TURKCELL GROUP. Q4 & FY 2016 February 15, 2017

Transcription

1 TURKCELL GROUP Q4 & FY 2016 February 15,

2 BUSINESS OVERVIEW Kaan Terzioğlu Turkcell CEO 2

3 TURKCELL GROUP FOURTH QUARTER HIGHLIGHTS 291K Highest mobile net add since mn Fiber customers exceeded 1 million 1.1mn TV subscribers exceeded 1 million 44mn Core digital services downloaded 94% Data & Services revenue growth record mobile ARPU at 30.9 TRY with record 18% yoy growth record Group revenue growth of 21.3% since 2007 record Group EBITDA growth of 29.6% since Note: Figures represent Turkcell Turkey figures, except revenue, EBITDA and digital services. ARPU is blended mobile excluding M2M subscribers

4 TURKCELL GROUP STRONG EXECUTION IN 2016 REVENUE GROWTH EBITDA MARGIN OP.CAPEX / SALES* GUIDANCE DELIVERED 2016 INITIAL GUIDANCE Turkey 8-10% Group 8-10% 31% - 33% 2016 REVISED GUIDANCE Turkey 10-12% Group 10-12% 32% - 33% ACTUAL Turkey 11.4% Group 11.9% 32.3% ~20% ~22-24% 23.0% 2016 RECAP 4.5G launch in April; population coverage reaching 82.5%, customers reaching 23 mn Triple-play share of mobile customers reaching 42%, multi-play with TV at 36% Consumer Finance Co. started in March; reached loan portfolio of 2.4 bn TL First step towards Turkey s fiber joint infrastructure company 4 *Excluding licence fees

5 TURKCELL GROUP FINANCIAL HIGHLIGHTS Consolidated TRY Million 1 Q QUARTER Growth YoY % Revenue 4, % EBITDA 1, % EBITDA Margin 33.9% 2.2pp Net Income- Proforma % Net Income- IFRS 351 (40.0%) Op.Capex/Sales % 0.6pp YEAR FY 2016 Growth YoY % 14, % 4, % 32.3% (0.1pp) 2, % 1,492 (27.8%) 23.0% 2.7pp Record full year revenue and EBITDA, both at the Turkcell Turkey and Group level Fintur is classified as discontinued operations as of October TRY figures are based on IFRS TRY figures 2 Net income excluding FX gain / (loss) (including tax and minority impact), interest Income on time deposits of Turkcell Iletisim Hizmetleri, interest expense on loans & borrowings, impact of Fintur, 4.5G license amortization and one-off items. 3 Excluding licence fees

6 TURKCELL TURKEY FINANCIAL HIGHLIGHTS TRY Million 1 Q QUARTER Growth YoY % Revenue 3, % EBITDA 1, % EBITDA Margin 34.3% 2.4pp Net Income- Proforma % Net Income- IFRS 386 (25.5%) YEAR FY 2016 Growth YoY % 12, % 4, % 32.5% (0.2pp) 2, % 1,480 (40.4%) Turkcell Turkey y-o-y revenue growth including financial services is 22.3% in 4Q16 and 13.0% in FY16 Excluding emergency packages, Turkcell Turkey revenue growth would be 11.9%, EBITDA margin would be 32.9% Successful acceleration of 4.5G investments 6 1 TRY figures are based on IFRS TRY figures, do not include contribution from information and entertainment services, call center and financial services 2 Net income excluding FX gain / (loss) (including tax and minority impact), interest Income on time deposits of Turkcell Iletisim Hizmetleri, interest expense on loans & borrowings, 4.5G license amortization and one-off items.

7 TURKCELL GROUP REVENUE DRIVERS TURKCELL TURKEY 88% TRY MILLION 19.3% YoY 2, ,576 TURKCELL INTERNATIONAL 6% 12.4% YoY OTHER BUSINESSES 5% 91.1% YoY 7 % in Turkcell Group Q416 Revenue Turkcell Turkey Revenue Q415 Δ in Consumer Δ in Corporate Δ in Wholesale Turkcell Turkey Revenue Q416

8 TURKCELL TURKEY OUR SUBSCRIBER BASE MOBILE SUBS (mn) FIXED SUBS (th) 1, TV SUBS (th) % 53% QoQ QoQ Q415 Q416 Q415 Q416 Q415 Q416 Postpaid Prepaid Postpaid (%) ADSL Fiber IP TV & OTT TV OTT TV only Postpaid 333K ADSL 95K IP TV & OTT TV 37K Prepaid 41K Fiber 52K OTT TV only 111K

9 TURKCELL TURKEY DIFFERENTIATED THROUGH QUALITY MOBILE BROADBAND DOWNLOAD SPEED Mbps Turkcell Turk Telekom MOBILE CHURN RATE 7.9% 7.5% 8.0% 6.3% 5.6% 2.3pp YoY Vodafone Q415 Q116 Q216 Q316 Q416 FIXED BROADBAND DOWNLOAD SPEED Mbps Turkcell MOST RECOMMENDED OPERATOR (NPS*) Vodafone Turk Telekom Source: Speedtest Intelligence Turkey Market Report, OOKLA, December 21, 2016 Q415 Q116 Q216 Q316 Q416 Turkcell Competitor A Competitior B *Depending on Net Promoter Score of Consumers by Ipsos

10 TURKCELL TURKEY GROWTH DRIVERS 13% MOBILE DATA TRY MILLION 1,430 1, Q415 Q316 Q416 89% YoY 63% 94.1% YoY Total TRY 2.2 bn 24% FIXED DATA TRY MILLION Q415 Q316 Q416 27% YoY 10 Mobile Data Fixed Data Digital Services DIGITAL SERVICES TRY MILLION Q415 Q316 Q % YoY

11 TURKCELL TURKEY MAJOR UPSURGE IN MULTIPLAY MOBILE* (Subscriber Breakdown) FIBER RESIDENTIAL (Subscriber Breakdown) 41% 42% 44% 17% 28% 28% 42% 31% 27% 25pp YoY 28% 46% 26% 34% 32% 34% 36% 30% 34% 10pp YoY Q415 Q316 Q416 Single Play Double Play Triple Play Q415 Q316 Q416 Single Play Double Play Multiplay with TV 11 *Breakdown among mobile voice users which excludes subscribers who do not use their line in the last 3 months

12 TURKCELL GROUP CONSISTENT GROWTH IN CORE DIGITAL SERVICES 11.7M INSTANT MESSAGING 2.5M MOBILE TURKCELL TV+ TOTAL CORE DIGITAL SERVICE DOWNLOADS (Million)) 8.3M 15.0M MUSIC MY ACCOUNT 3.8M 3.1M PERSONAL CLOUD SPORTS M TURKCELL ACADEMY 1.0M DIGITAL PUBLISHING Q415 Q116 Q216 Q316 Q416 Feb' Refers to downloads as of February 2017

13 TURKCELL GROUP TV HIGHLIGHTS OTT TV* and IP TV (Thousand) Rich TV Content Sports (UK Premier League, NBA TV, Eurosport 1&2, Bundesliga, Formula 1) Documentary (Discovery, Discovery Science, Animal Planet) Local TV channels Q415 Q116 Q216 Q316 Q416 IP TV & OTT TV customers OTT TV only customers TV USERS EXCEEDED 1 MILLION Turkcell users mobile TV watching duration increased to 34 min from 7 min. 13 *OTT refers to TV subscribers on mobile device, computer, tablet etc

14 TURKCELL TURKEY ARPU ACCELERATION SINCE Q2 52% 55% SMARTPHONE 60% 62% 64% Q415 Q116 Q216 Q316 Q416 Number (million) Penetration MOBILE DATA USAGE (Av. GB/User) 12pp YoY MOBILE ARPU* TREND Higher smartphone penetration, upsell strategy and 4.5G data usage boosted ARPU since Q TRY GB in Dec Q415 Q116 Q216 Q316 Q416 Total Users 4.5G Users *Mobile Blended ARPU (excl.m2m)

15 TURKCELL GROUP TURKCELL INTERNATIONAL HIGHLIGHTS TRY MILLION 1 Q4 16 YoY Growth FY 16 YoY Growth Revenue % % EBITDA % 235 (4.3%) EBITDA Margin 27.2% (3.0pp) 26.9% (1.8pp) lifecell 13.4% BeST in UAH 14.2% in BYN Kuzey Kıbrıs Turkcell 6.9% in TRY 27.6% 6.1% 34.4% Highest Quarter Revenue Positive trend in EBITDA Digital Brand «lifecell» 15 1 TRY figures are based on IFRS TRY figures Q416 YoY Revenue Growth Q416 EBITDA Margin

16 TURKCELL GROUP 2017 GUIDANCE GUIDANCE MIDTERM TARGET ( ) REVENUE GROWTH 12% 13% - 15% 12% - 14% EBITDA MARGIN 32.3% 32% - 34% 33% - 35% OP.CAPEX / SALES* 23.0% ~20% ~16% (in 2019) 16 * Excluding license fees

17 FINANCIAL OVERVIEW Bülent Aksu Turkcell CFO 17

18 TURKCELL GROUP REVENUE QUARTER FULL YEAR TRY MILLION ,044 TRY MILLION 12,769 1, ,286 3, % 11.9% Revenue Q415 Δ Turkcell Δ Turkcell Turkey International ΔTCF* Δ Other Subsidiaries Revenue Q416 Revenue FY15 Δ Turkcell Turkey Δ Turkcell International Δ TCF* Δ Other Subsidiaries Revenue FY16 18 * Turkcell Consumer Finance Company

19 TURKCELL GROUP EBITDA & EBITDA MARGIN QUARTER FULL YEAR TRY MILLION TRY MILLION 709 (386) (24) 14 1,371 4,141 1,516 (932) (97) (9) 4,620 1,058 Margin 31.7% 29.6% Margin 33.9% Margin 32.4% 11.6% Margin 32.3% EBITDA Q415 Δ in Revenues Δ in Direct cost of revenues* Δ in G&A exp. Δ in S&M exp. EBITDA Q416 EBITDA FY15 Δ in Revenues Δ in Direct cost of revenues* Δ in G&A exp. Δ in S&M exp. EBITDA FY16 19 * Excluding depreciation and amortization

20 TURKCELL GROUP NET INCOME DEVELOPMENT Q415 vs. Q416 TRY MILLION (143) (253) (2) (23) FY15 vs. FY16 TRY MILLION 2,068 (57) (120) (410) (9) 244 (224) 2,522 1,492 Net income-ifrs Δ in EBIT Δ in Interest Inc./Exp. Δ in Fintur Δ in FX Gain/Loss Δ in Taxation Δ in Other Inc/Exp. Net income-ifrs Net Income- Proforma FX/Gain loss includes impact of fair market value change and net interest income/expense of swap contracts. 2 Net income excluding FX gain / (loss) (including tax and minority impact), interest Income on time deposits of Turkcell Iletisim Hizmetleri, interest expense on loans & borrowings, impact of Fintur, 4.5G license amortization and one-off items.

21 TURKCELL GROUP SOLID BALANCE SHEET SUMMARY NET DEBT/ EBITDA TRY MILLION Q Q Q Total Cash 2,919 5,646 6,052 Total Assets 26,207 30,230 31,600 Total Debt 4,214 8,132 9,781 Net Debt 1,295 2,485 3,729 1, x 3 «investment grade» 2, x 3, x 0.5x Total Equity 14,419 15,445 16,068 Q Q Q Net Debt (TRY mn) Net Debt/EBITDA Net Debt (w/o 4.5G license fee payment) /EBITDA 21

22 TURKCELL GROUP FX EXPOSURE CASH DEBT NET FX POSITION* (million USD) Before Hedging After Hedging Q415 Q116 Q216 Q316 Q416 30% 70% 25% 75% 53% ~70% 47% (1,979) (1,987) (1,239) (688) (125) FX position minimized FX Local Currency 22 * Including advance payments, hedging, and assuming the remaining 4.5G license payment in TRY

23 FINTUR DISCONTINUED OPERATIONS Fintur has operations in Azerbaijan, Kazakhstan, Moldova and Georgia, and Turkcell holds 41.45% stake in the company. We believe that an exit from Fintur is highly probable within one year and therefore classified as asset held for sale and reported as discontinued operations as of October Going forward P&L will not be impacted from Fintur results Moldcell KCell Geocell Azercell 23

24 NOTICE This presentation may contain statements that are forward looking. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2015 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this presentation, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this presentation or any other written or oral information made available to any interested party or its advisers. Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified. In the charts or tables used in this presentation totals may not foot due to rounding differences. The figures used in this presentation are rounded while percentage changes are calculated based on the figures disclosed in the press release. 24

25 THANK YOU For further information please or call Turkcell Investor Relations at ( ) Have you downloaded Turkcell IR app? For Android For ios 25

26 26 APPENDIX

27 Summary Income Statement As Per CMB 1 Financials (TRY MILLION) Summary income statement Q Q YoY (%) YoY (%) Revenue 3,334 4,044 21% 12,769 14,286 12% Direct Cost of Revenues 2 (2,054) (2,608) 27% (7,767) (9,219) 19% S&M (493) (479) (3%) (1,902) (1,911) 0% G&A (166) (190) 15% (625) (722) 15% EBITDA 1,058 1,371 30% 4,141 4,620 12% EBITDA Margin 31.7% 33.9% 2.2pp 32.4% 32.3% (0.1pp) Net Income (40%) 2,070 1,512 (27%) 27 1 Capital Markets Board of Turkey 2 Depreciation and amortization is included

28 Consolidated Balance Sheet (TRY MILLION) Consolidated Balance Sheet (TRY mn) YoY(%) Cash & Bank 2,919 6, % CURRENT ASSETS 8,795 13,351 52% TOTAL NON-CURRENT ASSETS 17,412 18,249 5% TOTAL ASSETS 26,207 31,600 21% S/T Debt 726 2, % TOTAL CURRENT LIABILITIES 6,304 7,359 17% L/T Debt 3,488 6,935 99% TOTAL NON-CURRENT LIABILITIES 5,484 8,173 49% MINORITY INTEREST (11%) SHARE CAPITAL 2,200 2,200 0% TOTAL EQUITY 14,419 16,068 11% TOTAL EQUITY AND LIABILITIES 26,207 31,600 21% 28

29 Currency Trends USD / TRY USD / BYN EUR / TRY Average Period-End USD / UAH