Q4 & FY 2015 Feb 18, 2016 · Turkcell | Fourth Quarter & Full Year 2015 5 CONSOLIDATED TRY MILLION1...

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TURKCELLQ4 & FY 2015Feb 18, 2016

Turkcell | Fourth Quarter & Full Year 2015

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This presentation may contain statements that are forward looking. These statements arebased on current expectations and assumptions that are subject to risks and uncertainties,which may cause actual results to differ materially due to factors discussed in thispresentation, in our press release, in the Risk Factors section of Turkcell’s most recent Form20-F, or in other reports and filings with the US Securities and Exchange Commission. Weundertake no duty to update or revise any forward looking statements, whether as a resultof new information, future events or otherwise.

Please note that all financial data is consolidated, whereas non-financial data isunconsolidated unless otherwise specified.

NOTICE


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BUSINESS OVERVIEWKaan TerzioğluTurkcell CEO


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Network, marketing & sales

Convergence

Largest spectrum1200 Mbps speed in 4.5G test

4.5G

Globally Relevant ServicesBIP downloaded in 189 countries

Voice & video call

Efficient Balance Sheet3 investment grade ratings

Debt restructuring in subsidiaries

$2.9 billion debt raised

Consumer Finance Company

Settlement with Turk Telekom

International ExpansionAcquired 100% of lifecell in Ukraine

Non-binding offer for FinturGOOD CORPORATE GOVERNANCE & EXECUTION

2015 Recap


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CONSOLIDATEDTRY MILLION1 Q4 2015

GrowthYoY %

Revenue 3,334 7.5%

EBITDA 1,058 15.4%

EBITDA Margin 31.7% 2.1pp

Net Income-Proforma2 671 28.7%

Net Income-IFRS 584 126.5%

FY 2015Growth

YoY %

12,769 6.0%

4,141 10.1%

32.4% 1.2pp

2,590 18.3%

2,068 10.9%

1 TRY figures are based on IFRS TRY figures2 Net Income excluding FX gain/(loss) (inc tax and minority impact), monetary gain (inflation impact), interest Income on time deposit & one off items

YearQuarter

Group Financial Highlights

Record performance both in Q415 & FY 2015, guidance delivered

↑ ↑


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CONSOLIDATEDTRY MILLION1 Q4 2015

GrowthYoY %

Revenue 2,998 10.1%

EBITDA 956 18.0%

EBITDA Margin 31.9% 2.1pp

Net Income-Proforma2 564 26.0%

Net Income-IFRS 518 (11.1%)

FY 2015Growth

YoY %

11,481 9.5%

3,760 13.0%

32.7% 1.0pp

2,256 17.9%

2,484 3.3%

1 TRY figures are based on IFRS TRY figures2 Net Income excluding FX gain/(loss) (including tax and minority impact), monetary gain (inflation impact), interest Income on time deposit & one off itemsNote: Call center revenues were previously included in Turkcell Turkey but are, with effect from the fourth quarter of 2015, now included in “Other subsidiaries

YearQuarter

Turkcell Turkey Financial Highlights

↑ ↑

Record revenue & EBITDA both in Q4 & FY 2015


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Turkcell Turkey: Solid Growth

9.0% 8.9%

10.1% 10.1%

31.1%32.8%

34.9%

31.9%

Q115 Q215 Q315 Q415

Revenue Growth EBITDA Margin

9.4%YoY

3%

% in Turkcell Turkey

CONSUMER

CORPORATE

80%

18%

FY15 Revenue Growth

WHOLESALE

6.5%YoY

10.2%YoY

QUARTER FULL YEAR

5.9%

9.5%

31.7%32.7%

FY14 FY15


8 1 Includes Turkcell Satış (retail store in telecommunications) and Turkcell Teknoloji (research and development) and other revenuesTotal may have rounding differences

Data & Services Drive Growth

YoY Growth

Consumer & Corporate

567 606 638727 740

178187 200

213 228

Q414 Q115 Q215 Q315 Q415

Mobile broadband Fixed broadband

30.1%

28.4%

30.6%

940

744

REVENUE BREAKDOWN (FY15) DATA REVENUESTRY MILLION

793 837

968

% of Turkcell Turkey

Data 38.1%31%

Services & Solutions 38.5%6%

Other1 (including

Hardware & Software Sales) 18.5%3%

Messaging 13.5%5%

Voice 2.7%52%

YoY Growth


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Market Share

35.2% 35.6% 35.5%

18.6% 18.9% 20.3%

46.2% 45.5% 44.2%

2013 2014 2015

Revenue Share of Major Players1

1 Share calculation based on operators announcements. Turkcell Turkey’s market share is based on Turkcell Turkey reported revenues and call center revenues.

2.0%

1.7%

0.3%

Change vsFY13 (%)


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54% 46%

4.5 4.2 4.03.7

47% 30%

23%

46%

24%

30%

Best Positioned to Monetize Convergence

#1in Spectrum

(1) Based on operators announcements (2) Company research among Turkcell’s customers (3) IPSOS research Q415

16.6

9.5 8.7

Quality of dealer service

Spectrum distributionat the 4.5G tender

Fiber subscribermarket share1 # of postpaid customers1

#1 in Mobile

#1in Customer Care

#1in Postpaid

Turkcell Vodafone Turk Telekom

#1 in Fiber

Mobile subscribermarket share1

Owned2 Exclusive3


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34.6 34.0

15.2 16.6

44%

49%

Q414 Q415Total PostpaidPostpaid (%)

Strong Subscriber Growth

1,191

1,520

735899

Q414 Q415Total Fiber

60

224

Q414 Q415IPTV

↑1.2mn

↑0.9mn

Not disclosed

↑39K

No IPTV

↑95K

MOBILE (million) FIXED (thousand) TV (thousand)

↑1.4mn ↑164K ↑164K

Smartphone (million)

12.716.1

40%

52%

Q414 Q415Number Penetration

↑15pp

↑14pp

↑12pp

* Other operators’ numbers are based on their announcements

Postpaid Fiber IPTV SP Penetration


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MOBILE

Monetizing Multi-play

41%

45%

14%

Single Play

Double Play

Triple Play

*Breakdown among mobile voice users which excludes subscribers who do not use their line in the last 3 monthsMobile multiplay includes voice, data and strategic services usage

FIBER RESIDENTIAL

28%

50%

23%Single Play

Double Play

Triple Play

Subscriber Breakdown (Q415)* Subscriber Breakdown (Q415)

ARPU (TRY) Q415 YoY Growth

Mobile Blended 25.1 9.1%

Postpaid (excl. M2M) 42.8 2.1%

Prepaid 12.8 10.3%

M2M 3.5 12.9%

ARPU (TRY) Q415 YoY Growth

Fixed Residential 50.3 4.6%


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Focus on Services Continued

INSTANT MESSAGING6.2M download

As of Feb 18

SPORTS1.8M download

As of Feb 18

SMART STORAGE1.7M users

As of Feb 18

TURKCELL MUSIC5.4M download

As of Feb 18

DOWNLOAD (Million) DOWNLOAD (Million) DOWNLOAD (Million)USER (Million)

558342

211165

Q415Q315Q215Q115Q414

TURKCELL TV+600K+ subscribers

As of Feb 18

1.61.1

0.90.6

0.35

Q415

Q315

Q215

Q115

Q414

1.71.3

0.30.5

0.3

Q415

Q315

Q215

Q115

Q414

5.24.1

3.53.0

2.5

Q415

Q315

Q215

Q115

Q414

4.81.9

1.40.50.5

Q415

Q315

Q215

Q115

Q414

SUBSCRIBERS (000)

36% non-Turkcell

Global download: 184K(302K as of Feb 18)

#1 music platform in Turkey

#1 personal cloud in Turkey

Best Sports app to follow favorite team

New generation TV platform

*

Download numbers are cumulativeBIP download numbers include total of BIP 1.0, 2.0 and 3.0* Management reporting on active TV subscription started in Q115.


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Turkcell’s 4.5G to Redefine TV Experience

Launched smart projector «ZTE Spro2», more to come…

Flexible payment plans are available as of Februarythrough Turkcell’s consumer finance company


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193 205235 224

27.5% 27.2% 29.6% 30.2%

Q115 Q215 Q315 Q415Revenue (TRY million*) EBITDA Margin

1,138

856

24.7%28.7%

FY14 FY15

Turkcell International: Improved Profitability

16.5%

UKRAINE

BELARUS

65.9%

% in TurkcellInternational

15.3%

NORTHERN CYPRUS

33.2%

2.2%

7.6%

FY15 RevenueGrowth

(in local currency)

FY15 EBITDA Margin

38.4%

10.5%

13.0%

QUARTER FULL YEAR

UAH/USD: ↓52% in FY15

BYR/USD: ↓57% in FY15

* TRY figures are based on IFRS TRY figures

in UAH

in BYR

in TRY


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Guidance for 2016 Maintained

2015 2016E

REVENUE GROWTH

EBITDA MARGIN

OP. CAPEX / SALES*

Turkey 9.5%Group 6.0%

31%-33%32.4%

20% ~20%

* Excluding license fees

TURKCELL GROUP

Turkey 8-10%Group 8-10%

MIDTERM2016-2018

32%-35%

~17-16%in 2018

Turkey ~10%Group 10-14%


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FINANCIAL OVERVIEWMurat D. ErdenTurkcell CFO

NOTICE:

Please note that all financial data are consolidated whereas non-financial data are unconsolidated unless otherwise specified.

All non-financial data are unconsolidated, prepared in accordance with IFRS and expressed in US$ and/or TRY.

The figures used in this presentation are rounded while percentage changes are calculated based on the figures disclosed in the Q4 2015 result announcement press release.


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3,103

3,334275

(31) (13)

RevenueQ414

Δ in Turkcell Turkey

Δ in Turkcell International

Δ in Other Subsidiaries

RevenueQ415

7.5%

12,04412,769

1,001 (282) 6

RevenueFY14

Δ in Turkcell Turkey

Δ in Turkcell International

Δ in Other Subsidiaries

RevenueFY15

TRY MILLION

6.0%

FULL YEARQUARTER

Turkcell Group: Revenue


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3,7624,141

726 (357)(63) 73

EBITDAFY14

Δ in Revenues

Δ in Direct cost of

revenues*

Δ in G&Aexp.

Δ in S&Mexp.

EBITDAFY15

*Excluding depreciation and amortization

Margin31.2%

Margin32.4%

10.1%

917

1,058231(96)

(19) 25

EBITDAQ414

Δ in Revenues

Δ in Direct cost of

revenues*

Δ in G&Aexp.

Δ in S&Mexp.

EBITDAQ415

TRY MILLIONFULL YEARQUARTER

15.4%Margin29.6%

Margin31.7%

Turkcell Group: EBITDA Development


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1,865 2,068 2,590

350 (373) 160 622

(205) 63 (414)

Net income-IFRS

Δ in EBIT Δ in InterestInc./Exp.

Δ in Equity inNet Inc./Loss

Δ in FXGain/Loss

Δ in MonetaryGain/Loss

Δ in Taxation Δ in Other Inc/Exp.

Net income-IFRS

Net Income-Proforma

258

584 671 155 (239) 105

428

(32) 78

(169) TRY MILLION

QUARTER

FULL YEAR

Turkcell Group: Net Income Development

Net income impacts

(TRY mn)Q415 FY15

FX impact (tax &

minority included)38 (404)

Interest income 16 181

One-off impacts1 (141) (299)

Total (87) (522)

1 One-off impacts include commercial agreement termination, Turk Telekom settlement, 4.5G VAT receivables discount, restructuring costs and other impacts


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TRY MILLION Q4 2014 Q4 2015

Total Cash 9,032 2,919

Total Assets 23,694 26,207

Total Debt 3,698 4,214

Net Cash/(Debt) 5,334 (1,295)

Total Equity 16,711 14,419

SUMMARY BALANCE SHEET NET DEBT/EBITDA

(4,796) (5,334)

1,295

-1.4x -1.4x

0.3x

2013 2014 2015

Net Debt (TRY mn) Net Debt/EBITDA

Turkcell Group: Balance Sheet Highlights


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64%

36%

Turkcell Group: FX Breakdown

CASH DEBT REVENUE OPEX

FX Local Currency

CAPEX

77%

23%4%

96%

Group Turkcell Turkey

~30%

~70% ~90%

~10%

Breakdown as of Q4 2015


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THANK YOUFor further information please e-mail

[email protected] call Turkcell Investor Relations at

(+90 212 313 1888)

Have you updated Turkcell IR app?

For Android For iOS


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APPENDIX


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SUMMARY INCOME STATEMENT AS PER CMB1 FINANCIALS

1 Capital Markets Board of Turkey 2 Depreciation and amortization is included

(TRY MILLION)

Summary income statement Q4 2014 Q4 2015 YoY (%) 2014 2015 YoY (%)

Revenue 3,103 3,335 7% 12,044 12,769 6%

Direct Cost of Revenues2 (1,972) (2,054) 4% (7,381) (7,767) 5%

S&M (518) (493) (5%) (1,975) (1,902) (4%)

G&A (147) (166) 13% (563) (625) 11%

EBITDA 917 1,058 15% 3,762 4,141 10%

EBITDA Margin 29.6% 31.7% 2.1pp 31.2% 32.4% 1.2pp

Net Income 258 585 127% 1,867 2,070 11%


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CONSOLIDATED BALANCE SHEET (IFRS) (TRY MILLION)

Consolidated Balance Sheet (TRY mn) 2014 2015 YoY(%)

Cash & Bank 9,032 2,919 (68%)

CURRENT ASSETS 13,308 8,795 (34%)

TOTAL NON-CURRENT ASSETS 10,386 17,412 68%

TOTAL ASSETS 23,694 26,207 11%

S/T Debt 2,451 729 (70%)

TOTAL CURRENT LIABILITIES 4,991 6,304 26%

L/T Debt 1,248 3,488 179%

TOTAL NON-CURRENT LIABILITIES 1,992 5,484 175%

MINORITY INTEREST (383) 64 (117%)

SHARE CAPITAL 2,200 2,200 -

TOTAL EQUITY 16,711 14,419 (14%)

TOTAL EQUITY AND LIABILITIES 23,694 26,207 (11%)


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2.31 2.54 2.90 3.02 2.35

2.94 2.82 3.18

2012 2013 2014 2015

Average Period-End

CURRENCY TRENDS

USD / TRY EUR / TRY

USD / BYR USD / UAH

1.79 1.91 2.19 2.73

1.78 2.13 2.32 2.91

2012 2013 2014 2015

8,326 8,883 10,255

15,917 8,570 9,510 11,850

18,569

2012 2013 2014 2015

7.99 7.99 11.87

23.18 7.99 7.99 15.77

24.00

2012 2013 2014 2015

Q4 & FY 2015 Feb 18, 2016 · Turkcell | Fourth Quarter & Full Year 2015 5 CONSOLIDATED TRY MILLION1...

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