AFTER 2015, THE YEAR OF RECORDS, OUR AIM IS 2016 AT 4.5G SPEED

In 2015, the year of records for Turkcell, we have defined our medium term objectives and taken bold steps towards achieving them. The coming term will be one in which we continue to grow with increasing profits and advance through confident steps towards our aim of becoming the telecommunication sector leader.

Kaan Terzioğlu

We concluded the year of 2015 having accomplished all of our targets with an improving performance every quarter. We recorded historic high revenue and EBITDA, as both Turkcell Turkey and Turkcell Group. Turkcell Turkey, generating 90% of Group revenues, grew 9.5% with an EBITDA margin of 32.7%. Turkcell Group revenues rose 6.0% yearly to TRY 12.8 billion with EBITDA reaching TRY 4.1 billion with a 10.1% increase, while the EBITDA margin reached 32.4% on a rise of 1.2 percentage points. Our adjusted Group net income1 increased 18.2% to TRY 2.6 billion whereas net income according to TFRS was TRY 2.1 billion. This year, the ratio of operational capex to sales was recorded at 20%.

Key growth drivers were our data and services businesses. Our data revenues increased 38.1% in 2015, reaching TRY 3.5 billion on the back of Turkcell’s superior network experience, while our service revenues grew 38.5% to TRY 659 million.

In 2015, the total number of subscribers in the five countries where we have direct operations reached 51.5 million. In Turkey, this was 35.8 million2 with strong performance in postpaid, fiber and TV.

An important development in 2015 was the General Assembly, which took place after a number of years. Accordingly, we distributed a total dividend of TRY 3,925 million, corresponding to TRY 1.78 per share.

We offer globally relevant products

Notable among Turkcell’s innovative services which play a significant role in our ambition of providing globally relevant product and services, our new generation communication platform, BiP has been downloaded 6.2 million3 times. Launched in Germany, Ukraine, Belarus and the Turkish Republic of Northern Cyprus after Turkey, BiP has since been downloaded in 189 countries.

Turkcell TV+, which plays an important role in our convergence strategy, reached 558,000 customers in 2015. The active users of Turkcell Smart Storage, which is the most widely used personal cloud service in Turkey have exceeded 1.7 million3 and Turkcell Music downloads have reached 5.4 million3.

We took bold steps towards being an effective player in our region

We acquired the remaining 44.96% stake in lifecell, our subsidiary in Ukraine for USD 100 million where we have recently announced its rebranding as part of Turkcell’s brand integrity strategy. Within a short period after launch on Jun 4, two million of lifecell’s 13.5 million customers have already switched to 3G+ services.

We took significant steps to improve the group balance structure and to create value for our shareholders. Furthermore, we established a consumer financing company to continue providing financial flexibility for our customers’ technology needs. Meanwhile, we structured the financial debts of our international subsidiaries lifecell and BeST, and eliminated the exchange rate risk generated from those debts.

We confirmed, once again, the trust invested in Turkey and Turkcell in international markets

Our new vision and strategic steps that we have taken in this context were well received in the international markets. We also became the only Turkish company to receive “investment grade” rating from the world’s three leading credit rating agencies. We raised close to USD 2.9 billion in funds, of which USD 500 million in Eurobonds, within the short period of 2 months for infrastructure investments, restructuring of existing debt, and the financing of possible new investment opportunities.

We are investing in the speed of the future

Undoubtedly, the most important topic in the sector in 2015 was the 4.5G tender. At the tender, we purchased 47% of the total frequency for EUR 1.9 billion (including VAT). With this investment in the future of Turkey, Turkcell is once again set to provide the greatest value to both its customers and the economy. With Carrier Aggregation Technology in 4.5G, Turkcell will yet again be the first and only company to provide speeds of above 1000 Mbps in mobile devices in the coming term. In a sense, this means providing ‘wireless fiber’ speed! Going forward, these frequencies will make us the leader in 5G.

A time of change and growth for Turkcell

Our strategic priorities to create more value for our shareholders in the coming term shall be to position Turkcell as a converged company, strengthen our position in Turkey, focus on international expansion and take value creating actions to strengthen our balance and cash generation ability.

Our aim is to expand the extent of the innovative products and services we provide through our integrated mobile and fixed network platform as a regional player in converged communication and technology services. In this context, we aim to present the full range of our services in an integrated and coordinated manner by integrating our marketing and sales force, and our infrastructure. We believe that this change will carry our competitive structure and results one step further.

Special thanks to the Turkcell Family

In 2015, we accomplished results that would enhance our sector, our country and the surrounding region besides Turkcell. We took great steps towards new achievements. We are glad to have also recorded achievements in our corporate social responsibility projects. I have the pleasure to say that the most important factor enabling this success, achieved under tough macroeconomic conditions, is the harmonious teamwork among our Board of Directors, senior management and employees. I would therefore like to express my special thanks to the entire Turkcell Family. I also would like to voice our gratitude towards our customers, who have always been with us in our success story.

Ahmet Akça

KAAN TERZİOĞLU
Turkcell CEO

1 Please refer to page 129 for an explanation on adjusted net income 2 The total number of mobile, fixed and IPTV subscribers 3 As of 18 February 2016