Segment information

12 Months Ended

Dec. 31, 2019

4.	Segment information

The Group has two reportable segments in accordance with its integrated communication and technology services strategy—Turkcell Turkey and Turkcell International. While some of these strategic segments offer the same types of services, they are managed separately because they operate in different geographical locations and are affected by different economic conditions.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker function is carried out by the Board of Directors, however Board of Directors may transfer the authorities, other than recognized by the law, to the General Manager and other directors.

Turkcell Turkey reportable segment includes the operations of the Company, Turkcell Superonline Iletisim Hizmetleri A.S. (“Turkcell Superonline”), Turkcell Satis ve Dijital Is Servisleri Hizmetleri A.S. (“Turkcell Satis”), group call center operations of Global Bilgi Pazarlama Danismanlık ve Cagri Servisi Hizmetleri A.S. (“Turkcell Global Bilgi”), Turktell Bilisim Servisleri A.S. (“Turktell”), Turkcell Teknoloji Arastirma ve Gelistirme A.S. (“Turkcell Teknoloji”), Kule Hizmet ve Isletmecilik A.S. (“Global Tower”), Rehberlik Hizmetleri Servisi A.S. (“Rehberlik”) and Turkcell Gayrimenkul Hizmetleri A.S. (“Turkcell Gayrimenkul”). Turkcell International reportable segment includes the operations of Kibris Mobile Telekomunikasyon Limited Sirketi (“Kibris Telekom”), East Asian Consortium B.V. (“Eastasia”), Lifecell LLC (“lifecell”), Lifecell Ventures Coöperatief U.A (“Lifecell Ventures”), Beltel Telekomunikasyon Hizmetleri A.S. (“Beltel”), CJSC Belarusian Telecommunications Network (“Belarusian Telecom”), LLC UkrTower (“UkrTower”), LLC Global Bilgi (“Global LLC”), Turkcell Europe GmbH (“Turkcell Europe”), Lifetech LLC (“Lifetech”), Beltower LLC (“Beltower”) and Lifecell Digital Limited (“Lifecell Digital”). The operations of these legal entities aggregated into one reportable segment as the nature of services are similar and most of them share similar economic characteristics. The other reportable segment mainly comprises the information and entertainment services in Turkey and Azerbaijan,

non-group

call center operations of Turkcell Global Bilgi, Turkcell Finansman, Turkcell Özel Finansman A.Ş. (“TÖFAŞ”), Turkcell Enerji Cozumleri ve Elektrik Satıs Ticaret A.S (“Turkcell Enerji”) Paycell LLC, Turkcell Odeme, Turkcell Sigorta Aracılık Hizmetleri A.Ş (“Turkcell Sigorta”), Türkiye’nin Otomobili Girişim Grubu Sanayi ve Ticaret A.Ş.(“Türkiye’nin Otomobili”) and Sofra Kurumsal ve Ödüllendirme Hizmetleri A.Ş.(“Sofra”).

The Board primarily uses adjusted EBITDA to assess the performance of the operating segments. Adjusted EBITDA definition includes revenue, cost of revenue excluding depreciation and amortization, selling and marketing expenses and administrative expenses.

Adjusted EBITDA is not a financial measure defined by IFRS as a measurement of financial performance and may not be comparable to other similarly titled indicators used by other companies. Reconciliation of Adjusted EBITDA to the consolidated profit for the year is included in the accompanying notes.


	Turkcell Turkey						Turkcell International						All other segments						Intersegment eliminations						Consolidated
	2019			2018			2019			2018			2019			2018			2019			2018			2019			2018
Total segment revenue		21,487,156			18,092,586			2,002,789			1,456,980			2,217,979			2,113,681			(570,789	)		(370,772	)		25,137,135			21,292,475
Inter-segment revenue		(79,318	)		(46,355	)		(94,703	)		(69,657	)		(396,768	)		(254,760	)		570,789			370,772			—			—
Revenues from external customers		21,407,838			18,046,231			1,908,086			1,387,323			1,821,211			1,858,921			—			—			25,137,135			21,292,475
Adjusted EBITDA		8,789,179			7,403,822			903,896			612,697			765,798			801,687			(32,454	)		(30,224	)		10,426,419			8,787,982
Net impairment losses on financial and contract assets		(223,879	)		(248,171	)		(5,109	)		(4,088	)		(109,869	)		(94,131	)		—			—			(338,857	)		(346,390	)

	Turkcell Turkey						Turkcell International						All other segments						Intersegment eliminations						Consolidated
	2018			2017			2018			2017			2018			2017			2018			2017			2018			2017
Total segment revenue		18,092,586			15,340,866			1,456,980			1,067,078			2,113,681			1,297,545			(370,772	)		(73,425	)		21,292,475			17,632,064
Inter-segment revenue		(46,355	)		(31,757	)		(69,657	)		(40,897	)		(254,760	)		(771	)		370,772			73,425			—			—
Revenues from external customers		18,046,231			15,309,109			1,387,323			1,026,181			1,858,921			1,296,774			—			—			21,292,475			17,632,064
Adjusted EBITDA		7,403,822			5,504,124			612,697			263,962			801,687			467,580			(30,224	)		(7,412	)		8,787,982			6,228,254
Net impairment (losses)/gains on financial and contract assets		(248,171	)		49,468			(4,088	)		(6,070	)		(94,131	)		(79,676	)		—			—			(346,390	)		(36,278	)


	2019			2018			2017
Profit for the period		3,276,690			2,177,335			2,037,759

Add(Less):

(Profit)/loss from discontinued operations		(772,436	)		—			—

Profit from continuing operations		2,504,254			2,177,335			2,037,759
Income tax expense		785,630			495,481			571,758
Finance income		(297,450	)		(1,677,114	)		(597,246	)
Finance costs		2,025,118			3,364,072			920,112
Other income		(140,705	)		(241,435	)		(74,438	)
Other expenses		487,295			381,582			773,329
Depreciation and amortization		5,046,565			4,287,974			2,596,980
Share of loss of equity accounted investees		15,712			87			—

Consolidated adjusted EBITDA		10,426,419			8,787,982			6,228,254

Geographical information

In presenting the information on the basis of geographical segments, segment revenue is based on the geographical location of operations and segment assets are based on the geographical location of the assets.


	2019		2018		2017
Revenues
Turkey		23,229,046		19,636,682		16,431,863
Ukraine		1,322,116		923,181		664,643
Belarus		366,314		293,181		209,884
Turkish Republic of Northern Cyprus		209,109		169,014		148,637
Netherlands		8,396		366		—
Germany		2,154		1,580		3,016
Azerbaijan		—		268,471		174,021

		25,137,135		21,292,475		17,632,064


	31 December 2019		31 December 2018
Non-current assets
Turkey		22,737,468		21,037,351
Ukraine		3,030,095		2,751,277
Belarus		219,281		293,622
Turkish Republic of Northern Cyprus		198,732		177,380
Unallocated non-current assets		197,255		168,536

		26,382,831		24,428,166