INVESTOR PRESENTATION
CONTENTS 1 REFINING INDUSTRY 2 COMPANY OVERVIEW 3 KEY FINANCIALS 4 INVESTMENTS
1 Refining Industry
Brent Crude Oil Prices ($/bbl) 55 5 PROS OPEC & Non OPEC Supply Cut Healthy PMI data in US, Europe and China Expectation of high global GDP Protests in Venezuela Inventory levels 5,7 56,3 53,4 52,6 45 49,2 47,5 4 35 3 26, 4,3 CONS Increase in number of rigs & production in US Concerns about the impact of OPEC & Non OPEC production cuts Supply is still in line with demand, inventory drawbacks has not stabilised yet Increase in Libya, Brazil, Nigeria & Canada prod. High crude exports of OPEC 25 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 4
Thousand Barrels/Day Thousands Refinery Capacity Change 3. China India Middle East Other Asia Other Japan North America Europe 7 244 27 2. 1. -1. 1.8 1.6 1.4 52 53 16 334 81 3 526 25 15 64 156 417 51 4 181 Gross Capacity Additions 15 12 34 84 135 16 195-22 76 4 198 39 32 18 52-255 -145-24 -14-443 -13-143 15 364 63 35 65-543 -486-19 -266-775 -421-546 -2. -3. 1.2 1. 8 6 4 2 1.678 1.79 1.685 1.335 1.41 1.82 1.8 679 47 212 213 214 215 216 217 218 219 22-352 -189-57 -268 29 21 211 212 213 214 215 216 Source: Tüpraş, Reuters, Reports 5
Turkish Economy Strengths 84 82 8 Population (mn) 1.4% growth in last 5 yrs -4 yrs >65% 81 8 79 81 82 1 8 6 4 9,2 8,8 GDP Forecast (Million USD) 4,2 3, 22-214 4.9% 21-214 5.4% 4, 2,9 3,5 78 2 2,1 2,5 76 216 217 218 219 22 21 211 212 213 214 215 216 217ACT 27 26 25 24 23 22 22 Diesel Consumption 3.5% 8.7% average growth in last 5 yrs 23 24 25 annual growth 26 25 2 15 1 127 Car ownership per thousand people 67% 134 176 213 21 5 2 216 217 218 219 22 214 215 22 23 Source: EMRA, TSI 6
Competitive Advantages of Tüpraş Added Value Created by Tüpraş Local Market Dynamics Cost Base of Tüpraş Best Fit for the Market with high diesel yield High Growth Energy Efficient High Complexity of Tüpraş Short on Diesel Crude Oil & Feedstock Cost Advantage Presence in all over Turkey through refineries and terminals Import Parity Pricing (Freight advantage of Tüpraş) Economies of Scale 7
Middle Distilatte Cracks ($/bbl) Diesel 2 214 215 216 217 16 12 8 4 1,4 11,1 1, 7,8 8,6 7,2 11,2 7,3 1,6 7,6 1, Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec 2 Jet Fuel 16 12 8 4 9,5 1,1 8,9 7,6 7,7 6,6 1,2 9,5 6,7 8, 9,1 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec Kaynak: Platts *As of 24th May,217 8
Light Distilatte Cracks ($/bbl) 24 Gasoline 214 215 216 217 18 12 18,6 13,5 14,1 12,2 15,9 13,6 12,8 15,7 11,9 6 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec 4-4 -8-12 2,4 -,7 -,5-2,9-2,2-2, Naphta -4, -7,3-7,9-7,3-11,7 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec -2,2-1 -12,2-17,2-2 -1,2-19,5-19,7 LPG -21,9-31, -3-4 -46, -5 Jan Feb Mar Apr May Jun July Agu Sep Oct Nov Dec -4,7 Kaynak: Platts *As of 24th May,217 9
Quarterly Product Crack Margins ($/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 11,2 1,8 9,2 8,9 7,9 Q1 Q2 Q3 Q4 12 1 8 6 9,5 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 19,4 18,9 15,2 13,5 14,5 13, 12,8 1,9 Q1 Q2 Q3 Q4-4 -6-8 -1-12 -14-16 -9,1 Q1 Q2 Q3 Q4-11,6-12, -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 -1-1,2-1,5-1,1-1,4-2 -1,7-3 -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 *As of 24th May,217 11
Turkish Consumption (Million tons) Diesel Jet Fuel 216 22,31 216 4,4 +8.5 % -4% 215 2,56 215 4,58 214 17,43 +15.8 % 214 4,1 +12 % 1 12 14 16 18 2 22 24, 1, 2, 3, 4, 5, Gasoline Fuel Oil* 216 2,23 216,58 215 2,1 +6.5 % 215,6-3.5% +9.1 % -18.5% 214 1,92 214,54 Source: EMRA *bunker excluded.,8 1, 1,2 1,4 1,6 1,8 2, 2,2,1,2,3,4,5,6 12
3 Months 217 - Turkish Consumption (Million tons) Diesel Jet Fuel 217 4,94 217,83 +5.5 % -1.2% 216 4,69 216,93 1, 2, 3, 4, 5, 6,,,2,4,6,8 1, Gasoline Fuel Oil* 217,48 217,19 +2.1% -1.8% 216,47 216,21 Source: EMRA *bunker excluded.,1,15,2,25,3,35,4,45,5,,5,1,15,2,25 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 Black Sea Baku OPET Marmara Terminal 721, m3 İstanbul MARMARA İzmit OPET Giresun Terminal 43,13 m3 Ankara Kırıkkale İzmir Batman 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 Terminal Kirkuk Refinery İzmit İzmir Kırıkkale Batman 11. MT Capacity 11. MT Capacity 5. MT Capacity 1.1 MT Capacity NC: 14.5 NC: 7.66 NC: 6.32 NC: 1.83 Storage Capacity: 3. mn m 3 Storage Capacity:2.5 mn m 3 Storage Capacity: 1.4 mn m 3 Storage Capacity:.25 mn m 3 Base oil 4 k tons 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 $) Net Sales 151,3 Op. Profit 4,5 25 2 15 1 5 21,9 2,6 18, 3,1 19,3 14,8 Crude Oil Product 9,6 8,4 3,1 3,5 11,8 5,2 6,4 4,8 6,6 15,2 5,9 9,3 211 212 213 214 215 216 18
,59,6,3,3,, 1,43 2,39 2,26 3,11 3,24 2,57 2,58 2,8 5,47 6,98 9,25 11,54 Crude Suppliers of TÜPRAŞ (Million Tons) Crude Type - 216 52,% 6,3% In 216, Tüpraş purchased 18 different types of crude oil from 1 countries, with gravities ranging between 19-48 API 41,7% >34 3-34 3> 12 1 9,7 8 6 4 2 5,3 5,1 7,2,6 1,5 2, 2,1 1,9 2,9 2,8 2, 2,4 2,4 2,3 2,4 3,8 3,1 5,7 6,1 1,6 1,5 1,5 1,1,2,3,3,1,1,7 1,, 2,6,6,6,3 I RAN RUSSIA S.ARABIA TURKEY I RAQ K A Z A K STAN I TALY L İ BYA OTHER 211 212 213 214 215 216 19
J-8 A-8 J-8 O-8 J-9 A-9 J-9 O-9 J-1 A-1 J-1 O-1 J-11 A-11 J-11 O-11 J-12 A-12 J-12 O-12 J-13 A-13 J-13 O-13 J-14 A-14 J-14 O-14 J-15 A-15 J-15 O-15 J-16 A-16 J-16 O-16 J-17 A-17 Margin Environment ($/bbl) 9,5 Med Complex Month Annual 7,5 5,5 3,5 1,5 -,5 16 12 8 4 5,54 4,83 5,13 4,21 3,97 2,89 1,95 1,95 1,67 1,17 Tüpraş Gross Margin Tüpraş Net Margin Med Margin 13,26 11,86 11,22 1,55 9,62 8,65 6,47 6,3 4,83 5,1 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 217Q1 2
65,1 8,7 94,5 99,9 Production Capacity Utilisation* (%) Quarterly Production Volume (Mn Tons) 12 1 85,9 99,7 5,2 +6.7% 16,4 6,5 8 6 7,1 6,6 5,6 6,9 6,7 7,3 7,4 7,2 7,4 8 5,2 4 68, 2,9 Min / Max 27/215 6 2 215 Crude Oil Other 216 217 4 214 Q1 215 Q1 216 Q1 217 Q1 Q1 Q2 Q3 Q4 *Nameplate capacity calculated by standard 33 days of operations. 21
1st Quarter Product Yields 216 217 ASRFO+Vac 2% Bitumen 9% Gasoline 22% -5,2 Fuel Oil 12% ASRFO+Vac 1% Bitumen 5% Gasoline 21% -,4 Coke 2% Fuel Oil 13% Other 6% Other 6,1% Black Prod. 26,1% Light Distil. 22,4% Mid. Distil. 45,4% Naphtha 1% Jet 15% -,7 Coke 3% Other 5% Other 5,4% Black Prod. 2,9% Mid. Distil. 51,7% Light Distil. 22,% Naphtha 1% Jet 16% ULSD 3% White Product 72,94% Production : 6,6 mn tons API: 31,14 % +5, ULSD 36% White Product 77,97% Production : 7,1 mn tons API: 31,8 +6,3 22
Tüpraş Sales (Million Tons) 7 6 5 4 3 2 1 1 8 6 4 2 Jet Fuel Bitümen Gasoline Domestic sales of selected products Diesel 4,6 4,1 4,3 3,9 2,62 2,94 2,75 3,3 3,5 2,23 2,9 1,83 2,27 2,33 1,66,6,64 1,73,55 1,48,52,54 1,8,45,63,91 1,16,46,79,39,43,43,44,23,27,42,29,76,86 1,,83,98 1,26 1,23 1,18 1,5 1,27 5,4 5,8 6, 3,6 1,73,44,51 5,1 5,3 2,59 2,87,5,52,9,87,91 1,13 1,1 14 15 16 17 14 15 16 14 15 16 14 15 16 4,7 1,1 Domestic Export 5,6 1,7 3,6 3,9 Q1 Q2 Q3 Q4 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 1,3 6,4 6,4 1,5 4,9 7,9 8,1 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 14 15 16 14 15 16 Q1 Q2 Q3 Q4 23
Investments (mn $) RUP Total Investment: 3,1 Billion $ Total Incentive: 3,78 Billion TL Remaining : 3,18 Billion TL 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 Q1 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
Financial Highlights (mn $) -1.955 551 1.34 1.994 1.869 1.598 1.663 2.452 2.577 2.748 2.37 2.258 2.391 1.751 1.729 1.555,3,32,24,26,35,4,11,16,22,45 1.4 1. 6 2-2 715 16 361 56 89 EBITDA 338 41 294 315 415 226 237 153 78 95 79 15 15 114-27 -11 1.397 422 1.125 48 427 212 213 214 215 216 217 Net Debt / EBITDA,77 2,39 4,92 1,7 1,54 1,8 Net Debt 1. 75 5 25 938 817 271 39 75 161 Net Income 629 667 285 47 91 175 268 594 256 435 171 273 197 75 231 72 112 113 27 235 212 213 214 215 216 217 Return on Average Equity 3.,5 2.,4 1.,3-1.,2-2. -3.,1, 211 212 213 214 215 216 Q1 216 1H 216 9M 216 217Q1 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 Cash & Equivalents (Billion $) 3 2,45 2,2 2 1,72 1,69 1,64 1,68 1,72 1,64 1,59 1,3 1,21 1,4 1,4 1,82 1,2,8,4, Receivables (Billion $) 1,7 1,9,93,88,91,91,71,75,66,7,52,51,2,9 5 4 3 3,1,5 Financial Loans (Billion $) LT Loans ST Loans 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 3,57,6,56,63 4 3 2 Payables (Billion $) 2 1 2,6 2,8 2,9 2,9 3, 3,3 3,1 3, 2,8 2,9 2,8 3,1 2,89 2,95 1 27
Tüpraş Balance Sheet Million USD 31.3.217 31.12.216 Diff. % Diff. Current Assets 4.529 3.884 645 17 Cash & Equivalents 2.17 1.719 298 17 Receivables 1.88 911 177 19 Derivatives 1 1 5 Inventories 1.29 1.25 184 18 Pre-paid expenses 19 28-9 -33 Other Current Assets 186 19-4 -2 Long Term Assets 4.827 4.987-16 -3 Financial Assets & Subsidiaries 252 264-12 -4 Fixed Assets 3.224 3.338-113 -3 Derivatives 19 15 4 4 Pre-paid expenses 77 68 9 14 Deferred Tax 874 917-43 -5 Other Long Term Assets 29 296-6 -2 Total Assets 9.356 8.871 485 5 Short Term Liabilities 4.315 3.597 718 2 Financial Loans 626 556 69 12 Payables 2.619 2.2 599 3 Derivatives 12 8 3 39 Deferred Incomes 1 4-3 -79 Provisions 31 18 13 7 Other ST Liabilities 1.27 99 37 4 Long Term Liabilities 3.4 2.953 51 2 Financial Loans 2.946 2.892 54 2 Payables & Provisions 56 59-3 -5 Derivatives 1 1 32 Other LT Liabilities 2 2 1 Equity 2.13 2.298-285 -12 Minority Interests 23 22 1 4 Total Liabilities 9.356 8.871 485 5 28
Dividends (TRY) 12 1 Earnings per Share Gross Dividend Total Payout One of the highest dividend yield in BIST The policy is to distribute all the net distributable profit for the period 1,18 1.628 Total Payout (Mn. TL) 1.8 1.557 1.6 1.4 8 1.2 6 4 2 985 964 7,16 6,5 6,22 746 5,83 626 579 4,96 4,78 3,93 3,85 3,24 2,94 2,98 396 2,31 2,5 1,73 1,58 28 29 21 211 212 213 214 215 216 1. 8 6 4 2 212/213 EPS includes the tax incentive 29
Creating Competitive & Sustainable Shareholder Value Foreign Currency Long Term Tüpraş BBB- (IG) Ba1 Turkey BBB-(IG) Ba1 (-) 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 (31 March 217) Consolidated Assets Consolidated Liabilities Million $ Cash 1.242 Receivables & other assets 26 Stock 1.166 Forward & CFH 1,636 Payables 957 ST Financials 522 RUP 296 LT Financials: 2,61 RUP Loans: 1,26 Eurobond: 7 Other credits 651-2 million $ *Cash flow hedge(cfh) accounting : 1,43 mn $ 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 55 dollars per barrel. We expect Med Complex margins to be between 4. 4.5 dollars per barrel band in 217. Net Tüpraş refinery margin is expected to be in the region of 5.75 6.25 dollars per barrel Expectations for 217; Full Capacity Utilization Production: ~ 29.2 million tons Total sales: 3.6 million tons Imports of finished products will be minimal, as we focus on selling increased volumes of production Refining CAPEX is expected to be 225 Million dollars. Additionally, 125 million dollar 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.