Turkcell Iletisim Hizmetleri A.s. · BIST:TCELL
Turkcell Iletisim Hizmetleri A.s — Q4 2020 Earnings Presentation
30 slides from Turkcell Iletisim Hizmetleri A.s's earnings presentation, Feb 22, 2021
Slide 1: Turkcell Group Q4 & FY 2020
TURKCELL GROUP Q4 & FY 2020 | February 22, 2021
Slide 2: Business Overview
Murat Erkan Turkcell CEO BUSINESS OVERVIEW
Slide 3: 2020: Outstanding Performance Through a Diversified Business Model
2020: Outstanding Performance Through a Diversified Business Model Revenue Growth EBITDA Margin FCF 15.8% 42.2% 3.4Bn TL Mobile (excl. M2M) Residential Fiber Total Subscriber ARPU Growth ARPU Growth Net Add 15.0% 9.2% 1.1Mn Digital Services Digital Business Paycell Stand-Alone Services Non-Group Rev
Slide 4: Q4 2020: Strong Execution Leading to a Remarkable Quarter
Q4 2020 Strong Execution Leading to a Remarkable Quarter 17.8% YoY Robust Revenue Growth 464K Postpaid Net Add 41.2% Strong EBITDA Margin 66% Postpaid share up 4pp YoY 1.3Bn TL Solid Net Income 65K Fiber Net Add 0.8Bn TL Strong FCF Generation 14.3% Digital Channels Revenue Share Q4 & FY 2020 Results
Slide 5: Pre-Pandemic Guidance Levels Delivered
2020 Pre-Pandemic Guidance Levels Delivered Initial Post-Pandemic Revised Actual Guidance Guidance Guidance February April November (2020) REVENUE GROWTH 13% - 16% 10% - 12% 14% - 15% 15.8% EBITDA MARGIN 39% - 42% 40% - 42% 41% - 42% 42.2% EBIT MARGIN 18% - 21% 19% - 21% 20% - 21% 21.6% OP.CAPEX/ SA
Slide 6: Operational Highlights - Mobile
Turkcell Group Operational Highlights - Mobile SUBSCRIBER TREND MILLION THOUSAND Net Add 1.6Mn 464K Net Add 268K SUPERBOX 41K 22.0 POSTPAID 21.0 21.2 21.5 20.4 591 491 551 400 323 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 MOBILE ARPU MOBILE CHURN Net Loss 0.9Mn BLENDED*, TL MONTHLY
Slide 7: Operational Highlights - Fixed Broadband
Turkcell Group Operational Highlights - Fixed Broadband SUBSCRIBER TREND MILLION THOUSAND Net Add 180K Net Add 152K 60K 65K 871 FIBER IP TV 811 1.7 747 772 1.6 720 1.6 1.5 1.5 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 THOUSAND FIBER RES. ARPU FIXED BROADBAND CHURN TL MONTHLY AVG. N
Slide 8: Growth Engine Mobile Data
Growth Engine Mobile Data MOBILE DATA USAGE 4.5G SUBSCRIPTION AV. GB/USER MILLION 14.1 14.9 12.2 13.0 30.7 32.0 31.8 10.8 9.0 21.4 21.5 4.4 5.4 5.4 44% growth YoY 19.2 Q4 19 Q3 20 Q4 20 Q4 19 Q3 20 Q4 20 Non 4.5G Users 4.5G Users Total Users 4.5G Subscription 4.5G Compatible Smartphone 81% smartphon
Slide 9: Leadership in Experience
Leadership in Experience "We Are Here For Our Customers" CUSTOMER EXPERIENCE CONSUMER NET PROMOTER SCORE (POINTS) Customer centric strategy 22 19 Turkcell Innovative & rich value propositions +15 +10 Op1 Wide sales channel, boosted by digital Op2 Smart, fast and well-invested network Q4 19 Q1 20 Q2
Slide 10: Digital Channel: Robust Growth, Next: Tech & Electronics Marketplace
Digital Channel: Robust Growth Next: Tech & Electronics Marketplace DIGITAL CHANNELS REVENUE SHARE* 14% 12% 11% 7% 6% Tech & electronics marketplace Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Trusted suppliers 2x Conversion Rate (YoY) Focus on customer experience 23Mn DO App Active User (3-month) 30Mn Website Vi
Slide 11: Strategic Focus Area: Digital Services
Strategic Focus Area Digital Services Stand-Alone Revenue Growth in 2020 (YoY) 26% Stand-Alone Paid Users* 3Mn BiP: Gaining TV+: Targeting Milestone: 25%↑ (YoY) Traction Big Screen New Structure • 74Mn+ cumulative downloads • Demand accelerated in OTT • Individual companies Share in Consolidated • 2
Slide 12: Strategic Focus Area: Digital Business Services
Strategic Focus Area Digital Business Services Project Management Revenue Growth • ~2.3K new projects in 2020 in 2020 (YoY) • 1Bn TL+ total contract value in 2020 • 420 SI projects in 2020 30% • 967 Mn TL backlog* from SI projects Products & Solutions • Strategic partner of enterprises in their digi
Slide 13: Strategic Focus Area: Techfin Services
Strategic Focus Area Techfin Services Paycell’s Dual Growth Strategy Paycell Non-Group* Revenue • Mobile payment: Paying via your Turkcell bill Growth in 2020 (YoY) Customers • Ready-to-use limit 62% • 24/7 money transfer to phone number & IBAN • Travel card and meal card integration • Synergy with
Slide 14: Turkcell International Strong Performance
Turkcell International Strong Performance FINANCIAL HIGHLIGHTS1 SUBSIDIARIES AT A GLANCE MILLION TL Q4 2020 Revenue Share 7%6% Lifecell Ukraine 15% • 22.8% YoY revenue growth in local currency in Q4 Q4 2020 YoY 2020 YoY Growth Growth • 4G user data usage: 13GB/month, ↑32% yoy 71% • Full year operati
Slide 15: Sustainability Focus Initiatives in 2020
Sustainability Focus Initiatives in 2020 Environmental • CDP sector leader in Turkey Upcoming: • Environmental Policy Turkcell 2020 Integrated • Green loan Annual Report CFO Taskforce Social Governance • Human Rights Policy • Integrated Value Creation Committee • Domestic Violence Procedure • Sustai
Slide 16: Focusing More on E-Mobility
Focusing More on E-Mobility On the Verge of Becoming Our Next Strategic Focus Area E-Mobility Ecosystem Turkcell & TOGG Synergy • Artificial Intelligence Use-Case MobilityTM • Connectivity Smart living solutions in smart cities New mobility services • Integrated Digital Services & Payment Smart Char
Slide 17: Strategic Priorities Into 2021 With High Momentum
Strategic Priorities Into 2021 With High Momentum Grow in Monetize Leverage Lead Telecom Services Digital Services Digital Business Services Techfin Services • Grow postpaid share • Grow paid-user base • Leverage digital transformation • Grow Paycell user base and volume via new products & marketpla
Slide 18: 2021 Guidance: Confident in Growth Prospects
2021 Guidance Confident in Growth Prospects 2020 - 2022 2020 2021 Guidance Actual Guidance REVENUE GROWTH 13% - 16% 15.8% 14% - 16% EBITDA 39% - 42% 42.2% ~14Bn TL Margin Margin 16% - 18% 18.5% ~20% OP.CAPEX/SALES* * Excluding license fees Q4 & FY 2020 Results | 18 Q4 & FY 2020 Results | 18
Slide 19: Financial Overview
Osman Yılmaz Turkcell CFO FINANCIAL OVERVIEW
Slide 20: Turkcell Group Financials
Turkcell Group Financials MILLION TL Q4 2020 YoY Growth 2020 YoY Growth Revenue 7,872 17.8% 29,104 15.8% EBITDA 3,243 17.8% 12,270 17.7% EBITDA Margin 41.2% 0.0pp 42.2% 0.7pp EBIT 1,608 19.2% 6,296 17.0% EBIT Margin 20.4% 0.2pp 21.6% 0.2pp Net Income 1,302 72.3% 4,237 30.5% Opr. Capex/Sales* 24.2% (
Slide 21: Turkcell Group Revenue Development
Turkcell Group Revenue Development QUARTER FULL YEAR MILLION TL MILLION TL 540 (333) 87 186 (56) 28 1,030 3,673 7,872 29,104 6,684 25,137 17.8% 15.8% Revenue Δ Turkcell Δ Turkcell ΔTCF* Δ Other Revenue Revenue Δ Turkcell Δ Turkcell Δ TCF* Δ Other Revenue Q4 19 Turkey International Subsidiaries Q4 20
Slide 22: Turkcell Group EBITDA & EBIT
Turkcell Group EBITDA & EBIT QUARTER FULL YEAR MILLION TL MILLION TL EBIT: 6,296 EBIT: 1,608 21.6% 20.4% EBIT: 5,380 (2,324) (732) 3,967 EBIT: 1,349 1,188 21.4% 30 182 (11) 20.2% 7 (16) 42 12,270 3,243 10,426 2,754 12,069 12,069 12,099 12,270 3,210 3,210 3,201 3,201 10,426 2,754 Margin Margin 41.2%
Slide 23: Turkcell Group Free Cash Flow Generation
Turkcell Group Free Cash Flow Generation FCF GENERATION1 BILLION TL 4.5G Investment period 3.4 2.4 0.0 (0.7) (2.2) 2016 2017 2018 2019 2020 • Higher free cash flow generation in a challenging year • Registered further 3.4Bn TL in 2020, thanks to strong operational performance and cost control • We a
Slide 24: Turkcell Group Solid Balance Sheet
Turkcell Group Solid Balance Sheet SUMMARY NET DEBT/EBITDA MILLION TL Q4 19 Q3 20 Q4 20 1.0x Total Cash 10,239 13,524 11,861 0.8x 0.8x Total Assets 45,715 51,528 51,498 2,409 TCF loan portfolio 1,938 1,901 Total Debt 20,306 22,841 21,586 0.8x 0.7x 0.7x Lease Obligations 1,533 2,065 2,099 7,658 7,788
Slide 25: Turkcell Group FX Exposure
Turkcell Group FX Exposure CASH1 DEBT DEBT REPAYMENT SCHEDULE2 1,571 USD MILLION Before Hedging After Hedging 9% 9% 552 325 1,571 22% 13% 275 325 66 255 4% 277 325 259 255 49% 38% Share 49% 2021 2022 2023 2024 2025+ 74% 29% FX Local Currency 5% NET FX POSITION3 Nominal 11.9Bn TL 21.6Bn TL USD MILLIO
Slide 26: Techfin Financing Business
Techfin Financing Business LOAN PORTFOLIO BILLION TL MILLION TL Q4 2020 YoY 2020 YoY 2.8 2.4 2.5 Revenue 144.7 (28.1%) 566.6 (37.0%) 2.4 1.9 1.9 EBITDA 96.0 (23.8%) 367.0 (27.1%) 0.4 0.5 0.6 EBITDA Margin 66.3% 3.7pp 64.8% 8.8pp Q4 19 Q3 20 Q4 20 Net Income 61.3 (38.9%) 240.7 28.7% Turkcell Contract
Slide 27: Techfin Payment Services Platform
Techfin Payment Services Platform FOUR PILLARS OF REVENUE GENERATION MILLION TL 64% 52% MOBILE BILL MERCHANT PAYCELL PAYMENT PAYMENT SOLUTIONS CARD 116 187 136 160 98 147 111% 37% 12K 213% 2019 2020 302 Million TL 4.1 Million Points Paycell is 159 Million TL Group Rev. Non-Group Rev. DCB transaction
Slide 28: Unlocking the Value, Funding Future Growth
Unlocking the Value Funding Future Growth Value Creation Growth Businesses 5,542 Diversified Sources of 4,822 Portfolio Funding 2,429 2,909 Fastest Fiber Company Telecom Services FCF Generation 285 252 Digital Services Debt Financing 160 147 Digital Business Services Equity Leading Techfin Company 4
Slide 29: Notice
NOTICE This presentation may contain 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,
Slide 30: Thank You
THANK YOU For further information please e-mail investor.relations@turkcell.com.tr or call Turkcell Investor Relations at (+90 212 313 1888) Turkcell IR Website
Turkcell Iletisim Hizmetleri AS — Q4 2020 Earnings Presentation on 6ix