Turkcell Iletisim Hizmetleri A.S (TKC) News
Market Cap: $5.08B
Avg Volume: 522.83K
Industry: Telecommunications Services
Sector: Communication Services
Are Investors Undervaluing Turkcell Iletisim Hizmetleri (TKC) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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3 Wireless Non-US Stocks Likely to Tide Over Industry Headwinds
The fast-track 5G rollout and solid wireless traction should help the Zacks Wireless Non-US industry thrive despite short-term headwinds. KT, TKC and PHI are well-positioned to make the most of the demand for seamless connectivity solutions.
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Odine to Provide Advanced Cloud-Based Provisioning for Turkcell
ISTANBUL , March 3, 2025 /PRNewswire/ -- Odine (BIST: ODINE), a global technology partner, has worked with Mavenir to empower Turkcell (NYSE: TKC) (BIST: TCELL) through the advanced cloud-based automation of its telecom infrastructure, utilizing Odine Orion, a comprehensive wholesale voice management platform engineered by Turkish engineers. By leveraging Odine's expertise in network automation and orchestration, this initiative enhances Turkcell's operational efficiency, modernizing provisioning and call routing within a telco cloud to deliver a fully integrated solution that improves scalability and reliability.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q4 2024 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC ) Q4 2024 Earnings Conference Call February 27, 2025 12:00 PM ET Company Participants Ozlem Yardim - Investor Relations & Corporate Finance Director Ali Taha Koc - Chief Executive Officer Kamil Kalyon - Chief Financial Officer Conference Call Participants Mandaci Ece - Unlu Securities Cemal Demirtas - Ata Invest Bystrova Evgeniya - Barclays Campos Gustavo - Jefferies Madhvendra Singh - HSBC Operator Ladies and gentlemen, thank you for standing by.
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Turkcell Iletisim Hizmetleri: Full Year 2024 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company” or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”) unless otherwise stated. We have four reporting segments: "Turkcell Türkiye," which comprises our telecom, digital services, and digital business services related businesses in Türkiye (as used in our.
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Is Turkcell Iletisim Hizmetleri (TKC) Stock Undervalued Right Now?
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Turkcell: Executing Well Through Hyperinflation, But Macro, Governance, And Capital Deployment Concerns Remain
Turkcell has managed to grow ARPU comfortably ahead of inflation and maintain over 40% market share despite aggressive competition and a challenging economic environment in Turkey. Turkcell has focused on expanding its range of service offerings, including mobile payments, consumer financing, and over-the-top digital TV programming, and these are nearly 20% of revenue now. Management continues to reinvest in the business, including ongoing investments in expanding its fiber infrastructure, but significant capex does limit capital returns to shareholders.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q3 2024 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC ) Q3 2024 Earnings Conference Call November 7, 2024 12:00 PM ET Company Participants Ozlem Yardim - Investor Relations & Corporate Finance Director Ali Taha Koc - Chief Executive Officer Kamil Kalyon - Chief Financial Officer Conference Call Participants Bystrova Evgeniya - Barclays Cemal Demirtas - Ata Investment Madhvendra Singh - HSBC Operator Ladies and gentlemen, thank you for standing by.
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Turkcell Iletisim Hizmetleri: Third Quarter 2024 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company” or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”) unless otherwise stated. We have four reporting segments: "Turkcell Türkiye," which comprises our telecom, digital services, and digital business services related businesses in Türkiye (as used in our.
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Turkcell CEO Ali Taha Koç Now Among the Top Management of the Global Mobile Communication Sector
ISTANBUL--(BUSINESS WIRE)--Dr. Ali Taha Koç, Chief Executive Officer of Turkcell (NYSE: TKC, BIST: TCELL), has been elected to the board of directors of the Global GSM Association (GSMA), which represents the global mobile communications sector. Dr. Ali Taha Koç, took office on the board of directors of the Global GSM Association (GSMA), which was founded in 1995 to improve global mobile operator standards. The GSMA is a global organisation unifying the mobile ecosystem to discover, develop and.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q2 2024 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC ) Q2 2024 Earnings Conference Call September 12, 2024 1:00 PM ET Company Participants Ozlem Yardim - Investor Relations and Corporate Finance Director Ali Taha Koc - Chief Executive Officer Kamil Kalyon - Chief Financial Officer Conference Call Participants Cesar Tiron - Bank of America Mandaci Ece - UNLU Securities Singh Madhvendra - HSBC Campos Gustavo - Jefferies Bystrova Evgeniya - Barclays Operator Ladies and gentlemen, thank you for standing by.
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Turkcell Q2 Earnings Preview: Business Is Overvalued (Rating Downgrade)
Turkcell's earnings are expected to be up sequentially and year-over-year, pacing the company in line with, or ahead of guidance. Macro factors continue to be a headwind for the business and following a run-up in price, I believe the business is overvalued. At a price target of $7.00 I lower my rating to sell.
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3 Dividend Growth Stocks for Compounding Returns
Finding reliable investments that can deliver consistent returns in uncertain macroeconomic times is more crucial than ever right now. After a massive rally, the broader market is finally seeing a correction, and many investors are already spooked.
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3 Undervalued Gems Poised for 100% Gains in 18 Months
Finding undervalued growth stocks in the middle of a bull market is no easy task. By definition, they are investments rising in value over time.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q1 2024 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC ) Q1 2024 Earnings Conference Call May 27, 2024 1:00 PM ET Company Participants Ozlem Yardim - Investor Relations and Corporate Finance Director Ali Taha Koc - Chief Executive Officer Kamil Kalyon - Chief Financial Officer Conference Call Participants Tiron Cesar - Bank of America Ignebekçili Murat - HSBC Demirtas Cemal - Ata Invest Mandaci Ece - UNLU Securities Operator Ladies and gentlemen, thank you for standing by.
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Turkcell Iletisim Hizmetleri: First Quarter 2024 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Türkiye" which comprises our telecom, digital services and digital business services related businesses in Türkiye (as used in our.
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Turkcell Files Its 2023 Annual Report on Form 20-F
ISTANBUL--(BUSINESS WIRE)--Turkcell (NYSE: TKC, BIST: TCELL) announced that it has filed its Annual Report on Form 20-F for the year ended December 31, 2023 with the United States Securities and Exchange Commission on May 13, 2024. The Company's Form 20-F and complete audited financial statements can be found at: https://www.turkcell.com.tr/en/aboutus/investor-relations/quarterly-results Hard copy versions of the complete audited financial statements are available free of charge upon request fr.
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Turkcell: Continue To Execute On Re-Pricing Strategy
Turkcell is a leading telecommunications provider in Turkey. Turkcell's stock has performed well, returning nearly 25% since I raised it to a buy rating in November, as it has been able to navigate the hyperinflationary environment. Looking forward, as long as the company continues to reprice its services at a faster pace than inflation, margins and earnings should continue to expand, driving shares higher.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q4 2023 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (TKC) Q4 2023 Earnings Call Transcript
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Turkcell Iletisim Hizmetleri: Full Year 2023 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Türkiye" which comprises our telecom, digital services and digital business services related businesses in Türkiye (as used in our.
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Lynk and Turkcell Sign Agreement to Bring Sat2Phone Services to Turkiye
FALLS CHURCH, Va.--(BUSINESS WIRE)-- #Space--Lynk Global, Inc. (Lynk), the world's leading satellite-direct-to-mobile-phone (Sat2Phone) telecoms provider, and Turkcell (NYSE: TKC), the largest mobile operator in Turkiye, jointly announced the contract signing starting initial Sat2Phone services utilizing Lynk's "cell-towers-in-space." This collaboration is anticipated to complement network resiliency and mobile coverage across Turkiye, benefiting the local population, businesses and visitors. Turkcell,.
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7 Cheap Stocks Under $10 That Could Soar 1,000%
This bull market has been quite selective, with a bifurcation building in the market. Mega-cap technology stocks have outperformed, with many cheap stocks still seeing relative underperformance in terms of the proportionate share of market gains seen in recent months.
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Turkcell: Masterclass In Managing Inflation
Turkcell has successfully managed its business in the face of high and persistent inflation in Turkey. The company's Q3/2023 financial results showed revenue growth exceeding inflation, leading to margin expansion and a surge in earnings. Turkcell's valuation appears cheap compared to the Communications Sector, but macro risks in the Turkish economy remain.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q3 2023 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC ) Q3 2023 Results Conference Call November 7, 2023 12:00 PM ET Company Participants Ozlem Yardim - IR Ali Taha Koc - CEO Kamil Kalyon - CFO Conference Call Participants Kayahan Demirak - AK Investment Nagy Nora - Erste Group Bank AG Murat Ignebekçili - HSBC Operator Ladies and gentlemen, thank you for standing by.
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Turkcell Iletisim Hizmetleri: Third Quarter 2023 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Türkiye" which comprises our telecom, digital services and digital business services related businesses in Türkiye (as used in our.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q2 2023 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC ) Q2 2023 Earnings Conference Call August 17, 2023 12:00 PM ET Company Participants Ali Serdar Yağcı - Investor Relations & Corporate Finance Director Murat Erkan - Chief Executive Officer Kamil Kalyon - Acting Chief Financial Officer Conference Call Participants Ece Mandaci - Unlu & Co. Cemal Demirtas - Ata Invest Co. Kayahan Demirak - AK Investment Operator Ladies and gentlemen, thank you for standing by.
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Turkcell Iletisim Hizmetleri: Second Quarter 2023 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our pr.
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4 Solid Profitable Stocks to Invest in Using Net Income Ratio
Tecnoglass (TGLS), Amphastar Pharmaceuticals (AMPH), Turkcell Iletisim Hizmetleri (TKC) and Copa Holdings (CPA) have been selected as the top picks with a high net income ratio.
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4 Must-Buy Efficient Stocks to Boost Your Portfolio Returns
Invest in companies like Wynn Resorts (WYNN), Turkcell Iletisim Hizmetleri (TKC), Green Brick Partners (GRBK) and Inspired Entertainment (INSE) due to higher efficiency levels.
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Turkcell: Successfully Navigating Inflation
Turkcell Iletisim Hizmetleri A.S. is a wireless communications provider from Turkey that has been impacted by runaway inflation and a weakening Turkish Lira. Despite inflation, Turkcell has continued to grow and outpace the competition, with revenue beating earnings estimates and outpacing inflation in Q1 2023.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q1 2023 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC ) Q1 2023 Earnings Conference Call May 9, 2023 1:00 PM ET Company Participants Ali Serdar Yağcı - Investor Relations & Corporate Finance Director Murat Erkan - Chief Executive Officer Kamil Kalyon - Acting Chief Financial Officer Conference Call Participants Kennedy-Good Jonathan - JPMorgan Mandaci Ece - Unlu Securities Demirtas Cermal - Ata Invest Operator Ladies and gentlemen, thank you for standing by.
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Turkcell Iletisim Hizmetleri: First Quarter 2023 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for March 31, 2023 refer to the same item as at March 31, 2022. For further details, please refer to our consolidated financial statements and notes as at and for March 31, 2023, which can be accessed via our website in the investor relations section (www.turkcell.com.tr). Selected financial information presented in this press release for the first and fourth quarters of 2022 and the first quarter of 2023 is based on Turkish Accounting Standards (TAS) / Turkish Financial Reporting Standards (TFRS) figures in TRY terms unless otherwise stated. In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text. Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation. NOTICE We are publishing financial statements as of March 31, 2023 prepared in accordance with Turkish Accounting Standards/Turkish Financial Reporting Standards (“TAS”/“TFRS”) only. These standards are issued by the Public Oversight Accounting and Auditing Standards Authority (“POA”) and are in full compliance with IAS/IFRS Standards. In an announcement published by the POA on January 20, 2022, it is stated that TAS 29 “Financial Reporting in Hyperinflationary Economies” does not apply to TFRS financial statements as of December 31, 2021. Since then and as of the preparation date of our latest consolidated financial statements, no new statement has been made by the POA about TAS 29 application. Consequently, no TAS 29 adjustment was made to our consolidated financial statements. Financial statements prepared in accordance with IFRS should apply IAS 29 “Financial Reporting in Hyperinflationary Economies” as of March 31, 2023. In this context, financial statements prepared in accordance with IFRS and TFRS would have significant differences and would not be comparable as of March 31, 2023. We intend to publish IFRS financial statements, compliant with IAS 29 to the extent that it remains applicable, with our Annual Report on Form 20-F that will be filed to the U.S. Securities and Exchange Commission. Although we have not prepared a detailed comparison of differences between IFRS (unadjusted according to IAS 29) and TFRS, we have noted in our past financial statements that the most significant differences have appeared in the lines Other Operating Income/Expense, Finance Income/Expense, and Investment Activity Income/Expense. In the past, revenue, net income and EBITDA have generally not differed. While no assurance can be given that this will be the case for Q1 2023, we are not at present aware of changes that would cause other significant differences, other than those resulting from the application of IAS 29. FINANCIAL HIGHLIGHTS TRY million Q122 Q422 Q123 y/y% q/q% Revenue 10,695 16,044 17,276 61.5% 7.7% EBITDA1 4,302 6,671 6,759 57.1% 1.3% EBITDA Margin (%) 40.2% 41.6% 39.1% (1.1pp) (2.5pp) EBIT2 2,217 4,156 4,073 83.7% (2.0%) EBIT Margin (%) 20.7% 25.9% 23.6% 2.9pp (2.3pp) Net Income 803 5,996 2,817 250.8% (53.0%) FIRST QUARTER HIGHLIGHTS Strong financial performance: Group revenues up 61.5% mainly on increased ARPU growth, expanded postpaid subscriber base, the contribution of international operations, techfin business and digital business services. Excluding earthquakes’ impact, revenue growth would have been around 65%* year-on-year EBITDA up 57.1% leading to an EBITDA margin of 39.1%; EBIT up 83.7% resulting in an EBIT margin of 23.6% Net income up 250.8% to TRY2.8 billion Net leverage3 level at 0.9x; net short FX position of US$31 million Group revenues up 61.5% mainly on increased ARPU growth, expanded postpaid subscriber base, the contribution of international operations, techfin business and digital business services. Excluding earthquakes’ impact, revenue growth would have been around 65%* year-on-year EBITDA up 57.1% leading to an EBITDA margin of 39.1%; EBIT up 83.7% resulting in an EBIT margin of 23.6% Net income up 250.8% to TRY2.8 billion Net leverage3 level at 0.9x; net short FX position of US$31 million Robust operational results: Turkcell Turkey subscriber base increased by 48 thousand quarterly net additions 342 thousand quarterly mobile postpaid net additions; postpaid subscriber base share at 69.1% 38 thousand fiber net additions 160 thousand new fiber homepasses Mobile ARPU4 exceeded the average of inflation rate and rose by 67.9% year-on-year in Q123 mainly on the back of gradual price adjustments over the last year, upsell to higher tariffs and larger postpaid subscriber base Residential fiber ARPU growth of 31.4% year-on-year Average monthly data usage of 4.5G users at 17.4 GB in Q123; smartphone penetration at 88% Turkcell Turkey subscriber base increased by 48 thousand quarterly net additions 342 thousand quarterly mobile postpaid net additions; postpaid subscriber base share at 69.1% 38 thousand fiber net additions 160 thousand new fiber homepasses Mobile ARPU4 exceeded the average of inflation rate and rose by 67.9% year-on-year in Q123 mainly on the back of gradual price adjustments over the last year, upsell to higher tariffs and larger postpaid subscriber base Residential fiber ARPU growth of 31.4% year-on-year Average monthly data usage of 4.5G users at 17.4 GB in Q123; smartphone penetration at 88% 2023 guidance5 maintained; revenue growth target of between 55-57%, EBITDA target of around TRY34 billion, and operational capex over sales ratio6 target of around 22% (1) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. Required reserves held in CBRT balances are also considered in net debt calculation. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. (4) Excluding M2M (5) Please note that this section contains forward-looking statements based on our initial impact assessment of the earthquake. Factors such as changes in the state of emergency measures and potential aftershocks, as well as the risk factors disclosed in our Annual Report on Form 20-F for 2022 filed with U.S. Securities and Exchange Commission, could cause actual impacts to differ materially from our expectations. (5) 2023 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29. (6) Excluding license fee *Excluding the impact of cancellation of certain fees such as activation, cancellation and late payment fees For further details, please refer to our consolidated financial statements and notes as at March 31, 2023 via our website in the investor relations section (www.turkcell.com.tr). COMMENTS BY CEO, MURAT ERKAN The wounds of the earthquake have begun to heal The wounds of the February earthquake epicentered in Kahramanmaraş, one of the worst disasters in our history, have been swiftly addressed. While all resources are being mobilized for the reconstruction and recovery of the affected region, as Turkiye’s Turkcell we, too, are supporting the region with various employment and education-focused projects. As part of the “Turkcell Employment Mobilization” project we will, in the first stage, provide employment to 1,100 citizens and their families affected by the earthquake across 11 provinces. In addition, with our Call and Vocational Training Center to be established in Hatay, we aim to support earthquake victims not only with training, but also by providing areas for socialization. Meanwhile, with the technical and personal development programs of Turkcell Academy, we aim to provide the region with a qualified workforce of 5,000 people. As Turkcell, we will continue our efforts at full speed to improve the conditions of those affected by the earthquake and alleviate their suffering. Mobile ARPU growth outpaced inflation In the first quarter, despite the new subscriber demand in the earthquake-affected region and regulatory tourist line closures, we saw a net total add of 48 thousand subscribers. On the mobile side, we achieved a net add of 342 thousand postpaid subscribers in line with our focus on this segment. On the other hand, we lost 367 thousand prepaid subscribers due to regulatory closures we made this quarter among such subscribers acquired in high numbers from tourists and visitors in 2022. The mobile churn rate slightly increased on an annual basis to 1.7%. Regarding market competition dynamics, it is fair to state that the first quarter of the year was more balanced compared to the same period of last year due to the earthquake impact. We saw the year-end aggressiveness continue in the early months of the year. Yet as the MNP market volume decreased during the earthquake period and aggressive campaigns subsided in march, the market became more rational. We continued our infrastructure investments to provide our citizens with the internet speeds they deserve, and aware that the digitalization of our country depends on the fiber internet infrastructure. Within the framework of our goal of reaching 300 thousand new homepasses in 2023, we extended our end-to-end fiber service to 160 thousand new homepasses this quarter reaching a total of 5.5 million households. As a result of our strategic investments, we gained a net 38 thousand fiber customers in the first quarter of the year. The strong demand for our high-speed packages continued in this quarter. On the fiber side, the share among new customers of packages with speeds of over 100 Mbps increased by 22 percentage points compared to the same period of last year to 44%. Again, in this period, our customers also appreciated the no-commitment packages we offered for the first time in the fiber segment. On the other hand, due to the earthquake effect, fixed churn rate rose slightly on an annual basis. The fixed and fiber residential churn rates were 1.5% and 1.2%, respectively. Despite the earthquake impact, the subscribers of IPTV, which we especially offer to our fiber customers, increased by 28 thousand this quarter. In line with our inflationary pricing policy, the sequential price adjustments since the end of 2021 and the slowdown in inflation led mobile ARPU growth to outpace inflation, as expected. Mobile ARPU1, which continued its upward momentum, increased by 67.9% in the first quarter of the year, while the average inflation rate during the period was 54.3%. On the fixed side, the revenue reflection of price adjustments is more extended when compared to mobile due to a longer contract period. In addition, with the actions we have taken for customers in the earthquake region, Residential Fiber ARPU grew 31.4% on a year-on-year basis. In the first quarter of 2023, our consolidated revenues increased by 61.5% year-on-year to TRY17.3 billion, while EBITDA2 rose by 57.1% to TRY6.8 billion compared to the same period of last year. Our net profit rose by 250.8% to TRY2.8 billion, thanks to our strong operational performance, lower FX losses and an effective cash management. Strong performance from our focus areas continued The stand-alone paid users of our digital services and solutions, which is among our strategic focus areas, rose 24% year-on-year to 5.2 million, while their stand-alone revenues rose 65,2%. TV+, which enriches its offering with domestic and foreign content, continues to strengthen its market position in the through consistent improvement in service quality. In this regard, TV+'s net promoter score (NPS) has steadily increased over the past four quarters, and as of this quarter TV+ leads the market. TV+ has been steadily raising its share in the paid TV market since the second quarter of 2014, and according to the fourth quarter ICTA report, it has increased its market share to 16.5%. Despite the earthquake impact, IPTV subscribers have reached 1.3 million on a 16% year-on-year increase, while OTT TV subscribers maintained a similar yearly increase sustaining 1.0 million subscribers. The revenues of digital business services that offer solutions for companies' digital transformation increased by 103.9% year-on-year, exceeding TRY1.6 billion in the first quarter of 2023. The revenue of our data center and cloud business services, which increase their share in digital business services revenue each quarter, more than doubled in revenue year-on-year. In this quarter, we signed 1,163 new projects with a total contract size of 1.8 billion TRY, of which TRY1.2 billion comprised system integration and managed services projects. Through this project portfolio, we have a backlog of TRY2.5 billion in contract value to be collected after the second quarter of 2023. Our third focus area, techfin, where we provide services under the Financell and Paycell brands, continued to support group growth. Financell3’s revenue reached TRY317 million, up 64.6% year on year. This performance was driven by a credit portfolio reaching TRY3.9 billion and an increase in average interest rates. Paycell, Turkiye's digital payment platform, saw its revenues rise 79.4% year-on-year to TRY294 million. “Pay Later”, which accounts for 71% of Paycell revenue, doubled its transaction volume compared to the same period of last year, thanks to a rising number of users, being preferred in digital content such as transactions in Apple and Android markets. The first deliveries of domestically produced smart device Togg T10X, for which pre-sales demand was exceed nine-fold of the production, began to be made in April. The T10X has the distinction of being the first vehicle in the world to be sold through an electronic wallet. During the presale period of T10X, which is the first vehicle to be sold via an electronic wallet, a volume of around TRY11 billion has been executed via Trumore wallet for which Paycell provided its infrastructure. Our Paycell virtual POS product, designed for corporate consumers, and enjoying high demand, will also mediate payments at "Trugo" charging stations. I take this opportunity to thank our Board of Directors and all our team members for their support in making a strong start to the year, despite the challenges we faced and grief we suffered together this quarter. I also express our gratitude to our customers and business partners who remain with us on our journey towards success. (1) Excluding M2M (2) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income (3) Following the change in the organizational structure, the revenues of Turkcell Sigorta Aracılık Hizmetleri A.Ş. (Insurance Agency), which was previously managed under the Financell, has been classified from Financell to "Other" in the Techfin segment as of the first quarter of 2023. Within this scope, all past data have been revised for comparability purposes. FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group Profit & Loss Statement (million TRY) Q122 Q422 Q123 y/y% q/q% Revenue 10,695.0 16,043.9 17,275.9 61.5% 7.7% Cost of revenue1 (5,493.5) (7,935.3) (8,840.5) 60.9% 11.4% Cost of revenue1/Revenue (51.4%) (49.5%) (51.2%) 0.2pp (1.7pp) Gross Margin1 48.6% 50.5% 48.8% 0.2pp (1.7pp) Administrative expenses (303.7) (473.4) (560.5) 84.6% 18.4% Administrative expenses/Revenue (2.8%) (3.0%) (3.2%) (0.4pp) (0.2pp) Selling and marketing expenses (540.7) (899.8) (911.8) 68.6% 1.3% Selling and marketing expenses/Revenue (5.1%) (5.6%) (5.3%) (0.2pp) 0.3pp Net impairment losses on financial and contract assets (55.1) (63.9) (203.9) 270.0% 219.1% EBITDA2 4,302.0 6,671.5 6,759.2 57.1% 1.3% EBITDA Margin 40.2% 41.6% 39.1% (1.1pp) (2.5pp) Depreciation and amortization (2,084.5) (2,515.7) (2,685.8) 28.8% 6.8% EBIT3 2,217.5 4,155.8 4,073.4 83.7% (2.0%) EBIT Margin 20.7% 25.9% 23.6% 2.9pp (2.3pp) Net finance income / (expense) (3,038.4) (3,424.2) (2,104.2) (30.7%) (38.5%) Finance income 72.3 (642.4) 4.6 (93.6%) n.m Finance expense (3,110.7) (2,781.8) (2,108.8) (32.2%) (24.2%) Other operating income / (expense) 1,494.1 1,028.9 1,070.6 (28.3%) 4.1% Investment activity income / (expense) 299.2 157.6 510.1 70.5% 223.7% Non-controlling interests (0.0) 0.9 0.2 n.m n.m Share of profit of equity accounted investees (23.4) (10.0) 6.4 n.m n.m Income tax expense (146.0) 4,087.3 (739.8) 406.7% (118.1%) Net Income 802.9 5,996.3 2,816.6 250.8% (53.0%) (1) Excluding depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. Revenue of the Group rose 61.5% year-on-year in Q123. Turkcell Turkey played a significant role in this performance given its robust ARPU growth, which was positively impacted by price adjustments during 2022 aimed at reflecting inflationary effects, along with successful upsell efforts. Additionally, revenue growth was supported by our international operations and techfin business. Turkcell Turkey revenues, comprising 78% of Group revenues, rose 69.7% year-on-year in Q123 to TRY13,491 million (TRY7,950 million). - Consumer segment revenues rose 67.6% year-on-year on the back of an expanded postpaid subscriber base and price adjustments to offset the impact of inflation. - Corporate segment revenues grew 85.1% year-on-year driven by the performance of digital business services, which grew 103.9% year-on-year. - Standalone digital services revenues registered as part of the consumer and corporate segments rose 65.2% year-on-year in Q123. The primary drivers of this growth were the increased number of stand-alone paid users and adjustments to the prices of services. - Wholesale revenues increased by 53.3% year-on-year to TRY894 million (TRY583 million), driven mainly by the positive impact of currency movements, as well as the traffic increase and capacity upgrades of customers. Turkcell International revenues, comprising 11% of Group revenues, rose 31.0% year-on-year to TRY1,869 million (TRY1,427 million) due mainly to lifecell’s performance. Techfin segment revenues, comprising 4% of Group revenues, rose 71.7% year-on-year to TRY606 million (TRY353 million). This was driven by a 79.4% rise in Paycell revenues and 64.6% growth in Financell revenues. Please refer to the Techfin section for details. Other subsidiaries' revenues, at 8% of Group revenues, including mainly consumer electronics sales revenues, digital channels, non-group call center and energy business revenues, were up 35.7% year-on-year to TRY1,310 million (TRY966 million). Cost of revenue (excluding depreciation and amortization) decreased to 51.2% (51.4%) as a percentage of revenues in Q123. This was driven mainly by the decline in interconnection cost (2.2pp), despite the increase in employee expenses (1.6pp) and other cost items (0.4pp) as a percentage of revenues. Administrative expenses increased to 3.2% (2.8%) as a percentage of revenues in Q123. Selling and marketing expenses rose to 5.3% (5.1%) as a percentage of revenues in Q123. This was driven mainly by the increase in employee expenses (0.7pp) and energy expenses (0.1pp), despite the decline in selling expenses (0.4pp) and marketing expenses (0.2pp) as a percentage of revenues. Net impairment losses on financial and contract assets was at 1.2% (0.5%) as a percentage of revenues in Q123. EBITDA1 rose by 57.1% year-on-year in Q123 leading to an EBITDA margin of 39.1% (40.2%). - Turkcell Turkey’s EBITDA grew by 64.1% to TRY5,391 million (TRY3,286 million) leading to an EBITDA margin of 40.0% (41.3%). - Turkcell International EBITDA increased 41.1% to TRY1,007 million (TRY714 million) driving an EBITDA margin of 53.9% (50.1%) on 3.8pp improvement. - Techfin segment EBITDA rose 36.3% to TRY248 million (TRY182 million) with an EBITDA margin of 40.9% (51.5%). - The EBITDA of other subsidiaries decreased by 6.0% to TRY113 million (TRY121 million). Depreciation and amortization expenses increased 28.8% year-on-year in Q123. Net finance expense decreased to TRY2,104 million (TRY3,038 million) in Q123. This was driven mainly by lower FX losses from borrowings and issued bonds. See Appendix A for details of net foreign exchange gain and loss. Net other operating income decreased to TRY1,071 million (TRY1,494 million) in Q123. See Appendix A for details of net foreign exchange gain and loss. Net investment activity income was TRY510 million in Q123 compared to TRY299 million in Q122. Income tax expense increased to TRY740 million (TRY146 million) due mainly to a higher deferred tax expense incurred in Q123. Net income of the Group increased by 250.8% to TRY2,817 million (TRY803 million) in Q123. This was driven mainly by robust topline growth on the back of strong operational performance, lower fx losses from borrowings and issued bonds in addition to positive impact from currency-protected time deposits. (1) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income Total cash & debt: Consolidated cash as of March 31, 2023 increased to TRY27,317 million from TRY25,961 million as of December 31, 2022. This was driven mainly by the positive impact of currency movements. Excluding FX swap transactions, 57% of our cash is in US$, 15% in EUR, and 26% in TRY. Consolidated debt as of March 31, 2023 increased to TRY58,486 million from TRY53,854 million as of December 31, 2022 mainly due to the impact of currency movements and new borrowings. Please note that TRY3,391 million of our consolidated debt is comprised of lease obligations. Please note that 44% of our consolidated debt is in US$, 26% in EUR, 2% in CNY, 5% in UAH, and 22% in TRY. Net debt1 as of March 31, 2023 was at TRY23,166 million with a net debt to EBITDA ratio of 0.9 times. Excluding finance company consumer loans, our telco only net debt was at TRY19,284 million with a leverage of 0.8 times. Turkcell Group had a short FX position of US$31 million as at the end of the first quarter. (Please note that this figure takes hedging portfolio and advance payments into account). The short FX position of US$31 million is in line with our FX neutral definition, which is between -US$200 million and +US$200 million. Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY5,439 million in Q123. For Q123, operational capital expenditures (excluding license fees) at the Group level were at 19.9% of total revenues. Capital expenditures (million TRY) Q122 Q422 Q123 Operational Capex 1,845.3 4,454.3 3,442.7 License and Related Costs - 317.5 14.4 Non-operational Capex (Including IFRS15 & IFRS16) 1,073.1 1,662.5 1,981.4 Total Capex 2,918.3 6,434.3 5,438.5 (1) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. Required reserves held in CBRT balances are also considered in net debt calculation. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. Operational Review of Turkcell Turkey Summary of Operational Data Q122 Q422 Q123 y/y% q/q% Number of subscribers (million) 40.0 41.7 41.7 4.3% - Mobile Postpaid (million) 24.1 25.6 25.9 7.5% 1.2% Mobile M2M (million) 3.5 4.0 4.1 17.1% 2.5% Mobile Prepaid (million) 12.0 12.0 11.6 (3.3%) (3.3%) Fiber (thousand) 1,941.0 2,121.8 2,159.7 11.3% 1.8% ADSL (thousand) 755.7 751.4 759.0 0.4% 1.0% Superbox (thousand)1 612.4 670.7 676.5 10.5% 0.9% Cable (thousand) 51.1 43.9 42.4 (17.0%) (3.4%) IPTV (thousand) 1,126.4 1,281.7 1,309.3 16.2% 2.2% Churn (%)2 Mobile Churn (%) 1.6% 2.7% 1.7% 0.1pp (1.0pp) Fixed Churn (%) 1.4% 1.3% 1.5% 0.1pp 0.2pp ARPU (Average Monthly Revenue per User) (TRY) Mobile ARPU, blended 54.6 83.8 90.3 65.4% 7.8% Mobile ARPU, blended (excluding M2M) 59.8 92.6 100.4 67.9% 8.4% Postpaid 67.0 101.6 107.4 60.3% 5.7% Postpaid (excluding M2M) 77.3 118.7 126.2 63.3% 6.3% Prepaid 29.8 47.9 53.0 77.9% 10.6% Fixed Residential ARPU, blended 88.9 110.5 117.1 31.7% 6.0% Residential Fiber ARPU 89.9 110.6 118.1 31.4% 6.8% Average mobile data usage per user (GB/user) 13.4 15.7 16.2 20.9% 3.2% (1) Superbox subscribers are included in mobile subscribers. (2) Churn figures represent average monthly churn figures for the respective quarters. Despite the negative impact of the earthquake, Turkcell Turkey subscriber base grew by 48 thousand net additions in Q123 to 41.7 million. On the mobile front, our subscriber base was at 37.5 million with 24 thousand net loss in the first quarter of 2023. Accordingly, postpaid subscribers reached 69.1% (66.7%) of the mobile subscriber base. During the quarter, our prepaid customers decreased by 367 thousand. This was due to the disconnection of 509 thousand prepaid customers in Q123 in accordance with the ICTA regulation because of significant tourist arrivals in Q322. On the fixed front, our fiber subscriber base increased by 38 thousand net additions in Q123 supported by sustained demand for high-speed and quality broadband connections. Total fixed subscribers reached 3.0 million on 44 thousand quarterly net additions. Meanwhile, IPTV customers reached 1.3 million on 28 thousand quarterly net additions in Q123. The average monthly mobile churn rate was at 1.7% in Q123. Meanwhile, the average monthly fixed churn rate was at 1.5% in Q123. Our customer-oriented approach and advanced analytic capabilities led to improved customer retention performance in both the mobile and fixed segments. This played a crucial role in maintaining a healthy level of churn. Despite the negative impact of the earthquake, our mobile ARPU (excluding M2M) exceeded the average of inflation rate and rose by 67.9% year-on-year in Q123 driven mainly by price adjustments, upsell to higher tariffs and a larger postpaid subscriber base. Our residential fiber ARPU growth was 31.4% year-on-year in Q123 due mainly to upselling our customers to higher tariffs. The earthquake had a negative impact on the gradual growth of our residential fiber ARPU. Average monthly mobile data usage per user grew by 20.9% in Q123 to 16.2 GB with the increasing number and data consumption of 4.5G users. Accordingly, the average mobile data usage of 4.5G users reached 17.4 GB in Q123. Total smartphone penetration on our network reached 88% in Q123 on a 1.5pp year-on-year improvement. 93% of those smartphones were 4.5G compatible. TURKCELL INTERNATIONAL lifecell1 Financial Data Q122 Q422 Q123 y/y% q/q% Revenue (million UAH) 2,306.8 2,606.8 2,687.4 16.5% 3.1% EBITDA (million UAH) 1,292.4 1,505.6 1,605.0 24.2% 6.6% EBITDA margin (%) 56.0% 57.8% 59.7% 3.7pp 1.9pp Net income (million UAH) 209.4 408.8 515.6 146.2% 26.1% Capex (million UAH) 711.6 997.4 638.0 (10.3%) (36.0%) Revenue (million TRY) 1,112.6 1,326.1 1,386.2 24.6% 4.5% EBITDA (million TRY) 623.6 765.8 827.9 32.8% 8.1% EBITDA margin (%) 56.0% 57.7% 59.7% 3.7pp 2.0pp Net income (million TRY) 101.0 207.8 266.2 163.6% 28.1% (1) Since July 10, 2015, we hold a 100% stake in lifecell. lifecell (Ukraine) revenues rose 16.5% year-on-year in Q123 in local currency terms. The growth in revenue is primarily driven by the increase in ARPU, which has been supported by the price adjustments. lifecell’s EBITDA grew 24.2% year-on-year leading to an EBITDA margin of 59.7% improving 3.7pp year-on-year on the back of lower international interconnection expenses. In Q123, lifecell's positive net income was driven by strong topline performance. lifecell revenues in TRY terms increased 24.6% year-on-year in Q123 with strong operational performance. lifecell’s EBITDA in TRY terms grew by 32.8%, leading to an EBITDA margin of 59.7%. lifecell Operational Data Q122 Q422 Q123 y/y% q/q% Number of subscribers (million)2 10.2 10.2 10.8 5.9% 5.9% Active (3 months)3 8.9 8.5 8.6 (3.4%) 1.2% MOU (minutes) (12 months) 170.0 148.0 133.5 (21.5%) (9.8%) ARPU (Average Monthly Revenue per User), blended (UAH) 75.6 86.0 85.1 12.6% (1.0%) Active (3 months) (UAH) 84.3 104.5 104.6 24.1% 0.1% (2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. (3) Active subscribers are those who in the past three months made a revenue generating activity. The three-month active subscriber base of lifecell increased to 8.6 million in Q123 compared to previous quarter. Meanwhile, lifecell’s 3-month active ARPU growth was 24.1% year-on-year on the back of price adjustments. As of Q123, lifecell maintained its leadership in the Ukrainian market with 84.6% smartphone penetration. lifecell remained focused on employee safety and providing services to Ukrainian customers, with a largely operational network. On average, around 15% of nearly 9 thousand sites are temporarily down as of March 31, 2023 on a daily basis. The conditions of sites in occupied territories are unclear. On average, approximately 92% of our stores nationwide were open daily as of the end of March. Moreover, country’s ICT systems, including payment and CRM, are functioning normally, and the country's banking system is operating without any issues. Additionally, with its improved cash generation, the company’s net debt decreased 54% year-on-year, and lifecell's current cash position is sufficient to maintain its operations. BeST1 Q122 Q422 Q123 y/y% q/q% Number of subscribers (million) 1.5 1.5 1.5 - - Active (3 months) 1.1 1.1 1.1 - - Revenue (million BYN) 34.3 38.8 39.3 14.6% 1.3% EBITDA (million BYN) 10.7 12.4 18.2 70.1% 46.8% EBITDA margin (%) 31.1% 32.0% 46.3% 15.2pp 14.3pp Net loss (million BYN) (8.5) (103.1) (9.2) 8.2% (91.1%) Capex (million BYN) 21.5 25.3 18.8 (12.6%) (25.7%) Revenue (million TRY) 175.8 288.1 269.4 53.2% (6.5%) EBITDA (million TRY) 54.6 92.1 124.7 128.4% 35.4% EBITDA margin (%) 31.1% 32.0% 46.3% 15.2pp 14.3pp Net loss (million TRY) (43.7) (745.4) (62.8) 43.7% (91.6%) (1) BeST, in which we hold a 100% stake, has operated in Belarus since July 2008. BeST revenues increased 14.6% year-on-year in local currency terms in Q123 supported by ARPU growth and upsell to higher tariffs. Due to the positive impact of the asymmetric mobile termination rates (MTRs), which came into effect on December 31, 2022, the EBITDA margin improved 15.2pp compared to Q122. BeST’s revenues in TRY terms increased 53.2% year-on-year in Q123 with an EBITDA margin of 46.3%. BeST provides LTE services to its customers in all six regions through reaching 4.1 thousand sites, and has increased the penetration of 4G services. Accordingly, 4G users comprised 79% of the 3-month active subscriber base as of Q123. Meanwhile, the average monthly data consumption of 4G subscribers rose 10% year-on-year to 18.4 GB. Kuzey Kıbrıs Turkcell2 (million TRY) Q122 Q422 Q123 y/y% q/q% Number of subscribers (million) 0.6 0.6 0.6 - - Revenue 96.9 147.8 162.8 68.0% 10.1% EBITDA 38.3 65.2 53.0 38.4% (18.7%) EBITDA margin (%) 39.5% 44.1% 32.5% (7.0pp) (11.6pp) Net income 21.8 106.8 21.6 (0.9%) (79.8%) Capex 34.9 361.2 92.2 164.2% (74.5%) (2) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999. Kuzey Kıbrıs Turkcell revenues rose by 68.0% year-on-year in Q123 due mainly to the increase in mobile and roaming revenues, as well as fixed broadband and handset sales revenues. Kuzey Kıbrıs Turkcell recorded a 38.4% increase in EBITDA with a resulting EBITDA margin of 32.5% in Q123. TECHFIN Paycell Financial Data (million TRY) Q122 Q422 Q123 y/y% q/q% Revenue 164.0 270.2 294.2 79.4% 8.9% EBITDA 72.9 116.7 123.2 69.0% 5.6% EBITDA Margin (%) 44.5% 43.2% 41.9% (2.6pp) (1.3pp) Net Income 49.1 83.3 78.8 60.5% (5.4%) In Q123, Paycell registered a 79.4% year-on-year increase in revenue due to the sustained demand for digital payment services. This demand was addressed through our diversified product portfolio, which includes mobile payment services, POS solutions, and Paycell card, particularly the Pay Later solution. Paycell's EBITDA increased by 69.0% year-on-year, resulting in an EBITDA margin of 41.9% in the first quarter of 2023. On the operational front, the quarterly transaction volume (non-group) of Pay Later service doubled year-on-year to TRY1.4 billion, which was utilized by 3-month active Pay Later users of 5.2 million in Q123. Meanwhile, the Paycell Card transaction volume almost doubled year-on-year to TRY2.8 billion in Q123. Additionally, in Q123 the transaction volume of POS solutions almost quintupled year-on-year to TRY10.1 billion supported by the Togg project (presale payments collected through Paycell wallet), Turkey’s first domestic car designed as an electric vehicle, which marks an important and powerful initiative in the mobility sector. Paycell also maintained its position as a marketplace for the trading of gold, silver, and platinum in Q123. Overall, Paycell's total transaction volume across all services almost tripled to TRY18.2 billion year-on-year, driven mainly by a 12% year-on-year rise in Paycell’s total 3-month active users to 7.7 million, and their increased usage. Financell1 Financial Data (million TRY) Q122 Q422 Q123 y/y% q/q% Revenue 192.8 307.4 317.4 64.6% 3.2% EBITDA 110.9 162.3 133.5 20.4% (17.7%) EBITDA Margin (%) 57.5% 52.8% 42.1% (15.4pp) (10.7pp) Net Income 67.1 98.4 108.9 62.3% 10.7% Financell’s revenue grew by 64.6% year-on-year in Q123. The main factors contributing to this growth were the expansion of the loan portfolio and a higher average interest rate on the portfolio as compared to the same period of last year. Meanwhile, Financell reported EBITDA growth of 20.4% year-on-year, resulting in an EBITDA margin of 42.1% in Q123. The decrease in EBITDA margin was due to higher funding costs compared to the Q122. Financell's net income increased 62.3% year-on-year. Financell’s loan portfolio increased to TRY3.9 billion at the end of Q123. Despite the continued installment limitation on consumer loans for telecom devices, the loan portfolio was supported by higher lending to corporate customers and greater mobility. Accordingly, Financell has extended loans to over 24 thousand corporate customers. Financell's higher loan portfolio, lower receivable sales, and the negative effects of earthquake were the main drivers behind the increase in its cost of risk from 1.0% in Q422 to 2.7% in Q123. (1) Following the change in the organizational structure, the revenues of Turkcell Sigorta Aracılık Hizmetleri A.Ş. (Insurance Agency), which was previously managed under the Financell, has been classified from Financell to "Other" in the Techfin segment as of the first quarter of 2023. Within this scope, all past data have been revised for comparability purposes. Turkcell Group Subscribers Turkcell Group registered subscribers amounted to approximately 54.6 million as of March 31, 2023. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell, BeST, and Kuzey Kıbrıs Turkcell. Turkcell Group Subscribers Q122 Q422 Q123 y/y% q/q% Turkcell Turkey subscribers (million)1 40.0 41.7 41.7 4.3% - lifecell (Ukraine) 10.2 10.2 10.8 5.9% 5.9% BeST (Belarus) 1.5 1.5 1.5 - - Kuzey Kıbrıs Turkcell 0.6 0.6 0.6 - - Turkcell Group Subscribers (million) 52.3 54.0 54.6 4.4% 1.1% (1) Subscribers to more than one service are counted separately for each service. OVERVIEW OF THE MACROECONOMIC ENVIRONMENT Q122 Q422 Q123 y/y% q/q% GDP Growth (Turkey) 7.6% 3.5% n.a n.a n.a Consumer Price Index (Turkey) (yoy) 61.1% 64.3% 50.5% (10.6pp) (13.8pp) US$ / TRY rate Closing Rate 14.6458 18.6983 19.1460 30.7% 2.4% Average Rate 13.8778 18.6010 18.8577 35.9% 1.4% EUR / TRY rate Closing Rate 16.3086 19.9349 20.8021 27.6% 4.4% Average Rate 15.5203 18.9748 20.2424 30.4% 6.7% US$ / UAH rate Closing Rate 29.2549 36.5686 36.5686 25.0% - Average Rate 28.7685 36.5686 36.5686 27.1% - US$ / BYN rate Closing Rate 2.9732 2.7364 2.8571 (3.9%) 4.4% Average Rate 2.7118 2.5055 2.7505 1.4% 9.8% The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below. RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results. Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes finance income and expense, other operating income and expense, investment activity income and expense, share of profit of equity accounted investees and minority interest. Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of our results of operations, as reported under TFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with TFRS to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with TFRS. Turkcell Group (million TRY) Q122 Q422 Q123 y/y% q/q% Adjusted EBITDA 4,302.0 6,671.5 6,759.2 57.1% 1.3% Depreciation and amortization (2,084.5) (2,515.7) (2,685.8) 28.8% 6.8% EBIT 2,217.5 4,155.8 4,073.4 83.7% (2.0%) Finance income 72.3 (642.4) 4.6 (93.6%) n.m Finance expense (3,110.7) (2,781.8) (2,108.8) (32.2%) (24.2%) Other operating income / (expense) 1,494.1 1,028.9 1,070.6 (28.3%) 4.1% Investment activity income / (expense) 299.2 157.6 510.1 70.5% 223.7% Share of profit of equity accounted investees (23.4) (10.0) 6.4 n.m n.m Consolidated profit before income tax & minority interest 948.9 1,908.0 3,556.2 274.8% 86.4% Income tax expense (146.0) 4,087.3 (739.8) 406.7% (118.1%) Consolidated profit before minority interest 802.9 5,995.3 2,816.4 250.8% (53.0%) NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2023. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2022 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers. ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, and Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY17.3 billion revenue in Q123 with total assets of TRY109.8 billion as of March 31, 2023. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr. Appendix A – Tables Table: Net foreign exchange gain and loss details Million TRY Q122 Q422 Q123 y/y% q/q% Net FX loss before hedging (1,077.5) (383.0) (432.4) (59.9%) 12.9% Swap interest income / (expense) (70.8) 29.0 52.1 n.m 79.7% Fair value gain on derivative financial instruments 58.8 (945.3) (108.2) (284.0%) (88.6%) Net FX gain / (loss) after hedging (1,089.5) (1,299.3) (488.5) (55.2%) (62.4%) Table: Income tax expense details Million TRY Q122 Q422 Q123 y/y% q/q% Current tax expense (157.3) 192.8 (305.5) 94.2% (258.5%) Deferred tax income / (expense) 11.3 3,894.6 (434.3) n.m (111.2%) Income Tax expense (146.0) 4,087.4 (739.8) 406.7% (118.1%) TURKCELL ILETISIM HIZMETLERI A.S. TURKISH ACCOUNTING STANDARDS SELECTED FINANCIALS (TRY Million) Quarter Ended Quarter Ended Year Ended Quarter Ended Mar 31, Dec 31, Dec 31, Mar 31, 2022 2022 2022 2023 7,949.7 12,448.8 40,851.1 13,490.7 1,426.6 1,812.6 6,353.6 1,868.8 352.9 583.2 1,849.1 606.1 965.9 1,199.4 4,824.7 1,310.3 10,695.0 16,043.9 53,878.5 17,275.9 (7,578.0) (10,451.0) (36,788.6) (11,526.4) 3,117.0 5,592.9 17,089.8 5,749.5 (303.7) (473.4) (1,519.0) (560.5) (540.7) (899.8) (2,700.1) (911.8) 1,494.1 1,028.9 6,800.9 1,070.6 3,766.7 5,248.5 19,671.6 5,347.8 (55.1) (63.9) (354.9) (203.9) 299.2 157.6 1,779.9 533.5 - - - (23.4) (23.4) (10.0) (71.4) 6.4 3,987.3 5,332.2 21,025.2 5,660.4 72.3 (642.4) 210.8 4.6 (3,110.7) (2,781.8) (13,699.8) (2,108.8) 948.9 1,908.0 7,536.1 3,556.2 (146.0) 4,087.3 3,516.1 (739.8) 802.9 5,995.3 11,052.2 2,816.4 (0.0) 0.9 1.0 0.2 802.9 5,996.3 11,053.2 2,816.6 0.4 2.7 5.1 1.3 29.1% 34.9% 31.7% 33.3% 4,302.0 6,671.5 21,993.8 6,759.2 2,918.3 6,434.3 16,360.6 5,438.5 1,845.3 4,454.3 10,859.4 3,442.7 - 317.5 317.5 14.4 1,073.1 1,662.5 5,183.6 1,981.4 18,804.0 25,960.7 25,960.7 27,316.6 75,324.6 101,264.8 101,264.8 109,842.8 30,105.2 37,133.1 37,133.1 39,049.2 40,855.4 53,854.4 53,854.4 58,486.4 51,944.9 70,369.8 70,369.8 75,990.3 23,379.7 30,895.1 30,895.1 33,852.5
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Turkcell Files Its 2022 Annual Report on Form 20-F
ISTANBUL--(BUSINESS WIRE)--Turkcell (NYSE: TKC, BIST: TCELL) announced that it has filed its Annual Report on Form 20-F for the year ended December 31, 2022 with the United States Securities and Exchange Commission on April 27, 2023. The Company's Form 20-F and complete audited financial statements can be found at: https://www.turkcell.com.tr/en/aboutus/investor-relations/quarterly-results Hard copy versions of the complete audited financial statements are available free of charge upon request from Turkcell Investor Relations Department at investor.relations@turkcell.com.tr and/or +90 212 313 1888.
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Turkcell Iletisim Hizmetleri: Fourth Quarter and Full Year 2022 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for December 31, 2022 refer to the same item as at December 31, 2021. For further details, please refer to our consolidated financial statements and notes as at and for December 31, 2022, which can be accessed via our website in the investor relations section (www.turkcell.com.tr). Selected financial information presented in this press release for the fourth quarter and for the full year of 2021 and 2022 is based on Turkish Accounting Standards (TAS) / Turkish Financial Reporting Standards (TFRS) figures in TRY terms unless otherwise stated. In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text. Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation. Our Initial Assessment of the Earthquakes’ Impact On February 6th, 2023, two high-magnitude earthquakes, epicentered in Kahramanmaraş yet impacting 11 cities across Southeastern Türkiye, have dramatically affected the lives of 14 million people. As Turkcell, we took immediate action after the quakes as quickly and efficiently as possible to ensure the safety of our colleagues and to provide communication to our 6.5 million subscribers in the region. On the very first day, almost half of our 3,300 base stations in the region was out of service mainly due to power outage and destruction. We rapidly deployed more than 1,200 network personnel to the region to make the necessary repairs. We swiftly reactivated 99% of our sites by deploying around 250 mobile base stations and 1,400 electric generators to compensate for one tower and around 150 base stations that were destroyed. We began to provide Wi-Fi services via mobile base stations in tent and container areas. While providing free communication packages to subscribers, healthcare personnel and emergency teams in the region, we have also provided 1-month of free communication to subscribers in the state of emergency region. Currently, 68% of our exclusive stores in the region are fully operational and all our services continue to run uninterruptedly through our digital channels and containers we have deployed in the area. We are deeply saddened by the lives lost, which include 21 of our colleagues. We will continue providing aid and support for the families of our colleagues who lost their lives, and for our citizens affected by the earthquake, as we have done since the first day of the disaster. We have prepared our 2023 guidance1 considering all of the above developments, and based upon the initial impact assessment of the earthquake on our business. Accordingly, we target revenue growth of between 55-57%, an EBITDA of around TRY34 billion and an operational capex over sales ratio2 of around 22%. We estimate a negative revenue impact of around TRY1.5 billion. This arises from the steps we have taken to alleviate pressure on our affected subscribers, such as free communication packages, the cancellation of line opening-closing fees, the suspension fees, and from shrinking customer demand in the longer term triggered by the earthquakes’ impact on people’s purchasing power. In addition, we expect an impact of around TRY400 million on operational expenses due to personnel, infrastructure, and network expenses that we have incurred to date, and will continue to incur in the region. We expect a replacement CAPEX of circa TRY900 million for mobile and fixed network investments, particularly in the regions that have suffered extensive destruction. These assessments include the effect of the earthquakes based on our initial impact analysis; and all these estimations are already considered in the 2023 guidance. However, potential measures that may arise subsequent to this announcement and other developments over time may further affect our guidance. We will continue to provide information as such developments occur over the coming periods. (1) Please note that this section contains forward-looking statements based on our initial impact assessment of the earthquake. Factors such as changes in the state of emergency measures and potential aftershocks, as well as the risk factors disclosed in our Annual Report on Form 20-F for 2021 filed with U.S. Securities and Exchange Commission, could cause actual impacts to differ materially from our expectations. (1) 2023 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29. (2) Excluding license fee NOTICE We are publishing financial statements as of December 31, 2022 prepared in accordance with Turkish Accounting Standards/Turkish Financial Reporting Standards (“TAS”/“TFRS”) only. These standards are issued by the Public Oversight Accounting and Auditing Standards Authority (“POA”) and are in full compliance with IAS/IFRS Standards. In an announcement published by the POA on January 20, 2022, it is stated that TAS 29 “Financial Reporting in Hyperinflationary Economies” does not apply to TFRS financial statements as of December 31, 2021. Since then and as of the preparation date of our latest consolidated financial statements, no new statement has been made by the POA about TAS 29 application. Consequently, no TAS 29 adjustment was made to our consolidated financial statements. Financial statements prepared in accordance with IFRS should apply IAS 29 “Financial Reporting in Hyperinflationary Economies” as of December 31, 2022. In this context, financial statements prepared in accordance with IFRS and TFRS would have significant differences and would not be comparable as of December 31, 2022. We intend to publish IFRS financial statements, compliant with IAS 29 to the extent that it remains applicable, with our Annual Report on Form 20-F that will be filed to the U.S. Securities and Exchange Commission. Although we have not prepared a detailed comparison of differences between IFRS (unadjusted according to IAS 29) and TFRS, we have noted in our past financial statements that the most significant differences have appeared in the lines Other Operating Income/Expense, Finance Income/Expense, and Investment Activity Income/Expense. In the past, revenue, net income and EBITDA have generally not differed. While no assurance can be given that this will be the case for Q4 2022, we are not at present aware of changes that would cause other significant differences, other than those resulting from the application of IAS 29. FINANCIAL HIGHLIGHTS TRY million Q421 Q422 y/y% FY21 FY22 y/y% Revenue 10,192 16,044 57.4% 35,921 53,878 50.0% EBITDA1 4,212 6,671 58.4% 15,014 21,994 46.5% EBITDA Margin (%) 41.3% 41.6% 0.3pp 41.8% 40.8% (1.0pp) EBIT2 2,136 4,156 94.6% 7,722 12,516 62.1% EBIT Margin (%) 21.0% 25.9% 4.9pp 21.5% 23.2% 1.7pp Net Income 1,385 5,996 333.1% 5,031 11,053 119.7% Net Income Exc. Fixed Asset Revaluation Net Impact3 354 1,903 437.4% 3,509 6,445 83.7% FULL YEAR HIGHLIGHTS Solid financial performance: Group revenues up 50.0% supported mainly by accelerated ARPU growth, and strong subscriber net add performance as well as the contribution of the digital business services and techfin business EBITDA up 46.5% leading to an EBITDA margin of 40.8%; EBIT up 62.1% resulting in an EBIT margin of 23.2% Net income up 119.7% to TRY11.1 billion including a major one-off (net TRY4.6 billion deferred tax income impact) resulting from fixed asset revaluation; without the one-off net income rose 83.7% to TRY6.4 billion Free cash flow4 generation of TRY1.7 billion; net leverage5 level at 0.9x; net short FX position of US$25 million Group revenues up 50.0% supported mainly by accelerated ARPU growth, and strong subscriber net add performance as well as the contribution of the digital business services and techfin business EBITDA up 46.5% leading to an EBITDA margin of 40.8%; EBIT up 62.1% resulting in an EBIT margin of 23.2% Net income up 119.7% to TRY11.1 billion including a major one-off (net TRY4.6 billion deferred tax income impact) resulting from fixed asset revaluation; without the one-off net income rose 83.7% to TRY6.4 billion Free cash flow4 generation of TRY1.7 billion; net leverage5 level at 0.9x; net short FX position of US$25 million Robust operational momentum continued: Turkcell Turkey subscriber base up by 2.3 million net additions; 1.9 million mobile postpaid net additions the highest performance since 2009 220 thousand fixed subscriber net additions; 234 thousand fiber net additions, best net add performance ever 887 thousand new fiber homepasses Mobile ARPU6 growth of 40.3%; residential fiber ARPU growth of 26.5% Turkcell Turkey subscriber base up by 2.3 million net additions; 1.9 million mobile postpaid net additions the highest performance since 2009 220 thousand fixed subscriber net additions; 234 thousand fiber net additions, best net add performance ever 887 thousand new fiber homepasses Mobile ARPU6 growth of 40.3%; residential fiber ARPU growth of 26.5% 2023 guidance7; revenue growth target of between 55-57%, EBITDA target of around TRY34 billion, and operational capex over sales ratio8 target of around 22% FOURTH QUARTER HIGHLIGHTS Strong financial results: Group revenues up 57.4% on the back of the strong ARPU performance of Turkcell Turkey and contribution from digital business services and techfin business EBITDA up 58.4% leading to an EBITDA margin of 41.6%; EBIT up 94.6% resulting in an EBIT margin of 25.9% Net income up 333.1% to TRY6.0 billion (including TRY4.1 billion net impact of tax income resulting from fixed asset revaluation) Group revenues up 57.4% on the back of the strong ARPU performance of Turkcell Turkey and contribution from digital business services and techfin business EBITDA up 58.4% leading to an EBITDA margin of 41.6%; EBIT up 94.6% resulting in an EBIT margin of 25.9% Net income up 333.1% to TRY6.0 billion (including TRY4.1 billion net impact of tax income resulting from fixed asset revaluation) Robust operational performance maintained: Quarterly mobile postpaid subscriber net additions of 599 thousand; postpaid subscriber share at 68.1% of mobile subscriber base Quarterly fixed subscriber net additions of 69 thousand Year-on-year mobile ARPU5 increased 55.6% mainly driven by price adjustments, upsell to higher tariffs, and higher postpaid share Residential fiber ARPU growth of 33.3% year-on-year mainly by price adjustments and upsell efforts, as well as increased IPTV penetration Average monthly data usage of 4.5G subscribers at 16.9 GB in Q422; smartphone penetration at 87% Digital channels’ share9 in sales at 24.9% Quarterly mobile postpaid subscriber net additions of 599 thousand; postpaid subscriber share at 68.1% of mobile subscriber base Quarterly fixed subscriber net additions of 69 thousand Year-on-year mobile ARPU5 increased 55.6% mainly driven by price adjustments, upsell to higher tariffs, and higher postpaid share Residential fiber ARPU growth of 33.3% year-on-year mainly by price adjustments and upsell efforts, as well as increased IPTV penetration Average monthly data usage of 4.5G subscribers at 16.9 GB in Q422; smartphone penetration at 87% Digital channels’ share9 in sales at 24.9% (1) EBITDA is a non-GAAP financial measure. See page 20 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Excludes the impact of fixed assets revaluation. Please refer to table on page 22 for details. (4) Free cash flow calculation includes EBITDA and the following items as per Turkish Financial Reporting Standartds (TFRS) cash flow statement; acquisition of property, plant and equipment, acquisition of intangible assets, change in operating assets/liabilities, payment of lease liabilities and income tax paid. (5) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. Required reserves held in CBRT balances are also considered in net debt calculation. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. (6) Excluding M2M (7) Please note that this section contains forward-looking statements based on our initial impact assessment of the earthquake. Factors such as changes in the state of emergency measures and potential aftershocks, as well as the risk factors disclosed in our Annual Report on Form 20-F for 2021 filed with U.S. Securities and Exchange Commission, could cause actual impacts to differ materially from our expectations. (7) 2023 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29. (8) Excluding license fee (9) Share of all sales from digital channels (including voice, data, services & smart devices) in Turkcell Turkey consumer sales (excluding fixed business) and equipment related revenues in other segment. For further details, please refer to our consolidated financial statements and notes as at December 31, 2022 via our website in the investor relations section (www.turkcell.com.tr). COMMENTS BY CEO, MURAT ERKAN The disaster of the century… Two devastating earthquakes, epicentered in Kahramanmaraş, with magnitudes of 7.7 and 7.6 have marked themselves as the greatest disaster of Türkiye’s modern history. The earthquakes that struck Türkiye and Syria have claimed thousands of lives and placed our country into deep mourning. We wish Allah’s mercy upon the victims, among whom were 21 of our colleagues. We offer our sincere and heartfelt condolences to those who lost their families and loved ones. From the first moment of the earthquake, Turkcell made an initial assessment to swiftly take all necessary actions. On the first day of the earthquake, we lost approximately half of the 3,300 sites in the region. We deployed mobile base stations, generators and batteries to the region and within four days increased our active site rate to over 90%. We provided free voice, SMS, and internet packages to close to 6.5 million subscribers in the earthquake region. Additionally, we provided a “Kahraman Paketi (Hero Package)” to meet the needs of emergency team and health care professionals. We sustained free Wi-Fi and charging stations in the region and supported victims with a donation commitment of TRY3.5 billion to the “Türkiye Tek Yürek (Türkiye One Heart)” quake relief campaign. Being Türkiye’s Turkcell, we will remain by our people as always. In 2022, as inflationary pressures topped the agenda, the tightening policies of Central Banks against inflation and concerns over recession were in focus. Energy and commodity prices rose massively in the wake of the Russia-Ukraine war. As we saw an easing of the pandemic’s impact on Türkiye, the agenda turned to deterioration in pricing behaviour and the expectation of high inflation propping up consumer spending. Strong tourism inflows that returned to pre-pandemic levels supported the current account balance, as well as the telecommunication sector. Best mobile postpaid subscriber net addition of the past 13 years In 2022 we outperformed our expectations. At the start of the year we targeted adding 1 million net subscribers and ended up exceeding 2.3 million net subscriber additions thanks to our value propositions that meet our customers’ needs, increased tourism activity and strong demand from the corporate segment. By keeping our focus of enlarging our mobile postpaid base which provides a higher revenue contribution, we added 1.9 million subscribers, the record of the past 13 years. Accordingly, the postpaid share in the mobile base increased to 68.1%. The mobile churn rate slightly increased to 2.7%, as we deactivated a higher number of inactive subscribers in the fourth quarter, since Türkiye had a greater tourist and visitor inflow in 2022 compared to the previous year. The Mobile Number Portability (MNP) market, which was rationalized as our sequential price increases were followed by competitors throughout the year, was triggered by aggressive price offerings in the market during the last quarter of the year. With an awareness of Türkiye lagging behind OECD countries in terms of speed and capacity of fixed broadband services, we continued to invest to our fiber infrastructure to provide fiber services that our customers demand. In 2022, we reached 887 thousand homes with our end-to-end fiber, and total fiber homepasses reached 5.4 million. For the year we had a record net fiber add of 234 thousand subscribers. Thanks to the increased penetration of our complementary, content-rich TV+ service, and our superior customer experience, the fiber churn rate decreased to an all-time low of 1.1%. Moreover, we sustained our focus on high speed internet packages. On the fiber subscriber acquisition side, 37% of the subscribers preferred speeds of 100 Mbps and above. In line with our inflationary pricing policy, we have made sequential price adjustments since December 2021, where inflation began to rise. We have emphasized that price adjustments would be reflected in ARPU growth with a lag, due to the contract-based nature of our business. Accelerating from the first quarter of the year, Mobile ARPU1 rose 55.6%, and Residential Fiber ARPU rose 33.3% year-over-year in the fourth quarter. For 2022, respective ARPU growth levels were 40.3% and 26.5%. Mobile ARPU growth was driven by sequential price adjustments, a higher postpaid subscriber base and upsell efforts, whereas Fiber ARPU growth was sustained by price adjustments, higher speed package preference of new subscribers in particular and increasing IPTV penetration. Our consolidated revenue increased by 50.0% year-over-year in 2022 to TRY53.9 billion. Rising 46.5% we registered TRY22.0 billion EBITDA2. Thanks to our strong operational performance and the contribution of TRY4.6 billion net deferred tax income arising from fixed asset revaluation, net income realized at TRY11.1 billion. The support of our strategic focus areas continues In 2022, the standalone paid users3 of our digital services and solutions, which are developed by Turkcell Engineers, increased by 1.1 million year-on-year to 5.1 million, while standalone revenues rose 30.3%. Digital TV platform TV+ continues to differentiate itself from the peers. According to 3rd quarter ICTA data, the pay TV market reached 7.7 subscribers, where TV+, with its 15.9% market share, is the only provider to have steadily increased its market share since the second quarter of 2014. This performance is attributable to its extensive sales network, strong brand recognition and rich content. IPTV subscribers increased by 200 thousand year-on-year to 1.3 million while OTT TV users reached 1.0 million. With an effort to increase the international penetration of BiP, our instant messaging app, we entered the 120 million mobile user Pakistani market through a partnership agreement with “Jazz” in December. Currently, 37% of 17.9 million BiP users3 are from global markets. The revenues of our digital business services, the greatest supporter of the digital transformation of its customers, rose 88.3% year-on-year, exceeding TRY4.3 billion. End-to-end tailored digital transformation projects, data center and cloud storage services were the main focus areas contributing to growth. While we have signed 2,800 system integrator and managed service projects to date, we have a contract value (backlog) from system integration projects of TRY2.8 billion to be realized beyond 2022, doubling the level of last year. Serving with Paycell and Financell brands, our techfin segment sustained its strong contribution to topline growth this year. In 2022, Financell’s revenue rose 59.4% to TRY980 million, while its loan portfolio reached TRY3.4 billion up from last year’s TRY2.1 billion. With its wide-range product portfolio, Paycell serves 7.7 million users3, and its revenues rose 87.2% to TRY877 million. Mobile payment services “Pay Later”, driving 66% of the topline, was the main driver of the growth, while POS solutions, accelerating its reach from the last quarter of 2021, was also supportive. During the year, Paycell launched new services almost in every vertical of the Turkish techfin ecosystem. And as of December, its users are able to invest in shares listed on the NYSE and Nasdaq Stock Exchange via the Paycell application. We entered 2023 with uncertainties As we left 2022 behind, having experienced consecutive macroeconomic and political challenges, we are entering 2023 with hopes of healing our wounds caused by the greatest disaster of the past century. Yet 2023 comes with series of challenges: the global economies face recession concerns arising in the post pandemic period, political uncertainty caused by the ongoing war in the central-Europe, energy, commodity and labor cost pressure on producer costs, and domestically, a much busier political agenda. Therefore, we foresee that our guidance4 may change in the light of changing conditions. At this stage, we target revenue growth of 55-57% and EBITDA of around TRY34 billion. We expect an operational CAPEX over sales ratio of around 22%. I would like to thank all of my colleagues those who have given their all in tackling the impact of the devastating earthquakes. As Türkiye’s Turkcell, we will continue working hard and heal our wounds together. (1) Excluding M2M (2) EBITDA is a non-GAAP financial measure. See page 20 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income (3) 3-month active (4) Please note that this section contains forward-looking statements based on our initial impact assessment of the earthquake. Factors such as changes in the state of emergency measures and potential aftershocks, as well as the risk factors disclosed in our Annual Report on Form 20-F for 2021 filed with U.S. Securities and Exchange Commission, could cause actual impacts to differ materially from our expectations. (4) 2023 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29. FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group Profit & Loss Statement (million TRY) Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Revenue 10,191.5 16,043.9 57.4% 35,920.5 53,878.5 50.0% Cost of revenue1 (5,019.9) (7,935.3) 58.1% (17,938.1) (27,310.6) 52.2% Cost of revenue1/Revenue (49.3%) (49.5%) (0.2pp) (49.9%) (50.7%) (0.8pp) Gross Margin1 50.7% 50.5% (0.2pp) 50.1% 49.3% (0.8pp) Administrative expenses (276.8) (473.4) 71.0% (919.0) (1,519.0) 65.3% Administrative expenses/Revenue (2.7%) (3.0%) (0.3pp) (2.6%) (2.8%) (0.2pp) Selling and marketing expenses (576.6) (899.8) 56.1% (1,778.5) (2,700.1) 51.8% Selling and marketing expenses/Revenue (5.7%) (5.6%) 0.1pp (5.0%) (5.0%) - Net impairment losses on financial and contract assets (106.7) (63.9) (40.1%) (271.2) (354.9) 30.9% EBITDA2 4,211.6 6,671.5 58.4% 15,013.8 21,993.8 46.5% EBITDA Margin 41.3% 41.6% 0.3pp 41.8% 40.8% (1.0pp) Depreciation and amortization (2,075.5) (2,515.7) 21.2% (7,291.9) (9,478.0) 30.0% EBIT3 2,136.1 4,155.8 94.6% 7,721.9 12,515.8 62.1% EBIT Margin 21.0% 25.9% 4.9pp 21.5% 23.2% 1.7pp Net finance income / (expense) (6,645.2) (3,424.2) (48.5%) (10,144.6) (13,489.0) 33.0% Finance income 2,569.6 (642.4) (125.0%) 3,051.1 210.8 (93.1%) Finance expense (9,214.8) (2,781.8) (69.8%) (13,195.7) (13,699.8) 3.8% Other income / (expense) 4,355.8 1,028.9 (76.4%) 6,409.6 6,800.9 6.1% Investment activity income / (expense) 474.7 157.6 (66.8%) 464.1 1,779.9 283.5% Non-controlling interests (0.1) 0.9 n.m (0.2) 1.0 n.m Share of profit of equity accounted investees 63.6 (10.0) (115.7%) 90.1 (71.4) (179.3%) Income tax expense 999.7 4,087.3 308.9% 490.2 3,516.1 617.3% Net Income 1,384.6 5,996.3 333.1% 5,031.1 11,053.2 119.7% (1) Excluding depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measure. See page 20 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. Revenue of the Group grew by 57.4% year-on-year in Q422. Turkcell Turkey’s growing customer base was the main driver of this performance with strong ARPU growth as a result of price adjustments to reflect inflationary impacts, larger postpaid subscriber base, and upsell efforts. Solid demand for digital business services and techfin also contributed to revenue growth. Turkcell Turkey revenues, comprising 78% of Group revenues, rose 61.9% year-on-year in Q422 to TRY12,449 million (TRY7,689 million). - Consumer segment revenues grew 65.2% year-on-year on the back of a larger subscriber base and price adjustments to reflect inflationary impacts. - Corporate segment revenues rose 75.8% year-on-year supported by the strong momentum of digital business services, which grew 86.7% year-on-year. - Standalone digital services revenues registered as part of consumer and corporate segments grew 51.0% year-on-year in Q422. The increased number of stand-alone paid users and price adjustments of services were the main drivers of this growth. Similar to the previous three quarters, in Q422 digital services revenues growth was negatively impacted by regulatory decision that amended the usage conditions of our voicemail service, the revenues of which are reported under digital services, as of December 1st, 2021. Excluding this impact, growth would have been 69%. - Wholesale revenues rose 35.9% year-on-year to TRY934 million (TRY687 million), mainly due to customers’ data capacity upgrades and the positive impact of currency movements. Turkcell International revenues, comprising 11% of Group revenues, rose 40.9% year-on-year to TRY1,813 million (TRY1,286 million) mainly due to lifecell’s performance and positive currency effects. Techfin segment revenues, comprising 4% of Group revenues, rose 76.8% year-on-year to TRY583 million (TRY330 million). This was driven by a 93.6% rise in Paycell revenues and 64.4% growth the finance company, Financell. Please refer to the Techfin section for details. Other subsidiaries' revenues, at 7% of Group revenues, including mainly non-group call center and energy business revenues, digital channels, and consumer electronics sales revenues, increased 35.4% year-on-year to TRY1,199 million (TRY886 million). For the full year, Turkcell Group revenues rose 50.0%. Turkcell Turkey revenues grew 50.1% to TRY40,851 million (TRY27,224 million). - Consumer business rose 47.9% driven mainly by strong subscriber net additions both in mobile and fixed segments, price adjustments and upsell efforts. - Corporate revenues rose 58.3% mainly supported by digital business services revenue growth of 88.3%. - Standalone digital services revenues from consumer and corporate segments grew 30.3% driven mainly by expanding standalone paid user base. - Wholesale revenues grew 72.7% to TRY3,285 million (TRY1,903 million). Turkcell International revenues rose 69.4% to TRY6,354 million (TRY3,750 million). Techfin segment revenues rose 71.9% to TRY1,849 million (TRY1,076 million). Other subsidiaries’ revenues were at TRY4,825 million (TRY3,871 million), indicating a 24.6% growth. Cost of revenue (excluding depreciation and amortization) increased to 49.5% (49.3%) as a percentage of revenues in Q422. This was driven mainly by the increase in radio expenses (1.8pp) and other cost items (1.3pp), despite the decline in interconnection cost (1.6pp) and cost of goods sold (1.3pp) as a percentage of revenues. For the full year, cost of revenue (excluding depreciation and amortization) rose to 50.7% (49.9%) as a percentage of revenues. This was due mainly to the rise in radio expenses (2.0pp) and other cost items (1.7pp), despite the decline in cost of goods sold (1.7pp) and interconnection expenses (1.2pp) as a percentage of revenues. Administrative expenses increased to 3.0% (2.7%) as a percentage of revenues in Q422. For the full year, administrative expenses were at 2.8% (2.6%) as a percentage of revenues. Selling and marketing expenses decreased to 5.6% (5.7%) as a percentage of revenues in Q422. This was driven mainly by the decline in marketing expenses (0.2pp) despite the rise in selling expenses (0.1pp) as a percentage of revenues. For the full year, selling and marketing expenses were at 5.0% (5.0%) as a percentage of revenues. Net impairment losses on financial and contract assets was at 0.4% (1.0%) as a percentage of revenues in Q422. For the full year, net impairment losses on financial and contract assets was at 0.7% (0.8%) as a percentage of revenues. EBITDA1 rose by 58.4% year-on-year in Q422 leading to an EBITDA margin of 41.6% (41.3%). (1) EBITDA is a non-GAAP financial measure. See page 20 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income - Turkcell Turkey’s EBITDA rose 60.2% to TRY5,208 million (TRY3,252 million) leading to an EBITDA margin of 41.8% (42.3%). - Turkcell International EBITDA increased 46.9% to TRY923 million (TRY628 million) driving an EBITDA margin of 50.9% (48.8%) on 2.1pp improvement. - Techfin segment EBITDA rose 42.7% to TRY274 million (TRY192 million) with an EBITDA margin of 47.0% (58.2%). - The EBITDA of other subsidiaries increased 90.3% to TRY267 million (TRY140 million). For the full year, EBITDA grew 46.5% resulting in an EBITDA margin of 40.8% (41.8%). - Turkcell Turkey’s EBITDA rose 41.3% to TRY17,197 million (TRY12,168 million) leading to an EBITDA margin of 42.1% (44.7%). - Turkcell International EBITDA increased 76.8% to TRY3,233 million (TRY1,828 million) driving an EBITDA margin of 50.9% (48.8%) on 2.1pp improvement. - Techfin segment EBITDA rose 41.1% to TRY902 million (TRY639 million) with an EBITDA margin of 48.8% (59.4%). - The EBITDA of other subsidiaries rose 74.9% to TRY662 million (TRY379 million). Depreciation and amortization expenses increased 21.2% year-on-year in Q422. For the full year depreciation and amortization expenses increased 30.0%. Net finance expense decreased to TRY3,424 million (TRY6,645 million) in Q422. This was mainly driven by lower FX losses. For the full year, net finance expense increased to TRY13,489 million (TRY10,145 million) mainly due to lower fair value gain on derivate instruments compared to FY21. See Appendix A for details of net foreign exchange gain and loss. Net other operating income decreased to TRY1,029 million (TRY4,356 million) in Q422. For the full year, net other operating income increased to TRY6,801 million (TRY6,410 million) mainly due to interest income from time deposits. See Appendix A for details of net foreign exchange gain and loss. Net investment activity income was TRY158 million in Q422 compared to TRY475 million in Q421. For the full year, net investment activity income increased to TRY1,780 million (TRY464 million). This was driven mainly by the fair value difference recognized on currency-protected time deposits. Income tax expense: The deferred tax income of TRY3,895 million (TRY1,016 million) and positive impact of current tax expense of TRY193 million were reported, leading to an income tax gain of TRY4,087 million in Q422. For the full year, deferred tax income of TRY4,047 million and current tax expense of TRY531 million were reported, leading to an income tax gain of TRY3,516 million. Please note that in Q422, we made use of the right introduced by Law No. 7338, which allows the revaluation of properties and depreciable economic assets under certain conditions. This resulted in an impact on the deferred tax asset reported in Q422. For the full year, net impact was at TRY4.6 billion. Please refer to our consolidated financial statements and notes as at December 31, 2022 for details. Net income of the Group increased by 333.1% to TRY5,996 million (TRY1,385 million) in Q422. This resulted mainly from strong operational performance and the positive impact of deferred tax income relating to the revaluation of assets as explained above. For the full year, group net income rose 119.7% to TRY11,053 million (TRY5,031 million) on the back of strong operational performance and the deferred tax income impact despite lower finance income. Without the deferred tax income impact, group net income is TRY6,445 million. Please note that in FY22 an impairment charge of TRY214 million has been recognized on the assets of Ukraine in territories under the control of Ukraine but not operating for more than 92 days and those in territories invaded by Russia. Total cash & debt: Consolidated cash as of December 31, 2022 increased to TRY25,961 million from TRY24,344 million as of September 30, 2022. This was driven mainly by the positive impact of currency movements. Excluding FX swap transactions, 51% of our cash is in US$, 15% in EUR, and 32% in TRY. Consolidated debt as of December 31, 2022 increased to TRY53,854 million from TRY51,922 million as of September 30, 2022 due mainly to the impact of currency movements. Please note that TRY3,055 million of our consolidated debt is comprised of lease obligations. Please note that 46% of our consolidated debt is in US$, 26% in EUR, 3% in CNY, 5% in UAH, and 19% in TRY. Net debt1 as of December 31, 2022 was at TRY20,838 million with a net debt to EBITDA ratio of 0.9 times. Excluding finance company consumer loans, our telco only net debt was at TRY17,473 million with a leverage of 0.8 times. Turkcell Group had a short FX position of US$25 million as at the end of the year (Please note that this figure takes hedging portfolio and advance payments into account). The short FX position of US$25 million is in line with our FX neutral definition, which is between -US$200 million and +US$200 million. Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY6,434 million in Q422. For the full year, capital expenditures including non-operational items were at TRY16,361 million. For Q422 and the full year, operational capital expenditures (excluding license fees) at the Group level were at 27.8% and 20.2% of total revenues, respectively. Capital expenditures (million TRY) Quarter Year Q421 Q422 FY21 FY22 Operational Capex 2,686.3 4,454.3 7,629.8 10,859.4 License and Related Costs - 317.5 - 317.5 Non-operational Capex (Including IFRS15 & IFRS16) 1,611.1 1,662.5 3,849.6 5,183.6 Total Capex 4,297.4 6,434.3 11,479.4 16,360.6 (1) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. Required reserves held in CBRT balances are also considered in net debt calculation. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. Summary of Operational Data Quarter Year Q421 Q422 y/y % FY21 FY22 y/y % Number of subscribers (million) 39.4 41.7 5.8% 39.4 41.7 5.8% Mobile Postpaid (million) 23.7 25.6 8.0% 23.7 25.6 8.0% Mobile M2M (million) 3.3 4.0 21.2% 3.3 4.0 21.2% Mobile Prepaid (million) 12.0 12.0 - 12.0 12.0 - Fiber (thousand) 1,887.8 2,121.8 12.4% 1,887.8 2,121.8 12.4% ADSL (thousand) 754.9 751.4 (0.5%) 754.9 751.4 (0.5%) Superbox (thousand)1 603.6 670.7 11.1% 603.6 670.7 11.1% Cable (thousand) 54.6 43.9 (19.6%) 54.6 43.9 (19.6%) IPTV (thousand) 1,082.2 1,281.7 18.4% 1,082.2 1,281.7 18.4% Churn (%)2 Mobile Churn (%) 2.5% 2.7% 0.2pp 2.0% 2.0% - Fixed Churn (%) 1.6% 1.3% (0.3pp) 1.5% 1.4% (0.1pp) ARPU (Average Monthly Revenue per User) (TRY) Mobile ARPU, blended 54.6 83.8 53.5% 50.5 70.0 38.6% Mobile ARPU, blended (excluding M2M) 59.5 92.6 55.6% 54.9 77.0 40.3% Postpaid 68.2 101.6 49.0% 62.8 84.7 34.9% Postpaid (excluding M2M) 78.3 118.7 51.6% 71.7 98.4 37.2% Prepaid 28.6 47.9 67.5% 26.9 40.5 50.6% Fixed Residential ARPU, blended 82.2 110.5 34.4% 77.9 98.7 26.7% Residential Fiber ARPU 83.0 110.6 33.3% 78.4 99.2 26.5% Average mobile data usage per user (GB/user) 13.3 15.7 18.0% 13.3 14.7 10.5% Mobile MoU (Avg. Monthly Minutes of usage per subs) blended 548.7 533.6 (2.8%) 551.2 546.4 (0.9%) (1) Superbox subscribers are included in mobile subscribers. (2) Churn figures represent average monthly churn figures for the respective quarters. Turkcell Turkey subscriber base grew by 2.3 million net additions in FY22 to 41.7 million, thanks to our customer-centric strategy and differentiated value proposition offered to customers. In addition, we achieved and doubled our 1 million net subscriber additions target for the year on the back of our diversified solutions that meet customer needs and our innovative campaigns that facilitate their lives. On the mobile front, our subscriber base expanded to 37.5 million on 1.9 million net annual additions in FY22. This was driven by net additions from the postpaid subscriber base, which reached 68.1% (66.4%) of total mobile subscribers. We had 599 thousand quarterly postpaid net additions in Q422. In FY22, we had a net 10 thousand decline in our prepaid subscribers, due mainly to the disconnection of 430 thousand inactive prepaid subscribers during the quarter in line with our churn policy. On the fixed front, our fiber subscriber base grew by 58 thousand net additions in Q422. In FY22, we had 234 thousand fiber net additions, making the best net add performance ever. This resulted mainly by focus on fiber network investments, and the strong demand for high-speed and quality broadband connections. In FY22, we had a net 14 thousand decline in our ADSL and cable subscribers. Total fixed subscribers reached 2.9 million on 69 thousand quarterly and 220 thousand annual net additions. Meanwhile, IPTV customers reached 1.3 million on 51 thousand quarterly and 200 thousand annual net additions. The average monthly mobile churn rate was at 2.7% in Q422, and 2.0% in FY22. Meanwhile, the average monthly fixed churn rate was at 1.3% in Q422 and 1.4% in FY22 on the back of our superior customer experience resulting from the speed and quality we offer on our fiber infrastructure which plays an important role in maintaining a healthy churn level. Our mobile ARPU (excluding M2M) rose 55.6% year-on-year in Q422 driven mainly by price adjustments to reflect inflationary impacts and upsell to higher tariffs, as well as larger postpaid subscriber base. Mobile ARPU (excluding M2M) grew 40.3% for the full year mainly on the same drivers. Our residential fiber ARPU growth was 33.3% year-on-year in Q422. This resulted mainly from price adjustments, upsell to higher tariffs, and higher IPTV penetration at 67.0% in Q422. For the full year, fiber residential ARPU rose 26.5%. Average monthly mobile data usage per user rose 10.5% in FY22 to 14.7 GB with the increasing number and data consumption of 4.5G users. Accordingly, the average mobile data usage of 4.5G users reached 16.0 GB in FY22. Total smartphone penetration on our network reached 87% in Q422. 93% of those smartphones were 4.5G compatible. TURKCELL INTERNATIONAL lifecell1 Financial Data Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Revenue (million UAH) 2,406.4 2,606.8 8.3% 8,482.7 9,411.7 11.0% EBITDA (million UAH) 1,319.1 1,505.6 14.1% 4,751.2 5,446.5 14.6% EBITDA margin (%) 54.8% 57.8% 3.0pp 56.0% 57.9% 1.9pp Net income (million UAH) 237.9 408.8 71.8% 610.9 972.3 59.2% Capex (million UAH) 1,319.3 997.4 (24.4%) 3,593.6 3,007.6 (16.3%) Revenue (million TRY) 996.6 1,326.1 33.1% 2,805.7 4,773.6 70.1% EBITDA (million TRY) 544.5 765.8 40.6% 1,566.4 2,763.4 76.4% EBITDA margin (%) 54.6% 57.7% 3.1pp 55.8% 57.9% 2.1pp Net income (million TRY) 98.1 207.8 111.8% 210.8 485.5 130.3% (1) Since July 10, 2015, we hold a 100% stake in lifecell. lifecell (Ukraine) had another positive revenue growth performance. Accordingly, lifecell revenues rose 8.3% year-on-year in Q422 in local currency terms on the back of ARPU growth supported by price adjustments and increased data usage. lifecell’s EBITDA grew 14.1% year-on-year leading to an EBITDA margin of 57.8%. lifecell revenues in TRY terms grew 33.1% year-on-year in Q422 mainly due to price adjustments and the positive impact of currency movements. lifecell’s EBITDA in TRY terms grew by 40.6%, leading to an EBITDA margin of 57.7%. For the full year, lifecell revenues in local currency terms increased 11.0%, while its EBITDA rose 14.6% resulting in an EBITDA margin of 57.9%. lifecell also continued to report positive net income in 2022. In TRY terms, lifecell registered revenue growth of 70.1% with an EBITDA margin of 57.9%. lifecell Operational Data Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Number of subscribers (million)2 10.1 10.2 1.0% 10.1 10.2 1.0% Active (3 months)3 9.2 8.5 (7.6%) 9.2 8.5 (7.6%) MOU (minutes) (12 months) 179.0 148.0 (17.3%) 180.9 156.9 (13.3%) ARPU (Average Monthly Revenue per User), blended (UAH) 80.2 86.0 7.2% 73.7 77.1 4.6% Active (3 months) (UAH) 88.5 104.5 18.1% 83.2 91.5 10.0% (2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. (3) Active subscribers are those who in the past three months made a revenue generating activity. The three-month active subscriber base of lifecell declined to 8.5 million in Q422, as people have fled the country because of the ongoing war. Meanwhile, lifecell’s 3-month active ARPU rose 18.1% year-on-year on the back of price adjustments and higher data usage. Meanwhile, lifecell continued its leadership of the Ukrainian market with 84.3% smartphone penetration as of the end of Q422. lifecell remained focused on ensuring the safety of its employees and provide services to our Ukrainian customers. Meanwhile, our network is largely operational. On average, around 23% of nearly 9 thousand sites are temporarily down as of December 31, 2022 on a daily basis. The conditions of sites in occupied territories are unclear. At the end of December, around 92% of our stores are open nationwide on a daily average. In Q422 daily top-ups almost recovered to the pre-war period levels. Additionally, ICT systems, such as billing and CRM are fully operational. The country’s banking system continues to operate and daily operations, including payments and collections continue as normal. The cash position of lifecell is conducive to sustain its operations. BeST1 Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Number of subscribers (million) 1.5 1.5 - 1.5 1.5 - Active (3 months) 1.1 1.1 - 1.1 1.1 - Revenue (million BYN) 35.6 38.8 9.0% 145.7 146.2 0.3% EBITDA (million BYN) 10.1 12.4 22.8% 38.1 44.2 16.0% EBITDA margin (%) 28.5% 32.0% 3.5pp 26.1% 30.2% 4.1pp Net loss (million BYN) (7.5) (103.1) 1,274.7% (31.6) (124.8) 294.9% Capex (million BYN) 16.7 25.3 51.5% 63.5 81.4 28.2% Revenue (million TRY) 157.3 288.1 83.2% 507.8 936.0 84.3% EBITDA (million TRY) 44.7 92.1 106.0% 133.9 284.5 112.5% EBITDA margin (%) 28.4% 32.0% 3.6pp 26.4% 30.4% 4.0pp Net loss (million TRY) (32.9) (745.4) 2,165.7% (109.9) (871.4) 692.9% (1) BeST, in which we hold a 100% stake, has operated in Belarus since July 2008. BeST revenues increased 9.0% year-on-year in local currency terms in Q422. This was mainly due to the data and outgoing voice revenues despite the decrease in handset sales revenues. BeST registered an EBITDA of BYN12.4 million in Q422, which led to an EBITDA margin of 32.0%. In Q422, financial obligation based on Investment Agreement signed between the Republic of Belarus, BeST and Turkcell has been booked in BeST standalone financial statements. This has no negative impact on consolidated financial statements since the previous obligation related to investment agreement booked on consolidated level has been reversed. BeST’s revenues in TRY terms increased 83.2% year-on-year in Q422 with an EBITDA margin of 32.0%. For the full year, BeST’s revenue in local currency terms remained flat compared with the previous year. EBITDA rose 16.0%, resulting in a 30.2% EBITDA margin on 4.1pp improvement. BeST’s revenue in TRY terms rose 84.3% with an EBITDA margin of 30.4%. In Q422, BeST continued to expand its 4G network in 6 regions, reaching 4.1 thousand sites, which grew by 186 additions during the quarter. Extended LTE coverage allows BeST to increase penetration of 4G subscribers. Accordingly, 4G users comprised 78% of the 3-month active subscriber base as of Q422. Meanwhile, the average monthly data consumption of 4G subscribers rose 14% year-on-year to 18.3 GB. Moreover, asymmetric MTR (mobile termination rates) which came into effect as of December 31, 2022 was a positive step towards further strengthening a fair competitive market. Kuzey Kıbrıs Turkcell2 (million TRY) Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Number of subscribers (million) 0.6 0.6 - 0.6 0.6 - Revenue 90.1 147.8 64.0% 306.6 473.1 54.3% EBITDA 35.3 65.2 84.7% 121.1 195.1 61.1% EBITDA margin (%) 39.2% 44.1% 4.9pp 39.5% 41.2% 1.7pp Net income 25.5 106.8 318.8% 68.3 175.6 157.1% Capex 26.6 361.2 1,257.9% 74.2 458.9 518.5% (2) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999 Kuzey Kıbrıs Turkcell revenues increased by 64.0% year-on-year in Q422 driven by higher voice and roaming revenues as well as fixed broadband and handset sales revenues. In Q422, the EBITDA of Kuzey Kıbrıs Turkcell grew 84.7% yielding a 44.1% EBITDA margin. For the full year, Kuzey Kıbrıs Turkcell revenues increased 54.3% with the same drivers. The EBITDA grew 61.1% leading to an EBITDA margin of 41.2%. Meanwhile, Kıbrıs Telekom was entitled to receive the 4G license for 18 years and the 5G license for 20 years. TECHFIN Paycell Financial Data (million TRY) Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Revenue 139.6 270.2 93.6% 468.4 876.9 87.2% EBITDA 64.3 116.7 81.5% 222.4 387.8 74.4% EBITDA Margin (%) 46.1% 43.2% (2.9pp) 47.5% 44.2% (3.3pp) Net Income 48.7 83.3 71.0% 155.1 274.1 76.6% Paycell’s revenue rose by 93.6% year-on-year in Q422. This robust performance resulted mainly from the continued demand for digital payments which we addressed with a diversified product portfolio that includes mobile payment services, particularly the Pay Later solution, as well as POS solutions and Paycell card. The demand for digital payment services remained solid with changing consumer behavior. Paycell’s EBITDA increased 81.5% year-on-year leading to an EBITDA margin of 43.2% in Q422. The quarterly transaction volume (non-group) of Pay Later service exceed TRY1 billion, which was utilized by 3-month active Pay Later users of 5.0 million in Q422 as well as higher merchant penetration supported by the dual growth strategy of Paycell. Meanwhile, the Paycell Card transaction volume more than doubled year-on-year to TRY2.8 billion in Q422. In addition, the transaction volume of POS solutions reached TRY4.4 billion in Q422. Meanwhile, Paycell App added Stock Market (NYSE & Nasdaq) feature, launched with commission-free campaign. Paycell also continued to act as a market-place for gold, silver, and platinum trading in Q422. Overall, Paycell's total transaction volume across all services more than doubled to TRY11.8 billion year-on-year, driven mainly by 17% year-on-year rise in Paycell’s total 3-month active users to 7.7 million, and their increased usage. For the full year, Paycell registered 87.2% revenue growth and the total transaction volume of TRY37.1 billion more than doubled year-on-year. Paycell’s EBITDA rose 74.4% year-on-year leading to an EBITDA margin of 44.2%. The decrease in the EBITDA margin was mainly due to the rise in personel expenses. Financell Financial Data (million TRY) Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Revenue 190.4 313.1 64.4% 614.9 980.1 59.4% EBITDA 128.9 160.9 24.8% 420.4 523.0 24.4% EBITDA Margin (%) 67.7% 51.4% (16.3pp) 68.4% 53.4% (15.0pp) Net Income 109.5 101.7 (7.1%) 334.6 318.6 (4.8%) Financell’s revenue increased 64.4% year-on-year in Q422. This growth was primarily due to the expansion of the loan portfolio and the higher average interest rate on the loan portfolio compared to the same period of last year. Meanwhile, Financell reported EBITDA growth of 24.8% year-on-year, resulting in an EBITDA margin of 51.4% in Q422. The decrease in EBITDA margin was due to higher funding costs compared to the Q421. Financell's net income declined 7.1% year-on-year. Financell’s revenues rose by 59.4% for the full year and EBITDA increased 24.4% yielding an EBITDA margin of 53.4%. Higher funding cost compared to the previous year was the main reason for the year-on-year decline in EBITDA margin. Financell’s loan portfolio increased to TRY3.4 billion at the end of Q422. Although the installment limitation on consumer loans for telecom devices continued to limit the growth of the loan portfolio, higher lending to corporate customers and greater mobility supported the loan portfolio. Accordingly, Financell has provided loans to over 22 thousand corporate customers. Financell’s cost of risk decreased from 1.3% in Q322 to 1.0% in Q422 thanks to customer portfolio improvement and successful collection performance. Turkcell Group Subscribers Turkcell Group registered subscribers amounted to approximately 54.0 million as of December 31, 2022. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell, BeST, and Kuzey Kıbrıs Turkcell. Turkcell Group Subscribers Q421 Q322 Q422 y/y% q/q% Turkcell Turkey subscribers (million)1 39.4 41.6 41.7 5.8% 0.2% lifecell (Ukraine) 10.1 10.1 10.2 1.0% 1.0% BeST (Belarus) 1.5 1.5 1.5 - - Kuzey Kıbrıs Turkcell 0.6 0.6 0.6 - - Turkcell Group Subscribers (million) 51.6 53.8 54.0 4.7% 0.4% (1) Subscribers to more than one service are counted separately for each service. OVERVIEW OF THE MACROECONOMIC ENVIRONMENT The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below. Quarter Year Q421 Q322 Q422 y/y% q/q% FY21 FY22 y/y% GDP Growth (Turkey) 9.6% 4.0% 3.5% (6.1pp) (0.5pp) 11.4% 5.6% (5.8pp) Consumer Price Index (Turkey)(yoy) 36.1% 83.5% 64.3% 28.2pp (19.2pp) 36.1% 64.3% 28.2pp US$ / TRY rate Closing Rate 13.3290 18.5038 18.6983 40.3% 1.1% 13.3290 18.6983 40.3% Average Rate 11.0757 17.8817 18.6010 67.9% 4.0% 8.8797 16.4900 85.7% EUR / TRY rate Closing Rate 15.0867 17.9232 19.9349 32.1% 11.2% 15.0867 19.9349 32.1% Average Rate 12.6591 18.0379 18.9748 49.9% 5.2% 10.4810 17.3108 65.2% US$ / UAH rate Closing Rate 27.2782 36.5686 36.5686 34.1% - 27.2782 36.5686 34.1% Average Rate 26.8092 35.3497 36.5686 36.4% 3.4% 27.3362 32.4854 18.8% US$ / BYN rate Closing Rate 2.5481 2.4803 2.7364 7.4% 10.3% 2.5481 2.7364 7.4% Average Rate 2.5019 2.5585 2.5055 0.1% (2.1%) 2.5448 2.6098 2.6% RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results. Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes finance income and expense, other operating income and expense, investment activity income and expense, share of profit of equity accounted investees and minority interest. Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of our results of operations, as reported under TFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with TFRS to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with TFRS. Turkcell Group (million TRY) Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Adjusted EBITDA 4,211.6 6,671.5 58.4% 15,013.8 21,993.8 46.5% Depreciation and amortization (2,075.5) (2,515.7) 21.2% (7,291.9) (9,478.0) 30.0% EBIT 2,136.1 4,155.8 94.6% 7,721.9 12,515.8 62.1% Finance income 2,569.6 (642.4) (125.0%) 3,051.1 210.8 (93.1%) Finance expense (9,214.8) (2,781.8) (69.8%) (13,195.7) (13,699.8) 3.8% Other operating income / (expense) 4,355.8 1,028.9 (76.4%) 6,409.6 6,800.9 6.1% Investment activity income / (expense) 474.7 157.6 (66.8%) 464.1 1,779.9 283.5% Share of profit of equity accounted investees 63.6 (10.0) (115.7%) 90.1 (71.4) (179.3%) Consolidated profit before income tax & minority interest 385.0 1,908.0 395.6% 4,541.1 7,536.1 66.0% Income tax expense 999.7 4,087.3 308.9% 490.2 3,516.1 617.3% Consolidated profit before minority interest 1,384.7 5,995.3 333.0% 5,031.3 11,052.2 119.7% NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2022. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2021 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers. ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, and Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY53.9 billion revenue in FY22 with total assets of TRY101.3 billion as of December 31, 2022. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr. Appendix A – Tables Table: Net foreign exchange gain and loss details Million TRY Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Net FX loss before hedging (4,137.2) (383.0) (90.7%) (5,538.5) (3,834.0) (30.8%) Swap interest income/(expense) (89.2) 29.0 n.m (422.4) (127.0) (69.9%) Fair value gain on derivative financial instruments 2,613.3 (945.3) (136.2%) 3,312.8 (130.8) (103.9%) Net FX gain / (loss) after hedging (1,613.1) (1,299.3) (19.5%) (2,648.1) (4,091.7) 54.5% Table: Income tax expense details Million TRY Quarter Year Q421 Q422 y/y% FY21 FY22 y/y% Current tax expense (106.6) 192.8 n.m (681.5) (530.6) (22.1%) Deferred tax income / (expense) 1,106.3 3,894.6 252.0% 1,171.7 4,046.7 245.4% Income Tax expense 999.7 4,087.4 308.9% 490.2 3,516.1 617.3% Table: Fixed asset revaluation net impact Million TRY Q421 Million TRY Q422 Tax effect of fixed asset revalution 1,137.3 Tax effect of fixed asset revalution 4,311.4 2% payment of fixed asset revalution (106.7) 2% payment of fixed asset revalution (217.6) Total 1,030.6 Total 4,093.8 Million TRY FY21 Million TRY FY22 Tax effect of fixed asset revalution 1,680.7 Tax effect of fixed asset revalution 4,862.7 2% payment of fixed asset revalution (158.2) 2% payment of fixed asset revalution (254.0) Total 1,522.5 Total 4,608.7 Dec 31, Dec 31, Sep 30, Dec 31, Dec 31, 2021 2021 2022 2022 2022 7,689.4 27,223.5 11,075.7 12,448.8 40,851.1 1,286.4 3,750.1 1,634.7 1,812.6 6,353.6 329.9 1,075.7 499.1 583.2 1,849.1 885.9 3,871.2 1,453.0 1,199.4 4,824.7 10,191.5 35,920.5 14,662.5 16,043.9 53,878.5 (7,095.4) (25,230.0) (9,852.1) (10,451.0) (36,788.6) 3,096.2 10,690.6 4,810.4 5,592.9 17,089.8 (276.8) (919.0) (393.8) (473.4) (1,519.0) (576.6) (1,778.5) (683.7) (899.8) (2,700.1) 4,355.8 6,409.6 2,414.8 1,028.9 6,800.9 6,598.6 14,402.7 6,147.8 5,248.5 19,671.6 (106.7) (271.2) (140.4) (63.9) (354.9) 402.6 464.1 526.1 157.6 1,779.9 72.1 - - - - 63.6 90.1 13.1 (10.0) (71.4) 7,030.2 14,685.7 6,546.6 5,332.2 21,025.2 2,569.6 3,051.1 4.2 (642.4) 210.8 (9,214.8) (13,195.7) (3,654.0) (2,781.8) (13,699.8) 385.0 4,541.1 2,896.9 1,908.0 7,536.1 999.7 490.2 (501.1) 4,087.3 3,516.1 1,384.7 5,031.3 2,395.8 5,995.3 11,052.2 (0.1) (0.2) (0.1) 0.9 1.0 1,384.6 5,031.1 2,395.8 5,996.3 11,053.2 0.6 2.3 1.1 2.7 5.1 30.4% 29.8% 32.8% 34.9% 31.7% 4,211.6 15,013.8 5,990.3 6,671.5 21,993.8 4,297.4 11,479.4 3,897.8 6,434.3 16,360.6 2,686.3 7,629.8 2,513.0 4,454.3 10,859.4 - - - 317.5 317.5 1,611.1 3,849.6 1,384.8 1,662.5 5,183.6 18,628.7 18,628.7 24,344.2 25,960.7 25,960.7 70,682.6 70,682.6 90,655.4 101,264.8 101,264.8 27,929.7 27,929.7 37,700.3 37,133.1 37,133.1 36,778.1 36,778.1 51,921.7 53,854.4 53,854.4 48,120.4 48,120.4 65,123.7 70,369.8 70,369.8 22,562.3 22,562.3 25,531.8 30,891.1 30,891.1 (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 20.
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Turkcell: Not A Turkish Delight
Turkcell is one of the largest telecommunications provider in Turkey with a commanding position in mobile. The company saw 57% YoY growth in revenues in Q3/22.
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Turkcell: The Stock Is A Buy
Turkcell reported strong 3Q 2022 financial results and I expect its 4Q 2022 results to be strong too. The company's liquidity and leverage ratios indicate its healthy conditions to handle potential risks in the future.
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What Makes Turkcell Iletisim Hizmetleri AS (TKC) a Good Fit for 'Trend Investing'
If you are looking for stocks that are well positioned to maintain their recent uptrend, Turkcell Iletisim Hizmetleri AS (TKC) could be a great choice. It is one of the several stocks that passed through our "Recent Price Strength" screen.
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SOCAR Türkiye Selected Turkcell for 5G Ready Private Wireless Network
ISTANBUL--(BUSINESS WIRE)--SOCAR Türkiye offers petro-chemical products, refining, and natural gas trade and distribution worldwide and Türkiye’s leading technology company Turkcell (NYSE:TKC) (BIST:TCELL) cooperated for digital transformation of Aliağa Peninsula that is one of the biggest refineries of Türkiye. 5G-ready private wireless network will be deployed at SOCAR’s Aliağa Peninsula. The future-proofed 5G-ready network will be provided by Turkcell for digital transformation of that area. “We are preparing SOCAR Türkiye and Aliağa for 5G with Turkcell's technology" Commenting on the cooperation, SOCAR Türkiye Chief Digital Transformation and Information Officer Hakan Irgıt said: “As Türkiye’s largest industrial holding, SOCAR Türkiye, we claim to be the leading company in digital transformation area in the energy industry. We have been preparing SOCAR Türkiye and Aliağa for 5G with Turkcell's technology in this project, which we developed in the light of our digital transformation vision and strategic plans.” “This project will be a pattern of energy sector’s digitalization” Turkcell Chief Corporate Sales Officer Ceyhun Özata stated: “We are very happy to contribute to the digitalization of Aliağa Peninsula with a new generation network compatible via 5G. This project will host the most advanced applications of Industry 4.0, bringing efficiency, flexibility, quality and productivity to high levels. It’s apparent that most of the sectors, especially the energy sector will follow this pattern.”
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Turkcell and VEON’s Jazz Announce Strategic Partnership for BiP
ISLAMABAD--(BUSINESS WIRE)--Türkiye and Pakistan's leading digital operators, Turkcell (NYSE: TKC, BIST: TCELL) and Jazz part of VEON Ltd. (NASDAQ and Euronext Amsterdam: VEON), collaborated to spread the latter’s instant free communication and life platform BiP in Pakistan. A memorandum of understanding (MoU) to this effect was signed today by Aamer Ejaz, Chief Digital Officer, Jazz and Gökhan Yüksektepe, BiP CEO. BiP is an easy-to-use instant communication app that offers fast and secure messaging, high quality voice and video calls, secret messages, and instant translation. Designed to be an all-in-one super app, BiP also allows users the ease of discovering channels like food, sports, entertainment, and fashion. It is actively used in 192 countries and has reached nearly 99 million downloads. This collaboration between both these digital operators is an example of how tech diplomacy, can deepen, already close relations between both countries. By offering exclusive features like translation, BiP is a uniquely inclusive app that will aid communication and enable multilingual local masses to readily adopt its usage. Speaking at the inauguration ceremony, Murat Erkan, Turkcell CEO, said, “Expanding our digital services is a critical growth factor for Turkcell, as we try to deliver on the evolving needs of our customers. We strongly believe in the power of partnership and we look forward to collaborating with Jazz to expand BiP within the Pakistani market. This cooperation with Jazz is a milepost in achieving Turkey’s goal of boosting high-value-added technology transfer. Once BiP’s usage grows in Pakistan, we will look to extend this partnership model across other VEON countries as well. We are happy to contribute to the development of these countries’ digital economies.” Gökhan Yüksektepe, BiP CEO, said, “We are proud to announce that our communication and life platform BiP is gaining ground with Pakistani users. We are dedicatedly working towards our goal of making BiP a global communication application, providing customized local experiences to its users. Regarding this strategy, it is important for us to collaborate with a partner in the region like Jazz. Today, BiP and Jazz are starting a strategic partnership with the aim of increasing the penetration of BiP in Pakistan.” “Messaging is a strategic application and a key enabler of our digital operator strategy,” explains Kaan Terzioğlu, CEO of VEON Group. “We aim to provide messaging solutions with a wide range of services in the countries we operate, offering high levels of security and enhancing the local technology economy. BiP is an excellent service that is already proven in different parts of the world and its expansion in Pakistan by Jazz will benefit both users and digital ecosystem.” Aamir Ibrahim, Jazz CEO, said, “Our digital operator strategy focuses on serving as a lifestyle partner for 120 million mobile broadband users in Pakistan whether they want to perform financial transactions or stream TV shows, listen to music or buy insurance. With the launch of BiP, we are further strengthening our digital services portfolio and providing subscribers with a multi-purpose communication app." About Turkcell Turkcell is a digital operator headquartered in Türkiye, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IP services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries: Türkiye, Ukraine, Belarus and Northern Cyprus. For more information visit: www.turkcell.com.tr About BiP BiP is a free communication and life platform with millions of users in 192 different countries of the world. It is possible to access BiP, which can be used on iOS, Android devices and the Web, via AppStore, GooglePlay and Huawei AppGallery. For more information visit: www.bip.com About VEON VEON is a global digital operator that currently provides converged connectivity and online services to over 200 million customers in seven dynamic markets. We are transforming people’s lives, empowering individuals, creating opportunities for greater digital inclusion and driving economic growth across countries that are home to more than 8% of the world’s population. Headquartered in Amsterdam, VEON is listed on NASDAQ and Euronext. For more information visit: https://www.veon.com About Jazz Jazz is Pakistan's number one 4G operator and a leading digital service provider with over 75 million subscribers, including 40 million 4G users. By providing the most extensive portfolio of digital value-added services, Jazz continues to be the country's undisputed telecom leader. For more information visit: www.jazz.com.pk
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Turkcell and VEON's Jazz Announce Strategic Partnership for BiP
ISLAMABAD--( BUSINESS WIRE )--Türkiye and Pakistan's leading digital operators, Turkcell (NYSE: TKC, BIST: TCELL) and Jazz part of VEON Ltd. (NASDAQ and Euronext Amsterdam: VEON), collaborated to spread the latter's instant free communication and life platform BiP in Pakistan. A memorandum of understanding (MoU) to this effect was signed today by Aamer Ejaz, Chief Digital Officer, Jazz and Gökhan Yüksektepe, BiP CEO.
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Paycell Partners with Nium for International Money Transfers
ISTANBUL--(BUSINESS WIRE)--Paycell, Türkiye's next-generation digital payment platform, today announced a strategic partnership with Nium, the platform for global money movement, to offer international money transfers from account to account using Nium’s leading business payments infrastructure. The partnership makes life easier for Paycell users to perform fast, safe, reliable, and affordable international money transfers. 24/7 access Thanks to Nium’s account-to-account money transfer infrastructure, users can perform international money transfer transactions without paying high commission fees and in a shorter time compared to their alternatives. With 24/7 transaction access, buyers also have instant access to the funds sent to them. Serhat Dolaz: “We offer fast and comprehensive solutions to those looking for innovative solutions.” Paycell CEO Serhat Dolaz pointed out that users are looking for innovative solutions in money transfer transactions; “In parallel with the rapid change in purchasing and payment methods, users are looking for innovative, easy and low-cost solutions in money transfer. At Paycell, we continue to increase our cooperation to meet this need. Paycell, which we develop day-by-day in line with the vision of being the richest platform in its field, stands out as Türkiye's most inclusive financial services platform. We are excited to provide the Nium’s fast and secure payment solutions for Paycell’s customers. Thanks to the Nium and Paycell partnership, international money transfer transactions are now getting easier. It is possible to send money without paying high commission fees and wasting time.” Frederick Crosby, Chief Revenue Officer, at Nium commented, “Our partnership with Paycell showcases how our solutions can be embedded and customized to add value to the world’s largest enterprises. We provide a faster, cost-effective money movement alternative to traditional rails that helps large enterprises increase their topline revenues, and we look forward to growing our relationship with Paycell as their user needs evolve globally.” About Paycell Turkcell's (NYSE: TKC, BIST: TCELL) digital payment and financial services platform Paycell which can be used by anyone, regardless of operator continues to create value for all of its customers and stakeholders with the mission of creating cashless society. Widespreading seamlessly and securely with payment solutions Paycell reached more than 7 million active users in the 3rd Quarter of 2022. Trading volume of Paycell in the first 3 quarters took place 3 times more compared to last year.Paycell is Turkey’s digital payment and financial services platform moves forward its knowledge and experience for mobile users to fintech industry. Paycell creates value for all users and stakeholders with the payment solutions what was created with the vision of leading the sector in the transition to an “unbanked” society. With a vision of creating a financial world without boundaries Paycell, which has become increasingly popular with our convenient and secure payment solutions, has reached 7 million active users as of the first half of 2022. Paycell is also making significant international investments and collaborations to achieve its goal of becoming an inclusive financial service provider. Paycell which opened its first European office in Germany will serve its European customers under the Paycell Europe brand. About Nium Nium is the global platform for Modern Money Movement. It provides banks, payment providers, and businesses of any size with access to global payment and card issuance solutions. Its modular platform powers frictionless commerce, helping businesses pay and get paid across the globe. Once connected to the Nium platform, businesses are able to pay out in more than 100 currencies to over 190 countries – 100 of which in real time. Funds can be received in 35 markets, including Southeast Asia, UK, Hong Kong, Singapore, Australia, India, and the US. Nium's growing card issuance business is already available in 34 countries, including Europe (SEPA), the UK, Australia and Singapore. Nium holds regulatory licenses and authorizations in over 40 countries, enabling seamless global payments and rapid integration, regardless of geography. For more information visit: https://www.nium.com.
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Turkcell Continues To Execute Well, But Macro Remains An Uncontrollable Risk
Turkcell management has continued to deliver strong performances in challenging times, with ongoing subscriber growth and not as much EBITDA margin erosion as feared. Significant capex spending on the mobile network is still in the future, and the company continues to invest in the growth of the fiber broadband business today.
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Turkcell Intends to Appeal South African Court’s Decision in MTN Case
ISTANBUL--(BUSINESS WIRE)--Turkcell (NYSE: TKC) (BIST: TCELL) received a decision from the South Gauteng High Court of South Africa stating that Iranian law should be applied to the merits of the dispute and that the Iranian courts have jurisdiction and not the South African courts. Turkcell intends to appeal this decision. “We are surprised and disappointed with the Court’s decision preventing a South African company’s illegal acts to be subjected to a trial in South Africa” said Serhat Demir, Vice President of Legal and Regulation of Turkcell. He added “We are of the opinion that, in the lawsuit, which has been ongoing for almost 10 years regarding the damage caused by MTN by changing the outcome of the tender through bribery and corruption and by illegally interfering license agreement signed with Iran, South African law should be applied and the South African courts should also have jurisdiction over the matter. South Africa is where MTN's headquarter is located and where unlawful acts were planned and took place.” Serhat Demir also indicated that; as the judicial body of a democratic country, South African Court identifying the dispute as arising from the acts of foreign countries and its decision that Iranian courts have competence can be criticized in respect to the effectiveness of South African judiciary system and bears the risk of excluding illegal acts that take place in South Africa from judicial review. In this respect, he expressed that this decision would damage the trust in South Africa’s independent judiciary system and would have an adverse effect on the foreign investors of South African companies, and he is hopeful for the reverse of this decision. About Turkcell’s lawsuit against MTN On 26 November 2013, Turkcell announced that the Company filed a lawsuit before the South Gauteng High Court of South Africa in Johannesburg against, South African mobile operator MTN and its group companies, as well as former company executives, demanding compensation for the damages incurred by Turkcell during the GSM tender process in Iran. In the lawsuit, which was prolonged as a result of various procedural objections by the defendants, the initial objections of the defendants were rejected and on 1 June 2017, it was announced that the lawsuit was going to be examined on the merits. After the interim hearing on the separated issues, the Court in its latest decision, evaluated the objection made by the defendants regarding the jurisdiction and determination of the applicable law, and decided that Iranian law should be applied to the merits of the dispute and that the Iranian courts have jurisdiction and not the South African courts. This is on the ground that the acts of foreign states cannot be subjected to a trial in South Africa. Turkcell will continue to enforce all its legal rights against this decision including an appeal of the decision and will strongly and decisively continue to defend its rights for both compensation of the damages incurred and also to ensure that the relevant executives of MTN are held accountable and punished for their acts of corruption and bribery which will emerge into the daylight as a result the investigations being conducted by South African authorities.
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Turkcell Intends to Appeal South African Court's Decision in MTN Case
ISTANBUL--( BUSINESS WIRE )--Turkcell (NYSE: TKC) (BIST: TCELL) received a decision from the South Gauteng High Court of South Africa stating that Iranian law should be applied to the merits of the dispute and that the Iranian courts have jurisdiction and not the South African courts. Turkcell intends to appeal this decision.
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Turkcell Iletisim Hizmetleri A.S. (TKC) Q3 2022 Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC ) Q3 2022 Earnings Conference Call November 3, 2022 12:30 PM ET Company Participants Ali Serdar Yağcı - Investor Relations & Corporate Finance Director Murat Erkan - Chief Executive Officer Osman Yilmaz - Chief Financial Officer Conference Call Participants Kennedy-Good Jonathan - JPMorgan Nagy Nora - Erste Group Demirak Kayahan - AK Investment Operator Ladies and gentlemen, thank you for standing by.
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Turkcell Iletisim Hizmetleri: Third Quarter 2022 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for September 30, 2022 refer to the same item as at September 30, 2021. For further details, please refer to our consolidated financial statements and notes as at and for September 30, 2022, which can be accessed via our website in the investor relations section (www.turkcell.com.tr). Selected financial information presented in this press release for the third quarter and nine months of 2021 and 2022 is based on Turkish Accounting Standards (TAS) / Turkish Financial Reporting Standards (TFRS) figures in TRY terms unless otherwise stated. In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text. Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation. NOTICE We are publishing financial statements as of September 30, 2022 prepared in accordance with Turkish Accounting Standards/Turkish Financial Reporting Standards (“TAS”/“TFRS”) only. These standards are issued by the Public Oversight Accounting and Auditing Standards Authority (“POA”) and are in full compliance with IAS/IFRS Standards. In an announcement published by the POA on January 20, 2022, it is stated that TAS 29 “Financial Reporting in Hyperinflationary Economies” does not apply to TFRS financial statements as of December 31, 2021. Since then and as of the preparation date of our latest consolidated financial statements, no new statement has been made by the POA about TAS 29 application. Consequently, no TAS 29 adjustment was made to our consolidated financial statements. Financial statements prepared in accordance with IFRS should apply IAS 29 “Financial Reporting in Hyperinflationary Economies” as of September 30, 2022. In this context, financial statements prepared in accordance with IFRS and TFRS would have significant differences and would not be comparable as of September 30, 2022. We intend to publish IFRS financial statements, compliant with IAS 29 to the extent that it remains applicable, as of the year ending December 31, 2022. Although we have not prepared a detailed comparison of differences between IFRS (unadjusted according to IAS 29) and TFRS, we have noted in our past financial statements that the most significant differences have appeared in the lines Other Operating Income/Expense, Finance Income/Expense, and Investment Activity Income/ Expense. In the past, revenue, net income and EBITDA have generally not differed. While no assurance can be given that this will be the case for Q3 2022, we are not at present aware of changes that would cause other significant differences, other than those resulting from the application of IAS 29. FINANCIAL HIGHLIGHTS TRY million Q321 Q322 y/y% 9M21 9M22 y/y% Revenue 9,354 14,662 56.7% 25,729 37,835 47.1% EBITDA1 4,030 5,990 48.7% 10,802 15,322 41.8% EBITDA Margin (%) 43.1% 40.9% (2.2pp) 42.0% 40.5% (1.5pp) EBIT2 2,212 3,593 62.4% 5,586 8,360 49.7% EBIT Margin (%) 23.6% 24.5% 0.9pp 21.7% 22.1% 0.4pp Net Income 1,429 2,396 67.6% 3,647 5,057 38.7% THIRD QUARTER HIGHLIGHTS Financial performance accelerated on solid results: Group revenues up 56.7% year-on-year on the back of the strong ARPU performance and larger subscriber base of Turkcell Turkey as well as contribution of international operations, digital business services, and techfin business EBITDA up 48.7% year-on-year leading to an EBITDA margin of 40.9%; EBIT up 62.4% year-on-year resulting in an EBIT margin of 24.5% Net income up 67.6% year-on-year Free cash flow3 generation of TRY2.0 billion; net leverage4 level at 1.0x; short FX position of US$19 million Group revenues up 56.7% year-on-year on the back of the strong ARPU performance and larger subscriber base of Turkcell Turkey as well as contribution of international operations, digital business services, and techfin business EBITDA up 48.7% year-on-year leading to an EBITDA margin of 40.9%; EBIT up 62.4% year-on-year resulting in an EBIT margin of 24.5% Net income up 67.6% year-on-year Free cash flow3 generation of TRY2.0 billion; net leverage4 level at 1.0x; short FX position of US$19 million Strong operational performance continued: Turkcell Turkey subscriber base up by 1 million quarterly net additions; 2.2 million total net additions in the first nine months of 2022 422 thousand quarterly mobile postpaid net additions; postpaid subscriber base share at 66.5% 506 thousand quarterly prepaid subscriber net additions backed by increased tourism activity 68 thousand fiber net additions 240 thousand new fiber homepasses in line with our annual expansion plan in Q322 Mobile ARPU5 ramped up 48.5% year-on-year mainly on the back of sequential price adjustments throughout the year and successful upsell performance; residential fiber ARPU growth of 26.5% year-on-year Data usage of 4.5G users at 17.1 GB in Q322; smartphone penetration at 87% Digital channels’ share6 in sales at 22.8% Turkcell Turkey subscriber base up by 1 million quarterly net additions; 2.2 million total net additions in the first nine months of 2022 422 thousand quarterly mobile postpaid net additions; postpaid subscriber base share at 66.5% 506 thousand quarterly prepaid subscriber net additions backed by increased tourism activity 68 thousand fiber net additions 240 thousand new fiber homepasses in line with our annual expansion plan in Q322 Mobile ARPU5 ramped up 48.5% year-on-year mainly on the back of sequential price adjustments throughout the year and successful upsell performance; residential fiber ARPU growth of 26.5% year-on-year Data usage of 4.5G users at 17.1 GB in Q322; smartphone penetration at 87% Digital channels’ share6 in sales at 22.8% We upgraded our guidance7 for 2022. Accordingly, we now target revenue growth of 47%-48% up from above 40%, an EBITDA of ~TRY21 billion compared to ~TRY20 billion, and operational capex over sales ratio8 of ~20% which was 20%-21% previously. (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Free cash flow calculation includes EBITDA and the following items as per Turkish Financial Reporting Standartds (TFRS) cash flow statement; acquisition of property, plant and equipment, acquisition of intangible assets, change in operating assets/liabilities, payment of lease liabilities and income tax paid. (4) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. (5) Excluding M2M (6) Share of all sales from digital channels (including voice, data, services & smart devices) in Turkcell Turkey consumer sales (excluding fixed business) and equipment related revenues in other segment. (7) Please note that this paragraph contains forward-looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2021 filed with U.S. Securities and Exchange Commission, and in particular, the risk factors section therein. (7) 2022 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29. (8) Excluding license fee For further details, please refer to our consolidated financial statements and notes as at September 30, 2022 via our website in the investor relations section (www.turkcell.com.tr). COMMENTS BY CEO, MURAT ERKAN Growth accelerated with price adjustments In the third quarter of the year, inflation pressures based on increased energy and commodity prices due to geopolitical tension and challenging macroeconomic conditions stood out. Nevertheless, it was also observed that in this period consumer spending strengthened, demand accelerated, and recovery of the market increased. Additionally, rising mobility in the summer period, the tourism sector, which even exceeded its pre-pandemic level, and the back-to-school period accelerated our operations. In addition to an expanding subscriber base, consistent price increases and upsell efforts, we achieved an accelerated quarterly performance with the contribution of digital business services, techfin, and our international operations. Group revenues accelerated and rose 56.7% year-on-year to TRY14.7 billion. Meanwhile, despite higher electricity and personnel costs reflecting the minimum wage increase, EBITDA1 rose by 48.7% to TRY6.0 billion, with an EBITDA margin of 40.9% thanks to focused cost management. With the contribution of our dynamic and prudent risk management, net profit increased by 67.6% year-on-year to TRY2.4 billion. With the strong seasonality effect thanks to the higher number of tourists, the differentiated value proposition offered to our customers, and our focus on the corporate front, we achieved 928 thousand net additions, recording 422 thousand postpaid and 506 thousand prepaid subscriber net additions. In the mobile segment, we continued price increases in September in line with our focus on inflationary pricing, and since the price increases are followed by competitors, we continued to rationalize the market. Mobile blended ARPU2 accelerated in the third quarter and increased by 48.5% year-on-year thanks to our successful upsell efforts and the increasing contribution of price adjustments. Furthermore, with the contribution of rationalization in the market and thanks to our analytical competencies, brand strength and strong network, the average monthly mobile churn rate remained limited to 1.9%. We continued our fiber investments at full speed in order to provide our customers with fast and seamless internet, and delivered our fiber service to 711 thousand new homepasses in the first 9 months of the year. With new rollouts and increasing demand during the back-to-school period, we gained 68 thousand fiber customers. The high-speed fiber internet packages that we offer to meet the increasing speed needs of our customers were welcomed. The number of our subscribers using speeds of 100 Mbps and above doubled year-on-year. Additionally, residential fiber ARPU growth increased by 26.5% year-on-year, driven mainly by weak price adjustments and long-term contracts on the fixed side. With our focus on the expansion of our digital services, the number of standalone paid users increased 1.2 million year-on-year to 4.8 million. OTT TV reached 932 thousand paid subscribers with its big screen strategy, while IPTV’s paid subscribers exceeded 1.2 million with increasing fiber rollouts. According to the ICTA, TV+ was the only platform that increased its market share in the second quarter. With the contribution of our end-to-end tailored projects to meet the digitalization needs of companies, the revenues of our digital business services increased by 107.1% year-on-year and exceeded TRY1 billion. Data center, cloud storage, and business applications services remained other verticals contributing to growth, with their revenues doubling compared to last year. Reaching 7.3 million users3 in the techfin segment, Paycell's transaction volume tripled year-on-year, with the increasing contribution of our POS solutions. Thus, Paycell revenues accelerated and rose 105.4% year-on-year. As part of Paycell's growth strategy, we established Paycell Europe in October, in cooperation with Solaris, one of the leading financial solution providers in Europe in the field of neo-banking. We will begin with international money transfer services in the first phase, thereafter aiming to diversify our services with many innovative and end-to-end finance solutions such as digital wallet, investment, card and loan intermediation. We share Togg's excitement to become a global brand Turkey's global technology brand Togg’s Gemlik Technology Campus was opened on October 29th, to coincide with Republic Day in Turkey. As Turkcell, we have been honored to support our global mobility brand Togg since day one, with our experience, knowledge and vision. We not only support Turkey’s automobile project, designed within the mobility ecosystem to become the new living space, but also work to create an integrated value with our digital services. As a first example of this, Paycell will provide all payment services in Togg's digital ecosystem, with its strong and dynamic infrastructure. We are revising our guidance upwards As we enter the last months of the year, we are faced with a difficult period in which inflationary pressures will increase. These pressures oblige us to maintain our focused pricing strategy. Considering our strong first nine-month performance and our expectations4 for the remainder of the year, we revise our year-end consolidated revenue growth guidance to 47%-48% with EBITDA of around TRY21 billion. We expect an operational CAPEX (excluding license fees) to sales ratio of ~20%. I extend my thanks to our entire team for its contribution to our successes, and to our Board of Directors for their support in realizing our strategy, which is the key to our achievements. We also express our gratitude to our customers and business partners for remaining with us on our journey. (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) Excluding M2M (3) 3-month active (4) Please note that this paragraph contains forward-looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2021 filed with U.S. Securities and Exchange Commission, and in particular, the risk factors section therein. 2022 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29. FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group Profit & Loss Statement (million TRY) Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Revenue 9,354.2 14,662.5 56.7% 25,729.0 37,834.6 47.1% Cost of revenue1 (4,611.1) (7,454.4) 61.7% (12,918.2) (19,375.3) 50.0% Cost of revenue1/Revenue (49.3%) (50.8%) (1.5pp) (50.2%) (51.2%) (1.0pp) Gross Margin1 50.7% 49.2% (1.5pp) 49.8% 48.8% (1.0pp) Administrative expenses (219.3) (393.8) 79.6% (642.2) (1,045.6) 62.8% Administrative expenses/Revenue (2.3%) (2.7%) (0.4pp) (2.5%) (2.8%) (0.3pp) Selling and marketing expenses (429.9) (683.7) 59.0% (1,201.9) (1,800.3) 49.8% Selling and marketing expenses/Revenue (4.6%) (4.7%) (0.1pp) (4.7%) (4.8%) (0.1pp) Net impairment losses on financial and contract assets (64.1) (140.4) 119.0% (164.5) (291.0) 76.9% EBITDA2 4,029.8 5,990.3 48.7% 10,802.2 15,322.4 41.8% EBITDA Margin 43.1% 40.9% (2.2pp) 42.0% 40.5% (1.5pp) Depreciation and amortization (1,817.6) (2,397.7) 31.9% (5,216.4) (6,962.3) 33.5% EBIT3 2,212.2 3,592.6 62.4% 5,585.8 8,360.1 49.7% EBIT Margin 23.6% 24.5% 0.9pp 21.7% 22.1% 0.4pp Net finance income / (expense) (641.6) (3,649.7) 468.8% (3,499.4) (10,064.9) 187.6% Finance income (170.3) 4.2 n.m 481.5 853.2 77.2% Finance expense (471.3) (3,654.0) 675.3% (3,980.9) (10,918.0) 174.3% Other operating income / (expense) 240.1 2,414.8 905.7% 2,053.8 5,772.0 181.0% Investment activity Income / (expense) 22.1 526.1 2,280.5% (10.6) 1,622.3 n.m Non-controlling interests (0.0) (0.1) n.m (0.0) (0.1) n.m Share of profit of equity accounted investees (2.1) 13.1 n.m 26.5 (61.5) (332.1%) Income tax expense (401.6) (501.1) 24.8% (509.5) (571.2) 12.1% Net Income 1,429.1 2,395.8 67.6% 3,646.5 5,056.9 38.7% (1) Excluding depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. Revenue of the Group grew by 56.7% year-on-year in Q322. Turkcell Turkey’s expanding subscriber base and robust ARPU growth reflecting the relentless focus on price adjustments and upsell efforts as well as the contribution of international operations, digital business services, and techfin business were the main drivers of this growth. Turkcell Turkey revenues, comprising 76% of Group revenues, rose 57.1% year-on-year to TRY11,076 million (TRY7,050 million). - Consumer segment revenues grew 52.6% year-on-year on the back of the price adjustments to reflect inflationary impacts, as well as successful upselling performance, and growing subscriber base. - Corporate segment revenues rose 60.9% year-on-year, on the back of strong momentum in digital business services revenues, which grew 107.1% year-on-year. - Standalone digital services revenues registered as part of consumer and corporate segments grew 29.2% year-on-year in Q322 supported by the increased number of stand-alone paid users and price adjustments of services. Similar to the first half of the year, in Q322 the growth of digital services revenues was impacted negatively due to a regulatory decision that amended the usage conditions of our voicemail service, the revenues of which are reported under digital services, as of December 1st, 2021. Excluding this impact, growth would have been 57%. - Wholesale revenues grew 106.8% to TRY1,026 million (TRY496 million), mainly due to positive impact of currency movements, as well as the increased international carrier traffic and capacity upgrades of customers. Turkcell International revenues, comprising 11% of Group revenues, rose 78.6% to TRY1,635 million (TRY915 million), with a positive impact of currency movements as well as the slight recovery in lifecell performance. Techfin segment revenues, comprising 3% of Group revenues, rose 77.3% to TRY499 million (TRY281 million). This was driven by 105.4% rise in Paycell revenues and 56.7% growth in finance company, Financell. Please refer to the Techfin section for details. Other subsidiaries' revenues, at 10% of Group revenues, mainly including consumer electronics sales, call center revenues and revenues from energy business, increased 31.2% to TRY1,453 million (TRY1,107 million). Cost of revenue (excluding depreciation and amortization) rose to 50.8% (49.3%) as a percentage of revenues in Q322. This was mainly due to the rise in radio expenses (2.2pp), mostly related to increasing energy prices, employee expenses (0.6pp), and other cost items (1.4pp) despite the decline in cost of goods sold (1.4pp) and interconnection cost (1.3pp) as a percentage of revenues. Administrative Expenses increased to 2.7% (2.3%) as a percentage of revenues in Q322. Selling and Marketing Expenses increased to 4.7% (4.6%) as a percentage of revenues in Q322. This was mainly due to the rise in employee expenses (0.3pp) despite the decline in selling expenses (0.2pp) as a percentage of revenues. Net impairment losses on financial and contract assets increased to 1.0% (0.7%) as a percentage of revenues in Q322. EBITDA1 rose by 48.7% year-on-year in Q322 leading to an EBITDA margin of 40.9% (43.1%). - Turkcell Turkey’s EBITDA rose 43.5% year-on-year to TRY4,759 million (TRY3,316 million) leading to an EBITDA margin of 43.0% (47.0%). - Turkcell International EBITDA grew 87.6% year-on-year to TRY846 million (TRY451 million), which resulted in an EBITDA margin of 51.8% (49.3%) on 2.5pp improvement. - Techfin segment EBITDA rose 32.5% to TRY230 million (TRY174 million) with an EBITDA margin of 46.1% (61.7%). Higher funding cost of Financell compared to Q321 was the main factor behind the year-on-year decline in EBITDA margin. - The EBITDA of other subsidiaries was at TRY155 million (TRY88 million). Depreciation and amortization expenses increased 31.9% year-on-year in Q322. Net finance expense increased to TRY3,650 million (TRY642 million) in Q322. This was driven mainly by higher FX losses registered in relation to bank loans and bonds and borrowing costs despite the positive impact of the fair value gains on derivative instruments. See Appendix A for details of net foreign exchange gain and loss. Net other operating income increased to TRY2,415 million (TRY240 million) in Q322 mainly due to higher FX gains registered on foreign currency cash, as well as interest income from time deposits. See Appendix A for details of net foreign exchange gain and loss. Net investment activity income was TRY526 million in Q322 compared to TRY22 million in Q321. This was driven mainly by the fair value gains registered on currency-protected time deposits and FX gain on financial investments. Income tax expense increased to TRY501 million (TRY402 million) in Q322. A lower deferred tax expense of TRY16 million (TRY214 million) was more than offset by a higher current tax expense. Please note that in Q322, we made use of the right introduced by Law No. 7338, which allows the revaluation of properties and depreciable economic assets under certain conditions. This resulted in a slight positive impact on the deferred tax asset reported in Q322. Please refer to our consolidated financial statements and notes as at September 30, 2022 for details. (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income. Net income of the Group rose 67.6% to TRY2,396 million (TRY1,429 million) in Q322 on the back of strong operational and financial performance as well as proactive financial risk management. Please note that in Q322, an impairment charge of TRY231 million has been recognized on the assets of Ukraine in territories under the control of Ukraine but not operating for more than 92 days and those in territories invaded by Russia. Total cash & debt: Consolidated cash as of September 30, 2022 increased to TRY24,344 million from TRY21,972 million as of June 30, 2022. Our cash position was positively impacted by currency movements during the quarter. Excluding FX swap transactions, 55% of our cash is in US$, 17% in EUR, and 27% in TRY. Consolidated debt as of September 30, 2022 increased to TRY51,922 million from TRY48,235 million as of June 30, 2022 mainly due to the impact of currency movements and the new borrowings. TRY3,108 million of our consolidated debt is comprised of lease obligations. Please note that 49% of our consolidated debt is in US$, 26% in EUR, 3% in CNY, 6% in UAH, and 16% in TRY. Net debt1 as of September 30, 2022 was at TRY20,282 million with a net debt to EBITDA ratio of 1.0 times. Excluding finance company consumer loans, our telco only net debt was at TRY17,400 million with a leverage of 0.9 times. Turkcell Group had a short FX position of US$19 million as at the end of the third quarter (Please note that this figure takes hedging portfolio and advance payments into account). The short FX position of US$19 million is in line with our FX neutral definition, which is between -US$200 million and +US$200 million. Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY3,898 million in Q322. In Q322 and 9M22, operational capital expenditures (excluding license fees) at the Group level were at 17.1% and 16.9% of total revenues, respectively. Capital expenditures (million TRY) Quarter Nine Months Q321 Q322 9M21 9M22 Operational Capex 1,379.2 2,513.0 4,944.6 6,406.4 License and Related Costs - - - - Non-operational Capex (Including IFRS15 & IFRS16) 837.4 1,384.8 2,242.3 3,521.1 Total Capex 2,216.6 3,897.8 7,186.9 9,927.5 (1) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. Summary of Operational Data Q321 Q222 Q322 y/y % q/q % Number of subscribers (million) 39.3 40.6 41.6 5.9% 2.5% Mobile Postpaid (million) 23.3 24.5 25.0 7.3% 2.0% Mobile M2M (million) 3.2 3.6 3.8 18.8% 5.6% Mobile Prepaid (million) 12.3 12.1 12.6 2.4% 4.1% Fiber (thousand) 1,813.6 1,996.1 2,063.8 13.8% 3.4% ADSL (thousand) 739.7 740.6 739.4 (0.0%) (0.2%) Superbox (thousand)1 613.6 640.3 676.4 10.2% 5.6% Cable (thousand) 59.8 48.6 45.3 (24.2%) (6.8%) IPTV (thousand) 1,011.9 1,185.9 1,230.8 21.6% 3.8% Churn (%)2 Mobile Churn (%) 1.9% 1.8% 1.9% - 0.1pp Fixed Churn (%) 1.4% 1.4% 1.5% 0.1pp 0.1pp ARPU (Average Monthly Revenue per User) (TRY) Mobile ARPU, blended 52.9 63.2 77.5 46.5% 22.6% Mobile ARPU, blended (excluding M2M) 57.5 69.5 85.4 48.5% 22.9% Postpaid 65.0 76.5 92.7 42.6% 21.2% Postpaid (excluding M2M) 74.2 88.6 107.9 45.4% 21.8% Prepaid 29.9 36.4 47.3 58.2% 29.9% Fixed Residential ARPU, blended 78.6 93.8 100.8 28.2% 7.5% Residential Fiber ARPU 79.5 94.5 100.6 26.5% 6.5% Average mobile data usage per user (GB/user) 13.7 14.1 15.8 15.3% 12.1% Mobile MoU (Avg. Monthly Minutes of usage per subs) blended 559.2 560.3 560.5 0.2% 0.0% (1) Superbox subscribers are included in mobile subscribers. (2) Churn figures represent average monthly churn figures for the respective quarters. Turkcell Turkey’s subscriber base continued to expand, reaching 41.6 million on 1.0 million net quarterly additions, by rising tourism activity over the summer season, as well as our customer-centric approach, and our offerings with rich value propositions to our customers. This solid performance led us to achieve a total of 2.2 million net additions in the first nine months of the year. On the mobile front, our subscriber base expanded to 37.5 million on 928 thousand quarterly net additions in Q322. We had strong performance on both the prepaid and postpaid side in this quarter. Our prepaid subscribers grew by 506 thousand quarterly net additions supported by improved tourism activities. Meanwhile, we registered 422 thousand quarterly net additions to the postpaid subscriber base, supported by higher acquisitions both in the consumer and corporate segments. Accordingly, our postpaid subscribers reached 66.5% (65.5%) of our mobile subscriber base as at the end of Q322. On the fixed front, our subscriber base reached 2.8 million as of Q322 with 63 thousand quarterly net additions. Reaping the fruits of our focused fiber investments, our fiber subscriber base expanded by 68 thousand quarterly and 250 thousand annual net additions. Superbox, our fixed-wireless access offering, registered 36 thousand net additions in Q322, the highest performance since Q420. Meanwhile, our IPTV subscriber base exceeded 1.2 million with 45 thousand net additions in Q322. The average monthly mobile churn rate was at 1.9% in Q322. Meanwhile, the average monthly fixed churn rate was 1.5%. Our mobile ARPU (excluding M2M) rose 48.5% year-on-year mainly on price adjustments, successful upsell performance, and higher revenue generating subscriber acquisitions. Our residential fiber ARPU growth was 26.5% year-on-year. This was driven mainly by price adjustments and upsell to higher tariffs, as well as increased IPTV penetration, at 66.5% in Q322. Average monthly mobile data usage per user rose 15.3% year-on-year to 15.8 GB with the increasing number and data consumption of 4.5G users. Accordingly, the average mobile data usage of 4.5G users reached 17.1 GB in Q322. Total smartphone penetration on our network reached 87% in Q322 on a 2.6pp year-on-year rise. 92.5% of those smartphones were 4.5G compatible. TURKCELL INTERNATIONAL lifecell1 Financial Data Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Revenue (million UAH) 2,159.2 2,370.9 9.8% 6,076.3 6,804.9 12.0% EBITDA (million UAH) 1,224.0 1,417.6 15.8% 3,432.2 3,940.9 14.8% EBITDA margin (%) 56.7% 59.8% 3.1pp 56.5% 57.9% 1.4pp Net income / (loss) (million UAH) 173.8 381.6 119.6% 373.0 563.5 51.1% Capex (million UAH) 713.7 639.6 (10.4%) 2,274.3 2,010.2 (11.6%) Revenue (million TRY) 684.6 1,199.9 75.3% 1,809.1 3,447.5 90.6% EBITDA (million TRY) 388.0 717.4 84.9% 1,021.9 1,997.6 95.5% EBITDA margin (%) 56.7% 59.8% 3.1pp 56.5% 57.9% 1.4pp Net income / (loss) (million TRY) 54.9 195.0 255.2% 112.7 277.7 146.4% (1) Since July 10, 2015, we hold a 100% stake in lifecell. lifecell (Ukraine) revenues rose 9.8% year-on-year in Q322 in local currency terms with an EBITDA margin of 59.8% on 3.1pp improvement. This was due mainly to the lower sales and marketing expenses, which compensated for increasing energy expenses. lifecell registered UAH382 million net income in Q322. lifecell revenues in TRY terms grew 75.3% year-on-year in Q322 mainly due to price adjustments and the positive impact of currency movements. Meanwhile, lifecell’s EBITDA in TRY terms grew by 84.9%, leading to an EBITDA margin of 59.8%. lifecell Operational Data Q321 Q222 Q322 y/y% q/q% Number of subscribers (million)2 9.9 10.2 10.1 2.0% (1.0%) Active (3 months)3 8.9 8.4 8.2 (7.9%) (2.4%) MOU (minutes) (12 months) 180.6 160.7 148.8 (17.6%) (7.4%) ARPU (Average Monthly Revenue per User), blended (UAH) 74.2 69.2 77.7 4.7% 12.3% Active (3 months) (UAH) 83.0 82.8 95.4 14.9% 15.2% (2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. (3) Active subscribers are those who in the past three months made a revenue generating activity. lifecell’s three-month active subscribers continued to decline to 8.2 million in Q322 due to the ongoing war in the country. 3-month active ARPU grew 14.9% year-on-year mainly on the back of price adjustments. lifecell continued its leadership of the Ukrainian market in smartphone penetration, which was 84.5% as at the end of Q322. lifecell continued to focus on ensuring the safety of its employees and provide services to our customers in Ukraine. Meanwhile, our network is largely operational. Around 9% of nearly 9 thousand sites are temporarily down on average. The conditions of sites in occupied territories are unclear. Around 91% of our stores are open nationwide as a daily average as of the end of September. In Q322 daily top-ups are almost recovered to pre-war period levels. Additionally, ICT systems, such as billing and CRM are fully operational. The banking system in the country continues to operate and day-to-day operations, including payments and collections are exercised normally. lifecell’s cash position is conducive to sustain its operations. We continue to monitor the developments in Ukraine and the potential impact on our operations. We oversee our action plans to ensure the safety of our employees and maintain our operations. BeST1 Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Number of subscribers (million) 1.5 1.5 - 1.5 1.5 - Active (3 months) 1.1 1.1 - 1.1 1.1 - Revenue (million BYN) 35.1 38.2 8.8% 110.2 107.4 (2.5%) EBITDA (million BYN) 9.3 11.9 28.0% 27.9 31.8 14.0% EBITDA margin (%) 26.4% 31.1% 4.7pp 25.4% 29.6% 4.2pp Net loss (million BYN) (8.2) (5.1) (37.8%) (24.2) (21.7) (10.3%) Capex (million BYN) 18.8 22.9 21.8% 46.8 56.1 19.9% Revenue (million TRY) 119.3 267.3 124.1% 350.6 647.9 84.8% EBITDA (million TRY) 31.5 83.1 163.8% 89.2 192.4 115.7% EBITDA margin (%) 26.4% 31.1% 4.7pp 25.4% 29.7% 4.3pp Net loss (million TRY) (28.0) (35.9) 28.2% (77.0) (126.0) 63.6% (1) BeST, in which we hold an 80% stake, has operated in Belarus since July 2008. BeST revenues increased 8.8% year-on-year in Q322 in local currency terms. This was driven mainly by the rise in voice and data revenues, supported by price increases and upselling performance despite the decline in handset sales revenues. BeST’s EBITDA was at BYN11.9 million in Q322 with an EBITDA margin of 31.1% on a 4.7pp improvement. The decline in lower margin handset sales had a positive impact on EBITDA margin. BeST’s revenues in TRY terms grew by 124.1% year-on-year in Q322 and EBITDA margin was at 31.1%. BeST provides LTE services in 6 regions through over 3.9 thousand sites to its customers at the end of Q322. BeST maintained to its leadership in the market in terms of 4G geographical coverage which has reached 88.5% in Q322. BeST has also continued to increase the penetration of 4G services. Accordingly, 4G subscribers comprised 77% of the 3-month active subscriber base as of Q322. Meanwhile, the average monthly data consumption of subscribers rose 16.4% year-on-year to 15.9 GB. Kuzey Kıbrıs Turkcell2 (million TRY) Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Number of subscribers (million) 0.5 0.6 20.0% 0.5 0.6 20.0% Revenue 81.7 125.4 53.5% 216.5 325.3 50.3% EBITDA 34.7 48.3 39.2% 85.9 129.9 51.2% EBITDA margin (%) 42.4% 38.5% (3.9pp) 39.7% 39.9% 0.2pp Net income 20.7 26.0 25.6% 42.8 68.8 60.7% Capex 19.1 32.7 71.2% 47.6 97.8 105.5% (2) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999 Kuzey Kıbrıs Turkcell revenues grew 53.5% year-on-year in Q322, driven by higher data, handset sales, and voice revenues backed by increased mobility. The EBITDA of Kuzey Kıbrıs Turkcell rose 39.2% year-on-year leading to an EBITDA margin of 38.5%. TECHFIN Paycell Financial Data (million TRY) Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Revenue 118.8 244.0 105.4% 328.9 606.7 84.5% EBITDA 55.1 109.0 97.8% 158.0 271.1 71.6% EBITDA Margin (%) 46.4% 44.7% (1.7pp) 48.1% 44.7% (3.4pp) Net Income 36.3 75.6 108.3% 106.4 190.8 79.3% Paycell saw another quarter of strong performance registering 105.4% year-on-year revenue growth in Q322. This solid performance resulted mainly from the continued demand for digital payments which we addressed with a diverse product portfolio of mobile payment services. Paycell’s EBITDA rose 97.8% year-on-year, leading to an EBITDA margin of 44.7% in Q322. The growth is sustained by successful performance in all verticals, where increased POS solutions volume have a slight negative impact on EBITDA margin. The transaction volumes across Paycell’s product portfolio continued to rise in Q322. The quarterly transaction volume (non-group) of Pay Later service doubled year-on-year to TRY979 million, which was utilized by 3-month active Pay Later users of 4.6 million in Q322. Meanwhile, Paycell card transactions increased to TRY2.4 billion, which was fourfold that of Q321. The transaction volume of total POS solutions accelerated to TRY4.0 billion with a quarterly increase of 37% where Android POS devices reached almost 15 thousand. Overall, the total transaction volume across all services reached TRY10.4 billion tripling year-on-year, which derived from an increase in 3-month active users to 7.3 million and their increased usage. Financell Financial Data (million TRY) Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Revenue 162.9 255.3 56.7% 424.5 666.9 57.1% EBITDA 119.6 123.1 2.9% 291.5 362.0 24.2% EBITDA margin (%) 73.4% 48.2% (25.2pp) 68.7% 54.3% (14.4pp) Net income 61.8 72.4 17.2% 225.1 216.9 (3.6%) Financell registered strong year-on-year revenue growth of 56.7% in Q322 mainly due to greater loan portfolio and higher average interest rate on the loan portfolio compared to the same period of the last year and increase in insurance revenues. Meanwhile, Financell reported EBITDA growth of 2.9% year-on-year, resulting in an EBITDA margin of 48.2%. The decline in the EBITDA margin was mainly due to the increase in funding costs, higher interest rates, and lower receivable sales compared to the same quarter of last year. The loan portfolio of Financell increased to TRY2.9 billion as of the end of Q322. Although the installment limitation on consumer loans for telecom devices still limits the growth of the loan portfolio, higher lending to corporate customers and greater mobility supported the loan portfolio. Accordingly, Financell has provided loans to over 19 thousand corporate customers to date. Financell’s cost of risk has slightly increased from 1.0% in Q222 to 1.3% in Q322, mainly due to expansion in the loan portfolio and a lower amount of receivable sales. Turkcell Group Subscribers Turkcell Group registered subscribers amounted to approximately 53.8 million as of September 30, 2022. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell, BeST and Kuzey Kıbrıs Turkcell. Turkcell Group Subscribers Q321 Q222 Q322 y/y% q/q% Turkcell Turkey subscribers (million)1 39.3 40.6 41.6 5.9% 2.5% lifecell (Ukraine) 9.9 10.2 10.1 2.0% (1.0%) BeST (Belarus) 1.5 1.5 1.5 - - Kuzey Kıbrıs Turkcell 0.5 0.6 0.6 20.0% - Turkcell Group Subscribers (million) 51.2 52.8 53.8 5.1% 1.9% (1) Subscribers to more than one service are counted separately for each service. OVERVIEW OF THE MACROECONOMIC ENVIRONMENT The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below. Quarter Nine Months Q321 Q222 Q322 y/y% q/q% 9M21 9M22 y/y% GDP Growth (Turkey) 7.9% 7.6% n.a n.a n.a 12.1% n.a n.a Consumer Price Index (Turkey)(yoy) 19.6% 78.6% 83.5% 63.9pp 4.9pp 19.6% 83.5% 63.9pp US$ / TRY rate Closing Rate 8.8433 16.6690 18.5038 109.2% 11.0% 8.8433 18.5038 109.2% Average Rate 8.5212 15.5996 17.8817 109.8% 14.6% 8.1477 15.7864 93.8% EUR / TRY rate Closing Rate 10.3135 17.5221 17.9232 73.8% 2.3% 10.3135 17.9232 73.8% Average Rate 10.0656 16.7104 18.0379 79.2% 7.9% 9.7550 16.7562 71.8% US$ / UAH rate Closing Rate 26.58 29.2549 36.5686 37.6% 25.0% 26.58 36.5686 37.6% Average Rate 26.87 29.2549 35.3497 31.6% 20.8% 27.51 31.1243 13.1% US$ / BYN rate Closing Rate 2.5083 2.5235 2.4803 (1.1%) (1.7%) 2.5083 2.4803 (1.1%) Average Rate 2.5088 2.6634 2.5585 2.0% (3.9%) 2.5591 2.6446 3.3% RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results. Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes finance income and expense, other operating income and expense, investment activity income and expense, share of profit of equity accounted investees and minority interest. Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of our results of operations, as reported under TFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with TFRS to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with TFRS. Turkcell Group (million TRY) Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Adjusted EBITDA 4,029.8 5,990.3 48.7% 10,802.2 15,322.4 41.8% Depreciation and amortization (1,817.6) (2,397.7) 31.9% (5,216.4) (6,962.3) 33.5% EBIT 2,212.2 3,592.6 62.4% 5,585.8 8,360.1 49.7% Finance income (170.3) 4.2 n.m 481.5 853.2 77.2% Finance expense (471.3) (3,654.0) 675.3% (3,980.9) (10,918.0) 174.3% Other operating income / (expense) 240.1 2,414.8 905.7% 2,053.8 5,772.0 181.0% Investment activity Income / (expense) 22.1 526.1 2,280.5% (10.6) 1,622.3 n.m Share of profit of equity accounted investees (2.1) 13.1 n.m 26.5 (61.5) (332.1%) Consolidated profit before income tax & minority interest 1,830.7 2,869.9 56.8% 4,156.1 5,628.2 35.4% Income tax expense (401.6) (501.1) 24.8% (509.5) (571.2) 12.1% Consolidated profit before minority interest 1,429.1 2,395.8 67.6% 3,646.6 5,056.9 38.7% NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2022. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2021 filed with the U.S. Securities and Exchange Commission, and in particular the risk factors section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers. ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, and Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY14.7 billion revenue in Q322 with total assets of TRY90.7 billion as of September 30, 2022. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr. Appendix A – Tables Table: Net foreign exchange gain and loss details Million TRY Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Net FX loss before hedging (25.6) (722.6) 2,722.7% (1,401.3) (3,450.9) 146.3% Swap interest income/(expense) (109.2) (35.8) (67.2%) (333.2) (156.0) (53.2%) Fair value gain on derivative financial instruments (105.3) (10.1) (90.4%) 699.5 814.5 16.4% Net FX gain / (loss) after hedging (240.1) (768.5) 220.1% (1,035.0) (2,792.4) 169.8% Table: Income tax expense details Million TRY Quarter Nine Months Q321 Q322 y/y% 9M21 9M22 y/y% Current tax expense (187.6) (484.6) 158.3% (574.9) (723.4) 25.8% Deferred tax income / (expense) (214.0) (16.5) (92.3%) 65.4 152.1 132.6% Income Tax expense (401.6) (501.1) 24.8% (509.5) (571.2) 12.1% Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, 2021 2022 2022 2021 2022 7,050.3 9,376.9 11,075.7 19,534.2 28,402.3 915.3 1,479.7 1,634.7 2,463.7 4,541.0 281.5 414.0 499.1 745.9 1,265.9 1,107.1 1,206.4 1,453.0 2,985.3 3,625.3 9,354.2 12,477.1 14,662.5 25,729.0 37,834.6 (6,428.7) (8,907.5) (9,852.1) (18,134.6) (26,337.6) 2,925.6 3,569.5 4,810.4 7,594.4 11,496.9 (219.3) (348.1) (393.8) (642.2) (1,045.6) (429.9) (575.9) (683.7) (1,201.9) (1,800.3) 240.1 1,863.1 2,414.8 2,053.8 5,772.0 2,516.5 4,508.6 6,147.8 7,804.1 14,423.1 (64.1) (95.5) (140.4) (164.5) (291.0) 23.9 797.0 526.1 61.5 1,622.3 (1.9) - 0.0 (72.1) 0.0 (2.1) (51.1) 13.1 26.5 (61.5) 2,472.3 5,159.0 6,546.6 7,655.5 15,693.0 (170.3) 776.7 4.2 481.5 853.2 (471.3) (4,153.4) (3,654.0) (3,980.9) (10,918.0) 1,830.7 1,782.3 2,896.9 4,156.1 5,628.1 (401.6) 75.9 (501.1) (509.5) (571.2) 1,429.1 1,858.2 2,395.8 3,646.6 5,056.9 1,429.1 1,858.2 2,395.8 3,646.6 5,056.9 0.0 (0.0) (0.1) 0.0 (0.1) 1,429.1 1,858.2 2,395.8 3,646.5 5,056.9 0.7 0.9 1.1 1.7 2.3 31.3% 28.6% 32.8% 29.5% 30.4% 4,029.8 5,030.1 5,990.3 10,802.2 15,322.4 2,216.6 3,110.8 3,897.8 7,186.9 9,927.5 1,379.2 2,047.7 2,513.0 4,944.6 6,406.4 - - - - - 837.4 1,063.1 1,384.8 2,242.3 3,521.1 12,321.8 21,972.3 24,344.2 12,321.8 24,344.2 57,307.2 84,545.2 90,655.4 57,307.2 90,655.4 19,168.1 35,010.4 37,700.3 19,168.1 37,700.3 24,804.6 48,234.6 51,921.7 24,804.6 51,921.7 35,390.3 60,711.1 65,123.7 35,390.3 65,123.7 21,917.0 23,834.0 25,531.8 21,917.0 25,531.8 (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 16.
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Paycell Begins Its European Journey
ISTANBUL--(BUSINESS WIRE)--Paycell, Türkiye's next-generation digital payment platform, is making significant international investments and collaborations to achieve its goal of becoming an inclusive financial service provider. Opening of its office in Germany, Paycell will serve its European customers under the Paycell Europe company. Paycell Europe plans to expand its investments and collaborations in order to provide end-to-end financial services to European users in an easy, smart, and timely manner. Paycell Europe signed an agreement with Solaris, Europe's leading embedded finance platform, at the opening of its office in Stuttgart. As part of their collaboration, the two institutions will work to broaden the scope and portfolio of digital finance solutions that they provide. Paycell Europe will provide financial services to its users in an easy, smart and fast way Paycell Europe will offer easy, smart, and advantageous digital finance solutions thanks to its experience in Türkiye and powerful technology. Paycell will give the service to its European customers in one of Germany's innovation hubs. Regarding Paycell's European journey, Osman Yılmaz, Turkcell CFO elaborated as follows: "Paycell which is one of the subsidiaries of Turkcell is extending its operations in Europe to strengthen its position in the fintech sector. We have entered to the European market by opening our office in Stuttgart ‘de:hub’ which is one of the important digital innovation hubs of Germany. Our innovative and inclusive products and services will be accessible to all European users thanks to our unique digital infrastructure. It’s apparent that the improvement of Paycell will contribute to the European market.” Mentioning Paycell Europe's cooperation with Solaris, Serhat Dolaz, Paycell CEO stated, “As Paycell, we are happy to collaborate with Europe’s one of the leader in the field of neo-banking and decided to move forward with Solaris. Along with being one of the best providers of financial solutions in the industry, Solaris will also share the knowledge it has acquired through the various services it offers to renowned organizations with Paycell." Dr. Roland Folz, CEO of Solaris, added: “We are thrilled that Paycell has chosen to partner with Solaris for its European expansion. The powerful combination of fintech and telco offers tremendous potential for embedded finance. Paycell's offering in Turkey is a prime example of building an impressive ecosystem and becoming a market leader. As a pan-European provider, Solaris offers the ideal platform to quickly and securely implement Paycell's ambitious plans and innovative concepts. We are delighted to announce our partnership and look forward to an exciting journey.” International money transfer and financial services via Paycell Super App Paycell Europe will initially provide money remittance and collection services with its international money transfer service. Offering a superior digital finance experience with its unique advanced technological infrastructure, Paycell will provide many innovative solutions such as card, loan, and digital wallet for European customers. About ‘de:hub’ The Digital Hub (de:hub) Stuttgart can draw on an ecosystem of innovative and established partners - often international market leaders among medium-sized companies. The hub focuses primarily on the promotion of projects in the fields of smart products, mobility, AI and Industry 4.0. The cross-industry platform and hub for digital pioneers questions the conditions for creativity and innovation, promotes forward-looking ideas and provides a stage for trends and new business models in a wide variety of industries. In addition, the Innovation Spaces offer co-working offices, in which above all the exchange between the residents and the partners of the hub is promoted and a lively environment for start-ups and companies is created in order to give creative ideas a space to develop. About Paycell Türkiye’s most inclusive payment platform Paycell which can be used by anyone, regardless of operator continues to create value for all of its customers and stakeholders with the mission of creating cashless society. Widespreading seamlessly and securely with payment solutions Paycell reached 7 million active users in the 2nd Quarter of 2022. Trading volume of Paycell in the first half took place 3 times more compared to last year. About Solaris Solaris is Europe’s leading embedded finance platform empowering the future of financial services. The tech company enables businesses to easily provide trusted and innovative financial experiences to their customers. Through smart APIs, partners can embed financial services quickly and compliantly into their own product offerings. Solaris is headquartered in Berlin and employs over 750 people at eight locations in Europe and in India. Combined net revenue in 2021 exceeded 100 million euros, representing growth of over 90 percent year-on-year.
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Turkcell: Excellent Business Hampered By Politics
TKC has all the hallmarks of a well-run company: credible market leader, solid balance sheet, and multiple growth opportunities. Currently, TKC is trading near 5-year low valuations, with 41% upside from mean valuation reversion.
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Turkcell Superonline and Equinix Cooperated for a Digital Ecosystem
ISTANBUL--(BUSINESS WIRE)--Turkcell Superonline (NYSE:TKC) (BIST:TCELL) has collaborated with Equinix, which is among the most reputable and extensive digital infrastructure companies in the world. Thanks to this agreement, both companies will be able to manage the business processes and digitalization requirements of their customers more quickly and efficiently. Turkcell Superonline, which provides lightning-fast internet services with its strong fiber infrastructure, has signed a strategic cooperation agreement with Equinix; the world’s leading digital infrastructure company, for regional and international activities. Both companies will benefit greatly from the collaboration and will be able to manage their customers’ business processes and digitalization needs more quickly and efficiently. This agreement, which will strengthen Turkcell Superonline’s goal of turning the Silk Road into a fiber road and will also contribute to Türkiye’s strong position in the region, and in the global market; which is critical for large-scale global companies between the East and the West. The Mutual Benefit Ecosystem Because of the partnership between Turkcell Superonline and Equinix, Turkcell will also be able to respond quickly to the needs of its corporate customers, regardless of where they are located in the world. Equinix’s global customers will also be able to take full advantage of the superior global efficiency of Turkcell’s fixed and digital services. With its stable, redundant, and easy-to-use fixed infrastructure, it will also meet the high-capacity needs of Equinix’s business processes. In addition, global technology brands in the Equinix portfolio will be able to reach these regions swiftly through Turkcell Superonline, because of Türkiye’s geographical location, as well as Turkcell Superonline’s strategic steps in nearby geographic locations. “Türkiye’s position as a digital bridge between East and West is getting stronger.” - Emre Erdem Emre Erdem, General Manager of Turkcell Superonline, made the following statement while emphasizing that the cooperation will strengthen Türkiye’s influence in global markets: “With our cooperation, we have become and be able to meet the international needs of our corporate customers more easily and more quickly by incorporating the global, inclusive power and strong infrastructure of our solution partner into our business processes. We have opened a new door to opportunities that will make use of Türkiye’s location, making it even stronger. We were able to strengthen Türkiye’s position as a digital bridge connecting the East and the West. As a result, we were given the opportunity to provide data services to operators that offer global service in the OTT, CDN, and Tier-1 sectors. Thus, more companies will start to focus on our country and digital trends will start to shift toward Türkiye. This will strengthen our ecosystem. In addition to all of these benefits, it will also help Turkcell Superonline realize its vision of “Transforming the Silk Road into a fiber road.” “Those who quickly adapt to digital ecosystem cooperation models reveal the greatest value.” - Aslıhan Güreşcier Emphasizing the importance of digital transformation, Equinix Türkiye General Manager Aslıhan Güreşcier stated, “We are happy to cooperate with Turkcell. In order to maintain their competitive advantage in the global market, domestic and foreign businesses in Türkiye are increasingly turning to new digital transformation solutions. As the world’s leading digital infrastructure company, Equinix provides an operating environment in which digitalization is the most advanced, and businesses connect using the most modern technology. By offering digital services through our 235 plus International Business Exchange data centres situated in Türkiye and elsewhere around the world, we enable businesses to take advantage of our digital ecosystems. Those who quickly adopted to the new digital ecosystem collaboration models; that have emerged because of the accelerating digital transformation, have demonstrated the greatest value. With this collaboration, we believe we will contribute to Türkiye’s strong position in the region and in the global market, which has strategic importance at the intersection of Europe and Asia."
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Turkcell Iletisim Hizmetleri: Second Quarter 2022 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey," which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where the context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. "Turkcell Turkey," which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where the context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. In this press release, a year-on-year comparison of our key indicators is provided, and figures in parentheses following the operational and financial results for June 30, 2022, refer to the same item as at June 30, 2021. For further details, please refer to our consolidated financial statements and notes as at and for June 30, 2022, which can be accessed via our website in the investor relations section (www.turkcell.com.tr). Selected financial information presented in this press release for the second quarter and half year of 2021 and 2022 is based on Turkish Accounting Standards (TAS) / Turkish Financial Reporting Standards (TFRS) figures in TRY terms unless otherwise stated. In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text. Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation. NOTICE We are publishing financial statements as of June 30, 2022 prepared in accordance with Turkish Accounting Standards/Turkish Financial Reporting Standards (“TAS”/“TFRS”) only. These standards are issued by the Public Oversight Accounting and Auditing Standards Authority (“POA”) and are in full compliance with IAS/IFRS Standards. In an announcement published by the POA on January 20, 2022, it is stated that TAS 29 “Financial Reporting in Hyperinflationary Economies” does not apply to TFRS financial statements as of December 31, 2021. Since then and as of the preparation date of our latest consolidated financial statements, no new statement has been made by the POA about TAS 29 application. Consequently, no TAS 29 adjustment was made to our consolidated financial statements. Financial statements prepared in accordance with IFRS should apply IAS 29 “Financial Reporting in Hyperinflationary Economies” as of June 30, 2022. In this context, financial statements prepared in accordance with IFRS and TFRS would have significant differences and would not be comparable as of June 30, 2022. We intend to publish IFRS financial statements, compliant with IAS 29 to the extent that it remains applicable, as of the year ending December 31, 2022. Although we have not prepared a detailed comparison of differences between IFRS (unadjusted according to IAS 29) and TFRS, we have noted in our past financial statements that the most significant differences have appeared in the lines Other Operating Income/Expense, Finance Income/Expense, and Investment Activity Income/ Expense. In the past, revenue, net income and EBITDA have generally not differed. While no assurance can be given that this will be the case for Q2 2022, we are not at present aware of changes that would cause other significant differences, other than those resulting from the application of IAS 29. FINANCIAL HIGHLIGHTS TRY million Q221 Q222 y/y% H121 H122 y/y% Revenue 8,548 12,477 46.0% 16,375 23,172 41.5% EBITDA1 3,466 5,030 45.1% 6,772 9,332 37.8% EBITDA Margin (%) 40.5% 40.3% (0.2pp) 41.4% 40.3% (1.1pp) EBIT2 1,723 2,550 48.0% 3,374 4,767 41.3% EBIT Margin (%) 20.2% 20.4% 0.2pp 20.6% 20.6% - Net Income 1,113 1,858 67.0% 2,217 2,661 20.0% SECOND QUARTER HIGHLIGHTS Strong financial performance maintained: Group revenues up 46.0% mainly on the accelerated ARPU and strong subscriber net add performance of Turkcell Turkey, as well as the contribution of international operations and techfin business EBITDA up 45.1% year-on-year leading to an EBITDA margin of 40.3%; EBIT up 48.0% year-on-year driving an EBIT margin of 20.4% Net income up 67.0% year-on-year Net leverage3 level at 1.2x; short FX position of US$149 million Group revenues up 46.0% mainly on the accelerated ARPU and strong subscriber net add performance of Turkcell Turkey, as well as the contribution of international operations and techfin business EBITDA up 45.1% year-on-year leading to an EBITDA margin of 40.3%; EBIT up 48.0% year-on-year driving an EBIT margin of 20.4% Net income up 67.0% year-on-year Net leverage3 level at 1.2x; short FX position of US$149 million Robust operational momentum: Turkcell Turkey subscriber base up by 579 thousand quarterly net additions; 1.2 million net additions in the first half of 2022 437 thousand quarterly mobile postpaid net additions; postpaid subscribers share at 67.0% 45 thousand quarterly prepaid subscriber net additions 38 thousand quarterly fixed subscriber net additions; 55 thousand quarterly fiber net additions 284 thousand new fiber homepasses in Q222 Robust mobile ARPU4 growth of 32.9%; fixed residential fiber ARPU growth of 23.4% Data usage of 4.5G users at 15.4 GB in Q222; smartphone penetration at 87% Digital channels’ share5 in sales at 22% Turkcell Turkey subscriber base up by 579 thousand quarterly net additions; 1.2 million net additions in the first half of 2022 437 thousand quarterly mobile postpaid net additions; postpaid subscribers share at 67.0% 45 thousand quarterly prepaid subscriber net additions 38 thousand quarterly fixed subscriber net additions; 55 thousand quarterly fiber net additions 284 thousand new fiber homepasses in Q222 Robust mobile ARPU4 growth of 32.9%; fixed residential fiber ARPU growth of 23.4% Data usage of 4.5G users at 15.4 GB in Q222; smartphone penetration at 87% Digital channels’ share5 in sales at 22% We revise our 2022 guidance6. Accordingly, we now target revenue growth above 40% and EBITDA of ~TRY20 billion. We maintain our operational capex over sales ratio7 guidance at 20%-21%. (1) EBITDA is a non-GAAP financial measure. See page 17 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. (4) Excluding M2M (5) Share of all sales from digital channels (including voice, data, services & smart devices) in Turkcell Turkey consumer sales (excluding fixed business) and equipment related revenues in other segment. (6) Please note that this paragraph contains forward-looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2021 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. (6) 2022 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29. (7) Excluding license fee For further details, please refer to our consolidated financial statements and notes as at June 30, 2022 via our website in the investor relations section (www.turkcell.com.tr). COMMENTS BY CEO, MURAT ERKAN Accelerating growth thanks to subscriber base expansion and price adjustments In the second quarter of the year, while inflation remained at the forefront of the global conjuncture, the tightening policies of the central banks and the increasing risk of recession stood out. Additionally, the markets closely followed the global effects of the Russia-Ukraine war, the grain crisis, and oil, energy and commodity prices. Reaching 80% level in Turkey, inflation triggered the second increase in the minimum wage in a year, whereby a rise in general personnel costs has been observed. Being directly related to foreign exchange rates, energy prices have also risen. Duly, companies have had to reflect the rise in their cost base to their prices. On the other hand, although the COVID-19 cases, still on agenda, were low at the beginning of the quarter, they started to rise again with the new variants and increased mobility at the beginning of the summer. Nevertheless, we see that the mobility in the tourism sector in Turkey is quite strong compared to the pandemic period, in the absence of international travel restrictions. It has been a tough and uncertain period in which challenging macroeconomic conditions shaped global and local markets, global trade slowed down and the Turkish Lira depreciated against foreign currencies. And yet we have managed our operations effectively and growth accelerated thanks to our diversified business strategy and proactive risk management. While our consolidated revenues increased by 46.0% year-on-year to TRY12.5 billion, EBITDA1 reached TRY5.0 billion with an increase of 45.1% thanks to timely price adjustments and focused cost management. In addition to operational profitability, with the contribution of our successful risk management, net profit increased by 67.0% year-on-year to TRY1.9 billion. Despite the depreciation in the exchange rate, thanks to the investments that we made at the right time and with the right plan, we managed to keep capital expenditures under control. The operational capex (excluding license fees) to sales ratio over the past 12 months was 18.6%. Thanks to our customer-centricity, strong brand perception that surpasses our competitors, superior service quality and the value propositions that we offer, we have gained 579 thousand subscribers in this quarter, totaling to a net of 1.2 million in the first half of the year. With increasing mobility and tourist visits in the post-pandemic period, we have recorded 482 thousand net mobile additions, with 437 thousand being postpaid, whereby total mobile subscribers reached 36.6 million. While the decline in the MNP market also continued with the prevailing rationalization in the market, we managed to keep our subscriber churn rate at a healthy level of 1.8% on a monthly basis, thanks to the value propositions that we offer to meet our customers' needs and our effective analytical approach. Thanks to our expanding postpaid subscriber base and sustained price adjustments, mobile blended ARPU (excluding M2M) continued to accelerate, increasing by 16.2% quarterly and 32.9% yearly. Even though customer demand on the fixed side eased in the post-pandemic period, we continued to expand our real fiber product at full speed with a focus on superior customer experience and speed. Accordingly, we delivered our fiber service to 284 thousand new fiber homepasses in the second quarter of the year, and improving quarterly, had 55 thousand net fiber subscriber additions. The subscriber base of IPTV, which offers our customers great entertainment with its rich content, playing an active role in customer retention, reached 1.2 million with an increase of 60 thousand in this quarter. Again, in this period, while leading the sector by offering fiber internet packages with 1000 Mbps speed with an increasing focus, we have also taken a big step in the widespread use and experience of high-speed fiber internet. We continue to grow with our strategic focus areas The stand-alone revenues of our digital services, the first of the three main strategic focus areas, increased by 23% year-on-year in this quarter, and its stand-alone paid subscribers increased by 1.1 million to 4.5 million. BiP, which has 23.4 million users2, signed a new cooperation with Trendyol, Turkey's leading e-commerce platform, in July. Accordingly, Trendyol started to communicate with its business partners through the Closed Group Communication Channels of BiP. TV+, which increased its OTT TV subscriber base by 24%, stood out from its competitors with its rich content and effective price positioning, while Lifebox, over which we provide cloud-based storage service, continued its strong performance and increased the stand-alone paid user base by 51% year-on-year. Our digital business services, developed by Turkish engineers, are also appreciated by our corporate customers. In July we launched the "İşte Suit" package, which includes Lifebox Business, BiP Meet and YaaniMail services, for corporate users keen to keep their data in Turkey and in accordance with the personal data protection law. The revenues of Turkcell Digital Business Services, which is the pioneer in digital transformation, increased by 85% year-on-year to TRY1.1 billion. While we signed 840 new projects this quarter, we have a TRY1.7 billion backlog, which will turn into revenue beyond the second quarter of 2022. In order to meet the high demand for data center and cloud storage services, we increased the capacity of the Gebze data center and opened a new area of 1,000 square meters. Data center, cloud, cyber security and business applications verticals, which serve the digital transformation of our corporate customers, doubled their revenues in this quarter. We diversify our portfolio by making new initiatives in techfin, which we serve with our Financell and Paycell brands, and we continue to provide innovative solutions with our technology that meet the needs of our customers. This quarter, by leveraging our experience in the insurance agency business, we established the Turkcell Digital Insurance company, where we aim to serve our customers with data-driven products and a focus on the digital experience. Moreover, we have applied to the regulator to incorporate a digital banking company, which will complement our existing services. In the second quarter, financial payments platform Paycell’s revenues increased by 77.5% year-on-year to TRY199 million, where EBITDA rose 79.6% to TRY89 million. Paycell users2 reached 7 million as of the end of the quarter, and its transaction volume through all services nearly tripled year-on-year to TRY8 billion. The users2 of 'Pay Later', which allows customers to reflect their spending on their Turkcell invoices, increased by 1.2 million year-on-year to 4.5 million. We continued to see great traction of our virtual and Android POS products that are offered for the needs of SMEs, even exceeding our expectations. The transaction volume of total POS solutions reached TRY2.9 billion with a quarterly increase of 39% thanks to Android POS devices reaching almost 12 thousand and the use of virtual POS with the new cooperation with e-commerce companies. Paycell, strengthens its position in the market day-by-day by offering new services. Through the platform, Paycell enables customers to trade in precious metals such as gold, silver and platinum, and through cooperation arrangements, offers consumer loans with Financell and personal loans of up to TRY50 thousand from Fibabanka. We clarify our sustainability goals As Turkcell, we took important steps in environmental, social and governance issues in the first half of the year in line with our goal of creating sustainable value. Reducing our Company's resource consumption and greenhouse gas emissions are our key environmental focus areas. In this sense, we made our application to the Science Based Target Initiative (SBTi) by determining our Science Based Targets in order to undertake our role in complying with the terms of the Paris Agreement, which was also ratified by Turkey. In line with Science Based Targets; in Scope 1, we aim to reduce our fossil fuel consumption by 51.5% by 2030, while in Scope 2, we aim to provide 100% of our electricity consumption from renewable sources by 2030. And in Scope 3, we aim to reduce the emissions of products we buy and sell by 25% by 2030. With our ‘Recycle into Education’ project, we have collected 4 tons of e-waste since the beginning of the year and ensured the efficient use of resources by recycling. We have also made 55.72 GWh of savings with several energy-efficiency projects as of the first half of 2022. On the social sustainability side, aside from our responsibility to the wider society, we are now in a period where we prioritize our employees. We launched the 'T.Life' application to support the employee experience with entertaining and comprehensive content. For every 30,000 steps they take with the 'Step into the Future', our employees donate a sapling to the Turkcell Forest, which we intend to plant on August 30, the national Victory Day. We are taking important steps to support women-led initiatives in order to empower women in business life and to increase the employment of ‘women engineers' in Turkey. Accordingly, we supported 5 innovative ideas that emerged at the Women Developers of the Future Climathon in February. In addition, we are making progress in line with the targets we have set to increase the number of women employees and women managers in our Company. On the governance side, we implemented the Board Diversity Policy in the first half of 2022. In addition, the sustainability transformation in the supply chain was initiated in the second half of the year, and our sustainability training was also assigned to Turkcell store employees and to our suppliers. In March, we maintained our stance on sustainability issues by publishing our second integrated report, which we prepared in order to present the environmental, social and governance information requested by all of our stakeholders in a more holistic and transparent manner. Artificial intelligence was used in the preparation of the report, and the summary of the report was also voiced using artificial intelligence. As a result, we prepared the world's first audio integrated annual report. We are revising our guidance upwards Considering our strong half-year performance and our expectations for the remainder of the year, we revise our full year guidance3 upwards. Accordingly, we expect our consolidated revenue growth to be above 40% and EBITDA of around TRY20 billion. In line with the previous quarter, we continue to expect an operational capex (excluding license fees) to sales ratio of 20-21%. I extend my thanks to our entire team for its contribution to our successes, and to our Board of Directors for their support in realizing our strategy, which is the key to our achievements. We also express our gratitude to our customers and business partners for remaining with us on our journey. (1) EBITDA is a non-GAAP financial measure. See page 17 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) 3-month active (3) Please note that this paragraph contains forward looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2021 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. (3) 2022 guidance figures are based on TFRS, and do not include the effects of a likely adoption of inflationary accounting in accordance with IAS 29. FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group Profit & Loss Statement (million TRY) Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Revenue 8,548.3 12,477.1 46.0% 16,374.8 23,172.1 41.5% Cost of revenue1 (4,394.1) (6,427.4) 46.3% (8,307.1) (11,920.9) 43.5% Cost of revenue1/Revenue (51.4%) (51.5%) (0.1pp) (50.7%) (51.4%) (0.7pp) Gross Margin1 48.6% 48.5% (0.1pp) 49.3% 48.6% (0.7pp) Administrative expenses (223.6) (348.1) 55.7% (423.0) (651.8) 54.1% Administrative expenses/Revenue (2.6%) (2.8%) (0.2pp) (2.6%) (2.8%) (0.2pp) Selling and marketing expenses (413.8) (575.9) 39.2% (772.0) (1,116.6) 44.6% Selling and marketing expenses/Revenue (4.8%) (4.6%) 0.2pp (4.7%) (4.8%) (0.1pp) Net impairment losses on financial and contract assets (50.8) (95.5) 88.0% (100.4) (150.6) 50.0% EBITDA2 3,465.9 5,030.1 45.1% 6,772.4 9,332.1 37.8% EBITDA Margin 40.5% 40.3% (0.2pp) 41.4% 40.3% (1.1pp) Depreciation and amortization (1,742.9) (2,480.1) 42.3% (3,398.8) (4,564.7) 34.3% EBIT3 1,723.0 2,550.0 48.0% 3,373.5 4,767.4 41.3% EBIT Margin 20.2% 20.4% 0.2pp 20.6% 20.6% - Net finance income / (expense) (1,936.8) (3,376.7) 74.3% (2,857.8) (6,415.1) 124.5% Finance income (721.3) 776.7 n.m 651.8 848.9 30.2% Finance expense (1,215.5) (4,153.4) 241.7% (3,509.6) (7,264.1) 107.0% Other operating income / (expense) 1,115.0 1,863.1 67.1% 1,813.7 3,357.2 85.1% Investment activity Income / (expense) (35.8) 797.0 n.m (32.7) 1,096.2 n.m Non-controlling interests 0.0 0.0 - 0.0 0.0 - Share of profit of equity accounted investees 10.9 (51.1) (568.8%) 28.6 (74.5) (360.5%) Income tax expense 236.2 75.9 (67.9%) (107.9) (70.1) (35.0%) Net Income 1,112.5 1,858.2 67.0% 2,217.4 2,661.1 20.0% (1) Excluding depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measure. See page 17 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. Revenue of the Group rose 46.0% year-on-year in Q222. Turkcell Turkey was the main driver of this performance with a solid ARPU growth positively impacted by price adjustments to reflect inflationary impacts and upsell efforts, and a growing customer base. Turkcell International and techfin business also supported topline growth. Turkcell Turkey revenues, comprising 75% of Group revenues, rose 44.1% year-on-year to TRY9,377 million (TRY6,505 million). - Consumer segment revenues grew 39.0% year-on-year based on price adjustments to reflect inflationary impacts, upsell efforts, and a larger subscriber base. - Corporate segment revenues rose 49.9% year-on-year supported by the strong momentum of digital business services, which grew 84.7% year-on-year. - Standalone digital services revenues registered across consumer and corporate segments grew 22.6% year-on-year. Similar to Q122, the growth of digital services revenues was impacted negatively due to a regulatory decision that amended the usage conditions of our voicemail service, the revenues of which are reported under digital services, as of December 1st, 2021. Excluding this impact, growth would have been 45%. - Wholesale revenues grew 95.9% year-on year to TRY743 million (TRY379 million), positively impacted by currency movements, customers’ data capacity upgrades, and increased international carrier traffic. Turkcell International revenues, comprising 12% of Group revenues, rose 76.1% to TRY1,480 million (TRY840 million) positively impacted by currency movements. Techfin segment revenues, comprising 3% of Group revenues, increased 71.2% year-on-year to TRY414 million (TRY242 million). Paycell revenues grew 77.5%, while those of our financing business, Financell, rose 64.7% year-on-year. Please refer to the Techfin section for details. Other subsidiaries' revenues, at 10% of Group revenues, which include mainly non-group call center and energy business revenues, and consumer electronics sales revenues, rose 25.5% year-on-year to TRY1,206 million (TRY961 million). This was driven mainly by increased equipment revenues. Cost of revenue (excluding depreciation and amortization) rose to 51.5% (51.4%) as a percentage of revenues in Q222. The decline in cost of goods sold (1.4pp) and interconnection expenses (0.9pp) was offset by the rise in radio expenses (1.8pp), impacted by rising energy prices and other cost items (0.6pp) as a percentage of revenues. Administrative Expenses rose to 2.8% (2.6%) as a percentage of revenues in Q222. Selling and Marketing Expenses declined to 4.6% (4.8%) as a percentage of revenues in Q222, mainly due to the decrease in marketing expenses (0.2pp) and selling expenses (0.2pp) despite the rise in other cost items (0.2pp) as a percentage of revenues. Net impairment losses on financial and contract assets increased to 0.8% (0.6%) as a percentage of revenues in Q222. EBITDA1 rose 45.1% year-on-year in Q222 leading to an EBITDA margin of 40.3% (40.5%). - Turkcell Turkey’s EBITDA grew 37.5% year-on-year to TRY3,944 million (TRY2,869 million) with an EBITDA margin of 42.1% (44.1%). - Turkcell International EBITDA rose 85.4% year-on-year to TRY750 million (TRY405 million) leading to an EBITDA margin of 50.7% (48.2%). - Techfin segment EBITDA increased 59.3% year-on-year to TRY216 million (TRY135 million) with an EBITDA margin of 52.1% (56.0%). - The EBITDA of other subsidiaries rose to TRY121 million (TRY57 million). Depreciation and amortization expenses increased 42.3% year-on-year in Q222. Net finance expense rose to TRY3,377 million (TRY1,937 million) in Q222 due mainly to higher FX losses registered in relation to bank loans and bonds, and borrowing costs despite the positive impact of the fair value gains on derivative instruments. See Appendix A for details of net foreign exchange gain and loss. Net other operating income rose to TRY1,863 million (TRY1,115 million) in Q222 due mainly to higher FX gains registered on foreign currency cash, as well as lower litigation and penalty expenses. See Appendix A for details of net foreign exchange gain and loss. Net investment activity income was TRY797 million in Q222 compared to a net investment activity expense of TRY36 million. This was driven mainly by the fair value gains registered on currency-protected time deposits. Income tax expense: The current tax expense of TRY82 million was more than offset by TRY157 million deferred tax income reported in Q222. Please note that in Q222, we made use of the right introduced by Law No. 7338, which allows the revaluation of properties and depreciable economic assets under certain conditions. This resulted in a positive impact on the deferred tax asset reported in Q222. Please refer to our consolidated financial statements and notes as at June 30, 2022 for details. Net income of the Group rose 67.0% to TRY1,858 million (TRY1,113 million) in Q222, driven mainly by strong operational profitability, higher net operating and net investment activity income, and the positive impact of deferred tax income relating to the revaluation of assets despite a higher net finance expense registered. (1) EBITDA is a non-GAAP financial measure. See page 17 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income. Please note that in Q222, we reported TRY204 million impairment in relation to our assets, which are located in territories under control of Ukraine but not operating for more than 92 days, and also for assets located in territories invaded by Russia. Total cash & debt: Consolidated cash as of June 30, 2022 increased to TRY21,972 million from TRY18,804 million as of March 31, 2022. Our cash position was positively impacted by the currency movements. Excluding FX swap transactions, 72% of our cash is in US$, 18% in EUR, and 9% in TRY. Consolidated debt as of June 30, 2022 rose to TRY48,235 million from TRY40,855 million as of March 31, 2022, due mainly to the impact of currency movements and new borrowings. TRY3,197 million of our consolidated debt is comprised of lease obligations. Please note that 47% of our consolidated debt is in US$, 28% in EUR, 2% in CNY, 7% in UAH, and 16% in TRY. Net debt1 as of June 30, 2022, was at TRY21,564 million with a net debt to EBITDA ratio of 1.2 times. Excluding finance company customer loans, our telco only net debt was at TRY19,068 million with a leverage of 1.1 times. Turkcell Group had a short FX position of US$149 million as at the end of the second quarter (Please note that this figure takes hedging portfolio and advance payments into account). The short FX position of US$149 million is broadly in line with our FX neutral definition, which is between -US$200 million and +US$200 million. Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY3,110.8 million in Q222. In Q222 and H122, operational capital expenditures (excluding license fees) at the Group level were at 16.4% and 16.8% of total revenues, respectively. Capital expenditures (million TRY) Quarter Half Year Q221 Q222 H121 H122 Operational Capex 2,097.6 2,047.7 3,565.5 3,894.0 License and Related Costs - - - - Non-operational Capex (Including IFRS15 & IFRS16) 615.5 1,063.1 1,404.8 2,135.8 Total Capex 2,713.1 3,110.8 4,970.3 6,029.8 (1) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets” reported under current and non-current assets. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. Summary of Operational Data Q221 Q122 Q222 y/y % q/q % Number of subscribers (million) 38.1 40.0 40.6 6.6% 1.5% Mobile Postpaid (million) 22.9 24.1 24.5 7.0% 1.7% Mobile M2M (million) 3.0 3.5 3.6 20.0% 2.9% Mobile Prepaid (million) 11.7 12.0 12.1 3.4% 0.8% Fiber (thousand) 1,754.1 1,941.0 1,996.1 13.8% 2.8% ADSL (thousand) 725.5 755.7 740.6 2.1% (2.0%) Superbox (thousand)1 625.7 612.4 640.3 2.3% 4.6% Cable (thousand) 62.2 51.1 48.6 (21.9%) (4.9%) IPTV (thousand) 961.0 1,126.4 1,185.9 23.4% 5.3% Churn (%)2 Mobile Churn (%) 1.7% 1.6% 1.8% 0.1pp 0.2pp Fixed Churn (%) 1.3% 1.4% 1.4% 0.1pp - ARPU (Average Monthly Revenue per User) (TRY) Mobile ARPU, blended 48.2 54.6 63.2 31.1% 15.8% Mobile ARPU, blended (excluding M2M) 52.3 59.8 69.5 32.9% 16.2% Postpaid 59.9 67.0 76.5 27.7% 14.2% Postpaid (excluding M2M) 68.1 77.3 88.6 30.1% 14.6% Prepaid 25.5 29.8 36.4 42.7% 22.1% Fixed Residential ARPU, blended 76.4 88.9 93.8 22.8% 5.5% Residential Fiber ARPU 76.6 89.9 94.5 23.4% 5.1% Average mobile data usage per user (GB/user) 13.4 13.4 14.1 5.2% 5.2% Mobile MoU (Avg. Monthly Minutes of usage per subs) blended 564.8 531.1 560.3 (0.8%) 5.5% (1) Superbox subscribers are included in mobile subscribers. (2) Churn figures represent average monthly churn figures for the respective quarters. In Q222, we sustained our robust operational performance on the back of our rich and differentiated value proposition offered to our customers and our customer-centric strategy. Turkcell Turkey’s subscriber base expanded by 579 thousand net quarterly additions, reaching 40.6 million. This strong performance led us to achieve a total of 1.2 million net additions in the first half of the year. On the mobile front, our subscriber base reached 36.6 million on 482 thousand quarterly net additions in Q222, driven mainly by 437 thousand net quarterly additions to our postpaid subscriber base. Accordingly, our postpaid subscribers reached 67.0% (66.2%) of our mobile subscriber base as of the end of Q222. Meanwhile, our prepaid subscriber base increased by 45 thousand net additions in Q222. On the fixed front, our fiber subscriber base continued to expand with 55 thousand quarterly net additions, on the back of rising demand for high-speed and quality broadband connection. Total fixed subscribers reached 2.8 million on 38 thousand quarterly net additions in Q222. Meanwhile, IPTV subscribers reached 1.2 million on 60 thousand quarterly net additions. The average monthly mobile churn rate slightly increased to 1.8% in Q222 due mainly to the disconnections of tourist lines under our churn policy following the improvement in tourism activity last year. The average monthly fixed churn rate stood at 1.4%. Our mobile ARPU (excluding M2M) rose 32.9% year-on-year in Q222, on the back of our successful upsell efforts, larger postpaid subscriber base, and price adjustments to reflect inflationary impacts. Our residential fiber ARPU growth was 23.4% year-on-year in Q222, driven mainly by price adjustments to reflect inflationary impacts and increased IPTV penetration at 67% in Q222, as well as upsell efforts to higher tariffs. Average monthly mobile data usage per user rose 5.2% year-on-year to 14.1 GB in Q222. The average mobile data usage of 4.5G users reached 15.4 GB in Q222. Total smartphone penetration on our network reached 87% in Q222 on a 2.5pp year-on-year increase. 93% of those smartphones are 4.5G compatible smartphones. TURKCELL INTERNATIONAL lifecell1 Financial Data Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Revenue (million UAH) 2,017.8 2,127.3 5.4% 3,917.1 4,434.1 13.2% EBITDA (million UAH) 1,131.3 1,230.9 8.8% 2,208.1 2,523.3 14.3% EBITDA margin (%) 56.1% 57.9% 1.8pp 56.4% 56.9% 0.5pp Net income / (loss) (million UAH) 116.0 (27.4) (123.6%) 199.2 181.9 (8.7%) Capex (million UAH) 988.1 659.0 (33.3%) 1,560.6 1,370.6 (12.2%) Revenue (million TRY) 615.6 1,134.9 84.4% 1,124.4 2,247.5 99.9% EBITDA (million TRY) 345.3 656.5 90.1% 633.9 1,280.2 102.0% EBITDA margin (%) 56.1% 57.9% 1.8pp 56.4% 57.0% 0.6pp Net income / (loss) (million TRY) 35.4 (18.2) (151.4%) 57.8 82.8 43.3% (1) Since July 10, 2015, we hold a 100% stake in lifecell. lifecell (Ukraine) revenues grew 5.4% year-on-year in local currency terms, driven mainly by the increase in international incoming and data revenues. lifecell registered an EBITDA margin of 57.9% on 1.8pp improvement year-on-year. This was due mainly to the cost control measures implemented by lifecell. Meanwhile, lifecell registered a net loss in Q222 due to impairment charges recognized on assets in territories under control of Ukraine but not operating for more than 92 days and those in territories invaded by Russia. lifecell revenues in TRY terms rose 84.4% year-on-year in Q222, mainly with the positive impact of currency movements. lifecell’s EBITDA in TRY terms grew 90.1%, leading to an EBITDA margin of 57.9%. lifecell Operational Data Q221 Q122 Q222 y/y% q/q% Number of subscribers (million)2 9.5 10.2 10.2 7.4% - Active (3 months)3 8.4 8.9 8.4 - (5.6%) MOU (minutes) (12 months) 186.8 170.0 160.7 (14.0%) (5.5%) ARPU (Average Monthly Revenue per User), blended (UAH) 71.9 75.6 69.2 (3.8%) (8.5%) Active (3 months) (UAH) 81.9 84.3 82.8 1.1% (1.8%) (2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. (3) Active subscribers are those who in the past three months made a revenue generating activity. lifecell’s three-month active subscribers declined to 8.4 million in Q222 as people fled abroad due to the ongoing war in the country. The situation also negatively impacted the consumption of subscribers leading to a limited 3-month active ARPU growth year-on-year and a decline on a quarter-on-quarter basis. Meanwhile, 3-month active 4.5G users rose 7% year-on-year in Q222 to 76% of total mobile data users. lifecell continued its leadership of the Ukrainian market in smartphone penetration, which reached 84.6% as at the end of Q222. lifecell kept its focus on ensuring the safety of its employees and continued to provide critical telecom services in this environment. lifecell’s network has been largely operational. Around 9% of nearly 9 thousand sites are temporarily down on average. The national roaming among the three operators continues and helps continuity of communication in the country. On a daily average around 82% of the stores were open nationwide as of the end of June. There has been no interruption to the ICT systems, such as billing and CRM. The banking system in the country continues to operate and day-to-day operations, including payments and collections are exercised normally. lifecell’s cash position is conducive to sustain the operations. We closely monitor the developments in Ukraine. We oversee our action plans to ensure the safety of our employees and maintain our operations. BeST1 Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Number of subscribers (million) 1.4 1.5 7.1% 1.4 1.5 7.1% Active (3 months) 1.0 1.1 10.0% 1.0 1.1 10.0% Revenue (million BYN) 37.1 34.8 (6.2%) 75.0 69.1 (7.9%) EBITDA (million BYN) 9.5 9.2 (3.2%) 18.6 19.9 7.0% EBITDA margin (%) 25.5% 26.6% 1.1pp 24.8% 28.8% 4.0pp Net loss (million BYN) (7.8) (8.0) 2.6% (15.9) (16.6) 4.4% Capex (million BYN) 10.1 11.7 15.8% 28.1 33.2 18.1% Revenue (million TRY) 121.9 204.9 68.1% 231.3 380.7 64.6% EBITDA (million TRY) 31.2 54.7 75.3% 57.7 109.3 89.4% EBITDA margin (%) 25.6% 26.7% 1.1pp 24.9% 28.7% 3.8pp Net loss (million TRY) (25.7) (46.4) 80.5% (49.0) (90.1) 83.9% (1) BeST, in which we hold an 80% stake, has operated in Belarus since July 2008. BeST revenues declined 6.2% year-on-year in local currency terms in Q222 due mainly to a contraction in handset sales despite the continued rise in data revenues. BeST registered an EBITDA margin of 26.6% on 1.1pp improvement driven mainly by the decline in lower margin handset sales. BeST’s revenues in TRY terms grew 68.1% year-on-year in Q222, while its EBITDA margin was at 26.7%. BeST continued to expand its 4G network in Q222, reaching 3.8 thousand sites in 6 regions. BeST also continued to grow its rural coverage, expanding its LTE-800 sites to over 1.5 thousand. All these efforts helped BeST to lead the market in terms of 4G geographical coverage and increase the penetration of its 4G subscribers. Accordingly, the 4G users of BeST reached 75% of the 3-month active subscriber base, which continued to support mobile data consumption and digital services usage. In Q222, the average monthly data consumption of subscribers rose 21% year-over-year to 16.0GB. The sanctions against Belarusian persons, entities and export controls on Belarus may affect the economic climate in Belarus and our access to imported equipment and software. These factors may impact the financial condition and operating performance of our operations in Belarus. Kuzey Kıbrıs Turkcell2 (million TRY) Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Number of subscribers (million) 0.5 0.6 20.0% 0.5 0.6 20.0% Revenue 72.9 103.1 41.4% 134.8 199.9 48.3% EBITDA 26.7 43.4 62.5% 51.2 81.7 59.6% EBITDA margin (%) 36.6% 42.1% 5.5pp 38.0% 40.9% 2.9pp Net income 12.2 21.1 73.0% 22.1 42.8 93.7% Capex 12.7 30.1 137.0% 28.5 65.0 128.1% (2) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999. Kuzey Kıbrıs Turkcell revenues grew 41.4% year-on-year in Q222, mainly due to increased mobility leading to higher mobile voice and roaming revenues. Fixed broadband and handset sales revenues also contributed to growth. The EBITDA of Kuzey Kıbrıs Turkcell rose 62.5% year-on-year, leading to an EBITDA margin of 42.1% on the back of robust revenue growth. TECHFIN Paycell Financial Data (million TRY) Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Revenue 112.0 198.8 77.5% 210.1 362.7 72.6% EBITDA 49.6 89.1 79.6% 102.9 162.0 57.4% EBITDA margin (%) 44.3% 44.8% 0.5pp 49.0% 44.7% (4.3pp) Net income 29.9 66.1 121.1% 70.1 115.2 64.3% Paycell saw another quarter with strong growth performance, leveraging the demand for digital payments with a diverse product portfolio encompassing mobile payment services, Paycell Card, and payment facilitation solutions. Accordingly, the revenues of Paycell rose 77.5% year-on-year in Q222. Paycell’s EBITDA rose 79.6% year-on-year, leading to an EBITDA margin of 44.8% on 0.5pp improvement in Q222. The Pay Later service transaction volume (non-group) more than doubled year-on-year to TRY878 million. This was driven by a 34% increase in the 3-month active users of the Pay Later service to 4.5 million and their increased usage. Meanwhile, the penetration of payment facilitation services continued to increase during the quarter. Accordingly, the transaction volume over physical and virtual POS services reached TRY2.9 billion in Q222, 39% higher when compared to the previous quarter. The Paycell Card transaction volume rose to TRY1.9 billion in Q222, to six-fold the transaction volume of Q221. Paycell started to act as a market-place for platinum trading in Q222 in addition to gold and silver. Paycell also started to offer consumer and personal loans to its customers over its marketplace. Overall, Paycell's total transaction volume across all services tripled to TRY8 billion year-on-year, driven mainly by 26% year-on-year rise in Paycell’s total 3-month active users to 7.0 million and their increased usage. Financell Financial Data (million TRY) Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Revenue 131.5 216.6 64.7% 261.5 411.6 57.4% EBITDA 86.6 128.9 48.8% 171.9 239.0 39.0% EBITDA margin (%) 65.9% 59.5% (6.4pp) 65.7% 58.1% (7.6pp) Net income 68.3 78.8 15.4% 163.3 144.5 (11.5%) Financell’s revenues rose 64.7% year-on-year in Q222, driven mainly by the expanding loan portfolio, as well as the higher average interest rate on the loan portfolio, compared to the same period of the last year. Financell reported 48.8% year-on-year EBITDA growth. Higher funding cost compared to Q221 was the main factor behind the year-on-year decline in EBITDA margin. Financell’s net income rose 15.4% year-on-year. Q221 net income was positively impacted by a TRY50 million dividend income. Financell’s loan portfolio rose to TRY2.5 billion in Q222, from TRY1.8 billion in Q221, on the back of increased mobility and higher lending to the corporate segment. Moreover, Financell’s cost of risk has increased to 1.0% in Q222, driven mainly by a larger loan portfolio and lower receivable sales. Turkcell Group Subscribers Turkcell Group registered subscribers amounted to approximately 52.8 million as of June 30, 2022. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell and BeST, as well as those of Kuzey Kıbrıs Turkcell. Turkcell Group Subscribers Q221 Q122 Q222 y/y% q/q% Turkcell Turkey subscribers (million)1 38.1 40.0 40.6 6.6% 1.5% lifecell (Ukraine) 9.5 10.2 10.2 7.4% - BeST (Belarus) 1.4 1.5 1.5 7.1% - Kuzey Kıbrıs Turkcell 0.5 0.6 0.6 20.0% - Turkcell Group Subscribers (million) 49.6 52.3 52.8 6.5% 1.0% (1) Subscribers to more than one service are counted separately for each service. OVERVIEW OF THE MACROECONOMIC ENVIRONMENT The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below. Quarter Half Year Q221 Q122 Q222 y/y% q/q% H121 H122 y/y% GDP Growth (Turkey) 21.9% 7.3% n.a n.a n.a 14.4% n.a n.a Consumer Price Index (Turkey)(yoy) 17.5% 61.1% 78.6% 61.1pp 17.5pp 17.5% 78.6% 61.1pp US$ / TRY rate Closing Rate 8.7052 14.6458 16.6690 91.5% 13.8% 8.7052 16.6690 91.5% Average Rate 8.4135 13.8778 15.5996 85.4% 12.4% 7.9610 14.7387 85.1% EUR / TRY rate Closing Rate 10.3645 16.3086 17.5221 69.1% 7.4% 10.3645 17.5221 69.1% Average Rate 10.1310 15.5203 16.7104 64.9% 7.7% 9.5996 16.1154 67.9% US$ / UAH rate Closing Rate 27.18 29.2549 29.2549 7.6% - 27.18 29.2549 7.6% Average Rate 27.59 28.7685 29.2549 6.0% 1.7% 27.83 29.0117 4.2% US$ / BYN rate Closing Rate 2.5312 2.9732 2.5235 (0.3%) (15.1%) 2.5312 2.5235 (0.3%) Average Rate 2.5574 2.7118 2.6634 4.1% (1.8%) 2.5843 2.6876 4.0% RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results. Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes finance income and expense, other operating income and expense, investment activity income and expense, share of profit of equity accounted investees and minority interest. Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of our results of operations, as reported under TFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with TFRS to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with TFRS. Turkcell Group (million TRY) Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Adjusted EBITDA 3,465.9 5,030.1 45.1% 6,772.4 9,332.1 37.8% Depreciation and amortization (1,742.9) (2,480.1) 42.3% (3,398.8) (4,564.7) 34.3% EBIT 1,723.0 2,550.0 48.0% 3,373.5 4,767.4 41.3% Finance income (721.3) 776.7 n.m 651.8 848.9 30.2% Finance expense (1,215.5) (4,153.4) 241.7% (3,509.6) (7,264.1) 107.0% Other operating income / (expense) 1,115.0 1,863.1 67.1% 1,813.7 3,357.2 85.1% Investment activity Income / (expense) (35.8) 797.0 n.m (32.7) 1,096.2 n.m Share of profit of equity accounted investees 10.9 (51.1) (568.8%) 28.6 (74.5) (360.5%) Consolidated profit before income tax & minority interest 876.3 1,782.3 103.4% 2,325.4 2,731.2 17.5% Income tax expense 236.2 75.9 (67.9%) (107.9) (70.1) (35.0%) Consolidated profit before minority interest 1,112.5 1,858.2 67.0% 2,217.5 2,661.1 20.0% NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2022. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2021 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers. ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, and Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY12.5 billion revenue in Q222 with total assets of TRY84.5 billion as of June 30, 2022. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr. Appendix A – Tables Table: Net foreign exchange gain and loss details Million TRY Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Net FX loss before hedging 242.4 (1,651.2) (781.2%) (1,375.7) (2,728.8) 98.4% Swap interest income/(expense) (109.4) (49.4) (54.8%) (224.0) (120.2) (46.3%) Fair value gain on derivative financial instruments (651.3) 765.8 n.m 804.8 824.6 2.5% Net FX gain / (loss) after hedging (518.4) (934.9) 80.3% (794.9) (2,024.4) 154.7% Table: Income tax expense details Million TRY Quarter Half Year Q221 Q222 y/y% H121 H122 y/y% Current tax expense (224.1) (81.5) (63.6%) (387.3) (238.8) (38.3%) Deferred tax income / (expense) 460.4 157.4 (65.8%) 279.4 168.6 (39.7%) Income Tax expense 236.2 75.9 (67.9%) (107.9) (70.1) (35.0%) TURKCELL ILETISIM HIZMETLERI A.S. TURKISH ACCOUNTING STANDARDS SELECTED FINANCIALS (TRY Million) Quarter Ended Quarter Ended Quarter Ended Half Ended Half Ended Jun 30, Mar 31, Jun 30, Jun 30, Jun 30, 2021 2022 2022 2021 2022 6,505.3 7,949.7 9,376.9 12,483.9 17,326.6 840.2 1,426.6 1,479.7 1,548.4 2,906.4 241.8 352.9 414.0 464.4 766.8 961.0 965.9 1,206.4 1,878.2 2,172.3 8,548.3 10,695.0 12,477.1 16,374.8 23,172.1 (6,137.0) (7,578.0) (8,907.5) (11,705.9) (16,485.6) 2,411.3 3,117.0 3,569.5 4,668.9 6,686.5 (223.6) (303.7) (348.1) (423.0) (651.8) (413.8) (540.7) (575.9) (772.0) (1,116.6) 1,115.0 1,494.1 1,863.1 1,813.7 3,357.2 2,888.8 3,766.7 4,508.6 5,287.6 8,275.3 (50.8) (55.1) (95.5) (100.4) (150.6) (13.2) 299.2 797.0 37.5 1,096.2 (22.7) 0.0 - (70.3) 0.0 10.9 (23.4) (51.1) 28.6 (74.5) 2,813.1 3,987.3 5,159.0 5,183.2 9,146.4 (721.3) 72.3 776.7 651.8 848.9 (1,215.5) (3,110.7) (4,153.4) (3,509.6) (7,264.1) 876.3 948.9 1,782.3 2,325.4 2,731.2 236.2 (146.0) 75.9 (107.9) (70.1) 1,112.5 802.9 1,858.2 2,217.5 2,661.1 0.0 0.0 0.0 0.0 0.0 1,112.5 802.9 1,858.2 2,217.5 2,661.1 (0.0) (0.0) 0.0 (0.0) 0.0 1,112.5 802.9 1,858.2 2,217.4 2,661.1 0.5 0.4 0.9 1.0 1.2 28.2% 29.1% 28.6% 28.5% 28.9% 3,465.9 4,302.0 5,030.1 6,772.4 9,332.1 2,713.1 2,918.3 3,110.8 4,970.3 6,029.8 2,097.6 1,845.3 2,047.7 3,565.5 3,894.0 0.0 0.0 0.0 0.0 0.0 615.5 1,073.1 1,063.1 1,404.8 2,135.8 12,442.7 18,804.0 21,972.3 12,442.7 21,972.3 55,860.8 75,324.6 84,545.2 55,860.8 84,545.2 18,616.5 30,105.2 35,010.4 18,616.5 35,010.4 24,077.4 40,855.4 48,234.6 24,077.4 48,234.6 35,607.4 51,944.9 60,711.1 35,607.4 60,711.1 20,253.5 23,379.7 23,834.0 20,253.5 23,834.0 (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 17
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Turkcell Iletisim Hizmetleri: First Quarter 2022 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey," which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where the context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. "Turkcell Turkey," which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where the context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. In this press release, a year-on-year comparison of our key indicators is provided, and figures in parentheses following the operational and financial results for March 31, 2022, refer to the same item as at March 31, 2021. For further details, please refer to our consolidated financial statements and notes as at and for March 31, 2022, which can be accessed via our website in the investor relations section (www.turkcell.com.tr). Selected financial information presented in this press release for the first and fourth quarters of 2021 and the first quarter of 2022 is based on IFRS figures in TRY terms unless otherwise stated. In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text. Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation. FINANCIAL HIGHLIGHTS TRY million Q121 Q421 Q122 y/y% q/q% Revenue 7,827 10,192 10,695 36.7% 4.9% EBITDA1 3,306 4,212 4,302 30.1% 2.1% EBITDA Margin (%) 42.2% 41.3% 40.2% (2.0pp) (1.1pp) EBIT2 1,651 2,136 2,217 34.4% 3.8% EBIT Margin (%) 21.1% 21.0% 20.7% (0.4pp) (0.3pp) Net Income 1,105 1,385 803 (27.3%) (42.0%) FIRST QUARTER HIGHLIGHTS Solid financial performance: Group revenues up 36.7% year-on-year on increased ARPU growth and larger subscriber base of Turkcell Turkey, higher contribution from international operations and techfin business Group EBITDA up 30.1% year-on-year leading to an EBITDA margin of 40.2% EBIT up 34.4% year-on-year resulting in an EBIT margin of 20.7% Net income at TRY803 million Healthy net leverage3 level at 1.2x Short FX position of US$204 million (broadly in line with our FX neutral definition, which is between -US$200 million and +US$200 million) Group revenues up 36.7% year-on-year on increased ARPU growth and larger subscriber base of Turkcell Turkey, higher contribution from international operations and techfin business Group EBITDA up 30.1% year-on-year leading to an EBITDA margin of 40.2% EBIT up 34.4% year-on-year resulting in an EBIT margin of 20.7% Net income at TRY803 million Healthy net leverage3 level at 1.2x Short FX position of US$204 million (broadly in line with our FX neutral definition, which is between -US$200 million and +US$200 million) Robust set of operational results: Turkcell Turkey subscriber base up by 577 thousand quarterly net additions 423 thousand quarterly mobile postpaid net additions; postpaid subscriber base share at 66.7% 59 thousand quarterly mobile prepaid net additions 50 thousand fixed subscriber net additions; 53 thousand fiber net additions 186 thousand new fiber homepasses in line with our annual expansion plan Mobile ARPU4 growth of 19.8%; residential fiber ARPU growth of 21.0% Average monthly data usage of 4.5G subscribers at 14.7 GB in Q122; smartphone penetration at 86% Digital channel’s share5 in sales at 21.8% Turkcell Turkey subscriber base up by 577 thousand quarterly net additions 423 thousand quarterly mobile postpaid net additions; postpaid subscriber base share at 66.7% 59 thousand quarterly mobile prepaid net additions 50 thousand fixed subscriber net additions; 53 thousand fiber net additions 186 thousand new fiber homepasses in line with our annual expansion plan Mobile ARPU4 growth of 19.8%; residential fiber ARPU growth of 21.0% Average monthly data usage of 4.5G subscribers at 14.7 GB in Q122; smartphone penetration at 86% Digital channel’s share5 in sales at 21.8% 2022 guidance6 maintained; revenue growth target of around 30%, EBITDA target of around TRY19 billion, and operational capex over sales ratio7 target of between 20% - 21% (1) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets at fair value through other comprehensive income” reported under current and non-current assets, and “financial assets at amortized cost”. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. (4) Excluding M2M (5) Share of all sales from digital channels (including voice, data, services & smart devices) in Turkcell Turkey consumer sales (excluding fixed business) and equipment related revenues in other segment. (6) Please note that this paragraph contains forward-looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2021 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. (7) Excluding license fee For further details, please refer to our consolidated financial statements and notes as at March 31, 2022 via our website in the investor relations section (www.turkcell.com.tr). COMMENTS BY CEO, MURAT ERKAN We step into the year strongly, despite the challenges and uncertainties Challenging macroeconomic conditions caused by high inflation, increased energy and labor costs, disruptions to the supply chain all around the world, and international political risk from the Russia-Ukraine war stood out in the first quarter of 2022. And meanwhile, the effects of COVID-19 variants that unsettled the markets continued to be observed, despite being reduced by widespread vaccination programs. While the recovery in mobility started with the substantial easing of the COVID-19 restrictions in Turkey as of March, the main concerns that stood out in this quarter were the prevailing impact of currency depreciation in the last quarter of 2021 and the inflationary environment. Then, of course, we are deeply saddened by the humanitarian disaster resulting from the war that has been waged for the past two months in Ukraine, the home of our largest international subsidiary. Perceiving communication as a human right in all conditions, we continue the activities of our subsidiary lifecell, and ensure the continuity of our network for seamless communication. Prevailing conditions have made our company confront uncertainties. And yet we continued to improve our growth, managing operations effectively with our diversified business model and proactive risk management, which we implemented decisively in the first quarter of the year. Accordingly, our consolidated revenues increased by 36.7% year-on-year to TRY10.7 billion in the first quarter of the year. While our strong growth was driven mainly by Turkcell Turkey’s performance, the international and techfin segments, which grew by 101.4% and 58.5% year-on-year, respectively, also supported growth. EBITDA1 increased by 30.1% to TRY4.3 billion, with an EBITDA margin of 40.2%. Net profit was at TRY803 million. These results, realized in line with our guidance, enabled us to take a strong step into a challenging 2022, which will be shaped within the framework of global political and economic uncertainties. We serve 40 million Turkcell subscribers Since December 2021, we have sought to reflect the cost pressures caused by energy, commodities and labor, as well as the effects of the inflationary environment in our prices. Within a similar conjuncture in the first quarter, we maintained our focus on inflationary pricing, introducing price increases in fixed broadband services in January and also in mobile services in March. While rationalization prevailed in the market as our price increases were followed by those of competitors, the decline in the MNP market also continued. This quarter we also saw an acceleration in upsell of our existing customers to higher packages. Confirming our customer-driven approach, analysis of our customers’ behavior indicates that the churn rate continued to decrease with the timely actions we have taken. We reached 40 million subscribers with 577 thousand net additions in the first quarter of the year. Our robust and fast network, value-oriented pricing strategy and brand loyalty have been instrumental in customers opting for Turkcell. On the mobile front, we achieved 482 thousand net additions, recording 423 thousand postpaid and 59 thousand prepaid subscriber net additions. Our postpaid customer base reached 24.1 million, comprising 66.7% of the total mobile subscriber base. Besides the price increases, mobile blended ARPU (excluding M2M) accelerated compared to the previous quarter, rising 19.8% on the back of increased mobility, upsell efforts and a larger postpaid subscriber base. Reflecting the success of our customer-driven approach, the average monthly churn rate was realized at 1.6%, the lowest level of the past four years. We observe that customers’ need for high-speed and high-quality fixed internet connection has continued in the post-pandemic period. Our fiber subscriber base registered 53 thousand quarterly net additions thanks to our superior network quality and extensive sales channels, while our total fixed broadband subscribers exceeded 2.7 million. The subscribers of our IPTV service, which is in 65 out of every 100 households among our residential fiber customers, exceeded 1.1 million with 44 thousand quarterly net additions. Residential fiber ARPU rose by 21.0% with price increases, upsell to faster packages and increased TV+ penetration. With the target of increasing our fiber rollout, in the first quarter we reached 186 thousand new fiber homepasses in line with our plans. We meet the needs of our customers with our strategic focus areas that increase our inclusivity We continue to stand by our customers with the instant messaging, TV and music platforms, personal cloud services and e-mail services in our digital services portfolio, the engine of our digital transformation. BiP, which has been downloaded more than 92 million times to date, and the international recognition of which continues to rise day by day, had one out of every five of its active users from abroad. TV+, our digital TV platform, has accelerated its mobile subscriber additions in this quarter thanks to enriched content, its accessibility through smart televisions and the firm growth in our TV+ Ready product. The paid users of Lifebox, through which we provide a cloud-based storage service, increased by 50% compared to the same period of last year. Additionally, we launched the user-friendly "Office Collaboration" feature in Lifebox Business, where we serve approximately one thousand corporate customers. With all these developments, in the first quarter, the stand-alone revenues of our Digital Services & Solutions increased by 15.3% to TRY424 million and Digital OTT service revenues increased 46.3% year-on-year. The total revenues of Digital Business Services, the leader in the IT Services market, rose 75.2% year-on-year to TRY791 million. The biggest contributor to this increase was the acceleration of end-to-end system integration projects. In the first quarter of the year, we set a fresh record with close to a thousand new contracts signed. We have put into practice 2,310 system integration and managed services projects to date; from those we have a contract value (backlog) of TRY1.9 billion to be collected over the coming periods. In line with the demand for digital transformation accelerated by the COVID-19 pandemic, the revenues of data center and cloud technologies services almost doubled in the first quarter. We continue efforts to meet this demand with a larger capacity and to transform our country into a leading hub of data and cloud technologies. Within this scope, we will focus on capacity increases at our new generation data centers in the upcoming period. We remain the pioneer of the Techfin industry with our expanding product range Financell and Paycell had a strong quarter, contributing to the growth of our techfin business revenues, which increased by 58.5% in the first quarter of 2022. Financell is the pioneer of financing for technological needs. And as well as serving individual customers, it continues to create innovative financial solutions that increase SME competitiveness with the Digital Transformation Financing program that strengthens their digital infrastructures. Reaching a loan portfolio of TRY2.3 billion with an annual increase of 24%, Financell's revenues increased by 50.0% in this quarter with the contribution of the insurance business. With its superior technology and wide range of solutions Paycell, the payment platform that has swiftly adapted to new payment habits, notably transformed during the pandemic, has seen another successful quarter registering 67.2% growth. Paycell’s 3-month active users reached 6.9 million and transaction volume reached TRY6.7 billion, tripling on an annual basis. The transaction volume of “Pay Later” allowing expenditures to be reflected on Turkcell invoices, doubled and the transaction volume over Paycell Card rose to eightfold of the same period of last year. We accelerated our efforts to expand our POS service to support an increased number of merchants, and have increased the number of Android POS by 66% to 9.6 thousand since the previous quarter. Considering the virtual POS service, the transaction volume of our POS solutions has doubled compared to the previous quarter to TRY2.1 billion. We continue to stand by our customers in difficult conditions During these days of intense global and macroeconomic challenges, we, as Turkcell, aim to provide better service to our customers day by day by maintaining our innovative approach. Despite the difficulties we have experienced, especially in Ukraine, we maintain our 2022 guidance shared in February, thanks to our accelerated performance in Turkey. I extend my thanks to all our colleagues for their contribution that has enabled our strong start to the year, and to our Board of Directors for their confidence in us and invaluable support. I also express our gratitude to our customers and business partners, ever with us on our journey to success. (1) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate Adjusted EBITDA and it’s reconciliation to net income. FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group Profit & Loss Statement (million TRY) Q121 Q421 Q122 y/y% q/q% Revenue 7,826.5 10,191.5 10,695.0 36.7% 4.9% Cost of revenue1 (3,913.0) (5,019.9) (5,493.5) 40.4% 9.4% Cost of revenue1/Revenue (50.0%) (49.3%) (51.4%) (1.4pp) (2.1pp) Gross Margin1 50.0% 50.7% 48.6% (1.4pp) (2.1pp) Administrative expenses (199.4) (276.8) (303.7) 52.3% 9.7% Administrative expenses/Revenue (2.5%) (2.7%) (2.8%) (0.3pp) (0.1pp) Selling and marketing expenses (358.2) (576.6) (540.7) 50.9% (6.2%) Selling and marketing expenses/Revenue (4.6%) (5.7%) (5.1%) (0.5pp) 0.6pp Net impairment losses on financial and contract assets (49.5) (106.7) (55.1) 11.3% (48.4%) EBITDA2 3,306.5 4,211.6 4,302.0 30.1% 2.1% EBITDA Margin 42.2% 41.3% 40.2% (2.0pp) (1.1pp) Depreciation and amortization (1,656.0) (2,075.5) (2,084.5) 25.9% 0.4% EBIT3 1,650.5 2,136.1 2,217.5 34.4% 3.8% EBIT Margin 21.1% 21.0% 20.7% (0.4pp) (0.3pp) Net finance income / (costs) (207.1) (1,769.5) (1,259.4) 508.1% (28.8%) Finance income 1,601.9 2,643.6 319.9 (80.0%) (87.9%) Finance costs (1,809.0) (4,413.0) (1,579.3) (12.7%) (64.2%) Other income / (expense) (12.1) (45.2) 14.3 n.m. n.m. Non-controlling interests (0.0) (0.1) (0.0) n.m. n.m. Share of profit of equity accounted investees 17.7 63.6 (23.4) (232.2%) (136.8%) Income tax expense (344.1) 999.7 (146.0) (57.6%) (114.6%) Net Income 1,104.9 1,384.6 802.9 (27.3%) (42.0%) (1) Excluding depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. Revenue of the Group grew by 36.7% year-on-year in Q122. This was driven mainly by growth in Turkcell Turkey revenues thanks to the expanding subscriber base, as well as price adjustments to reflect inflationary impacts and upsell efforts leading to higher ARPU growth compared to previous quarters. A strong contribution from Turkcell International, continued momentum in techfin and higher energy business revenues also supported the topline in the first quarter. Turkcell Turkey revenues, comprising 74.3% of Group revenues, rose 33.0% year-on-year in Q122 to TRY7,950 million (TRY5,979 million). - Consumer segment revenues grew 26.9% year-on-year with the contribution of price adjustments to reflect inflationary impacts, upsell efforts, and a growing subscriber base. - Corporate segment revenues rose 42.7% year-on-year, driven mainly by the strong momentum of digital business services, which grew 75.2% year-on-year with all-time high quarterly new contracts. - Standalone digital services revenues, registered as part of the consumer and corporate segments, grew 15.3% year-on-year in Q122. The slower growth compared to previous quarters resulted from the negative impact of the regulatory decision that amended the usage conditions of our voicemail service, the revenues of which are reported under digital services. Excluding this impact, the growth would have been 36%. - Wholesale revenues rose 71.3% year-on-year to TRY583 million (TRY340 million), mainly due to the positive impact of currency movements, as well as the traffic increase and capacity upgrades of customers. Turkcell International revenues, constituting 13.3% of Group revenues, rose 101.4% year-on-year to TRY1,427 million (TRY708 million). lifecell was the main driver of this performance as the impact of the current situation on business remained limited in the first quarter. Currency movements also had a positive impact on Turkcell International revenues. Techfin segment revenues, comprising 3.3% of Group revenues, rose 58.5% to TRY353 million (TRY223 million). The 67.2% rise in Paycell revenues and 50.0% growth of our financing business, Financell, were the drivers of this performance. Please refer to the Techfin section for details. Other subsidiaries' revenues, at 9.0% of Group revenues, mainly including consumer electronics sales, call center revenues and revenues from energy business, increased 5.3% to TRY966 million (TRY917 million). The decline in equipment revenues was more than compensated for by the increase in call center and energy business revenues. Cost of revenue (excluding depreciation and amortization) increased to 51.4% (50.0%) year-on-year as a percentage of revenues in Q122. This was due mainly to the rise in radio expenses (2.2pp), mostly related to increasing energy prices, employee expenses (0.8pp), and other cost items (1.1pp) despite the decline in cost of goods sold (2.7pp) as a percentage of revenues. Administrative Expenses rose to 2.8% (2.5%) year-on-year as a percentage of revenues in Q122. This was led by higher employee expenses (0.2pp) and other cost items (0.1pp) as a percentage of revenues. Selling and Marketing Expenses increased to 5.1% (4.6%) year-on-year as a percentage of revenues in Q122. This was due mainly to the rise in employee expenses (0.3pp), selling expenses (0.1pp), and other expenses (0.1pp) as a percentage of revenues. Net impairment losses on financial and contract assets was at 0.5% (0.6%) as a percentage of revenues in Q122. EBITDA1 rose by 30.1% year-on-year in Q122 leading to an EBITDA margin of 40.2% (42.2%). - Turkcell Turkey’s EBITDA rose 20.3% year-on-year to TRY3,286 million (TRY2,731 million), leading to an EBITDA margin of 41.3% (45.7%). Rising energy prices and higher employee expenses pressured the profitability of this segment. - Turkcell International EBITDA increased 107.3% year-on-year to TRY714 million (TRY345 million), driving an EBITDA margin of 50.1% (48.6%) on a 1.5pp improvement. - Techfin segment EBITDA rose 31.8% year-on-year to TRY182 million (TRY138 million) with an EBITDA margin of 51.5% (62.0%). The lower EBITDA margin was due mainly to the higher funding costs of Financell, and the changing revenue mix and higher marketing expenses of Paycell. - The EBITDA of other subsidiaries was at TRY121 million (TRY93 million). Depreciation and amortization expenses increased 25.9% year-on-year in Q122. Net finance expense increased to TRY1,259 million (TRY207 million) year-on-year in Q122. The decline in swap rates in the first quarter, which negatively impacted fair valuation of our short-term derivative instruments, and further depreciation of the TRY resulted in higher FX losses. Lower interest income on time deposits and a higher interest expense on borrowings also led to a higher net finance expense. See Appendix A for details of net foreign exchange gain and loss. Income tax expense declined to TRY146 million (TRY344 million) in Q122. This was driven by a deferred tax income of TRY11 million registered in Q122 compared to a deferred tax expense of TRY181 million reported in Q121. Net income of the Group was TR803 million (TRY1,105 million) in Q122. Despite the strong operational performance, the decline in net income resulted mainly from higher net finance expense incurred in the quarter. (1) EBITDA is a non-GAAP financial measure. See page 15 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income Total cash & debt: Consolidated cash as of March 31, 2022, increased to TRY18,804 million from TRY18,629 million as of December 31, 2021. Our cash position was positively impacted by currency movements during the quarter. However, we switched around US$50 million of our hard currency cash to FX Protected TL Time Deposits, which is reported under the “Financial assets at fair value through other comprehensive income” item on our balance sheet. Excluding FX swap transactions, 76% of our cash is in US$, 12% in EUR, and 10% in TRY. Consolidated debt as of March 31, 2022, increased to TRY40,855 million from TRY36,778 million as of December 31, 2021, due mainly to the impact of currency movements. TRY2,984 million of our consolidated debt is comprised of lease obligations. Please note that 49% of our consolidated debt is in US$, 26% in EUR, 3% in CNY, 7% in UAH, and 14% in TRY. Net debt1 as of March 31, 2022, was at TRY19,449 million with a net debt to EBITDA ratio of 1.2 times. Excluding finance company customer loans, our telco only net debt was at TRY17,100 million with a leverage of 1.1 times. Turkcell Group had a short FX position of US$204 million as at the end of the first quarter (Please note that this figure takes hedging portfolio and advance payments into account). The short FX position of US$204 million is broadly in line with our FX neutral definition, which is between -US$200 million and +US$200 million. Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY2,918 million in Q122. For Q122, operational capital expenditures (excluding license fees) at the Group level were at 17.3% of total revenues. Capital expenditures (million TRY) Q121 Q421 Q122 Operational Capex 1,467.9 2,686.3 1,845.3 License and Related Costs - - - Non-operational Capex (Including IFRS15 & IFRS16) 789.4 1,611.1 1,073.1 Total Capex 2,257.3 4,297.4 2,918.3 (1) Starting from Q421, we have revised the definition of our net debt calculation to include "financial assets at fair value through other comprehensive income” reported under current and non-current assets, and “financial assets at amortized cost”. We believe that these assets are highly liquid and can be easily converted to cash without significant change in value. Summary of Operational Data Q121 Q421 Q122 y/y% q/q% Number of subscribers (million) 37.4 39.4 40.0 7.0% 1.5% Mobile Postpaid (million) 22.4 23.7 24.1 7.6% 1.7% Mobile M2M (million) 2.9 3.3 3.5 20.7% 6.1% Mobile Prepaid (million) 11.6 12.0 12.0 3.4% - Fiber (thousand) 1,714.3 1,887.8 1,941.0 13.2% 2.8% ADSL (thousand) 716.3 754.9 755.7 5.5% 0.1% Superbox (thousand)1 614.6 603.6 612.4 (0.4%) 1.5% Cable (thousand) 64.9 54.6 51.1 (21.3%) (6.4%) IPTV (thousand) 920.7 1,082.2 1,126.4 22.3% 4.1% Churn (%)2 Mobile Churn (%)3 1.8% 2.5% 1.6% (0.2pp) (0.9pp) Fixed Churn (%) 1.6% 1.6% 1.4% (0.2pp) (0.2pp) ARPU (Average Monthly Revenue per User) (TRY) Mobile ARPU, blended 46.0 54.6 54.6 18.7% - Mobile ARPU, blended (excluding M2M) 49.9 59.5 59.8 19.8% 0.5% Postpaid 57.8 68.2 67.0 15.9% (1.8%) Postpaid (excluding M2M) 65.8 78.3 77.3 17.5% (1.3%) Prepaid 23.4 28.6 29.8 27.4% 4.2% Fixed Residential ARPU, blended 73.9 82.2 88.9 20.3% 8.2% Residential Fiber ARPU 74.3 83.0 89.9 21.0% 8.3% Average mobile data usage per user (GB/user) 12.6 13.3 13.4 6.3% 0.8% Mobile MoU (Avg. Monthly Minutes of usage per subs) blended 532.0 548.7 531.1 (0.2%) (3.2%) (1) Superbox subscribers are included in mobile subscribers. (2) Churn figures represent average monthly churn figures for the respective quarters. (3) In Q117, our churn policy was revised to extend from 9 months to 12 months (the period at the end of which we disconnect prepaid subscribers who have not topped up above TRY10). Additionally, under our revised policy, prepaid customers who last topped up before March are disconnected at the latest by year-end. As a regulatory requirement, we started to disconnect prepaid lines in accordance with the new ICTA regulation, which requires deactivation of prepaid lines which lack residency documents by the 6th month of subscription starting from 2019. Furthermore, as required by the ICTA, the line of a deceased customer should either be transferred to a successor/another user or terminated. Lines, which are not transferred or terminated, are to be disconnected at the end of seven months. In Q122, we made a solid start to the year towards realizing our ambition of 1-million net subscriber additions in 2022. Accordingly, we registered 577 thousand quarterly net additions to our subscriber base, which reached 40.0 million. This robust performance was driven by our customer-centric approach and rich value proposition to our customers. On the mobile front, our subscriber base reached 36.1 million on 482 thousand quarterly net additions in Q122. The rise was driven mainly by 423 thousand quarterly net additions to the postpaid subscriber base, which reached 66.7% (65.8%) of total mobile subscribers. Meanwhile, in Q122, we had 59 thousand net additions in the prepaid segment. On the fixed front, our fiber subscriber base expanded with 53 thousand quarterly net additions supported by our focus on fiber network investments, and the strong demand for high-speed and quality broadband connections. Total fixed subscribers exceeded 2.7 million on 50 thousand quarterly net additions. Meanwhile, IPTV subscribers exceeded 1.1 million on 44 thousand quarterly net additions. In Q122, the average mobile monthly churn rate declined to 1.6%, the lowest level of the past four years. The decline resulted mainly from our customer-focused approach, our analytical capabilities supporting customer retention, and our pricing actions, which led to a more rational competitive environment. The average monthly fixed churn rate decreased to 1.4% in Q122. Our superior customer experience resulting from the speed and quality we offer on our fiber infrastructure plays an important role in maintaining a healthy churn level. Our mobile ARPU (excluding M2M) rose 19.8% year-on-year in Q122, driven mainly by pricing adjustments to reflect inflationary impacts, upsell efforts, and a larger postpaid subscriber share. Our residential fiber ARPU growth was 21.0% on a year-on-year basis in Q122. This was driven mainly by price adjustments and upsell to higher tariffs, as well as increased IPTV penetration, at 65% in Q122. Average monthly mobile data usage per user rose 6.3% in Q122 to 13.4 GB. The average mobile data usage of 4.5G users reached 14.7 GB in Q122. Total smartphone penetration on our network reached 86% in Q122 on a 2.4pp year-on-year rise. 92.4% of those smartphones were 4.5G compatible. TURKCELL INTERNATIONAL lifecell1 Financial Data Q121 Q421 Q122 y/y% q/q% Revenue (million UAH) 1,899.2 2,406.4 2,306.8 21.5% (4.1%) EBITDA (million UAH) 1,076.8 1,319.1 1,292.4 20.0% (2.0%) EBITDA margin (%) 56.7% 54.8% 56.0% (0.7pp) 1.2pp Net income (million UAH) 83.2 237.9 209.4 151.7% (12.0%) Capex (million UAH) 572.4 1,319.3 711.6 24.3% (46.1%) Revenue (million TRY) 508.8 996.6 1,112.6 118.7% 11.6% EBITDA (million TRY) 288.6 544.5 623.6 116.1% 14.5% EBITDA margin (%) 56.7% 54.6% 56.0% (0.7pp) 1.4pp Net income (million TRY) 22.4 98.1 101.0 350.9% 3.0% (1) Since July 10,2015, we hold a 100% stake in lifecell. lifecell (Ukraine) revenues rose 21.5% year-on-year in Q122 in local currency terms with an EBITDA margin of 56.0%. lifecell continued to register positive net income in Q122. lifecell revenues in TRY terms grew 118.7% year-on-year in Q122 with a strong operational performance and the positive impact of currency movements. lifecell Operational Data Q121 Q421 Q122 y/y% q/q% Number of subscribers (million)2 9.2 10.1 10.2 10.9% 1.0% Active (3 months)3 8.0 9.2 8.9 11.3% (3.3%) MOU (minutes) (12 months) 177.2 179.0 170.0 (4.1%) (5.0%) ARPU (Average Monthly Revenue per User), blended (UAH) 68.1 80.2 75.6 11.0% (5.7%) Active (3 months) (UAH) 78.7 88.5 84.3 7.1% (4.7%) (2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. (3) Active subscribers are those who in the past three months made a revenue generating activity. lifecell’s focus has been on ensuring the safety of its employees and continuing to provide critical telecom services that the Ukrainian people need during this difficult time. None of our employees have been harmed since the beginning of the war. Our network is largely operational, and we continue to provide services to our customers in Ukraine. There has been no material damage or outage in the core network. Around 10% of our nearly 9 thousand base stations are temporarily down on average daily due to energy cut-offs. The national roaming among the three operators also enables the continuity of communication in the country. The portion of telecommunication equipment and revenues earned in the region currently invaded by Russia is insignificant compared to our total telecommunication equipment and our total revenue earned in Ukraine. Around 60% of our stores are open nationwide daily average as of the end of March. Refills were down in March by around 20% compared to the average of December 2021 and January 2022. There has been no interruption to our ICT systems, such as billing and CRM. The banking system in the country continues to operate and day-to-day operations, including payments and collections are exercised normally. We have rolled over our debt during the quarter as access to local currency liquidity is still available. Meanwhile, our cash position is conducive to sustain the operations. We closely monitor the developments in Ukraine and the potential impact on our operations. We continuously update our corporate action plans to ensure safety and health of our employees and maintain our operations. At this point, we have no way of predicting either the progress or the outcome of the situation. The continuation of the situation going forward may impact our consolidated financial condition, results of operations and cash flows. BeST1 Q121 Q421 Q122 y/y% q/q% Number of subscribers (million) 1.4 1.5 1.5 7.1% - Active (3 months) 1.1 1.1 1.1 - - Revenue (million BYN) 38.0 35.6 34.3 (9.7%) (3.7%) EBITDA (million BYN) 9.2 10.1 10.7 16.3% 5.9% EBITDA margin (%) 24.2% 28.5% 31.1% 6.9pp 2.6pp Net loss (million BYN) (8.1) (7.5) (8.5) 4.9% 13.3% Capex (million BYN) 18.0 16.7 21.5 19.4% 28.7% Revenue (million TRY) 109.4 157.3 175.8 60.7% 11.8% EBITDA (million TRY) 26.5 44.7 54.6 106.0% 22.1% EBITDA margin (%) 24.2% 28.4% 31.1% 6.9pp 2.7pp Net loss (million TRY) (23.3) (32.9) (43.7) 87.6% 32.8% (1) BeST, in which we hold an 80% stake, has operated in Belarus since July 2008. BeST revenues declined 9.7% year-on-year in local currency terms. This was due mainly to a contraction in handset sales despite the increase in voice, messaging, and data revenues. BeST registered year-on-year EBITDA growth of 16.3% in Q122, which led to an EBITDA margin of 31.1%. The higher EBITDA margin resulted mainly from the decline in lower margin handset sales. BeST’s revenues in TRY terms grew 60.7% year-on-year in Q122 with an EBITDA margin of 31.1%. BeST continued to expand its 4G network in Q122. BeST provides LTE service to its customers in 6 regions over 3.6 thousand sites, growing by over 200 additions during the quarter. In Q122, BeST also continued to expand its rural coverage launching its LTE800 services in Brest. The expanding LTE coverage allows BeST to increase the penetration of its 4G subscribers. Accordingly, 4G users comprised 73% of the 3-month active subscriber base as of Q122. Meanwhile, the average monthly data consumption of subscribers rose 22% year-over-year to 15.4 GB. In March 2022, the EU, US, UK and certain other countries imposed new sanctions on Belarusian persons, entities and export controls on Belarus. These may affect the economic climate in Belarus and our access to imported equipment and software. These factors may impact the financial condition and operating performance of our operations in Belarus. Kuzey Kıbrıs Turkcell2 (million TRY) Q121 Q421 Q122 y/y% q/q% Number of subscribers (million) 0.5 0.6 0.6 20.0% - Revenue 61.9 90.1 96.9 56.5% 7.5% EBITDA 24.5 35.3 38.3 56.3% 8.5% EBITDA margin (%) 39.6% 39.2% 39.5% (0.1pp) 0.3pp Net income 9.9 25.5 21.8 120.2% (14.5%) Capex 15.7 26.6 34.9 122.3% 31.2% (2) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999 Kuzey Kıbrıs Turkcell revenues increased 56.5% year-on-year in Q122 on the back of the rise in mobile voice and roaming revenues with increased mobility, as well as fixed broadband and handset sales revenues. The EBITDA of Kuzey Kıbrıs Turkcell rose 56.3% yielding a 39.5% EBITDA margin. TECHFIN Paycell Financial Data (million TRY) Q121 Q421 Q122 y/y% q/q% Revenue 98.1 139.6 164.0 67.2% 17.5% EBITDA 53.3 64.3 72.9 36.8% 13.4% EBITDA Margin (%) 54.4% 46.1% 44.5% (9.9pp) (1.6pp) Net Income 40.2 48.7 49.1 22.1% 0.8% Paycell continued its strong growth momentum in Q122, leveraging the demand for digital payments with its diverse product portfolio including mobile payment services, as well as Paycell card and payment facilitation solutions. Accordingly, the revenues of Paycell rose 67.2% year-on-year in Q122. Paycell’s EBITDA rose 36.8% year-on-year, leading to an EBITDA margin of 44.5% in Q122. The changing revenue mix, plus selling and marketing efforts were the main factors behind the year-on-year decline in EBITDA margin. The transaction volumes across Paycell’s product portfolio continued to rise in Q122. The Pay Later service transaction volume (non-group) doubled year-on-year to TRY718 million. This was driven by a 42% increase in the 3-month active users of the Pay Later service to 4.1 million and their increased usage. Meanwhile, Paycell continued to penetrate its payment facilitation services during the quarter. Accordingly, the transaction volume over physical and virtual POS services reached TRY2.1 billion in Q122, almost doubling compared to previous quarter. The Paycell Card transaction volume increased to TRY1.6 billion in Q122, almost to eightfold of the transaction volume in Q121. Overall, Paycell's total transaction volume across all services rose 166% to TRY6.7 billion, driven mainly by the 32% year-on-year rise in 3-month active users to 6.9 million and their increased usage. Financell Financial Data (million TRY) Q121 Q421 Q122 y/y% q/q% Revenue 130.0 190.4 195.0 50.0% 2.4% EBITDA 85.3 128.9 110.0 29.0% (14.7%) EBITDA Margin (%) 65.6% 67.7% 56.4% (9.2pp) (11.3pp) Net Income 95.0 109.5 65.7 (30.8%) (40.0%) Financell’s revenues grew 50.0% year-on-year in Q122. A larger loan portfolio and a higher average interest rate on the loan portfolio, compared to the same period of the last year, were the main drivers of this growth. Financell reported 29.0% year-on-year EBITDA growth. The decline in EBITDA margin was due to the rise in funding costs and lower receivable sales compared to Q121. Financell’s net income declined 30.8% year-on-year due mainly to the fair valuation impact of its derivative instrument portfolio. Financell’s loan portfolio increased to TRY2.3 billion in Q122, from TRY1.9 billion in Q121, driven by higher lending to the corporate segment and greater mobility. Financell’s cost of risk has slightly increased from 1.0% in Q121 to 1.5% in Q122, mainly due to a lower amount of receivable sales and expansion in the loan portfolio. Turkcell Group Subscribers Turkcell Group registered subscribers amounted to approximately 52.3 million as of March 31, 2022. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell and BeST, as well as those of Kuzey Kıbrıs Turkcell. Turkcell Group Subscribers Q121 Q421 Q122 y/y% q/q% Turkcell Turkey subscribers (million)1 37.4 39.4 40.0 7.0% 1.5% lifecell (Ukraine) 9.2 10.1 10.2 10.9% 1.0% BeST (Belarus) 1.4 1.5 1.5 7.1% - Kuzey Kıbrıs Turkcell 0.5 0.6 0.6 20.0% - Turkcell Group Subscribers (million) 48.6 51.6 52.3 7.6% 1.4% (1) Subscribers to more than one service are counted separately for each service. OVERVIEW OF THE MACROECONOMIC ENVIRONMENT The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below. Q121 Q421 Q122 y/y% q/q% GDP Growth (Turkey) 7.3% 9.1% n.a n.a n.a Consumer Price Index (Turkey) (yoy) 16.2% 36.1% 61.1% 44.9pp 25.0pp US$ / TRY rate Closing Rate 8.3260 13.3290 14.6458 75.9% 9.9% Average Rate 7.5086 11.0757 13.8778 84.8% 25.3% EUR / TRY rate Closing Rate 9.7741 15.0867 16.3086 66.9% 8.1% Average Rate 9.0683 12.6591 15.5203 71.1% 22.6% US$ / UAH rate Closing Rate 27.89 27.28 29.2549 4.9% 7.2% Average Rate 28.07 26.81 28.7685 2.5% 7.3% US$ / BYN rate Closing Rate 2.6242 2.5481 2.9732 13.3% 16.7% Average Rate 2.6112 2.5019 2.7118 3.9% 8.4% RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results. Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes translation gain/(loss), finance income, finance expense, share of profit of equity accounted investees, gain on sale of investments, minority interest and other income/(expense). Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of our results of operations, as reported under IFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with IFRS as issued by the IASB, to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with IFRS as issued by the IASB. Turkcell Group (million TRY) Q121 Q421 Q122 y/y% q/q% Adjusted EBITDA 3,306.5 4,211.6 4,302.0 30.1% 2.1% Depreciation and amortization (1,656.0) (2,075.5) (2,084.5) 25.9% 0.4% EBIT 1,650.5 2,136.1 2,217.5 34.4% 3.8% Finance income 1,601.9 2,643.6 319.9 (80.0%) (87.9%) Finance costs (1,809.0) (4,413.0) (1,579.3) (12.7%) (64.2%) Other income / (expense) (12.1) (45.2) 14.3 n.m n.m. Share of profit of equity accounted investees 17.7 63.6 (23.4) (232.2%) (136.8%) Consolidated profit before income tax & minority interest 1,449.1 385.0 948.9 (34.5%) 146.5% Income tax expense (344.1) 999.7 (146.0) (57.6%) (114.6%) Consolidated profit before minority interest 1,104.9 1,384.7 802.9 (27.3%) (42.0%) NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2022. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2021 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers. ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, and Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY10.7 billion revenue in Q122 with total assets of TRY75.3 billion as of March 31, 2022. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr. Appendix A – Tables Table: Net foreign exchange gain and loss details Million TRY Q121 Q421 Q122 y/y% q/q% Net FX loss before hedging (1,618.1) (4,137.2) (1,077.5) (33.4%) (74.0%) Swap interest income / (expense) (114.5) (89.2) (70.8) (38.2%) (20.6%) Fair value gain on derivative financial instruments 1,456.1 2,613.3 58.8 (96.0%) (97.7%) Net FX gain / (loss) after hedging (276.5) (1,613.1) (1,089.5) 294.0% (32.5%) Table: Income tax expense details Million TRY Q121 Q421 Q122 y/y% q/q% Current tax expense (163.2) (106.6) (157.3) (3.6%) 47.6% Deferred tax income / (expense) (181.0) 1,106.3 11.3 (106.2%) (99.0%) Income Tax expense (344.1) 999.7 (146.0) (57.6%) (114.6%) 2021 2021 2021 2022 5,978.6 7,689.4 27,223.5 7,949.7 708.2 1,286.4 3,750.1 1,426.6 222.6 329.9 1,075.7 352.9 917.1 885.9 3,871.2 965.9 7,826.5 10,191.5 35,920.5 10,695.0 (5,568.9) (7,095.4) (25,230.0) (7,578.0) 2,257.6 3,096.2 10,690.6 3,117.0 (199.4) (276.8) (919.0) (303.7) (358.2) (576.6) (1,778.5) (540.7) (12.1) (45.2) (370.0) 14.3 (49.5) (106.7) (271.2) (55.1) 1,638.4 2,090.9 7,351.9 2,231.7 (1,809.0) (4,413.0) (6,492.9) (1,579.3) 1,601.9 2,643.6 3,592.0 319.9 17.7 63.6 90.1 (23.4) 1,449.1 385.0 4,541.1 948.9 (344.1) 999.7 490.2 (146.0) 1,104.9 1,384.7 5,031.3 802.9 0.0 0.0 0.0 0.0 (0.0) (0.1) (0.2) (0.0) 1,104.9 1,384.6 5,031.1 802.9 0.51 0.63 2.30 0.37 28.8% 30.4% 29.8% 29.1% 3,306.5 4,211.6 15,013.8 4,302.0 2,257.3 4,297.4 11,479.4 2,918.3 1,467.9 2,686.3 7,629.8 1,845.3 0.0 0.0 0.0 0.0 789.4 1,611.1 3,849.6 1,073.1 13,467.0 18,628.7 18,628.7 18,804.0 55,987.2 70,682.6 70,682.6 75,324.6 19,074.5 27,929.7 27,929.7 30,105.2 24,895.8 36,778.1 36,778.1 40,855.4 34,253.0 48,120.4 48,120.4 51,944.9 21,734.3 22,562.3 22,562.3 23,379.7 (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 15 For further details, please refer to our consolidated financial statements and notes as at 31 March 2022 on our website 2021 2021 2021 2022 5,978.6 7,689.4 27,223.5 7,949.7 708.2 1,286.4 3,750.1 1,426.6 222.6 329.9 1,075.7 352.9 917.1 885.9 3,871.2 965.9 7,826.5 10,191.5 35,920.5 10,695.0 (5,568.9) (7,095.4) (25,230.0) (7,578.0) 2,257.6 3,096.2 10,690.6 3,117.0 (199.4) (276.8) (919.0) (303.7) (358.2) (576.6) (1,778.5) (540.7) 698.7 4,355.8 6,409.6 1,494.1 2,398.8 6,598.6 14,402.7 3,766.7 (49.5) (106.7) (271.2) (55.1) 50.7 402.6 464.1 299.2 (47.6) 72.1 0.0 0.0 17.7 63.6 90.1 (23.4) 2,370.1 7,030.2 14,685.7 3,987.3 1,373.1 2,569.6 3,051.1 72.3 (2,294.1) (9,214.8) (13,195.7) (3,110.7) 1,449.1 385.0 4,541.1 948.9 (344.1) 999.7 490.2 (146.0) 1,104.9 1,384.7 5,031.3 802.9 0.0 0.0 0.0 0.0 1,104.9 1,384.7 5,031.3 802.9 (0.0) (0.1) (0.2) (0.0) 1,104.9 1,384.6 5,031.1 802.9 0.51 0.63 2.30 0.37 28.8% 30.4% 29.8% 29.1% 3,306.5 4,211.6 15,013.8 4,302.0 2,257.3 4,297.4 11,479.4 2,918.3 1,467.9 2,686.3 7,629.8 1,845.3 0.0 0.0 0.0 0.0 789.4 1,611.1 3,849.6 1,073.1 13,467.0 18,628.7 18,628.7 18,804.0 55,987.2 70,682.6 70,682.6 75,324.6 19,074.5 27,929.7 27,929.7 30,105.2 24,895.8 36,778.1 36,778.1 40,855.4 34,253.0 48,120.4 48,120.4 51,944.9 21,734.3 22,562.3 22,562.3 23,379.7
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Turkcell Files Its 2021 Annual Report on Form 20-F
ISTANBUL--(BUSINESS WIRE)--Turkcell (NYSE: TKC, BIST: TCELL) announced that it has filed its Annual Report on Form 20-F for the year ended December 31, 2021 with the United States Securities and Exchange Commission on April 14, 2022. The Company's Form 20-F and complete audited financial statements can be found at https://www.turkcell.com.tr/en/aboutus/investor-relations/quarterly-results Hard copy versions of the complete audited financial statements are available free of charge upon request from Turkcell Investor Relations Department at investor.relations@turkcell.com.tr and/or +90 212 313 1888.
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Turkcell Iletisim Hizmetleri: Fourth Quarter and Full Year 2021 Results
ISTANBUL--(BUSINESS WIRE)-- Contents HIGHLIGHTS QUARTER HIGHLIGHTS, 3 COMMENTS BY CEO, MURAT ERKAN, 5 FINANCIAL AND OPERATIONAL REVIEW FINANCIAL REVIEW OF TURKCELL GROUP, 8 OPERATIONAL REVIEW OF TURKCELL TURKEY, 12 TURKCELL INTERNATIONAL lifecell, 14 BeST, 15 Kuzey Kıbrıs Turkcell, 15 TECHFIN Paycell, 16 Financell, 16 TURKCELL GROUP SUBSCRIBERS, 17 OVERVIEW OF THE MACROECONOMIC ENVIRONMENT, 17 RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS, 18 Appendix A – Tables, 20 Please note that all fi
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Turkcell's earning a lot of lira -- and those lira are worth more today than yesterday.
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Hepsiburada's HepsiPay Announces Innovative Payments Partnership With Paycell, Fintech Arm Of Turkcell
ISTANBUL, Nov. 29, 2021 /PRNewswire/ -- HepsiPay, the digital open wallet of leading Turkish e-commerce platform Hepsiburada (NASDAQ: HEPS), today announces a new payment agreement with Paycell, the fintech subsidiary of Turkey's leading telecom operator, Turkcell (NYSE: TKC). The agreement will enable consumers to shop easily on the Hepsiburada platform without the need for a bank card by using the new direct carrier billing capability on HepsiPay Wallet.
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Turkcell is earning a lot of lira -- but lira aren't worth so much anymore.
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Turkcell Iletisim Hizmetleri A.S.'s (TKC) CEO Murat Erkan on Q3 2021 Results - Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S.'s (TKC) CEO Murat Erkan on Q3 2021 Results - Earnings Call Transcript
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Turkcell Iletisim Hizmetleri: Third Quarter 2021 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for September 30, 2021 refer to the same item as at September 30, 2020. For further details, please refer to our consolidated financial statements and notes as at and for September 30, 2021, which can be accessed via our website in the investor relations section (www.turkcell.com.tr). Selected financial information presented in this press release for the third quarter and nine months of 2020 and 2021 is based on IFRS figures in TRY terms unless otherwise stated. In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text. Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation. FINANCIAL HIGHLIGHTS TRY million Q320 Q321 y/y% 9M20 9M21 y/y% Revenue 7,649 9,354 22.3% 21,232 25,729 21.2% EBITDA1 3,394 4,030 18.7% 9,027 10,802 19.7% EBITDA Margin (%) 44.4% 43.1% (1.3pp) 42.5% 42.0% (0.5pp) EBIT2 1,877 2,212 17.8% 4,687 5,586 19.2% EBIT Margin (%) 24.5% 23.6% (0.9pp) 22.1% 21.7% (0.4pp) Net Income 1,211 1,429 18.0% 2,935 3,647 24.2% THIRD QUARTER HIGHLIGHTS Another quarter with strong set of financial results: Group revenues up 22.3% year-on-year on subscriber base expansion, increased data and digital services revenues as well as the contribution of international operations, techfin, and equipment revenues EBITDA up 18.7% year-on-year leading to an EBITDA margin of 43.1%; EBIT up 17.8% year-on-year resulting in an EBIT margin of 23.6% All time high quarterly net income of TRY1,429 million, up 18.0% year-on-year mainly on robust operational performance and disciplined financial risk management Free cash flow3 generation of TRY1,037 million; leverage at 0.9x; long FX position at US$122 million Group revenues up 22.3% year-on-year on subscriber base expansion, increased data and digital services revenues as well as the contribution of international operations, techfin, and equipment revenues EBITDA up 18.7% year-on-year leading to an EBITDA margin of 43.1%; EBIT up 17.8% year-on-year resulting in an EBIT margin of 23.6% All time high quarterly net income of TRY1,429 million, up 18.0% year-on-year mainly on robust operational performance and disciplined financial risk management Free cash flow3 generation of TRY1,037 million; leverage at 0.9x; long FX position at US$122 million Robust operational performance continued: Turkcell Turkey subscriber base up by 1.2 million quarterly net additions; highest quarterly net additions since Q207; 2.5 million total net additions in the first nine months of 2021 464 thousand quarterly mobile postpaid net additions; postpaid subscriber base share at 65.5% 643 thousand quarterly prepaid subscriber net additions supported by visitors to Turkey during the tourism season Mobile ARPU4 up 12.3% year-on-year mainly on upsell efforts and higher data and digital services usage Residential fiber ARPU growth of 10.0% year-on-year Data usage of 4.5G users at 15.2 GB in Q321; smartphone penetration at 84% Digital channels’ share in sales at 16.5%5 Turkcell Turkey subscriber base up by 1.2 million quarterly net additions; highest quarterly net additions since Q207; 2.5 million total net additions in the first nine months of 2021 464 thousand quarterly mobile postpaid net additions; postpaid subscriber base share at 65.5% 643 thousand quarterly prepaid subscriber net additions supported by visitors to Turkey during the tourism season Mobile ARPU4 up 12.3% year-on-year mainly on upsell efforts and higher data and digital services usage Residential fiber ARPU growth of 10.0% year-on-year Data usage of 4.5G users at 15.2 GB in Q321; smartphone penetration at 84% Digital channels’ share in sales at 16.5%5 We revise our 2021 guidance6. Accordingly, we now target revenue growth of ~20% up from ~18%, an EBITDA of ~TRY14.5 billion compared to ~TRY14.3 billion, and operational capex over sales ratio7 of ~21% which was 21% - 22% previously. (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Free cash flow calculation includes EBITDA and the following items as per IFRS cash flow statement; acquisition of property, plant and equipment, acquisition of intangible assets, change in operating assets/liabilities, payment of lease liabilities and income tax paid. (4) Excluding M2M (5) Share of sales from digital channels (including voice, data, services & smart devices) in Turkcell Turkey consumer sales (excluding fixed business) and equipment related revenues in other segment. (6) Please note that this paragraph contains forward looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2020 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. (7) Excluding license fee For further details, please refer to our consolidated financial statements and notes as at September 30, 2021 via our website in the investor relations section (www.turkcell.com.tr). COMMENTS BY CEO, MURAT ERKAN Record subscriber gain enabled strong results; we are raising our guidance As Turkcell Group, we have put our signature to successful results by once again maintaining our strong performance in the third quarter of 2021. This quarter has been a period of increased mobility with the end of COVID-19 restrictions, as Turks living abroad visited our country more frequently and foreign touristic visits were significantly above the level of the previous year, although they have yet to reach pre-pandemic levels. We remain the first choice of new and existing customers with our offers that touch their lives, our focus on quality, and with our diversified business model enriched by consumer/corporate digital services and techfin solutions. Thanks to our customer-centricity, innovative and extensive product portfolio, all further supported by increased mobility with widespread vaccination activities and seasonality, we have achieved the highest quarterly net subscriber addition level of the past 14 years with a net 1.2 million new subscribers in total in mobile, fixed broadband, and IPTV in this quarter. Thus, we cemented our leadership of the market by gaining a net 2.5 million subscribers in the first 9 months of the year. We have recorded 464 thousand postpaid and 643 thousand prepaid subscribers, making for a net of 1.1 million mobile subscribers in total in this quarter, by means of the rising visits of tourists and Turks residing abroad over the summer season, as well as the contribution of offerings we created leveraging our analytical capabilities, and our effectively employed digital channels. Mobile blended ARPU (excluding M2M) has reached TRY57.5 increasing 12.3% year over year on the back of rising data and digital service use in the summer season, upsell to higher packages supported by our smart data analysis models, and price adjustments. In the fixed broadband segment, we have added net 71 thousand subscribers in total, 60 thousand of which were fiber. This was achieved with the quality and high-speed infrastructure services we offered our customers to meet their fixed internet connection needs that have continued in the post-pandemic period, along with the rising fiber homepass and strong take-up rate trend. Accordingly, our fixed broadband subscriber base has exceeded 2.6 million. In this quarter, consolidated revenues reached TRY9.4 billion rising 22.3% on an annual basis. While EBITDA1 has reached TRY4 billion on a rise of 18.7%, the EBITDA margin was at 43.1%. Our net profit grew by 18.0% to TRY1.4 billion. With these results in the first nine months we have generated a revenue of TRY25.7 billion on growth of 21.2% and EBITDA of TRY10.8 billion with an increase of 19.7%. Considering our expectations in the last quarter we once again revise our full year guidance2 upwards. We have increased our revenue growth guidance to around 20% level and our nominal EBITDA guidance to around TRY14.5 billion for 2021. We update our operational capex to sales ratio3 target to around the 21% level. We take advance firmly in our three main strategic focus areas The stand-alone revenue of digital services, which are developed by Turkcell engineers with an aim of contributing to the digital transformation of Turkey and are offered under the Turkcell brand ecosystem, increased 31% to TRY435 million in this quarter. Stand-alone paid users have reached 3.6 million with a rise of 930 thousand year over year. BiP, offering uninterrupted communication with its robust infrastructure, launched new features in demand by our customers such as status sharing and group video call of up to 15 persons. The 3-month active users of BiP have reached 27.2 million by tripling from the same period of last year. Thanks to the offers that we have customized to meet customer needs, and to the product experience enhanced with rich content at an optimal price level, TV+ customers exceeded 1 million and the IPTV penetration among residential fiber users has reached 63.1%. Our TV+ focus, whereby we increased our market share for the last 12 quarters, will continue in the forthcoming quarters. The revenue of Digital Business Services through which we offer new generation technologies to automatize the business processes of our corporate customers, cloud-based software services enabling end-to-end digitalization, data center and IoT services was registered at TRY499 million in this quarter. We have led in the digital transformation processes of our customers by signing 575 projects with a contract value of TRY 221 million in this quarter. From system integration projects we have a contract value (backlog) of TRY832 million to be realized beyond the third quarter of 2021. This quarter we opened the Turkcell European Data Center, in which we invested to transform Turkey into a hub of data and cloud technologies. Additionally, we have included our data storage product “Object Storage” for Turkcell Cloud users and cybersecurity service “WatchGuard” in our product portfolio. In the forthcoming period, we aim to digitalize the end-to-end infrastructure services of private health institutions by enhancing our competences in the field of hospital management systems in which we are already the market leader, and to leverage the opportunities of remote education technologies in the market. Our techfin business had a strong quarter with the contribution of Paycell and Financell, and revenues rose 37% year on year to TRY281 million. The revenues of Financell increased 28.1% this quarter due to the end of loan portfolio contraction, increased average interest rates and support from the emerging insurance business. With its wide service portfolio Paycell’s 3-month active users reached 6 million. In line with the global trend, Paycell has enabled its users to continue their new payment habits in the post-pandemic period. The transaction volume of “Pay Later” allowing expenditures to be reflected on Turkcell invoices, increased 84% annually to TRY455 million and the transaction volume over Paycell Card has increased to around sixfold of the same period of last year. In this quarter, we ensured the widespread availability of our virtual and physical POS solutions designed for merchants. While the number of Android POS devices we offered for the use of SMEs reached 1,700, we provided virtual POS integration on approximately 900 e-commerce websites including Turkcell channels. Within this scope, the transaction volume of POS devices was 8 times that of last year at TRY475 million. We are among the three fastest operators in the world We serve our customers above world standards, by distinguishing ourselves from other operators with our resilient network enriched with analytical competences, our broad spectrum and robust and modern infrastructure. According to the report prepared by the Global Mobile Suppliers Association (GSA), we rank among the three operators providing the world’s highest speed thanks to our strong LTE network that has the capability to reach speeds of 1.6 Gbps, owning the fastest 4.5G network infrastructure in Europe. Sustainability remains our focus We adopt a human-centric and environmentally sensitive approach in all our business processes and act by considering the footprint we leave on the world with our products and services. Sustainability is a focus that we have factored into our business model, and we continue to implement it in our Group companies. We have also placed the Human Rights Policy and Environmental Policy adopted at the beginning of 2021 on the agenda of our subsidiaries. We have minimized not only our environmental impact by means of our renewable energy investments and recycling projects, but also continue developing new products and projects. We also produce solutions to the problem of climate change causing the disasters of fire and flood, along with humanitarian aid in the wake of such disasters. This year, we have determined the theme of the “Women Developers of the Future” project as “Climathon”, having put it into practice in cooperation with TOBB (The Union of Chambers and Commodity Exchanges of Turkey). In the contest women will offer technological solutions to climate change where the categories are waste management, emissions reduction, the use of renewable and efficient energy, and sustainable agriculture. Within the scope of the contest, participating women are provided with capacity increasing and climate change-based trainings to develop their knowledge of technology and entrepreneurship. While focusing on technological solutions for a sustainable environment, we also aim to contribute to gender equality and to reduce inequalities. We will work with all our strength to render quality service to our customers We have achieved leadership in the category of ‘Customer-Centric Culture’ at the European Customer Centricity Awards, one of the world’s most prestigious contests concerning customer experience. By keeping our customers in focus at all times, we will continue to serve Turkcell quality to existing and new subscribers with our mobile and fixed broadband services, and our innovative digital solutions. I extend my thanks to all our teammates for their contribution to our successes, and to our Board of Directors for their support in realizing our strategy, which is the key to our achievements. We also express our gratitude to our customers and business associates for remaining with us on our journey. (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) Please note that this paragraph contains forward looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2020 filed with U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. (3) Excluding license fee FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group Profit & Loss Statement (million TRY) Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Revenue 7,649.5 9,354.2 22.3% 21,231.6 25,729.0 21.2% Cost of revenue1 (3,727.2) (4,611.1) 23.7% (10,423.1) (12,918.2) 23.9% Cost of revenue1/Revenue (48.7%) (49.3%) (0.6pp) (49.1%) (50.2%) (1.1pp) Gross Margin1 51.3% 50.7% (0.6pp) 50.9% 49.8% (1.1pp) Administrative expenses (184.2) (219.3) 19.1% (538.9) (642.2) 19.2% Administrative expenses/Revenue (2.4%) (2.3%) 0.1pp (2.5%) (2.5%) - Selling and marketing expenses (295.6) (429.9) 45.4% (972.2) (1,201.9) 23.6% Selling and marketing expenses/Revenue (3.9%) (4.6%) (0.7pp) (4.6%) (4.7%) (0.1pp) Net impairment losses on financial and contract assets (48.5) (64.1) 32.2% (270.1) (164.5) (39.1%) EBITDA2 3,393.9 4,029.8 18.7% 9,027.3 10,802.2 19.7% EBITDA Margin 44.4% 43.1% (1.3pp) 42.5% 42.0% (0.5pp) Depreciation and amortization (1,516.6) (1,817.6) 19.8% (4,340.2) (5,216.4) 20.2% EBIT3 1,877.3 2,212.2 17.8% 4,687.1 5,585.8 19.2% EBIT Margin 24.5% 23.6% (0.9pp) 22.1% 21.7% (0.4pp) Net finance income / (costs) (294.7) (359.2) 21.9% (749.8) (1,131.4) 50.9% Finance income 1,307.8 (111.8) (108.5%) 2,435.5 948.5 (61.1%) Finance costs (1,602.5) (247.4) (84.6%) (3,185.3) (2,079.8) (34.7%) Other income / (expense) (11.2) (20.2) 80.4% (156.4) (324.8) 107.7% Non-controlling interests (0.0) (0.0) - (2.5) (0.0) (100.0%) Share of profit of equity accounted investees (5.3) (2.1) (60.4%) (8.6) 26.5 (408.1%) Income tax expense (355.5) (401.6) 13.0% (834.8) (509.5) (39.0%) Net Income 1,210.6 1,429.1 18.0% 2,935.0 3,646.5 24.2% (1) Excluding depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. Revenue of the Group grew by 22.3% year-on-year in Q321. Turkcell Turkey’s growing subscriber base and higher data and digital services revenues as well as the contribution of our international operations and equipment sales were the main drivers behind this growth. Turkcell Turkey revenues, comprising 75% of Group revenues, rose 17.2% year-on-year to TRY7,050 million (TRY6,013 million). - Consumer segment revenues grew 17.5% year-on-year on the back of increased mobile and fixed subscribers, upsell efforts and price adjustments. - Corporate segment revenues rose 14.1% year-on-year. Digital business services revenues grew 13.6% year-on-year. - Standalone digital services revenues registered as part of consumer and corporate segments grew 31.3% year-on-year. This performance was supported by the increased number of paid users, which rose 0.9 million year-on-year to 3.6 million. - Wholesale revenues grew 26.8% to TRY496 million (TRY391 million), mainly with customers’ data capacity upgrades, the positive impact of currency movements and increased international carrier traffic. Turkcell International revenues, comprising 10% of Group revenues, rose 39.2% to TRY915 million (TRY658 million). Our Ukrainian operations, having registered a strong subscriber and ARPU performance, were the main driver of this robust revenue performance. Currency movements also positively impacted the revenues of Turkcell International. Techfin segment revenues, comprising 3% of Group revenues, rose 37% to TRY281 million (TRY205 million). This was driven by 53% rise in Paycell revenues and 28% growth in that of Finance company. Please refer to the Techfin section for details. Other subsidiaries' revenues, at 12% of Group revenues, including mainly non-group call center and energy business revenues, and consumer electronics sales revenues, rose 43.1% to TRY1,107 million (TRY773 million). This was driven primarily by increased equipment revenues. Cost of revenue (excluding depreciation and amortization) rose to 49.3% (48.7%) as a percentage of revenues in Q321. This was due mainly to the Turkcell Energy subsidiary’s increased cost of goods sold (0.8pp) and radio costs (0.5pp), despite the decline in other cost items (0.7pp). Administrative Expenses decreased to 2.3% (2.4%) as a percentage of revenues in Q321. Selling and Marketing Expenses increased to 4.6% (3.9%) as a percentage of revenues in Q321. This was driven mainly by the increase in selling expenses (0.6pp) with higher mobility and marketing expenses (0.1pp) as a percentage of revenues. Net impairment losses on financial and contract assets was at 0.7% (0.6%) as a percentage of revenues in Q321. EBITDA1 rose by 18.7% year-on-year in Q321 leading to an EBITDA margin of 43.1% (44.4%). - Turkcell Turkey’s EBITDA rose 16.0% year-on-year to TRY3,316 million (TRY2,859 million) leading to an EBITDA margin of 47.0% (47.6%). - Turkcell International EBITDA grew 51.7% year-on-year to TRY451 million (TRY298 million), which resulted in an EBITDA margin of 49.3 (45.2%) on 4.1pp improvement. - Techfin segment EBITDA rose 20.8% to TRY174 million (TRY144 million) with an EBITDA margin of 61.7% (70.2%). - The EBITDA of other subsidiaries was at TRY88 million (TRY93 million). Depreciation and amortization expenses increased 19.8% year-on-year in Q321. Net finance expense increased to TRY359 million (TRY295 million) in Q321. This was driven mainly by a higher interest expense on financial assets and liabilities. See Appendix A for details of net foreign exchange gain and loss. Income tax expense increased to TRY402 million (TRY356 million) due mainly to a higher deferred tax expense incurred in Q321. Net income of the Group rose 18.0% to TRY1,429 million (TRY1,211 million) in Q321. This was driven mainly by solid operational performance as well as prudent financial risk management. Total cash & debt: Consolidated cash as of September 30, 2021 declined to TRY12,322 million from TRY12,443 million as of June 30, 2021. The positive impact of currency movements and cash flow generation was offset by the second installment payment of the dividend distribution. Excluding FX swap transactions, 86% of our cash is in US$, 9% in EUR, and 4% in TRY. Consolidated debt as of September 30, 2021 increased to TRY24,805 million from TRY24,077 million as of June 30, 2021 due mainly to the new borrowings and the impact of currency movements. Please note that TRY2,156 million of our consolidated debt is comprised of lease obligations. Consolidated debt breakdown excluding lease obligations: - Turkcell Turkey’s debt was at TRY20,261 million, of which TRY12,293 million (US$1,390 million) was denominated in US$, TRY6,588 million (EUR639 million) in EUR, TRY530 million (CNY390 million) in CNY, and the remaining TRY850 million in TRY. - The finance company had a debt balance of TRY1,056 million, of which TRY187 million (US$21 million) was denominated in US$, and TRY457 million (EUR44 million) in EUR with the remaining TRY413 million in TRY. (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income - The debt balance of lifecell was TRY1,170 million, fully denominated in UAH. - Under the Other segment we have a debt balance of TRY162 million (US$18 million), fully denominated in US$. TRY1,025 million of lease obligations is denominated in TRY, TRY59 million (US$7 million) in US$, TRY223 million (EUR22 million) in EUR, and the remaining balance in other local currencies (Please note that the figures in parentheses refer to US$ or EUR equivalents). Net debt as of September 30, 2021 was at TRY12,483 million with a net debt to EBITDA ratio of 0.9 times. Excluding finance company consumer loans, our telco only net debt was at TRY10,522 million with a leverage of 0.8 times. Turkcell Group had a long FX position of US$122 million as at the end of the third quarter. (Please note that this figure takes advance payments into account). Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY2,217 million in Q321. In Q321 and 9M21, operational capital expenditures (excluding license fees) at the Group level were at 14.7% and 19.2% of total revenues, respectively. Capital expenditures (million TRY) Quarter Nine Months Q320 Q321 9M20 9M21 Operational Capex 1,479.0 1,379.2 3,487.4 4,944.6 License and Related Costs 2.4 - 33.4 - Non-operational Capex (Including IFRS15 & IFRS16) 1,391.3 837.4 2,673.4 2,242.3 Total Capex 2,872.6 2,216.6 6,194.2 7,186.9 Summary of Operational Data Q320 Q221 Q321 y/y % q/q % Number of subscribers (million) 36.9 38.1 39.3 6.5% 3.1% Mobile Postpaid (million) 21.5 22.9 23.3 8.4% 1.7% Mobile M2M (million) 2.7 3.0 3.2 18.5% 6.7% Mobile Prepaid (million) 12.2 11.7 12.3 0.8% 5.1% Fiber (thousand) 1,599.4 1,754.1 1,813.6 13.4% 3.4% ADSL (thousand) 694.0 725.5 739.7 6.6% 2.0% Superbox (thousand)1 550.5 625.7 613.6 11.5% (1.9%) Cable (thousand) 66.9 62.2 59.8 (10.6%) (3.9%) IPTV (thousand) 811.1 961.0 1,011.9 24.8% 5.3% Churn (%)2 Mobile Churn (%)3 2.4% 1.7% 1.9% (0.5pp) 0.2pp Fixed Churn (%) 2.1% 1.3% 1.4% (0.7pp) 0.1pp ARPU4 (Average Monthly Revenue per User) (TRY) Mobile ARPU, blended 47.5 48.2 52.9 11.4% 9.8% Mobile ARPU, blended (excluding M2M) 51.2 52.3 57.5 12.3% 9.9% Postpaid 60.9 59.9 65.0 6.7% 8.5% Postpaid (excluding M2M) 68.9 68.1 74.2 7.7% 9.0% Prepaid 24.0 25.5 29.9 24.6% 17.3% Fixed Residential ARPU, blended 71.5 76.4 78.6 9.9% 2.9% Residential Fiber ARPU 72.3 76.6 79.5 10.0% 3.8% Average mobile data usage per user (GB/user) 12.2 13.4 13.7 12.3% 2.2% Mobile MoU (Avg. Monthly Minutes of usage per subs) blended 556.1 564.8 559.2 0.6% (1.0%) (1) Superbox subscribers are included in mobile subscribers. (2) Churn figures represent average monthly churn figures for the respective quarters. (3) In Q117, our churn policy was revised to extend from 9 months to 12 months (the period at the end of which we disconnect prepaid subscribers who have not topped up above TRY10). Additionally, under our revised policy, prepaid customers who last topped up before March is disconnected at the latest by year-end. As a regulatory requirement, we started to disconnect prepaid lines in accordance with the new ICTA regulation, which requires deactivation of prepaid lines which lack residency documents by the 6th month of subscription starting from 2019. Furthermore, as required by the ICTA, the line of a deceased customer should either be transferred to a successor/another user or terminated. Lines, which are not transferred or terminated, are to be disconnected at the end of seven months. (4) Starting from Q121, as a consequence of the change in reportable segments, commission revenues resulting from devices and accessories sales have been excluded from the mobile ARPU of Turkcell Turkey since these commissions are now reported under the Other segment. Turkcell Turkey’s subscriber base continued to expand reaching 39.3 million on 1.2 million net quarterly additions. This number marked the highest quarterly net addition performance since Q207. We achieved this robust performance thanks to our customer-centric strategy as well as rich and differentiated value proposition offered to our customers. Along with these, increased mobility with improvement in the pandemic environment and a higher number of visitors to the country on rising tourism activity also contributed to customer net additions. Our subscriber base expanded by 1.1 million quarterly net additions on the mobile front, reaching 35.7 million in total. This was driven by strong net addition performance from both postpaid and prepaid segments. We registered 464 thousand quarterly net additions to the postpaid subscriber base, which reached 65.5% (63.8%) of total mobile subscribers. Meanwhile, prepaid subscribers grew by 643 thousand quarterly net additions backed by improved tourism activity. On the fixed front, our subscriber base exceeded 2.6 million as of Q321 on 71 thousand quarterly net additions. We registered 60 thousand quarterly net additions to our fiber subscribers on demand for high-quality broadband connections. IPTV subscribers exceeded 1 million milestone on 51 thousand quarterly net additions. Accordingly, 63% of residential fiber subscribers also have IPTV subscriptions. The average monthly mobile churn rate was at 1.9% in Q321. Meanwhile the average monthly fixed churn rate was 1.4%. The improvement in both mobile and fixed churn rates compared to the previous year resulted from our customer-oriented approach and our analytical capabilities that allow us to make the right offer to the right customer at the right time. Our mobile ARPU (excluding M2M) rose 12.3% year-on-year driven mainly by a rising postpaid subscriber base, price adjustments and upsell efforts as well as increased data and digital services usage. Our residential fiber ARPU growth was 10.0% year-on-year, driven mainly by price adjustments, upsell efforts to higher speed offerings and increased IPTV penetration. Average monthly mobile data usage per user rose 12.3% year-on-year to 13.7 GB with the increasing number and data consumption of 4.5G users. Accordingly, the average mobile data usage of 4.5G users reached 15.2 GB in Q321. Total smartphone penetration on our network reached 84% in Q321 on a 4.6pp year-on-year increase. 92% of those smartphones were 4.5G compatible. 4.5G subscriptions reached 34.1 million, while only 70% of these had 4.5G compatible smartphones at the end of Q321. TURKCELL INTERNATIONAL lifecell1 Financial Data Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Revenue (million UAH) 1,745.5 2,159.2 23.7% 4,922.0 6,076.3 23.5% EBITDA (million UAH) 909.8 1,224.0 34.5% 2,588.0 3,432.2 32.6% EBITDA margin (%) 52.1% 56.7% 4.6pp 52.6% 56.5% 3.9pp Net income / (loss) (million UAH) 36.8 173.8 372.3% (148.1) 373.0 (351.9%) Capex (million UAH) 860.6 713.7 (17.1%) 1,936.7 2,274.3 17.4% Revenue (million TRY) 455.5 684.6 50.3% 1,244.2 1,809.1 45.4% EBITDA (million TRY) 237.3 388.0 63.5% 654.3 1,021.9 56.2% EBITDA margin (%) 52.1% 56.7% 4.6pp 52.6% 56.5% 3.9pp Net income / (loss) (million TRY) 9.5 54.9 477.9% (35.8) 112.7 (414.8%) (1) Since July 10, 2015, we hold a 100% stake in lifecell. lifecell (Ukraine) continued its growth momentum in Q321. Accordingly, lifecell reported strong revenue growth of 23.7% year-on-year in Q321 in local currency. This was driven by subscriber base expansion and ARPU growth on the back of price adjustments, mobile data and messaging revenues. Meanwhile, lifecell’s EBITDA rose 34.5% year-on-year, which led to an EBITDA margin of 56.7% on a 4.6pp improvement year-on-year. Strong revenue growth was the main driver behind this improvement. lifecell revenues in TRY terms grew 50.3% year-on-year in Q321 positively impacted by currency movements and robust operational performance. lifecell’s EBITDA in TRY terms grew by 63.5%, leading to an EBITDA margin of 56.7%. lifecell Operational Data Q320 Q221 Q321 y/y% q/q% Number of subscribers (million)2 9.1 9.5 9.9 8.8% 4.2% Active (3 months)3 7.8 8.4 8.9 14.1% 6.0% MOU (minutes) (12 months) 180.8 186.8 180.6 (0.1%) (3.3%) ARPU (Average Monthly Revenue per User), blended (UAH) 64.7 71.9 74.2 14.7% 3.2% Active (3 months) (UAH) 76.3 81.9 83.0 8.8% 1.3% (2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. (3) Active subscribers are those who in the past three months made a revenue generating activity. lifecell continued to expand its subscriber base in Q321 leveraging the attractiveness of its regional offerings and appealing content packages. Meanwhile, lifecell’s 3-month active ARPU rose 8.8% year-on-year, driven mainly by price adjustments and increased data consumption. lifecell continued to increase the penetration of its 4.5G users within its customer base in Q321. The 3-month active 4.5G subscribers grew 40% year-on-year reaching 71% of total data users as at the end of Q321. The increase in 4.5G users supported the growth of overall data consumption. Accordingly, average monthly data consumption per user rose 14% year-on-year in Q321. Meanwhile, lifecell continued its leadership of the Ukrainian market in smartphone penetration, which reached 83% as of the end of Q321. lifecell continued to enrich customer experience through its digital services while increasing their penetration of its customer base. As part these efforts, lifecell introduced its new intellectual game, WinQuiz in Q321. Accordingly, lifecell’s digital services 3-month active users grew 26% year-on-year in Q321. BeST1 Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Number of subscribers (million) 1.4 1.5 7.1% 1.4 1.5 7.1% Active (3 months) 1.1 1.1 - 1.1 1.1 - Revenue (million BYN) 35.8 35.1 (2.0%) 100.9 110.2 9.2% EBITDA (million BYN) 8.1 9.3 14.8% 24.1 27.9 15.8% EBITDA margin (%) 22.6% 26.4% 3.8pp 23.9% 25.4% 1.5pp Net loss (million BYN) (7.1) (8.2) 15.5% (24.1) (24.2) 0.4% Capex (million BYN) 15.8 18.8 19.0% 35.5 46.8 31.8% Revenue (million TRY) 101.2 119.3 17.9% 281.3 350.6 24.6% EBITDA (million TRY) 22.9 31.5 37.6% 67.2 89.2 32.7% EBITDA margin (%) 22.6% 26.4% 3.8pp 23.9% 25.4% 1.5pp Net loss (million TRY) (20.0) (28.0) 40.0% (67.1) (77.0) 14.8% (1) BeST, in which we hold an 80% stake, has operated in Belarus since July 2008. BeST revenues declined 2.0% year-on-year in Q321 in local currency terms. Despite the rise in voice, messaging and mobile data revenues, this was due mainly to declining handset sales. Excluding handset sales, services revenue growth was at 15.5%. BeST’s EBITDA was at BYN9.3 million in Q321 with an EBITDA margin of 26.4% on a 3.8pp improvement. The decline in lower margin handset sales had a positive impact on EBITDA margin. BeST’s revenues in TRY terms grew by 17.9% year-on-year in Q321, while its EBITDA margin was at 26.4%. BeST continued to expand its 4G network in Q321 leading the market in terms of 4G geographical coverage. At the end of Q321, BeST provides LTE services in 6 regions through over three thousand sites to its customers. Recently, it launched LTE-800 services over the beCloud network in the Vitebsk Region, which enables higher coverage and better customer experience. Having been expanding its 4G network, BeST has also continued to increase the penetration of 4G services within its customer base. Accordingly, 4G subscribers comprised 70% of the 3-month active subscriber base as of Q321. Meanwhile, the average monthly data consumption of subscribers rose 25% year-on-year to 13.7 GB. BeST continued its efforts to increase the penetration of digital services, which supports ARPU growth and customer retention. Accordingly, 37% of 3-month active subscribers use at least one digital service as of Q321. Kuzey Kıbrıs Turkcell2 (million TRY) Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Number of subscribers (million) 0.5 0.5 - 0.5 0.5 - Revenue 66.0 81.7 23.8% 173.9 216.5 24.5% EBITDA 24.6 34.7 41.1% 64.5 85.9 33.2% EBITDA margin (%) 37.3% 42.4% 5.1pp 37.1% 39.7% 2.6pp Net income 10.7 20.7 93.5% 25.6 42.8 67.2% Capex 19.0 19.1 0.5% 45.1 47.6 5.5% (2) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999 Kuzey Kıbrıs Turkcell revenues grew 23.8% year-on-year in Q321, driven by higher data, handset sales and voice revenues backed by increased mobility. The EBITDA of Kuzey Kıbrıs Turkcell rose 41.1% year-on-year leading to an EBITDA margin of 42.4%. TECHFIN Paycell Financial Data (million TRY) Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Revenue 77.8 118.8 52.7% 205.1 328.9 60.4% EBITDA 47.0 55.1 17.2% 110.3 158.0 43.2% EBITDA Margin (%) 60.4% 46.4% (14.0pp) 53.8% 48.1% (5.7pp) Net Income 37.8 36.3 (4.0%) 85.6 106.4 24.3% Paycell continued its strong momentum registering 52.7% year-on-year revenue growth in Q321. This robust performance resulted mainly from the continued demand for mobile payment services, particularly the Pay Later solution, as well as increased Paycell card transactions and recently launched POS offerings. The quarterly transaction volume of Pay Later service rose 84% to TRY455 million, which was supported by a 69% increase in Pay Later 3-month active users to 3.7 million. The increased volume of digital content purchases also contributed to higher Pay Later usage volume. Meanwhile, Paycell card transactions grew strongly to TRY657 million, which was 5.6 times that of Q320. Paycell registered increasing volumes in POS services, particularly virtual POS solutions, which supported topline growth in Q321. Overall, the total transaction volume exceeded TRY3.4 billion for the quarter, which derived from an increase in 3-month active users to 6 million and their increased usage. Paycell’s EBITDA rose 17.2% year-on-year leading to an EBITDA margin of 46.4%. The decline in EBITDA margin was due mainly to increased marketing activity and other operational expenses incurred to scale the business. Financell Financial Data (million TRY) Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Revenue 127.2 162.9 28.1% 421.9 424.5 0.6% EBITDA 96.3 119.6 24.2% 271.0 291.5 7.6% EBITDA Margin (%) 75.7% 73.4% (2.3pp) 64.2% 68.7% 4.5pp Net Income 69.1 61.8 (10.6%) 179.4 225.1 25.5% Financell registered strong year-on-year revenue growth of 28.1% in Q321. While the average loan portfolio was around TRY1.9 billion for both Q321 and Q320, the increase in revenues resulted mainly from higher average interest rate on the loan portfolio in Q321. Increased revenues from insurance operations also supported topline growth. Meanwhile, Financell reported EBITDA growth of 24.2% year-on-year, resulting in an EBITDA margin of 73.4%. Q320 EBITDA performance was positively impacted by the sale of doubtful receivables. The year-on-year decline in net income was mainly impacted by fair valuation of derivative instruments. The loan portfolio of Financell increased to TRY2 billion as of the end Q321. Although the installment limitation on consumer loans for telecom devices still limits the growth of the loan portfolio, the increase in loan portfolio was supported by the financing provided to corporate customers as well as the increased mobility with the improvement in pandemic conditions. Accordingly, Financell has provided loans to over 7,000 corporate customers to date. Meanwhile, Financell’s cost of risk was at 0.3% Q321 thanks to a successful collection performance and customer portfolio improvement. Having insured 82% of the loans it granted over the past year with an insurance product, Financell continued to support its strong collection performance. Financell’s market share for loans granted under TRY5 thousand in Turkey was 24%. Turkcell Group Subscribers Turkcell Group registered subscribers amounted to approximately 51.2 million as of September 30, 2021. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell and BeST, as well as those of Kuzey Kıbrıs Turkcell. Turkcell Group Subscribers Q320 Q221 Q321 y/y% q/q% Mobile Postpaid (million) 21.5 22.9 23.3 8.4% 1.7% Mobile Prepaid (million) 12.2 11.7 12.3 0.8% 5.1% Fiber (thousand) 1,599.4 1,754.1 1,813.6 13.4% 3.4% ADSL (thousand) 694.0 725.5 739.7 6.6% 2.0% Superbox (thousand)1 550.5 625.7 613.6 11.5% (1.9%) Cable (thousand) 66.9 62.2 59.8 (10.6%) (3.9%) IPTV (thousand) 811.1 961.0 1,011.9 24.8% 5.3% Turkcell Turkey subscribers (million)2 36.9 38.1 39.3 6.5% 3.1% lifecell (Ukraine) 9.1 9.5 9.9 8.8% 4.2% BeST (Belarus) 1.4 1.4 1.5 7.1% 7.1% Kuzey Kıbrıs Turkcell 0.5 0.5 0.5 - - Turkcell Group Subscribers (million) 47.9 49.6 51.2 6.9% 3.2% (1) Superbox subscribers are included in mobile subscribers. (2) Subscribers to more than one service are counted separately for each service. OVERVIEW OF THE MACROECONOMIC ENVIRONMENT The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below. Quarter Nine Months Q320 Q221 Q321 y/y% q/q% 9M20 9M21 y/y% GDP Growth (Turkey) 6.3% 21.7% n.a n.a n.a 0.2% n.a n.a Consumer Price Index (Turkey)(yoy) 11.7% 17.5% 19.6% 7.9pp 2.1pp 11.7% 19.6% 7.9pp US$ / TRY rate Closing Rate 7.8080 8.7052 8.8433 13.3% 1.6% 7.8080 8.8433 13.3% Average Rate 7.1891 8.4135 8.5212 18.5% 1.3% 6.7183 8.1477 21.3% EUR / TRY rate Closing Rate 9.1281 10.3645 10.3135 13.0% (0.5%) 9.1281 10.3135 13.0% Average Rate 8.4187 10.1310 10.0656 19.6% (0.6%) 7.5824 9.7550 28.7% US$ / UAH rate Closing Rate 28.30 27.18 26.58 (6.1%) (2.2%) 28.30 26.58 (6.1%) Average Rate 27.55 27.59 26.87 (2.5%) (2.6%) 26.59 27.51 3.5% US$ / BYN rate Closing Rate 2.6403 2.5312 2.5083 (5.0%) (0.9%) 2.6403 2.5083 (5.0%) Average Rate 2.5408 2.5574 2.5088 (1.3%) (1.9%) 2.4111 2.5591 6.1% RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results. Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes translation gain/(loss), finance income, finance expense, share of profit of equity accounted investees, gain on sale of investments, minority interest and other income/(expense). Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of our results of operations, as reported under IFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with IFRS as issued by the IASB, to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with IFRS as issued by the IASB. Turkcell Group (million TRY) Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Adjusted EBITDA 3,393.9 4,029.8 18.7% 9,027.3 10,802.2 19.7% Depreciation and amortization (1,516.6) (1,817.6) 19.8% (4,340.2) (5,216.4) 20.2% EBIT 1,877.3 2,212.2 17.8% 4,687.1 5,585.8 19.2% Finance income 1,307.8 (111.8) (108.5%) 2,435.5 948.5 (61.1%) Finance costs (1,602.5) (247.4) (84.6%) (3,185.3) (2,079.8) (34.7%) Other income / (expense) (11.2) (20.2) 80.4% (156.4) (324.8) 107.7% Share of profit of equity accounted investees (5.3) (2.1) (60.4%) (8.6) 26.5 n.m Consolidated profit before income tax & minority interest 1,566.1 1,830.7 16.9% 3,772.3 4,156.1 10.2% Income tax expense (355.5) (401.6) 13.0% (834.8) (509.5) (39.0%) Consolidated profit before minority interest 1,210.7 1,429.1 18.0% 2,937.6 3,646.6 24.1% NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2021. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2020 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers. ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, and Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY9.4 billion revenue in Q321 with total assets of TRY57.3 billion as of September 30, 2021. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr. Appendix A – Tables Table: Net foreign exchange gain and loss details Million TRY Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Net FX loss before hedging (1,434.4) (25.6) (98.2%) (2,664.2) (1,401.3) (47.4%) Swap interest income/(expense) (82.0) (109.2) 33.2% (306.7) (333.2) 8.6% Fair value gain on derivative financial instruments 1,276.0 (105.3) (108.3%) 2,533.7 699.5 (72.4%) Net FX gain / (loss) after hedging (240.4) (240.1) (0.1%) (437.3) (1,035.0) 136.7% Table: Income tax expense details Million TRY Quarter Nine Months Q320 Q321 y/y% 9M20 9M21 y/y% Current tax expense (230.0) (187.6) (18.4%) (588.5) (574.9) (2.3%) Deferred tax income / (expense) (125.5) (214.0) 70.5% (246.3) 65.4 n.m Income Tax expense (355.5) (401.6) 13.0% (834.8) (509.5) (39.0%) TURKCELL ILETISIM HIZMETLERI A.S. IFRS SELECTED FINANCIALS (TRY Million) Quarter Ended Quarter Ended Quarter Ended Nine Months Nine Months Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, 2020 2021 2021 2020 2021 6,013.4 6,505.3 7,050.3 16,764.1 19,534.2 657.6 840.2 915.3 1,795.1 2,463.7 205.0 241.8 281.5 619.9 745.9 773.4 961.0 1,107.1 2,052.4 2,985.3 7,649.5 8,548.3 9,354.2 21,231.6 25,729.0 (5,243.8) (6,137.0) (6,428.7) (14,763.3) (18,134.6) 2,405.7 2,411.3 2,925.6 6,468.3 7,594.4 (184.2) (223.6) (219.3) (538.9) (642.2) (295.6) (413.8) (429.9) (972.2) (1,201.9) (11.2) (292.5) (20.2) (156.4) (324.8) (48.5) (50.8) (64.1) (270.1) (164.5) 1,866.1 1,430.5 2,192.1 4,530.8 5,260.9 (1,602.5) (23.5) (247.4) (3,185.3) (2,079.8) 1,307.8 (541.6) (111.8) 2,435.5 948.5 (5.3) 10.9 (2.1) (8.6) 26.5 1,566.1 876.3 1,830.7 3,772.3 4,156.1 (355.5) 236.2 (401.6) (834.8) (509.5) 1,210.7 1,112.5 1,429.1 2,937.6 3,646.6 - - - - - (0.0) (0.0) (0.0) (2.5) (0.0) 1,210.6 1,112.5 1,429.1 2,935.0 3,646.5 0.55 0.51 0.65 1.34 1.67 31.4% 28.2% 31.3% 30.5% 29.5% 3,393.9 3,465.9 4,029.8 9,027.3 10,802.2 2,872.6 2,713.1 2,216.6 6,194.2 7,186.9 1,479.0 2,097.7 1,379.2 3,487.4 4,944.6 2.4 - - 33.4 - 1,391.3 615.4 837.4 2,673.4 2,242.3 13,523.9 12,442.7 12,321.8 13,523.9 12,321.8 51,528.1 55,860.8 57,307.2 51,528.1 57,307.2 16,821.5 18,616.5 19,168.1 16,821.5 19,168.1 22,840.8 24,077.4 24,804.6 22,840.8 24,804.6 31,239.1 35,607.4 35,390.3 31,239.1 35,390.3 20,289.0 20,253.5 21,917.0 20,289.0 21,917.0 (*) Please refer to the notes on reconciliation of Non-GAAP Financial measures on page 16 For further details, please refer to our consolidated financial statements and notes as at 30 September 2021 on our web site TURKCELL ILETISIM HIZMETLERI A.S. TURKISH ACCOUNTING STANDARDS SELECTED FINANCIALS (TRY Million) Quarter Ended Quarter Ended Quarter Ended Nine Months Nine Months Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, 2020 2021 2021 2020 2021 6,013.4 6,505.3 7,050.3 16,764.1 19,534.2 657.6 840.2 915.3 1,795.1 2,463.7 205.0 241.8 281.5 619.9 745.9 773.4 961.0 1,107.1 2,052.4 2,985.3 7,649.5 8,548.3 9,354.2 21,231.6 25,729.0 (5,243.8) (6,137.0) (6,428.7) (14,763.3) (18,134.6) 2,405.7 2,411.3 2,925.6 6,468.3 7,594.4 (184.2) (223.6) (219.3) (538.9) (642.2) (295.6) (413.8) (429.9) (972.2) (1,201.9) 1,212.6 1,115.0 240.1 2,121.9 2,053.8 3,138.5 2,888.8 2,516.5 7,079.0 7,804.1 (48.5) (50.8) (64.1) (270.1) (164.5) 44.1 (13.2) 23.9 163.3 61.5 (1.4) (22.7) (1.9) (1.4) (72.1) (5.3) 10.9 (2.1) (8.6) 26.5 3,127.4 2,813.1 2,472.3 6,962.3 7,655.5 1,210.2 (721.3) (170.3) 2,275.0 481.5 (2,771.4) (1,215.5) (471.3) (5,465.1) (3,980.9) 1,566.1 876.3 1,830.7 3,772.3 4,156.1 (355.5) 236.2 (401.6) (834.8) (509.5) 1,210.7 1,112.5 1,429.1 2,937.6 3,646.6 - - - - - 1,210.7 1,112.5 1,429.1 2,937.6 3,646.6 (0.0) (0.0) (0.0) (2.5) (0.0) 1,210.6 1,112.5 1,429.1 2,935.0 3,646.5 0.55 0.51 0.65 1.34 1.67 31.4% 28.2% 31.3% 30.5% 29.5% 3,393.9 3,465.9 4,029.8 9,027.3 10,802.2 2,872.6 2,713.1 2,216.6 6,194.2 7,186.9 1,479.0 2,097.7 1,379.2 3,487.4 4,944.6 2.4 - - 33.4 - 1,391.3 615.4 837.4 2,673.4 2,242.3 13,523.9 12,442.7 12,321.8 13,523.9 12,321.8 51,528.1 55,860.8 57,307.2 51,528.1 57,307.2 16,821.5 18,616.5 19,168.1 16,821.5 19,168.1 22,840.8 24,077.4 24,804.6 22,840.8 24,804.6 31,239.1 35,607.4 35,390.3 31,239.1 35,390.3 20,289.0 20,253.5 21,917.0 20,289.0 21,917.0
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Turkcell Iletisim Hizmetleri A.S. (TKC) CEO Murat Erkan on Q2 2021 Results - Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S. (TKC) CEO Murat Erkan on Q2 2021 Results - Earnings Call Transcript
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Turkcell Iletisim Hizmetleri: Second Quarter 2021 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our pr
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Turkcell Accelerates Investments in Renewable Energy: Turkcell Enerji Signs Share Transfer Agreement to Acquire İzmir Karadağ Wind Power Plant
ISTANBUL--(BUSINESS WIRE)--In line with the target of meeting its electricity demand from renewables by 2030 and becoming a carbon neutral company by 2050, Turkcell (NYSE:TKC) (BIST:TCELL) has signed a share transfer agreement to acquire Boyut Grup Enerji, which owns the İzmir Karadağ Wind Power Plant. The transfer of shares is subject to the approval of respective authorities and fulfillment of various conditions precedent. Turkcell CEO Murat Erkan stated the following in relation to the Karadağ Wind Power Plant acquisition: “In line with our sustainability approach, we continue to lead investments in renewable energy and target to become a company meeting its electricity need from eco-friendly resources. In accordance with this target, the energy we generated with the self-consumption model in 2020 reached a level equivalent to the annual consumption of 1,230 residences. In Northern Cyprus, Turkcell Group’s first solar power plant generates 1.2 million kWh of electricity annually and prevents 448 tons of carbon dioxide emissions. Meanwhile, the Ankara Data Center, the first in Turkey to generate its own energy via solar panels, produces 300,000 kWh of electricity annually. Furthermore, through solar power investments in our Adana Plaza, Diyarbakır Plaza and Çorlu Data Center, we have reached the capacity to generate 730,000 kWh of energy annually. Going forward, we will continue to invest in projects with respect to renewable energy generation.” Murat Erkan pointed out the high production efficiency of Karadağ Wind Power Plant, and that this acquisition would contribute to Turkcell’s focus on sustainability and minimize its environmental footprint. Erkan stated that the power plant commenced operations in 2016 holding a license that will expire in 2057, and concluded that: “Turkcell Enerji, operating under the Enerjicell brand, serves individual and corporate customers in Turkey, who are eligible to choose their own electricity suppliers. In addition to our investments in renewable energy and power plants, we also continue to utilize eco-friendly methods through trading with green energy companies. Going forward, we will continue to invest in renewable energy through Turkcell Enerji Çözümleri and make Turkcell a carbon neutral company that uses electricity generated from eco-friendly resources.” For the acquisition of Boyut Grup Enerji, an enterprise value (EV) of US$ 29.6 million has been determined. After adjusting for the net debt of Boyut Grup Enerji, Turkcell shall make a payment of US$ 11.5 million. According to the Turkcell statement, Karadağ Wind Power Plant has an 18 MW installed capacity as well as an annual electricity generation capacity of 67.5 GWh, and thereby has the potential to meet the annual electricity need of approximately 22,500 houses. The plant has state purchase guarantee until the end of 2026. The anticipated annual gross revenue of the plant during 2021-2026 period is approximately US$ 5 million.
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IP Infusion's OcNOS Optical Transport Solution Validated by Turkcell in Telecom Infra Project Trial
SANTA CLARA, Calif.--(BUSINESS WIRE)--IP Infusion announced that Turkcell validated IP Infusion's OcNOS® Optical Transport Solution in a TIP test on the Turkcell network.
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Fast and Secure Global Messaging App BiP Introduces Group and Chat Import
ISTANBUL--(BUSINESS WIRE)--Globally acknowledged life and communication platform BiP introduces its new feature that allows users to convey their group chats easily from other applications. Reaching out to 80 million users in 192 countries, BiP sustains innovative investments and introduces group chat import enabling users to move their existing group and individual chats, including videos and photographs, automatically at once. Unlike other applications, users are not obliged to manually add each user one by one as BiP handles the import directly by adding in all participants. Commenting on the new feature Ataç Tansuğ Executive Vice President - Digital Services and Solutions of Turkcell said: “Messaging apps are no longer solely a medium for exchanging texts, but more of a living ecosystem where we communicate, work and do business. Embedded in almost every step of our lives, they are party to our most critical personal data. Therein lies a great responsibility for us. Data ethics are fundamental for BiP. This recent feature commits to a secure and seamless import experience symbolizing our dedication to a fulfilled CX. The rapid rise in the number of BiP users around the world is the clearest proof-point of this approach.” BiP heavily invests in innovation that can relate to the actual necessity and delicacies of the consumer, and the platform has features that surpass the competition. BiP ALLOWS HD VIDEO GROUP CALL OF UP TO 10 PARTICIPANTS Offering a HD-quality group video call with up to 10 users and instant messaging and voice call features, BiP now allows up to 1,000 users in group chats. It also enables shortcuts for frequently communicated users or groups on the home screen. BiP’s longstanding secret messaging feature is another visionary solution, and was designed six years ago. Secret messaging has also gained the attention of millions of users worldwide as it enables them to make chats disappear from the chat screen within the period they determine. Paying particular attention to localization and the daily needs of consumers, BiP also offers an awarded instant translation feature. BiP instantly translates written words and phrases in 106 languages. With this built-in real-time translation feature, BiP was recognized as the ‘Most Innovative Mobile App’ at the Global Mobile Awards. With BiP, no data is shared with third parties for commercial or any other purposes. With BiP, messages are transported securely between devices and servers using the TLS encryption method in accordance with international standards. BiP differentiates itself from peers, acting on its data only with user permission. With no imposition or discriminating among its users in terms of data privacy, BiP protects users' data with a transparent user agreement and privacy policy that is compatible with GDPR. No third party can intercept, access, or read messages. With absolutely no imposition and discrimination between users, BiP operates entirely with user consent to provide service to its users. To access BiP’s latest version at AppStore, GooglePlay and Huawei AppGallery, and also desktop apps for Windows and MacOS please visit https://bip.com/en/ NOTES TO EDITORS About BiP BiP is a secure and easy-to-use communication platform developed by Turkcell in 2013, and can be used by smartphone users regardless of their operators. On top of core communication features like instant messaging and HD quality voice and video calls, BiP has many features that differentiate it from its competitors, such as group video calls of up to 10 people, disappearing message, simultaneous translation in 106 languages, and group messaging of up to 1,000 people. It can be used in iOS, Android and over the Web, and can be downloaded via AppStore, GooglePlay and Huawei AppGallery. About Turkcell Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, and Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers fiber internet speed of up to 10 Gbps with its FTTH services. Turkcell Group reported TRY7.8 billion of revenues in Q121 with total assets of TRY56.0 billion as of March 31, 2021. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr.
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Turkcell Iletisim Hizmetleri A.S.'s (TKC) CEO Murat Erkan on Q1 2021 Results - Earnings Call Transcript
Turkcell Iletisim Hizmetleri A.S.'s (TKC) CEO Murat Erkan on Q1 2021 Results - Earnings Call Transcript
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Turkcell Iletisim Hizmetleri: First Quarter 2021 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have four reporting segments: "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. "Turkcell Turkey" which comprises our telecom, digital services and digital business services related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom and digital services related businesses outside of Turkey. “Techfin” which comprises all of our financial services businesses. “Other” which mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for March 31, 2021 refer to the same item as at March 31, 2020. For further details, please refer to our consolidated financial statements and notes as at and for March 31, 2021, which can be accessed via our website in the investor relations section (www.turkcell.com.tr). Selected financial information presented in this press release for the first and fourth quarters of 2020 and the first quarter of 2021 is based on IFRS figures in TRY terms unless otherwise stated. In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text. Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation. SEGMENT INFORMATION In accordance with our integrated communication and technology services strategy, we have reported our telecom related businesses in Turkey and outside of Turkey under Turkcell Turkey and Turkcell International reportable segments, respectively. All other businesses were reported under the Other segment until Q121. Starting from Q121, our financial services businesses; Turkcell Finansman A.Ş., Turkcell Ödeme ve Elektronik Para Hizmetleri A.Ş., Turkcell Sigorta Aracılık Hizmetleri A.Ş., and Paycell LLC, will be reported under the new Techfin segment. In previous releases, these businesses were included under the Other segment. We made this change since these entities have similar business models, and to some extent have operations integrated with each other. Moreover, these businesses are subject to legislation and regulations, which differ from those applied to other entities reported under the Other segment. Furthermore, operations of Turkcell Satış ve Dijital İş Servisleri Hizmetleri A.Ş. (“Turkcell Satış”), which are reported under Turkcell Turkey are separated as “Digital Business Services” and other Turkcell Satış operations: Integrated corporate business solutions, city hospitals, equipment and corporate terminal activities will continue to be reported under Turkcell Turkey as “Digital Business Services”, while other Turkcell Satış operations, which include retail channel operations, smart devices management and consumer electronics sales through digital channels, will be reported in the Other segment. We have made this change since other Turkcell Satış operations, which are reported under the Other segment, are now less connected with the integrated business model of Turkcell Turkey. Accordingly, these operations mainly comprise the procurement and sale of consumer electronics not limited to integrated telco products. They target non-Turkcell customers as well. Moreover, these operations also have different level of operating profitability compared to businesses reported under Turkcell Turkey. There have been no changes to Turkcell International segment. Starting from Q121, our reporting segments will be as follows: “Turkcell Turkey” comprises “Turkcell İletişim Hizmetleri A.Ş.”, “Superonline İletişim Hizmetleri A.Ş.”, the group call center operations of “Global Bilgi Pazarlama Danışmanlık ve Çağrı Servisi Hizmetleri A.Ş.”, the abovementioned digital business services operations of “Turkcell Satış”, “Turktell Bilişim Servisleri A.Ş.”, “Turkcell Teknoloji Araştırma ve Geliştirme A.Ş.”, “Kule Hizmet ve İşletmecilik A.Ş.”, “Rehberlik Hizmetleri A.Ş.”, “Turkcell Gayrimenkul Hizmetleri A.Ş.”, “Lifecell Dijital Servisler ve Çözümler A.Ş.”, “Lifecell Bulut Çözümleri A.Ş.”, “Lifecell TV Yayın ve İçerik Hizmetleri A.Ş.”, “Lifecell Müzik Yayın ve İletim A.Ş.”, “BiP İletişim Teknolojileri ve Dijital Servisler A.Ş.” and “Turkcell Dijital İş Servisleri A.Ş.”. Hence, Turkcell Turkey comprises our telecom, digital services and digital business services related businesses in Turkey. “Turkcell International” comprises “Kıbrıs Mobile Telekomünikasyon Limited Şirketi”, “East Asian Consortium B.V.”, “Lifecell LLC”, “Lifecell Ventures Coöperatief U.A.”, “Beltel Telekomünikasyon Hizmetleri A.Ş.”, “CJSC Belarusian Telecommunications Network”, “LLC UkrTower”, “LLC Global Bilgi”, “Turkcell Europe GmbH”, “Lifetech LLC”, “Beltower LLC”, “Lifecell Digital Limited”, “Yaani Digital BV” and “BiP Digital Communication Technologies B.V.”. Turkcell International comprises our telecom and digital services related businesses outside of Turkey. “Techfin” comprises “Turkcell Finansman A.Ş.”, “Turkcell Ödeme ve Elektronik Para Hizmetleri A.Ş.”, “Turkcell Sigorta Aracılık Hizmetleri A.Ş.”, and “Paycell LLC”. Techfin comprises all our financial services businesses. “Other” comprises the non-group call center operations of “Global Bilgi Pazarlama Danışmanlık ve Çağrı Servisi Hizmetleri A.Ş.”, “Turkcell Enerji Çözümleri ve Elektrik Satış Ticaret A.Ş.” and the abovementioned other operations of “Turkcell Satış”. The Other segment mainly comprises our non-group call center and energy businesses, retail channel operations, smart devices management and consumer electronics sales through digital channels and intersegment eliminations. FINANCIAL HIGHLIGHTS TRY million Q120 Q420 Q121 y/y% q/q% Revenue 6,658 7,872 7,827 17.5% (0.6%) EBITDA1 2,809 3,243 3,306 17.7% 2.0% EBITDA Margin (%) 42.2% 41.2% 42.2% - 1.0pp EBIT2 1,437 1,608 1,651 14.9% 2.6% EBIT Margin (%) 21.6% 20.4% 21.1% (0.5pp) 0.7pp Net Income 873 1,302 1,105 26.6% (15.1%) FIRST QUARTER HIGHLIGHTS Strong set of financials: Group revenues up 17.5% year-on-year mainly on Turkcell Turkey’s data and digital services revenue growth, larger subscriber base, as well as the increase in equipment revenues backed by digital channels Robust performance in strategic focus areas; standalone digital services revenues up 27.5%; digital business services revenues up 27.3%; Paycell revenues up 52.6% Group EBITDA up 17.7% year-on-year leading to an EBITDA margin of 42.2%; EBIT up 14.9% year-on-year resulting in an EBIT margin of 21.1% Net income up 26.6% year-on-year mainly on solid operational performance and disciplined financial risk management Leverage at 0.9x, despite FX fluctuations; long FX position at US$183 million Group revenues up 17.5% year-on-year mainly on Turkcell Turkey’s data and digital services revenue growth, larger subscriber base, as well as the increase in equipment revenues backed by digital channels Robust performance in strategic focus areas; standalone digital services revenues up 27.5%; digital business services revenues up 27.3%; Paycell revenues up 52.6% Group EBITDA up 17.7% year-on-year leading to an EBITDA margin of 42.2%; EBIT up 14.9% year-on-year resulting in an EBIT margin of 21.1% Net income up 26.6% year-on-year mainly on solid operational performance and disciplined financial risk management Leverage at 0.9x, despite FX fluctuations; long FX position at US$183 million Robust operational performance: Turkcell Turkey subscriber base up by 705 thousand quarterly net additions, highest of the past three years; solid performance towards the target of 1 million net subscriber additions for the full year 410 thousand quarterly mobile postpaid net additions; postpaid subscriber share at 66% Quarterly mobile prepaid customer net additions of 190 thousand 50 thousand net quarterly fiber additions; 49 thousand quarterly IPTV net additions Mobile ARPU3 growth of 8.7% year-on-year; fixed residential ARPU growth of 11.0% year-on-year Average monthly data consumption of 4.5G users at 14.4 GB in Q121 Digital channels’ share in Turkcell Turkey consumer sales (excluding fixed business) at 15.7%; up 8.5pp year-on-year Turkcell Turkey subscriber base up by 705 thousand quarterly net additions, highest of the past three years; solid performance towards the target of 1 million net subscriber additions for the full year 410 thousand quarterly mobile postpaid net additions; postpaid subscriber share at 66% Quarterly mobile prepaid customer net additions of 190 thousand 50 thousand net quarterly fiber additions; 49 thousand quarterly IPTV net additions Mobile ARPU3 growth of 8.7% year-on-year; fixed residential ARPU growth of 11.0% year-on-year Average monthly data consumption of 4.5G users at 14.4 GB in Q121 Digital channels’ share in Turkcell Turkey consumer sales (excluding fixed business) at 15.7%; up 8.5pp year-on-year General Assembly meeting held on April 15th: TRY2.6 billion dividend distribution in three equal installments was approved; payment of first installment was performed on April 30th All board members, including independent ones, were appointed TRY2.6 billion dividend distribution in three equal installments was approved; payment of first installment was performed on April 30th All board members, including independent ones, were appointed (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Excluding M2M For further details, please refer to our consolidated financial statements and notes as at March 31, 2021 via our website in the investor relations section (www.turkcell.com.tr). COMMENTS BY CEO, MURAT ERKAN We began the year strongly with our customer-driven approach Having made a strong start, we have concluded this quarter with strong operational and financial results matching up with our targets. In this period in which we managed our business successfully, in spite of the challenging conditions of the COVID-19 pandemic, we continued our strong growth and achieved successful results. This was made possible by offering enriched value offers to our customers with our “Customer First” focus, and reflective of our diversified business model with strategic focus areas. Our consolidated revenues rose 17.5% year-on-year, reaching TRY7.8 billion. Consolidated EBITDA1 grew by 17.7% to TRY3.3 billion, resulting in an EBITDA margin of 42.2%. 26.6% growth in Turkcell International business contributed to the topline growth. Net income increased by 26.6% to TRY1.1 billion. These results, in line with our targets, have reinforced our confidence in reaching our guidance for the year 2021, despite the challenging environment due to the pandemic. The highest subscriber additions of the past 3 years Thanks to our value offers meeting changing customer needs and our innovative campaigns facilitating the lives of our customers, we recorded 410 thousand postpaid subscriber and 190 thousand prepaid subscriber net additions in this quarter. Including the fixed broadband and IPTV services, the total 705 thousand net subscriber addition marks our highest level of the past 3 years. Our strong and fast network, convenient digital sales channels and brand loyalty have been instrumental in customers opting for Turkcell. Our postpaid customer base reached 22.4 million, reflecting 66% of the total mobile base on a 3 point rise year-over-year. Mobile blended ARPU (except for M2M) has reached TRY49.9 on an annual 8.7% rise on the back of a larger postpaid subscription base, rising data and digital service use and upsell efforts, despite the negative effect of the pandemic. We enhanced our customer loyalty by combining our customer-driven approach and analytical competences; accordingly, the average monthly churn rate of 1.8% was the lowest level of the past 3 years. The strong demand for fixed broadband has continued in this quarter, too, under the prevailing mobility restrictions within the scope of measures against the pandemic, and more widespread remote working. We gained a net 50 thousand fiber subscribers with our high-speed and unlimited fiber internet offers designed to meet the need for speed in homes where a large number of devices are connected at the same time. Accordingly, our fixed broadband customer base reached 2.5 million. Interest in our digital services is rising daily We continue pioneering the digital transformation of Turkey with the instant messaging, TV and music platforms, personal cloud services, search engine and e-mail services developed by Turkcell engineers. Enjoying increasing recognition, BiP, our instant messaging application, saw 32 million new downloads in this quarter. With its total downloads reaching 77 million, BiP has been the most downloaded local application in Turkey. With no imposition or discriminating among its users in terms of data privacy, BiP has reached 40 million three-month active users, approximately one third of which are outside of Turkey. TV+, our web-based digital TV platform, has been another outstanding service this quarter. Both IPTV and the OTT TV+ service users have accelerated in this quarter thanks to enriched content, as well as its accessibility through smart televisions. With the addition of net 49 thousand IPTV customers, we now offer IPTV services to 61 out of every 100 households among our residential fiber customers. We launched GAMEPLUS, our new gaming platform on which we have been focusing recently, in March in collaboration with NVIDIA GeForce NOW, a cloud-based gaming service. Thanks to the cloud-based gaming technology eliminating the need for particular hardware to play games, users can access over 950 games. We believe that the strong interest in this platform, which has reached 10.4 thousand premium users within just 15 days will continue in the coming periods. Overall, the stand-alone revenue of our digital services business reached TRY367 million with an increase of 28% year-over-year in this quarter, mainly on the back of these developments. We aim at more diversified monetization with the launch of the B2B models of fizy business, lifebox business and BiP Meet services over the coming months. Turkcell Digital Business Services continues pioneering the digital transformation of companies The total revenues of Digital Business Services through which we offer a wide range of new generation technologies to our corporate customers, from access to cyber security, from cloud technologies to data centers, and from managed services to the internet of things, reached TRY452 million on an annual increase of 27% in this quarter. We have supported corporates on their digitalization journey by signing over 700 new contracts. As of the end of the first quarter, we have put into practice 1,589 system integration and managed services projects to date; from these projects we have a contract value (backlog) of TRY1.1 billion to be realized after the first quarter of 2021. We have continued to strengthen our ecosystem by increasing the number of our global partnerships. In the first quarter we launched the SOAR (Security Orchestration Automation and Response) Service allowing for instantaneous actions to be taken over security components against incidents of cyber-attack, a Forensics service enabling corporations to learn about the trajectory of events taking place, including the weaknesses being exploited and likely remedial methods to be employed following probable cyber-attacks, as well as the Turkcell Digital Facility, our first IoT Platform service. Along with these, we continued enriching our portfolio by relaunching Kopilot Filom and a brand-new user experience on turkcellbulut.com.tr. Growth of the Techfin sector’s rising star, Paycell, gains speed Paycell, our innovative payment services platform in the field of techfin, marked a successful quarter with its rising users and growing mobile payment volume. As the number of three-month active Paycell users reached 5.3 million, mobile payment volume reached TRY351 million, doubling on an annual basis. During the same period, the Paycell Card transaction volume quadrupled. Overall, Paycell revenues grew by 53% on an annual basis in this quarter; non-group revenue increased 81%. In the forthcoming period, we aim at the widespread use of our Android POS service, an increased number of member merchants, and reaching more customers with our new services. We have set our sustainability targets We, as Turkcell Group, have prioritized the use of renewable sources towards our goal of maximizing the efficient use of natural resources, reflective of our business model which is sensitive to the environment and based on shaping technology according to the needs of society. As we have also shared at the ‘GSMA Mobile Net Zero’ event on April 20, we aim to meet 100% of our electricity consumption through renewable resources by 2030. Also this quarter, as a pioneer in mobile working in Turkey, we have put into practice our “Flexible Working Model” designed together with our employees. Accordingly, our employees, reflecting their preferences and planning, can work remotely or at our offices if need be, for an indefinite period without any limitation on location. With this model, we aim at enhancing the comfort and productivity of our employees, while at the same time offering the best working experience. Dividend of TRY 2.6 billion approved at the Ordinary General Assembly As part of our disclosure about the change in our shareholding structure, we had stated that the number of seats on the Board of Directors was increased to nine. At the Turkcell Ordinary General Assembly meeting held on April 15, these appointments were realized and the number of members set forth in our articles of association has been completed. At the same meeting, the distribution of the dividend of TRY2.6 billion, corresponding to 61% of the net distributable period profit, in three equal installments was approved. We are pleased to have distributed the first installment on the same day as this earnings disclosure. We will continue to serve our country and people with sustained investments in the upcoming period In firm hopes that the COVID-19 pandemic may finally be behind us in the near future, I believe wholeheartedly that we will achieve new successes, while serving our country and people in the quarters ahead. I extend my thanks to all our colleagues for their contribution that has enabled our strong start to the year, and to our Board of Directors for their confidence in us and their invaluable support. I also express our gratitude to our customers and business partners, ever with us on our journey to success. (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group Profit & Loss Statement (million TRY) Q120 Q420 Q121 y/y% q/q% Revenue 6,658.2 7,872.2 7,826.5 17.5% (0.6%) Cost of revenue1 (3,197.4) (3,938.1) (3,913.0) 22.4% (0.6%) Cost of revenue1/Revenue (48.0%) (50.0%) (50.0%) (2.0pp) - Gross Margin1 52.0% 50.0% 50.0% (2.0pp) - Administrative expenses (188.3) (210.7) (199.4) 5.9% (5.4%) Administrative expenses/Revenue (2.8%) (2.7%) (2.5%) 0.3pp 0.2pp Selling and marketing expenses (348.7) (400.8) (358.2) 2.7% (10.6%) Selling and marketing expenses/Revenue (5.2%) (5.1%) (4.6%) 0.6pp 0.5pp Net impairment losses on financial and contract assets (114.8) (79.5) (49.5) (56.9%) (37.7%) EBITDA2 2,809.0 3,243.0 3,306.5 17.7% 2.0% EBITDA Margin 42.2% 41.2% 42.2% - 1.0pp Depreciation and amortization (1,372.1) (1,634.6) (1,656.0) 20.7% 1.3% EBIT3 1,437.0 1,608.4 1,650.5 14.9% 2.6% EBIT Margin 21.6% 20.4% 21.1% (0.5pp) 0.7pp Net finance income / (costs) (221.4) (381.8) (207.1) (6.5%) (45.8%) Finance income4 621.5 (316.0) 1,601.9 157.7% n.m Finance costs4 (842.9) (65.8) (1,809.0) 114.6% n.m Other income / (expense) (94.0) (366.9) (12.1) (87.1%) (96.7%) Non-controlling interests (1.2) - (0.0) (100.0%) - Share of profit of equity accounted investees (3.2) (5.2) 17.7 n.m n.m Income tax expense (244.4) 447.6 (344.1) 40.8% (176.9%) Net Income 872.7 1,302.0 1,104.9 26.6% (15.1%) (1) Excluding depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (4) Fair value loss and interest expense regarding derivative instruments and the respective fair value gain and interest income regarding derivative instruments are represented on a net basis. Starting from Q219, interest income on financial assets and interest expenses for financial liabilities, both measured at amortized cost, are represented on a net basis. Historical periods were restated to reflect this change. Revenue of the Group grew by 17.5% year-on-year in Q121. This resulted mainly from Turkcell Turkey’s revenue growth supported by a larger subscriber base, price adjustments, higher data consumption and digital services usage. Turkcell International’s strong revenue growth and equipment sales backed by digital channels also assisted the Group revenue rise. Turkcell Turkey revenues, comprising 76% of Group revenues, rose 13.3% year-on-year to TRY5,979 million (TRY5,276 million). - Consumer segment revenues grew 11.3% driven mainly by a larger subscriber base, increased data consumption and digital services usage. - Corporate segment revenues rose 19.6% backed by robust performance on digital business services, which grew 27.3%. - Standalone digital services revenues registered as part of consumer and corporate segments grew 27.5% year-on-year in Q121 supported by the increase in the number of paid users. - Wholesale revenues grew 22.0% to TRY340 million (TRY279 million), mainly with data capacity upgrades of customers and the positive impact of currency movements, despite lower roaming revenues impacted by limited mobility. Turkcell International revenues, comprising 9% of Group revenues, increased 26.6% to TRY708 million (TRY560) million. This was mainly driven by strong revenue growth in Ukrainian operations and the positive impact of currency movements. Total techfin segment revenues, comprising 3% of Group revenues, were at TRY223 million (TRY220 million). The decline in the finance company’s revenues, which was due mainly to loan portfolio contraction, was more than offset by the increase in Paycell revenues. Please refer to the Techfin section for details. Other subsidiaries' revenues, at 12% of Group revenues, which mainly includes non-group call center and energy business revenues, and consumer electronics sales revenues rose 52.2% to TRY917 million (TRY603 million). This was driven mainly by the increase in equipment revenues supported by digital channels. Cost of revenue (excluding depreciation and amortization) rose to 50.0% (48.0%) as a percentage of revenues in Q121. This was due mainly to the increase in cost of goods sold (2.9pp), despite the decline in treasury share expense (0.6pp) and other cost items (0.3pp) as a percentage of revenues. Administrative Expenses declined to 2.5% (2.8%) as a percentage of revenues in Q121, driven mainly by lower office overhead costs and travel expenses. Selling and Marketing Expenses declined to 4.6% (5.2%) as a percentage of revenues in Q121. This was driven mainly by the decline in selling expenses (0.6pp) as a percentage of revenues. Net impairment losses on financial and contract assets declined to 0.6% (1.7%) as a percentage of revenues in Q121 mainly with the better collection performance. EBITDA1 rose by 17.7% year-on-year in Q121 leading to an EBITDA margin of 42.2% (42.2%), driven mainly by strong revenue growth. - Turkcell Turkey’s EBITDA rose 14.4% year-on-year to TRY2,731 million (TRY2,388 million) leading to an EBITDA margin of 45.7% (45.3%). - Turkcell International EBITDA grew 37.9% year-on-year to TRY345 million (TRY250 million) with an EBITDA margin of 48.6% (44.6%). This performance was led by strong revenue growth and disciplined cost controls. - Techfin segment EBITDA was at TRY138 million (TRY137 million) with an EBITDA margin of 62.0% (62.1%). - The EBITDA of other subsidiaries stood at TRY93 million (TRY35 million). Depreciation and amortization expenses increased 20.7% year-on-year in Q121. Net finance expense declined to TRY207 million (TRY221 million) in Q121. This was driven mainly by higher interest income, despite a higher net FX loss after hedging, and a larger interest expense on financial assets and liabilities. See Appendix A for the details of net foreign exchange gain and loss. Income tax expense increased to TRY344 million (TRY244 million) due mainly to a higher deferred tax expense incurred in Q121. Please see Appendix A for details. Net income of the Group rose 26.6% to TRY1,105 million (TRY873 million) in Q121, mainly due to robust operational profitability and higher interest income on time deposits, despite a higher net FX loss after hedging. Total cash & debt: Consolidated cash as of March 31, 2021 increased to TRY13,467 million from TRY11,861 million as of December 31, 2020, driven by cash flow generation and the positive impact of currency movements. Excluding FX swap transactions, 78% of our cash is in US$, 8% in EUR, 13% in TRY and the remaining in other currencies. Consolidated debt as of March 31, 2021 increased to TRY24,896 million from TRY21,586 million as of December 31, 2020 mainly due to the impact of currency movements and new borrowings. Please note that TRY2,248 million of our consolidated debt is comprised of lease obligations. Consolidated debt breakdown excluding lease obligations: - Turkcell Turkey’s debt was at TRY20,467 million, of which TRY11,816 million (US$1,419 million) was denominated in US$, TRY6,693 million (EUR685 million) in EUR, TRY572 million (CNY454 million) in CNY, and the remaining TRY1,387 million in TRY. (1) EBITDA is a non-GAAP financial measure. See page 16 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income - The finance company had a debt balance of TRY1,089 million, of which TRY234 million (US$28 million) was denominated in US$, and TRY467 million (EUR48 million) in EUR with the remaining TRY388 million in TRY. - The debt balance of lifecell was TRY1,092 million, fully denominated in UAH. TRY1,203 million of lease obligations is denominated in TRY, TRY69 million (US$8 million) in US$, TRY211 million (EUR22 million) in EUR, and the remaining balance in other local currencies (Please note that the figures in parentheses refer to US$ or EUR equivalents). Net debt as of March 31, 2021 was at TRY11,429 million with a net debt to EBITDA ratio of 0.9 times. Excluding finance company consumer loans, our telco only net debt was at TRY9,534 million with a leverage of 0.8 times. Turkcell Group had a long FX position of US$183 million as at the end of first quarter. (Please note that this figure takes advance payments into account). Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY2,257 million in Q121. In the same period operational capital expenditures (excluding license fees) at the Group level were at 18.8% of total revenues. Capital expenditures (million TRY) Q120 Q420 Q121 Operational Capex 836.7 1,904.2 1,467.9 License and Related Costs 28.1 9.3 - Non-operational Capex (Including IFRS15 & IFRS16) 695.2 971.2 789.4 Total Capex 1,560.0 2,884.7 2,257.3 Summary of Operational Data Q120 Q420 Q121 y/y % q/q % Number of subscribers (million) 36.3 36.7 37.4 3.0% 1.9% Mobile Postpaid (million) 21.0 22.0 22.4 6.7% 1.8% Mobile M2M (million) 2.7 2.8 2.9 7.4% 3.6% Mobile Prepaid (million) 12.2 11.5 11.6 (4.9%) 0.9% Fiber (thousand) 1,518.4 1,664.3 1,714.3 12.9% 3.0% ADSL (thousand) 695.6 707.6 716.3 3.0% 1.2% Superbox (thousand)1 399.5 591.2 614.6 53.8% 4.0% Cable (thousand) 58.7 67.7 64.9 10.6% (4.1%) IPTV (thousand) 747.3 871.3 920.7 23.2% 5.7% Churn (%)2 Mobile Churn (%)3 2.0% 3.0% 1.8% (0.2pp) (1.2pp) Fixed Churn (%) 2.1% 1.9% 1.6% (0.5pp) (0.3pp) ARPU4 (Average Monthly Revenue per User) (TRY) Mobile ARPU, blended 42.6 46.8 46.0 8.0% (1.7%) Mobile ARPU, blended (excluding M2M) 45.9 50.5 49.9 8.7% (1.2%) Postpaid 56.1 59.8 57.8 3.0% (3.3%) Postpaid (excluding M2M) 63.6 67.8 65.8 3.5% (2.9%) Prepaid 19.9 23.4 23.4 17.6% - Fixed Residential ARPU, blended 66.6 72.6 73.9 11.0% 1.8% Residential Fiber ARPU 68.3 73.6 74.3 8.8% 1.0% Average mobile data usage per user (GB/user) 9.8 13.0 12.6 28.6% (3.1%) Mobile MoU (Avg. Monthly Minutes of usage per subs) blended 458.2 548.6 532.0 16.1% (3.0%) (1) Superbox subscribers are included in mobile subscribers. (2) Churn figures represent average monthly churn figures for the respective quarters. (3) In Q117, our churn policy was revised to extend from 9 months to 12 months (the period at the end of which we disconnect prepaid subscribers who have not topped up above TRY10). Additionally, under our revised policy, prepaid customers who last topped up before March is disconnected at the latest by year-end. As a regulatory requirement, we started to disconnect prepaid lines in accordance with the new ICTA regulation, which requires deactivation of prepaid lines which lack residency documents by the 6th month of subscription starting from 2019. Furthermore, as required by the ICTA, the line of a deceased customer should either be transferred to a successor/another user or terminated. Lines, which are not transferred or terminated, are to be disconnected at the end of seven months. (4) We historically recorded all TV-related revenue under Turkcell Superonline and presented the related ARPU under fixed residential ARPU. As previously announced, our TV business has become a separate standalone subsidiary. In order to reflect this change in our organization, we decided to shift mobile OTT TV ARPU from fixed residential ARPU into mobile ARPU starting from Q320. We note that mobile TV revenues are generated by mobile subscribers. IPTV revenues will continue to be recorded under Turkcell Superonline and included under residential fixed ARPU. Moreover, starting from Q121, as a consequence of the change in reportable segments, commission revenues resulting from devices and accessories sales have been excluded from mobile ARPU of Turkcell Turkey since these commissions are now reported under the Other segment. In order to maintain comparability, we provide ARPU data for the last three years, revised to reflect this change on our investor relations website in the financial and operational data spreadsheet. We started the year registering a strong subscriber net addition performance. Accordingly, the Turkcell Turkey subscriber base expanded by 705 thousand quarterly net additions, reaching 37.4 million. This robust performance was driven mainly by our offerings with rich value propositions, customer-oriented campaigns and retention focus. This also confirms our commitment to achieving 1 million subscriber net additions for the full year. On the mobile front, our subscriber base expanded by 599 thousand quarterly net additions, reaching 34.0 million in total. This was mainly driven by 410 thousand quarterly net additions to the postpaid subscriber base, which reached 65.8% (63.2%) of total mobile subscribers. Meanwhile, we registered 190 thousand quarterly net prepaid subscriber additions. On the fixed front, our subscriber base continued to grow, reaching 2.5 million subscribers on 56 thousand total quarterly net additions. Fiber subscribers exceeded 1.7 million on 50 thousand quarterly net additions. Superbox, our fixed-wireless access offering alternative to fiber, reached 615 thousand subscribers on 23 thousand quarterly net additions in Q121. Our cable subscribers were at 65 thousand by the end of the quarter. Meanwhile, our IPTV customers rose to 921 thousand on 49 thousand quarterly net additions. The average monthly mobile churn rate declined to 1.8% in Q121, which was the lowest churn rate since Q118. Our customer experience approach supported by analytical capabilities resulted in a better customer retention performance. The average monthly fixed churn rate declined to 1.6% mainly driven by proactive retention actions. Our mobile ARPU (excluding M2M) rose 8.7% year-on-year in Q121 on the back of price adjustments and a higher postpaid subscriber share, as well as increased data consumption and digital services usage, despite lower roaming revenues. Our residential fiber ARPU growth was 8.8% year-on-year in Q121. This was driven mainly by price adjustments, upsell efforts and the acquisition of higher revenue generating subscribers. Average monthly mobile data usage per user rose 28.6% year-on-year to 12.6 GB with the increasing number and data consumption of 4.5G users. Accordingly, the average mobile data usage of 4.5G users reached 14.4 GB in Q121 on 24.1% year-on-year rise. The increasing number of Superbox subscribers also had a positive impact on data consumption. Total smartphone5 penetration on our network reached 84% in Q121 on a 5.9pp year-on-year increase. 91% of those smartphones are 4.5G compatible smartphones. The number of 4.5G subscriptions reached 32.4 million, while only 70% of these subscriptions have 4.5G compatible smartphones. (5) Smartphone penetration was positively impacted by approximately 700 thousand smartphone net additions in Q121 that resulted from an algorithm improvement to detect devices which were not previously classified as smartphones. TURKCELL INTERNATIONAL lifecell1 Financial Data Q120 Q420 Q121 y/y% q/q% Revenue (million UAH) 1,580.1 1,913.8 1,899.2 20.2% (0.8%) EBITDA (million UAH) 798.2 1,042.9 1,076.8 34.9% 3.3% EBITDA margin (%) 50.5% 54.5% 56.7% 6.2pp 2.2pp Net income / (loss) (million UAH) (150.9) 2,736.7 83.2 n.m (97.0%) Capex (million UAH) 635.3 1,545.7 572.4 (9.9%) (63.0%) Revenue (million TRY) 386.4 531.4 508.8 31.7% (4.3%) EBITDA (million TRY) 195.2 289.6 288.6 47.8% (0.3%) EBITDA margin (%) 50.5% 54.5% 56.7% 6.2pp 2.2pp Net income / (loss) (million TRY) (37.0) 731.9 22.4 n.m (96.9%) (1) Since July 10, 2015, we hold a 100% stake in lifecell. lifecell (Ukraine) had another quarter with strong revenue growth performance. Accordingly, revenues rose 20.2% year-on-year in local currency terms, driven mainly by subscriber base growth, price adjustments and higher mobile data revenues. This was despite lower roaming revenues in Q121 due to the pandemic, which have yet to be restored. lifecell also registered robust EBITDA growth of 34.9%, which resulted in a 6.2pp EBITDA margin improvement to 56.7%. This was mainly the result of strong revenue growth, lower operational expenditures as a percentage of revenues led by savings in the pandemic environment and disciplined cost controls. The decline in MTR rates also supported lifecell’s solid EBITDA performance. Moreover, lifecell continued to report positive net income in Q121 on the back of strong operational performance. lifecell revenues in TRY terms rose 31.7% year-on-year in Q121, which reflected the solid operational performance and positive impact of currency movements. lifecell’s EBITDA in TRY terms grew by 47.8% leading to an EBITDA margin of 56.7%. lifecell Operational Data Q120 Q420 Q121 y/y% q/q% Number of subscribers (million)2 8.9 9.3 9.2 3.4% (1.1%) Active (3 months)3 7.5 8.1 8.0 6.7% (1.2%) MOU (minutes) (12 months) 162.8 185.5 177.2 8.8% (4.5%) ARPU (Average Monthly Revenue per User), blended (UAH) 59.2 69.6 68.1 15.0% (2.2%) Active (3 months) (UAH) 69.5 79.9 78.7 13.2% (1.5%) (2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. (3) Active subscribers are those who in the past three months made a revenue generating activity. lifecell’s three-month active subscriber base grew by 6.7% year-on-year to 8.0 million. This was driven mainly by lifecell’s regional offers, tariffs with rich content and customer retention focus. lifecell’s 3-month active ARPU rose 13.2% year-on-year to UAH78.7, driven mainly by price adjustments and increased data consumption. lifecell continued to increase the penetration of its 4.5G users within its customer base in Q121. Accordingly, the 3-month active 4.5G subscribers grew 40% year-on-year reaching 66% of total data users as at the end of Q121. The increase in 4.5G users continued to support data consumption. Average data consumption per user rose 31% year-on-year in Q121 on the back of 4.5G users, the data usage of which rose 22% year-on-year to 13GB per month. Meanwhile, lifecell continued its leadership of the Ukrainian market in smartphone penetration, which had reached 82% as of the end of Q121. lifecell continued its focus on increasing the penetration of its digital services within its customer base in Q121. BeST1 Q120 Q420 Q121 y/y% q/q% Number of subscribers (million) 1.5 1.4 1.4 (6.7%) - Active (3 months) 1.0 1.1 1.1 10.0% - Revenue (million BYN) 32.5 37.8 38.0 16.9% 0.5% EBITDA (million BYN) 8.4 10.3 9.2 9.5% (10.7%) EBITDA margin (%) 26.0% 27.4% 24.2% (1.8pp) (3.2pp) Net loss (million BYN) (8.1) (7.1) (8.1) - 14.1% Capex (million BYN) 11.1 11.0 18.0 62.2% 63.6% Revenue (million TRY) 89.1 114.1 109.4 22.8% (4.1%) EBITDA (million TRY) 23.1 31.1 26.5 14.7% (14.8%) EBITDA margin (%) 26.0% 27.3% 24.2% (1.8pp) (3.1pp) Net loss (million TRY) (22.2) (21.7) (23.3) 5.0% 7.4% (1) BeST, in which we hold an 80% stake, has operated in Belarus since July 2008. BeST revenues grew by 16.9% year-on-year in local currency terms. This was driven mainly by growth in voice, data, messaging and handset sales revenues, despite lower roaming revenues due to the pandemic. BeST’s EBITDA grew 9.5% year-on-year resulting in an EBITDA margin of 24.2%. BeST’s revenues in TRY terms grew by 22.8% in Q121 year-on-year, while its EBITDA margin was at 24.2%. BeST continued to expand its 4G coverage in Belarus in Q121. Accordingly, it leads the market in terms of 4G geographical coverage. Furthermore, BeST started to provide LTE800 service over beCloud’s network in 2 regions, which enabled higher coverage and positively impacted customer satisfaction. All these efforts supported the increase of 4G services penetration as reflected by the number of 4G users, which reached 65% of its 3-month active subscriber base. This led to higher average monthly data consumption of subscribers, which reached 12.7 GB on 35% year-on-year growth. BeST continued its efforts to promote its digital services in Q121, as digital services usage leads to higher loyalty and increased ARPU generation. Accordingly, 33% of 3-month active subscribers use at least one digital service. Moreover, subscriber acquisitions through digital subscription, which was introduced in Q320, reached 10% of total subscriptions. Kuzey Kıbrıs Turkcell2 (million TRY) Q120 Q420 Q121 y/y% q/q% Number of subscribers (million) 0.5 0.5 0.5 - - Revenue 54.5 65.6 61.9 13.6% (5.6%) EBITDA 20.3 21.8 24.5 20.7% 12.4% EBITDA margin (%) 37.3% 33.2% 39.6% 2.3pp 6.4pp Net income 6.9 9.3 9.9 43.5% 6.5% Capex 16.3 23.0 15.7 (3.7%) (31.7%) (2) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999 Kuzey Kıbrıs Turkcell revenues grew 13.6% year-on-year in Q121, driven by higher data and handset sales revenues. The EBITDA of Kuzey Kıbrıs Turkcell rose 20.7% year-on-year leading to an EBITDA margin of 39.6%. This was driven by the revenue growth as well as savings achieved in the pandemic environment. TECHFIN Paycell Financial Data (million TRY) Q120 Q420 Q121 y/y% q/q% Revenue 64.3 79.8 98.1 52.6% 22.9% EBITDA 36.4 37.0 53.3 46.4% 44.1% EBITDA Margin (%) 56.6% 46.4% 54.4% (2.2pp) 8.0pp Net Income 28.5 26.1 40.2 41.1% 54.0% Paycell registered a remarkable performance in Q121 achieving 52.6% year-on year revenue growth. This performance was positively impacted by the increasing demand for e-commerce transactions through cashless payment methods. Paycell was able monetize this demand with its mobile payment solutions; particularly direct carrier billing and e-money. Paycell’s EBITDA rose 46.4% year-on-year leading to an EBITDA margin of 54.4%. With a focus on expanding its business, Paycell concentrated its efforts on growing non-group driven revenues. Accordingly, non-group revenues rose 81.4% year-on-year this quarter. The strong operational performance resulted in a robust net income rise of 41.1% to TRY40.2 million. On the operational front, Paycell’s 3-month active users numbered 5.3 million. The increase in active users was driven mainly by increased digital content consumption, an expanding merchant channel and functionality of the Paycell application. Paycell serves 13 thousand contracted merchants as at the end of the quarter. The total transaction volume of TRY2.4 billion for the quarter was a result of the increase in active users and their increased consumption. The DCB transactions volume (non-group) rose 106% year-on-year, while Paycell card transaction volume was up by 291%. Meanwhile, Paycell also continues its efforts to increase the penetration of its android POS, which will facilitate expanding the merchant channel, as well as support payment facilitator revenues. Financell Financial Data (million TRY) Q120 Q420 Q121 y/y% q/q% Revenue 162.6 144.7 130.0 (20.0%) (10.2%) EBITDA 99.4 96.0 85.3 (14.2%) (11.1%) EBITDA Margin (%) 61.1% 66.3% 65.6% 4.5pp (0.7pp) Net Income 62.8 61.3 95.0 51.3% 55.0% Financell revenues continued to contract in Q121 due mainly to the lower loan portfolio compared to the same period of the previous year and lower average interest rate on loan portfolio. Meanwhile, the decline in Financell’s EBITDA was slower compared to revenues which resulted in 4.5pp rise in EBITDA margin. This was driven mainly by the customer portfolio improvement with better credit scoring, successful collection performance and sale of doubtful receivables that led to a decline in bad debt expenses. Net income increased 51.3% year-on-year to TRY95.0 million, driven mainly by lower FX loss after hedging. Financell’s loan portfolio declined from TRY2.1 billion as of Q120 to TRY1.9 billion as of Q121. This was due mainly to the installment limitation on consumer loans for telecom devices. Moreover, sales volume was affected by the negative impacts of COVID-19 measures. Compared to the previous quarter, Financell had a more stable loan portfolio. In the meantime, Financell’s cost of risk declined to 1.0% from 2.3% in Q420, due mainly to a successful collection performance, customer portfolio improvement, as well as the sale of doubtful receivables. Please also note that 81% of the loans granted by Financell over the last year is covered by an insurance product. Turkcell Group Subscribers Turkcell Group registered subscribers amounted to approximately 48.6 million as of March 31, 2021. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell and BeST, as well as those of Kuzey Kıbrıs Turkcell. Turkcell Group Subscribers Q120 Q420 Q121 y/y% q/q% Mobile Postpaid (million) 21.0 22.0 22.4 6.7% 1.8% Mobile Prepaid (million) 12.2 11.5 11.6 (4.9%) 0.9% Fiber (thousand) 1,518.4 1,664.3 1,714.3 12.9% 3.0% ADSL (thousand) 695.6 707.6 716.3 3.0% 1.2% Superbox (thousand)1 399.5 591.2 614.6 53.8% 4.0% Cable (thousand) 58.7 67.7 64.9 10.6% (4.1%) IPTV (thousand) 747.3 871.3 920.7 23.2% 5.7% Turkcell Turkey subscribers (million)2 36.3 36.7 37.4 3.0% 1.9% lifecell (Ukraine) 8.9 9.3 9.2 3.4% (1.1%) BeST (Belarus) 1.5 1.4 1.4 (6.7%) - Kuzey Kıbrıs Turkcell 0.5 0.5 0.5 - - lifecell Europe3 0.2 - - n.a n.a Turkcell Group Subscribers (million) 47.3 47.9 48.6 2.7% 1.5% (1) Superbox subscribers are included in mobile subscribers. (2) Subscribers to more than one service are counted separately for each service. (3) The marketing partnership between Turkcell Europe and Telekom Deutschland Multibrand GmbH, the subsidiary of Deutsche Telekom, has ended on April 30, 2020 pursuant to the respective agreement. Turkcell Europe was rebranded as lifecell Europe on January 15, 2018. OVERVIEW OF THE MACROECONOMIC ENVIRONMENT The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below. Q120 Q420 Q121 y/y% q/q% GDP Growth (Turkey) 4.5% 5.9% n.a n.a n.a Consumer Price Index (Turkey) (yoy) 11.9% 14.6% 16.2% 4.3pp 1.6pp US$ / TRY rate Closing Rate 6.5160 7.3405 8.3260 27.8% 13.4% Average Rate 6.1419 7.8933 7.5086 22.3% (4.9%) EUR / TRY rate Closing Rate 7.2150 9.0079 9.7741 35.5% 8.5% Average Rate 6.7901 9.3551 9.0683 33.6% (3.1%) US$ / UAH rate Closing Rate 28.06 28.27 27.89 (0.6%) (1.3%) Average Rate 25.12 28.40 28.07 11.7% (1.2%) US$ / BYN rate Closing Rate 2.6023 2.5789 2.6242 0.8% 1.8% Average Rate 2.2433 2.6088 2.6112 16.4% 0.1% RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results. Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes translation gain/(loss), finance income, finance expense, share of profit of equity accounted investees, gain on sale of investments, minority interest and other income/(expense). Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of our results of operations, as reported under IFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with IFRS as issued by the IASB, to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with IFRS as issued by the IASB. Turkcell Group (million TRY) Q120 Q420 Q121 y/y% q/q% Adjusted EBITDA 2,809.0 3,243.0 3,306.5 17.7% 2.0% Depreciation and amortization (1,372.1) (1,634.6) (1,656.0) 20.7% 1.3% EBIT 1,437.0 1,608.4 1,650.5 14.9% 2.6% Finance income 621.5 (316.0) 1,601.9 157.7% n.m Finance costs (842.9) (65.8) (1,809.0) 114.6% n.m Other income / (expense) (94.0) (366.9) (12.1) (87.1%) (96.7%) Share of profit of equity accounted investees (3.2) (5.2) 17.7 n.m n.m Consolidated profit before income tax & minority interest 1,118.3 854.5 1,449.1 29.6% 69.6% Income tax expense (244.4) 447.6 (344.1) 40.8% (176.9%) Consolidated profit before minority interest 873.9 1,302.0 1,104.9 26.4% (15.1%) NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2021. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2020 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers. ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY7.8 billion revenue in Q121 with total assets of TRY56.0 billion as of March 31, 2021. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr. Appendix A – Tables Table: Net foreign exchange gain and loss details Million TRY Q120 Q420 Q121 y/y% q/q% Net FX loss before hedging (688.3) 254.7 (1,618.1) 135.1% (735.3%) Swap interest income/(expense)1 (121.9) (97.8) (114.5) (6.1%) 17.1% Fair value gain on derivative financial instruments1 709.1 (400.3) 1,456.1 105.3% n.m Net FX gain / (loss) after hedging (101.1) (243.4) (276.5) 173.5% 13.6% (1) Swap interest income / (expense) which was included in fair value gain on derivative financial instruments line in previous quarters has been presented separately. Table: Income tax expense details Million TRY Q120 Q420 Q121 y/y% q/q% Current tax expense (161.5) (136.2) (163.2) 1.1% 19.8% Deferred tax income / (expense) (82.8) 583.7 (181.0) 118.6% (131.0%) Income Tax expense (244.4) 447.6 (344.1) 40.8% (176.9%) 2020 2020 2020 2021 5,276.3 6,058.7 22,822.9 5,978.6 559.6 747.3 2,542.4 708.2 219.8 225.3 845.2 222.6 602.5 840.9 2,893.3 917.1 6,658.2 7,872.2 29,103.7 7,826.5 (4,569.5) (5,572.8) (20,336.1) (5,568.9) 2,088.7 2,299.4 8,767.7 2,257.6 (188.3) (210.7) (749.6) (199.4) (348.7) (400.8) (1,373.0) (358.2) (94.0) (366.9) (523.3) (12.1) (114.8) (79.5) (349.6) (49.5) 1,343.0 1,241.5 5,772.3 1,638.4 (842.9) (65.8) (3,251.2) (1,809.0) 621.5 (316.0) 2,119.5 1,601.9 (3.2) (5.2) (13.8) 17.7 1,118.3 854.5 4,626.8 1,449.1 (244.4) 447.6 (387.2) (344.1) 873.9 1,302.0 4,239.6 1,104.9 - - - - (1.2) - (2.5) (0.0) 872.7 1,302.0 4,237.1 1,104.9 0.40 0.60 1.94 0.51 31.4% 29.2% 30.1% 28.8% 2,809.0 3,243.0 12,270.3 3,306.5 1,560.0 2,884.7 9,078.9 2,257.3 836.7 1,904.2 5,391.6 1,467.9 28.1 9.3 42.8 - 695.2 971.2 3,644.6 789.4 9,212.2 11,860.6 11,860.6 13,467.0 45,328.7 51,498.4 51,498.4 55,987.2 13,964.6 16,353.7 16,353.7 19,074.5 19,499.9 21,586.4 21,586.4 24,895.8 26,651.1 30,713.5 30,713.5 34,253.0 18,677.6 20,784.9 20,784.9 21,734.3 2020 2020 2020 2021 5,276.3 6,058.7 22,822.9 5,978.6 559.6 747.3 2,542.4 708.2 219.8 225.3 845.2 222.6 602.5 840.9 2,893.3 917.1 6,658.2 7,872.2 29,103.7 7,826.5 (4,569.5) (5,572.8) (20,336.1) (5,568.9) 2,088.7 2,299.4 8,767.7 2,257.6 (188.3) (210.7) (749.6) (199.4) (348.7) (400.8) (1,373.0) (358.2) 631.9 (578.5) 1,543.4 698.7 2,183.7 1,109.4 8,188.5 2,398.8 (114.8) (79.5) (349.6) (49.5) 80.9 4.5 167.8 50.7 - (30.2) (31.5) (47.6) (3.2) (5.2) (13.8) 17.7 2,146.6 999.1 7,961.4 2,370.1 605.3 (486.5) 1,788.6 1,373.1 (1,633.6) 341.9 (5,123.2) (2,294.1) 1,118.3 854.5 4,626.8 1,449.1 (244.4) 447.6 (387.2) (344.1) 873.9 1,302.0 4,239.6 1,104.9 - - - - 873.9 1,302.0 4,239.6 1,104.9 (1.2) - (2.5) (0.0) 872.7 1,302.0 4,237.1 1,104.9 0.40 0.60 1.94 0.51 31.4% 29.2% 30.1% 28.8% 2,809.0 3,243.0 12,270.3 3,306.5 1,560.0 2,884.7 9,078.9 2,257.3 836.7 1,904.2 5,391.6 1,467.9 28.1 9.3 42.8 - 695.2 971.2 3,644.6 789.4 9,212.2 11,860.6 11,860.6 13,467.0 45,328.7 51,498.4 51,498.4 55,987.2 13,964.6 16,353.7 16,353.7 19,074.5 19,499.9 21,586.4 21,586.4 24,895.8 26,651.1 30,713.5 30,713.5 34,253.0 18,677.6 20,784.9 20,784.9 21,734.3
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Turkcell Iletisim Hizmetleri: Fourth Quarter and Full Year 2020 Results
ISTANBUL--(BUSINESS WIRE)--Turkcell Iletisim Hizmetleri (NYSE:TKC) (BIST:TCELL): Please note that all financial data is consolidated and comprises that of Turkcell Iletisim Hizmetleri A.S. (the “Company”, or “Turkcell”) and its subsidiaries and associates (together referred to as the “Group”), unless otherwise stated. We have three reporting segments: "Turkcell Turkey" which comprises all of our telecom related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom related businesses outside of Turkey. “Other subsidiaries” which is mainly comprised of our call center business revenues, financial services revenues, energy business revenues and inter-business eliminations. "Turkcell Turkey" which comprises all of our telecom related businesses in Turkey (as used in our previous releases in periods prior to Q115, this term covered only the mobile businesses). All non-financial data presented in this press release is unconsolidated and comprises Turkcell Turkey only figures, unless otherwise stated. The terms "we", "us", and "our" in this press release refer only to Turkcell Turkey, except in discussions of financial data, where such terms refer to the Group, and except where context otherwise requires. “Turkcell International” which comprises all of our telecom related businesses outside of Turkey. “Other subsidiaries” which is mainly comprised of our call center business revenues, financial services revenues, energy business revenues and inter-business eliminations. In this press release, a year-on-year comparison of our key indicators is provided and figures in parentheses following the operational and financial results for December 31, 2020 refer to the same item as at December 31, 2019. For further details, please refer to our consolidated financial statements and notes as at and for December 31, 2020, which can be accessed via our website in the investor relations section (www.turkcell.com.tr). Selected financial information presented in this press release for the fourth quarter and for the full year of 2019 and 2020 is based on IFRS figures in TRY terms unless otherwise stated. In the tables used in this press release totals may not foot due to rounding differences. The same applies to the calculations in the text. Year-on-year and quarter-on-quarter percentage comparisons appearing in this press release reflect mathematical calculation. FINANCIAL HIGHLIGHTS TRY million Q419 Q420 y/y% FY19 FY20 y/y% Revenue 6,684 7,872 17.8% 25,137 29,104 15.8% EBITDA1 2,754 3,243 17.8% 10,426 12,270 17.7% EBITDA Margin (%) 41.2% 41.2% - 41.5% 42.2% 0.7pp EBIT2 1,349 1,608 19.2% 5,380 6,296 17.0% EBIT Margin (%) 20.2% 20.4% 0.2pp 21.4% 21.6% 0.2pp Net Income 756 1,302 72.3% 3,246 4,237 30.5% Net income excluding one-off items3 955 1,025 7.4% 2,850 3,953 38.7% FULL YEAR HIGHLIGHTS Solid financial performance: Group revenues up 16% with Turkcell Turkey’s topline growth of 17% supported mainly by strong ARPU performance, corporate projects and equipment sales on digital channels EBITDA up 18% leading to an EBITDA margin of 42.2% on 0.7pp improvement; EBIT up 17% resulting in an EBIT margin of 21.6% Net income up 31% positively impacted by TRY689 million deferred tax income registered by lifecell; net income up 39% excluding this impact and other one-off items TRY812 million dividends distributed Leverage down to 0.8x, despite FX fluctuations; long FX position at US$132 million Strong free cash flow4 generation of TRY3.4 billion Group revenues up 16% with Turkcell Turkey’s topline growth of 17% supported mainly by strong ARPU performance, corporate projects and equipment sales on digital channels EBITDA up 18% leading to an EBITDA margin of 42.2% on 0.7pp improvement; EBIT up 17% resulting in an EBIT margin of 21.6% Net income up 31% positively impacted by TRY689 million deferred tax income registered by lifecell; net income up 39% excluding this impact and other one-off items TRY812 million dividends distributed Leverage down to 0.8x, despite FX fluctuations; long FX position at US$132 million Strong free cash flow4 generation of TRY3.4 billion Operational momentum continued: Turkcell Turkey subscriber base up by 1.1 million net additions; 1.6 million mobile postpaid net additions Superbox5 subscribers at 591 thousand on 268 thousand annual net additions Mobile ARPU6 growth of 15.0% driven mainly by higher postpaid share and increased data usage Residential fiber ARPU growth of 9.2% 2021 guidance7; revenue target of 14%-16%, EBITDA target of around TRY14 billion, and operational capex over sales ratio8 target of around 20% Turkcell Turkey subscriber base up by 1.1 million net additions; 1.6 million mobile postpaid net additions Superbox5 subscribers at 591 thousand on 268 thousand annual net additions Mobile ARPU6 growth of 15.0% driven mainly by higher postpaid share and increased data usage Residential fiber ARPU growth of 9.2% 2021 guidance7; revenue target of 14%-16%, EBITDA target of around TRY14 billion, and operational capex over sales ratio8 target of around 20% FOURTH QUARTER HIGHLIGHTS Robust financial performance: Group revenues up 18% on the back of strong performance of Turkcell Turkey EBITDA up 18% resulting in an EBITDA margin of 41.2%; EBIT up 19% leading to an EBIT margin of 20.4% Group net income at TRY1,302 million positively impacted by deferred tax income registered by lifecell; healthy net income performance of TRY1 billion excluding this impact and other one-off items Group revenues up 18% on the back of strong performance of Turkcell Turkey EBITDA up 18% resulting in an EBITDA margin of 41.2%; EBIT up 19% leading to an EBIT margin of 20.4% Group net income at TRY1,302 million positively impacted by deferred tax income registered by lifecell; healthy net income performance of TRY1 billion excluding this impact and other one-off items Solid operational performance continued: Quarterly mobile postpaid customer net additions of 464 thousand; 66% postpaid share Mobile ARPU growth of 11.3% year-on-year; residential fiber ARPU growth of 8.6% year-on-year Average monthly data usage of 4.5G subscribers at 14.9 GB in Q420 Digital channels’ share in Turkcell Turkey consumer sales (excluding fixed business) at 14.3% Quarterly mobile postpaid customer net additions of 464 thousand; 66% postpaid share Mobile ARPU growth of 11.3% year-on-year; residential fiber ARPU growth of 8.6% year-on-year Average monthly data usage of 4.5G subscribers at 14.9 GB in Q420 Digital channels’ share in Turkcell Turkey consumer sales (excluding fixed business) at 14.3% (1) EBITDA is a non-GAAP financial measure. See page 17 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Please see Appendix A for details of one-off items. (4) Free cash flow calculation includes EBITDA and the following items as per IFRS cash flow statement; acquisition of property, plant and equipment, acquisition of intangible assets, change in operating assets/liabilities, payment of lease liabilities and income tax paid. (5) Superbox subscribers are included in mobile subscribers. (6) Excluding M2M (7) Please note that this paragraph contains forward looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2019 filed with the U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. (8) Excluding license fee For further details, please refer to our consolidated financial statements and notes as at December 31, 2020 via our website in the investor relations section (www.turkcell.com.tr). COMMENTS BY MURAT ERKAN, CEO We concluded the year 2020 successfully thanks to our sound game plan and strategy The year 2020 will forever be remembered in world history for the COVID-19 pandemic. And having caused significant changes worldwide both of an economic and social dimension, the pandemic brought about the transformation of daily life and the way we do business. While we all became acquainted with the concepts of social distancing, remote working and distance learning, digitalization has left its mark on both our individual lives and the corporate world at an unprecedented rate. This period has indicated that one of the key elements in proceeding swiftly and successfully with digital transformation is a robust telecommunication infrastructure. And by mobilizing our technological infrastructure, know-how and competencies we have continued to provide our customers with an uninterrupted and high-quality communication experience. Indeed, this year we have felt more than ever the value of the systematic investment made in our infrastructure, and of having already adopted a digitalization strategy. Our investors continued to gain through our strong results In 2020, we achieved strong operational and financial results thanks to our digital-oriented strategy and sound business model. This was managed in spite of the global economic and political repercussions of the pandemic that impacted our countries of operations and Turkey in general. Consolidated revenues reached TRY29.1 billion with a year-on-year increase of 15.8%. As consolidated EBITDA1 rose to TRY12.3 billion on an increase of 17.7%, the EBITDA margin printed at 42.2%. Our EBIT2 margin was 21.6%. Excluding one-off impacts, net profit was TRY4 billion on a strong annual increase of 39%. The operational capex to revenues ratio was at 18.5% thanks to effective management of investment need. Along with these results that exceeded our guidance in terms of growth and profitability, in 2020 we distributed a dividend to our investors of TRY812 million corresponding to the highest rate permissible by current legislation, and reflecting our effective balance sheet management and cash generation strength. We broke the record of the past 11 years with a net 1.6 million postpaid mobile subscriber additions. With that, we surpassed our additional 1 million subscriber target in 2020 In a year during which the effects of the pandemic were felt deeply, one of which being limited mobility, we gained a net 1.1 million subscribers, thereby achieving our target, despite the challenging circumstances. This resulted from our customer-driven strategy, innovative and comprehensive offers, broad sales network supported by digital channels and smartly managed strong infrastructure. As our postpaid mobile subscriber base expanded at the record level of the past 11 years with net 1.6 million additions, its ratio to total mobile subscribers reached 66%. Mobile blended ARPU3 was at TRY49.1 on an annual rise of 15.0% with the effect of the larger postpaid subscriber base, rising data and digital service usage and upsell to higher tariffs. We gained a net 180 thousand fiber subscribers on increased demand for our fixed broadband offers in 2020 as our customers spent more time at home. At the same time, residential fiber ARPU reached TRY70.9 on a rise of 9.2%. Superbox, through which we offer uninterrupted home internet at fiber speed over our mobile network, has become one of our most successful products. The Superbox subscriber number reached 591 thousand with an additional net 268 thousand subscriptions reflecting accelerating demand. Additionally, we reached 871 thousand IPTV subscribers in total by gaining a net 152 thousand additions this year. We met the changing needs of our individual and corporate customers with our digital applications and services In a period of increased time spent at home, we stood by our customers with our digital services portfolio. We enriched this portfolio with many new services, while at the same time, registering the incorporation of individual digital services companies, marking a significant milestone for their competition strategies. Along with new services such as TV+ Ready, Turkcell Digital Security Service, lifebox transfer, individual and corporate YaaniMail e-mail, we also launched the BiP Meet application in response to the rising need for video conferencing. Demand for our BiP application, which does not enforce data share permission or discriminate among its users - topics of considerable public debate amid rising concern over personal data security - has also increased rapidly. In the first two months of 2021, BiP registered 27 million new users. The stand-alone revenue of our digital services had increased by 26% year-on-year in 2020. In 2021, our aim is to increase the number of paid users, accelerate B2B opportunities, gain strength with our large screen strategy in the TV segment and take bold strides in new areas such as cloud gaming and game broadcasting businesses and grow the stand-alone revenue of this strategic focus by 25%. The institutions of Turkey are being renewed with Turkcell Digital Business Services The revenue of digital business services, one of our focal points, and with which we accompany private companies and public institutions on their digital transformation journeys increased by 30% in 2020. We successfully met the increased demand for new generation technologies such as data centers, cloud, cyber security, managed services, system integration projects, internet of things, big data and business applications, in addition to the conventional telecom services in our portfolio. We took the lead in corporate digital transformations having been awarded over 2,300 projects with a total contract value of TRY1 billion in 2020. Of these, 420 were system integration projects for which we provided end-to-end solutions. We have a backlog in the amount of TRY967 million from the system integration projects signed to date. As the largest data center operator of Turkey, we offered our more than 1,600 corporate customers the opportunity to manage their data remotely, supporting their business continuity. We put into use the cloud section of Ankara Temelli Data Center, Turkey’s largest data center, launching “Government Cloud” specifically designed for public institutions. Meanwhile, having implemented the technological infrastructure of 4 new hospitals in the health sector, two of which are field hospitals, we have reached a bed capacity of over 8 thousand at 9 hospitals in total, also continuing our market leadership of this sector. Additionally, this year, we increased the number of global vendor partnerships to 21 through strengthened cooperation. By further increasing our competencies in this field over the coming period, we will remain the digital transformation partner of corporations and become the leader in the information technologies services market. Paycell, our new generation payment platform, sees growth with solutions that make a difference In techfin, another focal point of ours, the demand for digital payment services increased rapidly in a period of changing payment habits. Duly, our customers were able to realize all their payment transactions swiftly and securely using Paycell, our new generation payment services platform. The annual transaction volume of Paycell reached TRY9.0 billion. We continued our dual strategy throughout the year, introducing member merchants and customers new offerings and taking fresh actions. The 3-month active users of Paycell, hugely popular for its convenience and secure payment infrastructure, reached 4.7 million. Thanks to the “Ready-to-use Limit” offered by Paycell since July, 190 thousand individual users have made purchases by transferring their mobile payment limits to their Paycell cards. Also this year, we enabled 24/7 money transfer service to IBAN numbers at banks party to the program. We also added the mobile POS product this year to the Paycell merchant solutions offered to 12 thousand-member merchants. We provided member merchants cost advantage and efficiency by offering the means of managing processes such as collection, inventory monitoring, and e-invoice over a single platform using the Paycell Android POS device. Going forward, we aim to diversify Paycell’s services with wealth management solutions and focus on commercial enterprises via our POS solutions while achieving 3-month active Paycell users of 6 million by the end of 2021. Revenues through digital channels rose incrementally; Turkcell Pasaj became the new address of technological shopping In promoting wider usage of our digital platforms, one of our strategic focus areas, we registered a strong rise in demand that partly reflected changing customer behavior. As the number of visitors to our digital sales channels reached 30 million on a monthly basis in 2020, the conversion (to sales) rate doubled on a year-on-year basis. 14% of Turkcell Turkey consumer sales (excluding fixed broadband) was derived from digital channels in the fourth quarter of 2020. Furthermore, and within the same scope, in December we launched Turkcell Pasaj, Turkey’s technological marketplace. At Turkcell Pasaj, hundreds of electronic goods, including smartphones, new generation technologies, household electrical appliances and personal care products from Turkey’s leading suppliers are offered with Turkcell assurance. We generated free cash flow of TRY3.4 billion with our effective and successful financial management Thanks to our strong operational performance, disciplined cost management practices, effective working capital management and efficient capex planning, we generated TRY3.4 billion free cash4 flow from our operations in 2020, whereby the leverage ratio declined to 0.8x on a 0.2x year-on-year improvement. Our use of hedging products and foreign currency cash at hand to mitigate foreign currency risk underpinned our strong net income performance. We also enter the coming investment periods prepared with long term financing secured in the amount of around USD700 million equivalent in total signed this year, and which may be utilized over the next 3 years in EUR, USD and RMB. We work towards delivering our customers 5G with Turkcell quality One of the major topics of the upcoming period will be 5G technology. Having commenced use in over 60 countries, 5G technology will play an important role in the digital transformation of institutions and sectors with the novel services it has to offer. While participating in studies both locally and at the international level towards bringing the technology of the future to our customers, we work towards making our infrastructure ready for the 5G transition. Within this framework, we take part in a variety of 5G projects in international technological collaborations such as those of NGMN, GSMA, and ITU. Additionally, this year, we also continued our support for the “End-to-End Domestic and National 5G Communication Network Project” established under the leadership of the Information and Communication Technologies Authority and with the support of TÜBİTAK, together with Communication Technologies Clustering firms. Sustainability is at the heart of our business strategy As Turkcell, we attach priority to creating sustainable value, realizing social responsibility projects and leveraging the power of technology and communication to create social benefit. Within this scope, we have also strengthened our sustainability credentials this year through important initiatives on environmental, social and governance matters. According to the results of our “Carbon Disclosure Project”, one of world’s preeminent sustainability initiatives geared at curbing the environmental impact of climate change, we are Turkey’s industry leader. This year, we reaffirmed our resolve on this matter with the rollout of the Turkcell Environmental Policy. Meanwhile, we also undersigned the longest term corporate green loan agreement in Turkey to date; a green loan finance agreement of EUR50 million with 5-year maturity geared at financing our sustainable investments. We continue to offer diverse solutions that allow the disabled to participate more fully in daily life through our No Barriers Project. Our support for education has included the rich content of our Whiz Kids Project, while on the environmental front our Recycle to Education Project geared at reducing electronic waste commenced. Additionally, we accepted and implemented our Turkcell Domestic Violence Procedure and Turkcell Human Rights Policy. On the governance front, we put into practice the Integrated Value Creation Committee and Sustainability Committee to elevate Turkcell to international benchmarks and to implement the preeminent practices in the field. Within the framework of Turkcell’s sustainability policies we determined the duties of these committees as formulating medium and long-term action plans and overseeing their efficient implementation. We contributed to the drafting of the Finance and Investment Principles for Sustainable Development Objectives of the United Nations Global Compact CFO Taskforce, of which we are a founding member, in an initiative to guide the finance leaders of global companies in the practice of sustainable finance. These principles were disclosed at the 75th General Assembly meeting of the UN in September. Within the framework of these focus areas, as of 2020, we have adopted integrated reporting as our primary corporate reporting tool. This reporting model enables us to present the environmental, social and corporate information demanded by key stakeholders, mainly our investors, more holistically and transparently. We continue to take firm steps towards our goals The beginning of 2021 was marked with the hope arising from the vaccination against COVID-19, and by the hope that the restrictions introduced during the pandemic would soon be lifted. This year, with a view to increasing value creation for all our stakeholders, joint infrastructure sharing and the delivery of new technologies and applications continues to top our agenda. We also continue to implement our digital strategy set on strong fundamentals, and take solid steps to meet our targets announced for the period of 2020-2022. Within this scope, we target5 revenue growth of around 14%-16%, and an EBITDA of around TRY14 billion for 2021. In doing so, our aim will be to add another million of subscribers and pass through additional 500 thousand homes with our fiber. We forecast an operational capex over revenues ratio6 of around 20%. I extend my thanks to all our employees who have made our success possible during a challenging year where we recognized more than ever the indispensable nature of communication and technology for humanity, to our management team cementing our permanent success, and to our Board of Directors for their confidence in us and their invaluable support. I also express gratitude to our customers and business associates who have stood by us at all times on our journey to success. (1) EBITDA is a non-GAAP financial measure. See page 17 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (2) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (3) Excluding M2M (4) Free cash flow calculation includes EBITDA and the following items as per IFRS cash flow statement; acquisition of property, plant and equipment, acquisition of intangible assets, change in operating assets/liabilities, payment of lease liabilities and income tax paid. (5) Please note that this paragraph contains forward looking statements based on our current estimates and expectations regarding market conditions for each of our different businesses. No assurance can be given that actual results will be consistent with such estimates and expectations. For a discussion of factors that may affect our results, see our Annual Report on Form 20-F for 2019 filed with the U.S. Securities and Exchange Commission, and in particular, the risk factor section therein. (6) Excluding license fee FINANCIAL AND OPERATIONAL REVIEW Financial Review of Turkcell Group Profit & Loss Statement (million TRY) Quarter Year Q419 Q420 y/y% FY19 FY20 y/y% Revenue 6,683.8 7,872.2 17.8% 25,137.1 29,103.7 15.8% Cost of revenue1 (3,206.3) (3,938.1) 22.8% (12,036.9) (14,361.3) 19.3% Cost of revenue1/Revenue (48.0%) (50.0%) (2.0pp) (47.9%) (49.3%) (1.4pp) Gross Margin1 52.0% 50.0% (2.0pp) 52.1% 50.7% (1.4pp) Administrative expenses (217.4) (210.7) (3.1%) (779.8) (749.6) (3.9%) Administrative expenses/Revenue (3.3%) (2.7%) 0.6pp (3.1%) (2.6%) 0.5pp Selling and marketing expenses (384.9) (400.8) 4.1% (1,555.2) (1,373.0) (11.7%) Selling and marketing expenses/Revenue (5.8%) (5.1%) 0.7pp (6.2%) (4.7%) 1.5pp Net impairment losses on financial and contract assets (121.3) (79.5) (34.5%) (338.9) (349.6) 3.2% EBITDA2 2,753.8 3,243.0 17.8% 10,426.4 12,270.3 17.7% EBITDA Margin 41.2% 41.2% - 41.5% 42.2% 0.7pp Depreciation and amortization (1,404.9) (1,634.6) 16.3% (5,046.6) (5,974.8) 18.4% EBIT3 1,348.9 1,608.4 19.2% 5,379.9 6,295.5 17.0% EBIT Margin 20.2% 20.4% 0.2pp 21.4% 21.6% 0.2pp Net finance income / (costs) (214.3) (381.8) 78.2% (1,727.7) (1,131.7) (34.5%) Finance income4 44.9 (316.0) (803.8%) 297.5 2,119.5 612.4% Finance costs4 (259.2) (65.8) (74.6%) (2,025.1) (3,251.2) 60.5% Other income / (expense) (128.2) (366.9) 186.2% (346.6) (523.3) 51.0% Non-controlling interests 2.0 - n.a (30.2) (2.5) (91.7%) Share of profit of equity accounted investees (19.1) (5.2) (72.8%) (15.7) (13.8) (12.1%) Income tax expense (233.7) 447.6 n.m (785.6) (387.2) (50.7%) Discontinued operations - - - 772.4 - - Net Income 755.6 1,302.0 72.3% 3,246.5 4,237.1 30.5% (1) Excluding depreciation and amortization expenses. (2) EBITDA is a non-GAAP financial measure. See page 17 for the explanation of how we calculate Adjusted EBITDA and its reconciliation to net income. (3) EBIT is a non-GAAP financial measure and is equal to EBITDA minus depreciation and amortization expenses. (4) Fair value loss and interest expense regarding derivative instruments and the respective fair value gain and interest income regarding derivative instruments are represented on a net basis. Starting from Q219, interest income on financial assets and interest expenses for financial liabilities, both measured at amortized cost, are represented on a net basis. Historical periods were restated to reflect this change. Revenue of the Group rose 17.8% year-on-year in Q420. This was driven mainly by Turkcell Turkey’s strong performance, supported by increased data and digital services usage, upsell efforts, and a larger postpaid subscriber base, as well as higher equipment revenues backed by sales on digital channels and corporate projects. Turkcell International’s solid revenue growth also supported the Group revenue increase. Turkcell Turkey revenues, comprising 86% of Group revenues, rose 17.9% to TRY6,771 million (TRY5,741 million). - Consumer segment revenues grew 16.1% on the back of upsell efforts, rising postpaid subscriber share, increased data and digital services usage, as well as equipment sales. - Corporate segment revenues rose 26.1% driven mainly by the strong performance of digital business services, which grew 31.6% year-on-year. - Wholesale revenues grew 19.3% to TRY363 million (TRY304 million), mainly on the positive impact of currency movements despite lower roaming revenues impacted by limited mobility. Turkcell International revenues, comprising 9% of Group revenues, increased 33.2% to TRY747 million (TRY561 million), mainly with the contribution of our Ukrainian operations and the positive impact of currency movements. Other subsidiaries' revenues, at 4% of Group revenues, which includes call center revenues, revenues from financial services and energy business revenues were at TRY354 million (TRY382 million). - Finance company’s revenues were at TRY145 million (TRY201 million) in Q420 impacted by contraction in the consumer loan portfolio, which declined from TRY2.4 billion as of Q419 to TRY1.9 billion as of Q420. This was due mainly to the installment limitation on consumer loans for telecom devices. Excluding the finance business, our consolidated revenue growth was 19.2% year-on-year in Q420. Standalone digital services revenues grew 23.1% year-on-year in Q420 backed by the increase in the number of standalone users. For the full year, Turkcell Group revenues rose 15.8%. Turkcell Turkey revenues grew 17.1% to TRY25,160 million (TRY21,487 million). - Consumer business increased 15.7% driven by strong ARPU performance on the back of data and digital services usage, as well as residential business growth. - Corporate revenues rose 23.5% supported by digital business services revenue growth of 30.1%. - Wholesale revenues grew 12.3% to TRY1,293 million (TRY1,152 million). Turkcell International revenues rose 26.9% to TRY2,542 million (TRY2,003 million). Other subsidiaries’ revenues were at TRY1,401 million (TRY1,647 million). Excluding finance business and sports betting operations, our consolidated revenue growth was 18.4% year-on-year in FY20. Standalone digital services revenues grew 25.6% year-on-year in FY20. Cost of revenue (excluding depreciation and amortization) rose to 50.0% (48.0%) as a percentage of revenues in Q420. This was driven mainly by the increase in cost of goods sold (2.7pp), despite the decline in other cost items (0.7pp) as a percentage of revenues. For the full year, cost of revenue (excluding depreciation and amortization) increased to 49.3% (47.9%) as a percentage of revenues. This was due mainly to the rise in cost of goods sold (2.3pp), despite the decline in cost of revenue of financial services (0.5pp) and other cost items (0.4pp) as a percentage of revenues. Administrative Expenses declined to 2.7% (3.3%) as a percentage of revenues in Q420, driven mainly by lower office overhead costs and travel expenses. For the full year, administrative expenses fell to 2.6% (3.1%) as a percentage of revenues, due mainly to the same drivers. Selling and Marketing Expenses declined to 5.1% (5.8%) as a percentage of revenues in Q420. This was driven mainly by the decline in marketing expenses (0.3pp), selling expenses (0.2pp) and other cost items (0.2pp) as a percentage of revenues. For the full year, selling and marketing expenses declined to 4.7% (6.2%) as a percentage of revenues driven by the decline in selling expenses (0.8pp), marketing expenses (0.5pp) and other cost items (0.2pp) as a percentage of revenues. Net impairment losses on financial and contract assets was at 1.0% (1.8%) as a percentage of revenues in Q420. For the full year, net impairment losses on financial and contract assets was at 1.2% (1.3%) as a percentage of revenues. EBITDA1 rose by 17.8% year-on-year in Q420 leading to an EBITDA margin of 41.2% (41.2%), driven mainly by strong topline growth and disciplined cost controls. - Turkcell Turkey’s EBITDA rose 16.6% year-on-year to TRY2,751 million (TRY2,360 million) leading to an EBITDA margin of 40.6% (41.1%) in Q420. - Turkcell International EBITDA grew 43.8% year-on-year to TRY350 million (TRY244 million) with an EBITDA margin of 46.9% (43.5%) in Q420. (1) EBITDA is a non-GAAP financial measure. See page 17 for the explanation of how we calculate adjusted EBITDA and its reconciliation to net income. - The EBITDA of other subsidiaries stood at TRY142 million (TRY150 million) in Q420. For the full year, EBITDA grew by 17.7% resulting in an EBITDA margin of 42.2% (41.5%) on 0.7pp improvement. - Turkcell Turkey’s EBITDA rose 20.4% to TRY10,585 million (TRY8,789 million) leading to an EBITDA margin of 42.1% (40.9%) on 1.2pp improvement. - Turkcell International EBITDA increased 29.4% to TRY1,169 million (TRY904 million) driving an EBITDA margin of 46.0% (45.1%) on 0.9pp improvement. - The EBITDA of other subsidiaries was at TRY516 million (TRY733 million). Depreciation and amortization expenses increased 16.3% year-on-year in Q420. For the full year depreciation and amortization expenses increased 18.4%. Net finance expense increased to TRY382 million (TRY214 million) in Q420. This was driven mainly by a higher net FX loss after hedging, and a higher interest expense on financial assets and liabilities, despite higher interest income on time deposits. For the full year net finance expense decreased to TRY1,132 million (TRY1,728 million). This was due mainly to lower foreign exchange losses after hedging and higher interest income on time deposits. See Appendix A for the details of net foreign exchange gain and loss. Income tax expense: The current tax expense of TRY136 million was more than offset by TRY584 million deferred tax income reported in Q420. Please note that in Q420 lifecell registered TRY689 million deferred tax income having recognized its accumulated losses as deferred tax assets. For the full year, income tax expense declined 50.7% due mainly to lifecell’s deferred tax income. Please see Appendix A for details. Net income of the Group rose 72.3% to TRY1,302 million (TRY756 million) in Q420. Net income was positively impacted by TRY689 million deferred tax income registered by lifecell. Excluding this impact and other one-off expenses, we registered a robust net income of TRY1,025 million on solid operational performance. For the full year, group net income increased 30.5% to TRY4,237 million (TRY3,246 million). Excluding the deferred tax income impact and other one-off expenses, we registered a net income of TRY3,953 million on a 39% rise on the back of strong operational performance and prudent financial risk management. Please see Appendix A for details of one-off items. Total cash & debt: Consolidated cash as of December 31, 2020 decreased to TRY11,861 million from TRY13,524 million as of September 30, 2020 due mainly to the dividend payment, and the impact of TRY appreciation on our FX denominated cash. Excluding FX swap transactions, 74% of our cash is in US$, 4% in EUR, and 22% in TRY. Consolidated debt as of December 31, 2020 decreased to TRY21,586 million from TRY22,841 million as of September 30, 2020 due mainly to the impact of TRY appreciation on FX denominated debt. Please note that TRY2,099 million of our consolidated debt is comprised of lease obligations. Consolidated debt breakdown excluding lease obligations: - Turkcell Turkey’s debt was at TRY17,469 million, of which TRY10,197 million (US$1,389 million) was denominated in US$, TRY5,624 million (EUR624 million) in EUR, TRY283 million (CNY253 million) in CNY, and the remaining TRY1,364 million in TRY. - Finance company had a debt balance of TRY1,038 million, of which TR259 million (US$36 million) was denominated in US$, and TRY465 million (EUR52 million) in EUR with the remaining TRY314 million in TRY. - The debt balance of lifecell was TRY980 million, fully denominated in UAH. TRY1,202 million of lease obligations is denominated in TRY, TRY56 million (US$8 million) in US$, TRY186 million (EUR21 million) in EUR, and the remaining balance in other local currencies (Please note that the figures in parentheses refer to US$ or EUR equivalents). Net debt as of December 31, 2020 was at TRY9,726 million with a net debt to EBITDA ratio of 0.8 times. Excluding finance company consumer loans, our telco only net debt was at TRY7,788 million with a leverage of 0.7 times. Turkcell Group had a long FX position of US$132 million as at the end of the year. (Please note that this figure takes advance payments into account). Capital expenditures: Capital expenditures, including non-operational items, amounted to TRY2,885 million in Q420. For the full year, capital expenditures including non-operational items were at TRY9,079 million. For Q420 and the full year, operational capital expenditures (excluding license fees) at the Group level were at 24.2% and 18.5% of total revenues, respectively. Capital expenditures (million TRY) Quarter Year Q419 Q420 FY19 FY20 Operational Capex 1,696.0 1,904.2 4,525.1 5,391.6 License and Related Costs 0.1 9.3 1.8 42.8 Non-operational Capex (Including IFRS15 & IFRS16) 749.2 971.2 2,697.8 3,644.6 Total Capex 2,445.4 2,884.7 7,224.7 9,078.9 Summary of Operational Data Quarter Year Q419 Q420 y/y % FY19 FY20 y/y % Number of subscribers (million) 35.7 36.7 2.8% 35.7 36.7 2.8% Mobile Postpaid (million) 20.4 22.0 7.8% 20.4 22.0 7.8% Mobile M2M (million) 2.6 2.8 7.7% 2.6 2.8 7.7% Mobile Prepaid (million) 12.4 11.5 (7.3%) 12.4 11.5 (7.3%) Fiber (thousand) 1,484.7 1,664.3 12.1% 1,484.7 1,664.3 12.1% ADSL (thousand) 719.1 707.6 (1.6%) 719.1 707.6 (1.6%) Superbox (thousand)1 323.2 591.2 82.9% 323.2 591.2 82.9% Cable (thousand) 49.2 67.7 37.6% 49.2 67.7 37.6% IPTV (thousand) 719.7 871.3 21.1% 719.7 871.3 21.1% Churn (%)2 Mobile Churn (%)3 4.5% 3.0% (1.5pp) 2.7% 2.3% (0.4pp) Fixed Churn (%) 2.3% 1.9% (0.4pp) 2.1% 1.9% (0.2pp) ARPU (Average Monthly Revenue per User) (TRY)4 Mobile ARPU, blended 42.9 47.5 10.7% 39.8 45.5 14.3% Mobile ARPU, blended (excluding M2M) 46.0 51.2 11.3% 42.7 49.1 15.0% Postpaid 59.7 60.9 2.0% 56.5 59.1 4.6% Postpaid (excluding M2M) 67.9 68.9 1.5% 64.3 67.0 4.2% Prepaid 18.8 23.4 24.5% 18.3 21.8 19.1% Fixed Residential ARPU, blended 66.2 72.6 9.7% 63.2 69.6 10.1% Residential Fiber ARPU 67.8 73.6 8.6% 64.9 70.9 9.2% Average mobile data usage per user (GB/user) 9.0 13.0 44.4% 7.4 11.7 58.1% Mobile MoU (Avg. Monthly Minutes of usage per subs) blended 431.4 548.6 27.2% 415.3 518.7 24.9% (1) Superbox subscribers are included in mobile subscribers. (2) Presentation of churn figures has been changed to demonstrate average monthly churn figures for the respective quarters. (3) In Q117, our churn policy was revised to extend from 9 months to 12 months (the period at the end of which we disconnect prepaid subscribers who have not topped up above TRY10). Additionally, under our revised policy, prepaid customers who last topped up before March will be disconnected at the latest by year-end. As a regulatory requirement, we started to disconnect prepaid lines in accordance with new ICTA regulation, which requires deactivation of prepaid lines which lack residency documents by the 6th month of subscription starting from 2019. Furthermore, as required by the ICTA, the line of a deceased customer should either be transferred to a successor/another user or terminated. Lines, which are not transferred or terminated, are to be disconnected at the end of seven months. (4) We historically recorded all TV-related revenue under Turkcell Superonline and presented the related ARPU under fixed residential ARPU. As previously announced, our TV business has become a separate standalone subsidiary. In order to reflect this change in our organization, we decided to shift mobile OTT TV ARPU from fixed residential ARPU into mobile ARPU starting from Q320. We note that mobile TV revenues are generated by mobile subscribers. IPTV revenues will continue to be recorded under Turkcell Superonline and included under residential fixed ARPU. In order to maintain comparability, we provide ARPU data for the last three years, revised to reflect this change on our investor relations website in financial and operational data spreadsheet. The number of our subscribers in Turkey grew by 1.1 million net annual additions, reaching 36.7 million in FY20 despite the pandemic environment. Accordingly, we achieved our 1 million net subscriber additions target for the year thanks to our solutions that meet changing customer needs, our rich value proposition, and innovative campaigns that facilitate their lives. On the mobile front, our subscriber base expanded to 33.4 million on 712 thousand net annual additions in FY20. Our postpaid subscribers grew on 1.6 million net annual additions, the highest of the past 11 years. Accordingly, our postpaid subscribers reached 65.7% (62.2%) of our mobile subscriber base as at the end of the year. Meanwhile, our prepaid subscribers declined 892 thousand in FY20, due mainly to the disconnection of 666 thousand inactive prepaid subscribers in Q420 in line with our churn policy. There were also 194 thousand disconnections in Q420 to reflect the regulatory change requiring deactivation of deceased customers’ subscriptions. On the fixed front, our subscriber base exceeded 2.4 million on 79 thousand quarterly and 187 thousand net annual additions. Our fiber subscribers grew by 65 thousand quarterly and 180 thousand annual net additions. Superbox, our fixed-wireless access offering, registered a strong performance in FY20. Accordingly, it had 41 thousand quarterly net additions in Q420, while registering 268 thousand net annual additions. Meanwhile, our IPTV customer base rose to 871 thousand on 60 thousand quarterly and 152 thousand annual net additions. The average monthly mobile churn rate was at 3.0% and 2.3% in Q420 and FY20, respectively. The higher mobile churn rate in Q419 was due mainly to the lump sum disconnection of subscriptions in accordance with the ICTA regulation that requires deactivation of prepaid lines, that lack residency documents by the 6th month of subscription. Average monthly fixed churn rate was at 1.9% in Q420, and at the same level for the full year. Our mobile ARPU (excluding M2M) rose 11.3% year-on-year in Q420 on the back of a larger postpaid subscriber base and upsell efforts, as well as increased data and digital services usage. Mobile ARPU (excluding M2M) grew 15.0% for the full year, mainly on the same drivers. Our residential fiber ARPU grew by 8.6% year-on-year in Q420 driven mainly by upsell efforts and the acquisition of higher revenue generating customers. Fiber residential ARPU grew by 9.2% for the full year. Average monthly mobile data usage per user increased 44.4% in Q420 year-on-year and 58.1% for the full year. This was driven mainly by the increasing number and data consumption of 4.5G users, as well as higher digital services usage. Accordingly, the average mobile data usage of 4.5G users reached 14.9 GB in Q420. The rising number of Superbox subscribers also had a positive impact on data consumption. The number of 4.5G compatible smartphones on our network rose to 21.5 million on 2.3 million annual additions, comprising 91% of smartphones on our network. Total smartphone penetration had reached 81% as at the end of the year. TURKCELL INTERNATIONAL lifecell1 Financial Data Quarter Year Q419 Q420 y/y% FY19 FY20 y/y% Revenue (million UAH) 1,557.9 1,913.8 22.8% 5,983.8 6,835.8 14.2% EBITDA (million UAH) 818.6 1,042.9 27.4% 3,243.4 3,630.9 11.9% EBITDA margin (%) 52.5% 54.5% 2.0pp 54.2% 53.1% (1.1pp) Net income / (loss) (million UAH) (215.0) 2,736.7 n.m (1,113.6) 2,588.7 n.m Capex (million UAH) 639.9 1,545.7 141.6% 1,895.3 3,482.4 83.7% Revenue (million TRY) 369.4 531.4 43.9% 1,315.8 1,775.6 34.9% EBITDA (million TRY) 194.2 289.6 49.1% 711.6 944.0 32.7% EBITDA margin (%) 52.6% 54.5% 1.9pp 54.1% 53.2% (0.9pp) Net income / (loss) (million TRY) (50.8) 731.9 n.m (243.3) 696.1 n.m (1) Since July 10, 2015, we hold a 100% stake in lifecell. lifecell (Ukraine) reported robust revenue growth of 22.8% year-on-year in Q420 in local currency terms. This performance resulted mainly from subscriber base growth, and the rise in voice and data services usage despite the decline in roaming revenues. Meanwhile, on the back of strong revenue growth, lifecell’s EBITDA rose 27.4% year-on-year, which led to an EBITDA margin of 54.5%. Moreover, lifecell registered a positive net income in Q420, resulting from a strong operational performance. Please note that, having recognized its accumulated losses as a deferred tax asset, lifecell registered a deferred tax gain of UAH2,582 million in Q420 which also positively impacted its net income. lifecell revenues in TRY terms rose 43.9% year-on-year in Q420 on the back of strong operational performance and the positive impact of currency movements. lifecell’s EBITDA in TRY terms rose 49.1%, which resulted in an EBITDA margin of 54.5%. For the full year, lifecell revenues in local currency terms grew 14.2%, while its EBITDA rose 11.9% leading to an EBITDA margin of 53.1%. lifecell also registered a positive net income for the full year. Even excluding the impact of the deferred tax gain, lifecell’s net income was positive for the full year on strong operational performance. In TRY terms, lifecell registered revenue growth of 34.9% with an EBITDA margin of 53.2%. lifecell Operational Data Quarter Year Q419 Q420 y/y% FY19 FY20 y/y% Number of subscribers (million)2 8.9 9.3 4.5% 8.9 9.3 4.5% Active (3 months)3 7.4 8.1 9.5% 7.4 8.1 9.5% MOU (minutes) (12 months) 157.0 185.5 18.2% 149.0 176.2 18.3% ARPU (Average Monthly Revenue per User), blended (UAH) 58.3 69.6 19.4% 54.0 63.3 17.2% Active (3 months) (UAH) 73.3 79.9 9.0% 71.8 74.1 3.2% (2) We may occasionally offer campaigns and tariff schemes that have an active subscriber life differing from the one that we normally use to deactivate subscribers and calculate churn. (3) Active subscribers are those who in the past three months made a revenue generating activity. lifecell continued to expand its subscriber base in Q420 with a customer retention focus. Accordingly, its three-month active subscriber base rose to 8.1 million. Meanwhile, lifecell’s 3-month active ARPU rose 9.0% year-on-year on the back of higher data usage and price adjustments. The 3-month active 4.5G subscribers grew 42% year-on-year reaching 63% of total data users as at the end of Q420. The increase in 4.5G users coupled with their higher average data usage, which grew 32% year-on-year, supported the growth of overall data consumption. Accordingly, average monthly data consumption per user rose 46% year-on-year in Q420. Meanwhile, lifecell continued its leadership of the Ukrainian market in smartphone penetration, which reached 81% as of the end of Q420. lifecell continued its efforts to increase the penetration of its digital services within its subscriber base by introducing attractive offers. BeST1 Quarter Year Q419 Q420 y/y% FY19 FY20 y/y% Number of subscribers (million) 1.5 1.4 (6.7%) 1.5 1.4 (6.7%) Active (3 months) 1.1 1.1 - 1.1 1.1 - Revenue (million BYN) 33.9 37.8 11.5% 135.0 138.7 2.7% EBITDA (million BYN) 7.4 10.3 39.2% 35.5 34.5 (2.8%) EBITDA margin (%) 21.7% 27.4% 5.7pp 26.3% 24.8% (1.5pp) Net loss (million BYN) (8.0) (7.1) (11.3%) (33.3) (31.2) (6.3%) Capex (million BYN) 7.2 11.0 52.8% 49.9 46.5 (6.8%) Revenue (million TRY) 93.8 114.1 21.6% 365.0 395.4 8.3% EBITDA (million TRY) 20.3 31.1 53.2% 96.4 98.3 2.0% EBITDA margin (%) 21.7% 27.3% 5.6pp 26.4% 24.9% (1.5pp) Net loss (million TRY) (22.1) (21.7) (1.8%) (89.8) (88.9) (1.0%) (1) BeST, in which we hold an 80% stake, has operated in Belarus since July 2008. BeST registered a revenue growth of 11.5% year-on-year in local currency terms, mainly with the rise in voice, data, messaging and handset sales revenues. This performance came despite the decline in roaming revenues. BeST’s EBITDA rose 39.2% leading to an EBITDA margin of 27.4% on the back of strong revenue growth and cost control initiatives. BeST’s revenues in TRY terms grew by 21.6% in Q420 year-on-year, while its EBITDA margin rose to 27.3%. For the full year, revenues in local currency terms increased by 2.7% with an EBITDA margin of 24.8%. In TRY terms, BeST achieved revenue growth of 8.3% with an EBITDA margin of 24.9%. The 4G subscriber base of BeST continued to expand in Q420. Accordingly, 4G users reached 63% of its 3-month active customer base as at the end of Q420. The higher number and usage of 4G users continued to drive higher data consumption. Overall, average monthly data consumption of subscribers reached 12.3 GB on 46% year-on-year growth. Meanwhile, BeST continued its focus on rising the penetration of its digital services, which supports ARPU growth and customer loyalty. Furthermore, subscriber acquisitions over the remote subscription platform, which was introduced in Q320, reached 9% of total subscriptions. Kuzey Kıbrıs Turkcell2 (million TRY) Quarter Year Q419 Q420 y/y% FY19 FY20 y/y% Number of subscribers (million) 0.5 0.5 - 0.5 0.5 - Revenue 67.1 65.6 (2.2%) 222.3 239.4 7.7% EBITDA 21.2 21.8 2.8% 78.5 86.3 9.9% EBITDA margin (%) 31.6% 33.2% 1.6pp 35.3% 36.0% 0.7pp Net income 12.4 9.3 (25.0%) 41.8 34.9 (16.5%) Capex 23.9 23.0 (3.8%) 58.6 68.1 16.2% (2) Kuzey Kıbrıs Turkcell, in which we hold a 100% stake, has operated in Northern Cyprus since 1999 Kuzey Kıbrıs Turkcell registered revenues of TRY65.6 million in Q420, impacted by lower roaming revenues with the decline in tourist traffic. The EBITDA of Kuzey Kıbrıs Turkcell rose 2.8% year-on-year leading to an EBITDA margin of 33.2% on the back of savings achieved during the pandemic environment. For the full year, Kuzey Kıbrıs registered revenue growth of 7.7% and EBITDA growth 9.9%, which resulted in an EBITDA margin of 36.0%. Fintur: In accordance with our strategic approach and IFRS requirements, Fintur was classified as ‘held for sale’ and reported as discontinued operations as of October 2016. On December 12, 2018, Turkcell signed a binding agreement, and on April 2, 2019 completed the transfer of its shares in Fintur to Sonera Holding B.V., the majority shareholder of Fintur. The final value of the transaction was EUR352.9 million. As the conditions precedent required for the share transfer were completed within Q119, TRY772 million profit generated from the transaction was reflected in the Q119 financial statements. Turkcell Group Subscribers Turkcell Group registered subscribers amounted to approximately 47.9 million as of December 31, 2020. This figure is calculated by taking the number of subscribers of Turkcell Turkey, and of each of our subsidiaries. It includes the total number of mobile, fiber, ADSL, cable and IPTV subscribers of Turkcell Turkey, and the mobile subscribers of lifecell and BeST, as well as those of Kuzey Kıbrıs Turkcell. Turkcell Group Subscribers Q419 Q320 Q420 y/y% q/q% Mobile Postpaid (million) 20.4 21.5 22.0 7.8% 2.3% Mobile Prepaid (million) 12.4 12.2 11.5 (7.3%) (5.7%) Fiber (thousand) 1,484.7 1,599.4 1,664.3 12.1% 4.1% ADSL (thousand) 719.1 694.0 707.6 (1.6%) 2.0% Superbox (thousand)1 323.2 550.5 591.2 82.9% 7.4% Cable (thousand) 49.2 66.9 67.7 37.6% 1.2% IPTV (thousand) 719.7 811.1 871.3 21.1% 7.4% Turkcell Turkey subscribers (million)2 35.7 36.9 36.7 2.8% (0.5%) lifecell (Ukraine) 8.9 9.1 9.3 4.5% 2.2% BeST (Belarus) 1.5 1.4 1.4 (6.7%) - Kuzey Kıbrıs Turkcell 0.5 0.5 0.5 - - lifecell Europe3 0.2 - - n.a n.a Turkcell Group Subscribers (million) 46.7 47.9 47.9 2.6% - (1) Superbox subscribers are included in mobile subscribers. (2) Subscribers to more than one service are counted separately for each service. (3) The marketing partnership between Turkcell Europe and Telekom Deutschland Multibrand GmbH, the subsidiary of Deutsche Telekom, has ended on April 30, 2020 pursuant to the respective agreement. Turkcell Europe was rebranded as lifecell Europe on January 15, 2018. OVERVIEW OF THE MACROECONOMIC ENVIRONMENT The foreign exchange rates used in our financial reporting, along with certain macroeconomic indicators, are set out below. Quarter Year Q419 Q320 Q420 y/y% q/q% FY19 FY20 y/y% GDP Growth (Turkey) 6.4% 6.7% n.a n.a n.a 0.9% n.a n.a Consumer Price Index (Turkey)(yoy) 11.8% 11.7% 14.6% 2.8pp 2.9pp 11.8% 14.6% 2.8pp US$ / TRY rate Closing Rate 5.9402 7.8080 7.3405 23.6% (6.0%) 5.9402 7.3405 23.6% Average Rate 5.7588 7.1891 7.8933 37.1% 9.8% 5.6604 7.0120 23.9% EUR / TRY rate Closing Rate 6.6506 9.1281 9.0079 35.4% (1.3%) 6.6506 9.0079 35.4% Average Rate 6.3706 8.4187 9.3551 46.8% 11.1% 6.3340 8.0255 26.7% US$ / UAH rate Closing Rate 23.69 28.30 28.27 19.3% (0.1%) 23.69 28.27 19.3% Average Rate 24.31 27.55 28.40 16.8% 3.1% 25.90 27.04 4.4% US$ / BYN rate Closing Rate 2.1036 2.6403 2.5789 22.6% (2.3%) 2.1036 2.5789 22.6% Average Rate 2.0840 2.5408 2.6088 25.2% 2.7% 2.0979 2.4605 17.3% RECONCILIATION OF NON-GAAP FINANCIAL MEASUREMENTS: We believe Adjusted EBITDA, among other measures, facilitates performance comparisons from period to period and management decision making. It also facilitates performance comparisons from company to company. Adjusted EBITDA as a performance measure eliminates potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates on periods or companies) and the age and book depreciation of tangible assets (affecting relative depreciation expense). We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties in evaluating the performance of other mobile operators in the telecommunications industry in Europe, many of which present Adjusted EBITDA when reporting their results. Our Adjusted EBITDA definition includes Revenue, Cost of Revenue excluding depreciation and amortization, Selling and Marketing expenses, Administrative expenses and Net impairment losses on financial and contract assets, but excludes translation gain/(loss), finance income, finance expense, share of profit of equity accounted investees, gain on sale of investments, minority interest and other income/(expense). Nevertheless, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation from, or as a substitute for analysis of our results of operations, as reported under IFRS. The following table provides a reconciliation of Adjusted EBITDA, as calculated using financial data prepared in accordance with IFRS as issued by the IASB, to net profit, which we believe is the most directly comparable financial measure calculated and presented in accordance with IFRS as issued by the IASB. Turkcell Group (million TRY) Quarter Year Q419 Q420 y/y% FY19 FY20 y/y% Adjusted EBITDA 2,753.8 3,243.0 17.8% 10,426.4 12,270.3 17.7% Depreciation and amortization (1,404.9) (1,634.6) 16.3% (5,046.6) (5,974.8) 18.4% EBIT 1,348.9 1,608.4 19.2% 5,379.9 6,295.5 17.0% Finance income 44.9 (316.0) (803.8%) 297.5 2,119.5 612.4% Finance costs (259.2) (65.8) (74.6%) (2,025.1) (3,251.2) 60.5% Other income / (expense) (128.2) (366.9) 186.2% (346.6) (523.3) 51.0% Share of profit of equity accounted investees (19.1) (5.2) (72.8%) (15.7) (13.8) (12.1%) Consolidated profit from continued operations before income tax & minority interest 987.3 854.5 (13.5%) 3,289.9 4,626.8 40.6% Income tax expense (233.7) 447.6 n.m (785.6) (387.2) (50.7%) Consolidated profit from continued operations before minority interest 753.6 1,302.0 72.8% 2,504.3 4,239.6 69.3% Discontinued operations - - - 772.4 - - Consolidated profit before minority interest 753.6 1,302.0 72.8% 3,276.7 4,239.6 29.4% NOTICE: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. This includes, in particular, our targets for revenue, EBITDA and capex for 2021. More generally, all statements other than statements of historical facts included in this press release, including, without limitation, certain statements regarding the launch of new businesses, our operations, financial position and business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as, among others, "will," "expect," "intend," "estimate," "believe", "continue" and “guidance”. Although Turkcell believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. For a discussion of certain factors that may affect the outcome of such forward looking statements, see our Annual Report on Form 20-F for 2019 filed with the U.S. Securities and Exchange Commission, and in particular the risk factor section therein. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company makes no representation as to the accuracy or completeness of the information contained in this press release, which remains subject to verification, completion and change. No responsibility or liability is or will be accepted by the Company or any of its subsidiaries, board members, officers, employees or agents as to or in relation to the accuracy or completeness of the information contained in this press release or any other written or oral information made available to any interested party or its advisers. ABOUT TURKCELL: Turkcell is a digital operator headquartered in Turkey, serving its customers with its unique portfolio of digital services along with voice, messaging, data and IPTV services on its mobile and fixed networks. Turkcell Group companies operate in 4 countries – Turkey, Ukraine, Belarus, Northern Cyprus. Turkcell launched LTE services in its home country on April 1st, 2016, employing LTE-Advanced and 3 carrier aggregation technologies in 81 cities. Turkcell offers up to 10 Gbps fiber internet speed with its FTTH services. Turkcell Group reported TRY29.1 billion revenue in FY20 with total assets of TRY51.5 billion as of December 31, 2020. It has been listed on the NYSE and the BIST since July 2000, and is the only NYSE-listed company in Turkey. Read more at www.turkcell.com.tr. Appendix A – Tables Table: Net foreign exchange gain and loss details Million TRY Quarter Year Q419 Q420 y/y% FY19 FY20 y/y% Turkcell Turkey (338.5) 200.2 n.m (799.2) (2,101.6) 163.0% Turkcell International (15.3) 33.3 n.m (49.9) (66.9) 34.1% Other Subsidiaries (78.6) 21.2 n.m (190.5) (241.0) 26.5% Net FX loss before hedging (432.4) 254.7 n.m (1,039.6) (2,409.5) 131.8% Swap interest income/(expense)1 (144.7) (97.8) (32.4%) (659.5) (404.6) (38.7%) Fair value gain on derivative financial instruments1 450.1 (400.3) (188.9%) 570.2 2,133.4 274.1% Net FX gain / (loss) after hedging (127.0) (243.4) 91.7% (1,128.9) (680.7) (39.7%) (1) Swap interest income / (expense) which was included in fair value gain on derivative financial instruments line in previous quarters has been presented separately. Table: Income tax expense details Million TRY Quarter Year Q419 Q420 y/y% FY19 FY20 y/y% Current tax expense (62.5) (136.2) 117.9% (570.5) (724.7) 27.0% Deferred tax income / (expense) (171.2) 583.7 n.m (215.1) 337.5 n.m Income tax expense (233.7) 447.6 n.m (785.6) (387.2) (50.7%) Table: Group net income one-off impacts One-off impacts (million TRY) Q419 One-off impacts (million TRY) Q420 Mobile tax settlement (199) lifecell deferred tax 689 Provision for litigation expenses (243) Litigation expenses (146) Other (23) Total (199) Total 277 One-off impacts (million TRY) FY19 One-off impacts (million TRY) FY20 Sales of Fintur 772 lifecell deferred tax 689 Mobile tax settlement (199) Provision for litigation expenses (243) Wireless tax (net of tax) (116) Litigation expenses (146) Compensation for Kcell SPA (Fintur) (60) Other (15) Total 396 Total 285 2019 2019 2020 2020 2020 5,740.7 21,487.2 6,647.9 6,770.9 25,160.2 561.0 2,002.8 657.6 747.3 2,542.4 382.1 1,647.2 344.0 354.0 1,401.1 6,683.8 25,137.1 7,649.5 7,872.2 29,103.7 (4,611.2) (17,083.5) (5,243.8) (5,572.8) (20,336.1) 2,072.5 8,053.7 2,405.7 2,299.4 8,767.7 (217.4) (779.8) (184.2) (210.7) (749.6) (384.9) (1,555.2) (295.6) (400.8) (1,373.0) (128.2) (346.6) (11.2) (366.9) (523.3) (121.3) (338.9) (48.5) (79.5) (349.6) 1,220.8 5,033.3 1,866.1 1,241.5 5,772.3 (259.2) (2,025.1) (1,602.5) (65.8) (3,251.2) 44.9 297.5 1,307.8 (316.0) 2,119.5 (19.1) (15.7) (5.3) (5.2) (13.8) 987.3 3,289.9 1,566.1 854.5 4,626.8 (233.7) (785.6) (355.5) 447.6 (387.2) 753.6 2,504.3 1,210.7 1,302.0 4,239.6 - 772.4 - - - 2.0 (30.2) (0.0) - (2.5) 755.6 3,246.5 1,210.6 1,302.0 4,237.1 0.35 1.49 0.55 0.60 1.94 31.0% 32.0% 31.4% 29.2% 30.1% 2,753.8 10,426.4 3,393.9 3,243.0 12,270.3 2,445.4 7,224.7 2,872.6 2,884.7 9,078.9 1,696.0 4,525.1 1,477.5 1,904.2 5,391.6 0.1 1.8 3.1 9.3 42.8 749.2 2,697.8 1,392.1 971.2 3,644.6 10,238.7 10,238.7 13,523.9 11,860.6 11,860.6 45,715.0 45,715.0 51,528.1 51,498.4 51,498.4 12,677.4 12,677.4 16,821.5 16,353.7 16,353.7 20,305.7 20,305.7 22,840.8 21,586.4 21,586.4 27,632.0 27,632.0 31,239.1 30,713.5 30,713.5 18,082.9 18,082.9 20,289.0 20,784.9 20,784.9 2019 2019 2020 2020 2020 5,740.7 21,487.2 6,647.9 6,770.9 25,160.2 561.0 2,002.8 657.6 747.3 2,542.4 382.1 1,647.2 344.0 354.0 1,401.1 6,683.8 25,137.1 7,649.5 7,872.2 29,103.7 (4,611.2) (17,083.5) (5,243.8) (5,572.8) (20,336.1) 2,072.5 8,053.7 2,405.7 2,299.4 8,767.7 (217.4) (779.8) (184.2) (210.7) (749.6) (384.9) (1,555.2) (295.6) (400.8) (1,373.0) 465.9 877.7 1,212.6 (578.5) 1,543.4 1,936.1 6,596.5 3,138.5 1,109.4 8,188.5 (121.3) (338.9) (48.5) (79.5) (349.6) 54.2 102.8 44.1 4.5 167.8 42.2 (44.1) (1.4) (30.2) (31.5) (19.1) (15.7) (5.3) (5.2) (13.8) 1,892.1 6,300.6 3,127.4 999.1 7,961.4 1.0 106.6 1,210.2 (486.5) 1,788.6 (905.8) (3,117.3) (2,771.4) 341.9 (5,123.2) 987.3 3,289.9 1,566.1 854.5 4,626.8 (233.7) (785.6) (355.5) 447.6 (387.2) 753.6 2,504.3 1,210.7 1,302.0 4,239.6 - 772.4 - - - 753.6 3,276.7 1,210.7 1,302.0 4,239.6 2.0 (30.2) (0.0) - (2.5) 755.6 3,246.5 1,210.6 1,302.0 4,237.1 0.35 1.49 0.55 0.60 1.94 31.0% 32.0% 31.4% 29.2% 30.1% 2,753.8 10,426.4 3,393.9 3,243.0 12,270.3 2,445.4 7,224.7 2,872.6 2,884.7 9,078.9 1,696.0 4,525.1 1,477.5 1,904.2 5,391.6 0.1 1.8 3.1 9.3 42.8 749.2 2,697.8 1,392.1 971.2 3,644.6 10,238.7 10,238.7 13,523.9 11,860.6 11,860.6 45,715.0 45,715.0 51,528.1 51,498.4 51,498.4 12,677.4 12,677.4 16,821.5 16,353.7 16,353.7 20,305.7 20,305.7 22,840.8 21,586.4 21,586.4 27,632.0 27,632.0 31,239.1 30,713.5 30,713.5 18,082.9 18,082.9 20,289.0 20,784.9 20,784.9
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BiP Booms Beyond Turkey
İSTANBUL--(BUSINESS WIRE)--There is growing attention being directed at BiP, Turkey’s local communication platform developed by Turkcell engineers, in international arena. It has been downloaded 64 million times in total, of which 12 million beyond Turkey. With the rising demand from users of late, BiP continues to scale the top ranks of the “Most Popular Free” and “Trending” categories in application markets the world over. BiP has become the most downloaded communication application in Google Play Store in Bahrain, Bangladesh, Qatar, Pakistan, Saudi Arabia and Oman. Users have also been sharing their positive comments about BiP on Apple’s AppStore and Huawei’s AppGallery. Emphasizing BiP’s global success Ataç Tansuğ, Executive Vice President of Digital Services and Solutions stated that: “We continue to invest in BiP, which has recently gained much popularity, worldwide. Turkey’s application BiP, has staked its place at the forefront, leaving all other applications behind in Google Play Store in Bahrain, Bangladesh, Qatar, Pakistan, Saudi Arabia and Oman. And in fact, with the upcoming new capabilities and features over the coming days, BiP will remain a preferred communication application both in Turkey and all around the world.” BiP, the usage rate of which is increasing exponentially, has many features that differentiate it from its competitors, such as HD quality voice and video calls of up to 10 people, disappearing messaging, simultaneous translation in 106 languages, group messaging of up to 1,000 people and customized menu. In addition, messaging, audio and video calls can be made via BiP’s desktop application, or else solely through an internet browser.
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4.6 Million New Users Joined BiP in the Past 3 Days
İSTANBUL--(BUSINESS WIRE)--Within the past 3 days 4.6 million new users have participated in BiP, the communication and life platform of Turkey witnessing daily growth. BiP has made a difference in the field of communication apps by bringing many superior features into action before its competitors. All the data is stored in the data centers of Turkcell in Turkey with highly secured encryption. Brought into use as operator free application in 192 countries, BiP offers uninterrupted and secure communication with its messaging, voice and video call features. Recently, Digicel has brought BiP into the use of its customers in 32 countries in which it operates by means of the partnership ‘Lifecell Ventures’, the affiliate of Turkcell. BiP has over 1 million customers in the Caribbean region alone. Ataç Tansuğ: We receive no data without permission Ataç Tansuğ, Executive Vice President - Digital Services and Solutions of Turkcell, has stated that users may continue using BiP without the obligation to share their data with third parties. “BiP have been developed by Turkcell engineers since 2013 has been welcomed with a great interest within the past 3 days. We store the data of our BiP users in the most highly secured Turkcell data centers within the boundaries of Turkey. What is important in communication applications is that, for the service to be able to be rendered, the necessary data are received from users, processed within their approvals, and shared to the extent necessary for provision of the service. For instance, BiP being a communication application requests permission for access to directory in order to be able to provide its users with call and messaging services” said Tansuğ. Emphasizing that they do not receive, process and share any data without permission of users at BiP, Tansuğ has stated: “All our users may feel at ease on this subject. We do not in any way discriminate between our users in 192 countries. We listen to customer feedback and act in the swiftest manner to meet their demands. Hence, if there is something to be remedied, we are ready to do our best to remedy the same.” All information are secure at BiP All BiP data is stored at the data centers of Turkcell in Istanbul and Ankara which hold international security certification (Transport Layer Security-TLS). The entire communication between the devices and servers by means of which the messages on BiP are transmitted is transported securely using TLS encryption. Not any third party is able to have access to and read the messages by intervening in the system. If the back-up setting on BiP is not switched on, the messages are kept for a temporary period by being encrypted until they are transmitted to other party on systems and erased fully from the systems upon message transmission. If user switches on the back-up setting, sharing is kept in data centers by being encrypted. BiP is developing with each passing day While competing on global platforms with its superior features that BiP’s competitors do not have, BiP makes also a difference with its features developed according to the needs of Turkey. For instance, providing its users with informative and entertaining contents by means of various channels available in the section ‘discover’, BiP has also opened Coronavirus Information and Service Hotline in cooperation with the Ministry of Health. Without any discrimination among operators, BiP users are able perform coronavirus test and freely have access to ALO 184 Ministry of Health Communication Center Information Hotline in necessary circumstances over this channel. Thanks to the Emergency Button feature of BiP, users are able to communicate with each other on an uninterrupted basis over BiP with a single click in emergency cases even if there is a network interruption by sharing their wellbeing information and locations. The feature ‘translation’ enables users to chat in 106 different languages during instant messaging. BiP ensures that its users view the incoming messages as translated message and translates the messages sent by them spontaneously. Thanks to the ‘disappearing message’ feature offered exclusively by BiP, the messages sent appear on chat window during the period chosen by the user and are deleted automatically when the period expires.
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Turkcell Is Underappreciated
Turkey's new economic administration proved itself, and stocks rallied. However, Turkcell could not keep up with the rising stock market despite its solid fundamentals.
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Investors who are screening the market in search of bargains may be interested in the following stocks, as their share prices are standing below the intrinsic value calculated by GuruFocus' free cash flow-based discounted cash flow calculator. These stocks also have optimistic recommendation ratings on Wall Street.
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As the coronavirus pandemic continues spreading around the globe, families are wishing each other happy holidays, including Christmas and Hanukkah, through mobile phone and communication platforms like Zoom Video Communications Inc. (NASDAQ:ZM). According to the All-in-One Screener, a Premium feature of GuruFocus, four global telecommunication services stocks with strong margin growth are Rogers Communications Inc. (NYSE:RCI)(TSX:RCI.B), TELUS Corp. (NYSE:TU)(TSX:T), Elisa Oyj (OHEL:ELISA) and Turkcell Iletisim Hizmetleri AS (NYSE:TKC)(IST:TCELL).
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