Hizmete ÖzelJuly 2018

Company Presentation

2Hizmete Özel

Disclaimer

Important Information

This presentation contains information relating to Enerjisa Enerji A.Ş. (“Enerjisa”) that must not be relied upon for any purpose and may not be redistributed, reproduced, published, or passed on to any other person or used in whole or in part for any other purpose. By accessing this document you agree to abide by the limitations set out in this document as well as any limitations set out on the webpage of Enerjisa on which this presentation has been made available.

This document is being presented solely for informational purposes. It should not be treated as giving investment advice, nor is it intended to provide the basis for any evaluation or any securities and should not be considered as a recommendation that any person should purchase, hold or dispose of any shares or other securities.

This presentation may contain forward-looking statements based on current assumptions and forecasts made by Enerjisamanagement and other information currently available to Enerjisa. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Enerjisa does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments.

Neither Enerjisa nor any respective agents of Enerjisa undertake any obligation to provide the recipient with access to any additional information or to update this presentation or any information or to correct any inaccuracies in any such information.

Certain numerical data, financial information and market data (including percentages) in this presentation have been rounded according to established commercial standards. As a result, the aggregate amounts (sum totals or interim totals or differences or if numbers are put in relation) in this presentation may not correspond in all cases to the amounts contained in the underlying (unrounded) figures appearing in the consolidated financial statements. Furthermore, in tables and charts, these rounded figuresmay not add up exactly to the totals contained in the respective tables and charts.

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Executive Summary

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Successful track-record of expansion and improvement of legacy regional companies

1996

20062009

2013

2017

Establishment of Enerjisa by

Start of 1st

Regulatory Period

Acquisition of Başkent Region

E.ON Becomes 50% Partner

Unbundling Process Initiated

Acquisition ofAyedaş andToroslar Regions

Generation and Wholesale Spin-off from Distribution and Retail

Turkey’s No.1 Electricity

Distribution and Retail Company

2016

Start of Current (3rd) Regulatory Period

2018

IPO & listing at IstanbulStock Exchange –included to BIST 30 & FTSE All-World Index

5Hizmete Özel

Enerjisa at a glance

10.9m2017 Connection

Points

c. 220,000 km2017

Network Length

35.2 TWh2017 Sales

Volume

9.2m2017 Customers

TL5.3bn2017 RAB

Overview

Turkey’s leading electricity distribution and retail company with consolidated revenues of over TL12bn for the year ended 31 December 2017

Successful partnership between E.ON and Sabancı, through a 50/50 joint venture since 20131

Fundamental growth from incumbent regions (Başkent, Ayedaş and Toroslar)

Successfully completed operational and financial improvement post privatizations

Total RAB of TL5.3bn as of 2017

Large retail customer base of over 9 million (representing 22% market share) with high proportion of regulated sales

Reta

ilD

istr

ibu

tion

1 1 1

1 1

No.1 Electricity Distribution and Retail

Player in Turkey

1 Post IPO E.ON and Sabancı own 40% each.

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Enerjisa24%

Other Players76%

Enerjisa26%

Other Players74%

Enerjisa14%

Other Players86%

Presence in highly attractive regions in Turkey

Key Statistics on Regions (2017)

Source: Company, TUIK.1 Based on EMRA disclosure.

Rank Region Population

İstanbul European Side 9.7m

İstanbul Asian Side 5.3m

Ankara 5.4m

İzmir 4.3m

Bursa 2.9m

Antalya 2.4m

Adana 2.2m

Konya 2.2m

Gaziantep 2.0m

Şanlıurfa 2.0m

Kocaeli 1.9m

2

Population

20.9m

AreaNet

Distribution Volume1

Ayedaş 5.3m 1,926 km2 11.6 TWh

Başkent 7.3m 61,141 km2 15.0 TWh

Toroslar 8.3m 46,596 km2 15.2 TWh

109,663 km2 41.8 TWh

3

4

5

6

7

8

9

10

11

Presence in Turkey’s Top 10 Provinces by Population

Ayedaş

Başkent

Toroslar

Ankara(Capital)

Istanbul (Asian Side)

Adana

79

Gaziantep

3

2

Operations in some of the most influential and

industrialised regions of Turkey

More than a quarter of population covered

Total: 15.0m

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Turkey’s no.1 electricity distribution and retail company

Leader in an Attractive Market

26%1

10.9m Distribution Connections

9.2m Retail Customers

22%2

Supportive and Transparent Regulatory Framework

TL2.6bn Operational Earnings3

(2017)

Premium Sponsors and Superior Governance

40% 40%

Free Float

Strong Historical Growth and Untapped Potential

Regulated Asset Base(TLbn)

> 2x RAB 2016

2020E

No.1

Retail9%

Distribution91%

Regulated

20%

+55%

2016

5,3

1,4

2,7

20172015

3,9

2014

1 Market share by number of connections as of 2017.2 Market share by number of Retail customers as of 2017.3 EBITDA + Capex Reimbursements.

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Significant operational earnings and cash growth

Consolidated Underlying Net Income (TLm)

Consolidated Operational Earnings(TLm)

Consolidated Free Cash Flow before Interest and Tax (TLm)

1 Source: S&P and company research.

Net Debt/Operational Earnings

Global Peers1

779

+49% 2.565

2017

1.938

20162014 2015

1.100

522377

70

-277

2014 2015 2016 2017

2017

176

2016

2

2014

-379

2015

444

Operating Cash Flow (before interest & tax)

Capex

2014 2015 2016 2017

2,9x

3,4x

5,5x

7,0x

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Mid-term targets

Operational Earnings(TLm)

Dividend policy 60-70% payout of Underlying Net Income

Leverage <3.5x Net Debt/Operational earnings

+32%

20202017

2,565

1,938

2016

+20%CAGR

2016-20522

377

20202017

+38%

2016

Significantly>20% CAGR

2016-20

68%

2017

70%

60%

2020

0.30TL

Dividend per share1

1 Dividend per 100 shares; total number of outstanding shares is 118,106,896,712.

20202017

2.9x

2016

3.4x

3.5x

Underlying Net Income(TLm)

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Electricity distribution leadership provides economies of scale

No.1No.1

10,9

8,0

5,0

3,1 3,02,2 2,0 1,8 1,7 1,7

1,0 0,7 0,7 0,7

CK

Bere

ket

Lim

ak

Calik-K

iler

Aksa

Ala

rko-C

engiz

Dic

le E

daş

Zorl

u

Akcez

Içta

ş

Kceta

s

Akedas

Türk

erler

2017 Number of Distribution Connections by Competitors (millions)

Share of National Regulatory Asset Base1

(2017)

Share of 2016–2020 National Capex Allowance of Total ~TL18bn(October 2015, real)

24%

Enerjisa Distributes Electricity to 1 Out of Every 4 Persons in Turkey

Enerjisa Reads c. 120 Million Meters Every Year

Centralised Management Enables Sustainable Top Performance

23%

= 26% Market Share

29%

Source: Company and EMRA.1 National Regulatory Asset Base according to initial Capex allowance, Enerjisa RAB accounts for actual Capex.

Other players

Other players

10.2 = 24% Market Share

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35

31

23

1311 9 8 8

29 30

CK

Bere

ket

Lim

ak

Akenerj

i

İçta

ş

Zorl

u

Aksa

Oth

er

Incum

bents

Non-

Incum

bents

1

22%2

No.1 electricity retailer with nationwide reach No.1No.1

2017 Sales Volume by Competitors(TWh)

Market Share by Customers(2017)

Market Share of Residential and SME Volume(2017)

Enerjisa Operates Nearly 200 Customer Service Points

Call Centres Handle 1.3 Million Calls a Year

Retailer with Nationwide Reach and Brand Awareness

= 18% Market Share

9.2m

22 TWh

c.2

00 P

layers

Source: Company and EMRA.1 Including Cengiz Toptan.2 Includes inactive customers.

Other players

Other players

18%

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RAB-based regulation similar to Western Europe with stronger fundamentals

Key Features of Distribution

Infrastructure

Regulation Approach

TurkeyWestern Europe vs.

Connections Growth

Demand Growth

Level of Interruptions

Dispersion in Performance by Concessionaires

Low

Low

Low

Low

High

High

High

High

Source: Regulatory Bodies, Moody’s’ “Regulated Electric and Gas Networks – EMEA” reports dated November 2016 and June 2017.

Regulatory Period Length

RAB-Based

Capex Reimbursement Accounting

Capex ReimbursementPeriod

Outperformance Incentives

4-8 years

P

In EBITDA

30-45 years

5 years

Regulatory: in EBITDAIFRS: in Cash Flow

Statement

10 years

P

P P

RAB Growth Low High

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Distribution regulation incentivises investment and outperformance

Regulated WACC(real Oct 2015, pre-tax)

EnerjisaCapex Allowance(TLbn, real Oct 2015)

Theft and Loss Allowance

Fixed by Regulator

Variable with Actual

Historical Rates

Financial Income and

Capex

Reimbursement

Efficiency &

Quality

Other

Distribution Operational Earnings Breakdown1

(2017)

9,97%

11.91%

2.8

4.3

+194bps

+53%

TL2.3 bn

Regulated WACC (real)

2nd Reg. Period2011 – 2015

3rd Reg. Period2016 – 2020

Source: Company, Bloomberg and EMRA.1 For the explanation please see “Operational Earnings bridge “in the Appendix.

69%

26%

5%

EnerjisaOpex Allowance1

(TLbn, real Oct 2015)

4.0

4.8

+21%

2016-2017 ->

2018-2020 -> 13.61%

11,91%

9,97%

2011-2015 2018-2020

13,61%

2016-20172006-2010

9,35%

2nd reg. period 3rd reg. period

1st reg. period

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Majority of retail customers still regulated –liberalisation as potential upside for profitability

By Consumption Limits in Eligibility Limit Development*(MWh p.a.)

Illustrative Profitability Structure

Market Openness by Volume

30,0

5,0 4,5 4,0 3,62,4 2,0

~ 94%

2015 2016

~ 47%

20142012

100.0

2010 2013

25.0

2011

Market Openness by No. of Customers

2.38%

Regulated

Sales Price

Liberalised

Sales Price

Discount Gross Margin

Retail Service Revenue Sourcing Cost

2.38%

-Potential for

ReducedSourcing Cost

+Potential for

HigherMargins

2017

Source: Company, EMRA.

In December 2017, the regulator has lowered the eligibility threshold from 2.4MWh to 2.0MWh, effective starting from 2018

2018

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High quality partners and experienced management team

40%

World class utility – operating in networks, customer solutions, and renewables

RAB of ~€19bn

>22m retail customers across Europe

>400k customers purchasing value added units

Operates 754,000 km of network grid length

Current Ownership Structure

Turkey’s leading conglomerate company

Strong retail experience/brand awareness

Listed holding with listed subsidiaries including Akbank, Avivasa, Brisa and Carrefoursa

Track record of working with international partners (e.g. Aviva, Ageas, Bridgestone, Heidelberg and Carrefour)

Experienced Management Team

Independent Board Members

Transparent and Arm’s Length Related Party Transactions

40%

Source: E.ON & Sabancı websites.Note: Operational and financial data as of 2016.

Free Float

20%

>75% international institutions at IPO

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Turkish electricity sector investment needs to continue to grow significantly

• Population growth of 1.4% p.a. since 2000, expected 0.6% p.a. until 2042

• Young population with median age of 31 years• Economic growth driven by increasing population and

prosperity, with GDP expected to grow 4.7% p.a. until 2042

Strong macro with favourable dynamics

• Electricity demand growth ~5% p.a. since 2000 and projected

to continue going forward in line with government guidance

• Electricity consumption per capita of 3.2 MWh in 2016 is significantly behind European countries

5% CAGR electricity demand since 2000

• Frequency and duration of outages as well as level of theft and loss rates vs. other EU countries shows need for significant additional investments into network quality improvements

Quality improvements required

• Exceptional wind and solar generation capacity increase from virtually nothing in 2000 to 6.5 GW in 2017 has driven network requirements

• Renewables and decentralised energy will play a significant role for security of supply purposes in the future (12.3 GW wind and solar installed capacity expected in 2020)

Impact from renewables / decentralised energy

Source: EIU, World Bank, TEİAŞ, EMRA.

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One of the Fastest Growing European Countries(real GDP CAGR in %)

Turkey’s macro growth story remains strong, supported by positive demographic dynamics

5,7

%

3,7

%

3,6

%

2,7

%

1,7

%

1,3

%

1,1

%

1,1

%

1,1

%

0,1

%

(0,1

%)

Turk

ey

Pola

nd

Rom

ania

Czech R

ep.

UK

Spain

Germ

any

Neth

erlands

Fra

nce

Port

ugal

Italy

4.6% 3.3% 4.1% 1.6%2.8% 2.3% 1.6% 1.6% 1.0%2.2% 1.7%

CAG

R (

2001 –

2016)

CAG

R

(2016-

2022E)

One of the Largest and Still Growing Population in Europe(2016 population in millions, CAGR 2016-2022E in %)

Favorable Demographics with Increasing Urbanisation(% of Total Population)

CAG

R

(2016-

2022E)

82,6

79,5

65,1

64,7

59,4

46,4

38,4

19,8

17,0

10,6

10,3

Germ

any

Turk

ey

UK

Fra

nce

Italy

Spain

Pola

nd

Rom

ania

Neth

erlands

Czech R

ep.

Port

ugal

0.1% 1.1% 0.6% 0.4% (0.1%) 0.0% 0.0% (0.5%) 0.5% 0.0% (0.3%)

71.0%

25%

18% 18% 17% 15% 15% 15% 15% 14% 14% 13%Turk

ey

Fra

nce

UK

Neth

erlands

Rom

ania

Czech R

ep.

Pola

nd

Spain

Port

ugal

Italy

Germ

any

31 41 42 41 42 40 43 44 46 4640

% o

f 0-1

4 A

ge

in 2

016 p

opula

tion

Media

n

Age

A Young Population(Percent of 0-14 Age in Total 2016 Population, Median Age in 2016)

73,9%

91,0%

82,8%80,5% 79,8% 79,8%

Turkey Netherlands UK OECD France Spain

2010

Popula

tion

(in m

)

2016

Turkey

Source: EIU, World Bank.

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Electricity consumption growing steadily, with room for further increase

Netherlands

UKGermany

France

Italy

Spain

PortugalCzech Republic

Poland

Turkey

Romania

-

10

20

30

40

50

2.000 3.000 4.000 5.000 6.000 7.000 8.000

GD

P p

er c

ap

ita

20

16

(U

SD

k)

Electricity consumption per capita 2016 (kWh)

581

461

338 307257 251

153 11669 49 54

Germ

any

Fra

nce

UK

Italy

Spain

Turk

ey

Pola

nd

Neth

erlands

Czech R

ep.

Port

ugal

Rom

ania

5.1%0.7% 0.7% 0.9% 1.1% 0.9% 1.4% 2.5% 1.2% 2.8%1.7%

Electricity Consumption Growth Expected to Outpace European Countries(TWh 2016, CAGR 2016-2021 in %)

Electricity per Capita Consumption Significantly Below European Countries

Source: EIU.

19Hizmete Özel

14,3% 15,4% 14,3% 14,0% 13,4%

2012 2013 2014 2015 2016

Network investments to bridge the efficiency/ quality gap with other European markets

Turkish SAIDI (minutes per year)

SAIDI Benchmarking vs. European Counterparts(minutes per year, 2014)1

694

320 277153 99 92 67 67 25

Romania Poland Czech Rep. Italy Portugal UK France Spain Germany

1.764

1.567

2015 2016

Duration of outages and theft & loss rates show need for significant further investments into network quality improvements

Significant Transmission and Distribution Losses in Turkey vs. European Counterparts(% of output, 2015)

Turkey Electricity Transmission and Distribution Losses Evolution(% of output)

Source: Company, EMRA, Eurostat.1 Sourced from: 6th CEER benchmarking report on the quality of electricity and gas supply.2 Turkey 2015 data sourced from EMRA.

14,0%

10,3%8,8% 7,9%

7,0% 6,7% 6,4%4,7%

Turk

ey

Spain

UK

Fra

nce

Euro

pe

Czech R

ep.

Italy

Germ

any

2

20Hizmete Özel

Attractive home regions enhance growth potential

Enerjisa Geographic Footprint Başkent

• First Enerjisa region acquired in 2009

• Largest electricity distribution region in Turkey by grid size and geographic area

• Key urban centers: Ankara (Capital)

• Network length: 110 thousand km

• License Expiry Date: Sep 2036

• Population: 7.3 million

Ayedaş

• Acquired in a privatisation tender in 2013

• Fastest growing Enerjisa regions by electricity consumption

• Exposure to the Asian side of İstanbul (Turkey’s largest city)

• Network length: 24 thousand km

• License Expiry Date: Dec 2042

• Population: 5.3 million

Toroslar

• Acquired in a privatisation tender in 2013

• 3 large metropolitan areas: Mersin, Adana and Gaziantep

• Network length: 86 thousand km

• License Expiry Date: Dec 2042

• Population: 8.3 million (most populous of Enerjisa’s regions)

Ayedaş

Başkent

Toroslar

Ankara(Capital)

Istanbul (Asian Side)

Mersin

Gaziantep

Adana

Consumption Growth1

Population Growth2

Household Size

Turkey 3.6%

Turkey 0.6%

3.8

3.5

3.0

Western Europe 3

2.0 - 2.5

Başkent

Ayedaş

Toroslar

4.0%

4.7%

3.9%

1.0%

1.5%

0.8%

Source: Company, EMRA, Turkstat and Eurostat.1 Ayedaş and Toroslar annual growth rate 2016–2042, Başkent annual growth rate 2016-2036; Source: Mercados.2 Ayedaş and Toroslar annual growth rate 2016–2042, Başkent annual growth rate 2016-2036; Source: Population

growth study by Prof. Dr. Ahmet Sinan Türkyılmaz.3. Based on average household sizes in Germany (2.0), UK (2.3), France (2.2) and Spain (2.5). 4. Ayedaş considers Istanbul household size (including European side) as per Turkstat.

4

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Leverage Customer Base into New Services and Customer Solutions

Clear priorities to harvest growth potential

Benefit from Retail Liberalisation

Ensure Competitive Financing Cost and Leverage

Drive Operational Excellence, Digitalise all Processes

Capitalise on Distribution Investment Opportunities

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Enerjisa is a forward thinking utility

Future Focus Areas / R&D

Actionable medium term opportunities including rooftop solar, smart meters and battery storage

Energy efficiency

Distributed generation

Internet of things

Platform / network activities

Digital customer

experience

Cross-sells

Network Operations Growth Areas

B2B & B2C Growth Areas

Smart appliances

Distributed generation

Smart cities

E-battery

Connected home

Back-office and other shared

services

Network Monitoring

Drones

Electric Bus

Lines

Solar PV

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Key Investment Highlights

Significant growth realized & expected

Highly regulated and guaranteed income

Reliable framework, positive regulatory trend

Solid balance sheet, declining leverage

Attractive dividend pay-out

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Key Financials

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Background and definition of key financial KPIs

In Turkey, Distribution companies operate under a transfer of operating rights (TOR) agreement, which meansno legal ownership of assets; legal and asset ownership remains with TEDAŞ (i.e. the state)

As a consequence, accounting for all Turkish distribution companies falls under IFRIC 12 “service concession arrangements: government or other body grants contracts for supply of public services”

Therefore, networks are accounted as financial asset instead of fixed assets in IFRS which need to be recognized at fair value under IFRIC 12

This has two important implications for the presentation of top financial KPIs:

1. IFRS P&L does not show any asset depreciation and accordingly no income from amortisation allowance (reimbursement of capital) Enerjisa uses EBITDA + Capex reimbursement as its main operational

financial KPI to capture the full regulatory, cash-effective RAB return and to increase comparability with international peers who generally do not have to apply IFRIC12

2. Changes in long-term assumptions (e.g. Regulatory parameters) lead to changes in the fair value of thenetworks-related financial asset. These changes are IFRS P&L-effective, can be material because theyrelate to the remaining concession period and are fully non cash-effective. As a result they are treatedas exceptional items and adjusted from top financial KPIs in order to avoid time series distortions

As a result, Enerjisa defines the top financial, P&L-related KPIs as follows:

EBITDA

+ Capex reimbursements

- Exceptional items

= Operational Earnings

Reported Net Income

- Exceptional items

= Underlying Net Income

26Hizmete Özel

Operational earnings and cash development in2014 – 2017

Consolidated Operational Earnings(TLm)

Consolidated Free Cash Flow before Interest and Tax (TLm)

Distribution

Higher financial income driven by higher Capex related RAB and higher WACC in 3rd regulatory period

Higher outperformance on Capex, Opex and T&L driven by efficiency gains as well as more favorable regulatory parameters starting in 2016 (theft accrual & collection)

Retail

Focus on profitable volumes and flexible optimization of customer segments depending on market conditions

Distribution

Generally increasing, even though significant discretionaryCapex weigh on FCF

Retail

Generally positive and closely linked with EBITDA due toinavailability of Capex

Significant working capital-related shift between 2014 and 2015 due to change in sourcing driven by increased liberalised sales

Key Drivers

Key Drivers

Source: Company

290635

807

145 280

2017

2.344

20152014

1.650

2016

247

7791.100

1.938

2.565+49%

RetailDistribution Other

299420

323

-432 -423

121

48

2014 2015 2016

-379

-59

2

2017

444

176

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Significant deleverage helps to capitalise on investment opportunities

Avg. nominal effective cost of financing

Net Debt Development(TLbn)

9.8% 11.6% 13.3%

Net debt increase largely driven by Distribution Capex

Privatisation Administration debt fully repaid by end of 2016

Cost of debt has increased with market interest rates mainly driven by rising inflation

Net Debt/Operational Earnings

Global Peers1

Significant deleveraging despite increasing absolute net debt

Leverage target: Below 3.5x Net Debt / Operational Earnings2

Source: Company.1 Source: S&P and company research.2 See disclaimer regarding forward-looking statements on “Disclaimer”.

2,41,2

3,2 5,1 6,6 7,5

(0,1) (0,2) (0,1) (0,2)

5,56,1 6,5

7,3

2014 2015 2016 2017

Privatisation Administration Debt Debt Cash

7,0x

4,2x

3,4x 2,9x

2014 2015 2016 2017

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Source: Company.1 Gross debt excluding ~60-70m€ TEDAŞ payable2 Long-term national rating.

Reduced leverage supported by improvingfinancing mix

Increasing Tenor

Increasing alignment with capex reimbursement period within constraints of Turkish financing environment

Average remaining tenor 2-3 years

Diversifying Debt Instruments1

Biggest corporate real sector issuer in 2017, including biggest and longest bond issuances

Bank loans are based on “name lending”, with minimal covenants

Alignment with Revenue Streams

No material FX exposure other than TEDAŞ payable of ~60-70m€ payable before hedges

Bonds are CPI-linked and therefore match inflation exposure of business

Rating

Highest rating among Turkish electricity companies

Key positives in its rating report are: regulated nature of Enerjisa, favorable market reforms, predictable operating cash flows and experienced shareholders of Enerjisa

National

Rating2

Rating

Agency

Enerjisa AA

Başkent AA

Limak Yatırım AA-

Aksa Enerji A+

IC IÇTAŞ Enerji A

Çalık Enerji A-

Odaş Elektrik BBB-

Zorlu Enerji BBB-

Turkish Electricity Companies

93% 82%

7% 18%

2014 2017

Banks Loans Bonds

37%27%

45%

28%

9%

30%

6% 10%

2014 2017

<1 year 1–2 year2–3 year 3–4 year>4 year

5%3%

*

29Hizmete Özel

Bottom-line development in 2014 - 2017

Consolidated Underlying Net Income1

(TLm)

2014 2015 2016 2017

377

-277

70

Consolidated Free Cash Flow after Interest and Tax (TLm)

2014 2015 2016 2017

-1,023

-446-303

Substantial increase compared to EBITDA growth due to parallel deleveraging

Increase in financial expenses (net) due to Capex-related higher loan volume as well as higher interest rate

Effective tax expense rate of ~30% driven by non-tax deductible financial expenses at holding level

2014 burdened by high PPI-linked privatization agency interest payments, which positively contributed in 2015 and 2016 (at end of 2016, those have been fully repaid)

Positive operational development from 2015 to 2016 partially offset by higher interest payments as a result of higher net debt

2017 burdened by discretionary front-loaded CAPEX profile in the years 2016 and 2017 resulting in higher interestpayments without a corresponding increase in OCF

Key Drivers

Key Drivers

1 Excludes fair value change of financial assets (see “TOR concessions”).

522

-775

30Hizmete Özel

Distribution Business

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No. 1 Distribution Company in Turkey1 Distribution Operational Earnings (TLbn)

Enerjisa distribution operations at a glance

23% 29%

+55%

EBITDA excluding exceptional items

Capex Reimbursements

Other Players

TL 5.3bn2

2017 RAB1 10.9m

2017 Connection Points

1c.220,000 kmNetwork Length

1

Access to aPopulation of

over 20m

c. 8,500 employees4

c.110,000 km2

Coverage area1

Turkey Market Share

Source: Company, EMRA.1 As of 2017. In terms of RAB; number of connection points, total network length and coverage area.2 National Regulatory Asset Base according to initial Capex allowance, Enerjisa RAB accounts for actual Capex.3 Capex allowance for the 3rd regulatory 2016-2020 period.4 As of 2017.

Other Players

CAGR 2014-2017:

3rd Regulatory period Capex allowance3 2017 RAB2

2,3

0,40,6

1,2

1,8

0,2

0,2

0,4

0,6

2014 2015 2016 2017

1,6

0,8

0,6

32Hizmete Özel

Başkent experience: driving operational excellence

Transition

Up to Q4 2014

“One Distribution”

Q4 2014 to Q4 2015

Excellence in Distribution

From 2016 onwards

Definition of processes & interaction

Establishment of organisational structure

Clear definition of roles & responsibilities

Setting of strong IT infrastructure

Cultural integration

Business excellence

Sharing & transferring best practices & implementation

Strong IT infrastructure, implementing SAP ISU, WFM and SAP PS systems

Warehouse and fleet management optimisation

Research & Development activities (R&D)

Safety Improvement Plan

Material Quality control

Geographical Information System (GIS)

Automated Meter Reading (AMR)

Efficient Structural Organisation (Central Function)

Financial management (FCF, CPI Linked Bonds)

Process Efficiency in Field & Customer Operations

Digitalization

P

Başkent was acquired during the 1st round of privatisations in January 2009. Many challenges were experienced, from which valuable lessons were extracted for the takeover of Ayedaş and Toroslar regions

PHuman resources, technological infrastructure, IT systems and processes were integrated to newly acquired regions successfully

Source: Company.

33Hizmete Özel

Historical track record and expected continued growth

● Enerjisa is the market leader in Turkey by number of connection points and network length

– Başkent and Toroslar are the largest and 2nd largest power distribution companies in Turkey by network length respectively

● Demand growth results from favourable Turkish demographics (i.e. young and growing population in large metropolitan areas), favourable macroeconomic parameters (GDP per capita, increasing disposable incomes) and urbanization

– Enerjisa’s concessions are in privileged locations given exposure to large Turkish urban centres: Istanbul (Asian side), Ankara, Adana, Mersin and Gaziantep

Ayedaş Başkent Toroslar

Number of Connection Points(# Million)

Distributed Energy (Net)(TWh)

c.3% CAGR2016-2020E

Turkey’s 5% Demand CAGR

2016-2020E

1

Source: EMRA.1 As per 5 year master plan application to EMRA.

9,9 10,2 10,5 10,9

36,4 38,4 39,7 41,8

2,6 2,7 2,8 2,8

3,8 4,0 4,1 4,2

3,4 3,5 3,7 3,8

2014 2015 2016 2017 2020E

10,3 10,8 11,1 11,5

13,2 13,9 14,3 15,0

12,9 13,8 14,3 15,2

2014 2015 2016 2017 2020E

34Hizmete Özel

Scope of the distribution business

Business Activity

Investments Planning

Investments Execution

Supply Chain Management

Technical Customer Operations

Network Operations

Capex plan execution

Construction works

5-year master plans

Yearly investment

plans

Quarterly revisions

Procurement

Warehouse, stock and

fleet management

Other

Associated Regulatory Item

Regulatory Remuneration

New connections

Meter reading

Connection / disconnection

Meter operations

Theft & Loss

SCADA system

Quality enhancements

Rental and advertisement Theft accruals

Lighting

Customer satisfaction

Opex allowance

T&L Allowance

Quality parameters

Financial Income

Capex Outperformance

Capex Reimbursement

Opex Outperformance

T&L Outperformance

Other Revenues

Capex Unit Prices

Capex Allowance

In

vestm

en

tsO

perati

on

s

Quality Bonus

Source: Company.

Theft accrual

35Hizmete Özel

TOR concessions

Legal

Accounting

TOR Period

Acquisition of license to operate as transfer of operating rights (TOR) agreement

No transfer of legal ownership of assets; legal and asset ownership remains with TEDAŞ

Accounting for all Turkish distribution companies falls under IFRIC 12 “service concession arrangements: government or other body grants contracts for supply of public services”

Networks are accounted as financial asset instead of fixed assets in IFRS which need to be recognized at fair value under IFRIC 12; subsequently changes in fair value are recognized through the P&L and are driven by changes in long-term assumptions impacting financial income

Therefore, IFRS P&L does not show any asset depreciation and accordingly no income from amortisation allowance (reimbursement of capital) Enerjisa uses EBITDA and Capex

reimbursement as its main KPI to capture the full regulatory RAB return and to increase comparability with international peers

In contrast, local GAAP accounts for a fixed asset and therefore P&L shows both a depreciation expense as well as reimbursement of capital expenditure as income which is naturally captured in local GAAP EBITDA

Local GAAP depreciation expense is calculated until end of concession, while Capex reimbursement period is 10 years. Thus, there is a tax correction in place.

Başkent: 01.09.2036

Toroslar & Ayedaş: 31.12.2042

Expiration Assets are handed back to TEDAŞ in exchange of reimbursement of unamortised RAB

A new re-tender of the asset may follow

“Liberalised” retail license is not in the scope of TOR

36Hizmete Özel

Well-established incentive-based regulatory framework

First Regulatory Period(2006–2011)

Second Regulatory Period(2011–2015)

Third Regulatory Period(2016–2020)

Approach Uniform regulation for all Distribution System Operators in Turkey

Method RAB-based framework with incentives given to outperformance

WACC(real, pre-tax) 9.35% 9.97% 11.91% - 13.61%

Evolution

• WACC revised up

• Unbundling between distribution and retail operations

• WACC revised up (2016-2017

11.91%, 2018-2020 13.61%)

• T&L methodology revised

• Significant increases in Opex and Capex allowances

• Enhancement of Quality and Efficiency Incentives

• “Transition” period designed to provide smooth shift to a cost-based tariff structure post-2010

• RAB-based tariff calculation methodology introduced with RAB set to 0 in 2006

• Private operator model (TOR) established for privatisations

Revenue components

and incentives

Regulated Revenue cap

• WACC return: RAB x WACC

• Capex reimbursement

• Opex allowance

• Tax difference adjustment

• No volume and inflation risk

Incentives

• Capex outperformance

• Opex outperformance

• Theft & Loss ratio improvement

• Service quality

• Other revenue (Advertisement, rent, lighting margin)

Capex reimbursement 10 years5 years

Continuous incentives for

efficiency, quality and

outperformance across regulatory

periods

Stable regulatory environment

with long-standing track

record

Similar building blocks to various

Western European countries

Source: Company, EMRA.

37Hizmete Özel

Outperformance on allowed controllable expenses

Distribution-specific cost inflation linked to CPI

Illustrative Operational Earnings breakdown

Financial Income

Capex reimbursement

Capex outperformance

Opex outperformance

T&L outperformance

Other

Illustrative OperationalEarnings Breakdown

RAB Development

IFRS WACC return largely driven by regulated WACC (pre-tax real: 2016-2017 11.91%, 2018-2020 13.61%) and inflation

New investments included in RAB as soon as approved by EMRA

RAB set to zero in 2006

Capex reimbursement period: 10 years

Reimbursement amounts indexed by CPI

Capex unit prices updated by the regulator to reflect prevailing prices

Target rates set by regulator for each region separately

e.g. theft accruals and quality bonus

Gu

aran

teed

by R

eg

ula

tor

Ou

tperfo

rm

an

ce

& O

ther

Incentive for Investment

Incentive forOutperformance

38Hizmete Özel

Earnings and cash generation in IFRS

Financial income

Capex outperformance

Opexoutperformance

Theft & Loss outperformance

Other

Stated IFRS EBITDA

Capex Reimburse-

ments

OperationalEarnings

+/-

CashInflows

• Adjustment for fair value change of Financial Assets

Adjustment for Statutory Financial Income not yet cash-effective

Capex outperformance

Net VAT (18%) collection/payment

Capex

Free Cash Flow

(before Interest &

Tax)

-

Actual allowed Capex net of Capex outperformance

Including VAT (18%) payments net of VAT incentive

+/-

-

+

Theft accruals & quality bonus

39Hizmete Özel

Earnings and cash generation in IFRS (cont’d)

2017 OperationalEarnings1 Actual 2017Drivers

Targets2 vs. 2016 base

CapexOutperformance

Opex Outperformance

Theft & Loss Outperformance

Theft Accruals & Quality Bonus

Financial Income& Capex

Reimbursements

Other

69%

6%

2%

6%

12%

5%

• Capex (initial allowed & actual)• RAB development• Regulated WACC• Inflation

• Capex (actual)• Capex unit prices• Procurement performance

• Opex allowance• Actual Opex• Operational efficiency

• T&L target rates• T&L performance• Consumption growth• Procurement prices

• Theft accrual collection• Quality bonus

• Tax correction• Other income (e.g. rent & advertisement)

More than double RAB 2016 by 20203

Maintain

Continue to outperform

Continue to outperform

Growing contribution

57% overspending

9% outperformance

5% outperformance

1.8pts average

outperformance

TL 277m

1 EBITDA + Capex reimbursements excluding exceptional items2 See disclaimer regarding forward-looking statements on “Disclaimer”.3 Key assumptions include (i) EMRA’s approval for the reimbursement of Capex overspending (over the initial Capex allowance) per annum and (ii) Enerjisa’s estimates for inflation. See

“Financial Income: regulatory RAB development” and “Financial income: RAB development” for the development of RAB until end of 2020.

40Hizmete Özel

Ability of increasing Capex allowances contribute to further RAB growth

Process to increase initial Capex

allowance:

Additional allowance is permitted by

EMRA regulations if investments are

needed in order to meet service

requirements as per legislation

Similar procedure as initial

5-year plan approval process

After acquisition of Toroslar in 2013,

need for additional allowance was

approved – additional investments were

mainly realised in 2015

Starting with 3rd regulatory period,

application for additional investments

has to be made when actual spending

reaches 80% of cumulative initial

allowance for 2016–2020

2017 shows overspending vs. full year

allowance

If rate of overspending continues, this

80% threshold will be reached in 2018

Capex allowance post-2020:

Fundamentals and need for investment

remain intact post-2020 driven by

network upgrades, smart grid and

expansion

Initial vs. Actual Allowed Capex(October 2015 prices, TLbn)

Initial vs. Actual Allowed Capex(TLbn)

0.90.7

0.6

1.3

0.6

2017

1.5

+0.6(77%)

0.9

+0.7(122%)

+0.1(18%)

20152014 2016

Initial allowed Capex Actual allowed Capex

1.0

2016

+0.7(77%)

+0.1(18%)

1.6

2015

0.9

+0.7(122%)

1.3

0.6

2014

0.60.5

2017

Actual allowed CapexInitial allowed Capex

Source: EMRA, Company.

For illustrative purposes and not to scale.

1.4

+0.5(57%)

+0.6(57%)

1.6

Financial Income& Capex

Reimbursements

41Hizmete Özel

1.1

0.7

RAB2016

RAB2013

0.9

OpeningRAB2021

0.9

0.6

RAB2019

2.6

RAB2015

1.5

0.90.4

4.0

0.7

RAB2020

3.1

RAB2018

0.6

0.2

3.7

3.4

0.1

0.2

0.5

0.6

3.9

0.9

RAB2014

0.8

RAB2017

0.9

RAB

Additional Capex allowance

2nd Regulatory period 3rd Regulatory period

Initial allowed Capex

Capex reimbursement

Recognition of Overspent Capex1

Regulatory RAB development

Regulatory RAB Development(October 2015 prices, TLbn)

Regulatory RAB development depends on announced initial Capex allowance and Capex reimbursement and is therefore fixed until end of the 3rd regulatory period – indexed to October 2015 prices (CPI index 267.2)

Any deviation in actual Capex vs. initial Capex allowance will be adjusted in the opening balance of 2021 (start of 4th

regulatory period). This is also when any additional Capex starts to be reimbursed

To compensate for this timing difference, the regulator grants a lump sum payment at the beginning of the next regulatory period including the foregone financial income inflated to the start of the next regulatory period

Source: EMRA, Company.Note: See disclaimer regarding forward-looking statements on “Disclaimer”.1 Assumes reimbursement of Capex overspending will be approved by EMRA.

For illustrative purposes and not to scale.

Financial Income& Capex

Reimbursements

42Hizmete Özel

Financial income: RAB development

RAB Development(Nominal, TLbn)

RAB depends on actual allowed Capex and requires an inflation adjustment for the opening balance each year

Capex reimbursement is again based on initial allowed Capex and is only adjusted for the overspending in the next regulatory period (same as in statutory financials)

Source: EMRA, Company.Note: See disclaimer regarding forward-looking statements on “Disclaimer”.1 Key assumptions include (i) EMRA’s approval for the reimbursement of Capex overspending (over the initial Capex allowance) per annum and (ii) Enerjisa’s estimates for inflation.

Inflation on Capex Reimbursements

RAB 2015

0.4

0.1

RAB 2014

1.6

3.9

0.2

0.2

RAB 2017

2.0

1.6

1.3

2.7

1.4

2.6

5.30.6

0.4

RAB 2016

RAB20201

2nd Regulatory period 3rd Regulatory period

Initial allowed Capex 2018–2020 (Real)

Overspending & inflation on Capex2018–2020

>2xRAB2016

Capex Reimbursements 2018–2020 (real)

RAB

Actual allowed Capex

Capex reimbursement

Inflation effect on opening balance

Financial Income& Capex

Reimbursements

43Hizmete Özel

Financial income

AverageRAB (nominal)

Regulated WACC (real)X + Inflation rate ≈

IFRS Financial Income(Nominal, TLm)

Simplified & illustrative calculation logic of IFRS Financial Income

Illustration of Difference in Cash-effective Financial Income in IFRS vs. Statutory

Source: EMRA, Company.

Cash-effective within the 10 years Capex reimbursement period

Statutory Financial Income

Financial Income on Overspending

Revaluation component on RAB basis

IFRS Financial Income

Cash-effective at beginning of next regulatory period

Directly cash-effective

Average Regulatory RAB

(real)

Regulated WACC (real)X X

Cumulative Inflation Index

The calculations and models in this slide are simplified illustrative representations of the relevant figures. The corresponding line items in Enerjisa financial statements or our reported results may deviate significantly as such line item would contain other components.

205 305

610

1.014

2014 2015 2016 2017

Financial Income& Capex

Reimbursements

44Hizmete Özel

Economies of scale enable efficiencies in Capex…

Capex Outperformance(TLbn) EMRA announced new, more favorable Capex unit prices

for the 3rd regulatory period starting in 2016

Subsequently, those new unit prices will form the basis for

outperformance until 2020

Outperformance is included in EBITDA and reduces Capex

Capex allowance of

~TL864m p.a. (real) until 2020

Capex outper-

formance (%)

X ≈Capex outper-

formance (abs)

Inflation

Overspending

Actual allowed Capex (nominal)

In spite of increased and accelerated Capex, majority of

investments continue to be spent for mandatory network

expansion rather than quality improvements

As a consequence network quality trails network growth

and leaves substantial investment needs in the years to

come

The calculations and models in this slide are simplified illustrative representations of the relevant figures. The corresponding line items in Enerjisa financial statements or our reported results may deviate significantly as such line item would contain other components.

619

1.269

1.599 1.573

577

1.246

1.434 1.431

2014 2015 2016 2017Actual Allowed CAPEX Actual CAPEX spent

-10%

-2%

-7%

-9%

CapexOutperformance

45Hizmete Özel

…and Opex

Opex Outperformance(TLbn)

Opex outper-formance

(%)X ≈

Opex outper-formance

(abs)Opex allowance of ~TL880m p.a. (real) until 2020

Inflation

Opex allowance (nominal)

0.8

-16%

0.9

0.70.7

-10%

0.60.7

-12%

20152014 2016

Opex allowance (controllable) Actual controllable Opex

Opex Breakdown by Type (ex-Depreciation)(2017, %)

Personnel

50%

Material

15%

Subcontracting

/ Outsourcing

12%

Utilities & Rent

12%

Other

11%

Majority of Opex is related to Personnel expenditure:

payroll, employee benefit expenses and social security

premiums

Material expenses mainly for conducting maintenance

operations and equipment for health & safety

TL1.1bn

Source: Company.

The calculations and models in this slide are simplified illustrative representations of the relevant figures. The corresponding line items in Enerjisa financial statements or our reported results may deviate significantly as such line item would contain other components.

2017

1.0

-5%

1.1

Opex Outperformance

46Hizmete Özel

Theft & Loss outperformance

T&L target rates have

increased for all regions

as of the 3rd regulatory

period starting 2016

In the 3rd regulatory, T&L

target rates are a result of

past 3 year average

actual rates

EMRA has taken into

consideration a 8%

overall reference for

setting target T&L rates

Regional profiles vary due

to differences in

population density,

network length

and industrial vs.

agricultural activity

Distributed energy growth

in line with average

consumption growth

T&L outperformance

(TLm) is the product of

T&L outperformance (%),

distributed energy and

energy sourcing costs

over all regions

X

X

-0.2

20142014 2015

+1.9

20162014 2015

-1.5

+0.6

2016

+0.4

2015

+0.8

-1.5-0.9

2016

-1.0

Actual T&L rate

Target T&L rate

Başkent Ayedaş Toroslar

Theft & Loss outperformance(% of Energy Sold)

Gross distributed energy(TWh)

CAGR 3.8% CAGR 3.5%CAGR 4.9%

Başkent Ayedaş Toroslar

Energy sourcing costs(TL/MWh)

≈

Theft & Loss outperformance(TLm)

% Spread % (Actual – Target)

Source: EMRA, Company.1 Initial T&L target rate before EMRA revision for Toroslar.

The calculations and models in this slide are simplified illustrative representations of the relevant figures. The corresponding line items in Enerjisa financial statements or our reported results may deviate significantly as such line item would contain other components.

7,9% 7,9% 8,0% 7,8%7,7% 7,0% 7,0%6,0%

2017

-1.7

6,6% 6,6%7,6% 7,6%7,2% 7,0% 6,8% 6,1%

-0.8

2017

12,2%

11,7%

13,6%

12,1%

13,2%

12,5%

12,1%

11,4%

2017

1.21% 10.7%1

-2.0

11,111,6

11,912,3

20162014 2015 2017

14,315,0

15,316,0

20162014 2015 2017

14,9

15,716,3

17,2

20162014 2015 2017

193199

187

170

20162014 2015 2017-60

26

84

135

20162014 2015 2017

Theft & Loss Outperformance

47Hizmete Özel

Theft accrual collection

Regulation in the 3rd tariff period explicitly incentivizes distribution companies to detect and invoice theft energy usage as well as to seek legal proceedings

20% (40% effective starting from 2018) of every theft usage invoice is granted to the distribution company regardless of collection

75% of every collection after legal proceeding can be kept by distribution companies

Distributed Energy(GWh) X ≈

Detected & invoiced

theft rate (%)

Theft accrual(TLm)X

Avg. price of energy (TL/kWh)

Theft accrual(TLm) X ≈

40% granted by regulator

Guaranteed income (TLm)

2017: 2% 2017: 0.50-0.60

2017: TL206m

2017: 45,449 GWh

Theft accrual(TLm) X ≈

Percentage of legal proceedings

executed

Additional collection (TLm)

2017: TL71m

X75% collection kept after legal

proceeding

2017: 18%

Company performance

Regulatory parameters

Source: Company.

The calculations and models in this slide are simplified illustrative representations of the relevant figures. The corresponding line items in Enerjisa financial statements or our reported results may deviate significantly as such line item would contain other components.

Theft Accruals & Quality Bonus

48Hizmete Özel

Tax correction

Capex-related tax correction result from difference between statutory depreciation period (based on remaining concession time) and Capex reimbursement (based on 10 year amortisation period)

Difference expected to significantly grow over the next years, reversing towards the end of concession

Simplified Tax Correction Mechanism

2014 2015 2016 2020

Capex reimbursement (nominal)

Statutory depreciation(related to Capex)

Additions are a function of initial allowed Capex (nominal) divided by average remaining time until concession end (Başkent: 2036, Ayedaş & Toroslar: 2042)

TL592m

TL269m

Average difference 2014–2017~TL186m

~TL47m p.a. 2014–2017

25%Tax Rate

Source: Company.

The calculations and models in this slide are simplified illustrative representations of the relevant figures. The corresponding line items in Enerjisa financial statements or our reported results may deviate significantly as such line item would contain other components.

2017

Tax correction rate until 2017:20% / (1-20%) = 25%

Tax correction rate starting 2018:22% / (1-22%) = 28%

Other

49Hizmete Özel

43%

25%

6%

2%

12%

4%

2% 6%

Rapid growth in earnings driven by constructive regulation and increasing RAB

Comments Distribution Operational Earnings1

(TLbn) 55% Operational Earnings CAGR between 2014-2017

Financial income has increased by

70% between 2014–2017 supported by the increase in

WACC rate and RAB growth

Capex reimbursements have increased with a CAGR of 41%

supported by past investments

Significant improvement of Efficiency & Quality by 108% as

Başkent experience is leveraged in other regions

2017 earnings continued to be driven by significant RAB

growth

+55%

Distribution Operational Earnings(2017A)

Financial Income

Capex Reimbursement

Opex Outperformance

Capex Outperformance

T&L

Tax Correction

Other

Theft Accrual & Collection

2,3

0,4 0,6 1,2

1,7

0,2 0,2

0,4

0,6

2014 2015 2016 2017EBITDA Capex reimbursements

1,6

0,80,6

1 EBITDA + Capex Reimbursements excluding exceptional items.

In TLm 2014 2015 2016 2017

Financial Income 205 305 610 1.014

Capex reimbursements 210 200 443 592

Efficiency & Quality 67 137 449 605

Capex outperformance 42 23 165 142

Opex outperformance 78 70 146 51

T&L outperformance -60 26 84 135

Theft accrual & collection 7 17 54 277

Tax correction 32 39 44 86

Other 121 126 104 47

Operational Earnings 635 807 1.650 2.344

50Hizmete Özel

Improving cash flow

Comments

Operating cash flow grows significantly

IFRS financial income is partially not yet cash-effective due to overspending and inflation revaluation recognition, which are compensated at a later point in time

Capex outperformance is not a contribution to operating cash flow, but reclassified as a reduction of Capex

Capex frontloading creates higher Capex which decreases FCF while significantly growing EBITDA

Free Cash Flow Before Interest and Tax(TLm)

-432 -423

121

-59

2014 2015 2016 2017

In TLm 2014 2015 2016 2017

Operational Earnings 635 807 1.650 2.344

Financial income not yet cash effective -71 -125 -265 -577

Capex outperformance -42 -23 -165 -142

Other (non-cash, NWC, VAT) -476 -35 -146 21

Operating Cash Flow before interest and tax

47 624 1.633 1.646

Actual allowed Capex (nominal) -619 -1.269 -1.599 -1.573

Actual allowed Capex (incl. Capex outperf.)

-577 -1.246 -1.434 -1.431

Unpaid Capex and VAT 98 198 -78 -274

Cash-effective Capex -479 -1.048 -1.512 -1.705

Free Cash Flow before interest and tax -432 -423 121 -59

51Hizmete Özel

Retail Business

52Hizmete Özel

Source: Company, EMRA.1 As of 2017. In terms of number of customers.2 Includes inactive customers. 3 Full-time employees as of 2017.4 EBITDA includes TradeCo related EBITDA adjustments in the amount of TL16M, TL-60m and TL-16m in 2014,2015 and 2016. Starting from 2017, there is no TradeCo related

EBITDA adjustments.

Enerjisa retail operations at a glance

35.2 TWh2017 Sales

Volume

9.2m2017

Customers2

22%29.2m

18%

# of Customers (2017)

No.1 Retail Company in Turkey1 Operational Earnings4

(TLm)

c. 1,100employees3

1

Turkey Market Share

145

280290

247

2014 2015 2016 2017

1

18%

Sales Volume (2017)

35.2 TWh

53Hizmete Özel

Ayedaş and Toroslar take-over

Legal and financial unbundling

Centralization/ standardization

of critical processes

Renovation of all CCOs1

Setting up of sales and

marketing departments

Fixed and variable products for

mass segment

Customer-centric process design

incl. customer journeys

NPS reporting

SAP ISU roll-out

Single ISU & CRM systems in

incumbent regions

Take-over & Reorganization

System unbundling

SAP Full CRM roll-out

Commodity risk management

D2D: 200k sales

Telesales: 118k renewals

Dealer: 8.8m collections

Call Center: 1.3m calls answered

Customer service qualityimprovements (sample):

CCO avg. Waiting Time: 1 hr2 > 12 minutes

Call Center Reach Rate: 10% 2 > 90%

Invoice Errors:188k3 > 49k

Customer satisfaction: 613 > 73

Mobile app launch

«Save Your Energy» campaign

Behavioral, demographic, geographic segmentation models

D2D route optimization backed by analytics

Prevailing as a Retail Company

D2D / Telesales / Dealer

channels launched

Rebranding –new Enerjisa brand

launched nation-wide

First cross-sector marketing

campaigns with Telecoms and

Insurance

Customer Experience

Committee

Customer immersion sessions

SAS platform for analytics –

value based segmentation

2016–2020 tariff negotiations

Transformation from Utility to Retail

Collection performance increased

from 98% in 2014 to >99.5%

100k liberalized contracts signed

in a month

Digitalized archiving

90k mobile app / 400k online

portal users

Closing of D2D channel due to

slowdown in sales (flexible

response to market conditions)

Brand awareness:

47%3 > 78%

Trustworthy brand:

48%3 > 62%

Flexibility in Adaptation to Market Conditions

Evolution of Enerjisa’s retail platform

2013 20152014 2016 2017

1- Customer Care Office 2- Before take-over 3- As of 2015

54Hizmete Özel

Liberalisation has led to various customer and retailer types

In

elig

ible

Elig

ible

Reg

ula

ted

Lib

eralised

Reg

ula

ted

Ineligible customers regulated in nature

Exclusive supply by the incumbent retailer at regulated tariffs

Largely composed of residential customers

Constitutes c.10% of volume and c.75% of customers in 2017 in Turkey

Eligible customers who opt to remain regulated

Exclusive supply by the incumbent retailer atregulated tariffs

Largely composed of industrials, commercials and high consumption residentials

Eligible customers who opt to be liberalised

Flexibility to choose retailer

Free market prices

Consist of industrials and commercial customers as well as high consumption residentials

In

cu

mb

en

t R

eta

ilers

Oth

er R

eta

ilers

Total of 21 incumbent retailers

Division of 21 electricity distribution regions also represents the separation for “incumbent” retailer operations

Exclusive rights of electricity sale to regulated customers in their regions at regulated tariffs

Further flexibility of sales to liberalised customers in other regions at free market prices

Dominant players in the sector with strong reach to the end customers

Supplied c. 80% of total sales volume in Turkey in 2017

Currently c.200 other non-incumbent retailers

Sales to liberalised customers throughout Turkey at free market prices

Largely serves industrials and commercials currently

Customer Types Retailer Types

Source: Company, EMRA.

55Hizmete Özel

Company

Incumbent

Region

# of Subscribers

(m)

Sales Volume

(TWh)

In

cu

mb

en

tR

eta

ilers

EnerjiSA Toroslar Başkent Ayedaş

Cengiz-Kolin1

Bogazici Akdeniz Camlibel

Aksa Coruh Firat

Bereket Enerji Gediz Menderes

IC-Ictas Trakya

Limak Uludag

AKCEZ Sakarya

Alarko-Cengiz Meram

Zorlu Enerji Osmangazi

Iskaya-Dogu Dicle

Calik Yesilirmak

Kipas Holding Goksu

Kayseri Municipality + Private Players Kayseri

Kiler-Calik Aras

Turkerler Van Golu

Non-incumbent

players• c.200 players

Source: Company, EMRA.1 Including Cengiz Toptan.

Electricity retail market is still dominated by incumbents

9,0

7,8

2,2

4,8

1,0

3,0

1,7

2,0

1,7

1,7

1,9

0,6

0,7

0,9

0,6

32,9

28,9

16,7

13,6

13,2

11,1

8,9

7,2

7,1

5,6

4,2

2,3

1,6

1,2

1,1

30,7

7

9

14

1710

6

4

5

11

19

13

12

15

8

16

1

21

20

18

3

2

n.a.

Retail Companies (2016)

Dominant presence of local ownership with the exception of two groups, one being Enerjisa

Top 5 companies supply 57% of the total market in terms of sales volume

Incumbent Retailers Overlap with Distribution Regions

KIRLARELI

EDIRNE

TEKIRDAĞ

CANAKKALE

BALIKESIR

MANISA

IZMIR

BURSA

DÜZCE

SAKARYAYALOVA

BOLU

AYDIN

MUGLA

UŞAK

ANTALYA

BURDUR

ISPARTADENIZLI

KÜTAHYA

AFYON

ESKİŞEHIR

BILECIK

ANKARA

KIRIKKALE

KASTAMONU

ÇANKIRI

SINOP

SAMSUN

AMASYA

ÇORUM

ORDU

KARAMAN

YOZGAT SIVAS

KAYSERI

KIRSEHIR

NEVSEHIR

AKSARAY

NIGDEKONYA

TOKAT

GAZIANTEP

ISKENDERUN

ADANA

OSMANiYE

MERSIN

ADIYAMAN

MARAŞ

URFAKILIS

VAN

HAKKARI

ŞIRNAK

SIIRT

BITLIS

MUŞ

DIYARBAKIR

MARDIN

BATMAN

TUNCELIBINGÕL

MALATYA

ELAZIĞ

ARDAHAN

KARSIĜDIR

AĜRIERZURUM

BAYBURT

ERZINCAN

GIRESUN

TRABZON

RIZE

ARTVIN

GÛMUŞH-ANE

13

14

12

11

19

10

16

15 9

8

7

20

18

6

21

5

1

2

3

417

ISTANBUL

KOCAELIKARABÜK

BARTIN

ZONGULDAK

56Hizmete Özel

Sales Volume by Region(TWh)

Volume Breakdown by Customer Type(TWh)

29,0

12,3 11,5 8,3

15,19,4 16,0

8,3 12,212,0

10,9

2014 2015 2016 2017

32.939.6

35.2

Enerjisa’s Incumbent Regions Other Regions

Regulated customers represent 69% of total sales volumes in 2017

37.235.2

Removal of unprofitablecorporates

Regulated

(eligible + ineligible)Source: Company.1. Includes inactive customers.

Number of Customers by Type1

(m)98% 96% 93% 88%

78% 69% 63% 69%

LiberalisedIneligible Regulated Eligible Regulated % Regulated%

LiberalisedIneligible Regulated Eligible Regulated % Regulated%

1.2

34.0

8,2 8,1 8,06,7

0,40,5

0,4 1,40,1

0,4 0,6 1,1

2014 2015 2016 2017

8.8 8.9 9.0 9.2

Reaction tounfavorable

liberal market conditions

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Residential & SME (<400 MWh p.a.) Corporates

Key Features

Largely regulated customers (either ineligible or eligible regulated)

Efficiency, innovation and direct customer accessallow for strong retention of customer base

Scope to realise transition volumes from eligible regulated to liberalised, at higher margins

Scope to acquire liberalised customers in other regions

All eligible

Material volume still remain under regulated tariffs

Focus on profitable customers only

Liberalised customers provide volume, yet price sensitive with low margins

# of Customers(% of Total Enerjisa)

Volumes(% of Total Enerjisa)

Volume Breakdown by Customer Type(Liberalised vs.

Regulated)

Well-defined strategy by customer segment

Source: Company.Note: All data as of 20171. Includes inactive customers.

99.9%

21.9TWh

13.2TWh

0.10%

62.3% 37.6%

Other regions

Incumbent regions

Other regionsIncumbent regions

Other regions

Incumbent regions

0.1 TWh 1.1

TWh

9.2

21.95

21.96

Regulated%65.4

Liberalised%34.6

Liberalised%25.0

Regulated%75.0

12.1

13.2

9.2k9.6k

0.3k

58Hizmete Özel

Product Product Description Sourcing Strategy

Reg

ula

ted

Regulated

Regulated sales with regulated margin

Pass through of electricity cost by regulation

Regulated sourcing from TETAŞ and EPİAŞ

Lib

erali

sed

Floating

Automatic inflation increase

Contractual flexibility for above-inflation increase with a 30-day notice

Dominant share in residential & SME volume (63% in 2016)

Flagship profitability product in a market with minimal churn

Dynamic sourcing from EPİAŞ and wholesale

Fixed

Fixed price for contract duration

Dominant share in corporates volume (72% in 2016)

Flagship corporate product in a market where price increases are shunned by customers Back-to-back bilateral agreements

with private wholesale at a fixed and tariff indexed prices

Tariff Index

Discount to national tariff

Mainly offered to lower-consumption corporates with lower tailor-made requirements

14% of overall liberalised corporate sales

DAP1 Index

DAP1

Customer price is determined by the actual EPİAŞ exchange price

Preferred by sophisticated and high consuming customers (e.g. cement producers)

Usually preferred seasonally, especially in off-peak months

Cost pass-through sourcing from EPİAŞ

Res. & SME

Corporates

Res. & SME

Res. & SME

Corporates

Corporates

Corporates

Corporates

Customer-tailored products with aligned hedging in sourcing

Source: Company.1 Refers to Day Ahead Price (EPİAŞ, Spot market).

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Source: Company.1 Enerjisa TradeCo is an entity owned by Enerjisa Üretim Santralleri A.Ş. (generation company) and not part of IPO perimeter.

Electricity Sourcing Channels

TETAŞ(State-owned electricity wholesale company )

EPİAŞ(Spot market)

Private Wholesale

Regulated price fixed quarterly

All regulated volumes need be sourced from TETAŞ (unless TETAŞ is not able to satisfy demand)

Historically, TETAŞ has not been able to provide 100% of the volumes

Markets include day-ahead and intra-day balancing

Buy or sell electricity through derivatives in BIST

Bilateral agreements with EnerjisaTradeCo1

Contracts with other wholesalers possible in the future

Contract terms are mostly ≤1 year

1 2 3

Proportion of TETAŞ in the Electricity Sourcing Electricity Purchase by Source(2017, TWh)

TETAŞ EPİAŞ (free) Enerjisa TradeCo EPİAŞ (regulated)

Regulated

Liberalised

TETAŞ

EPİAŞ

EPİAŞ

Enerjisa TradeCo1

Three electricity sources driven by customer type

56% 15%29%

Sourcing of Liberalised vs. Regulated Sales

Regulated

Liberalised

Decreasing dominance of TETAŞ as the eligibility limit decreases

Removal of unprofitable liberalised

corporates

Customers switch to regulated due to pricing

conditions

4,6

5,3

5,6

19,7

1

10,9

24,3

Sales (GWh)Sales Sourcing

35.235.2

67,7%

42,8% 47,1%56,0%

2014 2015 2016 2017

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Strong credit management with improving collection rates

Initiatives on Collections Supported by Favorable Regulation Improving Collection Rates2

Customer Credit Scoring

Payment Behavior Analysis

Automated Dunning

Regulation

Incentives on high collection

Deterrent factors including

– Immediate disconnect of regulated customers

– Regulated monthly interest of 1.4% on late payment

– Deposits / Letter of Guarantees received

Collection Channels1

Source: Company.1 Collection channels as of 30.09.2017.2 Enerjisa monitors its collection capacity as the rate of collection over sales of electricity for the relevant period. Due to operational requirements, Enerjisa defines an unpaid invoice

“mature” after six month period following the invoicing. Enerjisa measures its collection rate on the basis of its capacity to collect mature invoices within 12 months of their maturity. Reference to “collection rate” are to the collected portion of the mature invoices to the total mature invoice amounts.

105 Authorised Payment

Points

4,244 PTT Branches

16 BanksWebsite and Mobile App

98,0%

98,9%99,1%

99,5%

2014 2015 2016 2017

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Operational improvements arising from successful restructuring

Source: Company.1 As at end of Q3 2013.2 As at end of Q3 2017.3 Also includes the impact of increasing market opennes as a result of the decrease of eligibility threshold from 5.0MWh p.a. to 2.4 MWh p.a. in respective periods.

Selected Operational Metrics

Reach rate to Call Center

Waiting time in CCO

Wrong # of Invoice

Free Market Contracts3

Daily Contract Sales/Agent3

10% 98%

238k 29k

16 min

1 hr

168 69

50 k 1.1m

1 6.3

Now2

Customer Care Offices(CCO)

Before1

Significant Improvement in Customer Interface in our Retail Shops

Before Now

Paym

en

t P

oin

tsC

usto

mer C

are

Off

ices (

CC

O)

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D2D

Channel

Retail

Channel

Call Center

Dealer

Corporate

Mobile/ Apps

Website

D2D Own

CCO

Call CenterDigital

Channel

Telesales

D2D Outsourced

Channel Management Organized Around the End-Customer

Key Account

Manager

Sales Representative

Physical Office

Overview

Residential & SME

RetailChannel

SME and residential customers can sign up and get information

200 customers service points

D2D(Door to

Door)

Assign sales representatives for corporate customers

Win new customers

Use of outsourced personnel

Call Center

Acquire customers through outbound calls and mobile applications

1.3m outbound calls and 335k inbound calls a year

Digital

Send e-mails and SMS for customer services/ marketing

A favourable environment for digital switching

CorporatesKey

Account Manager

Dedicated account managers for each corporate client

Customized services

Corporate

Strong end-customer reach via multiple channels

Source: Company.

Customer

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Enerjisa’s large scale and incumbent position helps achieve competitive advantages

Extensive database of9.0m retail customers

Incumbent Advantage Leveraged by Strong CRM Capabilities

Customer Service

Single CRM

Automated Call Handling

Field Force Route Optimisation

Customer Analytics

Value Based Segmentation

Behavioural Segmentation

Demographic and Geographic Segmentation

Reporting Infrastructure

Automated Sales Reporting

Profitability Reporting

Automated Dashboards

Source: Company.

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Enerjisa benefits from strong brand recognition

Highest Brand Awareness

Most Customer-Oriented

Most Prestigious and Trustworthy

Social Impact Award

Source: Company.1 Market Deep Dive Market Research dated August 2014.2 According to image and perception study conducted by Future Bright Research Agency in January 2017.

Won 2 Crystal Apple awards for:

First digital commercial to encourage energy saving

“Save Your Energy” campaign short movie

Worlds’ first digital commercial to encourage energy saving from MixxAwards Europe 2017

Innovation & Marketing Awards

Most Well-known Brand2

Won 2 “Smarties” awards from the Mobile Marketing Association in the “Social Impact Turkey” and “Social Impact EMEA” categories with “Save Your Energy” campaign

65Hizmete Özel

Resilient customer base in a liberalising environment

Improving Customer Satisfaction1

Low Churn Rate2

(Eligible Residential and SME Segments)

High cost of acquiring customers by non-incumbents

0,9%

3,0% 2,9%

1,2%

2014 2015 2016 2017

Source: Company.1 Customer satisfaction surveys conducted by IPSOS in 2014 and Future Bright in 2016.2 Number of churned customers to the yearly average of eligible residential and SME customers (including regulated customers that did not switch to free market portfolio). The

yearly average is calculated as the relevant number as of January 1 plus the relevant number as of December 31 which is then divided by two.

65% 66%

54%

72% 74%69%

Ayedas Baskent Toroslar

2014 2017 2014 2017 2014 2017

Ayedaş Başkent

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Unit Price (TL/kWh)

Total (TL)

0.245 48.93

0.127 25.32

3.91

78.16

18% on sub-total

14.07

92.23

Regulated electricity tariff components

National Monthly Residential End-User Energy Bill(based on illustrative volume assumptions of 200 kWh, representing eligibility limit)

Unit Price (TL/kWh)

Total (TL)

Including energy procurement costs, gross profit margin and retail service revenues

0.231 46.19

Including costs of operating and maintaining of facilities, investment cap for distribution investments, reimbursement of Capex, cost of supplying energy for T&L and general lighting, transmission costs, fixed meter reading fees differentiated according to voltage level

0.130 26.09

Reactive Energy Fee: For consumers subject to Reactive Energy Application (excl. household, illumination subscriptions and mono phase premises)

Overload Charges: For Two Phase Industrial Consumers (Connected to high voltage level)

Energy Fund Surcharge (1% of retail energy) TRT Surcharge (2% of retail energy) Electricity consumption tax (1% for Industry, 5% for the Rest)

3.69

Total 75.97

18% on sub-total

13.67

89.64

Retail Energy Sales Tariff

Distribution Tariff

Reactive Energy Fee, Capacity and Overload Charges

Energy Fund and TRT Surcharge, Electricity Consumption Tax

VAT

Source: Eurostat, Regulatory review of Turkish electricity market.

2018 Q1 2018 Q2

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Electricity costs represent a relatively small share of disposable income

Share of Electricity Costs over Disposable Income

5,6%

5,1%

4,8%

4,3% 4,2%4,0%

3,7% 3,6%

2,7% 2,6%

Port

ugal

Spain

Czech R

ep.

Germ

any

Pola

nd

Belg

ium

Fra

nce

Italy

Turk

ey

UK

Electricity Costs 1,2 (€/MWh, 2016)

Disposable Income Growth(rebased to 100)

100

110

120

130

140

150

160

2012 2013 2014 2015 2016

Disposable Income Retail Energy Bill

CAGR 2012-2016

11.7%

5.2%

230 228 142 298 135 275 171 234 121 183

Source: Turkstat, Eurostat electricity retail prices second half of year.1 Retail prices after taxes, levies etc.2 Annual consumption: 2 500 kWh < consumption < 5 000 kWh.3 Based on 413 TL / MWh for the second half of year for Turkey and exchange rate TL/ € of 3.43, source: Eurostat.

3

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Regulated

Pass through for the retailer

Electricity Procurement

Cost=

TETAŞ+ EPİAŞ

DistributionSystem Usage Fee

Theft & Loss

Transmission Fee

Taxes and Other

RegulatedEnd-user price

Retail Service Revenue Invoicing and collecting for

regulated sales Tariffs set for every three

month period

Electricity Procurement Cost

TETAŞ as primary source

EPİAŞ as secondary source

Regulated Gross Margin1

Set at 2.38% on reference procurement price (including FiT

cost effective starting from 2018)

for the 2016-2020 period

-Potential

for Reduced Sourcing

Cost

+Potential for HigherMargins

Liberalised

Free sourcing at free market prices

Higher Gross Margin

Pass through for the retailer

Electricity Procurement

Cost=

EPİAŞ + Private

Wholesale

DistributionSystem Usage Fee

Theft & Loss

Transmission Fee

Taxes and Other

LiberalisedEnd-user price

Components of regulated and liberalised end-user prices

Discount

1 As stated in the regulation. Regulator gross margin and sales services combined compensate for the operational expenses.

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Price equalisation mechanism

• EMRA determines the revenue and price caps for distribution and retail companies in each region

• Price equalisation mechanism was introduced to balance the inequalities and differences between the 21 distribution regions

- Mechanism was determined for inequalities in regional characteristics like distribution of customer segments, theft & loss occurrences and performances

- Mechanism was implemented as a result of application of a single tariff throughout Turkey

• Price equalisation mechanism makes sure that the distribution companies and the incumbent retail companies obtain their regulated returns, although they charge the same end tariff.

• EMRA sets the regulated margin and revenue requirements for regulated sales based on demand and consumption forecasts. However, the actual demand of customers shows some variance from forecasts which leads to imbalances in our electricity purchases.

• EMRA compensates for such variances via the price equalisation mechanism two quarters after the occurrence of such variances and guarantees that the incumbent retail company generates a gross margin of 2.38%, independent of its sourcing costs for its regulated customers.

• Reconciliation of over or under collections is made by EMRA through TETAŞ on a monthly basis.

Energy cost Revenue Cap Region A Revenue Region B Revenue

TETAŞ

Day Ahead Market

ProcurementCost

2,38% Gross Margin

Other Market Costs

(EMRA)

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Turkish electricity pricing dynamics impacted by renewable feed-in-tariffs in 2017

Comments

FiT ($73/MWh2) applicable to renewables

Renewable players can opt yearly to sell power at FiT or at spot market

With depreciation of TL, renewable companies have been consistently opting for FiT

Renewable capacity increased from 4.1 GW in 2014 to 8 GW in 2017

Electricity Prices(TL/MWh)

Additional costs from FiT have put an increasing pressure on the total cost of sourcing from EPİAŞ (spot market) in 2017

Regulated national tariff has remained largely stable since 2014

Liberalised margins contracted in 2017, as national tariff, which acts as a natural cap to liberalised market price, has not yet increased to reflect increasing sourcing costs

Source: TEDAŞ, EPİAŞ

0

50

100

150

200

250

300

EPİAŞ (Spot Market) FIT Regulated Electricity Price

Average differencefor 2014-2016:58 TL/MWh

Average differencefor 4Q2017:17 TL/MWh

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Earnings and cash generation

Liberalised

Volume x Margin

GrossProfit

OPEX

EBITDA

+/-

Free Cash Flow (before Interest

& Tax)

• Changes in Working Capital

• Price Equalisation

Regulated

Volume x 2.38% of regulated procurement price

+

Retail Service Revenue including Doubtful Component

+/-

+/-

+/-

Other:• Doubtful Provision

Expenses• Bonus Collection• Late Payment

Income

-

+

+

Source: Company.

72Hizmete Özel

Regulated gross profit

XRegulated

Margin(2.38%)

Retail Service Revenue(TLm)

Volume(TWh)

Regulatedprocurement price (including

FiT cost*)

(TL/MWh)

Regulated Gross Profit

(TLm)X + =

Effective total regulated margin

* Regulated margin of 2.38% will be applied to a higher procurement cost basis (pure sourcing costs + Feed-in-Tariff cost), which increases the regulated gross profit margin (2018 onwards)

/ =

Regulated Gross Profit(TLm)

Regulated Volume(TWh)

Effective Total Regulated Margin(TL/MWh and %1)

115157

239 255

184155

7380

201720152014 2016

299 312 312335

Regulated Margin

Retail Service Revenue

29,0 27,3

20,924,3

2014 20162015 2017

10,311,4

15,013,8

2014 2015 2016 2017

4.9% 5.3% 6.8%

Source: Company.1 % margin calculated vs. average residential household tariff.

RegulatedGrossProfit

The calculations and models in this slide are simplified illustrative representations of the relevant figures. The corresponding line items in Enerjisa financial statements or our reported results may deviate significantly as such line item would contain other components.

6.4%

73Hizmete Özel

Optimization of liberalized segments depending on market conditions

X =

X =

Corporate Segment

Residential & SME Segment

Source: Company.

LiberalisedGrossProfit

The calculations and models in this slide are simplified illustrative representations of the relevant figures. The corresponding line items in Enerjisa financial statements or our reported results may deviate significantly as such line item would contain other components.

3,3

4,8

7,6

2015 2016 2017

Volume(TWh)

8,9

7,2

3,3

2015 2016 2017

Volume(TWh)

Gross Margin(TL/MWh and %)

Gross Margin(TL/MWh and %)

37,131,9

8,7

2015 2016 2017

122

154

66

2015 2016 2017

17.5% 15.3% 4.1%

-5,6

-1,3

3,0

2015 2016 2017-50

-9

10

2015 2016 2017

-2.7% -0.7% 1.5%

Gross Profit(TLm)

Gross Profit(TLm)

74Hizmete Özel

Opex and others

Key Drivers

Inflation

Efficiency gains

Segment mix

Business expansion

Comments

Includes

– Doubtful provision expense and late payment income

– Bonus collections (collection of previously written-off receivables; partially related to state-owned times) with significant contributions in 2015-2017 that are expected to decline in the mid-term

Opex1

(TLm)

Source: Company.1 Adjusted for TradeCo related Opex (TL7m, TL12m, TL8m in 2014, 2015 and 2016 respectively) excluding depreciation as well as doubtful provision expense in the year 2015.

Focus on operational excellence after acquisition of regions until 2015

Increase in Opex after 2015 due to higher spending on marketing and sales efforts in the liberalised segment as well as general business expansion and inflation

42%

10%7%

10%

5%

9%

17%

Personnel

Marketing and Sales

Consulting & Outsourcing

Payment Channel and

Collection ExpensesStamp Taxes

Rent and Utility

Other

Breakdown of 2017 Opex

Comments

Bad debt related income and expense(TLm)

174

224 231246

2014 2015 2016 2017

2014

Doubtful prov.Expense

82

-3

2015 2016 2017

Bonuscollection

Late paymentincome

119

64

75Hizmete Özel

Retail growth and profitability

Retail Operational Earnings1

Breakdown (TLm)

Source: Company.1 Operational Earnings refers to EBITDA plus TradeCo related EBITDA adjustments in the amount of TL16m, TL-60m and TL-16m in 2014, 2015 and 2016. Starting from 2017, there

is no TradeCo related EBITDA adjustments.

2014 2015

290

2016 2017

145

280 247

Bad debt related income/expense

Liberalised Gross Profit

Regulated Gross Profit

Opex

(TLm) 2014 2015 2016 2017

Regulated gross profit 299 312 312 335

Liberalised gross profit 23 72 145 76

OPEX -174 -224 -231 -246

Bad debt related income and expense

-3 119 64 82

Operational Earnings 145 280 290 247

∆ in NWC -51 186 68 82

Operating Cash Flowbefore Interest and Tax

94 466 358 329

Capex -46 -46 -35 -30

Free Cash Flow beforeInterest and Tax

48 420 323 299

Cash flow driven by operational earnings

Cash flow conversion is on average above 100% (of Operational Earnings)

Capex limited to IT-related expenditures

76Hizmete Özel

Investor Relations contacts

Ilkay DemirdağHead of Investor Relations

T +90 (0) 212 385 8907investorrelations@enerjisa.com

Sibel TurhanInvestor Relations

T +90 (0) 212 385 8984investorrelations@enerjisa.com

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Appendix

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Key Financials

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Summary Financial StatementsConsolidated Income Statement

FY FY FY FY 1Q 1Q

(TLm) 2014 2015 2016 2017 2017 2018

Sales Revenue 8,064 9,154 9,103 12,345 2,726 4,070

Cost of Sales -6,754 -7,108 -6,501 -8,412 -1,971 -3,045

Gross Profit 1,311 2,045 2,602 3,932 755 1,025

OPEX -967 -1,080 -1,228 -1,519 -340 -415

Other Income/(Expense) -36 73 -102 -173 -58 -14

Operating profit before finance income/(expense) 308 1,038 1,272 2,241 357 596

Financial Income/(Expense) -571 -575 -758 -957 -240 -264

Profit before tax -264 463 514 1,284 117 332

Taxation -13 -127 -137 -296 -39 -89

Net Income -277 336 377 988 78 243

FY FY FY FY 1Q 1Q

(TLm) 2014 2015 2016 2017 2017 2018

Operating profit before finance income/(expense) 308 1,038 1,272 2,241 357 596

Adjustment of depreciation and amortization 209 219 218 235 56 61

TradeCo-related pro-forma EBITDA adjustments 16 -60 -16 0 0 0

Adjustments related to fair value difference arising from deposits 43 36 40 79 30 26

Interest income related to revenue cap regulation -5 -2 -19 0 0 -8

EBITDA 569 1,232 1,495 2,555 443 676

CAPEX Reimbursements 210 200 443 592 144 191

EBITDA+CAPEX Reimbursements 779 1,432 1,938 3,147 587 867

Fair value changes of financial assets 0 -332 0 -467 0 0

Non-recurring income related to fiscal year 0 0 0 -115 -70 0

Operational earnings 779 1,100 1,938 2,565 517 867

Net Income -277 336 377 988 78 243

Fair value changes of financial assets 0 -266 0 -374 0 0

Non-recurring income related to fiscal year 0 0 0 -92 -56 0

Underlying Net Income -277 70 377 522 22 243

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Summary Financial StatementsConsolidated Balance Sheet

YE YE YE YE 1Q

(TLm) 2014 2015 2016 2017 2018

Cash and Cash Equivalents 113 152 75 173 79

Financial Assets 313 456 654 692 767

Trade Receivables 1,471 1,545 1,721 2,382 2,852

Other Current Assets 345 379 490 855 923

Current Assets 2,242 2,532 2,940 4,102 4,621

Financial Assets 1,469 2,565 3,640 5,747 5,758

Tangible and Intangible Assets 8,281 8,103 7,949 7,841 7,790

Other Non-Current Assets 771 820 603 896 799

Non-Current Assets 10,521 11,489 12,192 14,484 14,347

TOTAL ASSETS 12,763 14,021 15,133 18,586 18,968

Short-Term Financial Liabilities 805 1,916 3,098 1,939 1,766

Other Financial Liabilities 17 21 25 30 35

Trade Payables 816 827 1,118 1,512 951

Payables to PA 1,238 1,188 0 0 0

Other Current Liabilities 417 629 710 1,374 1,416

Current Liabilities 3,294 4,581 4,951 4,855 4,168

Long-Term Financial Liabilities 2,098 2,878 3,200 5,269 6,269

Other Financial Liabilities 240 232 245 280 284

Payables to PA 1,176 0 0 0 0

Other Non-current Liabilities 1,915 1,964 1,989 2,302 2,474

Long-Term Liabilities 5,429 5,074 5,434 7,851 9,027

Total Share Capital 4,390 4,390 3,965 4,017 3,966

Other Equity Items 58 47 136 184 220

Retained Earnings -407 -71 646 1,679 1,587

Equity 4,040 4,366 4,747 5,880 5,773

TOTAL LIABILITIES AND EQUITY 12,763 14,021 15,133 18,586 18,968

Note: Consolidated numbers include the Business Units Distribution and Retail as well as the legal holding entity.

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Summary Financial StatementsConsolidated Cash Flow Statement

FY FY FY FY 1Q 1Q

(TLm) 2014 2015 2016 2017 2017 2018

Profit for the period -277 336 377 988 78 243

Adjustments to reconcile net profit for the period 777 830 801 960 287 233

Changes in operating assets and liabilities -665 -463 -7 -979 -231 -886

Other inflows (incl. Capex reimbursements) 311 391 833 954 232 313

Cash Flows from Operating Activities (before interest and tax) 146 1,095 2,004 1,923 366 -97

Tax payments -48 -73 -145 -65 -22 -7

Cash Flows from Operating Activities (before interest, after tax) 98 1,021 1,859 1,858 344 -104

CAPEX -525 -1,093 -1,560 -1,747 -398 -501

Payment to Privatization Administration -1,176 -1,225 -1,188 0 0 0

Interest received 59 31 40 65 7 32

Cash Flows from Investing Activities -1,643 -2,286 -2,709 -1,682 -391 -469

Cash in-flows and out-flows from borrowings 1,072 1,710 1,414 873 938 790

Capital increase 900 0 0 0 0 0

Interest paid -655 -406 -642 -951 -242 -311

Cash Flows from Financing Activities 1,317 1,305 772 -78 696 479

Increase in cash and cash equivalents -228 39 -78 98 649 -94

Cash and cash equivalents at the beginning of the period 341 113 152 75 75 173

Cash and cash equivalents at the end of the period 113 152 75 173 724 79

FY FY FY FY 1Q 1Q

(TLm) 2014 2015 2016 2017 2017 2018

Cash Flows from Operating Activities (before interest and tax) 146 1,095 2,004 1,923 366 -97

CAPEX -525 -1,093 -1,560 -1,747 -398 -501

Free cash flow (before interest and tax) -379 2 444 176 -32 -598

Tax payments -48 -73 -145 -65 -22 -7

Interest received 59 31 40 65 7 32

Interest paid -655 -406 -642 -951 -242 -311

Free cash flow (after interest and tax) -1,023 -445 -303 -775 -289 -884

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Electricity Market Regulation in Turkey

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Turkish electricity market structure is in line with proven models seen in other European markets

Turkish Electricity Market Framework Replicates the Tested Electricity Market Structures

Note: EÜAŞ: State-owned generation company; EPIAS: Market operation company; TEİAŞ: State-owned transmission company; BIST: Istanbul stock exchange: TETAŞ: State-owned wholesale Company; BOO: Build, Operate, Own, BOT: Build, Operate, Transfer, TOR: Transfer of Operating Rights, IPP: Independent Power Producers.

Transmission Distribution: 21 Regions

Physical flow of electricity

Generation

Generation Activities Wholesale Activities Supplier Activities

State-owned Bilateral(Forward /

OTC)

Wholesale Market (TETAŞ / Private)

Suppliers

• IPPs/Producers

• Incumbent Retailers

• Non-Incumbent Retailers

Customers

• Non-eligible Customer (from incumbent retailers only)

• Eligible customers (free to choose their supplier)

BOO – BOT – TOR

IPP

Organised Spot

Market

Enerjisa is the Leading Player in the Turkish Electricity Distribution and Retail Sector

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Distribution revenue build-up

EMRA Determines Revenue Caps for Distribution Companies, which are Taken as a Basis for the Determination of the Distribution Tariff

Capex Allowance

Opex Allowance

Return on RAB

Capex Reimbursement

Fixed costs

Variable costs

Uncontrollable cots

Tax Adjustment Component Revenue and Investment Difference

Adjustment

R&D Difference Adjustment

Other Revenues

Return on RAB: Average RAB x WACC

Reimbursement of Capex

Lighting Revenues

Advertising and rent

Theft & Loss Margin

Additional Revenues

The cost of operating and maintaining the distribution network

Transmission costs (pass through to TEDAŞ)

Fixed meter reading fees

Meter replacement costs

Other costs (e.g., distribution fee, capacity fee, overcapacity fee, available capacity fee, and customer care services costs)

Distribution companies are entitled to buy the energy required for general illumination

Cost of energy for target theft and loss and general lighting

Advertising, rent and lighting

Maintenance income, punishment warrant and compensation income, advertisement and renting, etc.

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Distribution revenue build-upTotal Capex allowance

Note: 1 RAB derived from average of RAB at the start and at the end of the tariff year plus new investments minus depreciation escalated by Energy Price Index (EPE) equal to CPI.

Total Capex Allowance

● Capex is reimbursed within 10 years as fixed by EMRA

● 5 categories in Capex eligible for the Capex allowance system

● Calculated by Regulatory Period based on average RAB and regulatory real WACC of 11,91% before-tax, real for the period 2016-2020

194 bp increase in WACC rate compared to 2011-2015, meaning greater financial income from RAB

● Current framework allows outperformance for certain components determined on the basis of centralized unit prices through betterprocurement and supply chain management

Capex Reimbursement

● Reimbursement duration is 10 years vs. 5 years in the previous regulatory period

● By the end of a tariff year, if the distribution company realises its mandated investments at a cost less than the allowed Capex value, then it will still have collected the revenues through its tariffs that were calculated on the basis of initially allowed Capex

Capex Outperformance

Return on RAB1 11.91% – 13.61%

● RAB1 was set to “0 TL” by the regulator in 2006

● Allowed capex is included in the RAB as soon as they are realized

● Additional capex included in RAB after EMRA approval

● Yearly indexation of RAB by Consumer Price Index (CPI)

● Increase in RAB due to greater Capex allowance results in greater RAB leading to additional income

Tax adj. from Depreciation

● Compensation item for the additional tax burden arising from the difference between the depreciation periods in Tax Law and Electricity Market Regulation

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Distribution revenue build-upOpex allowance

Total Opex Allowance

● 2016-2020 based on actualisations of years 2013-2014

● Key growth drivers of Opex allowance: number of customers, distributed energy volume, number of transformers, line length

● Opex allowance is set on the basis of region requirements

● Increase in Opex allowance in the Regulatory Period of 2016-2020 which provides potential for income from Opex efficiency

● Current framework allows outperformance through employee efficiency, better workforce management and IT systems

Fixed Opex

● Component not affected by factors like demand, # of customers, network length

Variable Opex

● Component affected by demand level, # of customers, network length

Non-controllable CostsTransmission (pass thr.)

incl.

● Transmission expenses

● Utilisation of forestry areas

● Taxes except for VAT, corporate tax, and licensing and transmission fees

R&D Opex1% of fixed / variable

Opex

● R & D Expenses reimbursed through Revenue Ceiling

● The over and under-realisation of Opex is not taken into account in the revenue and tariff calculations

● By the end of a tariff year if a distribution company realises its mandated Opex at a cost less than the allowed Opex value calculated by EMRA, then the distribution company will keep the difference between what is allowed and what is spent

Opex Outperformance

Other

● 75% advertisement income kept by companies (25% deducted from revenue ceiling)

● Theft accrual (c. 7% of EBITDA)

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Distribution revenue build-upOther revenues

Additional revenues

● Maintenance income

● Punishment warrant and compensation income

● Advertisement and renting

● Provisions no longer required

● AMR incomes, theft usage accrual

Lightning revenues

● Distribution companies are entitled to buy the energy required for general illumination

● As per the current regulation, distribution companies must supply electricity from TETAŞ and to sell energy to municipalities and provincial administrations within the scope of general illumination responsibilities

● If a new omnibus bill is enacted, distribution companies will no longer be required to supply electricity within the scope of general illumination activities, following October 1, 2018, and will replace TETAŞ with TEDAŞ

Theft & Loss margin

● All eligible and ineligible customers, pay the theft and lost tariff as distribution companies are obligated to buy energy to compensate for energy theft and loss based on the theft and loss target

● The theft and loss tariff is determined at the national level and the revenue imbalances between the distribution regions are corrected via the price equalisation mechanism meaning the cost burden calculated according to the theft and loss target, does not fall on the consumers in a specific region alone, but distributed across all consumers in the country

● If actual performance of distribution companies is below the target it is bonus, if it is above, it is a penalty

● T&L target is determined using 3 different clusters: <8%, 8<T&L<Turkey Avg, Others

● New EMRA approach for 2016-2020 is a dynamic T&L target based on previous 3 years (Y-2, Y-3, Y-4) performance with 100% performance sharing with customers

Other revenues ● Other revenue items are fully included in the calculation of the revenue cap

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3rd regulatory period

Regulatory period 5 Years between 2016 and 2020

Opex allowance

Base years 2013-2014

50% Fixed and 50% Variable allocation, growth (# of customers, distributed energy volume, # of transformers & line length) & efficiency

Adjustment for variable and uncontrollable expenses

X-efficiency

2013-2014 are base years

DEA (line length, # of customers, # of transformers, distributed energy volume, environmental variables)

5 year convergence duration

Capex allowance 5 categories in Capex

Unit price application. Capex outperformance in scope

WACC 2016 – 2017 11.91%, 2018 – 2020 13.61% (Before Tax, Mid-Year) WACC is applicable to all distribution companies

Reimbursement duration 10 Year reimbursement, which is shorter than most international examples

Demand forecast

Reports and analysis submitted to EMRA every year until end of June

Includes: # of customers, distributed energy volume, peak energy volume

TEİAŞ merges its own demand forecast with distribution companies and submits final forecast report to EMRA

Theft & Loss

Dynamic T&L target determination methodology

3 different clusters (<8%, 8<T&L<Turkey Avg, Others)

Targets based on performance of y-4, y-3, y-2

100% performance sharing with customers

Quality

Incentive mechanism for supply quality & commercial quality

Non- fatal accident determined as general quality indicator. 0,05 % extra system operation revenue based on non- fatal accident rate

%1 extra system operation revenue based on call centre performance quality parameter

Starting year of application: 2017

EMI EMI = Consumer Price Index

Other revenues Maintenance income, punishment warrant and compensation income, rentals and advertisements, consultancy,

provisions no longer required, AMR incomes, electricity theft accrual

Introduction of new quality incentives: The new regulation (announced in December 2017) allows for an additional upto 5% (of the revenue requirement) revenue, if all quality parameters are satisfied (previously, it was 1% of the yearly revenue requirement). The impact to Enerjisa is not yet clear as the specific implementation of this new regulation is not yet defined (e.g. which quality parameters and what are the targets)

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Glossary Glossary of terms

AMR Automated Meter Reading EÜAŞElektrik Üretim Anonim Şirketi(Electricity Generation Co)

R&D Research and Development

BIST Borsa Istanbul FCF Free Cash Flow RAB Regulated Asset Base

BOO Build, Operate, Own FiT Feed-in Tariffs RES Renewables

BOT Build, Operate, Transfer FPO Financial Promotion SAIDI System Average Interruption Duration Indices

CAGR Compound Annual Growth Rate FX Foreign Exchange SAIFI System Average Interruption Frequency Indices

Capex Capital Expenditure GAAP Generally Accepted Accounting Principles SCADA Supervisory Control and Data Acquisition System

CCO Customer Care Offices GDP Gross Domestic Product SME Small Medium Sized Entities

CMB Capital Markets Board GIS Geographical Information System T & L Theft and Loss

Cont'd Continued GSM Global System for Mobile Communications TEAŞTürkiye Elektrik Üretim İletim A.Ş. (Turkey Electricity Generation Co.)

CPI Consumer Price Index GW Gigawatt TEDAŞTürkiye Elektrik Dağıtım A.Ş. (Turkey Electricity Distribution Co.)

CRM Customer Relations Management HSE Health and Safety Executive TEİAŞTürkiye Elektrik İletim A.Ş. (Turkey Electricity Transmission Co.)

D2D Door to Door IFRICInternational Financial Reporting Interpretations Committee

TETAŞTürkiye Elektrik Ticaret ve Taahhüt A.Ş. (Turkey Electricity Trading and Contracting Co.)

DSO Distribution System Operator IFRS International Financial Reporting Standards TFRS Turkish Financial Reporting Standards

EBIT Earnings Before Interest and Tax IPP Independent Power Producers TLbn Turkish Lira billion

EBITDAEarnings Before Interest, Tax, Depreciation and Amortisation

IR Investor Relations TLm Turkish Lira million

EC European Commission IT Information Technology TOR Transfer of Operating Rights

EEA European Economic Area KPI Key Performance Indicators TradeCo Trading Company

EEDAŞ Enerjisa Elektrik Dağıtım A.Ş. LTM Last Twelve Months TSO Transmission System Operator

EFET European Federation of Energy Traders m Millions TWh Terawatt Hour

EIA Energy Information Administration MWh Megawatt Hour WACC Weighted Average Cost of Capital

EML Electricity Market Law NWC Net Working Capital

EMRA Electricity Market Regulatory Authority OHSAS Occupational Health and Safety Assessment

EPİAŞEnerji Piyasaları İşletme A.Ş. (Energy Exchange Istanbul)

Opex Operating Expenditure

EU European Union OTC Over the Counter