Turkcell Iletisim Hizmetleri A.s. · BIST:TCELL
Turkcell Iletisim Hizmetleri A.s — Turkcell — FY2003 Earnings Presentation
21 slides from Turkcell Iletisim Hizmetleri A.s's earnings presentation, Apr 22, 2004
Slide 1: Results for Year End and Fourth Quarter 2003
1 Turkcell Results for Year End and Fourth Quarter 2003 April 22, 2004
Slide 2: Notice
2 Notice The information contained in this document has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither
Slide 3: Overview of Operations
3 Overview of Operations Muzaffer Akpınar, CEO
Slide 4: Overview of Turkcell in 2003
4 Overview of Turkcell in 2003 Positive market sentiment due to declining inflation and strong TL Changing competitive environment Subscriber growth of 21% to 19.0 million; 3.3 million net additions Revenues increased through improved MoU to 58.5 due to positive market sentiment and subscrib
Slide 5: 2003 Results Key Figures
5 2003 Results Key Figures 4Q03 YE2003 Pre Net Add. Prov* Results Pre Net Add. Prov* Results ARPU – Blended 11.0 6.7 11.7 10.6 Post-paid 25.8 19.3 26.0 24.4 Pre-paid 5.9 2.4 6.4 5.4 (US$ million) Revenues 620 380 2,459 2,219 Gross profit 203 (102) 911 606 EBITDA** 235 (158) 1,036 643 EBITDA margin 3
Slide 6: Usage and Churn
6 Usage MoU (minutes) Improved MoU in 2003 due to: 56.2 65.7 57.5 58.5 - Positive macro environment and increasing consumer confidence - Segmented volume based campaigns - Loyalty programs for the mass market YE 02 Q3 03 Q4 03 YE 03 Churn Churn Increase in churn to 14.5% in 2003 mainly 12.9% 14.
Slide 7: Highlights from 2003 Performance
7 Highlights from 2003 Performance Enhanced award winning Customer Relations Management Retention activities and loyalty programs for mass & different target segments - 10th year anniversary Differentiated competitive services - Collect Call Services - Unit Transfer Services - Shubuo Alterna
Slide 8: Regulatory Environment
8 Regulatory Environment Changing regulatory environment in line with EU requirements Market liberalization as of January 1, 2004, legal monopoly rights of Turk Telekom lifted Implementation of Access and Interconnection Regulation is underway Turk Telekom’s 51% block sale privatization is o
Slide 9: Competitive Environment
9 Competitive Environment Turkcell: Maintained leadership position Telsim: Management control seized by the SDIF Aria & Aycell: Merger completed Mainly price based competition continued A stronger 3 player market is expected in 2004
Slide 10: New International Markets
10 New International Markets Strategic growth opportunities: Iran & Ukraine Increase in target population to 220 million including Turkey and our CIS operations Capital expenditure: bridge and vendor financing terms are being discussed Paid in Capital contribution in progress for; - Ukraine:
Slide 11: Main focus areas in 2004
11 Main focus areas in 2004 Customer retention activities will continue to be our emphasis in changing competitive landscape - Competition by strong positioning of our brand - Focus on customer value; subscriber and usage retention Continue to lead new acquisitions market Emphasis on internati
Slide 12: Overview of Financial Results
12 Overview of Financial Results Ekrem Tokay, CFO
Slide 13: Improved Revenue
13 Improved Revenue Revenues (US$ million) (US$ (million million) US$) 1-Turk Telekom’s non-payment of interconnection revenues in 2003(1) 2,459 25% 240 Q2 03 Q3 03 Q4 03 TOTAL 12% Net impact (56,6) (45,1) (43,6) (145) 2,219 1.974 620 240 2-Impact of net additional provisions on revenues: 584 765 50
Slide 14: Improved underlying performance: EBITDA and EBITDA Margin
14 Improved underlying performance EBITDA , EBITDA Margin (US$ million) Despite non-payment of Interconnect 1,036 29% revenues; improvement was 39% 47% 46% 38% achieved due to: 33% 37% 393 - subscriber growth - Positive market sentiment 235 - increase in usage 761 643 393 Share of expenses in re
Slide 15: ARPU
15 ARPU ARPU (Blended) ARPU (Postpaid) ARPU (Prepaid) (US$) (US$) 26.0 (US$) 25.8 1,6 6,5 11.7 11.0 32,1 5.9 6.4 1,1 23,3 24,4 1,0 14,2 22,4 4,3 19,3 7,8 3,5 10,9 11,7 10,6 5,9 5,9 5,4 6,7 2,4 Q4 02 YE 02 Q3 03 Q4 03 YE 03 Q4 02 YE 02 Q3 03 Q4 03 YE 03 Q4 02 YE 02 Q3 03 Q4 03 YE 03 Blended ARPU Diff
Slide 16: Solid Performance
16 Solid Performance Revenues , Gross Margin Net Income (US$ million) 2,459 240 2.219 42% 38% 37% 33% 33% 31% 28% 754 1.974 27% 620 240 525 584 765 505 491 380 215 73 117 47 40 Q4 02 YE 02 1Q 03 2Q 03 Q3 03 Q4 03 YE 03 (18) (14) Revenues Pre-add. Prov. Q4 02 YE 02 1Q 03 2Q 03 Q3 03 Q4 03 YE 03 Net I
Slide 17: Cost Efficiency
17 Cost Efficency Direct Cost of Revenue, Sales & Marketing, General & Administration, % of Revenue % of Revenue % of Revenue (US$ million) 72% 1613 69% 67% 67% 73% 62% 32% 58% 60% 15% 73% 295 239 137 1367 16% 482 7% 6% 1548 11% 10% 10% 9% 121 13% 5% 5% 5% 5% 4% 11% 10% 58 5% 363 364 441 417 224 105
Slide 18: Improved Cashflow
18 Improved Cashflow (US$ million) Q4 02 YE 02 1Q 03 2Q 03 Q3 03 Q4 03 YE 03 EBITDA 168 761 232 218 351 (158) 643 LESS: Capex License & Investments (11) (142) (60) (56) (39) (44) (199) Interest (61) (279) (81) (73) (77) (79) (311) Other 105 127 65 59 40 545 709 Net Change in Debt (113) (316) (241) (
Slide 19: Balance Sheet
19 Balance Sheet (US$ million) Q4 02 YE 02 1Q 03 2Q 03 Q3 03 Q4 03 YE 03 Cash & Cash Equivalents 394 394 309 444 696 583 583 Short-term Debt 383 383 126 204 486 108 108 Long-term Debt 925 925 923 831 525 522 522 Total Debt 1.308 1.308 1.049 1.035 1.011 630 630 Net Debt 914 914 740 591 315 47 47 Tota
Slide 20: Additional Legal Provision
20 Additional Legal Provision B/S (Payment + Accrual) YE2003 – US$ million Paid Net Risk Principal Interest A B C A+B=C Tresury Share (534) (222) 240 (516) Turk Telekom (442) (211) 209 (444) Telecommunications Authority (184) (68) 57 (195) Tax Office (30) - 30 - Other (26) - 0 (26) TOTAL (1.216) (50
Slide 21: Financing
21 Financing (US$ million) 2003 2004 2005 2006 Principles 673 93 463 50 Interest 133 62 57 1 Total 806 155 520 51 Net debt decreased to US$47 million as of 2003 vs US$914 million as of 2002 Turkcell repaid US$806 million principle and interest during 2003 Early redemption of US$300 million 15%