INVESTOR PRESENTATION 1
CONTENTS 1 REFINING INDUSTRY 2 COMPANY OVERVIEW 3 KEY FINANCIALS 4 INVESTMENTS 2
1 REFINING INDUSTRY 3
4 Brent Crude Oil Prices ($/bbl) 55 5 PROS OPEC & Non OPEC Supply Cut Healthy PMI data in US, Europe and China Expectation of high global GDP Protests in Venezuela Inventory levels 5,7 56,3 53,4 52,4 45 49,2 47,5 44,3 4 4,3 35 3 26, CONS Increase in number of rigs & production in US Concerns about the impact of OPEC & Non OPEC production cuts Supply is still in line with demand, inventory drawbacks has not stabilized yet Increase in Libya, Brazil, Nigeria & Canada prod. High crude exports of OPEC 25 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17
Refinery Capacity Change Thousand Barrels/Day Thousands 3. China India Middle East Other Asia Other Japan North America Europe 7 244 27 2. 1. -1. 1.8 1.6 1.4 52 53 16 334 81 3 526 25 15 64 156 417 51 4 181 Gross Capacity Additions 15 12 34 84 135 16 195-22 76 4 198 39 32 18 52-255 -145-24 -14-443 -13-143 15 364 63 35 65-543 -486-19 -266-775 -421-546 -2. -3. 1.2 1. 8 6 4 2 1.678 1.79 1.685 1.335 1.41 1.82 1.8 679 47 212 213 214 215 216 217 218 219 22-352 -189-57 -268 29 21 211 212 213 214 215 216 Source: Tüpraş, Reuters, Reports 5
Turkish Economy Strengths 84 82 8 Population (mn) 1.4% growth in last 5 yrs -4 yrs >65% 81 8 79 81 82 1 8 6 4 9,2 8,8 GDP Forecast (Million USD) 4,2 3, 22-214 4.9% 21-214 5.4% 4, 2,9 5, 78 2 2,1 76 216 217 218 219 22 21 211 212 213 214 215 216 217Q1 27 26 25 24 23 22 22 Diesel Consumption 3.5% 8.7% average growth in last 5 yrs 23 24 25 annual growth 26 25 2 15 1 127 Car ownership per thousand people 67% 134 176 213 21 5 2 Source: EMRA, TSI 216 217 218 219 22 214 215 22 23 6
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 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 7
Middle Distillate Cracks ($/bbl) Diesel 2 214 215 216 217 16 12 8 4 14,8 1,4 7,2 11,1 1, 7,8 8,6 11,2 7,3 1,6 1,4 12,4 13,3 7,6 1, Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec 2 Jet Fuel 16 12 8 15,1 9,5 1,1 8,9 1,2 9,5 1,1 11,7 12,6 9,1 4 6,6 7,6 7,7 6,7 8, Jan Feb Mar Apr May Jun Jul Agu* Sep Oct Nov Dec Kaynak: Platts *As of 1th Aug,217 8
Light Distillate Cracks ($/bbl) 24 Gasoline 214 215 216 217 18 12 6 18,6 13,5 9,8 14,1 12,2 15,9 13,7 13,4 12,8 14,3 15,3 15,7 11,9 Jan Feb Mar Apr May Jun Jul Agu* Sep Oct Nov Dec 4-4 -8-12 2,4 -,7 Naphta -,5-2,2-2, -3,2-3, -2,2-1,6-4, -7,3-7,9-7,3-11,7 Jan Feb Mar Apr May Jun Jul Agu* Sep Oct Nov Dec -2,2-1 -12,2-17,2-2 -3-4 -5-1,2-14,9-19,8-19,5-21,9-31, LPG -46, -2,5-15,8 Jan Feb Mar Apr May Jun July Agu* Sep Oct Nov Dec -4,7 Kaynak: Platts *As of 1th Aug,217 9
Quarterly Product Crack Margins ($/bbl) Diesel Jet Fuel 215 216 217 215 216 217 16 15,7 15,2 14,6 16 14,4 14 14 12 1 8 6 1,5 1,7 11,2 1,8 9,2 8,9 7,9 Q1 Q2 Q3 Q4 12 1 8 6 9,5 9,9 11,2 1,7 1,2 9,4 7,3 7,7 7,9 Q1 Q2 Q3 Q4 Gasoline Fuel Oil 215 216 217 215 216 217 2 18 16 14 12 1 13,3 15,2 13, 19,4 18,9 14,5 13,5 14,3 12,8 1,9 Q1 Q2 Q3 Q4-4 -6-8 -1-12 -14-16 Q1 Q2 Q3 Q4-7, -9,1-11,6-12, -13,2-15, -5,7-1,6-12,5-13,1 1
Crude Price Differentials ($/bbl) 1 Brent 212-217 Differental Range 215 216 217 Ural Differentials -1-2 -1,23-1,46-1,73-1,12 -,96-1,37-3 -4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Price Differentials Brent -4-8 -12 Ural Iran Light (KI) Iran Heavy (KI) Kirkuk Arab. Heavy 11
Turkish Consumption (Million tons) Diesel Jet Fuel 216 22,31 +8.5 % 216 4,4-4% 215 2,56 215 4,58 214 17,43 +15.8 % 214 4,1 +12 % 1 12 14 16 18 2 22 24 Gasoline, 1, 2, 3, 4, 5, Fuel Oil* 216 2,23 +6.5 % 216,58-3.5% 215 2,1 +9.1 % 215,6-14.6% 214 1,92 214,71 Source: EMRA *bunker excluded.,8 1, 1,2 1,4 1,6 1,8 2, 2,2,,2,4,6,8 12
5 Months 217 - Turkish Consumption (Million tons) Diesel Jet Fuel 217 8,91 217 1,6 +5.4% -7,5% 216 8,46 216 1,73,,5 1, 1,5 2,, 1,5 3, 4,5 6, 7,5 9, Gasoline Fuel Oil* 217,85 217,24 +2.1% -18.3% 216,84 216,29,,2,4,6,8 1,,,5,1,15,2,25,3,35 Source: EMRA *bunker excluded. 13
Turkey s Import / Export Balance (Net) (Million Ton) 211 212 213 214 215 216 4 2 Export 2,1 2,5 2,4 2,5 3, 2,8 1,5 1,6 1, 1,8 1,6,3-2 -4-3, -3, -3,1-3,1-3, -3,4-6 -8-1 -12-14 Import -1, -1,8-12, -12,3-12,7-13, LPG Gasoline Diesel Fuel 14
2 COMPANY OVERVIEW
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 Distribution Companies; 5.241; 42% Tüpraş; 7.228; 58% OPET Antalya Terminal OPET Mersin Terminal 19,392 m3 24, m3 Total Capacity: 28.1 mn. ton Nelson Complexity: 9.5 Tüpraş Storage Cap.: 7.2 mn. mᶟ OPET Storage Cap.: 1.1 mn. mᶟ 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 16
OPET Tüpraş Share 4.% 1.524 Stations Market positions: 18.9% in White product; 1.5% in black product 1.1 Million M3 Storage Marmara, Aegean, Black Sea & Mediterranean 2nd Biggest Distribution Company by Volume # 1 Brand Royalty Award Jet Fuel Sales Turkish Airlines JV 66% Market Share Lubricants Fuchs JV International Trading London 17
Million Tons DİTAŞ, Marine Transport Tüpraş Share 79.98% Cumhuriyet Sevgi Gönül Suna Leyla Esra & Aylin Caroline Nevbahar Crude 21 164,9 K DWT Products 28 1,98 K DWT Products 29 1,87 K DWT Products 212 51,5 K DWT Products 211 6,3 K DWT Bitumen 2x2 K DWT Esra 214 Aylin 215 Products 29 1,9 K DWT Products 29 11,5 K DWT Turkey s leading company in marine transportation of crude oil and petroleum products World s biggest Asphalt Tankers (2 x 2, DWT ) for semi-product transfers btwn refineries 13 tugboats 1 mooring boats 2 service boats 1 pilot boat DİTAŞ Financials 216 (mn $) Net Sales 151,3 Op. Profit 4,5 25 2 15 1 5 21,9 2,6 18, 3,1 19,3 14,8 Crude Oil Product 9,6 8,4 3,1 3,5 11,8 5,2 6,4 4,8 6,6 15,2 5,9 9,3 211 212 213 214 215 216 18
,59,6,3,3,, 1,43 2,39 2,26 3,11 3,24 2,57 2,58 2,8 5,47 6,98 9,25 11,54 Crude Suppliers of TÜPRAŞ (Million Tons) Crude Type - 216 52,% 6,3% In 216, Tüpraş purchased 18 different types of crude oil from 1 countries, with gravities ranging between 19-48 API 41,7% >34 3-34 3> 12 1 9,7 8 6 4 2 5,3 5,1 7,2,6 1,5 2, 2,1 1,9 2,9 2,8 2, 2,4 2,4 2,3 2,4 3,8 3,1 5,7 6,1 1,6 1,5 1,5 1,1,2,3,3,1,1,7 1,, 2,6,6,6,3 I RAN RUSSIA S.ARABIA TURKEY I RAQ K A Z A K STAN I TALY L İ BYA OTHER 211 212 213 214 215 216 19
J-8 A-8 J-8 O-8 J-9 A-9 J-9 O-9 J-1 A-1 J-1 O-1 J-11 A-11 J-11 O-11 J-12 A-12 J-12 O-12 J-13 A-13 J-13 O-13 J-14 A-14 J-14 O-14 J-15 A-15 J-15 O-15 J-16 A-16 J-16 O-16 J-17 A-17 J-17 Margin Environment ($/bbl) 9,5 Med Complex Month Annual 7,5 5,5 3,5 1,5 -,5 16 12 8 4 5,54 5,52 4,83 4,21 3,97 2,89 1,95 1,95 1,67 1,17 Tüpraş Gross Margin Tüpraş Net Margin Med Margin 12,7 11,9 11,2 1,6 9,6 8,2 6,47 6,3 5,41 4,83 3,97 3,21 2,45 1,67 1,95 Premium to the benchmark Mediterranean peers refining margin due to: 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 213 214 215 216 217H1 2
Production Capacity Utilisation* (%) Quarterly Production Volume (Mil. Tons) 12 1 8 6 4 2 69, 4,1 14, 12, 4,4 5,2 116,5 7,6 18,9 99,6 96,8 64,9 Crude Oil Other Total 1 8 6 4 2 7,1 6,6 5,6 7,8 6,9 6,7 Min / Max 27/215 215 216 217 7,3 7,4 7,2 7,4 214 Q2 215 Q2 216 Q2 217 Q2 1Q 2Q 3Q 4Q *Nameplate capacity calculated by standard 33 days of operations. 21
1st Half Product Yields 216 217 Coke 2% ASRFO+Vac 1% Other 6% Fuel Oil 1% Other 5,7% Bitumen 11% Black Prod. 23,4% Mid. Distil. 48,4% Light Distil. 22,5% Gasoline 21% Naphtha 1% Jet 17%,1-2,2 Coke 3% Other 6% ASRFO+Vac % Fuel Oil 9% Other 5,8% Bitumen 9% Black Prod. 21,2% Mid. Distil. 51,4% Light Distil. 21,6% Gasoline 21% -,9 Naphtha 1% Jet 16% ULSD 31% White Product %75,59 Production : 13,34 mn tons API: 3,99 % +3 ULSD 35% 3 White Product %77,64 Production : 14,88 mn tons API: 3,71 22
Tüpraş Sales (Million Tons) 7 6 5 4 3 2 1 Jet Fuel Bitümen Gasoline Diesel Domestic sales of selected products 5,44 5,42 4,64 4,15 4,34 3,89 2,62 2,94 2,75 3,29 3,52 2,8 2,86 2,23 1,83 2,27 2,33 1,66,6,64 1,73,55 1,48,52,57,54 1,8,45,46,63,91 1,16,92,79,39,43,23,27,43,44,29,42,76,86 1,,83,98 1,26 1,23 1,13 1,18 1,5 1,27,91 1,13 1,1 Q1 Q2 Q3 Q4 5,8 6,1 3,59 1,73,44,51 5,12 5,27 2,59 2,87,5,52,9,87 14 15 16 17 14 15 16 17 14 15 16 14 15 16 1 8 6 4 2 4,7 1,1 Domestic Export 5,6 1,7 3,6 3,9 6,9 7,2 1,8 2,3 5,1 5, 4,7,9 4,1 7,3 1,9 5,4 Total Sales 7,7 8,1 1,3 1,4 6,4 6,6 6,4 1,5 4,9 7,9 1,2 1,2 6,8 6,9 6,1 1,8 4,3 7,9 7,6 1,7 1,3 6,2 6,4 14 15 16 17 14 15 16 17 14 15 16 14 15 16 Q1 Q2 Q3 Q4 23
Investments (mn $) RUP Total Investment: $ 3,2 Billion Total Incentive: TL 3,78 Billion Remaining: TL 3,18 Billion Avg 278 mn $ 274 355 4 186 177 9.5 Nelson complexity High white product yield Process more heavier and sour crudes Run all refineries with 1% capacity utilization Avg 943 mn $ 628 974 1.213 26 27 28 29 21 211 212 213 214 215 216 217 H1 959 Avg. 279 mn $ 344 213 *125 46,6 Ongoing Projects New Power Plant Revamp of Crude Unit FCC Modernization New Sulphur Units Energy Saving Projects Optimization of conversion units 24
3 KEY FINANCIALS
21-1.955 212_R 213 214 Q1 214 1H 214 9M 214 215 Q1 215 Q2 215 9M 215 216 Q1 216 1H 216 9M 216 217Q1 217Q2,4,11,16,24,22,26,3 551,32,35 1.34 1.994 1.869 1.598 1.663 2.452 2.577 2.748 2.37 2.258 1.751 1.729 2.391 1.555 1.68,45,55 Financial Highlights (mn $) EBITDA Net Income 1.4 1. 6 2-2 1.397 422 41 415 1.125 938 817 285 75 629 667 271 594 715 48 47 91 16 56 431 5 175 268 256 89 45 338 294 361 39 435 315 171 226 237 427 25 273 153 197 78 75 95 79 15 15 114-27 -11 231 235 161 75 72 112 113 27 212 213 214 215 216 217 212 213 214 215 216 217 1. 858 64 Net Debt Return on Average Equity 3. 2.,6,5 1.,4,3-1. -2. -3.,2,1, 211 212 213 214 215 216 Q1 216 1H 216 9M 216 217Q1217Q2 26
Balance Sheet Analysis 3,22 3,1 3,28 3,4 2,46 1,74 1,7 1,59 1,36 1,23 1,69 1,98 2,2 2,62 2,19 3 2 1 1,72 1,69 1,3 Cash & Equivalents (Billion $) 1,64 1,68 1,21 1,4 1,4,82 1,64 1,59 2,45 2,2 1,72 1,58 1,6 1,2,8,4,,93,71,52,51 Receivables (Billion $),9,2,66 1,7,88,7 1,9 1,15,91,91,75 Financial Loans (Billion $) Payables (Billion $) 5 4 4 3 3 2 3,1,5 3,7 3,2 3,2 3,3 3,7 3,9 4, 4,2 3,6 3,6 3,4,9,3,3,3,4,5,6 1, 1,2 1,1 3,45 3,57 3,3,6,56,63 1,1 4 3 2 2 1 2,6 2,8 2,9 2,9 3, 3,3 3,1 3, 2,8 2,9 2,8 3,1 2,892,95 2,1 1 1 LT Loans ST Loans 27
Tüpraş Balance Sheet Million USD 3.6.217 31.12.216 Difference % Difference Current Assets 4.317 3.884 434 11 Cash & C. Equivalents 1.58 1.719-14 -8 Receivables 1.151 911 24 26 Derivatives 96 1 86 872 Inventories 1.194 1.25 169 16 Pre-paid expenses 33 28 6 2 Other Current Assets 264 19 73 39 Long Term Assets 4.983 4.987-4 Financial Assets & Subsidiaries 279 264 15 6 Fixed Assets 3.345 3.338 8 Derivatives 23 15-82 -78 Pre-paid expenses 92 68 24 35 Deferred Tax 944 917 27 3 Other Long Term Assets 3 296 4 1 Total Assets 9.3 8.871 43 5 Short Term Liabilities 4.534 3.597 937 26 Financial Loans 1.142 556 586 15 Payables 2.186 2.2 166 8 Derivatives 16 8 8 92 Deferred Incomes 1 4-3 -79 Provisions 37 18 18 98 Other ST Liabilities 1.152 99 162 16 Long Term Liabilities 2.182 2.953-771 -26 Financial Loans 2.117 2.892-775 -27 Payables & Provisions 62 59 3 6 Derivatives 1 1 35 Other LT Liabilities 2 2 Equity 2.558 2.298 26 11 Minority Interests 27 22 4 19 Total Liabilities 9.3 8.871 43 5 28
Dividend 12 Earnings per Share Gross Dividend Total Payout 1.628 Total Payout (Mn. TL) 1.8 1.557 1.6 1 One of the highest dividend yield in BIST 1,18 1.4 8 1.2 6 4 2 1,73 579 3,24 626 2,31 2,5 2,94 746 2,98 4,96 985 964 5,83 3,93 3,85 28 29 21 211 212 213 214 215 216 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. 212/213 EPS includes the tax incentive 29 4,78 396 1,58 6,5 7,16 6,22 1. 8 6 4 2
Creating Competitive & Sustainable Shareholder Value Foreign Currency Long Term Tüpraş BBB-(IG) Ba1 (Stab.) Turkey BB+ (stable) Ba1 (Neg.) BB Koç Holding Baa3- (IG) BBB (IG) Analyst Recommendations CORPORATE GOVERNANCE RATING O V ERALL 94,15 HOLD; 33% S H A R EHOLDERS T R A N S P A R ENCY S T A K EHOLDERS 95,51 92,55 97,66 BUY 67% B O A R D 92,8 Tüpraş has one of the highest Corporate Governance Ratings 3
FX Risk Exposure (3 June 217) Consolidated Assets Cash 541 Receivables & other assets 2 Stock 1.153 Forward & CFH 2,142 Million $ Consolidated Liabilities Payables 932 ST Financials 1.75 RUP 35 Eurobond 7 LT Financials: 1,797 RUP Loans: 1,111 Other credits 687 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. 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. Cash flow Hedge: RUP Facility financing loans designated as hedging instruments of highly probable export revenues. +34 million $ As a general Koç Holding financial policy, Group companies are allowed to keep foreign exchange positions within certain limits. 31
32 Future Expectations Brent Price Estimation Med Complex Margin Tüpraş Net Margin Capacity Utilisation Investment The average Brent price in 217 is expected to be 5-55 dollars per barrel. We expect Med Complex margins to be between 4.75-5.25 dollars per barrel band in 217. Net Tüpraş refinery margin is expected to be in the region of 7. 7.5 dollars per barrel Expectations for 217; Full Capacity Utilization Production: approximately 29.2 million tons Imports of finished products will be minimal, as we focus on selling increased volumes of production Total sales: 3.6 million tons Refining investments is expected to be 225 Million dollars. Additionally, 125 million dollars investment is planned for increasing the marine tanker fleet capacity.
Updated information can be found in the Investor Relations section of the company website www.tupras.com.tr DISCLAIMER Investor Relations and Reporting Department Tel. : 262 316 3269 Fax : 262 316 3 1-11 Güney Mah. Petrol Cad. No.25 PK.4179 Körfez-Kocaeli www.tupras.com.tr E-mail: info@tupras.com.tr 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. 33