Management Presentation July 2018 -...

Management Presentation July 2018

İzmir Adnan Menderes Airport

Investment Highlights

2

Turkey is the fastest growing aviation market in Europe

Diversified, balanced portfolio with leading market positions

Strong momentum with EBITDA posting 28% CAGR between 2006 and 2017

Well-positioned to benefit from further organic and inorganic growth

Attractive market with strong growth prospects

Leading airport operator with diversified portfolio

& integrated structure

Strong financial performance and cash

flow generation “Platform play”

Passenger growth of 12% p.a. during 2002-2017

Projected passenger growth of 10% p.a. between 2017-2023(1)

Aggressive capacity expansion plans of major airlines in Turkey(2)

Access to fast growing MENA region

#1 airport terminal operator in Turkey

15* airports operated in Turkey, Georgia, Tunisia, Macedonia, Saudi Arabia, Croatia and Latvia

78 airports around the world have a TAV Airports subsidiary functioning in them

Strong vertically integrated value chain

As of June 2018

* TAV will add 3 more airports in Saudi Arabia, bringing airports operated to 18.

High earnings visibility given clear / agreed regulatory framework

Proven track record of growth and profitability with attractive organic growth prospects

High financial returns and cash flow generation given fixed cost base (operational leverage) and minimal ongoing capex

Hard currency based cash flow & visible earnings

50% dividend payout policy

TAV will receive compensation for all loss of profit in case of new Istanbul airport opening before 2021

Central and Eastern Europe, Africa, Middle East, South East Asia and Cuba

Inorganic growth of service companies

(1) Source: Turkey’s Ministry of Transport (2) THY and Pegasus web site

Exceptional Growth

3

Revenue (€m)

402 508 627 640 785 881 1099 1205 1092

847 904

983 1079 1,104 1132

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Pre-IFRS11

Post-IFRS11

EBITDAR (€m)

170 189 267 311 342 387 483 555 597

463 524

569 621 611

673

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Pre-IFRS11

Post-IFRS11

23 30

41 42 48

53

72

84 95

102 105 115

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

-71

-38

4

51 50 53

129 133

218 210

127

175

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Passenger (m) Net Profit (€m)

2006 2007

26 51

120

1

5

234 31 44

1

206 222 242

2016 Restated

2016 Restated

TAV Corporate and Shareholder Structure

26 51

120

1

234 31 44

1

242 247 252

9

5.06%

1.29%

3.20%

44.33%

46.12

Shareholder Structure (as of June 2018)

Shareholders

TAV Airports Holding Co.

1

2

3

4

5

*Through Tank oWA Alpha GMBH

1. Groupe ADP* Internationally acclaimed airport operating company with global operations

2. Tepe Insaat Sanayi A.S. Turkish integrated conglomerate focused on infrastructure and construction

3. Sera Yapi Endustrisi A.S. Focused on construction in Turkey & MENA region

4. Other Non-floating

5. Other Free Float

Airport Companies Service Companies

ATU (50%)

BTA (100%)

OS (100%)

TAV Technologies (100%)

Security (100%)

Academy (100%)

Havas (100%)

TGS (50%)

Havas Latvia (100%)

Ataturk (100%)

Esenboga (100%)

Adnan Menderes (100%)

Gazipasa Alanya (100%)

Milas Bodrum (100%)

Medinah (33%)

Tbilisi (80%) & Batumi (76%)

Monastir & Enfidha (67%)

Skopje & Ohrid (100%)

Latvia (100%)

Zagreb (15%)

Havas Saudi (67%)

Yanbu, Hail & Qassim (50%) **

Note: Groupe ADP bought Akfen Holding’s 8.12% stake in TAV Airports as of July 7, 2017

4

Antalya (50%)*

*TAV Airports’ 49% stake in Antalya Airport entitles it to equal governance and 50% of dividends ** TAV Airports won the concession for these airports but has not operated these airports

http://www.sera.com.tr/tr_index.php

TAV Airports Business Areas

5

ATU (50%) Largest duty free operator in Turkey Partner with Unifree –owned by Heinemann, leading German travel retailer (Travel Value) Operating in Turkey, Georgia, Tunisia, Macedonia, Latvia, Oman and Medinah Operating in Houston, USA, since September 2015.

BTA (100%) Operating in Turkey, Georgia, Macedonia, Tunisia, Latvia, Saudi Arabia, Oman and Croatia Operates Istanbul Airport Hotel (128 rooms) Operates İzmir Airport Hotel (81 rooms) Total seating capacity of c. 23 thousand at c. 380 points including BTA IDO and UNIQ Baker and pastry factory serving in Turkey BTA Denizyollari (50%) is the F&B operator of Istanbul Deniz Otobusleri (IDO) Operating in New Muscat Int’l Airport since March 2018

HAVAS (100%) Major ground handler in Turkey with a c.70% share Operates in 31 airports in Turkey including Istanbul, Ankara, Izmir and Antalya TGS (50%) operates in Istanbul (IST&SAW), Ankara, Izmir, Antalya, Adana, Bodrum and Dalaman 100% owner of Havas Latvia, with c.66% market share 67% owner of Saudi HAVAS operating in Medina

TAV OS (100%) Commercial area allocations and lounges

TAV Technologies (100%) Airport IT services

TAV Security (100%) Security service provider in Istanbul, Ankara, Izmir and Gazipasa

TAV Latvia (100%) Commercial area management in Riga Airport

Airports Duty free Food and beverage Ground handling Others

Turkey Istanbul Ataturk Airport (100%)

Ankara Esenboga Airport (100%) Izmir Adnan Menderes Airport (100%) Gazipasa Alanya Airport (100%) Milas Bodrum Airport (100%) Antalya Airport (50%)*

Georgia

Tbilisi (80%) and Batumi Airports (76%)

Tunisia Monastir and Enfidha Airports (67%)

Macedonia Skopje and Ohrid Airports (100%)

Saudi-Arabia Medinah (33%) Yanbu, Hail &Qassim (50%)**

Croatia Zagreb Airport (15%)

*TAV Airports’ 49% stake in Antalya Airport entitles it to equal governance and 50% of dividends. ** TAV Airports won the concession for these airports but has not operated these airports .

Source: State Airports Authority

Growth of the Turkish Aviation Market

6

Foreign Visitors in Turkey

Deregulation of the domestic market in 2003

2nd largest country in Europe in terms of population: 81m (1)

In 2016, foreign visitors amounted 25m (vs. 36mn in 2015) (2)

In 2017, foreign visitors reached to 32.4m (+28%)

Passport ownership of Turkish citizens (+18) is only 8%. (3)

Only 11% of Turkish people vacationed abroad. (3)

Aircraft number in Turkey expected to reach 750 in 2023 (4)

Source: DHMI, (1)Turkstat, (2) Ministry Culture and Tourism, (3) Konda Research and Consultancy 2017 Turkey Report (4) Ministry of Transport

41 51 58 65 76 86 97 103 110 122 130 139 180

44 52 59 66

73 80

84 71 83

97 103 107

170

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e 2019e 2020e 2023e

International

Domestic

234

86 104 118

130 149

166 181 174 193

219

350

State Airports Authority Turkish Aviation Market Forecast

Mn, pax

//

Foreign Visitors in Turkey (mn)

16%

7%

16%

11% 7%

6% 4%

7%

38% 32% 35%

28% 27%

-10% -7% -4%

18% 16%

43% 46% 46% 43%

22% 22% 31%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018/2017 2017/2016 2016/2015

28% -30%

4,5 3,6 0,9

4,7

5,3 5,6

3,9

3,6

14,1 13,5

9,3

9,5

5,7 6,2

4,8

6,9

7,1 7,3

6,6

7,6

2014 2015 2016 2017

Russia Federation Germany Rest of Europe Total Asia Rest of the world

36,8 36,2

25,4

32,4 3%

-11% 16% 8%

-22% 45%

-5%

-31% 3%

6% -30% -8%

-20%

-75% 422%

-2%

-30% 28%

YTD 31%

247

Traffic Outlook

7 Source: IATA, Airbus Global Market Forecast 2018, Boeing Current Market Outlook 2018

Source: IATA, Eurocontrol, DHMI

Source: THY presentation (May 2018) Pegasus Presentation (March 2018)

1

Source: ADI

2 3 4

World Air Traffic will double in 20 years

Turkish air traffic will double in 7 years

Aggressive fleet expansion plans of

major airlines in Turkey

~7% international seat capacity growth in

2018

Eurocontrol, projects 7% CAGR for Turkey until 2020 DHMI expects 10% CAGR in Turkey until 2023 IATA expects Turkish air traffic to grow at a 4.7% CAGR in the next twenty years

Boeing projects 4.7% CAGR for world air traffic (2018-2037) Airbus projects 4.4% CAGR for for world air traffic (2018-2037) IATA expects 7.8 bn pax to travel in 2036 a near doubling of 4 bn in 2017

~7% seat capacity increase expected at Ataturk Airport international scheduled traffic in 2018

THY to expand fleet size to 393 by 2020 (from 329 in 2017) Pegasus to increase fleet to 94 by 2020 (from 76 in 2017)

Traffic Performance

Istanbul Traffic started to recover in Apri 2017 with low base when Turkish Airlines started to re-utilise grounded fleet. Strong O&D recovery since the second quarter of 2017. International O&D +23%, int2int transfer +11% in 1H17

Ankara Significant growth continues thanks to year-on-year effect of routes opened in mid/late 2017

İzmir Increased seat capacity on several routes by Turkish carriers

Milas-Bodrum Traffic started to recover

Gazipasa

Traffic started to recover

Medinah Strong growth in scheduled international and Umrah traffic

Tunisia Recovery started following lift of UK travel ban in late July

Georgia Increase in seat capacity, new routes

Macedonia Driven by WizzAir

Zagreb Driven by new routes, new terminal opened at the end of March 2017

Pax Strong growth in all markets continues Like for like growth of 16%

6

235 242 250

8

0 0 0

çizgiler

251 243 223

8

Source: Turkish State Airports Authority (DHMI), Georgian Authority, TAV Tunisie, TAV Macedonia, TIBAH and MZLZ Note: DHMI figures for 2018 are tentative. 1) Both departing and arriving passengers, including transfer pax 2) Antalya added to portfolion in May 2018. TAV Total 2017 Traffic figures do not include 2017 Antalya Airport figures. TAV Total 2018 figures includes Antalya Airport starting from May.

Antalya

Traffic growth spurred by strong tourist arrivals

January-June January-December

Passengers (1) 2017 2018 Chg 2016 2017 Chg %

Ataturk Airport 28.876.193 32.558.271 13% 60.415.470 63.727.448 5%

International 19.749.816 23.109.982 17% 41.281.937 44.277.101 7%

Domestic 9.126.377 9.448.289 4% 19.133.533 19.450.347 2%

Esenboga Airport 6.730.236 8.733.087 30% 13.044.116 15.845.878 21%

International 834.580 1.030.829 24% 1.496.876 1.991.979 33%

Domestic 5.895.656 7.702.258 31% 11.547.240 13.853.899 20%

Izmir Airport 5.806.728 6.461.800 11% 12.051.243 12.823.701 6%

International 835.211 986.698 18% 2.096.076 2.354.622 12%

Domestic 4.971.517 5.475.102 10% 9.955.167 10.469.079 5%

Gazipaşa Airport 318.774 478.316 50% 718.718 823.238 15%

Milas-Bodrum 1.207.163 1.498.683 24% 3.221.776 3.509.347 9%

International 263.009 460.756 75% 909.734 935.849 3%

Domestic 944.154 1.037.927 10% 2.312.042 2.573.498 11%

Antalya(2) 9.321.413 11.808.378 27% 18.768.535 25.931.659 38%

International 5.952.673 8.145.494 37% 11.720.296 18.472.418 58%

Domestic 3.368.740 3.662.884 9% 7.048.239 7.459.241 6%

Medinah 3.855.417 4.138.620 7% 6.572.787 7.805.295 19%

Tunisia (Monastir&Enfidha) 519.767 837.948 61% 1.593.780 1.683.604 6%

Georgia (Tbilisi&Batumi) 1.418.620 1.861.530 31% 2.560.462 3.654.389 43%

Macedonia (Skopje&Ohrid) 860.130 1.041.583 21% 1.794.376 2.027.344 13%

Zagreb Airport 1.335.936 1.471.638 10% 2.766.087 3.092.047 12%

TAV TOTAL (1) 50.928.964 66.661.638 31% 104.738.815 114.992.291 10%

International 28.372.078 39.976.301 41% 58.745.737 65.220.285 11%

Domestic 22.556.886 26.685.337 18% 45.993.078 49.772.006 8%

34% 27% 29%

26%

7%

20%

-13% -12%

-5%

10%

-1%

4%

24% 28%

14% 19%

23% 20%

-30%

-20%

-10%

0%

10%

20%

30%

40%


18/17 change 17/16 change 16/15 change

Istanbul Int2int Transfer and O&D Pax, Yoy % Change

3,0

3,5

4,0

4,5

5,0

5,5

6,0

6,5

7,0


2014 Seat Capacity 2015 Seat Capacity

2016 seat capacity 2017 Seat Capacity

International Scheduled Traffic Developments & Outlook

9

Istanbul International O&D Pax Istanbul International Seat Capacity

Istanbul Transfer Pax / International Pax

2011 30%

2012 33%

2013 38%

2014 38%

2015 40%

2016 49%

2017 47%

+7%

(m, pax)

235 242 250

8

O&D : 6%

Transfer : 21%

2008-2017 CAGR

-16%

THY grounded aircraft 2018e: ~+7%

9% YTD 23%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2016

Jan

2016

Feb

2016

Mar

2016

Ap

r

2016

May

2016

Ju

n

2016

Ju

l

2016

Au

g

2016

Sep

2016

Oct

2016

No

v

2016

Dec

2017

Jan

2017

Feb

2017

Mar

2017

Ap

r

2017

May

2017

Ju

ne

2017

Ju

ly

2017

Au

g

2017

Sep

2017

Oct

2017

No

v

2017

Dec

2018

Jan

20

18

Feb

2018

Mar

2018

Ap

r

2018

May

2018

Ju

ne

O&D Transfer

Antalya International Airport

Transaction Overview

Transaction

TAV acquires IC Ictas’ 49% stake in ICF Antalya, the joint-venture that manages Antalya Airport

Fraport AG maintains 51% stake

Date of signing of SPA 27 February 2018

Date of Closing 8 May 2018

Price EUR 360 million cash

Impact on TAV Transaction expected to be EPS accretive

Source of funding Transaction financed through debt (EUR 300 million) and

equity (EUR 60 million)

Consolidation Consolidated by equity method

TAV acquires 49% of Antalya Airport with co-control; i.e. 50% dividend rights and 50% of voting rights

51% 49%

10

*EBITDAR=IFRS EBITDA which is before rent amortization **EBITDA= Adjused IFRS EBITDA after rent amortization

Antalya Airport Financials (100%)

15,2

18,3

20,5 20,2 21,5 22,1

20,9

11,7

18,5

6,0

8,1

3,1 3,7 4,5 4,9 5,5 6,2 6,9 [VALUE],0 7,5

3,4 3,7

18,3

22,0

25,0 25,1 27,0

28,3 27,8

18,7

26,0

9,3

11,8

2009 2010 2011 2012 2013 2014 2015 2016 2017 2017 6M2018 6M

Antalya Pax (m) Int

Dom

Total

Source for Pax: DHMI

Severe international traffic decrease occured in 2016 with

Russian ban to charters (started late 2015) and security issues

in Turkey.. Majority of Russian traffic recovered in 2017 with

the lift of travel ban. Domestic traffic increased non-stop

during last 10 years.

EUR (m) 2014 2015 2016 2017 Revenue 327 303 182 260 EBITDAR* 283 258 141 223 EBITDA** 151 130 16 106 EBITDA Margin 46% 43% 9% 41% Net Profit 85 68 -24 40

IFRIC 12 Adjusted Financials (in m€, unless stated otherwise) 1H17 (5) 1H18 Chg %

Revenue (1) 510,7 549,7 8%

EBITDAR (2) 283,0 334,6 18%

EBITDAR margin (%) 55,4% 60,9% 5,5 ppt

EBITDA (2) 203,0 253,7 25%

EBITDA margin (%) 39,8% 46,2% 6,4 ppt

FX Loss (2,0) (7,4) 273%

Deferred Tax Expense (5,3) (2,7) -50%

Net Profit (3) 60,0 93,1 55%

Capex 23,3 53,4 129%

Net Debt 830 725 -13%

Average number of employees 16.516 17.781 8%

Number of passengers (m) 50,9 66,7 31%

- International 28,4 40,0 41%

- Domestic 22,6 26,7 18%

Duty free spend per pax (€) (4) 14,0 12,1 -14% (1) IIFRS Revenue – Construction revenue + Ankara guaranteed passenger revenue - Discount Income (please refer to page 21, for

revenue reported by Groupe ADP)

(2) EBITDA(R) – Construction revenue + construction expense + Ankara guaranteed passenger revenue - Discount Income + Equity

accounted investees (EAI). EAI is not classified to EBITDA in Groupe ADP’s accounts. (Please refer to pg. 21 for EBITDA reported by

Groupe ADP)

(3) Attributable to equity holders of the company

(4) Transfer numbers are tentative and subject to change

(5) Restated

1H18 Summary Financials

11

Source: TAV Airports Holding, DHMI, TAV Tunisia, TAV Macedonia, Georgian Aviation Authority, TIBAH , MZLZ

Spend per Pax From €14.0 to €12.1, mainly due to depreciation of TRY impacting Turkish passengers’ spending, as well as weakness in European passengers.

Pax -+31%

Like-for-Like pax growth is 16%, Antalya added in May 18 Istanbul Airport international pax +17% in 1H18 with +11% in international-to-international transfer pax and +23% in international O&D O&D recovery started in Q2 2017 Share of transfer is 46% in Istanbul (1H17: 48%)

6

235 242 250

8

0 0 0

çizgiler

251 243 223

Revenue +8%

Revenue growth supported by traffic growth, while impacted by depreciation of TRY and strong EUR vs USD 47% aero, 53% non-aero

EBITDA +25%

EBITDA margin expansion due to cost control and TAV Istanbul’s rent expense staying almost flat vs 1H17

FX Loss +273%

Forward EUR transactions and depreciation of TRY impacted FX loss in 1Q18

Net Profit +55%

Operating performance reflected in bottomline

Net Debt -13%

Net debt decreased with cash generation

EBITDAR +18%

EBITDAR margin expansion, mainly due to cost control and depreciation of TRY

203,0

54,6

20,9 4,7 1,0 8,0

8,6 11,9

253,7

1H

17

Vo

lum

e

EPU

**

Mix

Ren

t

Oth

er

F/X

Price

1H

18

510,7

81,8

6,8 6,7 3,7 0,5 60,6

549,7

1H

17

Vo

lum

e

Price

Mix

Oth

er

On

e-O

ffs

F/X

1H

18

1H18 Revenue and EBITDA Bridges *

Revenue Bridges (€m) EBITDA Bridges (€m)

26 51

120

1

5

234 31 44

1

206 222 242

* Please refer to page 21, for revenue reported by Groupe ADP, 2017 restated

251 243 223

12

** Equity Pick -up

Ege

Ege

510,7

12,3 5,5 4,3 4,0 2,9 2,0 2,3 1,7 1,3 1,1 1,0 0,5

549,7

1H

17

Istanb

ul

BTA

Geo

rgia

Havas

Tun

isia

Bo

dru

m

Oth

ers

Maced

on

ia

Elimin

ation

Izmir

Gazip

asa

An

kara

1H

18

203,0

20,9

14,7 9,9

4,2 3,9 2,4 1,6 1,4 1,1 0,6 0,3 8,5

253,7

1H

17

Oth

ers***

Istanb

ul

Havas

Geo

rgia

Tun

isia

Bo

dru

m

Izmir

Maced

on

ia

Gazip

asa

BTA

An

kara

Elimin

ation

1H

18

***Others includes equity pick-up

(Ege)

(Ege)

2018 1H Comparison (2017 figures restated)

54% 31%

2% 8% 5%

47%

29%

2% 10%

12%

Istanbul Other Airports BTA

HAVAS Other Services

13

Consolidated Revenue (1) (€m) Net Profit (2) (€m)

Consolidated Revenue (%) EBITDA (%) Opex (%)

511 550

1H17 1H18

203

254

1H17 1H18

60

93

1H17 1H18

(1) Please refer to page 21, for revenue and EBITDA reported by Groupe ADP


32%

22% 15%

16%

9% 5% 32%

22% 19%

15%

8% 5%

Personnel Concession rent

Other D&A

Services rendered Catering

1H17

1H18

EBITDAR (1) (€m)

26 51

120

144 146 148

247 166 63

234 31 44

85 129 193

186 186 186

206 222 242

230 231 232

253 219 151

248 182 187

5

228 238 248

245 245 247

EBITDA (1) (€m)

283 335

1H17 1H18

21%

33% 13%

9%

23%

21%

34% 13%

10%

23%

Duty-free Aviation Ground-handling F&B Other

2017 FY Comparison (2016 figures restated)

54% 33%

3% 4%

48%

35%

3% 9%

5%

Istanbul Other Airports BTA HAVAS Other Services

14

Consolidated Revenue (1) (€m) Net Profit (2) (€m)

Consolidated Revenue (%) EBITDA (%) Opex (%)

1092 1132

FY16 FY17

447 508

FY16 FY17

127

175

FY16 FY17

(1) IFRIC 12 adjusted


22%

32% 13%

8%

25%

21%

34% 13%

9%

23%

Duty-free Aviation Ground-handling F&B Other

33%

20% 17%

14%

9% 7% 31%

21% 15%

18%

9% 5%

Personnel Concession rent Other

D&A Services rendered Catering

FY16

FY17

EBITDAR (1) (€m)

26 51

120

144 146 148

247 166 63

234 31 44

85 129 193

186 186 186

206 222 242

230 231 232

253 219 151

248 182 187

5

228 238 248

245 245 247

EBITDA (1) (€m)

599 673

FY16 FY17

Selected Financials by Assets (IFRIC 12 Adjusted) and Employee #s (1H18)

15

(€m) Revenue EBITDA EBITDA

Margin (%) Net Debt

Airports 383,3 200,5 52% 765 Istanbul 249,9 124,1 50% -23 Ankara 26,1 13,6 52% 9 Ege (İzmir) 30,0 18,7 62% 211 Gazipasa 2,5 0,9 38% 48 Tunisia 10,9 0,4 3% 356 Georgia 40,1 31,6 79% -13 Macedonia 13,9 5,7 41% 41 Bodrum 9,8 5,5 56% 136

Services 223,3 62,4 28% -40 Havas 64,8 25,8 40% -4 BTA 78,4 4,5 6% 4 Others* 80,2 32,1 40% -40

Total 606,7 262,9 43% 725

Elimination -57,0 -9,2 0

Consolidated 549,7 253,7 46% 725

Revenue (€m) 1H17* 1H18 Chg.(%)

Airports 357,4 383,3 7% İstanbul 237,6 249,9 5% Ankara 25,6 26,1 2% Ege (İzmir) 28,9 30,0 4% Gazipasa 1,5 2,5 67% Tunisia 8,0 10,9 36% Georgia 35,8 40,1 12% Macedonia 12,2 13,9 14% Bodrum 7,8 9,8 26%

Services 211,5 223,3 6% Havas 60,8 64,8 7% BTA 72,9 78,4 8% Others 77,8 80,2 3%

Total 568,9 606,7 7% Elimination -58,2 -57,0 -2% Consolidated 510,7 549,7 8% ATU** 154,1 164,2 7% TGS** 57,6 65,5 14% TIBAH (Medinah)** 35,0 34,1 -2%

Number of Employees (eop) 1H17* 1H18

Istanbul 2.908 3.088 Ankara 964 944 Ege (İzmir) 915 931 Tunisia 791 789 Gazipasa 62 67 Georgia 873 982 Macedonia 695 709 Havas 4.471 4.988 BTA 3.161 3.591 Holding 109 113 O&S 716 744 Technologies 328 328 Security 1.057 1.304 Latvia 6 6 Bodrum 98 108 Academy 2 2

TOTAL 17.156 18.694

EBITDA (€m) 1H17* 1H18 Chg.(%)

Airports 171,6 200,5 17% Istanbul 109,4 124,1 13% Ankara 14,0 13,6 -3% Ege (İzmir) 17,1 18,7 9% Gazipasa -0,1 0,9 nm Tunisia -3,5 0,4 nm Georgia 27,3 31,6 16% Macedonia 4,3 5,7 33% Bodrum 3,1 5,5 75%

Services 32,2 62,4 94% Havas 15,9 25,8 62% BTA 5,1 4,5 -11% Others* 11,2 32,1 186%

Total 203,8 262,9 29% Elimination -0,7 -9,2 1145% Consolidated 203,0 253,7 25% ATU** 12,3 17,0 38% TGS** 5,7 7,9 40% TIBAH (Medinah)** 7,6 8,1 6%

*Others EBITDA includes share of profit of equity accounted investees (equity-pick up).

6

235 242 250

8

0 0 0

çizgiler

251 243 223

**Equity accounted investee *Others EBITDA includes share of profit of equity accounted investees (equity-pick up). * Restated

Selected Financials by Assets (IFRIC 12 Adjusted) and employee #s (FY17)

16

(€m) Revenue EBITDA EBITDA

Margin (%) Net Debt

Airports 796,0 419.6 53% 668 Istanbul 506.3 249.6 49% -76 Ankara 56.4 33.5 59% 18 Ege 68.5 44.0 64% 186 Gazipasa 4.4 1.1 25% 48 Tunisia 23.0 -2.5 nm 348 Georgia 85.5 68.1 80% -15 Macedonia 28.0 11.7 42% 43 Bodrum 24.0 14.1 59% 116

Services 458.0 88.7 19% -81 Havas 139.5 49.1 35% 7 BTA 158.4 13.7 9% 7 Others* 160.1 25.9 16% -95

Total 1,253.9 508.3 41% 586

Elimination -122.2 -0.4 0

Consolidated 1,131.7 507.9 45% 586

Revenue (€m) FY16* FY17 Chg.(%)

Airports 765.7 796.0 4% İstanbul 500.9 506.3 1% Ankara 55.7 56.4 1% Ege 66.5 68.5 3% Gazipasa 4.5 4.4 -1% Tunisia 24.3 23.0 -5% Georgia 62.8 85.5 36% Macedonia 26.6 28.0 5% Bodrum 24.4 24.0 -2%

Services 456.9 458.0 0% Havas 131.6 139.5 6% BTA 170.2 158.4 -7% Others 155.0 160.1 3%

Total 1,222.6 1253.9 3% Elimination -130.2 -122.2 -6% Consolidated 1,092.3 1131.7 4% ATU** 336.4 342.1 2% TGS** 130.2 126.7 -3% TIBAH** 59.8 70.2 17%

Number of Employees (eop) FY16* FY17

Istanbul 2,936 2,993 Ankara 928 941 Ege 878 928 Tunisia 672 778 Gazipasa 57 62 Georgia 781 876 Macedonia 675 681 Havas 3,853 4,135 BTA 2,904 3,165 Holding 105 111 O&S 700 678 Technologies 277 332 Security 774 1,070 Latvia 6 6 Bodrum 75 78 Academy 3 2

TOTAL 15,624 16,836

EBITDA (€m) FY16* FY17 Chg.(%)

Airports 383.2 419.6 9% Istanbul 245.8 249.6 2% Ankara 28.8 33.5 16% Ege 39.5 44.0 12% Gazipasa 0.9 1.1 25% Tunisia -3.7 -2.5 -32% Georgia 47.1 68.1 45% Macedonia 11.6 11.7 1% Bodrum 13.2 14.1 7%

Services 63.4 88.7 40% Havas 31.8 49.1 54% BTA 13.5 13.7 2% Others* 18.2 25.9 42%

Total 446.7 508.3 14% Elimination 0.3 -0.4 nm Consolidated 447.0 507.9 14% ATU** 27.4 28.7 5% TGS** 11.2 15.6 40% TIBAH** 26.8 15.1 -43%

*Others EBITDA includes share of profit of equity accounted investees (equity-pick up).

6

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8

0 0 0

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**Equity accounted investee *Others EBITDA includes share of profit of equity accounted investees (equity-pick up). * Restated

2,7 3,3 3,4 3,5

5,5

4,6 4,5

2011 2012 2013 2014 2015 2016 2017

39 62 66

109 105

64 87

53

124 133

218 210

127

175 74%

50%

2011 2012 2013 2014 2015 2016 2017

Dividends Paid Net Income Payout Ratio

CAPEX Development / Dividends

17

Quarterly Capex (€m)(i) 2018 Capex

Dividend Yield (%) Dividend History (€m)

The bulk of the capex was made for new headquarter building and new international lounges

(i) Adjusted to exclude effects of IFRIC 12 accounting change

TAV Airports’ dividend policy: 50% of the consolidated IFRS net profit.

26 51

120

1

5

206 222 242

251 243 223

2018 1H CAPEX

€53m 14

8 14 13 12 14

6

20

9 6

16 11

20 13

19

10 12 12 6

20

33

1Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q18

Istanbul Other

Decentralized Debt Structure - Prudently Levered

18

Net Debt (eop, €m) June

2017 March

2018 June 2018

Airports 842 803 765

İstanbul 46 32 -23

Ankara 31 7 9

Ege (İzmir) 214 213 211

Gazipasa 48 49 48

Tunisia* 346 355 356

Georgia -15 -14 -13

Macedonia 49 42 41

Bodrum 124 118 135

Services -12 -57 -40

HAVAS 24 8 -4

BTA 6 6 4

Holding (stand alone) -

55 -80 -51

Others 13 9 11

Total 830 746 725

Gross Debt Maturity Profile (€m)

Door to Door Maturity 7.5 Years

Average Maturity 4.8 Years

Average € Cost of Debt (Hedged*) 4.1%

Net Debt / 2017 FY EBITDA 1.2

* 64% of all loans have fixed rates. -as of June 30, 2018

6

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8

0 0 0

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With the Istanbul refinancing the average cost of debt decreased from 4.6% in 2015 to 4.1% in 2018. ·

*Due to the trilateral negotiations in Tunisia, all financial debt has been reclassified to short term borrowings. Details can be found in IFRS financials Note 15

Non-recourse

207

97 121 72 64

240

363

1 Year 2 Years 3 Years 4 Years 5 Years 6+ Years

Tunisia

TAV Airports

2018 Guidance - Revised

2018 Initial Guidance

Istanbul Ataturk

Airport Int. Pax

Total TAV Airports

Pax Revenue EBITDA CAPEX Net Profit

Notes: All financial targets have been adjusted to reverse the effects of IFRIC 12 and are compliant with IFRS 11; assuming Istanbul Ataturk Airport will operate for the full year in 2018. Antalya Airport included since May, excluding the losses in the first four months of 2018. Revenue: IFRS Revenue – Construction revenue + Ankara guaranteed passenger revenue - Discount Income related to Ankara guaranteed passenger revenue. EBITDA: IFRS EBIT + Depreciation & Amortisation – Construction revenue + construction expense + Ankara guaranteed passenger revenue - Discount Income related to Ankara guaranteed passenger revenue + Equity accounted investees (EAI). EAI is not classified to EBITDA in Groupe ADP’s accounts. Please refer to pg. 27 for reconciliation to ADP’s reporting of TAV Airports financials.

Istanbul Ataturk

Airport Int. O&D Pax

19

6 to 8 Percent

10 to 12 Percent

2 to 4 Percent

double digit

~ €80m 9 to 11 Percent

5 to 7 Percent

Subject to our traffic and FX assumptions

2018 Revised Guidance Istanbul

Ataturk Airport Int.

Pax

Total TAV Airports

Pax Revenue EBITDA CAPEX Net Profit

Istanbul Ataturk


8 to 10 Percent

> 30 Percent

4 to 6 Percent

significant double digit

~ €120m

11 to 13 Percent

14 to 16 Percent

Subject to our revised traffic (with Antalya Airport since May 2018) and FX assumptions

2017 Guidance and Realization

2017 Revised Guidance

Istanbul Ataturk

Airport Int. Pax

Total TAV Airports

Pax Revenue

EBITDAR (EBITDA before concession &

rent)

CAPEX Net Profit

Notes: All financial targets have been adjusted to reverse the effects of IFRIC 12 and are compliant with IFRS 11.

Istanbul Ataturk


Realization

Guidance is revised due to better than expected passenger recovery and updated FX assumptions.

20

4 to 6 percent

6 to 8 percent

1 to 3 percent

significant increase

~ €50m 6 to 8 percent

6 to 8 percent

7 percent

9 percent

10 percent

3 percent

12 percent

37 percent

€41m

FX Exposure of Operations (FY17)

21

10%

23%

10%

57%

Opex (1)(2)

€75m

€182m

€79m

€452m

98%

1%

Gross Debt

€1092m

4%

18%

56%

22%

Revenue (1)

€716m

€230m

€54m

€281m

96%

4%

Concession Rent Expense

€7m

€158m

€4m

€1282m

€165m

€788m

€1119m

EUR USD TRY Other

(1) Combined figures, pre-elimination IFRIC12 adjusted, includes equity-pick up (€16m) (2) Includes concession rent expenses (€165m), does not include depreciation (€141m)

€22m

FX Exposure

22

Hedging

Subsidiaries, TAV Ege, TAV Macedonia, TAV İsletme and TAV Milas Bodrum enter into swap transactions in order to diminish exposure interest rate risk to manage exposure to the floating interest rates relating to loans used. Interest payments of 100%, 100%, 100% and 90% of floating bank loans for TAV Ege, TAV Macedonia, TAV İsletme and TAV Milas Bodrum respectively are fixed with interest rate swaps. Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized directly in equity to the extent that the hedge is highly effective. To the extent that the hedge is ineffective, changes in fair value of the ineffective are recognized in profit or loss.

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Equity Profit or loss

(‘000)

Strengthening of EUR

Weakening of EUR

Strengthening of EUR

Weakening of EUR

30 June 2018 - -

USD - - (12,550) 12,550

TRY - - (6,192) 6,192

Other - - (1,191) 1,191

Total (19,933) 19,933 31 December 2017

USD - - (23,331) 23,331

TRY - - (2,799) 2,799

Other - - (1,634) 1,634

Total - - (27,764) 27,764

Sensitivity Analysis

The Group’s principal currency risk relates to changes in the value of the Euro relative to TRL and USD. The Group manages its exposure to foreign currency risk by entering into derivative contracts and, where possible, seeks to incur expenses with respect to each contract in the currency in which the contract is denominated and attempt to maintain its cash and cash equivalents in currencies consistent with its obligations. The basis for the sensitivity analysis to measure foreign exchange risk is an aggregate corporate-level currency exposure. The aggregate foreign exchange exposure is composed of all assets and liabilities denominated in foreign currencies, both short-term and long-term purchase contracts. A 10 percent strengthening / (weakening) of EUR against the following currencies at 30 June 2018 and 31 December 2017 would have increased / (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

ATU (50%)

23

ATU Financials (€m) Duty Free Spend per Pax (€)

16,6 16,5 16,0

14,4 15,3 15,3

14,2

15,1 13,2 14,9 15,0 14,8

13,3 14,3 14,2

13,1 14,0

12,1

2011 2012 2013 2014 2015 2016 2017 1H17 1H18

Istanbul TAV

SPP dropped in 1H18, mainly due to TRY depreciation impacting Turkish passengers’ spending, as well as weakness in European passengers.

Operations started in 5 Tunisian airports in Q4 2014, ramp up in 2017 (one-off income in Q4 2016).

206 222 242

72,1 84,7

93,0 86,5

68,3

85,8 102,0

86,0 76,0

88,2

1,5 4,7 10,2 11,1

5,9 6,4 12,7

3,8 6,9 10,1

2%

6%

11%

13%

9%

7%

12%

8% 9%

11%

0%

2%

4%

6%

8%

10%

12%

14%

0

20

40

60

80

100

120

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18

Revenue EBITDA Margin

BTA

24

BTA Financials (€m)

39,5 44,6 48,3

37,8 32,7

40,1 47,5

38,1 36,7 41,72

1,9 4,1

6,3

0,7 1,9 2,9 7,0

1,8 1,6 2,91

5%

9%

13%

2%

6%

7%

15%

5% 4%

7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

Revenue EBITDA

TAV F&B Spend per Pax (€)

1,8

2,1 2

1,6

1,3 1,3 1,3 1,3 1,3 1,3 1,2 1,2

1,1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H17 1H18

Predominantly TRY based revenue and opex Cease of third party operations of BTA Logistics during 2016 Croatia added in 4Q17, Muscat added end of March 2018

49

148

10

207

66

170

13

250

HAVAS TGS HVS E HAVAS + TGS +HVS E

1H17

1H18

HAVAS

25

Havas Consolidated * Financials (€m) TGS Financials (50%) (€m)

Havas Solo FX Exposure FY 2017 # of Flights Served (‘000)

* Post IFRS 11

9%

40%

51%

Revenue

3%

73%

24%

Cost

28,0 33,3

39,0

31,3 26,0

34,8

46,9

31,8 27,0

37,8

4,2

9,7

17,1

0,4 4,0

11,7

24,0

9,3 6,0

19,8

0%

20%

40%

60%

0,0

10,0

20,0

30,0

40,0

50,0

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18


32,4 36,0

39,5

22,3 25,5

32,0 36,8

32,4 29,0

36,4

3,3 4,9 5,8

-2,8

1,9 3,8

7,3 2,6 1,1

6,8

-20%

-10%

0%

10%

20%

30%

-10,0-5,00,05,0

10,015,020,025,030,035,040,045,0

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18


EUR USD TRY

26 51

120

1

5

206 222 242

IFRIC 12 & Our Adjusted Financials Policy

26

Introduction to IFRIC 12 IFRIC 12 booking model

IFRIC 12- is an accounting application treating BOT assets with special provisions for guaranteed income. Ankara Esenboga Airport and Izmir Adnan Menderes Airport International Terminal, with their guaranteed passenger fee structures, fall under the scope.

The capex we incur on our BOT assets, is routinely booked as “airport operation right” in the balance sheet. However when there are guaranteed passenger fees in question, these fees are discounted to their NPV and subtracted from the “airport operation right” of the BOT in question. The remaining capex amount gets booked as “airport operation right” and the NPV of guaranteed passenger fees gets booked as “trade receivables.”

When the guaranteed passenger fees become earned during the course of operations, these are credited from the balance sheet and the difference between discounted (NPV of) guaranteed passenger fees and the actual fees as they are earned are booked as finance income.

Due to the application of IFRIC 12, guaranteed passenger fees stop being P&L items and get treated as Balance Sheet/Cash Flow items, while at the same time, part of these fees gets shown as finance income. This unduely decreases aviation income and increases finance income and distorts our P&L. To adjust for the distortion we add back guaranteed passenger fees while reporting our adjusted revenues.

On the other hand the capex incurred during the construction phase is immediately transferred to P&L with an offsetting construction income assigned to it. This income may or may not carry a mark-up on it. Since this method of booking also distorts both the P&L and the Balance Sheet we adjust our financials to disregard the effects of both “construction expense” and “construction income.”

Debit Credit

1. During Construction

BS Debt

BS Cash

BS Construction in progress

PL Construction Expense Construction Income

2. Completion of Construction

BS Construction in progress

BS (NPV of) Passenger Revenue Receivable (Trade Receivables)

BS Airport Operation Right *

3. Operations During Year

PL Aviation Income for the Current Year **

BS Cash **

4. Year Close

PL Aviation Income for the Current Year ***

PL

Was: Finance Income Is: Other operating revenue (Difference between discounted receivables and the actual receivables)

BS Passenger Revenue Receivable****

PL Amortisation of Airport Operation Right

BS Accumulated Amortisation of Airport Operation Right

* AOR = Construction in progress-(NPV of Passenger Revenue Receivable ** TR-GAAP *** IFRS (IFRIC 12 application) **** Discounted guaranteed passenger revenues for that period

Guaranteed Pax Structure 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

An

kara

International Departing Pax (m) 0.8 0.8 0.9 0.9 1.0 1.0 1.1 1.1 1.2 1.2 1.3 1.3 1.4 1.5 1.6 0.6

Guaranteed Pax Income (€m) 11.8 12.4 13.0 13.7 14.4 15.1 15.8 16.6 17.5 18.3 19.2 20.2 21.2 22.3 23.4 9.6

Domestic Departing Pax (m) 0.6 0.7 0.7 0.7 0.8 0.8 0.8 0.9 0.9 1.0 1.0 1.1 1.1 1.2 1.2 0.5

Guaranteed Pax Income (€m) 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.7 2.8 2.9 3.1 3.2 3.4 3.6 3.7 1.5

Total Guaranteed Pax Income (€m) 13.7 14.4 15.1 15.9 16.7 17.5 18.4 19.3 20.2 21.3 22.3 23.4 24.6 25.8 27.1 11.1

Discount Income (€m) 11.80 10.96 9.93 8.69 7.21 5.47 3.43 0.43

İzm

ir

International Departing Pax (m) 1.1 1.1 1.1 1.2 1.2 1.2 1.3

Guaranteed Pax Income (€m) 15.9 16.4 16.9 17.4 17.9 18.4 19.0

Total Guaranteed Pax Income (€m) 29.6 30.8 32.0 33.3 34.6 35.9 37.4 19.3 20.2 21.3 22.3 23.4 24.6 25.8 27.1 11.1

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Reconciliation of Revenue and EBITDA (1H 2018)

27

Revenue Reconciliation EBITDA Reconciliation

545,3

4,4 0,0

549,7

IFR

S R

eve

nu

e(r

epo

rted

by

AD

P)

An

kara

Gu

aran

teed

Pax

Rev

enu

e

Co

nst

ruct

ion

Rev

enu

e

Ad

just

ed R

eve

nu

e(r

epo

rted

by

TAV

)

227,7

4,4 21,6

253,7

EBIT

DA

rep

ort

ed b

yA

DP

An

kara

Gu

aran

teed

Pax

Rev

enu

e

Equ

ity

Pic

k-u

p

EBIT

DA

rep

ort

ed b

yTA

V

(Net

of

dis

cou

nt

inco

me)

(Net

of

dis

cou

nt

inco

me)

Equity Accounted Investees – IFRS 11

28

1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 2Q18 Antalya (50%) ¹ Revenue 8,9 23,2 39,2 19,6 90,9 7,5 35,4 65,0 22.3 130.2 12,0 43,4

EBITDAR ² 4.1 18.3 33.9 14.3 70.6 3.8 30.5 59.6 17.4 111.3 4.3 41.1 EBITDA ² -11,4 2,8 18,2 -1,4 8,2 -6,9 14,7 43,6 1.4 52.8 -10,9 25,8 Net Profit -16,3 1,2 9,6 -6,2 -11,8 -10,1 8,2 24,7 -2,8 20,0 -12,4 16.8 Net Debt 113,2 104,7 76,2 63,4 63,4 63,8 47,6 2,1 -21,2 -21,2 29,9 54,0

PPAA ³ -8,5

Net Profit+PPAA 8.3 (⁴) 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 2Q18 ATU (%50) Revenue 72.1 84.7 93.0 86.7 336.4 68.3 85.8 102.0 86.0 342.1 76.0 88.2

EBITDA* 1.5 4.7 10.2 11.1 27.4 5.9 6.4 12.7 3.8 28.7 6.9 10.1 Net Profit 1.3 3.5 1.8 10.4 16.9 3.3 4.5 8.4 4.3 20.5 5.0 7.5 Net Debt 13.3 12.2 18.0 9.3 9.3 8.8 4.5 -1.1 -4.6 -4.6 -9.3 -5.4

1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 2Q18

TGS (50%) Revenue 32.4 36.0 39.5 22.3 130.2 25.5 32.0 36.8 32.4 126.7 29.0 36.4 EBITDA 3.3 4.9 5.9 -2.8 11.2 1.9 3.8 7.3 2.6 15.6 1.1 6.8 Net Profit 1.8 2.7 3.5 -3.6 4.4 0.6 2.0 5.0 1.8 9.4 0.3 5.2 Net Debt 0 0.0 0.0 0.1 0.1 - 0.0 0.0 -11.4 -11.4 0.0 0.0

1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 2Q18

TIBAH (33%) Revenue 14.1 14.8 16.5 14.3 59.8 16.8 18.2 21.4 13.8 70.2 16.8 17,3

(Medinah) EBITDA 8.8 6.1 7.1 4.8 26.8 3.4 4.1 5.5 2.1 15.1 4.2 3,9

Net Profit 0.8 -1.3 -0.7 -2.9 -4.2 -4.5 -3.7 -0.7 -2.7 -11.6 -1.6 -1,8

Net Debt 317.0 322.6 315.6 316.5 316.5 311.0 300.7 300.3 283.0 283.0 274.9 294.4

6

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8

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¹ TAV Airports’ 49% stake in TAV Antalya entitles it to equal governance and 50% of dividends. ² Adjusted EBITDA after concession rent amortization (IFRS EBITDA is before concession rent amortization) ³ TAV Airports’ Purchase Price Allocation (PPA) Amortization for Antalya Airport ⁴ While TAV Antalya’s contribution to TAV Airports Q2 2018 consolidated financials only includes May and June 2018 amounting to EUR 8.5 million, the EUR 8.3 million is calculated for Q2 2018.

Income Statement / Balance Sheet

29

INCOME STATEMENT (€m) 1H17 1H18

Construction revenue 13,5 0,0 Total operating revenue 507,9 545,3 Other operating income 0,3 0,3 Aviation income 161,5 181,7 Ground handling income 67,8 71,1 Commission from sales of duty free goods 109,5 116,0 Catering services income 48,3 52,6 Other operating revenue 120,9 123,8 Construction expenditure (13,5) 0,0 Operating expenses (367,4) (372,3) Cost of catering inventory sold (19,7) (19,0) Cost of services rendered (33,3) (29,7) Personnel expenses (119,1) (118,2) Concession rent expenses (79,9) (80,9) Depreciation and amortization expense (58,8) (54,5) Other operating expenses (56,5) (70,0) Equity Pick-up 0,6 21,6 Operating profit 141,5 194,8 Finance income 2,6 7,1 Finance expenses (52,4) (63,1) Profit before income tax 91,7 138,8 Income tax expense (30,2) (43,4) Profit for the period from continuing operations 60,0 93,1 Attributable to: Owners of the Company 60.0 93.1 Non-controlling interest 1.5 2.3

EQUITY AND LIABILITIES (€m) 1H17 1H18

EQUITY

Share capital 162,4 162,4

Share premium 220,3 220,3

Legal reserves 109,7 118,9

Other reserves -70,2 -81,3

Revaluation surplus 0,0 0,0

Purchase of shares of entities under common control 40,1 40,1

Cash flow hedge reserve -53,9 -47,1

Translation reserves -31,1 -45,2

Retained earnings / (Accumulated losses) 429,0 540,8

Total equity attributable to equity holders of the Company 806,2 908,8

Non-controlling interest -1,4 -2,9

Total Equity 804,8 905,9

Loans and borrowings 541,7 605,9

Reserve for employee severance indemnity 23,4 18,1

Due to related parties 0,0 301,4

Derivative financial instruments 43,5 28,7

Deferred income 30,0 18,0

Other payables 564,7 541,1

Deferred tax liabilities 18,8 15,2

Total non-current liabilities 1.222,2 1.528,3

Bank overdraft 3,1 -0,0

Loans and borrowings 627,8 572,3

Trade payables 44,3 46,7

Due to related parties 5,7 1,0

Current tax liabilities 14,7 24,3

Other payables 250,7 221,3

Provisions 7,3 6,4

Deferred income 13,5 11,9

Derivative financial instruments 0,0 -0,0

Total current liabilities 967,0 883,8

Total Liabilities 2.189,2 2.412,2

TOTAL EQUITY AND LIABILITIES 2.994,0 3.318,0

ASSETS (€m) 1H17 1H18

Property and equipment 210,1 216,0

Intangible assets 13,2 11,4

Airport operation rights 1.677,5 1.597,4

Other investments 0,0 -0,0

Goodwill 136,1 136,0

Prepaid concession expenses 7,7 4,7

Derivative Financial Instruments 0,0 0,1

Trade receivables 85,0 72,7

Other non-current assets 5,4 5,8

Deferred tax assets 35,2 29,5

Equity pick-up assets 76,0 441,2

Total non-current assets 2.246,2 2.514,7

Inventories 10,2 9,8

Prepaid concession expenses 150,6 110,9

Trade receivables 157,7 143,0

Due from related parties 22,2 28,9

Derivative financial instruments 0,0 0,0

Other receivables and current assets 64,2 57,9

Cash and cash equivalents 192,7 248,1

Restricted bank balances 150,1 204,7

Total current assets 747,8 803,3

TOTAL ASSETS 2.994,0 3.318,0

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Cash Flow Statement

30

CASH FLOWS FROM OPERATING ACTIVITIES 1H17 1H18

Profit for the period 61.5 95.5

Adjustments for:

Amortisation of airport operation right 31.0 26.7

Depreciation of property and equipment 25.7 26.4

Amortisation of intangible assets 2.2 1.3

Concession and rent expenses 79.9 80.9

Provision for employee severance indemnity 3.0 2.6

Provision for doubtful receivables 0.4 0.4

Discount on receivables and payables, net -0.1 0.0

Provision set for unused vacation 0.9 1.1

Interest income -4.6 -7.1

Interest expense on financial liabilities 30.9 34.5

Tax expense 30.2 43.4

Unwinding of discount on concession receivable and payable

11.4 11.2

Share of profit of equity-accounted investees, net of tax -0.6 -21.6

Unrealised foreign exchange differences on statement of financial position items

-2.2 -9.8

Cash flows from operating activities 269.5 285.3

Change in current trade receivables -27.7 -13.3

Change in non-current trade receivables 11.0 11.6

Change in inventories -1.4 0.1

Change in due from related parties -6.3 -3.3

Change in other receivables and assets -0.6 13.8

Change in trade payables -11.8 0.4

Change in due to related parties 2.8 0.3

Change in other payables and provisions -38.9 -71.3

Cash provided from operations 196.6 223.6

Income taxes paid -33.6 -36.2

Retirement benefits paid -2.1 -2.1

Additions to prepaid concession and rent expenses -134.1 -116.0

Net cash provided from operating activities 26.8 69.2

CASH FLOWS FROM INVESTING ACTIVITIES 1H17 1H18

Proceeds from sale of property, equipment and intangible assets

0.5 0.8

Acquisition of property and equipment -9.3 -52.3

Additions to airport operation right -13.3 0.0

Acquisition of joint venture net of cash acquired 0.0 -360.0

Acquisition of intangible assets -0.7 -1.1

Change in due from related parties 4.1 -3.3


Dividends from equity-accounted investees 18.7 22.8

Net cash used in investing activities -0.1 -393.1

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings 28.1 170.1

Repayment of borrowings -100.1 -115.8

Dividends paid -68.8 -88.5

Interest received 4.7 9.4

Interest paid -23.4 -22.6


Change in restricted bank balances 8.9 -25.7

Change in finance lease liabilities -2.0 -0.5

Net cash used in financing activities -152.5 227.8

NET INCREASE IN CASH AND CASH EQUIVALENTS -125.8 -96.1

CASH AND CASH EQUIVALENTS AT 1 JANUARY 315.3 344.2

CASH AND CASH EQUIVALENTS AT 30 JUNE 189.5 248.1

6

235 242 250

8

251 243 223

Airport Type/Expire TAV Stake Scope 2016 Pax (mppa)

fee/pax Int'l

fee/pax Dom.

Volume Guarantee

Yearly Lease/ Concession Fee Paid

Net Debt (1)

Istanbul Ataturk Lease

100% Terminal 63.7 US$15

€3 No $140m + VAT €-23m (January 2021) €2.5 (Transfer)

Ankara Esenboga BOT

100% Terminal 15.8 €15

€2.5 (Transfer) €3

0.6m Dom. , 0.75m Int'l for 2007+5% p.a

- €9m (May 2023)

Izmir A.Menderes (Ege)

Concession 100% Terminal 12.8

€15 €2.5 (Transfer)

€3 No €29m+VAT (2)

€211m

(December 2032)

Gazipasa Alanya Lease

100% Airport 0.8 €10(3) TL7.5(3) No $50,000+VAT(4) €48m (May 2034)

Milas Bodrum Concession

(December 2035) 100% Terminal 3.5 €15 €3 No

€143.4m upfront+ €28.7m+VAT (5)

€135m

Tbilisi BOT

80% Airport 3.2 US$24 US$6 No - €-8m (February 2027)

Antalya Concession

(December 2024) 50%(10) Terminal 26.0

€15 €2.5(Transfer)

€3 No $100.5m + VAT -

Batumi BOT

76% Airport 0.5 US$12 US$7 No - €-6m (August 2027)

Monastir&Enfidha BOT+Concession

67% Airport 1.7 €9 €1 No

11-26% of revenue from €356m

(May 2047) 2010 to 2047

Skopje & Ohrid BOT+Concession

100% Airport 2.0 €17.5 in Skopje, €16.2 in Ohrid

- No 4% of the gross annual

turnover (6) €41m

(March 2030)

Medinah (TIBAH)

BTO+Concession 33% Airport 7.8 SAR 87 (7) - No 54.5% (8) -

(2037)

Yanbu, Hail & Qassim(7,9)

BTO+Concession

50% Airport

3.5 SAR 87(7) SAR 10 No

3% of the gross annual turnover for Yanbu

3,6% of the gross annual turnover until 2026, 7,2% between 2026-2047 for

Hail&Qassim

- (2047)

Zagreb (MZLZ)

BOT+Concession (April 2042)

15% Airport 3.1 €15

€7 No €2.0 - €11.5m fixed 0.5% (2016) - 61%

(2042) variable -

€4 (Transfer)

Concession Overview

31

1) As of 30 June 2018 2) Accrual basis: Depreciation expense of €13.5m in 2015 to €32.4m in 2032 plus finance expense of €17.8m in

2015 to €0m in 2032 3) TAV Gazipasa tariff increased on January 1, 2015 4) TAV Gazipasa will make a yearly rent payment of US$ 50,000 + VAT plus 65% of net profit to DHMI. 5) Yearly payments start October 2015. Accrual basis: Depreciation expense of €11.1m in 2016 to €38.0m in 2032 plus

finance expense of €18.8m in 2016 to €0m in 2032

6) The percentage will be tapered towards 2% as passenger numbers increase. 7) SAR 87 from both departing and arriving international pax. Pax charge will be increase as per cumulative CPI in Saudi

Arabia every three years 8) The concession charge was reduced to 27.25 % for the first two years that follow the completion of the construction

of the new terminal in Q2 2015 9) TAV Airports won the concession for these airports but has not operated these airports 10) TAV Airports’ 49% stake in Antalya Airport entitles it to equal governance and 50% of dividends.

6

235 242 250

8

251 243 223

Airport Type/Expire TAV Stake Scope 2017 Pax (mppa)

fee/pax Int'l

fee/pax Dom.

Volume Guarantee

Yearly Lease/ Concession Fee Paid

Net Debt (1)

TAV became 100% shareholder of BTA

EUR25million impairment of Milas Bodrum (net profit impact of EUR20million, after deferred tax)

Havas Germany operations shut down

Accounting methodology changes

~EUR15m software sales revenue accrued in Q4, mainly from Abu Dhabi and Saudi projects

MoU signed to undertake exclusive negotiations with the Cuban government for Havana Airport

Q4

Timeline

32

2017 2018 2016

TRY 348 million cash dividends paid

Macedonia loan refinanced with one-off cost of ~EUR7m

Q1


Adverse weather conditions in January led to flight cancellations in İstanbul

New terminal building of Zagreb Airport opened at the end of March

Q1


Signed SPA to purchase 49% of Antalya Airport with co-control and equal dividend rights from IC for EUR 360 million

Q1

Istanbul loan refinanced with one-off cost of ~EUR11m (will be net income neutral by year-end)

Tunisia deferred tax asset reversal of ~EUR14m

Ataturk extension complete

Tbilisi runway and taxiway rehabilitation complete

Attack on the airport (June 28), coup attempt (July 15)

Q2

Consortium with TAV invited to exclusive negotiations for Havana Airports, Cuba

Started negotiations with Saudi Oger Ltd. to purchase half of its 33.3% shares of Tibah

Q3

Philippines regional airports tender cancelled

Saudi airports awarded (Yanbu, Qasim and Hail)

New arrival terminal building of Tbilisi Airport opened at the end of June

Q2

Change in shareholder structure

Guidance Revision for 2017

Q3

Q4

Antalya Airport share transfer took place in May 2018

TGS contract renewed for 15 more years

Q2

Tax Regimes

33

Corporate income tax rate of 25%


Corporate income tax rate of 20% as of 2018 (15% previously)

Corporate income tax rate of 20% for non-residents


Corporate income tax rate of 22% for 2018-2019-2020 (20% previously) %. Advance tax returns are filed on a quarterly basis Losses can be carried forward for offsetting against future taxable income for up to 5 years


Turkey

Georgia

Tunisia

Macedonia

Latvia

Saudi Arabia

Croatia

Share Price Performance 1M 3M YTD

TRY 23% 15% 29%

USD 17% -4% 1%

Relative to BIST -100 21% 29% 56%

Share Performance (July 25, 2018)

ESG & Share Performance

34

Corporate Governance rating has increased to 96.17 (9.62 out of 10) from a rating of 95.38 (9.54 out of 10), owing to our strong emphasis on developing good corporate governance practices. The previous rating was announced on 19.08.2016.

Corporate Governance Rating Weight Grade

Shareholders 25% 95.77

Public Disclosure and Transparency 25% 97.34

Stakeholders 15% 98.82

Board of Directors 35% 94.48

Total 100% 96.17 Closing Price (TRY)

27.76 Market Cap USD 2.1 bn

Avg. Daily Volume** USD 8 m

Free Float* 44%

Effective Free Float* 44%

Foreign Ownership

~90%

* Source: Central Registry Agency (MKK) ** 2018 yearly average

85 129 193

247 166 63

TAV Airports was included in the BIST Sustainability Index on November 4, 2014.

6

235 242 250

8

251 243 223

Sustainability

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

25.

07.2

01

8

27.

04.2

01

8

31.

01.2

01

8

6.1

1.2

017

8.0

8.2

017

10.

05.2

01

7

13.

02.2

01

7

18.

11.2

01

6

18.

08.2

01

6

20.

05.2

01

6

24.

02.2

01

6

30.

11.2

01

5

01.

09.2

01

5

05.

06.2

01

5

09.

03.2

01

5

11.

12.2

01

4

12.

09.2

01

4

16.

06.2

01

4

18.

03.2

01

4

20.

12.2

01

3

19.

09.2

01

3

21.

06.2

01

3

26.

03.2

01

3

TAVHL ($)

TUNISIA

UAE

QATAR

GEORGIA

TURKEY

OMAN KENYA

SAUDI ARABIA

LATVIA

GERMANY

USA CROATIA

MACEDONIA

Global Presence with Service Companies in 20 Countries and 78 Airports

35

CHILE

INDONESIA

JORDAN

DENMARK

SWITZERLAND

EGYPT

RWANDA

Source: Groupe ADP, TAV Airports ( as of end-2017) * Groupe ADP sold its stake in the Mexican company Servicios de Tecnología Aeroportuaria (SETA), which itself has a 16.7% stake in holding company Grupo Aeroportuario del Centro Norte (GACN), which controls 13 airports in the north and centre of Mexico, including Monterrey International Airport. Since end of December 2016, Groupe ADP manages Antananarivo & Nosy Be airports in Madagascar but Group traffic figures do not include yet in 2016 their traffic figures. ** Passenger numbers are for FY 2017, excluding passenger numbers for Schiphol, Riga Airports and Yanbu, Hail and Qassim Airports in Saudi Arabia. This calculation takes into account Paris Aéroport and TAV Airports’ figures at 100% for 2017 and, for minority stakes, it takes into account the traffic weighted by stake of ownership. 36

A Platform of 23 airports* and 228 million passengers**

FRANCE Paris-CDG: 69.5mn pax Paris-Orly: 32.0mn pax Owner and operator

Schiphol Group (8%) 68.5mn pax Industrial cooperation

Liège (25.6%) Strategic partner Croatia (TAV 15% ADPM

21%) Zagreb Airport:3.1mn pax Concession operator

Turkey Istanbul Ataturk: 63.7mn pax Ankara: 15.8mn pax Izmir: 12.8mn pax Mlas-Bodrum: 3.5mn pax Gazipasa: 0.8mn Concession operator

Amman – Jordan (9.5%) 7.9 mn pax Management contract Strategic partner

Medinah (Saudi Arabia) (33%) 7.8mn pax

Concession operator

Tunisia (67%) Enfidha & Monastir 1.7mn pax Concession operator

Jeddah (Hajj Terminal) – Saudi Arabia

8.0mn pax Management contract

Mauritius (10%) 3.7mn pax Operator Strategic partner

Conakry Airport (29%) 0.5mn pax Operator

Santiago de Chile (45%) 21.4mn pax Concession

ADP TAV Airports

Groupe ADP – TAV Airports: A Global Footprint

Macedonia (100%) Skopje & Ohrid: 2.0 mn pax

Concession operator

Georgia Tbilisi(80%) & Batumi(76%): 3.7 mn pax Concession operator

Madagascar (35%) (Since December 2016)

1.1mn pax Concession Operator

Major Airports in Turkey

37

Istanbul / Ataturk Airport Tender Date: 2005 Type: Lease Expire: 2021

63,7 m Intl: 44,3 m

Dom: 19,5 m

Ankara / Esenboga Airport Tender Date: 2006 Type: BOT Expire: 2023

15,8 m Intl: 2,0 m

Dom: 13,9 m

İzmir / A.Menderes Airport Tender Date: 2011* Type: Lease Expire: 2032

12,8 m Intl: 2,4 m

Dom: 10,5 m

Milas-Bodrum Airport Tender Date: 2014* Type: Lease Expire: October 22,2035

3,5 m Intl: 0,9 m

Dom: 2,6 m Mugla / Dalaman Airport

Tender Date: 2014 Type: BOT+Lease Expire: 2039

3,7 m Intl: 2,3 m

Dom: 1,4 m

Antalya Airport Tender Date: 2007 Type: Lease Expire: 2024

25,9 m Intl: 18,5 m Dom: 7,5 m

Gaziantep Airport 2,9 m Intl: 0,3 m

Dom: 2,6 m

Adana Airport 5,6 m Intl: 0,6 m

Dom: 5,0 m

Kapadokya Airport 0,1 m Intl: 0 m

Dom: 0,1 m

Trabzon Airport 4,2 m Intl: 0,2 m

Dom: 4,0 m

Samsun Airport 1,2 m Intl: 0,0 m

Dom: 1,1 m

GazipasaAirport Tender Date: 2007 Type: Lease Expire: 2034

0,8 m Intl: 0,3 m

Dom: 0,5 m

* International terminal taken over in October 2015 ** Pax numbers are for 2017.

Operated by TAV Airports

Not privatized

Operated by others

230 231 232

İstanbul / Sabiha Gokcen Airport

Tender Date: 2007 Type: BOT Expire: 2032

31,4 m Intl:10,3 m

Dom: 21,1 m

New Airport

Sabiha Gokcen

Ataturk Int.

Airport

3rd Bridge

Macro Outlook

38

Country Subject Descriptor Units Scale 2016 2017 2018 2019 2020 2021 2022 2023

Gross domestic product, constant prices % Ch. 3,2 2,8 2,8 2,6 2,4 2,3 2,2 2,2

Croatia

Gross domestic product, current prices USD Billions 51,4 54,5 61,1 63,8 66,6 69,1 72,0 73,9

Gross domestic product per capita, current prices USD Thousands 12,3 13,1 14,8 15,5 16,3 17,0 17,8 18,4

Inflation, average consumer prices % Ch. -1,1 1,1 1,5 1,5 1,6 1,7 1,8 1,8

Population Persons Millions 4,2 4,1 4,1 4,1 4,1 4,1 4,0 4,0


Georgia



Inflation, average consumer prices % Ch. 2,1 6,0 3,6 3,0 3,0 3,0 3,0 3,0



Latvia






FYR Macedonia



Inflation, average consumer prices % Ch. -0,2 1,4 1,8 1,9 2,0 2,0 2,0 2,0


Gross domestic product, constant prices % Ch. 1,7 -0,7 1,7 1,9 1,9 2,1 2,2 2,3

Saudi Arabia



Inflation, average consumer prices % Ch. 2,0 -0,9 3,7 2,0 2,2 2,2 2,1 2,1


Gross domestic product, constant prices % Ch. 1,0 1,9 2,4 2,9 3,4 3,6 4 4,2

Tunisia






Turkey

Gross domestic product, current prices USD Billions 863,4 849,5 909,9 961,7 1.025,0 1.089,0 1.155,0 1.223,0




IMF, World Economic Outlook Database, April 2018

228 238 248

10

242 247 252

9

Contact IR

39

IR Team About TAV Airports

Nursel İLGEN, CFA Director, Head of Investor Relations [email protected] Tel :+90 212 463 3000 / 2122 Fax : +90 212 465 3100

Besim MERİC Investor Relations Coordinator [email protected] Tel :+90 212 463 3000 / 2123 Fax : +90 212 465 3100

Ali Ozgu CANERİ Investor Relations Coordinator [email protected] Tel :+90 212 463 3000 / 2124 Fax : +90 212 465 3100

IR Website http://ir.tav.aero

e-mail [email protected]

Phone +90-212-463 3000 (x2122 – 2123 – 2124 - 2125)

Twitter twitter.com/irTAV

Facebook facebook.com/irTAV

Address TAV Airports Holding Co. Istanbul Ataturk Airport International Terminal (Besides Gate A and VIP) 34149 Yesilkoy, Istanbul

Turkey

Georgia

Tunisia

Macedonia

Saudi Arabia

Latvia

Croatia

Istanbul Ataturk Ankara Esenboga Izmir Adnan Menderes

Gazipasa Alanya Milas Bodrum Antalya

Tbilisi and Batumi

Monastir and Enfidha

Skopje and Ohrid

Medinah Yanbu, Hail & Qassim*

Riga (only commercial areas)

Zagreb

TAV Airports through its affiliates and subsidiaries, in auxiliary airport services including duty free, food and beverage, ground handling services, IT, security and operation services. As part of these diversified services TAV Airports also operates the duty-free, food and beverage and other commercial areas at Riga Airport in Latvia. In 2017, the company provided services for 836K flights and more than 115 million passengers. The Company’s shares are listed in Borsa Istanbul since February 23, 2007, under the ticker code “TAVHL”

*TAV Airports won the concession for these airports but has not operated these airports

mailto:[email protected]

http://ir.tav.aero/

mailto:[email protected]

https://itunes.apple.com/tr/app/tav-ir/id1144512307

https://play.google.com/store/apps/details?id=com.tav.ir&hl=en

Disclaimer

This presentation does not constitute an offer to sell or the solicitation of an offer to buy or acquire any shares of TAV Havalimanlari Holding A.S. (the "Company") in any jurisdiction or an inducement to enter into investment activity. No information set out in this document or referred to in such other written or oral information will form the basis of any contract.

The information used in preparing these materials was obtained from or through the Company or the Company’s representatives or from public sources. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its accuracy, completeness or fairness. The information in this presentation is subject to verification, completion and change. While the information herein has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by the Company or any of its group undertakings, employees or agents as to or in relation to the accuracy, completeness or fairness of the information contained in this presentation or any other written or oral information made available to any interested party or its advisers and any such liability is expressly disclaimed. This disclaimer will not exclude any liability for, or remedy in respect of fraudulent misrepresentation by the Company.

This presentation contains forward-looking statements. These statements, which may contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning, reflect the Company’s beliefs, opinions and expectations and, particularly where such statements relate to possible or assumed future financial or other performance of the Company, are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. These forward-looking statements speak only as at the date of this presentation. The Company expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Past performance cannot be relied upon as a guide to future performance. As a result, you are cautioned not to place reliance on such forward-looking statements.

Information in this presentation was prepared as of July 26, 2018.

40

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