INVESTOR PRESENTATION November, 217
CONTENTS 1 REFINING INDUSTRY 2 COMPANY OVERVIEW 3 KEY FINANCIALS 4 INVESTMENTS
1 REFINING INDUSTRY
Brent Crude Oil Prices ($/bbl) 65 6 55 PROS OPEC & Non OPEC Supply Cut Political Instabilities Healthy PMI data in US and Europe Expectation of high global GDP Inventory levels 56,3 53,4 64, 62,6 59,3 52,4 55,3 5 5,7 45 49,2 47,5 44,3 4 35 3 26, 4,3 25 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Source: Platts *As of November 22th, 217 CONS Increase in number of rigs & production in US Concerns about the impact of OPEC & Non OPEC production cuts Increase in Libya, Brazil, Nigeria & Canada prod. High crude exports of OPEC 4
Refinery Capacity Change Thousand Barrels/Day Thousands 3. China India Middle East Other Asia Other Japan 7 244 27 North America Europe 2. 1. -1. 1.8 1.6 1.4 52 53 16 334 81 3 526 25 15 64 156 417 51 4 181 Gross Capacity Additions 15 12 34 84 135 16 195-22 76 4 198 39 32 18 52-255 -145-24 -14-443 -13-143 15 364 63 35 65-543 -486-19 -266-775 -421-546 -2. -3. 1.2 1. 8 6 4 2 1.678 1.79 1.685 1.335 1.41 1.82 1.8 679 47 212 213 214 215 216 217 218 219 22-352 -189-57 -268 29 21 211 212 213 214 215 216 Source: Tüpraş, Reuters, Reports 5
Turkish Economy Strengths 84 82 8 Population (mn) 1.4% growth in last 5 yrs -4 yrs >65% 81 8 79 81 82 1 8 6 4 9,2 8,8 4,2 GDP (%) 3, 4, 22-214 4.9% 21-214 5.4% 2,9 5, 5,1 78 2 2,1 76 216 217 218 219 22 21 211 212 213 214 215 216 217Q1 217Q2 27 26 25 24 23 22 22 Diesel Consumption 3.5% 8.7% average growth in last 5 yrs 23 24 25 annual growth 26 25 2 15 1 127 Car ownership per thousand people 67% 134 176 213 21 5 2 Source: EMRA, TSI 216 217 218 219 22 214 215 22 23 6
Competitive Advantages of Tüpraş Added Value Created by Tüpraş Local Market Dynamics Cost Base of Tüpraş Best Fit for the Market with high diesel yield High Growth Energy Efficient High Complexity of Tüpraş Short on Diesel Crude Oil & Feedstock Cost Advantage Presence in all over Turkey through refineries and terminals Import Parity Pricing (Freight advantage of Tüpraş) Economies of Scale 7
Middle Distillate Cracks ($/bbl) Diesel 2 214 215 216 217 16 12 8 4 15,1 14,8 1,4 7,2 11,1 1, 7,8 8,6 11,2 7,3 1,6 1,4 12,4 12,9 9,7 8,9 8,7 14,1 9,4 13,5 12,5 14,5 12, 11,5 1, 7,6 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov* Dec 2 Jet Fuel 16 12 8 4 13,3 15,1 9,5 1,1 8,9 7,6 6,6 7,7 1,2 9,5 1,1 7,7 6,7 9,1 11,7 12,7 12,6 12,8 11,7 14,8 1,5 1,9 9,1 8,2 7,6 8,1 8, Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov* Dec Source: Platts *As of November 22th, 217 8
Light Distillate Cracks ($/bbl) 24 Gasoline 214 215 216 217 18 12 6 18,6 13,5 9,8 15,9 14,1 13,7 13,4 12,2 11,7 12,8 14,3 9,1 15,9 14,8 11,4 13,4 11,7 11,7 15,7 11,9 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov* Dec 4-4 -8-12 2,4 Naphta -,7-2,2 -,5-3,2-3, -2,2-2, -1,2 -,7,3-1,3-4, -7,3-7,9-7,3-11,7 Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov* Dec -2,2-1 -12,2-17,2-2 -3-4 -5-1,2-19,5-14,9-19,8-21,9-31, LPG -46, -2,5-15,4-13,8-1,9-15,4 Jan Feb Mar Apr May Jun July Agu Sep Oct Nov* Dec -4,7 Source: Platts *As of November 22th, 217 9
Quarterly Product Crack Margins ($/bbl) 16 14 12 1 Diesel 215 216 217 15,7 15,2 14,6 13,1 1,5 1,7 11,2 1,8 16 14 12 1 14,4 11,2 9,5 9,9 Jet Fuel 215 216 217 12,4 1,7 1,2 8 6 9,2 8,9 7,9 Q1 Q2 Q3 Q4 8 6 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 15,2 13,3 13, 19,4 18,9 14,5 14,3 15, 13,5 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, -7, -6,9-5,7-1,6-12,5-13,1 Source: Platts 1
Crude Price Differentials (USD/bbl) Ural Differentials 1 212-217 Differental Range 215 216 217-1 -2 Brent -1,23-1,46-1,73-1,12-1,37 -,96 -,67 -,28-1,11 -,63 -,44-3 -4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov* Dec Price Differentials Ural Iran Heavy Kirkuk Kuwait Basra Heavy Arab Heavy Brent -4-8 -12 Source: Platts *As of November 22th, 217 11
Turkish Consumption (Million tons) 214-216 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
8 Months 217 - Turkish Consumption (Million tons) Diesel Jet Fuel 217 15,67 217 3,1 +8.4% +2.5% 216 14,46 216 2,94 4 8 12 16,,5 1, 1,5 2, 2,5 3, 3,5 Gasoline Fuel Oil* 217 1,55 217,31 +4.3% -15.9% 216 1,49 216,37,,4,8 1,2 1,6,,1,2,3,4 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 OPET Giresun Terminal 43,13 m3 Turkey Storage Capacity İzmir Ankara Kırıkkale Batman Tüpraş 7.2, 58% OPET 1.1, 9% Other Companies 4.1, 33% 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.% 1.553 Stations Market positions: 17.9% in White product; 16.6% 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% Semahat Sadberk Cumhuriyet Leyla Esra & Aylin Caroline Nevbahar Gönül&Sevgi Suna Crude 217 157,5 K DWT Crude 217 157,5 K DWT Crude 21 164,9 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 Products Sevgi 28 Gönül 29 2x11 K DWT Products 212 51,5 K DWT 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 semiproducts. 13 tugboats 1 mooring boats 2 service boats 1 pilot boat DİTAŞ Financials 216 (mn $) Net Sales 151,3 Op. Profit 4,5 25 2 15 1 5 21,9 2,6 18, 3,1 19,3 14,8 Crude Oil Product 9,6 8,4 3,1 3,5 11,8 5,2 6,4 4,8 6,6 15,2 5,9 9,3 211 212 213 214 215 216 18
,59,6,3,3,, 1,43 2,39 2,26 3,11 3,24 2,57 2,58 2,8 5,47 6,98 9,25 11,54 Crude Suppliers of TÜPRAŞ (Million Tons) Crude Type - 216 52,% 6,3% In 216, Tüpraş purchased 18 different types of crude oil from 1 countries, with gravities ranging between 19-48 API 41,7% >34 3-34 3> 12 1 9,7 8 6 4 2 5,3 5,1 7,2,6 1,5 2, 2,1 1,9 2,9 2,8 2, 2,4 2,4 2,3 2,4 3,8 3,1 5,7 6,1 1,6 1,5 1,5 1,1,2,3,3,1,1,7 1,, 2,6,6,6,3 I RAN RUSSIA S.ARABIA TURKEY I RAQ K A Z A K STAN I TALY L İ BYA OTHER 211 212 213 214 215 216 19
J-8 M-8 M-8 J-8 S-8 N-8 J-9 M-9 M-9 J-9 S-9 N-9 J-1 M-1 M-1 J-1 S-1 N-1 J-11 M-11 M-11 J-11 S-11 N-11 J-12 M-12 M-12 J-12 S-12 N-12 J-13 M-13 M-13 J-13 S-13 N-13 J-14 M-14 M-14 J-14 S-14 N-14 J-15 M-15 M-15 J-15 S-15 N-15 J-16 M-16 M-16 J-16 S-16 N-16 J-17 M-17 M-17 J-17 S-17 Margin Environment ($/bbl) 9,5 Med Complex Month Annual 7,5 5,5 3,5 1,5 -,5 16 12 8 4 5,54 5,7 4,83 4,21 3,97 2,89 1,95 1,95 1,67 1,17 Tüpraş Gross Margin Tüpraş Net Margin Med Margin 13, 11,9 11,2 1,6 9,6 8,5 6,47 6,3 5,8 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 213 214 215 216 217 9M 2
Production 12 1 8 6 4 2 8,7 4,3 Capacity Utilisation* (%) 11,3 19, 4,6 4,3 114,8 7,6 15,7 14,7 17,2 76,4 Crude Oil Other Total 214 Q3 215 Q3 216 Q3 217 Q3 8 7 6 5 4 Quarterly Production Volume (Mil. Tons) 7,1 6,6 5,6 4,5 214 215 216 217 7,8 6,9 6,7 4,6 7,7 7,3 7,2 5,4 7,4 7,4 5,5 Q1 Q2 Q3 Q4 MAINTENANCE SHUTDOWN Izmir Refinery Crude Unit (Capacity: 6,5 mtons/year) The maintenance shutdown in Q4 is expected to be completed in January 218. The effect of this maintenance shutdown has been included in our year-end estimations. *Nameplate capacity calculated by standard 33 days of operations. 21
9M Product Yields 216 217 Coke 2% ASRFO+Vac 1% Other 6% Fuel Oil 8% Other 5,5% Bitumen 12% Black Prod. 22,7% Light Distil. 22,2% Gasoline 21% Naphtha 1%, ASRFO+Vac % Bitumen 11% -,8 -,8 Coke 3% Other 6% Fuel Oil 8% Other 5,6% Black Prod. 21,9% Light Distil. 21,3% Gasoline 2% Naphtha 1% Mid. Distil. 49,5% Jet 17% Mid. Distil. 51,2% Jet 17% ULSD 32% White Product %76,2 Production : 2,32 mn tons API: 3,81 % +1 ULSD 34% 1,7 White Product %76,98 Production : 22,43 mn tons API: 3,32 22
Tüpraş Sales (Million Tons) 8 6 4 2 1 8 6 4 2 Jet Fuel Bitumen Gasoline Diesel Domestic sales of selected products 5,8 6, 5,4 5,4 4,6 3,2 4,1 4,3 3,9 2,6 2,9 3,3 3,5 2,8 2,8 2,9 2,2 1,8 2,3,6,7 2,3,6 1,7 1,7,5,6 1,5,6,5 1,1 1,3,5,5,6,9,9 1,2,8,4,4,2,3,4,4,3,4,8,9 1,,8 1, 1,3 1,2 1,1 1,2 1,5 1,3 1,5 6,7 3,6 5,1 5,3 2,6 2,9 1,7,5,5,4,9,9,5,9 1,1 1, 14 15 16 17 14 15 16 17 14 15 16 17 14 15 16 4,7 1,1 Domestic 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 7,7 Total Sales Export 8,9 1,3 8,1 1,4 6,4 6,6 6,4 1,5 4,9 7,9 8,1 1,2 1,2 6,8 6,9 1,2 7,7 6,1 1,8 4,3 All Time High Domestic Sales 7,9 7,6 1,7 1,3 6,2 6,4 14 15 16 17 14 15 16 17 14 15 16 17 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 1.213 959 Avg. 279 mn $ 344 213 *125 124 Ongoing Projects New Power Plant Revamp of Crude Unit FCC Modernization New Sulphur Units Energy Saving Projects Optimization of conversion units 26 27 28 29 21 211 212 213 214 215 216 217 9M 24
3 KEY FINANCIALS
,4,11,16 1.24,24,3,26,22,32,35,45,55,49 Financial Highlights (mn $) 1.75 1.45 1.15 85 55 25-5 3. 2.5 2. 1.5 1. 5,8 551 715 16 361 153 56 89 EBITDA 1st Q 2nd Q 3rd Q 4th Q Total 338 315 226 78-27 -11 1.397 422 41 415 1.125 48 294 237 95 79 15 15 114 1.292 435 431 427 212 213 214 215 216 217 Net Debt 2,4 3,5 3,6 1.869 1.34 4,9 1.598 1.663 2.748 2.577 2.37 2.391 2,8 3,3 Net Debt/*R. EBITDA 1,7 2, 1,6 1.751 1.7291.555 1.68 1,5 1,1 5 4 3 2 1 1,,7 1.2 95 7 45 2-5,6,5,4,3,2,1, Net Income 1st Q 2nd Q 3rd Q 4th Q Total 938 817 629 667 285 271 47 91 175 268 39 435 171 273 75 161 75 231 72 112 594 256 197 113 27 923 283 45 235 212 213 214 215 216 217 Return on Average Equity For P&L, USD/TL rates: 216 Q3 2,96; 9M 2,93; 12M 3,2 and 217 Q3 3,51; 9M 3,59. For Balance Sheet, USD/TL rates: 216 Q3 3,; 9M 216: 3,; 12M 216: 3,52 and 217 Q3 3,55; 9M 3,55 USD/TL Net Debt/Rolling EBITDA was calculated with USD figures. 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 2,71 3 2 1 1,721,69 1,3 Cash & Equivalents (Billion $) 1,641,68 1,21 1,4 1,4,82 1,641,59 2,45 2,2 1,72 1,58 2,19 2, 1,6 1,2,8,4,,93,71,52,51 Receivables (Billion $),9,2 1,7 1,9 1,15,88,91,91,66,7,75 1,57 Financial Loans (Billion $) Payables (Billion $) 5 4 4 3 3 2 3,1,5 3,7 3,9 4, 4,2 3,45 3,57 3,3 3,4 3,2 3,2 3,3 3,7 3,6 3,6 3,4,9,3,3,3,4,5,6 1, 1,2 1,1,6,56,63 1,1 1,3 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 2,1 1 1 LT Loans ST Loans For P&L, USD/TL rates: 216 Q3 2,96; 9M 2,93; 12M 3,2 and 217 Q3 3,51; 9M 3,59. For Balance Sheet, USD/TL rates: 216 Q3 3,; 9M 216: 3,; 12M 216: 3,52 and 217 Q3 3,55; 9M 3,55 USD/TL 27
Tüpraş Balance Sheet Million USD 3.9.27 31.12.216 Diff. % Diff. Current Assets 5.522 3.884 1.638 42 Cash & C. Equivalents 2.185 1.719 466 27 Receivables 1.568 911 657 72 Derivatives 9 1 8 812 Inventories 1.255 1.25 229 22 Pre-paid expenses 29 28 1 4 Other Current Assets 395 19 24 17 Long Term Assets 4.985 4.987-2 Financial Assets & Subsidiaries 294 264 31 12 Fixed Assets 3.377 3.338 4 1 Derivatives 23 15-82 -78 Pre-paid expenses 66 68-1 -2 Deferred Tax 93 917 13 1 Other Long Term Assets 294 296-3 -1 Total Assets 1.57 8.871 1.636 18 Short Term Liabilities 5.486 3.597 1.889 52 Financial Loans 1.34 556 747 134 Payables 2.79 2.2 689 34 Derivatives 98 8 89 169 Deferred Incomes 2 4-2 -57 Provisions 46 18 27 149 Other ST Liabilities 1.328 99 338 34 Long Term Liabilities 2.184 2.953-768 -26 Financial Loans 2.122 2.892-77 -27 Payables & Provisions 6 59 1 2 Derivatives 1 1 37 Other LT Liabilities 1 2-8 Equity 2.88 2.298 51 22 Minority Interests 28 22 6 26 Total Liabilities 1.57 8.871 1.636 18 For P&L, USD/TL rates: 216 Q3 2,96; 9M 2,93; 12M 3,2 and 217 Q3 3,51; 9M 3,59. For Balance Sheet, USD/TL rates: 216 Q3 3,; 9M 216: 3,; 12M 216: 3,52 and 217 Q3 3,55; 9M 3,55 USD/TL 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 (Pos.) Turkey BB+ (stable) Ba1 (Neg.) BB Koç Holding Baa3- (IG) BBB (IG) Analyst Recommendations CORPORATE GOVERNANCE RATING O V ERALL 94,67 HOLD; 33% S H A R EHOLDERS T R A N S P A R ENCY S T A K EHOLDERS 95,51 94, 98,59 BUY 67% B O A R D 92,86 Tüpraş has one of the highest Corporate Governance Ratings 3
FX Risk Exposure (3 Sept. 217) Consolidated Assets Cash 96 Receivables & other assets 24 Stock 1,211 Forward & CFH 2,459 *Cash flow hedge accounting : 1,212 mn $ Million $ -113 million $ Consolidated Liabilities Payables 1,688 ST Financials 1.144 RUP 296 Eurobond 7 LT Financials: 1,935 RUP Loans: 1,111 Other credits 825 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. As a general Koç Holding financial policy, Group companies are allowed to keep foreign exchange positions within certain limits. 31
Future Expectations Brent Price Estimation Med Complex Margin Tüpraş Net Margin Operations Investment The average Brent price in 217 is expected to be 5-55 dollars per barrel. We expect Med Complex margins to be between 5,25-5,75 dollars per barrel band in 217. Net Tüpraş refinery margin is expected to be in the region of 7,5-8, dollars per barrel Expectations for 217; Full Capacity Utilization on average even after taking Izmir Maintenance shut down into consideration 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 around 2 Million dollars. Additionally, around 125 million dollars investment is planned for increasing the marine tanker fleet capacity. 32
4 INVESTMENTS
14'Q1 14'Q2 14'Q3 14'Q4 15'Q1 15'Q2 15'Q3 15'Q4 16'Q1 16'Q2 16'Q3 16'Q4 17'Q1 17'Q2 17'Q3 217 Expectations vs 9 Months Results 6 55 5 45 54,7 55,1 51,6 Brent Price ($/bbl) 56, 57,4 52,5 51,6 5,4 48,6 46,5 16 12 8 4 74,9 Capacity Utilization (%) 12,5 15,3 112,6 114,8 12 8 4 4 J-17 F-17 M-17 A-17 M-17 J-17 J-17 A-17 S-17 O-17 N-17 D-17 The average Brent in 217 is expected to be in 5-55 $/bbl In 1M, the average was 52.4 $/bbl Expected Capacity Utilization in 217 - above 1 % In 9M, 112.6% capacity utilization was achieved. Tupras Net Refinery Margin Med Margin Mil. $ 4 Tüpraş Ditaş 1 9 8 7 6 5 4 3 2 1 8,7 8,2 5, 8,9 5,4 6,5 17 Q1 17 Q2 17 Q3 17 Q4 3 2 1 197.7 344 73,5 213 124,3 215 216 217 9M Net Tüpraş refinery margin for 9M: 8,5 $/bbl (Target is 7,5-8, $/bbl) Planned Tüpraş investments for 217-2 Million dollars 34
Q3 Product Yields 216 217 Bitumen 14% Gasoline 21% ASRFO+Vac % Bitumen 15% Gasoline 19% Coke 3% Other 5% Fuel Oil 5% Other 5,4% Black Prod. 2,7% Light Distil. 22,5% Naphtha % Fuel Oil 5% Coke 3% Other 5% Other 5,1% Black Prod. 23,2% Light Distil. 2,8% Naphtha 2% Mid. Distil. 51,4% Jet 18% Mid. Distil. 5,8% Jet 19% ULSD 34% ULSD 32% White Product %77,32 Production : 7,2 mn tons API: 3,48 % -2 White Product %75,7 Production : 7,6 mn tons API: 29,57 35
9M Product Yields 216 217 Coke 2% ASRFO+Vac 1% Other 6% Fuel Oil 8% Other 5,5% Bitumen 12% Black Prod. 22,7% Light Distil. 22,2% Gasoline 21% Naphtha 1%, ASRFO+Vac % Bitumen 11% -,8 -,8 Coke 3% Other 6% Fuel Oil 8% Other 5,6% Black Prod. 21,9% Light Distil. 21,3% Gasoline 2% Naphtha 1% Mid. Distil. 49,5% Jet 17% Mid. Distil. 51,2% Jet 17% ULSD 32% White Product %76,2 Production : 2,32 mn tons API: 3,81 % +1 ULSD 34% 1,7 White Product %76,98 Production : 22,43 mn tons API: 3,32 36
Sales By Customer (216) Customer Groups Sales to Distributors Total: 3.3 mn tons Distributors: 15.2 mn tons 37
Income Statement (In USD) Q3 Q3 216 217 % Diff. Million USD 216 9M 217 9M % Diff. 3.199 4.68 27 Net Sales 8.215 1.946 33 311 458 47 Gross Profit 699 1.339 92-83 -84 1 Operating Expenses -239-221 -8-23 -6-72 Income/Loss from other operations 8 16 118 25 367 8 Operating Profit 467 1.135 143 21 19-9 Income/Loss from equity investment 44 48 9 225 386 71 Operating Profit Before Fin. Income/Loss 512 1.183 131 68 63-8 Financial Income 113 125 1-16 -98-7 Finance Expenses -268-273 2 188 351 87 Profit Before Tax & Minorities 357 1.35 19 197 283 43 Net Profit 338 923 173 294,12 434,67 47,79 EBITDA *(mn. $) 644,7 1.292,28 1,45 278,92 366,75 31,49 EBITDA* (mn. $) CCS 534,9 1.193,6 123,14 25,7 48,1 62,8 EBITDA (mn.$)-cmb 65,8 1.253,9 17, 235,5 34,2 44,4 EBITDA (mn.$)-cmb- CCS 496, 1.155,2 132,9 In our EBITDA calculation, FX related items are not included, whereas CMB rules is that these should be included in operating profit. For P&L, USD/TL rates: 216 Q3 2,96; 9M 2,93; 12M 3,2 and 217 Q3 3,51; 9M 3,59. For Balance Sheet, USD/TL rates: 216 Q3 3,; 9M 216: 3,; 12M 216: 3,52 and 217 Q3 3,55; 9M 3,55 38
Product Price Effect on Tüpraş in Q3 (FOB Italy Prices) Product Price, $/ton Tüpraş Crack Margin, $/bbl Production 217 216 Yield % 217 216 LPG 399, 291,5 3,4% -16,6-19,9 Gasoline 544,5 461, 2,2% 15, 11, Naphtha 447,4 366,1,4% -1,6-4,5 Jet Fuel 56,7 423,3 16,7% 12,4 8, Diesel 485,4 48,1 31,4% 13,1 9, Diesel 1 467,2 397,8 1,1% 1,7 7,6 Fuel Oil 1% 3,1 247,,4% -5,8-7,8 Fuel Oil 3,5% 292,7 228,5 3,9% -6,9-1,6 Others 272,9 22,7 18,7% -6,8-9,3 Total Crack Margin,$/bbl 7,2 3,6 Dated Brent Avg. $/bbl 52,1 45,9 Margin Differences, $/bbl 3,6 Total Raw Materials Charge, mn bbl 57,3 Total Effect of Product Price, mn $ 26,3 Total Effect of Price Ratio, mn TL 724,3 39
High Complexity #1 (Nelson Complexity of Refinining Companies) İzmit 16 After RUP 14,5 14 12 1 13, 12,6 Tüpraş After RUP 11,8 11,6 11,5 11, 1,4 9,9 9,8 9,6 9,5 9,4 9,2 9,2 9, Tüpraş Before RUP 8 8,8 8,7 8,4 8, 7,3 7,1 7,1 7,1 7,1 6,8 6,5 6 5,9 5,8 5,8 4 2 4
High Complexity # 2 (Resid Upgrading Units Production-(Thousand Tons)) Raw Materials (kton) Products (kton) Natural Gas 246 Vacuum Resid 1,214 Atm. Straight Run Fuel Oil 3,36 Total Feed 4,496 Total Production 4,25 41
High Complexity # 3 (Tüpraş Total Production Change After RUP) Before RUP After Bitumen Coke,7 2,9 RUP production + 4 Refineries Capacities increase 9,1 mn tons, instead of 4,2 mn ton Fuel Oil,35 2,7 %-87 Others 1,4,3 %19 Diesel 5,6 5,5 Jet Fuel 3,6,9 %25 Gasoline&Na ptha 4,7 1,7 %35 2 4 6 8 1 12 42 Million ton 42
MHC 2 VACUUM 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% VACUUM 8 4232 HYDROCRACKER 4 182 NAFTA SPLITTER ISOMER. UNIFINER REFORMER Benzen Saturation GASOLINE NAPHTHA 22.% ISOMERISATION 3 64 UNIFINER REFORMER 7 169 KERO/DIES EL (HDS) 1 373 CRUDE OIL VACUMM DİST. KERO / DIESEL HDS FCC FCC Benzin HDS JET FUELOİL DIESEL 16.5% 33.9% FCC 2 47 COKER 1 82 NAPHTHA SPLITTER 8 More than one distillation and production units HYDROC. COKER Lube Oil Bitumen LUBE OIL BITUMEN & FUEL OİL.5% 19.9% LPG MEROX 6 OTHER 3.8% Increased conversion capacity Strong integration among refineries 43
Competition # 1 (European Pump Price Comparison) 8 7 6 555 Gasoline (Krş / Lt) Tax Distr. Marg. Pump No Tax 72 71 646 649 617 623 569 7 6 5 53 521 Diesel 1 (Krş / Lt) Vergi 586 594 57 538 636 65 5 4 323 31 42 4 48 411 462 462 4 256 259 32 322 348 38 45 4 3 3 2 49 26 58 46 64 2 54 63 47 26 56 1 184 259 19 165 239 192 24 184 1 193 262 174 248 19 286 25 194 TR Spa. UK Ger Eu19 Fra. Gre. Ita. TR Spa. Ger. EU19 Fra. Gre. UK Ita. Not: Prices valid on 2 Nov 217-Turkey Gasoline pirice as of 22nd of November 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 Romania Russia Spain Portugal Italy Albania Greece Turkey Tunisia Syria Bulgaria Georgia Morocco Algeria Israel Turkey Libya Egypt 54 Refineries 7.8mn bpd 17 Refineries 1.8mn bpd 45
Competition # 3 (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. Credit : 3.3 Billion $ Equity : 2.4 Billion $ Total Investment : 5.7 Billion $ STAR Refinery (Total Cap. 1 mn ton) 219, mn ton Production Tüpraş Star Total Turkish Demand Balance LPG 1,2,3 1,5 4,2-2,8 Petchem Feeds,3 2,6 2,9 Gasoline 5,8 5,8 2,4 3,4 Jet Fuel 5,4 1,6 7, 5, 2, Diesel 1,2 4,8 15 24,5-9,5 Coke,8,7 1,5 4,6-3,1 Fuel Oil 1,5 1,5 1,3,2 Bitumen 3,1 3,1 3,3 -,2 3,3 billion dollar credit aggrement. First 4 year grace period total 15-18 year term. Project finance is supplied to company (US$ 1.5 billion) It is planned to be commissioned in 218. Production (K Ton) Fuels Diesel 5. Jet Fuel 1.7 Sulphur 158 Petrocoke 698 Petrochemical Feedstock LPG 26 Naptha 1.3 Mixed xylene 46 Reformate 524 46
Mn b/d 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. 2,1 1,8 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. HS Fuel Oil Diesel LS FO HS FO Scrubbed Source: IEA, Oil Sector Report, 217 LS Fuel Gap %5 switch to LNG %2 Other Requirements of spec change can be achieved through; Use of lower sulphur blendstocks like ULSD (Diesel) Low Sulfur Fuel Oil production with light crudes Sulphur Fuel Reduction Systems (Scrubber) %19 Install Scrubber %74 Buy Low Sulphur Fuel LNG Source: UBS, 217 Ship Owners Intention Survey 47
3,5 3,6 1,9 3,2 1,7 1,8 1,9 2,6 1,7 1,4 2,4,8 2,8 1,3 3,4 2, 3,1,9 Tüpraş HSE KPI: Loss Time Incident Frequency and Severity Frequency Ratios 8, 7, 6, Incident Frequency 7,1 İncluding contractors Tüpraş Contractor Total 5, 4, 3, 2, 3,6 2,5 1,7 2,2 1,5 1,1 1,6 2,5 1,9 1,, 2 21 22 23 25 26 27 28 29 21 211 212 213 214 215 216 Loss Time Severity Frequency Rate 28 29 21 211 212 213 214 215 216 Tüpraş 92 44 4 53 65 61 59 719 11 Contractor 116 11 81 118 424 17 378 51 551 Total 15 73 57 83 29 26 38 315 354 loss time incident freaquency rate =number of incident *1/man hours loss severity frequency rate = loss time*1/man hours 48
Energy Saving Projects, mn$ 45 4 35 3 345 376 398 47 416 25 2 24 15 1 135 5 73 42 28 29 21 211 212 213 214 215 216 Energy Index 116,1 11,8 28 29 21 211 212 213 214 215 216 Total Tüpraş Energy consumption (TJ) 76.653 65.265 67.1 7.792 71.86 69.147 67.34 9.796 12.156 679.939 Energy-saving(TJ) 978 1.891 3.155 3.53 5.255 2.841 1.772 1.31 1.54 3.29 Energy Efficiency Project 36 52 65 92 97 4 22 21 18 443 Savings (mn $) 42 32 62 15 16 31 22 1 9 416 49
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.