TURKCELL INVESTOR PRESENTATION. November 2018

Transcription

1 TURKCELL INVESTOR PRESENTATION November

2 SNAPSHOT CONVERGED COMMUNICATION AND DIGITAL SERVICES PLAYER 8 COUNTRIES 50.3 MILLION TURKCELL GROUP SUBSCRIBERS 2.2 MILLION FIXED SUBSCRIBERS LISTED ON NYSE & BORSA ISTANBUL WITH A $5.1 BILLION MARKET CAP 1 SUBSCRIBER BREAKDOWN (m, Q318) Turkcell Turkey 37.8 Ukraine 10.1 Belarus TR Northern Cyprus lifecell Europe As of November 23, lifecell Europe GmbH operates in Germany under a marketing partnership agreement with Deutsche Telekom (DT). Its subscribers are owned by DT and are also included in the Turkcell Group subscriber figure 2 2

3 TRANSFORMING INTO THE DIGITAL OPERATOR OUR VISION TRANSFORMATION JOURNEY STARTED IN 2015 ORGANIZATIONAL TRANSFORMATION STATE-OF-THE-ART 4.5G DEPLOYMENT SALES CHANNEL TRANSFORMATION SHAPING TECHFIN IN TURKEY CONVERGENCE OF OTT SERVICES 3 3

4 3-YEAR GUIDANCE DELIVERED ONE YEAR AHEAD. New & higher 3-year guidance announced on March 14, 2018 Following the robust 9M 2018 performance, 2018 guidance is revised upwards on Oct 25, 2018 TURKCELL GROUP (Previous Guidance) 2017 Actual Performance Mar 2018 New (25 Oct) REVENUE GROWTH EBITDA MARGIN OP. CAPEX / SALES* 10% - 14% 32% - 35% 17% - 16% 23% Revenue Growth 35.3% EBITDA Margin 87% 4.5G Subs (G:55%) 2.2Mn TV+ Subs (G:2.0Mn) 2.2Bn Fizy Songs Streamed (G:800Mn) 14% - 16% 37% - 40% 18% - 16% 20% - 22% 39% - 41% 18% - 19% New guidance figures reflect the expected impacts of IFRS 9, IFRS 15 and IFRS 16. A positive 4-5pp impact is reflected in EBITDA margin guidance. * Excluding license 4 4

5 Q318 RESULTS PROVING OUR ROBUST BUSINESS MODEL TURKCELL STRENGTHS REFLECTION ON FINANCIALS Ability to create revenue from new & adjacent products Mobile triple play at 63.9%, up 13.5pp yoy Mobile ARPU growth at 18.0% Resilience at the operating profitability level Strong customer loyalty driven by digital services Growth momentum, 59% 2yr revenue increase 41.3% EBITDA Margin, 97% 2yr EBITDA increase Sector low monthly churn Enhanced offerings with digital services Sector leader at NPS by far Prudent financial risk management Hedging instruments in place FX impact under control Robust asset quality 5 5

6 Q115 Q215 Q315 Q415 Q116 Q216 THREE PILLARS OF OUR BUSINESS MODEL HEDGING Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 INFLATIONARY PRICING FX & INTEREST RATE HEDGING LIQUIDITY Key for sustaining growth & margins Secure ROI of projects & investments Reflecting costs to the prices Proven track record Keeping all cash in hard currency FX hedged for whole maturity, both on principal & interest of loans Converted variable to fixed interest Strong cash flow for capex needs Additional committed lines 1.5Bn USD cash covers principal & interest payments until 2020-end Turkcell ARPU vs. CPI Trend (Q115=100) TCELL ARPU (exl. M2M) CPI % Details of Financial Debt (After Hedging) 43% Local Currency FX 14% 86% Fixed interest Variable interest Principal & Interest Payments * (Million USD) , , FX Local Currency *Data of Turkcell Group companies, exluding TCF 6 6

7 SOLID BALANCE SHEET SUMMARY NET DEBT/ EBITDA TRY Mn Q Q Q Total Cash 4,590 7,081 8, x Total Assets 37,073 41,026 45,404 Total Debt * 14,002 17,313 21,969 Lease Obligations 1,128 1,136 1,086 Total Equity 14,248 14,952 14, x 1.49x 4,399 4, x 0.84x 4, x 8,430 TCF loan porfolio Net Debt** Net Debt * 9,413 10,231 13,220 5,014 5,541 Net Debt ** 5,014 5,541 8,430 Q118 Q218 Q318 Net Debt/EBITDA* Net Debt/EBITDA** * Impact of IFRS 16 (capitalised lease obligations) are excluded **Turkcell Consumer Finance Company s (TCF) loan portfolio and capitalized lease obligations related to IFRS 16 are excluded 7 7

8 CONSUMER FINANCE BUSINESS TCF KEY FINANCIALS * TRY MILLION Q YoY % 9M 2018 YoY % Revenues % % Net Income % % TCF Loan Portfolio details 4.7Mn loans outstanding 1,580 TL average ticket size 91 TL average monthly installment Loan protection insurance on over 95% recently Cost of risk remains stable at 2.2% at September 2018 Handset Financing (TRY billion) Q317 Q218 Q318 Turkcell Contracted Receivables TCF Consumer Loans 300Mn TL of Asset Backed Securities were issued to date *Turkcell Consumer Finance Company (TCF) 9 month net income includes 30 mn TL and 57 mn TL dividend from Paycell retained earnings in Q217 and Q218, respectively New Financing Regulation What has changed? Financing for telecom devices is limited to 6 months Installments are restricted industry-wide at all channels What we expect? Room for ARPU uplift Demand will shift towards mid-segment SPs Consumers will adjust their own budgets 8 8

9 MAJOR FUNDING & HEDGING DETAILS TYPE & DATE AMOUNT MATURITY INTEREST PURPOSE OF FUNDING UTILIZATION HEDGING DETAILS Club Loan (September 2015) US$500Mn EUR445Mn 2-year grace period, 5-year maturity 3-month LIBOR/ EURIBOR % CAPEX and inorganic growth opportunities Fully utilized in Jun 16 80% hedged with PCCS - Bond (October 2015) US$500Mn 15/10/ % (fixed rate) CAPEX and inorganic growth opportunities - - China Development Bank (October 2015) EUR500Mn EUR750Mn 3-year grace period, 10-year maturity EURIBOR % Debt restructuring CAPEX Fully utilized in Oct 15 ~EUR 120 Mn utilized as of September % hedged with PCCS ~86% hedged with PCCS &CCS Bond (April 2018) US$500Mn 11/04/ % (fixed rate) Repayment of existing indebtedness

10 FX EXPOSURE Share Nominal CASH * 23% 77% 8.7Bn TL * Excluding FX swap transactions for TL borrowing Before Hedging 9% 6% 36% 49% DEBT 23.1Bn TL USD EUR TRY Other IMPACT OF HEDGING TOOLS ON Q318 FX LOSS TRY MILLION After Hedging 52% 5% 30% 13% NET FX POSITION* USD MILLION Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 (125) (688) (91) (144) (203) (204) (255) (301) (330) Comfort Zone (USD 500Mn) 4,291 FX Loss from FX Denominated Liabilities 1,580 FX Gain from FX Denominated Assets 2,711 FX Loss 1,994 Hedge Portfolio Gain Note: In accordance with the IFRS 9, hedge accounting is applied as of July 1, Net FX Loss *Including advance payments, hedging and assuming the 4.5G license payables in TRY 10 for the periods before April 2017 and excluding FX swap transactions for TL borrowing. 10

11 FINTUR UPDATE Decided to exit with Telia Company in Q416 Classified as «assets held for sale» on balance sheet Already divested Geocell & Azercell in Q118 Kcell & Moldcell sale processes are on-going Moldcell KCell Geocell Azercell 11 11

12 Q318 RESULTS 12

13 THIRD QUARTER HIGHLIGHTS FINANCIAL Record top line at 5.8 bn TL, up 26.1% yoy, 59% 2yr growth EBITDA Margin at 41.3% FY18 Revenue & EBITDA guidance revised upwards Second installment of dividend distributed OPERATIONAL Record high mobile ARPU growth of 18% 4.5G user data usage reached 7GB 18.2Mn 4.5G compatible smartphones 130Mn core digital services * downloaded, +16Mn qoq Revenue and EBITDA Margin Mobile Triple Play Multiplay with TV 33.3% 33.9% 34.5% 33.8% 35.5% 37.3% 4,597 4,666 4,762 4,044 4,053 4,316 3, % 41.8% 41.3% 5,799 5,105 2,393 2,022 2,134 1,218 1,371 1,400 1,457 1,632 1, % 63.9% 46.8% 47.5% 42.3% 50.4% Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Revenue (Mn TL) EBITDA (Mn TL) EBITDA Margin (%) Q317 Q417 Q118 Q218 Q318 Q317 Q417 Q118 Q218 Q318 * 13 Includes BiP, Dergilik, fizy, My Account, Lifebox, Academy, Sports app, Upcall, TV+, Yaani and SİM 13

14 TURKCELL GROUP FINANCIAL HIGHLIGHTS Consolidated TRY Million 1 Q QoQ % YoY % 9M 2018 YoY % Revenue 5, % 26.1% 15, % EBITDA 2, % 46.6% 6, % EBITDA Margin 41.3% (0.5pp) 5.8pp 41.8% 7.2pp Net Income 241 (41.8%) (59.8%) 1,157 (34.4%) Op.Capex/Sales % (4.1pp) (0.9pp) 16.0% 0.3pp 59% two-year cumulative revenue growth Almost doubling EBITDA in 2 years Op.Capex/Sales at 16%, in line with the plan 1 TRY figures are based on IFRS. 2 Excluding license fees Two-year Cumulative Growth Rates 102% 107% 97% 64% 51% 46% 41% 36% 40% 37% 40% 48% 52% 59% Q117 Q217 Q317 Q417 Q118 Q218 Q318 Revenue EBITDA 14 14

15 OPERATIONAL HIGHLIGHTS TURKEY SUBSCRIBERS (million) 54% of total mobile Total Turkey subscribers 37.8 mn 591K net add YoY ARPU (TL) Q316 Q317 Q318 Fixed Residential Mobile Blended (excl. M2M) * The ARPU of customers who have stayed with Turkcell for at least 14 months. 18.1% Mobile ARPU like-for-like Growth YoY* MONTHLY AVERAGE MOBILE CHURN RATE YoY 3.4% 18.0% YoY Net add QoQ Postpaid Prepaid Fiber ADSL TV 191K 63K 43K 1K 22K 2.2% 1.9% 2.2% 0.4pp lower than competitors average in Q317-Q218** YoY 654K 353K 175K - 115K Q316 Q317 Q318 Note: TV subscribers include 2.5 million of «OTT only» customers and it is excluded from net add & total subs Note: Average monthly churn during the related quarter. ** Company calculation on the basis of monthly churn rates disclosed in ICTA sector reports

16 INCREASING APPRECIATION OF CUSTOMERS NET PROMOTER SCORE * OVER COMPETITION Turkcell Score Turkcell Score SUPERIOR 4.5G QUALITY & SPEED PIONEER CAMPAIGNS Q118 Q218 Q318 Points over next best Points over third best #1 in NPS reflecting superior overall customer satisfaction Continued to widen the gap in the third quarter *NPS score comparison is for consumer segment in mobile. (Source: Future Bright) DIGITAL SERVICES PORTFOLIO ENHANCED SHOPPING EXPERIENCE 16 16

17 CONTINUED RISE IN DATA USAGE MOBILE DATA USAGE (Av. GB/User) 4.5G SUBSCRIPTION (million) Lifecell user 8.6 GB Q316 Q317 Q318 Non 4.5G Users 4.5G Users Total Users Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q G subscribers 4.5G compatible smartphone 4.5G users are driving data usage, >2x consumption vs. non 4.5G users Significant room for further 4.5G adoption Smartphone penetration in our network reached 74% 79% of these are 4.5G compatible; +11pp yoy Vestel Venus Go General Mobile GM8 Huawei P9 Lite Mini Samsung Galaxy J7 Core 17 17

18 INCREASING MULTIPLAY MOBILE* (TRIPLE PLAY«3P») 50.4% 60.5% 63.9% MOBILE MULTIPLAY TRIPLE PLAY SHARE IN MOBILE REVENUE 69% 77% 80% 11pp YoY FIBER RESIDENTIAL (MULTIPLAY WITH TV) Q317 Q218 Q % 47.5% 42.3% Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q *Share of mobile voice line users which excludes subscribers who do not use their line in the last 3 months. Triple Play refers to mobile customers who use voice, data and one of core digital services.

19 INTERACT, READ, LISTEN, WATCH, STORE & SEARCH Download* INSTANT MESSAGING DIGITAL PUBLISHING** MUSIC TV PERSONAL CLOUD (lifebox) MY ACCOUNT (Hesabım) PAYCELL*** FAST LOGIN 30.3Mn 7.8Mn 19.2Mn 10.1Mn 8.6Mn 35.1Mn 6.5Mn 2.0Mn 12.2Mn registered user 3-Month Active User 9.7Mn 13.0Mn 3.2Mn 2.3Mn 2.0Mn 18.6Mn 2.6Mn 4.8Mn 5.7Mn Service KPI s 114Mn messages per day 2Mn digitized call experience per day 189K copies read per day 7.8Mn songs streamed per day 2.6Mn TV sessions per day 36 docs uploaded per person per day 32% more ARPU 1.8Mn search per day 1.5Bn TL transaction 182 Mn logins up to date *Refers to downloads as of October 22, 2018 ** 3-MAU includes users who utilised the zero rating benefit of Dergilik magazines and newspapers via browser. *** Transactions include subsidiary revenues

20 LIFECELL: FULLY DIGITAL WITH FREEDOM OF CHOICE SUBSCRIBERS (thousand) 2x 1, Mn as of Oct 18 55% of postpaid Lifecell acquisitions are new customers 195 2x Q417 Q118 Q218 Q TL ARPU (1.3x of Turkcell consumer) 8.6 GB av. data usage of a Lifecell user 1.4% churn rate (~40% lower vs. Turkcell consumer) Note: Average monthly churn during the related quarter

21 BiP IN GLOBAL MARKETS BiP Global Download Trend (Million) Downloads - Top 6 Countries (Thousands) As of Q318 Ukraine 652 Saudi Arabia 243 Germany 188 UAE 169 Belarus 160 Q417 Q118 Q218 Q318 TRNC 134 Times Square NYC on September 26 th! Global focus on our digital services via Lifecell Ventures Aim to reach 25 million global downloads 21 21

22 PAYCELL: DIGITAL PAYMENT COMPANION 1.5Bn TL transaction in Q318* PAYCELL Direct Carrier Billing 4.8Mn Mobile Payment users PAYCELL APP Mobile wallet Paycell top-ups Utility payments Money transfer QR code payment 2.0Mn downloads 1.9Mn Registered credit cards Paycell launch campaign PAYCELL CARD 440K users Available at: and counting * Transactions include subsidiary revenues 22 22

23 EXPANDING DIGITAL VALUE PROPOSITION TRAFFIC MANAGEMENT SECURE LOG-IN CONTENT SEAMLESS PAYMENT CUSTOMER SERVICE E-Commerce Market Turkey Paycell Market Volume Share (2020E) 10% New Users (2020E) 4 Mn 23 23

24 GAMING BUSINESS Attractive gaming market * in Turkey 31Mn gamers USD774 Mn market Aim to create the largest gaming brand in Turkey Segmented approach Value proposition for gaming Subscription based business model * Source: Market Report, Newzoo, 2017 Umbrella platform New interface 2.1Mn 3-months active users in Q3 Safe zone for kids up to age 12 Available in web & mobile 7.1Mn 3-month active users in Q3 Coming soon for age 12+ TavlaGO (Backgammon) Multiplayer online game 162K cumulative download App used 41 minutes per day 24 24

25 TURKCELL INTERNATIONAL HIGHLIGHTS TRY MILLION 1 Q YoY% 9M 2018 YoY % YoY Revenue Growth (Q318, in TRY) lifecell 62.6% EBITDA Margin (Q318) 41.8% Leader in 4.5G ARPU Revenue % 1, % EBITDA % % EBITDA Margin 35.5% 8.6pp 35.3% 9.7pp BeST 61.6% Kuzey Kıbrıs Turkcell 12.0% 16.1% 35.0% 4G growth on track Offering fixed broadband lifecell Europe 223K subscribers 1 TRY figures are based on IFRS 25 25

26 APPENDIX - Network Dynamics - New Opportunities - International Business - Regulatory - Currency Trends 26

27 FREQUENCIES BEFORE AND AFTER 4.5G TENDER 0.3 TOTAL FREQUENCY AFTER TENDER MHz MHz AWARDED FREQUENCY IN TENDER MHz TOTAL FREQUENCY BEFORE TENDER Turkcell Vodafone Türk Telekom Price / MHz / Population in Turkey: 0.12 per MHz per sub cost 27 27

28 FREQUENCY BANDS AFTER 4.5G TENDER MHz 4.5G main coverage layer 900 MHz 1800 MHz 2100 MHz 2600 MHz 2G/3G coverage and voice layer Main layer for 4.5G Terminal support, capacity and coverage layer Mobile broadband layer for 3G 4.5G usage for mid/long term 4.5G capacity boost layer for hot spots MHz MHz MHz Turkcell Vodafone Türk Telekom Price / MHz / Population in Turkey: 0.12 per MHz per sub cost 28 28

29 FASTEST & BEST & WIDEST SPEED QUALITY COVERAGE SPEED QUALITY COVERAGE 1,200 Mbps 4x4 4x4 MIMO all network 2018 Carrier Aggregation all network The Best Experts 2G 3G 4.5G > 99.5% > 97% > 90% * Source: MIMO: Multi Input Multi Output 29 29

30 DIFFERENTIATED THROUGH QUALITY DL T.put (Mbps) UL T.put (Mbps) Latency (msec) MONTHLY TRENDS (2017) Turkcell Operator-2 Operator Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec up to 3x faster in Downlink up to 10 ms lower Latency up to 2x faster in Uplink Source: Ookla, December

31 5G: MORE THAN HIGHER SPEED embb 10x Faster Data Rate 5G 10x 100x Lower Latency Higher Capacity emtc URLLC

32 5G: ROADMAP We do not worry about 5G You should not worry either Investment based on use cases Widest spectrum MHz SW upgradable 32 32

33 POTENTIAL GROWTH AREAS FOR TURKCELL ENERGY & TRANSPORTATION Smart home, city, transportation & energy solutions, connected car Turkcell Energy Member of Joint Initiative Group in «Turkey s Automobile Project» EDUCATION Offering education services nationally to a wide range of customer groups Turkcell Academy Hello Hope (Syrian customers) Sign Language HEALTH End-to-end «Hospital Information Management Systems» infrastructure and operation services 5 projects Leader in terms of # of beds Strong pipeline of new projects 33 33

34 FIXED BROADBAND MARKET TURKISH FIXED BROADBAND MARKET 12.7 mn Total Subscribers 15.7% Penetration FIBER SUBSCRIBER MARKET SHARE Q218 3 major Operators FIXED BROADBAND MARKET BY TECHNOLOGY (MN) CAGR 14.7% % % 10.2% 12.1% 11.5% 11.0% % % 50% Incumbent 46% Other players 4% xdsl Fiber Cable Penetration Note: Company calculation based on data in ICTA Q218 Report 34 34

35 TURKCELL SUPERONLINE NEW BUSINESS MODEL ON FIXED INFRASTRUCTURE Infrastructure sharing protocol signed by Turkcell, Türk Telekom, Vodafone TR, Türksat and Telkoder in May Bilateral agreements to follow: 3.6Mn additional homepass through Türksat and potential for more FIBER CUSTOMERS thousand 899 1,044 1,204 1,331 Fiber market share (%) 50% Sep 2018 NET REVENUE TREND A new capex model on fixed business TRY Mn 1,719 Turkcell Superonline Fiber Backbone 2,429 3,210 3,026 37% 42.6 thousand km rollout 19 cities Data speed up to 10Gbps 41% take up rate CAGR M EBITDA TREND TRY Mn ,276 1,376 CAGR % M 35 35

36 SUCCESSFUL IPTV SERVICES IP TV Subscriber Market Share 1 As of Q218 D-Smart 14% CableTV 18% 8% Tivibu 21% Digitürk (bein) 38% 1 Source: ICTA Q218 Report 2 Includes IP TV and OTT TV 3.1 million Turkcell TV+ subscriber 2 in Q

37 GLOBAL TOWER Turkey 8,288 NET REVENUE TREND TRY mn Tower portfolio: 10,337 Ukraine Belarus 1, E 2019E 2020E CAGR %-20% TRNC 115 TENANCY RATIO First and only TowerCo of Turkey Regional player operating in 4 countries Long term, visible revenue stream & strong profitability Listing still on the agenda E 2019E 2020E Medium Term 1.8x-1.9x Note: Tower portfolio includes owned and managed towers and towers for which contract management services are provided 37 37

38 CAPEX/SALES TREND 25% Turkcell Group Average: 17.1%* EEMEA Average: 18.0% Between 2007 and % 15% 10% 5% 0% Turkcell Group EEMEA Source: Bloomberg Industry Data and company announcements *Excluding licence fees 38 38

39 OPERATIONS IN UKRAINE UKRAINE MOBILE MARKET FACTS * lifecell PERFORMANCE 55.5m 131% Total Mobile subscribers Penetration 3 Operators UAH MILLION Q318 YoY% FY17 YoY% Revenue 1, % 4, % EBITDA % 1,327 (2.2%) EBITDA Margin 44.6% 14.9pp 27.2% (0.8pp) Ownership 100% Turkcell Ownership 100% VEON Ownership 51% JSFC Sistema 49% Free Float *Source: Global Wireless Matrix Q118 ** MTS Ukraine changed its legal name to Vodafone Ukraine with a marketing agreement ** HIGHLIGHTS Operational performance: 7.6 million subscribers in Q318 (3 months active) with UAH 59 ARPU (up 17.7% yoy) 4.2 million 3-month active 3G and 4.5G data users 73% SP penetration (market leader) Expanding digital services footprint with fizy, lifebox, magazines and TV+ First to launch 4G services in Ukraine Launched 4.5G services on the 1800 MHz frequency on Jul

40 UKRAINE: MOBILE MARKET PERFORMANCE MARKET SHARE Subscriber* 47.3% 47.7% 48.0% 48.3% 48.6% 37.6% 37.5% 37.6% 37.7% 37.2% 15.1% 14.8% 14.4% 14.0% 14.2% FINANCIALS Mobile Revenue Growth (in UAH) (YoY) lifecell VDF Kyivstar 15% 10% 11% 11% 12% 8% 1% 2% 9% 4% -3% 7% Q217 Q317 Q417 Q118 Q218 (*) 3 month active subscribers Q317 Q417 Q118 Q218 Q318 Mobile Revenue 48.0% 48.9% 47.5% 49.1% 48.9% 37.1% 35.9% 37.5% 35.9% 36.3% 14.9% 15.2% 15.0% 15.0% 14.8% EBITDA Margin (%) 58.0% 54.4% 56.7% 52.7% 41.4% 43.7% 41.8% 29.7% 26.1% 55.1% 54.9% 44.2% 44.6% Q217 Q317 Q417 Q118 Q218 Q317 Q417 Q118 Q218 Q318 Source: Company announcements. Note: lifecell Q118 and Q218 EBITDA margin includes new IFRS impacts (IFRS 9, 15 and 16) 40 40

41 OPERATIONS IN BELARUS BELARUS MOBILE MARKET FACTS* BeST PERFORMANCE 11.4m Total subscribers 121% Mobile Penetration 3 Operators BYN MILLION Q318 YoY% FY17 YoY% Revenue % % EBITDA % % EBITDA Margin 17.1% 10.6pp 3.8% (0.2pp) HIGHLIGHTS Ownership 80% Turkcell 20% Belarusian State Ownership 51% Belarusian State 49% MTS Ownership 100% Telekom Austria 1.2 million 3 month-active subscribers in Q318 4G services since September 2017 Expanding digital services footprints *Source: Company calculation based on Q118 New gaming platform for kids in Q

42 BELARUS: MOBILE MARKET PERFORMANCE MARKET SHARE FINANCIALS LIFE:) VELCOM MTS Subscriber* 10.8% 42.7% 46.5% MTS VELCOM LIFE :) Mobile Revenue Growth (in BYN) (YoY) 22% 13% 19% 18% 18% 22% 20% 15% 21% 11% 16% 11% 8% 8% (*) 3 month active subscribers Q317 Q417 Q118 Q218 Q318 Revenue LIFE :) EBITDA Margin Trend* 48.9% 6.4% 44.6% MTS VELCOM LIFE :) 7.0% 6.0% 18.2% 14.4% 17.1% Source: Company announcements (Q218). Q317 Q417 Q118 Q218 Q318 Source: Company announcements. Note: life :) Q118 and Q218 EBITDA margin includes impacts of IFRS 9, 15 and

43 TAXATION IN TURKEY TAX MOBILE FIXED Special Communication Tax (SCT) 7.5% 7.5% 70% TURKEY HAS THE WORLD S HIGHEST MOBILE SERVICE TAXES 3 VAT 18% 18% 60% Treasury Share 1 15% 1% 50% TRX fees 5% (of net sales) - 40% Contribution Share to Telecom Authority 0.35% 0.35% 30% New subscription SCT 2 (at first enrollment) TRY % Wireless license fees (per acquisition) Wireless usage fees (annual) TRY TRY % Turkey Hungary Jordan UK Croatia Greece Italy Spain Egypt 1 Under the license agreement Turkcell pays a treasury share equal to 15% of its gross revenue from Turkish GSM operations 2 Excluding M2M SIMs 3 GSMA/Turkey Report,

44 MOBILE/SMS TERMINATION RATES IN TURKEY MTR RATES TRYkr. Mobile Voice Rates SMS Rates OLD Since 2013 Asymmetry OLD Since 2013 Asymmetry Turkcell Vodafone TR % TTKOM % % TRY kuruş per min EVOLUTION OF MTR Turkcell MTR is 1.8x below EU MTR -Turkcell Europe-MTR MTR: Mobile Termination Rate Source: BEREC July 2017 report 44 44

45 CURRENCY TRENDS USD / TRY 5.99 EUR / TRY Average Period-End Q18 USD / BYN Q18 USD / UAH Q Q

46 NOTICE This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of This includes, in particular, our targets for revenue, EBITDA and capex in 2018 or for the medium term 2018 to More generally, all statements other than statements of historical facts included in this presentation, including, without limitation, certain statements regarding the launch and goals of our payment card business, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the written or oral use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and guidance. 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 2017 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

47 THANK YOU For further information please or call Turkcell Investor Relations at ( ) Please download our IR App via here for ios and here for Android mobile devices or via below QR codes. For Android For ios 47