Investor Presentation March 2018

Transcription

1 March 218

2 Disclaimer This presentation contains forward-looking statements that reflect the Company management s current views with respect to certain future events. Although it is believed that the expectations reflected in these statements are reasonable, they may be affected by a variety of variables and changes in underlying assumptions that could cause actual results to differ materially. Neither Tüpraş nor any of its directors, managers or employees nor any other person shall have any liability whatsoever for any loss arising from use of this presentation.

3 REFINING INDUSTRY

4 Brent Crude Oil Prices ($/bbl) ,7 65,8 PROS OPEC & Non OPEC Supply Cut Political Instabilities in Middle East Healthy PMI data in Developing Countries 55 Expectation of high global GDP , CONS Increase in number of rigs & production in US Concerns about the impact of OPEC & Non OPEC production cuts Inventory Levels High crude exports of OPEC Source:Platts REFINING INDUSTRY 4

5 Refinery Capacity Change Thousand Barrels/Day Gross Capacity Additions China India Middle East Other Asia Other Japan North America Europe , Source:, Reuters, UEA, Tüpraş, sector reports and news REFINING INDUSTRY 5

6 Middle Distillate Cracks ($/bbl) Diesel Jet Fuel , ,1 12,2 11,5 15, ,9 14,4 11, ,4 7,2 7,6 1, 1 11,9 6,6 5 9,1 8, Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec Source: Platts REFINING INDUSTRY 6

7 Light Distillate Cracks ($/bbl) Gasoline 4 2 Naphta 2,4 2, ,5 18,6 15,7 -,5-1, ,3-8 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec -4,9-4,8-4, 12 9,8 1,2 6 1,6 11,9 9,7-2, ,2-15, ,5-22,3 LPG -4,7-16,2-2,6 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec Source: Platts REFINING INDUSTRY -4 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec 7

8 Quarterly Product Crack Margins in ($/bbl) Source: Platts Diesel 1615,7 15,2 14,6 13, ,4 12 1,5 1,7 1,8 11,2 1 9,2 8 8,9 7,9 6 Q1 Q2 Q3 Q4 Gasoline 2 19,4 18, , 14,3 13,3 15, ,5 13,5 12 1,9 12,8 1 1,9 Q1 Q2 Q3 Q , ,5 1 11,2 9,9 Jet Fuel 12,4 12, 1,5 9,4 1,2 8 7,3 7,7 8 6 Q1 Q2 Q3 Q4 Fuel Oil (.1) -2-3,9-4 -5,3-5,8-6 -7,8-5,7-8-9,1-7,8-1, ,5-11, ,6-16 Q1 Q2 Q3 Q4 REFINING INDUSTRY 8

9 Crude Price Differentials ($/bbl) Ural Differentials Price Differentials 1 Brent Brent -,58-1 -,35-1, , Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Differential Range Q1 11Q2 11Q3 11Q4 12Q4 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 Iran Heavy Kirkuk Kuwait Basra Heavy Arab Heavy Ural Source: Platts REFINING INDUSTRY 9

10 Turkish Economy Strengths Population (mn) 12 GDP (%) % growth in last 5 yrs -4 yrs >65% 9 9,2 8, % % 11, , 5,1 4,2 4, 3, 2,9 2, Q1 217Q2 217Q Source: EMRA, TSI Diesel Consumption (mn tons) 8.8% average growth in last 5 yrs 22,3 24,2 25,1 26,1 4% annual growth 27, REFINING INDUSTRY Car ownership per thousand people %

11 Turkish Consumption (Million tons) Diesel Jet Fuel 215 2, % 4, % , % 216 4,4-4% , , Gasoline Fuel Oil* ,1 2,23 2,3 215,6 +3.1% -15.7% 216, % -3.5% 217,49 Source: EMRA *Bunker excluded REFINING INDUSTRY 1 11

12 Turkish Petroleum Market - 12 Months 217, (Million tons) Diesel Jet Fuel , % 217 4, % , , Gasoline Fuel Oil* 217 2, %, % 216 2,23 216,58 Source: EMRA *Bunker excluded REFINING INDUSTRY 1 12

13 Turkey s Import / Export Balance (Net) (Million tons) 4 Export 2,1 2,8 3,2 1,5,3, ,4-3,1-8 Import ,2-16 LPG Gasoline Diesel Fuel Source: EMRA REFINING INDUSTRY 13

14 COMPANY OVERVIEW

15 Tüpraş Shareholder Structure %77 %2 %3 Publicly Traded Energy Investments Inc. (SPV) *Distribution of Domestic/ Foreign Ownership of Tüpraş Shares %51 %17,5 %79,98 Free Float %4 %49 %82,5 %1 Foreign Ownership Domestic Ownership *As of December 31th, 217 COMPANY OVERVIEW 15

16 Tüpraş Refining Assets & Distribution Network Baku OPET Marmara Terminal 721, m3 İstanbul İzmit Ankara Kırıkkale OPET Giresun Terminal 43,13 m3 Turkey Storage Capacity İzmir Batman Tüpraş : 58% Opet : 9% Other Companies : 33% Total Capacity : 28.1 mn ton OPET Antalya Terminal OPET Mersin Terminal 19,392 m3 24, m3 Nelson Complexity : 9.5 Tüpraş Storage Cap. : 7.2 mn m 3 OPET Storage Cap. : 1.1 mn m3 Crude Pipeline Terminal Kirkuk Refinery İzmit 11. MT Capacity NC: 14.5 Storage Capacity: 3.3 mn m 3 İzmir 11. MT Capacity NC: 7.66 Storage Capacity:2.51 mn m 3 Base oil 4 k tons Kırıkkale 5. MT Capacity NC: 6.32 Storage Capacity: 1.41 mn m 3 Batman 1.1 MT Capacity NC: 1.83 Storage Capacity:.25 mn m 3 COMPANY OVERVIEW 16

17 High Complexity (Nelson Complexity of Refinining Companies) İzmit After Rup 15 14,5 14,5 Tüpraş After Rup , 12,6 11,8 11,6 11,5 11, 1,4 9,9 9,8 9,6 9,5 9,5 9,4 9,2 9,2 9, 8,8 8,7 8,4 Tüpraş Before Rup 8, 7,3 7,3 7,1 7,1 7,1 7,1 6,8 6,5 5,9 5,8 5,8 İzmit Ref. Valero Reliance Essar Marathon Oil Holly-Frontier Neste BP Tesoro Thai Oil IOCL Tüpraş-215 Hellenic PKN MOL SHELL Petrom Galp Saras Petrobras Tüpraş Lukoil HPCL CPCL BCP Esso(Thai) S-Oil MRPL SK Energy BPCL COMPANY OVERVIEW 17

18 Crude Suppliers of TÜPRAŞ (Million Tons) Africa America Europe CIS Middle East Crude Type %5,3 3 %36 %58,8 >34 3> COMPANY OVERVIEW 18

19 Sales By Customer (217) Customer Groups Sales to Distributors Bitumen %11 Military %1 LUKOIL %4 Other %13 OMV POAŞ %26 TP %3 Export %18 Distributors %45 BP %15 Other %6 Petkim %1 LPG %4 Jet %5 THY Opet %9 Shell %15 OPET %25 Total : 31.5 mn tons Distributors : 14.3 mn tons COMPANY OVERVIEW 19

20 Competitive Advantages of Tüpraş Added Value Created by Tüpraş Local Market Dynamics Cost Base of Tüpraş Best Fit for the Market with high diesel yield High Economic Growth Energy Efficient High Complexity of Tüpraş Short on Diesel Crude Oil & Feedstock Cost Advantage Presence in all over Turkey through refineries and terminals Import Parity Pricing (Freight advantage of Tüpraş) Economies of Scale COMPANY OVERVIEW 2

21 OPET- Tüpraş Share 4.% 1.56 Stations 1.1 Million M3 Storage # 1 Brand Royalty Award Jet Fuel Sales THY Opet- 5/5 joint venture with Turkish Airlines for air transport fuel sales in Turkey International Trading London Market positions: 17.8% in White product; 23% in black product Marmara, Aegean, Black Sea & Mediterranean 2nd Biggest Distribution Company by Volume Lubricants Opet Fuchs- 5/5 lubricant joint venture with Fuchs COMPANY OVERVIEW 21

22 DİTAŞ, Marine Transport -Tüpraş Share 79.98% 3 Crude Oil Tanker : DWT 1 Crude Oil - Product Tanker : DWT 7 Product Tanker : DWT 13 tugboats 1 mooring boats 2 service boats 1 pilot boat One of the biggest Turkish marine transportation companies of crude oil and petroleum products Carries mainly Tüpraş crude oil purchases and makes the transfer operations of product and semi-products 3 Crude Oil Product ,9 23, , , ,6 8, ,7 mn $ Net Sales 49,6 mn $ Op. Profit COMPANY OVERVIEW 22

23 Körfez Ulaştırma A.Ş.- Tüpraş Share 1% Körfez Ulaştırma A.Ş. Turkey's First Private Railway Operator On June 16th, Freight Train Operator Certificate, On September 2th, Safety Management Certificate received Operates with 491 cistern wagons and 5 diesel locomotives 2,5 mn tons/year Target transport % 1 Market share COMPANY OVERVIEW 23

24 Margin Environment ($/bbl) Premium to the benchmark Mediterranean peers refining margin due to: 1 7,5 Med Complex Margin Month Annual Refined products deficit characteristic to the Turkish market Access to cheaper sources of crude oil Ability to use heavier and sour crudes Proximity to major suppliers Reduces transport costs Implemented cost reduction measures Energy efficiency programs Capacity to produce higher value added range of refined products Direct pipeline connections with domestic clients High export capability 5 2,5-2,5 J-8 J-8 J-9 J-9 J-1 J-1 J-11 J-11 J-12 J-12 J-13 J-13 J-14 J-14 J-15 J-15 J-16 J-16 J-17 J-17 O ,8 9,6 6,4 3,2 Tüpraş Brüt Marj Tüpraş Net Marj Akdeniz Marj 12,9 11,9 11,2 1,6 9,6 8,1 6,5 6, 4,8 5,3 3,2 2,5 4, 1,7 2, COMPANY OVERVIEW 24

25 Capacity Utilization and Quarterly Production Volume Capacity Utilization* (%) Quarterly Production (Mil. Tons) ,9 71,3 Full Year 15,3 12,5 1,9 98,1 18,1 11,4 Crude Oil 12 9 Other 81,9 78,9 Q4 111,6 11,6 16,3 17,5 94,6 89, , ,8 7,7 7,3 6,9 7,2 7,4 7, ,6 6,7 6,3 6 5, ,4 5, *Nameplate capacity calculated by standard 33 days of operations ,5 4,6 4 Q1 Q2 Q3 Q4 COMPANY OVERVIEW 25

26 12M Product Yields Bitumen %12 LPG %4 Bitumen %12 LPG %4 Coke %3 Other %2 Fuel Oil %7 Other %1,7 Black Prod. %22,3 Light Distil. %25,5 Gasoline %2 Naphtha %1 Coke %3 Other %2 Fuel Oil %7 Other %2,1 Black Prod. %22,6 Light Distil. %25, Gasoline %2 Naphtha %1 Mid. Distil. %5,4 Mid. Distil. %5,3 Jet %17 Jet %17 ULSD %33 White Product %76.56 ULSD %33 White Product %76.27 Production 27,93 mn tons Production 28,88 mn tons API 3,62 API 3,26 COMPANY OVERVIEW 26

27 Tüpraş Sales (Million Tons) All Time High Total Sales ,2 16,9 Full Year Total Sales (mt) 28,7 3,3 22,2 24,8 31,5 25, ,1 4,3 Total Sales in Q4 (mt) 7,9 7,7 6,2 6,4 7,3 6,4 Export Domestic Sales Q4 215 Q4 216 Q4 217 Q4 Full Year Domestic Sales of Key Products (mt) Domestic Sales of Key Products in Q4 (mt) ,4 3,5 2,9 2,2 2, 2,2 1,9 1,8 4,3 4,4 4,5 3,6 1,6 11,1 9, 6,5 4 2,9,9 1,,5,5,5,5,4 1,1 1, 1,,9 2,6 2,9 2,9 1, Q4 215 Q4 216 Q4 217 Q4 COMPANY OVERVIEW Diesel Jet Fuel Gasoline Bitumen 27

28 Investments (mn $) 9.5 Nelson complexity High white product yield Process more heavier and sour crudes Run all refineries with 1% capacity utilization Avg. 278 mn$ Avg. 943 mn$ Avg. 247 mn$ E Ongoing Projects New Power Plant Revamp of Crude Unit FCC Modernization New Sulphur Units Energy Saving Projects Optimization of conversion units COMPANY OVERVIEW 28

29 217 Expectations vs 12 Months Results Brent Price ($/bbl) Capacity Utiliation (%) ,7 J-17 55,1 F-17 51,6 M-17 52,5 A-17 5,4 M-17 46,5 J-17 48,6 J-17 51,6 A S-17 57,4 O-17 62,6 N-17 64,2 D 'Q1 CPU 74,9 8, 'Q2 14'Q3 Average 81,9 84,1 14'Q4 15'Q1 12,5 15,3 18, ,5 116,5 16,4 114, ,3 111,6 99, 'Q2 15'Q3 15'Q4 16'Q1 16'Q2 16'Q3 16'Q4 17'Q1 17'Q2 17'Q3 94,6 17'Q4 Our expectation was 5-55 $/bbl; 217 average was 54.3 $/bbl. Expected Full Capacity Utilization in 217; achieved 18.1% capacity utilization. Margins ($/bbl) Capex (mn $) ,7 5, 8,2 5,4 8,9 6,5 Tüpraş Net Margin Med Margin 6,7 4, , Tüpraş 213, Ditaş 117,6 185,4 17 Q1 17 Q2 17 Q3 17 Q Net Tüpraş refinery margin for 12M was 8,1 $/bbl above target of 7,5-8, $/bbl. Tüpraş core refining business capex guidance for 217 was 2 Million dollars. COMPANY OVERVIEW 29

30 KEY FINANCIALS

31 217 Key Highlights 31.5 Million tons of Sales 11.4 % Crude Capacity Utilization 3.4 Million tons Processed (Total) 8.1 $/bbl Net Refining Margin 5.9 Billion TL EBITDA 4.5 Billion TL Profit Before Tax KEY FINANCIALS 31

32 Financial Highlights (mn $) EBITDA Net Income USD th Q 3rd Q 2nd Q 1st Q USD Net Debt- *Debt/Rolling EBITDA Return of Average Equity , ,5 3,6 2, R H M Net Debt/Rolling EBITDA was calculated with USD figures 4, ,3 2, H M Net Debt Net Debt/*R. EBITDA 1,7 2, 1,6 1,5 1,1 1, 1,1, H M Q1 217 H M 217 1,3 211,32 212,24 213,26 214,35 215,4 216 Q1, H1, M,22 216, Q1, H1, M, KEY FINANCIALS 32

33 Balance Sheet Analysis Cash & Cash Equivalents (Billion $) Receivables (Billion $) 3, 2,4 1,8 1,2,6, 1,7 Mar.14 1,3 Jun.14 1,6 Sep.14 1,7 Dec.14 1,2 Mar.15 1, Jun.15,8 Sep.15 1, Dec.15 1,6 Mar.16 1,6 Jun.16 2,5 Sep.16 1,7 Dec.16 2, Mar.17 1,6 Jun.17 2,2 Sep.17 2,3 2,3 Dec.17 2, 1,6 1,2,8,4,71 Mar.14,52 Jun.14,51 Sep.14,9 Dec.14,2 Mar.15,66 Jun.15 1,7 Sep.15,88 Dec.15,7 Mar.16,91 Jun.16,75 Sep.16,91 Dec.16 1,9 Mar.17 1,15 Jun.17 1,57 Sep.17 1,36 1,36 Dec.17 Financial Loans (Billion $) Payables (Billion $) 5, 4,3 3,6 2,9 2,1 1,4,7, LT Loans ST Loans 3,7 3,7 3,6 3,6 3,2 3,2 3,3,4,3,5,3,3,6,9 3, 3,3 2,8 2,9 2,9 3,1 3, Mar h 214 9M Dec 14 Mar.15 Jun.15 Sep.15 3,4,6 2,8 Dec.15 3,9 4, 1, 1,2 2,9 2,8 Mar-16 Jun-16 4,2 1,1 3,1 Sep-16 3,4,6 2,9 Dec.16 3,6,6 3, Mar.17 3,2 1,1 2,1 Jun.17 3,4 1,3 2,1 Sep.17 4, 1,4 2,6 Dec ,1 Mar.14 3,28 Jun.14 3,4 Sep.14 2,46 Dec.14 1,74 Mar.15 1,7 Jun.15 1,59 Sep.15 1,36 Dec.15 1,23 Mar-16 1,69 Jun-16 1,98 Sep-16 2,2 Dec.16 2,62 Mar.17 2,19 Jun.17 2,71 Sep.17 2,22 2,22 Dec.17 KEY FINANCIALS 33

34 Tüpraş Balance Sheet Million USD Difference % Difference Current Assets Cash & C. Equivalents Receivables Derivatives Inventories Pre-paid expenses Other Current Assets Long Term Assets Financial Assets & Subsidiaries Fixed Assets Derivatives Pre-paid expenses Deferred Tax Other Long Term Assets Total Assets Short Term Liabilities Financial Loans Payables Derivatives Deferred Incomes Provisions Other ST Liabilities Long Term Liabilities Financial Loans Payables & Provisions Derivatives Other LT Liabilities Equity Minority Interests Total Liabilities KEY FINANCIALS 34

35 Dividend In principle; as far as the related regulations, investment needs and financial situation allow, the entire amount of the net distributable profit for the period, calculated within the frame of the Capital Markets Regulations, is distributed in cash taking into consideration the market expectations, long term company strategies, investment and financing policies, profitability and cash position as long as it is covered from the existing resources in our legal records. 12 One of the highest dividend yield in BİST /213 EPS includes the tax incentive Earnings per Share Gross Dividend Total Payout (Mn. TL) KEY FINANCIALS 35

36 Creating Competitive & Sustainable Shareholder Value Tüpraş has one of the highest Corporate Governance Ratings Foreign Currency Long Term Tüpraş BBB-(IG) Ba1 (Pos.) Board Stakeholders Transparency 92,9 94, 98,6 Turkey BB+ (stable) Ba1 (Neg.) BB Koç Holding Baa3- (IG) BBB (IG) Analyst Recommendations Shareholders Overall 95,5 94,7 %38 %62 Buy Hold KEY FINANCIALS 36

37 Financial Policy Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counterparty risk, interest rate, commodity and currency exposure Threshold and limits Net financial debt/ebitda Net foreign currency position/shareholders' equity Inventory and crack margin exposure Current ratio The fixed/floating profile of financial debt Liquidity: share of long term debt Counterparty risk limits Counterp arty Risk Policy Deposit is kept, within certain limits, by banks that comply with the criteria determined in our policy Credit rating and strong capital base Cap on the maximum deposit allocated to a single bank Threshold for deposits subject to banks shareholders equity KEY FINANCIALS 37

38 Inventory & Crack Margin Hedge Inventory Hedging Policy Operational Hedge: Maintaining minimum amount of stock required for the refining activities Forward Pricing: Purchasing crude oil through forward-priced contracts Financial Hedge: Proxy Hedging (both crude oil and refined product inventories) Expected inventory exposure for the year end is hedged Derivative transactions: Asian swap, Zero Cost Collar Hedging ratio increasing throughout the year Margin Hedging Policy Crack margins: Gasoline, Diesel and Jet Fuel Cracks Derivative transactions: Asian Swaps Hedging Parameters: Budget figures, historical average prices of the cracks + standard deviations, market expectations Maximum hedge ratio: 5%, Tenor: up to next 4 quarters KEY FINANCIALS 38

39 FX Risk Exposure (31 December 217) Consolidated Consolidated A significant portion of the Group's crude oil and refined product purchases are denominated in US Dollars. In addition, the Group finances its capital expenditures mostly through borrowings denominated in US Dollars. Assets Cash Million $ Liabilities Payables 1,935 Natural Hedge: The Group is able to mitigate some of the impact of volatility in exchange rates through natural hedges: crude oil and refined product inventories are US Dollar denominated assets. Receivables & other assets 35 Stock ST Financial RUP : 34 Eurobond : 7 Other : 195 Cash flow Hedge: RUP Facility financing loans designated as hedging instruments of highly probable export revenues. 1,341 Forward & CFH 2,41 LT Financial 2,51 RUP Loans : 964 Eurobond 7 Other Credits : 846 As a general Koç Holding financial policy, Group companies are allowed to keep foreign exchange positions within certain limits. 139 mn $ Cash flow hedge accounting : 1,254 mn $ KEY FINANCIALS 39

40 OUTLOOK

41 218 Refinery Maintenance Schedule & Capacity Utilization Even after the 218 maintenance schedule, we aim to exceed our full total capacity utilization target and reach 14.6%. Unit Quarter Duration (weeks) Reason Plt 7 Crude Oil Unit Q4 17- Q in 218 Revamp İzmir İzmit Hydrocracker, DHP & Platformer Q1 5-6 Plt 4 FCC Q2 5-6 Plt 2 Crude Oil & Vacuum Unit Q4 5-6 Plt 5 Crude Oil & Vacuum Unit Q2 5-6 Plt 25 Crude Oil & Vacuum Unit Q4 5-6 Plt 47 Hydrocracker Complex Q2 4-5 Plt 63 CCR & DHP Q4 5-6 Periodic Maintenance Periodic Maintenance Kırıkkale All Units Q1 6-7 Battery Shutdown Batman Plt. 1/Crude Oil & Vacuum Q1 4-5 Periodic Maintenance 218 Crude Capacity Utilization 26.8 mn tons (95.4%) 218 Total Capacity Utilization 29.4 mn tons (14.6%) OUTLOOK FOR

42 218 Expectations Brent Price Estimation The average Brent crude oil price in 218 is expected to be 55-6 dollars per barrel. Med Complex Margin We expect Med Complex margins to be between dollars per barrel band in 218. Tüpraş Net Margin Net Tüpraş refinery margin is expected to be in the region of 7,5-8, dollars per barrel Operations Full Total Capacity Utilization using imported semi-products such as ASRFO and HVGO Production: approximately 28.3 million tons Total sales: 31. million tons Investment Refining investments is expected to be around 25 Million dollars. OUTLOOK FOR

43 Competition # 1 (SOCAR-STAR Refinery) Goldman Sachs has acquired a 13 percent stake in SOCAR Turkey for $1.3 billion. Goldman Sachs has the right to resell 1 percent of its stakes to Socar, and the remaining 3 percent to Sermaye Investments Limited owned by SOCAR within 6 year at the same price. : 3.3 Billion $ Credit : 2.4 Billion $ Equity Total Investment : 5.7 Billion $ Production (K Ton) Diesel Jet Fuel Sulphur Petrocoke Fuels Petrochemical Feedstock LPG Naptha Mixed xylene Reformate OUTLOOK FOR ,3 billion dollar credit agreement. First 4 year grace period total year term. Project finance is supplied to company (US$ 1.5 billion) It is planned to be commissioned in 218. STAR Refinery (Total Cap. 1 mn ton) 219, mn ton LPG Petchem Feeds Gasoline Jet Fuel Diesel Coke Fuel Oil Bitumen Tüpraş 1,2,3 5,8 5,4 1,2,8 1,5 3,1 Production Star,3 2,6 1,6 4,8,7 Total 1,5 2,9 5,8 7, 15 1,5 1,5 3,1 Turkish Demand 4,2 Balance -2,8 2,4 5, 26,1 4,6 3,4 2, -11,1-3,1 1,3 3,3,2 -,2 43

44 Competition # 2 (Regional Competition) Tüpraş is competing with 71 refineries in the Mediterranean and Black Sea markets. Mediterranean regional product balance is also affected from Middle East, North West Europe and Asia. Mediterranean Black Sea Moldova Ukraine France Croatia Spain Portugal Italy Albania Greece Romania Russia Turkey Bulgaria Syria Tunisia Israel Morocco Algeria Libya 54 Refineries 7.8mn bpd OUTLOOK FOR 218 Georgia Turkey Egypt 17 Refineries 1.8mn bpd 44

45 Marine Bunker Specification Changes and Its Effects IMO, at the meeting held in October 216, lowered the sulphur emission cap from marine bunkers from 3.5% to.5% (5ppm): effective from 1 January 22. HS FO Scrubbed LS FO 2,1 LS Fuel Gap 1,8 LS Fuel Gap %19 switch to LNG %5 %2 Other Diesel Install Scrubber Mn b/d HS Fuel Oil %74 Buy Low Sulphur Fuel Requirements of spec change can be achieved through; Use of lower sulphur blend stocks like ULSD (Diesel) Low Sulfur Fuel Oil production with light crudes Sulphur Fuel Reduction Systems (Scrubber) LNG Ship Owners Intention Survey 8% of global trade is done via marine transportation. 5. vessels are in operation. Bunker fuels account for; ~5% of global oil demand 4% of oil related sulphur emissions. Source: IEA, Oil Sector Report, 217 OUTLOOK FOR 218 Source: UBS,

46 Appendix

47 Q4 Product Yields Coke %3 Other %1 Fuel Oil %5 Bitumen %13 LPG %3 Other %1,2 Black Prod. %21,2 Mid. Distil. %52,8 Light Distil. %24,8 Gasoline %2 Naphtha %1 Jet %14 Coke %3 Fuel Oil %6 Other %3 Bitumen %16 LPG %3 Other %2,9 Black Prod. %25,2 Mid. Distil. %47, Light Distil. %24,9 Gasoline %21 Naphtha %1 Jet %16 ULSD %39 White Products %77.57 ULSD %31 White Products %73.74 Production 7,3 mn tons Production 6,3 mn tons API 3,1 API 3, APPENDIX 47

48 12M Product Yields Bitumen %12 LPG %4 Bitumen %12 LPG %4 Coke %3 Other %2 Fuel Oil %7 Other %1,7 Black Prod. %22,3 Light Distil. %25,5 Gasoline %2 Naphtha %1 Coke %3 Other %2 Fuel Oil %7 Other %2,1 Black Prod. %22,6 Light Distil. %25, Gasoline %2 Naphtha %1 Mid. Distil. %5,4 Mid. Distil. %5,3 Jet %17 Jet %17 ULSD %33 White Product %76.56 ULSD %33 White Product %76.27 Production 27,93 mn tons Production 28,88 mn tons API 3,62 API 3,26 COMPANY OVERVIEW 48

49 Income Statement (In USD) Million USD FY 216 FY 217 % Diff. 4Q 216 4Q 217 % Diff. Net Sales Gross Profit Operating Expenses Income/Loss from other operations Operating Profit Income/Loss from equity investment Operating Profit Before Fin. Income/Loss Net Financial Income /Expense Profit Before Tax & Minorities Net Profit * EBITDA (mn.$) * EBITDA (mn.$) CCS For P&L, USD/TL rates: M 3,645, M 3,186 *According to international standards, in our EBITDA calculation, FX related items are not included. APPENDIX 49

50 Crack Margin Effect on Tüpraş in 12M (FOB Italy Prices) Higher product cracks in 217 over 216 indicates a +1.9 $/bbl margin difference, yielding a 1.4 billion TL contribution to Tüpraş Financials. Product Price, $/ton Tüpraş Crack Margin, $/bbl Yield LPG 435,2 38,3 %3,3-15,5-16,2 Gasoline 549, 462,3 %19,5 13,4 13,3 Naptha 467,2 366,6 %1, -1,5-2,3 Jet Fuel 512,7 48,9 %15,4 1,9 8,3 Diesel 491, 394,6 %3,4 11,7 9,3 Diesel 1 478, 384,9 %1,2 9,9 8, Fuel Oil 1% 315, 222,3 %,9-5,7-9,4 Fuel Oil 3,5% 298,5 25,2 %5,7-8,2-12,1 Diğer 276,3 2,3 %16,8-8,5-1,5 Total Crack Margin,$/bbl 5,5 3,7 Dated Brent Avg. $/Bbl 54,3 43,7 Margin Differences, $/bbl +1,86 Total Processed, mn bbl Total Effect, mn $ Total Effect, mn TL 1.398,1 94,4 APPENDIX 5

51 High Complexity (Resid Upgrading Units Production-(Thousand Tons) (kton) Raw Materials Products Natural Gas 246 Vacuum Resid 1,214 Diesel Gasoline 522 LPG 69 Total Production Atm. Straight Run Fuel Oil 3,36 PetroCoke Sulphur 4, Total Feed 4,496 APPENDIX 51

52 High Complexity (Tüpraş Total Production Change After RUP) mn tons Gasoline&Naptha 4,7 1,7 %35 Jet Fuel 3,6,9 %25 Diesel 5,6 5,5 Others 1,4,3 %19 Fuel Oil Coke,35 2,7 %-87,7 RUP production + 4 Refineries Capacities increase 9,1 mn tons, instead of 4,2 mn ton Bitumen 2,9 Before RUP After RUP APPENDIX 52

53 Flexibility & Reliability; Multiple routes to maksimum capacity Key units Number of units Capacity (m3/d) CRUDE OIL 8 97 LPG MEROX Flow Diagram LPG Yields (%) 3.5% Increased conversion capacity Strong integration among refineries VACUUM HYDROCRACKER ISOMERISATION NAFTA SPLITTER CRUDE OIL ISOMER. UNIFINER REFORMER KERO / DIESEL HDS Benzen Saturation GASOLINE NAPHTHA JET FUELOİL 22.% 16.5% UNIFINER REFORMER KERO/DIES EL (HDS) FCC 2 47 COKER 82 1 NAPHTHA SPLITTER 8 VACUUM VACUMM DİST. More than one distillation and production units MHC 2 FCC HYDROC. COKER FCC Benzin HDS Lube Oil Bitumen DIESEL LUBE OIL BITUMEN & FUEL OİL 33.9%.5% 19.9% LPG MEROX 6 OTHER 3.8% APPENDIX 53

54 Competition (European Pump Price Comparison) Gasoline (Krş / Lt) Diesel 1 (Krş / Lt) Pump No Tax Distr. Marg. Tax Pump No Tax Distr. Marg. Tax TR Spa. UK Ger Eu19 Fra. Gre. Ita. TR Spa. Ger. EU19 Fra. Gre. UK Ita. Not: Prices valid on 12 Feb 218-Turkey Gasoline pirice as of 14th of February 218 APPENDIX 54

55 Tüpraş HSE KPI: Loss Time Incident Frequency and Severity Frequency Ratios 8 6 7,1 7,1 6,9 Incident Frequency 6,1 Including contractors Tüpraş Contractor Total 4 2 4,8 5, 3,6 3,4 3,5 3,6 2,5 3,2 3,4 2,5 3,1 1,7 2,2 2,6 2,8 1,9 1,5 2,4 1,6 1,9 1,8 1,9 1,1 2, 1,7 1,7 1,4 1,3,8, Loss Time Severity Frequency Rate Tüpraş Contractor Total loss time incident freaquency rate =number of incident *1/man hours loss severity frequency rate = loss time*1/man hours APPENDIX 55

56 Energy Saving Projects (mn$) Total Tüpraş Energy consumption (TJ) Energy-saving(TJ) Energy Efficiency Project Savings (mn $) APPENDIX 56

57 Koç Holding Turkey s Leading Investment Holding Company Turkey s largest industrial and services group in terms of revenues, exports, employees, taxes paid and market caputalization Turkey s Leading Investment Holding Company The only Turkish company in Fortune % CARG in consolidated profit 2 in the last five years Pioneer in its Sectors Leading positions with clear competitive advantages in sectors with long-term growth potential such as energy, automotive, consumer durables and finance Combined Revenues / GDP Total Exports / Turkey s Exports Total MCap on Borsa İstanbul 7% 1% 19% Notes : Data as of YE17, 217 GDP reflects the projection of Turkish government s Medium Term Program (1) 217 Report (2) In TL terms between APPENDIX 57

58 Updated information can be found in the Investor Relations section of the company website