TURKCELL GROUP. Q July 27, 2017

Transcription

1 TURKCELL GROUP Q July 27, 2017

2 BUSINESS OVERVIEW Kaan Terzioğlu Turkcell CEO

3 3

4 TURKEY S DIGITAL OPERATOR INTERACT, READ, LISTEN, WATCH AND STORE INSTANT MESSAGING CALL MANAGEMENT (UPCALL) DIGITAL PUBLISHING MUSIC TV PERSONAL CLOUD (lifebox) 25mn messages per day 502K calls per day 2.1mn copies read per month 6mn songs streamed per day 1.5mn TV sessions per day 110mn uploaded documents per month ~1mn call minutes per day 450K number identification per day 29min time spent per user per day 22min time spent per user per day 8.1h/51min watching duration per user per day* 110K GB monthly data usage 4 *Watching duration of IPTV/ OTT TV

5 TURKCELL GROUP SECOND QUARTER HIGHLIGHTS FINANCIAL OPERATIONAL Record top-line and EBITDA growth Mobile ARPU growth of ~14% YoY in Turkey 3.1pp yoy increase in EBITDA margin to 33.8% 79% data and digital services growth 3.5 bn TL consumer finance loans Data usage of 4.5G users reaching 5.9GB in June Total subscriber growth of ~6% YoY in Turkey Mobile churn rate decreased to 4.2% Smartphone penetration reaching 70% Mobile multi-play share at 47% 3 bn TL dividend ~64 mn core digital services downloaded 5

6 TURKCELL GROUP TURKCELL GROUP FINANCIAL HIGHLIGHTS Consolidated Q H TRY Million 1 YoY % YoY % Revenue 4, % 8, % EBITDA 1, % 2, % EBITDA Margin 33.8% 3.1pp 34.1% 3.3pp Net Income % 1, % Op.Capex/Sales % 15.0% REVENUE GROWTH TREND (YoY) 8.8% 8.3% 8.6% 6.4%7.5% 5.8% 4.3% 21.3% 25.6% 28.5% 6 All-time high quarter revenue and EBITDA, both at the Group and Turkcell Turkey Solid operational performance led to strong bottom-line 1 TRY figures are based on IFRS 2 Excluding license fees Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217

7 TURKCELL GROUP TURKCELL TURKEY FINANCIAL HIGHLIGHTS TRY Million 1 Q H YoY % YoY % Revenue 3, % 7, % EBITDA 1, % 2, % EBITDA Margin 34.1% 3.4pp 34.9% 3.9pp Net Income % 1, % Turkcell Turkey Q2 revenue growth including financial services is 29.7% with 34.4% EBITDA margin while for the first half revenue growth is 27.6% with 34.9% EBITDA margin 7 1 TRY figures are based on IFRS

8 TURKCELL TURKEY OPERATIONAL HIGHLIGHTS 8 53% of total mobile Net add 18.2 Postpaid TURKEY SUBSCRIBERS (million) 16.0 Prepaid 1.1 Total Turkey subscribers 36.6 mn 2.1mn YoY Fiber ADSL TV* QoQ 503K 253K 32K 28K YoY 1.4mn 226K 152K 232K 34K 133K *TV subscribers include 1.1 million of «OTT only» customers and it is excluded from net add & total subs 8.0% Q215 Q216 Q217 Mobile Blended (excl. M2M) 6.3% ARPU (TL) MOBILE CHURN RATE* 5.6% Operator figures are based on ICTA Q117 report 5.0% Fixed Residential 4.2% Q216 Q316 Q416 Q117 Q217 YoY 2.7% YoY 13.7% Turkcell Operator B Operator C YoY 3.8pp *In Q117, our churn policy was revised to extend from 9 months to 12 months (the period at the end of which we disconnect prepaid subscribers who have not topped up above TRY10). Additionally, under our revised policy, prepaid customers who last topped up before March will be disconnected at the latest by year-end. Please note that figures for prior periods have not been restated to reflect this change in churn policy. The net mobile subscriber addition figures and mobile churn rate for Q117 and Q217 disclosed in this document have been positively impacted by this change.

9 TURKCELL TURKEY CONTINUED RISE IN DATA USAGE MOBILE DATA USAGE (Av. GB/User) SMARTPHONE Q215 Q216 Q117 Q G Users Total Users 4.5G SUBSCRIPTION (million) «Shake & Win» & «Shake & Fold» Campaigns 45% % 17.5 o 5.2 Full HD Screen o Qualcomm 8 core processor o First operator branded VR 68% 70% Q215 Q216 Q117 Q217 Number (million) Penetration PREMIUM T-SERIES T80 9 Q216 Q316 Q416 Q117 Q G subscribers 4.5G compatible smartphone

10 TURKCELL TURKEY GROWTH DRIVERS SHARE OF REVENUES IN TURKCELL TURKEY MOBILE DATA TRY MILLION 1, Q215 Q216 Q217 65% YoY 59% 47% 46% 65% FIXED DATA TRY MILLION Q215 Q216 Q217 28% YoY 36% 20% Q215 Q216 Q DIGITAL SERVICES TRY MILLION Q215 Q216 Q % YoY Voice & SMS Data & Digital Services Revenue: TRY 2.5 bn Data and digital services 78.6% YoY

11 TURKCELL TURKEY POSITIVE TREND IN MULTIPLAY MOBILE* (TRIPLE PLAY) 24.0% 28.2% 41.8% 42.4% 46.7% 65% share in revenues FIBER RESIDENTIAL (MULTIPLAY WITH TV) 38.7% 40.5% 32.6% 33.9% 35.9% 11 Q216 Q316 Q416 Q117 Q217 *Share of mobile voice line users which excludes subscribers who do not use their line in the last 3 months

12 TURKEY S DIGITAL OPERATOR INTERACT, READ, LISTEN, WATCH AND STORE Total Downloads (mn) Download of core digital services doubled YoY Reached 63.5 million downloads as of July 20 Q216 Q316 Q416 Q117 Q217 July, 20 Digital services offered globally INSTANT MESSAGING CALL MANAGEMENT (UPCALL) DIGITAL PUBLISHING MUSIC TV PERSONAL CLOUD (lifebox) 14.7mn download 4mn monthly active users mn download 472K monthly active users 2.2mn download 752K monthly active users 10.9mn download 1.6mn monthly active users *In addition to above listed services, core digital services also include Sports, My Account and Turkcell Academy 4.2mn download 1.1mn monthly active users 4.9mn download 729K monthly active users

13 TURKCELL TURKEY TV HIGHLIGHTS OTT TV* and IP TV (Thousand) DAILY DATA USAGE OVER MOBILE INTERNET on Turkcell s network , million users ~55K GB ~3.2K GB Pay TV operator B ~1.2K GB Pay TV operator C Q216 Q316 Q416 Q117 Q217 IP TV & OTT TV users OTT TV only users 13 TV+ is the leader in mobile and tablet with 4.5G experience *OTT refers to TV subscribers on mobile device, computer, tablet etc

14 OTHER BUSINESSES CONSUMER FINANCE COMPANY HIGHLIGHTS 3.7 million loans provided to date Average ticket size of 1,362 TL AA local rating by Fitch 2nd ABS in progress Ambitious targets in techfin FINANCIAL KPIs* TRY MILLION Q216 Q117 Q217 Consumer loans 1,003 3,020 3,453 Revenues Gross profit Agreements with Apple & Google Play ~1 mn Users of Paycell card e-money license 146 mn TL Transactions through Paycell in 1H17** 26 mn Credit scored customers 14 *Financial services figures are based on the contribution to Turkcell Group **Excludes consumer finance company transactions

15 TURKCELL GROUP TURKCELL INTERNATIONAL HIGHLIGHTS Revenue Growth (YoY, in TRY) EBITDA Margin lifecell TRY MILLION 1 2Q 2017 YoY H YoY 20.5% 25.9% Digital services focus Revenue % % BeST EBITDA % % EBITDA Margin 25.6% (0.4pp) 25.0% (1.6pp) 50.3% Kuzey Kıbrıs Turkcell 18.7% 6.6% 38.1% Promising data growth 4K «lifecell» customers 15 1 TRY figures are based on IFRS

16 TURKCELL GROUP GUIDANCE REVISED UPWARDS 2017 GUIDANCE TURKCELL GROUP OLD NEW REVENUE GROWTH 16% - 18% 21% - 23% EBITDA MARGIN 32% - 34% 33% - 35% OP. CAPEX / SALES* 19% - 20% 19% - 20% 16 *Excluding licence fees

17 FINANCIAL OVERVIEW Bülent Aksu Turkcell CFO

18 TURKCELL GROUP REVENUE & EBITDA REVENUE TRY MILLION EBITDA TRY MILLION 3, (2) 4, (497) (8) (25) 1,457 1, % Margin 30.7% 41.6% Margin 33.8% Revenue Q216 Δ Turkcell Turkey Δ Turkcell International ΔTCF* Δ Other Subsidiaries Revenue Q217 EBITDA Q216 Δ in Revenues Δ in Direct cost of revenues* Δ in G&A exp. Δ in S&M exp. EBITDA Q bn TL revenue add in Q2 YoY Turkcell Turkey and TCF are main growth contributors EBITDA increase via top-line growth & opex management Flat expenses thanks to cost transformation programme 18 * Turkcell Consumer Finance Company *Excluding depreciation and amortization

19 TURKCELL GROUP NET INCOME DEVELOPMENT TRY MILLION (50) (25) 8 99 (50) (122) 428 in market value of swaps 118M TL Net income Q216 Δ in EBITDA Δ in D&A Δ in Interest Inc./Exp. Δ in Fintur Δ in FX Gain/Loss* Δ in Other Inc/Exp. Δ in Taxation Net income Q *FX/Gain loss includes impact of fair market value change of swap contracts

20 TURKCELL GROUP SOLID BALANCE SHEET 20 SUMMARY TRY MILLION Q Q Q Total Cash 6,052 6,451 4,995 Total Assets 31,600 32,955 31,914 Total Debt 9,781 10,730 11,197 Total Equity 16,068 16,536 14,201 Net Debt 3,729 4,280 6,203 Net Debt excl. TCF* 1,332 1,259 2,750 * Turkcell Consumer Finance Company s (TCF) consumer loans are excluded NET DEBT/ EBITDA 3 «investment grade» 0.8x 2, x 0.9x 3, x 1,332 1, x 3, x 2,750 Q Q Q Net Debt (ex. TCF) Net Debt/EBITDA Net Debt (TCF) Net Debt/EBITDA (excl. TCF) Excluding Consumer Finance Company, Net Debt/EBITDA is at 0.5x.

21 TURKCELL GROUP CASH DEVELOPMENT 1,457 (773) (1,535) (1,000) (195) 6,451 4,995 Q117 EBITDA Capex* Net int income Net chg in debt 4.5G license payment (final) Dividend payment Other Q * Including operational and non-operational Capex

22 TURKCELL GROUP FX EXPOSURE CASH DEBT NET FX POSITION* (million USD) Before Hedging After Hedging Q216 Q316 Q416 Q117 Q217 (125) (91) (203) Share 33% 67% 26% 74% 52% ~70% 48% (688) Comfort Zone (500 Mn USD) Nominal 5.0 Bn TL 11.2 Bn TL (1,239) FX Local Currency 22 * Including advance payments, hedging, and assuming the remaining 4.5G license payment in TRY

23 NOTICE 23 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 2017 or for the medium term 2017 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 forwardlooking 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 2016 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 THANK YOU For further information please or call Turkcell Investor Relations at ( ) Have you updated Turkcell IR app? For Android For ios

25 APPENDIX

26 Summary Income Statement As Per CMB 1 Financials (TRY MILLION) Summary income statement Q Q Q YoY (%) QoQ (%) Revenue 3,358 4,053 4,316 29% 6% Direct Cost of Revenues 2 (2,236) (2,617) (2,784) 25% 6% S&M (483) (465) (508) 5% 9% G&A (176) (200) (184) 5% (8%) EBITDA 1,029 1,400 1,457 42% 4% EBITDA Margin 30.7% 34.5% 33.8% 3.1pp (0.7pp) Net Income % 53% 1 Capital Markets Board of Turkey 2 Depreciation and amortization is included

27 Consolidated Balance Sheet (TRY MILLION) Consolidated Balance Sheet (TRY mn) Q Q Q YoY(%) QoQ(%) Cash & Bank 3,769 6,451 4,995 33% (23%) CURRENT ASSETS 9,952 14,720 13,402 35% (9%) TOTAL NON-CURRENT ASSETS 18,643 18,235 18,512 (1%) 2% TOTAL ASSETS 28,595 32,955 31,914 12% (3%) S/T Debt 1,098 3,322 4, % 22% TOTAL CURRENT LIABILITIES 6,103 7,674 9,193 51% 20% L/T Debt 6,209 7,409 7,156 15% (3%) TOTAL NON-CURRENT LIABILITIES 7,142 8,745 8,520 19% (3%) MINORITY INTEREST (7%) 18% SHARE CAPITAL 2,200 2,200 2, TOTAL EQUITY 15,350 16,536 14,201 (7%) (14%) TOTAL EQUITY AND LIABILITIES 28,595 32,955 31,914 12% (3%)

28 Currency Trends USD / TRY EUR / TRY 2.82 Average Period-End Q217 USD / BYN Q217 USD / UAH Q Q217