Evgeniya Bystrova

Evgenia Bystrova from Barclays inquired about the specific EBITDA margins for Turkcell's data center business, seeking more detailed financial color on this growing segment.

Answer

CEO Ali Taha Koç highlighted the data center business as a key growth area, projecting a 14% CAGR from 2025-2030, a doubling of active capacity, and a six-fold increase in data center and cloud revenues in USD terms by 2032. He stated that the share of DC cloud revenue in total revenues is expected to rise to 8%-10% from the current 2%, and no dilutive impact is anticipated on the overall company's EBITDA margin.

Evgenia Bystrova inquired about the data center business, specifically requesting more details on its EBITDA margins and growth expectations.

Answer

CEO Ali Taha Koç highlighted the data center business as a key growth area, driven by AI and cloud demand. He projected a more than twofold increase in active data center capacity and a sixfold increase in data center and cloud revenues in U.S. dollar terms by 2032. He also stated that no dilutive impact is expected on the overall EBITDA margin from this expansion.

Evgeniya Bystrova of Barclays Investment Bank asked for management's perspective on recent news about a potential fourth mobile operator entering the Turkish market and how this could affect Turkcell's competitive position, margins, and subscriber base.

Answer

CEO Ali Koç responded that while Turkcell has seen the press reports, there has been no official statement from regulatory bodies. He expressed confidence in Turkcell's ability to compete effectively, citing its strong network infrastructure, customer-oriented approach, and loyal customer base. Mr. Koç also highlighted the significant capital and time required for a new entrant to build a large-scale mobile network, suggesting it is not a short-term process.

Bystrova Evgeniya from Barclays asked if Turkcell plans to update its full-year guidance after beating expectations in Q1 and requested clarification on the CPI assumption used for the initial guidance.

Answer

CFO Kamil Kalyon stated that despite a strong start, it is too early to revise guidance due to macroeconomic uncertainties. He confirmed the original year-end CPI assumption for the budget was 30.5%, but the company's internal forecast has since been revised to 35%.

Bystrova Evgeniya of Barclays asked why Turkcell was not updating its full-year guidance, given that Q1 results for revenue growth and EBITDA margin appeared to beat expectations. She also requested clarification on the CPI assumption used for the 2025 guidance.

Answer

CFO Kamil Kalyon responded that while the company had a strong start to the year, it is too early to revise guidance due to significant domestic and international macroeconomic uncertainties. He confirmed they are currently sticking to the guidance announced at the start of the year. He also noted that their internal year-end CPI expectation, originally 30.5% for the budget, has now been revised to 35%.

Evgeniya Bystrova of Barclays asked for a repeat of the 2025 EBITDA per ton guidance, inquired about the potential impact of U.S. tariffs on steel, and sought details on the drivers behind the fourth-quarter improvement in working capital.

Answer

Idil Onay (Executive) reiterated the 2025 EBITDA per ton guidance of $90 to $100. She stated that potential U.S. tariffs are expected to have a positive impact by balancing the U.S. market and preventing unfair competition, likely leading to higher local prices in the U.S. but not necessarily in Europe or Turkey. The Q4 working capital improvement was attributed to decreasing inventories and value-added tax receivables, a trend expected to continue into Q1 2025.

Evgeniya Bystrova from Barclays requested a repeat of the 2025 EBITDA per ton guidance, asked about the potential direct or indirect impacts of U.S. steel tariffs, and sought more detail on the drivers behind the working capital improvement in the fourth quarter.

Answer

Executive Idil Onay reiterated the 2025 EBITDA per ton guidance of $90-$100. She stated that potential U.S. tariffs are expected to balance the U.S. market but not significantly affect prices in Europe or Turkey. Onay attributed the Q4 working capital improvement to a decrease in inventories and value-added tax receivables, a trend she expects to continue into Q1 2025.