TURKCELL INVESTOR PRESENTATION · MOBILE NET ADDITIONS ... This presentation may contain...
Transcript of TURKCELL INVESTOR PRESENTATION · MOBILE NET ADDITIONS ... This presentation may contain...
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TURKCELL
INVESTOR PRESENTATION
June 2019
STRATEGIC APPROACH
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FOCUS ON CUSTOMER
DIGITAL SERVICES
DIGITAL BUSINESSSOLUTIONS
TECHFIN PLATFORM
OUR CUSTOMERS
WELL-INVESTED INFRASTRUCTURE
MORE TO FOLLOW
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32 MinCalling
12 MinInteracting
37 Min For VOIP users
22 MinReading
79 Min Watching
49 MinListening
2.8 MSearchesper day
63Documents uploaded
per person per day
12 MinPlaying
(Playcell)
33 MinPlaying
(Tavla Go)
30 MinContest time
DELIVERING VALUE WITH DIGITAL SERVICES
178 million core app downloads
Note: Times given are in a day unless otherwise indicated.
68.6% multiplay customers
93.7 million digital subscribers
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DIGITAL SERVICES – GLOBAL EXPANSION
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PROVIDING END-TO-END ICT SERVICES
PUBLIC & HYBRID CLOUD SERVICES
CYBER DEFENSE & SECURITY OPERATION
SERVICES
DIGITAL TRANSFORMATION SOLUTION & SERVICES
INTEGRATED INDUSTRY DIGITAL SOLUTIONS
DIGITAL BUSINESS SOLUTIONS
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INFORMATION AND COMMUNICATION TECHNOLOGIES MARKET
47.1 55.6
64.7 75.6
86.9 22.1
25.9
29.6
38.2
44.7
2014 2015 2016 2017 2018
ICT Market Size in Turkey (bn TRY)
131.7
19%
17%
InformationTechnologies
CommunicationTechnologies
2014 - 18CAGR (%)
69.2
113.8
94.3
81.5
Source: Deloitte, April 2019
8 8
67K m2
33K m2
DC space with 10K m2 white space
DC space with 20K m2 white space
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TURKCELL DATA CENTERS
Locations
Turkcell Data Centers
Gebze Data Center
TURKEY’S LARGEST DATA CENTER
Key clients: Oracle, IBM, Pegasus Airlines, HP, PwC
Note: Turkeys largest in terms of white space.
Gebze Data Center
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3.3MnPaycell app downloads
1.5MnPaycellCards
TECHFIN PLATFORM
5.0MnTotal Paycell
users
1.7Bn TLTotal Transaction
on Paycell in Q119
Money transfer
Utility payments
QR code payment
Mobile wallet
PaycellTop-ups
Carrier Billing
Device Loan
Insurance
Device Leasing
3.6Bn TLLoan
Portfolio
28MnCredit scored
customers
2.9MnRegistered credit cards
POS
10
2550
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PAYCELL: VALUE PROPOSITION
20162015 2017 2019E2018 2020E 2021E 2022E 2023E
187
300
20 38 93 135 213EBITDAMn TL
50%
CAGR2019-2023
TODAY + TOMORROW
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 Payment
Paycell Revenue (mn TL)
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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.
3.4 mn 3.4 mn fiber + 3.0 mn cable (HFC)Homepass
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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 cash flow for capex needs
• Additional committed lines
• 2.0Bn USD cash* covers principal & interest payments until 2022
56%
44%
Details of Financial Debt (After Hedging)
Local Currency
FX
Principal & Interest Payments**
(Million USD)
100106
115111110
115
125131129130
139136142
147
164158161
100103103106109110112114120123123
128132138
147157
158
Q11
5
Q21
5
Q31
5
Q41
5
Q11
6
Q21
6
Q31
6
Q41
6
Q11
7
Q21
7
Q31
7
Q41
7
Q11
8
Q21
8
Q3
18
Q41
8
Q11
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TCELL ARPU (exl. M2M) CPI Column1
Turkcell ARPU vs. CPI Trend (Q115=100)
Fixed interest
Variable interest
*Includes Fintur sale proceeds.**Data of Turkcell Group companies, excluding TCF
80%
20%
552 591246 241
1,904297 7
7 6
22
2019 2020 2021 2022 2023+
FX Local Currency
849 598252 247
1,927
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MAJOR FUNDING & HEDGING DETAILS
TYPE & DATE
AMOUNT MATURITY INTERESTPURPOSE 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
-
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%
Q1 2019 RESULTS
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5.7 Bn TL 19.2% yoy
Q1 2019: STRONG START TO THE YEAR
178 Mn downloads
2.3 Bn TL40.2% margin
772 Mn TLFintur sale P&L contribution
0.2x impact1.3xLeverage ratio
STRONG TOPLINE RESILIENT EBITDA
THE DIGITAL OPERATOR ASSET-LIGHT STRATEGY
Performance exceeding targets
10 K Participants
265 KDigital participants
TURKEY’S TECH SUMMIT
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ConsolidatedTRY Million1 Q1 2018 Q4 2018 Q1 2019 QoQ% YoY %
Revenue 4,762 5,626 5,675 0.9% 19.2%
EBITDA 2,022 2,239 2,281 1.9% 12.8%
EBITDA Margin 42.5% 39.8% 40.2% 0.4pp (2.3pp)
Net Income 501 864 1,224 41.7% 144.5%
Op.Capex/Sales2 11.1% 25.7% 15.6% (10.1pp) 4.5pp
1 TRY figures are based on IFRS.2 Excluding license fees
TURKCELL GROUP FINANCIAL HIGHLIGHTS
• +0.4 pp QoQ improvement in EBITDA margin (+2.2 pp in Turkcell Turkey)
• Capex in line with targets
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10.3%12.8%
19.4%22.4%
19.9%18.5%
13.8%15.0%
Q118 Q218 Q318 Q418 Q119 Q219E Q319E Q419E
32.7
38.1 38.1
6.30
(0.11) (0.80)
Q118 ARPUexcl. one-off
impacts and M2M
Organic growth Dunning fee Other reg. & taximpacts
Q119 ARPUexcl. M2M
54.0 55.962.8
30.5
33.6
38.1
Q117 Q118 Q119 Q219
REPORTED AND COMPARABLE ARPU TREND
ARPU (TL)
like-for-like* growth
Residential fiber
Mobile blended(excl.M2M)
19.6%11.7%
* The ARPU of customers who have stayed with Turkcell for at least 14 months.
Mobile ARPU Growth (TL)
CPI Turkey (YoY)
12.3%YoY
13.4%
19.3%
As inflation declines, we expect our ARPU growth to exceed it
Source: Bloomberg
Upsell performance has doubled in Q119 on a yearly basis in terms of number of subs and revenues
12pp y-o-y decrease in downsell (to lower packages) ratio in Q119
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37.735.5 35.1
41.6 41.6 42.1
10.3%
17.3%20.0%
Jan-19 Feb-19 Mar-19
2018 2019 YoY
NET ADD AND NEW SUBSCRIBER TRENDS
NEW POSTPAID CUSTOMERS’ ARPU (TL)MOBILE NET ADDITIONS (thousand)
Positive net additions since March
Customer loss in low ARPU segment in Jan-Feb
<25 TL ARPU decreased by 4% QoQ
>50 TL ARPU increased by 7% QoQ
-103
-45
66
Jan-19 Feb-19 Mar-19 Apr-19
Increasing prices of new postpaid customers’ packages
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LEADING CAMPAIGNS IN Q119
LEADERSHIP IN QUALITY AND EXPERIENCE
4.5 mn participants/gifts
«#DO» campaign
+9+11
+20+23
Q118 Q119
Points over next best Points over third best
Source: Future Bright
CUSTOMER EXPERIENCE
TurkcellScore 23
2.2 mn first-timer to ourdigital services
Consumer Net Promoter Score (Points)
13.4 mn participants
140 mn gifts
Turkcell’s Shake & Win –specials for the 25th year
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SOLID BALANCE SHEET
NET DEBT/EBITDA
1 Corresponds to proceeds from the Fintur transaction closed on April 2, 2019.2 Q119 balance includes Fintur sale proceeds.3 Excludes Turkcell Consumer Finance Company’s loan portfolio
TCF loan porfolio
Net Debt2,3
TRY Mn Q4 2018 Q1 2019
Total Cash 7,419 8,888
Due From Related Parties1 - 2,230
Total Assets 42,765 46,079
Total Debt 20,156 22,867
Lease Obligations 1,414 1,410
Total Equity 16,054 17,102
Net Debt2 12,736 11,749
Net Debt3 8,565 8,108
SUMMARY
9,5168,565
8,108
4,790
4,1713,641
1.7x
1.4x
1.3x
1.2x
1.0x0.9x
Q318 Q418 Q119
Net Debt/EBITDA Net Debt/EBITDA
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7,419 7,305
8,888 8,888
2,281(827)
(1,569) 1,666
(83)
Cash Q418 EBITDA Change in operatingassets/liabilities
Cash flow frominvesting activities
Cash flow fromfinancing activities
Other Cash Q119
LIQUIDITY MANAGEMENT
TRY MILLION1
Q418 vs. Q119
Fintur cash
2,230
1 Figures are based on IFRS.
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(204)
(301)(255)
(224)
216
Q118 Q218 Q318 Q418 Q119
FX EXPOSURE
8.9Bn TLNominal
34%
10%
49%
7%
50%33%
9%8%
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
22.9Bn TL
USD MILLION
Share
1 Excluding FX swap transactions for TL borrowing.
USD EUR TRY Other
79%
21%
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GUIDANCE REVISED UPWARDS
PREVIOUS
OP. CAPEX / SALES*
TURKCELL GROUP
2019 GUIDANCE
REVENUE GROWTH
EBITDA MARGIN
NEW
16% - 18% 17% - 19%
37% - 40% 38% - 40%
16% - 18%16% - 18%
*Excluding licence fees
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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 app
For Android For iOS
THANK YOU