoy revenue growth in local currency 66% • 8.8 GB/month 4G subs data consumption EBITDA • 79% smartphone penetration 45.0% 9.5pp 45.8% 10.5pp Margin • Like-for-like EBITDA margin improvement is 2.3 pp in Q319 and 3.3 pp in 9M 2019 2 Other comprises lifecell Germany, other international operations and intra- 1 Figures are based on IFRS company eliminations. Ukraine, Belarus and Turkish Republic of Northern 11 Cyprus figures are based on stand-alone financials.

CAPITAL MARKETS DAY 2019 AGENDA Turkcell Group Strategy & 3-year outlook PROGRAMME 08.00 – 08.55 Registration & Breakfast 09.00 – 12.00 Management Presentations 12.00 – 13.00 Guest Speaker&Lunch November 12, 2019 Tuesday Sheraton Grand London Park Lane 12

FINANCIAL OVERVIEW Osman Yılmaz Turkcell CFO

REVENUE & REVENUE BREAKDOWN REVENUE REVENUE BREAKDOWN TRY MILLION YoY Growth (33) (25) 101 (11.4%) 2.9% OTHER 3.7% 745 (13.3%) 3.3% TCF 4.3% 8.0% TURKCELL 23.8% 7.3% INTERNATIONAL 6,587 5,799 85.8% TURKCELL TURKEY 84.6% 15.2% 13.6% Higher contribution of Revenue Δ Turkcell Δ Turkcell Δ TCF* Δ Other Revenue Q3 18 Q3 19 Turkcell Turkey Q3 18 Turkey International Subsidiaries Q3 19 • 0.8 bn TL yearly revenue increase in Q319; Turkcell Turkey is the main growth driver • Top-line mainly impacted by fx change in international business and slow down in TCF due to regulation 14 * Turkcell Consumer Finance Company, Financell

OPERATIONAL PROFITABILITY EBITDA & EBITDA MARGIN TRY MILLION EBIT: 1,641 24.9% EBIT: 1,418 (312) (25) 24.4% 11 (16) 788 2,869 2,844 2,844 2,839 2,839 2,393 2,393 18.6% Margin Margin 41.3% 43.1% EBITDA Growth EBITDA Δ in Δ in Direct Δ in G&A Δ in S&M Δ Doubtful EBITDA Q3 18 Revenues cost of expenses expenses trade Q3 19 revenues* receivables** • Effective G&A and S&M management; 1.8 pp YoY improvement in EBITDA margin • Higher contribution to EBITDA margin from Turkcell International 15 * Excluding depreciation and amortization ** net impairment losses on financial and contract assets

LIQUIDITY MANAGEMENT Q2 19 – Q3 19 TRY MILLION 1 189 (1,086) 1,198 (1,269) 1,641 (384) 12,328 11,359 10,975 10,975 10,687 Cash Q2 19 EBIT Depreciation and Change in Cash flow from Cash flow from Other Cash Q3 19 Amortization operating investing activities financing activities assets/liabilities 1 Figures are based on IFRS. 16

TECHFIN: FINANCIAL & OPERATIONAL PERFORMANCE HANDSET FINANCING CONSUMER FINANCE TRY BILLION TRY MILLION 9M 2018 9M 2019 YoY % 5.2 Revenues 694.5 695.8 0.2% 301.2 378.4 25.6% 3.6 EBITDA 3.1 43.4% 54.4% 11.0pp EBITDA Margin 4.8 3.2 2.7 Financell Consumer Net Income 1 307.6 83.1 (73.0%) Loans Turkcell Contracted Net income in 2019 is impacted by swap m-t-m losses arising from declining 0.3 0.4 0.4 Receivables interest rates. Q3 18 Q2 19 Q3 19 PAYMENT SERVICES 3.0% cost of risk 2 96% penetration of TRY MILLION 9M 2018 9M 2019 YoY % loan insurance 3 144.0 175.1 21.6% Revenues EBITDA 108.4 128.1 18.1% 4.6Mn 3-month 1.4Bn TL transaction EBITDA Margin 75.3% 73.1% (2.2pp) active user of Paycell size in Q319 1 including the 57 mn TL and 45 mn TL dividend from Paycell in 9M18 and 9M19, 2 per IFRS 3 in the past one year 17 respectively

SOLID BALANCE SHEET SUMMARY NET DEBT/ EBITDA TRY Mn Q1 2019 Q2 2019 Q3 2019 Total Cash 1 11,118 10,687 10,975 1.3x 1.2x 46,079 45,608 45,515 Total Assets 3,641 3,215 1.0x Total Debt 22,867 22,062 20,675 TCF loan portfolio 2,724 1,410 1,577 1,544 Lease Obligations 0.9x 0.9x 17,102 17,331 17,431 Total Equity 0.7x Net Debt 2 8,108 6,975 11,749 11,375 9,700 8,160 Net Debt Net Debt 2 8,108 8,160 6,975 Q1 19 Q2 19 Q3 19 2 Net Debt/EBITDA Net Debt/EBITDA 1 Q119 figure includes proceeds from the Fintur transaction closed on April 2, 2019. 2 Excludes Turkcell Consumer Finance Company’s loan portfolio 18

FX EXPOSURE CASH 1 DEBT NET FX POSITION 2 Before Hedging After Hedging USD MILLION 8% 9% 11% 216 9% 207 155 17% 50% Share 32% 51% 72% 32% 10% (224) (255) Nominal 11.0Bn TL 20.7Bn TL Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 USD EUR TRY Other 1 Excluding FX swap transactions for TL borrowing. 2 Including advance payments, hedging and excluding FX swap transactions for TL borrowing. Derivatives (VIOP) and forward transactions are included. 19

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