turkcell investor presentation · note: tv subscribers and the related net add figure include the...
TRANSCRIPT
1
TURKCELL
INVESTOR PRESENTATION
September 2019
TURKCELL GİZLİ
2
TURKCELL: KEY INVESTMENT HIGHLIGHTS
TRACK RECORD LOOKING AHEAD: PRIORITIES
Long FX positionUS$207mn
Robust growth via differentiated offerings23% top-line CAGR since 2016
ARPU growth above inflation17% ARPU growth in Q2
Leader in customer experienceNPS: 21
Low leverage1.2x
Divested minority investment in FinturEUR353mn cash proceeds
Continue prudent balance sheet and FX mngt
Continued growth in telco and new businesses
Continue inflationary pricing strategy
Improve Free Cash Flow generation
Sustain leadership in customer experience
Focus on growing postpaid base
STRATEGIC APPROACH
4
KEY STRATEGIC PRIORITIES
DIGITAL SERVICES
DIGITAL BUSINESSSOLUTIONS
TECHFIN PLATFORM
OUR CUSTOMERS
WELL-INVESTED INFRASTRUCTURE
MORE TO FOLLOW
5
DIGITAL SERVICES: ENHANCING USER EXPERIENCE
A WIDE PORTFOLIO OF DIGITAL SERVICES
✓ 9 bn messages/month
➢ new: instant translator in 106 languages
✓ 117 mn hours of watching/month
➢ new channels / AI-based suggestions
✓ 47 minutes streaming/user/day
➢ new experiences with gamification
✓ 1,700 magazine&paper: unmatched!
➢ new AI-based article suggestions
6
DIGITAL SERVICES – GLOBAL EXPANSION
7
PROVIDING END-TO-END ICT SERVICES
DIGITAL BUSINESS SOLUTIONS
Turkcell Digital SolutionsDigital Partners Ecosystem
Vertical SolutionsManaged Services
Consultant Sales Force
One Stop ShopAutomation
Self Management
GROWTH DRIVERS
ENTERPRISE CUSTOMERS SMB CUSTOMERS
Cloud Security Digitization ICT Services
ENABLERS
STRONG NETWORK
TURKCELL GİZLİ
8
2550
117
CAPTURING OPPORTUNITY IN TECHFIN: PAYCELL
20162015 2017 2019E2018 2020E 2021E 2022E 2023E
187
20 38 93 135EBITDAMn TL
TODAY + NEW BUSINESSES
POS & MPOS
Hybrid cards (Gaming, Gift)
Loyalty program
Paycell Card Sales Points
Micro Credit
Carrier Billing
Utility payments
Money Transfer
Mobile wallet
Paycell Top-ups
QR Code PaymentFuture growth driven by
new businesses
TRY MILLION
PAYCELL REVENUE
Recently launched:
9
WELL-INVESTED INFRASTRUCTURE: FOCUS ON SHARING
21 28Number of cities
In partnership withTürksat & Vodafone
Turkcell (stand-alone)
Turkcell infrastructure
Overlapping
Türksat infrastructure
First in Europe
10 GbpsFiber to the home
The map displays the cities in Turkey where Turkcell offers fiber and cable internet services through its partnership with Türksat and Vodafone. HFC stands for hybrid fiber-coaxial.
3.5 mn 3.5 mn fiber + 3.0 mn cable (HFC)Homepass
10
THREE PILLARS OF OUR BUSINESS MODEL HEDGING
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 free cash flow generation
• Additional committed lines
• 1.9Bn USD cash* covers principal & interest payments until 2023
58%42%
Details of Financial Debt (After Hedging)
Local Currency
FX
Principal & Interest Payments**
(Million USD)
100106
115111110
115125
131129130139136
142147
164158161
172
100103103106109110112114120123123
128132138
147157158
163
Q11
5Q
215
Q31
5Q
415
Q11
6Q
216
Q31
6Q
416
Q11
7Q
217
Q3
17
Q41
7Q
118
Q21
8Q
318
Q41
8Q
119
Q21
9
TCELL ARPU (exl. M2M) CPI
Turkcell ARPU vs. CPI Trend (Q115=100)
Fixed interest
Variable interest
*Includes Fintur sale proceeds.**Data of Turkcell Group companies, excluding TCF
80%
20%
310 602255 306
1,930
302
2019 2020 2021 2022 2023+
FX Local Currency
612 602255 306
1,930
11
MAJOR FUNDING & HEDGING DETAILS TYPE &
DATEAMOUNT MATURITY INTEREST
PURPOSE OF FUNDING
Club Loan(September 2015)
US$500Mn
EUR445Mn
2-year grace period, 5-year
maturity
3-month LIBOR/
EURIBOR+ 2.00%
CAPEX and inorganic growth opportunities
Bond(October 2015) US$500Mn 15/10/2025 5.75%
(fixed rate)
China DevelopmentBank(October 2015)
EUR500Mn
EUR750Mn
3-year grace period, 10-year
maturity
EURIBOR + 2.20% Debt restructuring
CAPEX
CAPEX and inorganic growth opportunities
Bond(April 2018) US$500Mn 11/04/2028
5.80%(fixed rate)
Repayment of existing indebtedness
80% hedged with PCCS
7% hedged with PCCS
HEDGING DETAILS
-
-
100% hedged with PCCS
~48% hedged with PCCS &CCS
UTILIZATION
Fully utilizedin Jun 16
-
Fully utilizedin Oct 15
~EUR550 Mn utilized as of March 19 -
availability expired
-
EKN-Covered(March 2019) US$150Mn
10-year maturity
1st Tranche: LIBOR + 2.10%
2nd-3rd Tranche: 5.35%CAPEX US$50mn utilized
as of March 31-
EUR : EURIBOR + 2.20%USD : LIBOR + 2.22%
CNY : 5.51%
Sustainability Linked Loan(May 2019)
EUR50Mn3-year
maturityEURIBOR + 1.95% General Corporate
Purposes
TURKCELL GİZLİ
12
OUR SUSTAINABILITY INITIATIVES
906k Kg Co2 EmissionSaving
SOCIALENVIRONMENTAL
GOVERNANCE
ESG Rating: A
900 kWpPower Fieldin TRNC
✓ RENEWABLE ENERGY
✓ WASTE RECYCLING
Zero Waste
OfficesDigitalPublishing
Whiz Kids30k gifted student in 3 years
✓ SOCIAL RESPONSIBILITY
Women in TechnologyOver 3 thousand applications
✓ TECHNOLOGY-BASED EDUCATION
DQ InstituteDigital education
Code of Ethics
Anti Corruption Program Sustainability Index
Note: ESG rating last review date is June 6, 2019
Q2 2019 RESULTS
TURKCELL GİZLİ
14
6.2 Bn TL 21.3% yoy
Q2 2019: SOLID PERFORMANCE
2.6 Bn TL41.2% margin
ROBUST REVENUE GROWTH SOLID ARPU GROWTH
STRONG EBITDA DIGITAL BUSINESS SERVICES IMPROVED LEVERAGE
180 Mn downloads
DIGITAL SERVICES
16.6% yoy
mobile blended
17.2% yoy
residential fiber
1.2x Net Debt/EBITDA
0.3x yoy decrease
693 Mn TL 1H revenue
62% yoy growth
TURKCELL GİZLİ
15
ConsolidatedTRY Million1 Q2 2018 Q1 2019 Q2 2019 YoY % H1 2019 YoY %
Revenue 5,105 5,675 6,191 21.3% 11,866 20.3%
EBITDA 2,134 2,281 2,553 19.6% 4,834 16.3%
EBITDA Margin 41.8% 40.2% 41.2% (0.6pp) 40.7% (1.4pp)
EBIT 1,088 1,103 1,287 18.3% 2,390 12.2%
EBIT Margin 21.3% 19.4% 20.8% (0.5pp) 20.1% (1.4pp)
Net Income 415 1,224 465 12.1% 1,690 84.5%
Op.Capex/Sales2 20.2% 15.6% 15.4% (4.8pp) 15.5% (0.5pp)
1 TRY figures are based on IFRS. 2 Excluding license fees 3 Share Sales and Purchase Agreement signed on Dec 12,2018.
TURKCELL GROUP FINANCIAL HIGHLIGHTS
• Strong topline growth and solid EBITDA performance
• Net income excluding recognition of liability in relation to Kcell SPA3 is TRY526 mn in Q219, up by 27% yoy
TURKCELL GİZLİ
16
56.4
62.866.1
34.9
38.1
40.7
Q218 Q119 Q219
1.9% 1.9% 2.0%
Q218 Q119 Q219Note: TV subscribers and the related net add figure include the total of and the change for 3.9 million of «OTT only» cumulative active users.
TURKEY SUBSCRIBERS (million) ARPU (TL)
MONTHLY AVERAGE MOBILE CHURN RATE
18.9
15.0
Postpaid Prepaid
QoQ 215K↑ 1K↓ 15K↑ 337K↑Net add
56%of total mobile
OPERATIONAL HIGHLIGHTS
* The ARPU of mobile customers who have stayed with Turkcell for at least 14 months.
-63K↓
1.4
0.8
20K
Fixed subscribers
17.2%YoY
4.5
TV
fiber ADSL
fiber
cable
ADSL
130 KSuperbox
subscribers
20.5%19.6%like-for-like* growth
16.6%Residential fiber
Mobile blended(excl.M2M)
TURKCELL GİZLİ
17
SMART CAMPAIGNS IN Q219
LEADERSHIP IN QUALITY AND EXPERIENCE
+11 +10
+23 +22
Q119 Q219
Points over next best Points over third best
Source: Future Bright
CUSTOMER EXPERIENCE
Turkcell Score 21
Consumer Net Promoter Score (Points)
7 mn participants/gifts
«#DO» campaign
3 mn new to our digital services
23 mn participants
1 bn gifts
Turkcell’s Shake & Win
Turkcell’s «Comfortable» Tariff Model
Figures reflect the first six months performance
Hybrid (post&pre) model
~50% new to Turkcell
TURKCELL GİZLİ
18
31.1 31.0 31.4
17.6 18.5 19.0
Q218 Q119 Q219
4.5G subscribers 4.5G compatible smartphone
3.2 3.4 3.7
6.67.4
8.2
5.05.9
6.6
Q218 Q119 Q219
Non 4.5G Users 4.5G Users Total Users
MOBILE DATA USAGE (Av. GB/User) 4.5G SUBSCRIPTION (million)
GROWTH ENGINE: MOBILE DATA
93% are 4.5G
subscribers
19 million with
4.5G compatible SPs
83% are 4.5G
compatible SPs
8.9 GBin Jun 2019
Data consumption continued its pace with a 8.2GB user/month on average
75% smartphone
penetration
TURKCELL GİZLİ
19
STRONG B2B STRATEGY: DIGITAL BUSINESS SERVICES
426
693
H118 H119
Turkcell Digital SolutionsDigital Partners Ecosystem
Vertical SolutionsManaged Services
Consultant Sales Force
One Stop ShopAutomation
Self Management62%
DIGITAL BUSINESS SERVICES REVENUE GROWTH DRIVERS
ENTERPRISE CUSTOMERS SMB CUSTOMERS
Cloud Security Digitization ICT Services
ENABLERS
STRONG NETWORK
TRY MILLION
TURKCELL GİZLİ
20
H1 2018 H1 2019 YoY %
Revenues 442.6 477.4 7.9%
EBITDA 204.4 234.6 14.8%
EBITDA Margin 46.2% 49.1% 2.9pp
Net Income1 162.2 78.2 (51.8)%
CONSUMER FINANCE
TECHFIN: NEW GROWTH AND PROFITABILITY ENGINE
HANDSET FINANCING
0.4 0.3 0.3
4.73.6 3.2
Q218 Q119 Q219
Financell ConsumerLoans
Turkcell ContractedReceivables
TRY BILLION
5.14.0
3.6
2 per IFRS 3 in the past one year
TRY MILLION
H1 2018 H1 2019 YoY %
Revenues 88.8 117.1 31.9%
EBITDA 66.1 86.6 31.0%
EBITDA Margin 74.4% 74.0% (0.4)pp
TRY MILLION
PAYMENT SERVICES
1 including the 57 mn TL and 45 mn TL dividend from Paycell in Q218 and Q219, respectively
125 TL average
monthly installment
97% penetration of
loan insurance3
1,542 TL average
ticket size
2.9% cost of risk2
1.5Bn TL transaction
size in Q219
4.9Mn 3-month
active user of Paycell
TURKCELL GİZLİ
21
TRY MILLION1 Q2 2019 YoY% H1 2019 YoY %
Revenue 492 48.4% 917 50.1%
EBITDA 230 88.1% 424 96.9%
EBITDA
Margin46.8% 9.9pp 46.2% 11.0pp
HIGHLIGHTS
1 Figures are based on IFRS
TURKCELL INTERNATIONAL
TURKCELL INT’L REVENUE BREAKDOWN
2 Other comprises lifecell Germany, other international operations and intra-company eliminations. Ukraine, Belarus and Turkish Republic of Northern Cyprus figures are based on stand-alone financials.
66%
19%
10%5%
• 8.2 GB/month 4.5G subs data consumption
• 16% yoy revenue growth in local currency
• MNP launched in May
• 10% yoy revenue growth in local currency
Ukraine
Belarus
TR Northern CyprusOther2
• Like-for-like EBITDA margin improvement is 1.2 pp in Q219 and 3.3 pp in H1 2019
Q219
TURKCELL GİZLİ
22
SOLID BALANCE SHEET
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
TCF loan porfolio
Net Debt2
TRY Mn Q4 2018 Q1 2019 Q2 2019
Total Cash1 7,419 11,118 10,687
Total Assets 42,765 46,079 45,608
Total Debt 20,156 22,867 22,062
Lease Obligations 1,414 1,410 1,577
Total Equity 16,054 17,102 17,331
Net Debt 12,736 11,749 11,375
Net Debt2 8,565 8,108 8,160
SUMMARY
8,565 8,108 8,160
4,171
3,6413,215
1.4x1.3x
1.2x
1.0x0.9x 0.9x
Q418 Q119 Q219
Net Debt/EBITDA Net Debt/EBITDA2
TURKCELL GİZLİ
23
7,419
9,80910,813 10,687 10,687
2,390
2,444(1,070)
(300) (69) (127)
Cash Q418 EBIT Depreciation andAmortization
Change inoperating
assets/liabilities
Cash flow frominvesting activities
Cash flow fromfinancing activities
Other Cash Q219
LIQUIDITY MANAGEMENT
TRY MILLION1
Q418 - Q219
1 Figures are based on IFRS.
TURKCELL GİZLİ
24
(301)(255)
(224)
216 207
Q218 Q318 Q418 Q119 Q219
FX EXPOSURE
10.7Bn TLNominal
34%
8%50%
8%
50%
33%
8%9%
CASH1 DEBT
Before Hedging
2 Including advance payments, hedging and excluding FX swap transactions for TL borrowing. Derivatives (VIOP) and forward transactions are included.
After Hedging
NET FX POSITION2
22.1Bn TL
USD MILLION
Share
1 Excluding FX swap transactions for TL borrowing.
USD EUR TRY Other
80%
17%
3%
TURKCELL GİZLİ
25
GUIDANCE REVISED UPWARDS
ANNOUNCED (Q418)
OP. CAPEX / SALES*
TURKCELL GROUP
2019 GUIDANCE
REVENUE GROWTH
EBITDA MARGIN
REVISION (Q119)
16% - 18%
37% - 40%
16% - 18%16% - 18%
*Excluding licence fees
39% - 41%
16% - 18%
17% - 19%
38% - 40%
NEW
17% - 19%
26
APPENDIX- Digital Services KPIs
- Network Dynamics
- International Business
- Regulatory
- Currency Trends
TURKCELL GİZLİ
27
1: Refers to downloads as of June 30, 2019. 2: 3-MAU includes users who utilised the zero rating benefit of Dergilik magazines and newspapers via browser. 3: 3-month active users also include IPTV users 4: My Account is renamed as Digital Operator in 4Q 2018.
3-Month Active User
Service KPIs
Download1
283K
1.5Mn
38MnGames played
on BiP
DIGITALPUBLISHING2
12.2Mn
12.0Mn
0.8Mncopies read
per day
MUSICPLATFORM
23.4Mn
3.7Mn
8.3Mnsongs streamed
per day
MOBILE TV3
13.3Mn
4.2Mn
4.0MnTV sessions
per day
PERSONAL CLOUD
11.8Mn
2.6Mn
40docs uploaded
per person / day
DIGITAL SERVICES: UNIQUE PORTFOLIO
8.5Mn
3.8Mn
1.0Mnsearchper day
DIGITAL OPERATOR4
43.6Mn
20.1Mn
29% more ARPU
INSTANT MESSAGING
37.8Mn
9.9Mn
302Mnmessages per day
GAMINGPLATFORMS
SEARCH ENGINE
Unique visitor on BiP
For BackgammonGO
YoY +5.8M +6.3M +4.9M +4.2M +11.5M +3.4M
+0.2M +0.5M +2.1M +0.6M +8.3M +1.9M
+16.9M
+1.3M -0.2MYoY
n.a.
2828
234.4 MHz
FREQUENCIES BEFORE AND AFTER 4.5G TENDER
TOTAL FREQUENCYBEFORE TENDER
Turkcell Vodafone Türk Telekom
62.0 57.064.8
172.4
82.8
110.2
AWARDED FREQUENCY IN
TENDER
TOTAL FREQUENCYAFTER TENDER
139.8 MHz
175.0 MHz
€0.3
€0.4
€0.5
• Price / MHz / Population in Turkey: €0.12 per MHz per sub cost
2929
234.4 MHz
FREQUENCY BANDS AFTER 4.5G TENDER
Turkcell Vodafone Türk Telekom
62.0 57.064.8
172.4
82.8
110.2
139.8 MHz
175.0 MHz
Main layer for 4.5G Terminal support, capacity and coverage layer
2600 MHz
2100 MHz
1800 MHz
900 MHz
800 MHz 4.5G main coverage layer
2G/3G coverage and voice layer
Mobile broadband layer for 3G4.5G usage for mid/long term
4.5G capacity boost layer for hot spots
€0.3
€0.4
€0.5
• Price / MHz / Population in Turkey: €0.12 per MHz per sub cost
60.040.0 35.0
70.0
35.0 30.0
59.6
20.070.0
24.8
24.8
20.0
20.0
20.0
20.0
3030
FASTEST & BEST & WIDEST
SPEED
1,200 Mbps
2018
* Source: https://gsacom.com/paper/progress-gigabit-lte-networks-2/
QUALITY
CarrierAggregationall network
The BestExperts
4x44x4 MIMOall network
MIMO: Multi Input Multi Output
SPEED QUALITY
3131
DIFFERENTIATED THROUGH QUALITY
Source: IRIS Telecommunication Engineering Services, January 2019
USER EXPERIENCE
82
7574
0-100
DATA SPEED
49
21
13
17
11 10
Download(Mbps)
Upload(Mbps)
Turkcell Telco1 Telco2
3232
5G
eMBB
eMTC URLLC
Higher Capacity100x
10x Faster Data Rate
10x Lower Latency
5G: MORE THAN HIGHER SPEED
3333
48.8%
Incumbent48.1%
Other players
3.0%
FIXED BROADBAND MARKET
6.6 6.6 6.8 7.27.8
8.79.5 9.6
0.551.2
1.461.67
1.93
2.29
2.80 2.89
0.490.49
0.560.63
0.74
0.83
0.930.96
10.2%11.0%
11.5%12.1%
13.2%
14.7%
16.3% 16.6%
2012 2013 2014 2015 2016 2017 2018 2019 Q1
xDSL Fiber Cable Penetration
Note: Company calculation based on data in ICTA Q1 2019 Report
13.6 mnTotal
Subscribers
3 majorOperators
16.6%Penetration
TURKISH FIXED BROADBAND MARKET FIXED BROADBAND MARKET BY TECHNOLOGY (MN)
FIBER SUBSCRIBER MARKET SHARE
Q1 2019
3434
548900
1,276
2,070
2015 2016 2017 2018
Turkcell Superonline (stand-alone) Fiber Backbone
NET REVENUE TREND
24%
CAGR2015-2018
EBITDA TREND
39%
CAGR2015-2018
1,7192,429
3,2104,076
2015 2016 2017 2018
TRY Mn
TRY Mn
899 1,044 1,2041,386 1,426
2015 2016 2017 2018 2019 H1
FIBER CUSTOMERS
Fiber market share (%)
50%
thousand
• 44.3 thousand km rollout
• 21 cities
• Data speed up to 10Gbps
• 42% take up rate
• Infrastructure sharing protocol signed by Turkcell, Türk Telekom,
Vodafone TR, Türksat and Telkoder in May
• Bilateral agreements to follow: 3 Mn additional homepass through
Türksat and potential for more
• A new capex model on fixed business
NEW BUSINESS MODEL ON FIXED INFRASTRUCTURE
TURKCELL SUPERONLINE
3535
9%
Digitürk(beIN) 35%Tivibu
24%
D-Smart14%
CableTV18%
IP TV Subscriber Market Share1
As of Q119
1Source: ICTA Q1 2019 Report2Includes IP TV and OTT TV subscribers
4.5 millionTurkcell TV+ subscribers2 in Q2 2019
SUCCESSFUL IPTV SERVICES
3636
Tower portfolio:
10,581
Turkey
Ukraine
Belarus
TRNC
8,501
1,132
833
115
• First and only TowerCo of Turkey
• Regional player operating in 4 countries
• Long term, visible revenue stream & strong profitability
• Aim to increase efficiency by consolidating towers in Turkey
338
2018 2019E 2020E 2021E
1.60
2018 2019E 2020E 2021E
25%-30%
1.8x-1.9x
CAGR2019-2021
MediumTerm
TRY mn
Note: Tower portfolio includes owned and managed towers and towers for which contract management services are provided.
GLOBAL TOWER
NET REVENUE TREND
TENANCY RATIO
3737
5%
10%
15%
20%
25%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Turkcell Group EEMEA
Source: Bloomberg Industry Data and company announcements*Excluding licence fees
Turkcell Group Average: 17.7%*
EEMEA Average: 17.6%Between 2008 and 2018
CAPEX/SALES TREND
3838
lifecell PERFORMANCE
HIGHLIGHTS
UKRAINE MOBILE MARKET FACTS*
55.3mTotal
subscribers
3Operators
132% Mobile
Penetration
Ownership 100% Turkcell
Ownership 100% VEON
Ownership 100% MTS
*Source: Global Wireless Matrix Q1 2019** MTS Ukraine changed its legal name to Vodafone Ukraine with a marketing agreement
UAH MILLION Q2 2019 YoY% FY18 YoY%
Revenue 1,482 16.1% 5,269 8.0%
EBITDA 799 41.7% 2,762 108.2%
EBITDA Margin 53.9% 9.7pp 52.4% 25.2pp
**
OPERATIONS IN UKRAINE
• Operational performance:
• 6.8 million subscribers in Q2 2019 (3 months active) with UAH 53ARPU (up 27.3% yoy)
✓ 3.8 million 3-month active 3G and 4.5G data users
• 78% SP penetration (market leader)
• fizy stepped over half a million barrier of downloads
• First to launch 4G services in Ukraine on 2600 MHz
• 4.5G services on the 1800 MHz frequency since Jul 1st
3939
49.8%
37.1%
13.0%
KYIVSTAR
VDF
lifecell
9%
9%
12%17%
16%
11%14% 17%
20%
24%
9%14%
9%
18%
Q218 Q318 Q418 Q119 Q219
FINANCIALS
44.1%
44.6%
76.6%
57.6%
53.9%54.9% 54.9% 52.7% 52.8%
55.1% 57.5% 55.8% 60.2%
62.4%
Q218 Q318 Q418 Q119 Q219
Mobile Revenue
Subscriber*
(*) 3 month active subscribers
Mobile Revenue Growth (in UAH)(YoY)
lifecell VDF Kyivstar
EBITDA Margin (%)
Source: Company announcements (Q1 2019). Note: lifecell EBITDA margins in 2018 include new IFRS impacts (IFRS 9, 15 and 16)
MARKET SHARE
UKRAINE: MOBILE MARKET PERFORMANCE
51.3%
34.6%
14.2%
KYIVSTAR
VDF
lifecell
4040
*Source: Company calculation based on Q1 2019 results
OPERATIONS IN BELARUS
BeST PERFORMANCE
HIGHLIGHTS
BELARUS MOBILE MARKET FACTS*
11.5mTotal
subscribers
3Operators
121% Mobile
Penetration
Ownership 80% Turkcell20% Belarusian State
Ownership51% Belarusian State49% MTS
Ownership100% Telekom Austria
Q2 2019 YoY% FY18 YoY%
Revenue 33.7 10.1% 124.9 11.7%
EBITDA 11.1 152.3% 27.9 548.8%
EBITDA Margin 32.9% 5.0pp 22.3% 18.5pp
BYN MILLION
• 1.1 million 3 month-active subscribers in Q2 2019
• 4G services since September 2017 (through becloud)
• Average monthly data consumption grew by 70% yoy to 6.4GB in Q219.
• Expanding digital services footprints
• Launched its new digital offering PLAY, which includes 7 digital
services.
4141
BELARUS: MOBILE MARKET PERFORMANCE
11%8% 8%
9% 10%11%
8% 7%
7% 6%
16% 17%19% 20%
Q218 Q318 Q418 Q119 Q219
47.5%
46.1%
6.4%
MTS
VELCOM
LIFE :)
Source: Company announcements (Q1 2019).
Subscriber*
Revenue
(*) 3 month active subscribers
47.7%
42.1%
10.3%
MTS
VELCOM
life :)
life :) EBITDA Margin Trend*
Mobile Revenue Growth (in BYN)(YoY)
14.4%17.1%
38.6%
23.2%
32.9%
Q218 Q318 Q418 Q119 Q219
LIFE:) VELCOM MTSMARKET SHARE FINANCIALS
Note: life :) EBITDA margins in 2018 include the impacts of IFRS 9, 15 and 16
4242
10%
20%
30%
40%
50%
60%
70%
Turkey Hungary Jordan UK Croatia Greece Italy Spain Egypt
Special Communication Tax (SCT) 7.5% 7.5%
VAT 18% 18%
Treasury Share1 15% 1%
TRX fees 5%(of net sales)
-
Contribution Share to Telecom Authority
0.35% 0.35%
New subscription SCT2
(at first enrollment)TRY 65.00 -
Wireless license fees (per acquisition)
TRY 27.86 -
Wireless usage fees (annual)
TRY 27.86 -
TAX MOBILE FIXED TURKEY HAS THE WORLD’S HIGHEST MOBILE SERVICE TAXES3
1Under the license agreement Turkcell pays a treasury share equal to 15% of its gross revenue from Turkish GSM operations2 Excluding M2M SIMs3 GSMA/Turkey Report, 2016
TAXATION IN TURKEY
4343
13.6
9.1
6.6
3.1 3.1 3.12.5 2.5 2.5 2.5 2.5 2.5
17.2 15.714.4
11.1 11.1
8.16.5
4.94.8 4.2 4.4 4.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
MTR -Turkcell Europe-MTR
MTR: Mobile Termination RateSource: BEREC July 2017 report, Cullen International
EVOLUTION OF MTR TRY kuruş per min.
MTR RATESTRYkr.
OLD Since 2013 Asymmetry OLD Since 2013 Asymmetry
Turkcell 3.13 2.50 - 1.70 0.43 -
Vodafone TR 3.23 2.58 3% 1.73 0.43 -
TTKOM 3.70 2.96 18% 1.87 0.47 9%
Mobile Voice Rates SMS Rates
Turkcell MTR is 1.8x below EU
MOBILE/SMS TERMINATION RATES IN TURKEY
4444
CURRENCY TRENDS
3.02 3.324.11
5.606.55
3.183.71
4.52
6.03 6.55
2015 2016 2017 2018 Q219
Average Period-End
2.73 3.013.63
4.76
5.85
2.913.52 3.77
5.265.76
2015 2016 2017 2018 Q219
1.591.98 1.93 2.03 2.10
1.86 1.96 1.972.16 2.04
2015 2016 2017 2018 Q219
21.7925.56 26.64 27.32 26.73
24.0027.19 28.07 27.69 26.17
2015 2016 2017 2018 Q219
USD / TRY EUR / TRY
USD / BYN USD / UAH
45
NOTICE
This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21Eof the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Thisincludes, in particular, our targets for revenue, EBITDA and capex in 2019 or for the medium term 2018 to 2020. More generally, allstatements other than statements of historical facts included in this presentation, including, without limitation, certain statementsregarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-lookingstatements. In addition, forward-looking statements generally can be identified by the written or oral use of forward-lookingterminology 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 noassurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to usare expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affectthe outcome of such forward looking statements, see our Annual Report on Form 20-F for 2018 filed with the U.S. Securities andExchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward lookingstatements, 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, whichremains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of itssubsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the informationcontained 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 thecharts or tables used in this presentation totals may not foot due to rounding differences. The figures used in this presentation arerounded while percentage changes are calculated based on the figures disclosed in the press release.
TURKCELL GİZLİ
For further information please e-mail
[email protected] call Turkcell Investor Relations at
(+90 212 313 1888)
Turkcell IR Website
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