Results for Third Quarter October 25, 2002

Transcription

1 1 Results for Third Quarter 2002 October 25, 2002

2 2 Notice The information contained in this document has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the company nor any of its respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

3 3 Overview of Operations Muzaffer Akpınar, CEO

4 4 Turkcell Today Retained leadership position in Turkish mobile market Subscriber base up by 7% to million by adding 1.05 million net new adds in Q3 Revenue up by 7% to $534.3 million in Q3 EBITDA before FX loss margin improved to 41.4% Net income reached $ 58.8 million Blended minutes of usage per subscriber increased by 7% to 61.7 Strong cash in hand $305.4 million Majority of year end targets will be achivable Aria Telsim Aycell TURKCELL Remained Market Leader * Competitor information based on various media reports. No official market share statistics are currently available

5 5 Background for Q Environment Industrial production and capacity utilization rates improved in Q GDP growth was positive for the second consecutive quarter Recovery in economy is observed but still fragile Political volatility due to elections still clouds operating environment Instability in the region brings further uncertainty to Turkey Depreciation of TL against USD lowered to 5% in Q3 2002, YTD depreciation reached 14.5% We remain cautious about Q and 2003

6 6 Maintained Leading Position in the Market Subscriber base grew in line with Q trends Preserved market position with customer focused organization Balanced market share and cost of acquiring new subscribers Maintained tariffs despite heigthened pricing competition initiated by one of the competitors Continue to monitor the competitors and environment Net New Subscribers Added (thousands) ARPU, SAC ($), Payback period (month) 1,090 1, Q Q Q Q Q ARPU (blended) SAC Payback period

7 7 Customer satisfaction through services Usage improvement achieved in line with expectations in Q Retention of subscribers on our network evidenced by stable churn rate Postpaid subscriber base (4.66 million) remained relatively stable for the last four quarters Stable contribution of value added services Best New Service award to GPRSLand at the World Communications Award Revenue Breakdown (%) Blended Minutes of Usage (min) Q Q Q Q Q Voice SMS & Data

8 8 Capital Expenditure and Network Quality Total capex & capex per sub (US$) 3,458 Drop rate : 0.77% Congestion : 0.15% ** 2001 Q Q Q Cumulative Capex (million US$) Cumulative Capex per Subscriber* Quality indicators such as drop rate and congestion rate remain satisfactory as per international measurements and better than our licence requirements Capital expenditure totaled $59.3 million for the first nine months of 2002 Additional $18.1 million spent for maintenance of the network and expensed in OPEX *Turkcell only ** Including Licence Current capex covers both capacity investments in radio network in selected areas and software upgrades for new services Capital expenditures for the year will be lower than the originally budgeted amount of $150 million and will total approximately $85 million

9 9 Regulatory Issues and Legal Environment No national roaming agreement reached and development is not expected soon unless a significant change in commercial terms occur No significant changes in pending legal issues Fintur restructuring transaction closed in August Cost based interconnect tariff regulation in the telecom sector is on the agenda of Telecom Authority No changes in Turkcell shareholder structure other than 8.4% of Pamukbank s direct and indirect stake that were transfered to Saving Deposit Insurance Fund

10 Overview of Financial Results 10

11 11 ARPU ARPU (Blended, quarterly, US$) ARPU by Subscriber Type (Quarterly, US$) Prepaid Postpaid Postpaid ARPU in Q increased in line with usage trends Prepaid ARPU in Q stayed stable Blended ARPU stayed stable in Q mainly due to increase in postpaid ARPU eliminating the dilutive impact of increasing prepaid subscribers in total subscriber base

12 12 P/L Highlights Revenue and Gross Margin (US$ millions,%) Pre-FX EBITDA and Margin (US$ millions, %) % 55% 40% 36% 41% Post-FX EBITDA and Margin (US$ millions, %) Net Income (US$ millions) % 33% 39% 6-27

13 13 Cost levels improved S & M Expenses (US$ millions) G & A Expenses (US$ millions) % 11% 8% 6% 5% 5% SAC (US$ per subscriber, quarterly) Direct Cost of Revenues (US$ millions) % % 65% % of revenue

14 14 Balance Sheet Hightlights CASH & CASH EQUIVALENTS SHORT TERM DEBT LONG TERM DEBT TOTAL DEBT ,336 1, ,609 1,480 1,397 NET DEBT TOTAL EQUITY 1,476 1,312 1,092 1,331 1,291 1,348

15 15 Cash flow (US$ $ millionsm illions) 2001 Q Q Q EBITDA Post FX Less: Capex Licence & Investments Interest Other Net Change in Debt Equity Cash Generated (197) (13) (21) (98) (208) (41) (53) (45) 85 9 (156) 152 (438) (68) (55) (83) (120) 47 (122) 137 Cash Balance

16 16 Financing Debt Repayment Schedule (US$ million) Principle Interest Total Covenants met and room for additional borrowing is approximately $1billion Required Actual Total Debt/EBITDA 3.50x 2.00x EBITDA/Interest 2.00x 6.56x Turkcell is still planning to meet its obligations mainly through its cash at hand and cash to be generated from operations Some of the interest rates on our outstanding local debt were lowered in line with market developments