Turkcell Iletisim Hizmetleri AS

Ladies and gentlemen, thank you for standing by. I am Gail Lee, your chorus call operator. Welcome and thank you for joining the Turkcell's conference call live webcast to present and discuss the Turkcell fourth quarter and full year 2024 financial results. All participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mrs. Özlem Yardim, Investor Relations and Corporate Finance Director. Mrs. Yardim, you may now proceed.

Özlem Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Yardim Before we begin, I would like to kindly remind you to review our safe harbor statement available at the end of our presentation. Now I'm handing the meeting over to Mr. Ali Taha.

Thank you, Özlem. Good afternoon, everyone, and thank you for being with us today. This year, in which we celebrated our 30th anniversary, has been a testament to our dedication and achievements. We delivered on our promises, honored our commitments, and strengthened our foundation for the future. For the full year, our top line reached 166.7 billion Turkish Liras, reflecting a 7.8% year-on-year rise, suppressing our guidance. With a strong focus on profitability, we achieved 69.8 billion Turkish Liras in EBITDA, maintaining a solid margin just below 42%. Throughout the year, we prioritized upselling and driving customers to post-paid plans, leading to a record-breaking 1.9 million net postpaid additions, the highest of the past 15 years. In addition, we delivered double-digit ARPU growth, supported by a disciplined pricing strategy and an expanding postpaid base. In total, we added a net of 0.6 million subscribers in 2024. A key milestone of the year was the completion of our Ukraine assets sale in the third quarter. Along with this, we delivered a 30 percent increase in net income, exceeding 23.5 billion Turkish Liras. Next slide, please, Ozan. Let's take a look at our operational performance. On the mobile front, the aggressive pricing dynamics that began in May persisted into the second half of the year. there were no price adjustments across the market beyond July. With intensified competitor campaigns, particularly in December, the market remained highly competitive. While we strategically responded to these moves, we closed Q4 with 479,000 post-paid net debts. Over the past year, our post-paid base has grown by 1.9 million raising the post-paid share to 76%, marking a five-point increase year-on-year. We had 0.9 million quarterly net loss in the prepaid segment. This is mainly due to broader adoption of alternative data solutions, the quarterly disconnection of inactive subscribers in line with our term policy and post-paid migrations. We achieved double-digit ARPA growth, driven by our rational pricing strategy, successful upselling to higher packages, and expanding post-paid bays and a slowdown in CPI. However, due to accelerated market aggressiveness and lifecycle closures, the churn rate rose to 2.8%. We have retained our focus on profitability and leveraging our digital services to support ARPA growth. As a result, Our standalone paid user base is at 4.8 million in Q4. Next, please. In Q4, the fixed broadband market remained relatively rational other than the late price adjustments among small ISPs. We maintain our focus on fiber subscribers, strong demand for our high-speed end-to-end fiber service draw 32,000 net additions in this quarter. bringing the full year net at 268,000. Momentum in the demand for high-speed packages continued in this quarter. The share of packages of 100 megabits per second and above in our residential fiber portfolio rose by 12 percentage points year-on-year. Residential fiber output grew by 18.8% year-on-year. This is mainly due to the rising 12-month contract share to 85% higher usage of 100 megabits per second plus packages and price adjustments. The slight rise in churn is mainly due to price increases and the transition to 12-month contracts. Meanwhile, our take-up rate rose by 1.7 points year-on-year, as we focused on adding Fiverr subscribers over expanding HomePass coverage. Next, please. Digital business services generated 4.4 billion Turkish Liras in revenue this quarter, with recurring service revenues rising 19% year on year. Hardware revenues also provided support, showing a partial recovery this quarter. Notably, our system integration project backlog has reached 4.8 billion Turkish Liras. In our high-potential data center and cloud segment, Revenues rose 39%, driven by high demand and strong pricing. Guided by our principle of keeping Turkey's data in Turkey, we remain committed to expanding our data center investments, reinforcing our longstanding market leadership. We are Turkey's first company to receive 3333 certification from the Uptime Institute for design, facility, and operations. Our data centers are built to the highest standards, ensuring redundancy, reliability, and near-zero downtime. This makes us the number one choice for top enterprises, securing our long-term growth potential. To meet growing demand, we expanded our data center capacity by 27% to 41.4 megawatts in 2024. In 2025, we plan to build two more new modules, increasing our capacity by 8.4 megawatts by year end. Next, please. Our Techfin segment. PayCell and FinanceCell comprises 5% of our group revenues, strengthening our top line growth. PayCell, our mobile payment platform. achieved 33% growth in the Q4. While all verticals contributed, the biggest drivers were higher commissions and transaction volumes from pay later and post solution. Notably, pay later transaction volumes surged by 87%, fueled by broader adoption in app stores and expanded QR payment eligibility. Meanwhile, pay sales a bit to grow by 51.8%, with a 4% touchpoint increase in EBITDA margin, reinforcing our commitment to profitable growth. Financial revenue rose by 13.6%, supported by higher average interest rates and an expanded loan portfolio. Thanks to the personalized pricing strategy we adopted in 2024, we are now able to address the wider customer segment. This strategy has contributed to our portfolio growth. The rising interest in our loan book is offsetting higher funding costs, driving the net interest margin up to 4.6%. Despite the challenging macroeconomic environment, Finansial remains the market leader in loan volume within the financing sector, a proof of our strength and resilience. Next, please. This year, I'm proud to say that we stayed true to our commitment to sustainability, reaching key milestones along the way. We successfully issued a $1 billion euro bond, with half of it marking our inaugural sustainable bond issue, a clear reflection of our ECG efforts. Our CFO will share the details shortly. On the renewable energy front, we added 8.2 megawatts of active solar capacity in 2024. on track to reach 54 megawatts by mid-2025. Additionally, we integrated solar panels to a thousand base stations, further strengthening our commitment to renewable energy in our telco operations. Our social and digital inclusion projects have impacted 377,000 lives. We also conducted a sustainability assessment for our key suppliers, to reinforce our ECG commitment in the supply chain. In governance, transparency and accountability remain our guiding principles. As part of our bond issuance, we published our first sustainable finance framework and secured an independent third-party opinion to help investors assess our ECG commitments. These milestones underscore our dedication to sustainability and we remain committed to building a more responsible and inclusive future. I want to take a moment to lay out our strategy, our roadmap for driving Turkcell into the future. At the heart of our plan lies a commitment to robust infrastructure and cutting-edge technology. We are making comprehensive investments to pave the way forward. Our leadership in mobile services will continue as we advance in 5G, coupled with an expanding fiber network, not only to power mobile infrastructure, but also to enhance residential access. When it comes to 5G, we are committed to leading the way in connectivity. Just last week, we successfully tested 5G in a packed football stadium with around 50,000 supporters. delivering impressive download speeds of 1 gigabit per second and above. As data and cloud services surge, we are building next-generation data centers. While to meet growing energy demand, we remain committed to renewable energy investments. Our strategy is about more than infrastructure alone. It is about transforming lives. We are dedicated to delivering superior technologies. We are embedding AI into our operations, ensuring operational excellence. With continued investments in data centers, we are driving growth in the cloud business through strategic partnerships. And as a pioneering innovator, we are actively exploring disruptive technologies such as 6G, satellite systems, and quantum technologies in collaboration with global industrial leaders. Our mission is clear. to keep our service simple, functional, and unique, ensuring we remain the first choice of our customers. No matter the sector, no matter the challenge, our people-centric approach remains our guiding principle. Finally, sustainability and business continuity form the backbone of our strategic vision. With this strategy, we are unlocking the full potential of our world-class infrastructure and technology expertise, delivering lasting value to our stakeholders and shaping the future of connectivity. To conclude my presentation, I share our guidance for 2025. For 2025, we expect 7% to 9% top line revenue growth, 32% to 34% data center and cloud revenue growth, We have an EBITDA margin guidance of 41% to 42%, and we expect a CAPEX intensity of around 24%. I will now leave the floor to our CFO, Mr. Kamil Kalyon.