Investor Presentation December - Microsoft · Investor Presentation 58.2 0 10 20 30 40 50 60 70 80 90 100 Brent Brent Crude Oil Prices ($/bbl) 5 CONS •Increase in number of rigs

Investor Presentation December 2018

Investor Presentation

www.tupras.com.tr

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.


www.tupras.com.tr

Content

3

• Refining Market Slides 4-10

• Turkish Market Slides 11-15

• Company Overview Slides 16-26

• Operations Slides 27-33

• Key Financials Slides 34-46

• Outlook Slides 47-52

• Appendix Slides 53-60

CONTENT

REFINING

MARKET


www.tupras.com.tr

58.2

0

10

20

30

40

50

60

70

80

90

100Brent

Brent Crude Oil Prices ($/bbl)

5

CONS • Increase in number of rigs & production

in US

• OPEC production increase announced

in Summer 2018

• Inventory Levels

• Impact of trade tariff negotiations

PROS

• OPEC & non OPEC supply cut through

2017–mid 2018

• Political instabilities in Middle East

• Future of nuclear agreement

• Healthy PMI data in developing countries

• Expectation of high global GDP

• Potential impact of sanctions

36.5

REFINING INDUSTRY

Source : Platts

As of December 17th


www.tupras.com.tr

Refinery Capacity Change

6

530 526

0 0302

-5

-775-546

520

0

400120

390

-140

305

-352

270

0

510

0

198

-443

63

-189

244

300

417

150

40

-130

364

-57

70

0

156

-220

76

-143

105

-268

420

120

-116

244

46

-91

0

200

36

330

200

343

160

200

-2750

-1600

-450

700

1850

3000

China India Middle East Other Asia Other Japan North America Europe

2018 2017 2016 2015 2014 2013 2012

1,7 1,8

1,01,3

0,3 0,6

1,51,3

0,6

1,8

1,1

1,5

0,0

0,5

0,9

1,4

1,8

2,3

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Thousand Barrels/Day

Source:, Reuters, International Energy Agency, Tüpraş, sector reports and news

Net Capacity Additions (mb/d)

REFINING INDUSTRY


www.tupras.com.tr

Middle Distillate Cracks ($/bbl)

7

12,1 12,2 12,613,6

14,313,7 13,6

15,9

14,1

15,5

19,5

15,0

0

4

8

12

16

20

Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

2015 2016 2017 2018

10,4

7,2

14,8

11,5

10,0

7,6

11,9

14,413,7

14,413,9

13,2 13,3

14,4

12,5

14,3

18,1

15,0

0

4

8

12

16

20


9,5

6,6

15,1

11,4

9,1

8,0

Diesel Jet Fuel

REFINING INDUSTRY

Source : Platts

As of December 17th


www.tupras.com.tr

10,2 10,6

12,0 12,113,0 13,1 13,4

14,4

9,6

5,5 5,0

3,1

0

6

12

18

24


2015 2016 2017 2018

Gasoline and High Sulphur Fuel Oil Cracks ($/bbl)

8

-13,2

-11,9-12,7

-15,2

-13,0

-9,1-8,3 -8,5

-13,2

-10,9

-3,7

-6,0

-20

-17

-14

-10

-7

-4


10,4

18,6

9,89,7

11,9

15,7

Gasoline High Sulphur Fuel Oil

-8,7

-12,2

-10,2

-12,5

10,9

-16,7

REFINING INDUSTRY

Source : Platts

As of December 17th


www.tupras.com.tr

Quarterly Product Crack Margins ($/bbl)

9REFINING INDUSTRY

Diesel and jet fuel cracks increased by 11% and 9% respectively; while gasoline and fuel oil cracks

were weaker compared to 2017 Q3.

13,0

19,418,9

13,5

1515

11

1313,3

14,315,0

10,910,9

12,7

12,5

10

12

14

16

18

20

Q1 Q2 Q3 Q4

Gasoline

1615

15

11

8

9 9

1111 11

1312

12,313,9

14,5

6

8

10

12

14

16

Q1 Q2 Q3 Q4

Diesel 2015 2016 2017 2018

14

1111

9

7 8 8

109,5 9,9

12,412,0

13,3

13,8

13,4

6

8

10

12

14

16

Q1 Q2 Q3 Q4

Jet Fuel

-12 -12

-13 -16

-13 -15

-11-9

-9,1

-7,0 -6,9

-10,0

-12,6-12,4

-10,2

-20

-16

-12

-8

-4

Q1 Q2 Q3 Q4

High Sulphur Fuel Oil


www.tupras.com.tr

Crude Price Differentials ($/bbl)

10

Ural differentials narrowed with higher Chinese demand while Heavy Crude differentials narrowed

with lower Venezuelan and Iranian crude availability.

Heavy Crude Price Differentials Ural Differentials

-0,6

-2,1-2,3 -2,4

-1,7

-0,9

-1,4-1,1

-0,5

-1,1

-0,20,0

-4

-3

-2

-1

0

1

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2012-2017 Min. 2015 2016 2017 2018

-0,3

-1,2

-1,3

-1,6

Brent

-10

-8

-6

-4

-2

0

15

Q1

15

Q2

15

Q3

15

Q4

16

Q1

16

Q2

16

Q3

16

Q4

17

Q1

17

Q2

17

Q3

17

Q4

18

Q1

18

Q2

18

Q3

Iran Heavy Kirkuk Kuwait Basra Heavy Arab Heavy

Brent

Kirkuk

Iran Heavy

Kuwait

Basra Heavy

Arab Heavy

Chinese demand towards Ural crude narrowed differentials in Q3 Following decrease in Iranian exports, alternate heavy crude differentials

narrowed in Q3

Source : Platts

As of December 17th

TURKISH

MARKET


www.tupras.com.tr

Turkish Economy Strengths

12

7980

81 8182

77

78

79

80

81

82

83

2016 2017 2018 2019 2020

Population (mn)

1.4% growth in last 5 yrs

0-40 yrs >65%

9,28,8

2,1

4,2

3,0

4,0

2,9

7,4

0

2,5

5

7,5

10

2010 2011 2012 2013 2014 2015 2016 2017

GDP (%)

22

2425

26

28

21

22

23

24

25

26

27

2016 2017 2018 2019 2020

Diesel Consumption (mn ton)

8.8% average growth in

last 5 yrs

4% annual

growth

Car ownership per thousand people

127 134176

213

0

50

100

150

200

250

2014 2015 2016 2017

2002-2014 4.9%

2010-2014 5.4%

Source: EMRA, TSI

67%

REFINING INDUSTRY


www.tupras.com.tr

Turkish Consumption (Million tons) 2015-2017

13

Diesel

-4%

Jet Fuel

0,49

0,58

0,60

0 0 0 0 1 1

2017

2016

2015

Fuel Oil*Gasoline

+6.5%-3.5%

24,17

22,31

20,56

10 14 17 21 24

2017

2016

2015+8.5%

+8.3%+2.7%

+3.1%-15.7%

Source: EMRA

*Bunker excluded.

REFINING INDUSTRY

2,30

2,23

2,10

2017

2016

2015

4,52

4,40

4,58

2017

2016

2015


www.tupras.com.tr

Strong Turkish Market, 9M 2018 (Million tons)

14REFINING INDUSTRY

• Tüpraş is well positioned in a growing, short market.

• Diesel and jet fuel consumption in Turkey grew significantly the first 9 months of 2018 driven by infrastructure

projects and aviation growth.

*Bunker excluded

Source: EMRA

3,85

3,50

0 1 1 2 2 3 3 4 4 5 5

2018

2017

Diesel

+9.9%

Jet Fuel

0,27

0,34

0 0 0 0 0 0 0

2018

2017

Fuel Oil*

1,80

1,75

2018

2017

Gasoline

+6.7%

+2.6% -21.7%

18,99

17,79

14 17 20

2018

2017


www.tupras.com.tr

Turkey’s Import / Export Balance (Net) (Million Tons)

15

-3,1

2,4

-12,0

1,0

0,0

-3

3

-13

10

-16

-12

-8

-4

0

4

LPG Gasoline Diesel Fuel Oil Jet

2013 2014 2015 2016 2017

Source EMRA

Import

Export

REFINING INDUSTRY

COMPANY

OVERVIEW


www.tupras.com.tr

16%

84%

Tüpraş Shareholder Structure

17

Energy Investments Inc. (SPV)

Free Float

*Distribution of Domestic/

Foreign Ownership of Tüpraş

Shares

*As of December 31th, 2017

Foreign

Ownership

Domestic

Ownership

COMPANY OVERVIEW


www.tupras.com.tr

Tüpraş Refining Assets & Distribution Network

18

Turkey Storage

Capacity

Tüpraş : 58%

Opet : 9%

Other Companies : 33%

İzmit

• 11.0 MT Capacity

• NC: 14.5

• Storage Capacity: 3.03 mn m3

İzmir

• 11.0 MT Capacity

• NC: 7.66

• Storage Capacity:2.51 mn m3

• Base oil 400 k tons

Kırıkkale

• 5.0 MT Capacity

• NC: 6.32

• Storage Capacity: 1.41 mn m3

Batman

• 1.1 MT Capacity

• NC: 1.83

• Storage Capacity:0.25 mn m3

Total Capacity : 28.1 mn ton

Nelson Complexity : 9.5

Tüpraş Storage Cap. : 7.2 mn m3

OPET Storage Cap. : 1.1 mn m3

COMPANY OVERVIEW


www.tupras.com.tr

High Complexity (Nelson Complexity of Refining Companies)

19

14,5

13,012,6

11,8 11,6 11,511,0

10,49,9 9,8 9,6 9,4 9,2 9,2 9,0 8,8 8,7 8,4

8,07,7

7,1 7,1 7,1 7,1 6,8 6,5 6,35,9 5,8 5,8

1,30

5

10

15

20

İzm

it R

ef.

Va

lero

Relia

nce

Essa

r

Ma

rath

on

Oil

Ho

lly-F

ron

tie

r

Ne

ste

BP

Te

so

ro

Th

ai O

il

IOC

L

He

llen

ic

PK

N

MO

L

SH

ELL

Pe

tro

m

Galp

Sara

s

Pe

tro

bra

s

İzm

ir R

ef.

Luko

il

HP

CL

CP

CL

BC

P

Esso

(Th

ai)

S-O

il

Kır

ıkka

le R

ef.

MR

PL

SK

En

erg

y

BP

CL

Ba

tma

n R

ef.

Tüpraş After

RUP

Tüpraş

Before RUP

İzmit After

RUP

14,5

9,5

7,3

COMPANY OVERVIEW


www.tupras.com.tr

Crude Suppliers of TÜPRAŞ (Million Tons)

20

Crude Type 2017

6 610

2 23 3 112 13 13

10 10 10

1715

1114 14

7

65 6763

7176

79

0

10

20

30

40

50

60

70

80

90

2012 2013 2014 2015 2016 2017

Africa America Europe CIS Middle East

5,3%

58,8%

36%

>34 30> 30 - 40

In 2017, Tüpraş purchased 25 different types of crude oil from 14 countries, with gravities ranging between

18-47 API.

COMPANY OVERVIEW


www.tupras.com.tr

Sales By Customer (9M 2018)

21

Dist.; 50%

THY Opet; 11%

Jet; 6%

LPG; 3%

Other; 6%

Export; 13%

Bitumen; 11%

Military; 1%

POAŞ26%

OPET31%

SHELL17%

BP13%

TP1%

AKPET4%

OTHER8%

Customer Groups Sales to Distributors

Total : 22.3 mn tons Distributors : 11.1 mn tons

COMPANY OVERVIEW


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Competitive Advantages of Tüpraş

22COMPANY OVERVIEW


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OPET

23

830 885 915 938 966 1.009 1.073 1.126 1.150

394394

410 418 427435

431434 455

1.2791.325

1.325 1.3561.393

1.4441.504

1.5601.605

0

200

400

600

800

1000

1200

1400

1600

1800

2010 2011 2012 2013 2014 2015 2016 2017 9M 2018

Opet Sunpet

Opet expanded its retail footprint from 1.560 stations in December 2017 to 1.605 stations in

September 2018.

Market share as of

August 2018

White

Product

32.26%

Black

Product

17.85%

COMPANY OVERVIEW


www.tupras.com.tr

DİTAŞ, Marine Transport -Tüpraş Share 79.98%

24

• 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

19,0

15,0

6,05,0

7,0

9,0

17,0

3,0

3,0

3,0 4,0

5,0

6,0

6,0

0

5

10

15

20

25

2011 2012 2013 2014 2015 2016 2017

Product Crude Oil

11 tugboats

8 mooring boats

2 service boats

1 pilot boat

253,7 mn $Net Sales

49,6 mn $Op. Profit

3 Crude Oil Tanker :479.765 DWT

1 Crude Oil - Product Tanker : 51.532 DWT

7 Product Tanker : 90.534 DWT

COMPANY OVERVIEW


www.tupras.com.tr

Körfez Ulaştırma A.Ş.- Tüpraş Share 100%

25

Körfez Ulaştırma A.Ş.

• On June 16th, Freight Train Operator Certificate,

• On September 20th, Safety Management

Certificate received

• Operates with 491 cistern wagons and 5 diesel

• locomotives2,5 mn

tons/year tran

sport

% 10 Market share

Turkey's First

Private Railway Operator

2018

Target

COMPANY OVERVIEW


www.tupras.com.tr

Enhancing our Trading Capabilities

26

๏ We are opening a trading office in London to

๏ London office is planned to be opened until the end of the year

Closely monitor

international market

opportunities,

Support import and

export operations,

Create additional value

from supply chain and sales

activities.

COMPANY OVERVIEW


www.tupras.com.tr

Capacity Utilization and Quarterly Production Volume on Track in Q3

28

Capacity utilization reached 115% in Q3.

*Nameplate capacity calculated by standard 330 days of operations.

Quarterly Production (Million Tons)

4,5 4,6

5,4 5,5

5,6

6,9

7,3 7,4

6,6 6,7

7,27,4

7,1

7,8 7,7

6,3

5,2

6,2

7,7

4

5

6

7

8

9

Q1 Q2 Q3 Q4

2014 2015 2016 2017 2018

Capacity Utilization* (%)

71,3

98,1 100,9 101,4

67,3

85,4

107,2

3,6

4,4 4,4 6,7

10,7

7,1

7,3

75

103 105 108

78

93

115

2014 2015 2016 2017 Q1 2018 Q2 2018 Q3 2018

Crude Oil Semi Product Feedstock

9M 2018 CUR: 95%

OPERATIONS


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Q3 2018 Product Yields

29

White Products %75.70

Production 7.6 mn tons

API 29.6

White Products %75.75


API 30.7

2017

LPG3%

Gasoline19%

Naphtha2%

Jet19%

ULSD32%

Other2%

Coke3%

Fuel Oil5%

Bitumen15%

Light Distil.24,2%

Mid. Distil.50,8%

Other 1,7%

Black Prod.23,2%

LPG4%

Gasoline19%

Naphtha1%

Jet19%

ULSD32%

Other2%

Coke3%

Fuel Oil7%

Bitumen13%

Light Distil.24,2%

Mid. Distil.50,8%

Other 1,9%

Black Prod.23,1%

2018

OPERATIONS


www.tupras.com.tr

9M 2018 Product Yields

30

White Products %77


API 30.3

White Products %77


API 31.0

2017

LPG4%

Gasoline20%

Naphtha1%

Jet17%

ULSD34%

Other2%

Coke3%

Fuel Oil8%

Bitumen11%

Light Distil.25,0%

Mid. Distil.51,2%

Other 1,9%

Black Prod.21,9%

LPG4%

Gasoline20%

Naphtha1%

Jet19%

ULSD33%

Other2%

Coke3%

Fuel Oil6%

Bitumen13%

Light Distil.24,5%

Mid. Distil.52,0%

Other 1,8%

Black Prod.21,6%

2018

OPERATIONS


www.tupras.com.tr

Domestic Sales (Million Tons)

31

We generated 22.3 million tons of total sales in 9M 2018. Jet fuel and diesel sales increased by 8.5%

and 6.7% compared to last 9M 2017 respectively.

12,6

16,0

18,419,3 19,5

3,5

4,8

4,24,9

2,7

16,1

20,9

22,6

24,2

22,3

9M 2014 9M 2015 9M 2016 9M 2017 9M 2018

Domestic Sales Export

57

8 8 9

2,9

3,6

3,5 3,53,8

1

2

22

2

1,4

2,0

2,52,6

2,4

11

14

1616

17

9M 2014 9M 2015 9M 2016 9M 2017 9M 2018

Diesel Jet Fuel Gasoline Bitumen

Total Sales in 9M Domestic Sales of Key Products in 9M

OPERATIONS


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Investments (Million $)

32

• Revamp of Crude Unit

• FCC Modernization

• New Sulphur Units

• Energy Saving Projects

• Optimization of conversion units

• 9.5 Nelson complexity

• High white product yield

• Process more heavier and sour crudes

• Run all refineries with 100% capacity utilization

Ongoing Projects

Avg. 247 mn$

Avg. 943 mn$

Avg. 278 mn$

274

355400

186177

628

974

1.213

959

344

213185

97

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 9M 2018

OPERATIONS


www.tupras.com.tr

9M 2018 Results

33

Refining Margins ($/bbl)

Brent Price ($/bbl)

6965 66

7277

74 74 73

79

55

60

65

70

75

80

J-18 F-18 M-18 A-18 M-18 J-18 J-18 A-18 S-18

Brent ($/bbl) Tüpraş Expectation Min Tüpraş Expectation Max

10,7

4,5

0

2

4

6

8

10

Tüpraş Net Margin Med Margin

99

104

113

95

2015 9M

2016 9M

2017 9M

2018 9M

Axis Title

Capacity Utilisation (%)

18,9

22,3

Production

Sales

2018 Operational (mn ton)

Capex (mn $)

213,0

185,0

97,0

2016

2017

9M 2018

• 72.1 $/bbl Brent Price average in 9M

• 95% Total Capacity

Utilization in 9M

• 22.3 mn tons of sales 18.9

m tons of production in 9M

• 97 mn $ CAPEX in 9M

OPERATIONS


www.tupras.com.tr

-2

0

2

4

6

8

10

12

Oca-08 May-09 Eyl-10 Oca-12 May-13 Eyl-14 Oca-16 May-17 Eyl-18

Month

Annual

Margin Environment ($/bbl)

35

Tüpraş’ 13.5 $/bbl Net Refining Margin in Q3 2018 was higher than 8.4 $/bbl Med Complex margin.

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

Med Complex

4,57

5,30

3,97 4,83

1,67 1,95

4,21

1,17

2,89

1,95

5,54

9,610,6

11,911,2

12,9

16,0

2,53,2

6,5 6,0

8,1

10,7

1,7 2,0

4,84,0

5,34,5

0

2

4

6

8

10

12

14

16

18

2013 2014 2015 2016 2017 9M 2018

Tüpraş Gross Margin Tüpraş Net Margin Mediterranean

KEY FINANCIALS


www.tupras.com.tr

Income Statement

36

Strong EBITDA generation continued in Q3 2018

Million TL Q3 2018 Q3 2017 % 9M 2018 9M 2017 %

Net Sales 30.247 14.344 111 63.749 39.344 62

Gross Profit 3.910 1.610 143 7.200 4.813 50

Operating Expenses -324 -296 9 -870 -793 10

Income/Loss from other operations -2.783 -24 -3.771 59

Operating Profit 802 1.290 -38 2.559 4.079 -37

Income/Loss from equity investment 47 67 -30 185 173 6

Operating Profit Before Fin. Income/Loss 849 1.356 -37 2.743 4.253 -35

Net Financial Income /Expense -171 -123 39 -668 -533 25

Profit Before Tax 678 1.234 -45 2.075 3.720 -44

Net Profit (including minority interest) 551 1.000 -45 1.973 3.339 -41

EBITDA *(mn.TL) 3.778 1.528 147 7.021 4.645 51

EBITDA* (mn. TL) CCS 1.745 1.290 35 3.463 4.284 -19

* On CMB reports, EBIT includes extra items such as FX impacts of trade receivables and payables. In our EBITDA calculation, FX related items are excluded from EBIT as customary in international practices.

Million $ Q3 2018 Q3 2017 % 9M 2018 9M 2017 %

Net Sales 5,672 4,068 39 13,868 10,946 27

Gross Profit 761 458 66 1,566 1,339 17

Operating Expenses -56 -84 -34 -189 -221 -14

Income/Loss from other operations -579 -6 -820 16

Operating Profit 127 367 -65 557 1,135 -51

Income/Loss from equity investment 6 19 -66 40 48 -17

Operating Profit Before Fin. Income/Loss 133 386 -65 597 1,183 -50

Net Financial Income /Expense -24 -35 -33 -145 -148 -2

Profit Before Tax 110 351 -69 451 1,035 -56

Net Profit (including minority interest) 81 285 -72 429 929 -54

EBITDA* (mn.$) 734 435 69 1,527 1,292 18

EBITDA* (mn.$) CCS 333 368 -10 753 1,192 -37

KEY FINANCIALS


www.tupras.com.tr

Financial Highlights (Million $)

37

Net Debt- Net Debt/ Rolling EBITDA*

EBITDA

551

1.340

1.869

1.598 1.663

2.5772.748

2.370 2.391

1.751 1.7291.555

1.680

1.240

1.657

2.331

1.957

1.613

0

500

1.000

1.500

2.000

2.500

3.000

201

2_

R

201

3

201

4 H

1

201

49

M

201

4

201

5 H

1

201

59

M

201

5

201

6 H

1

201

69

M

201

6

201

7Q

1

201

7 H

1

201

79

M

201

7

201

8Q

1

201

8 H

1

201

89

M

Tüpraş achieved 734 mn USD EBITDA in Q3 2018 with high capacity utilization and inventory gain.

Net Income

Return of Average Equity

30% 32%

24% 26%

35%

4%

11%16%

22%

45%

55%

49%

41%

17%

31% 29%

0

0

0

0

0

1

1

201

1

201

2

201

3

201

4

201

5

201

6 Q

1

201

6 H

1

201

6 9

M

201

6

201

7 Q

1

201

7 H

1

201

7 9

M

201

7

201

8 Q

1

201

8 H

1

201

8 9

M

29%

161 72 231 112 27 235 99

7575

171273

113

405

244

309 435 175268

197

283

81

271

47 91

285

256

123

-50

200

450

700

950

1200

2012 2013 2014 2015 2016 2017 2018

1.046

594

938

667629

817

95 79150 150 114

427271153

78 -27

415

237

431 522

361315

226

410

294

435

734

10689

-11

422

480

321

-50

242

533

825

1117

1408

2012 2013 2014 2015 2016 2017 2018

4th Q

3rd Q

2nd Q

1st Q

715560

338

1.397

1.125

1.614

*Rolling EBITDA is calculated with dollar terms

1.527

423

1.613

0,8

2,4

3,5 3,6

4,9

3,32,8

1,72,0

1,6 1,51,1 1,0

0,71,0

1,6 1,51,2

Net Debt/R. EBITDA

KEY FINANCIALS

Net Debt


www.tupras.com.tr

Balance Sheet Analysis (Billion $)

38

0,71

0,52 0,51

0,090,20

0,66

1,07

0,880,70

0,910,75

0,911,09 1,15

1,57

1,36 1,421,52 1,57

0,0

0,5

1,0

1,5

2,0

Ma

r.1

4

Jun

.14

Se

p.1

4

De

c.1

4

Ma

r.1

5

Jun

.15

Se

p.1

5

De

c.1

5

Ma

r.1

6

Jun

.16

Se

p.1

6

De

c.1

6

Ma

r.1

7

Jun

.17

Se

p.1

7

De

c.1

7

Ma

r.1

8

Jun

.18

Se

p.1

8

2,91

3,263,03

2,42

1,72 1,69 1,581,33 1,21

1,671,96 1,99

2,18 2,17

2,68

2,18 2,19

2,75 2,8

0

1

2

3

4

Ma

r.14

Jun

.14

Se

p.1

4

Dec.1

4

Ma

r.15

Jun

.15

Se

p.1

5

Dec.1

5

Ma

r-16

Jun

-16

Se

p-

16

Dec.1

6

Ma

r.17

Jun

.17

Se

p.1

7

Dec.1

7

Ma

r.18

Jun

.18

Se

p.1

8

2,8 2,9 2,9 3,0 3,3 3,1 3,0 2,8 2,9 2,8 3,1 2,9 3,0

2,1 2,12,6 2,4 2,5 2,4

0,9 0,3 0,3 0,30,4

0,5 0,60,6 1,0 1,2

1,10,6 0,6

1,1 1,3

1,41,6 0,8 0,9

3,7

3,2 3,2 3,33,7 3,6 3,6

3,4

3,9 4,04,2

3,4 3,53,3 3,4

4,0 4,0

3,2

0,0

0,7

1,4

2,1

2,9

3,6

4,3

5,0

Ma

r.1

4

20

14 1

h

20

14

9M

Dec 1

4

Ma

r.1

5

Jun.1

5

Sep.1

5

Dec.1

5

Ma

r-16

Jun-1

6

Sep-1

6

De

c.1

6

Ma

r.1

7

Jun.1

7

Sep.1

7

Dec.1

7

Ma

r.1

8

Jun.1

8

Sep.1

8

ST Loans LT Loans

Strong operational FCF generation and tight working capital management led to an increase in our cash

position.Cash & Cash Equivalents Trade Receivables

Trade PayablesFinancial Loans

1,7

1,3

1,6 1,7

1,21,0

0,81,0

1,6 1,6

2,5

1,7

2,0

1,6

2,22,3

1,7

1,3

1,7

0,0

0,6

1,2

1,8

2,4

3,0

Ma

r.1

4

Jun

.14

Se

p.1

4

De

c.1

4

Ma

r.1

5

Jun

.15

Se

p.1

5

De

c.1

5

Ma

r.1

6

Jun

.16

Se

p.1

6

De

c.1

6

Ma

r.1

7

Jun

.17

Se

p.1

7

De

c.1

7

Ma

r.1

8

Jun

.18

Se

p.1

8

1.6

1.57

2.803.3

KEY FINANCIALS


www.tupras.com.tr

Q3 Profit Before Tax Bridge (2017-2018)

39

Decline in profit before tax was mostly driven by FX loss, partially offset by inventory gain.

Million TL

KEY FINANCIALS


www.tupras.com.tr

Dividend (TL)

40

1,73

3,24 2,94

4,96

5,83

4,78

0,00

10,18

7,16

15,22

2,31 2,502,98

3,93 3,85

1,580,00

6,50 6,20

13,60

0

1000

2000

3000

4000

0

2

4

6

8

10

12

14

16

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Earings per Share Gross Dividend Total Payout

One of the highest dividend

yield in BIST

2012/2013 EPS includes the tax incentive

KEY FINANCIALS


www.tupras.com.tr

Tüpraş Balance Sheet

41

Million $ 31.12.2017 30.09.2018 Difference %

Current Assets 5,399 5,050 -349 49

Cash & C. Equivalents 2,334 1,662 -671 -29

Receivables 1,333 1,556 223 17

Derivatives 92 79 -13 -14

Inventories 1,403 1,418 15 1

Pre-paid expenses 17 22 5 33

Other Current Assets 222 313 91 41

Long Term Assets 4,718 3,141 -1,577 40

Financial Assets & Subsidiaries 304 207 -97 -32

Fixed Assets 3,279 2,059 -1,221 -37

Derivatives 27 44 17 64


Deferred Tax 813 587 -226 -28

Other Long Term Assets 268 191 -77 -29

Total Assets 10,118 8,191 -1,927 89

Short Term Liabilities 4,686 4,523 -163 211

Financial Loans 1,398 907 -491 -35

Payables 2,219 2,796 577 26


Deferred Incomes 5 6 0 6

Provisions 24 28 5 19

Other ST Liabilities 993 630 -363 -37

Long Term Liabilities 5,432 3,668 -1,763 106

Financial Loans 2,592 2,368 -224 -9

Payables & Provisions 59 40 -19 -32


Other LT Liabilities 1 1 -1 -49

Equity 2,750 1,241 -1,509 -55

Minority Interests 28 14 -14 -51

Total Liabilities 10,118 8,191 -1,927 316

Million TL 31.12.2017 30.09.2018 Difference %

Current Assets 20,366 30,250 9,884 430

Cash & C. Equivalents 8,802 9,958 1,156 13

Receivables 5,027 9,319 4,292 85


Inventories 5,291 8,495 3,204 61


Other Current Assets 837 1,872 1,036 124

Long Term Assets 17,797 18,816 1,019 417

Financial Assets & Subsidiaries 1,148 1,239 91 8

Fixed Assets 12,369 12,332 -37 0



Deferred Tax 3,068 3,519 451 15

Other Long Term Assets 1,013 1,146 134 13

Total Assets 38,163 49,066 10,903 847

Short Term Liabilities 17,676 27,093 9,417 688

Financial Loans 5,274 5,434 160 3

Payables 8,370 16,749 8,379 100


Deferred Incomes 20 34 14 68

Provisions 90 170 81 90

Other ST Liabilities 3,745 3,774 30 1

Long Term Liabilities 20,487 21,973 1,486 520

Financial Loans 9,777 14,188 4,411 45

Payables & Provisions 224 242 18 8


Other LT Liabilities 5 4 -1 -20

Equity 10,373 7,437 -2,937 -28

Minority Interests 104 81 -23 -22

Total Liabilities 38,163 49,066 10,903 1,208

KEY FINANCIALS


www.tupras.com.tr

Creating Competitive & Sustainable Shareholder Value

42

75%

25%

Buy Hold

Foreign Currency

Long Term

Tüpraş BB+(Neg.) Ba2 (Negative)

Türkiye BB (Neg.) Ba3 (Negative) B+ (Stable)

Koç Holding Ba2 (Negative) BB- (Stable)

Analyst Recommendations

92,9

99,5

94,0

95,5

94,8

0 25 50 75 100

Board

Stakeholders

Transparency

Shareholders

Overall

Tüpraş has one of the highest Corporate Governance Ratings

KEY FINANCIALS


www.tupras.com.tr

Financial Policy

43

Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counter

party 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

• Counter party risk limits

Counter party

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


www.tupras.com.tr

Inventory & Crack Margin Hedge

44

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

• Crack margins: Gasoline, Diesel, Jet Fuel and Fuel Oil Cracks

• Derivative transactions: Asian Swaps

• Hedging Parameters: Budget figures, historical average prices of the cracks + standard

deviations, market expectations

• Maximum hedge ratio: 50%,

• Tenor: up to next 4 quarters

Inventory

Hedging

Policy

Margin

Hedging

Policy

KEY FINANCIALS


www.tupras.com.tr

FX Exposure Management (30 September 2018)

45

* Cash flow hedge accounting : 928 mn $

Active management of FX exposure kept

the risk level within our limits.

• 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.

KEY FINANCIALS

Consolidated

Assets

Consolidated

Liabilities

Cash

1,410

Receivables &

other assets

53

Stock

1,412

Forward & CFH

2,414

Payables

2,539

ST Financial

717• RUP : 263

• Other: 454

LT Financial

2,097• RUP : 859

• Eurobond 700• Other Loans : 538

-64 mn $

Million $


www.tupras.com.tr

Tüpraş: Growing, Resilient, Profitable

46

Tüpraş is a compelling investment case with strong sales growth, resilient and profitable operational

and financial structure.

• Operating in a diesel short market

(supplies 45% of the market) , along with

strong jet growth

• Well poised to capture future

opportunities including IMO 2020 with its

output complexity

• Continuous investment in logistics,

infrastructure and trading capabilities

• Strong balance sheet with no

immediate rollover requirement for the

rest of the year

• Secure receivables portfolio, tight

working capital management

• Pricing mechanism in place to address

commodity and FX fluctuations

• Benefits from full system optimization

given high complexity, procurement and

logistics flexibility

• Prudent hedging practices to ensure

stable earnings outlook

• High dividend pay-out ratio annually

Growing Resilient Profitable

KEY FINANCIALS

OUTLOOK


www.tupras.com.tr

2018 Refinery Maintenance Schedule & Capacity Utilization

48

• We are completing our 2018 maintenance schedule with only two remaining maintenances in Q4

• We are planning maintenance in RUP unit in the 1H 2019. We will provide more details in the beginning of 2019.

Unit Quarter Duration (weeks) Reason

İzmir

*Plt 7000 Crude Oil Unit Q4 ’17 - Q2’ 18 17 in 2018 Revamp

*Hydrocracker Q1 3Periodic Maintenance

*Plt 4000 FCC Q2 7

İzmit

*Plt 5 Crude Oil & Vacuum Unit Q2 8,5

Periodic MaintenancePlt 25 Crude Oil & Vacuum Unit Q4 8-9**

*Plt 47 Hydrocracker Complex Q3 11

Plt 63 CCR & DHP Q4 6-7**

Kırıkkale *All Units Q1- Q2 10 Battery Shutdown

Batman *Plt. 100/Crude Oil & Vacuum Q1 4-5 Periodic Maintenance

* Completed Maintenances

** Revised

2018 Crude Capacity Utilization ~25 mn tons 88%**

2018 Total Capacity Utilization 95-100%**

OUTLOOK


www.tupras.com.tr

Future Expectations

49

Average Brent price expectation in 2018 is unchanged at 70 - 75 $/bbl

Med Complex margin expectation is revised to 4.25 – 4.75 $/bbl in 2018

Net Tüpraş refinery margin expectation is revised to 9.5 – 10.5 $/bbl

• Capacity utilization target is revised to 95-100%

• Production: ~27 million tons

• Total sales: ~30 million tons

Refining investments expectation is revised to 150 Million $

Brent Price

Estimation

Med Complex

Margin

Tüpraş

Net Margin

Operations

Investment

Slight revision to our 2018 targets.

OUTLOOK


www.tupras.com.tr

Competition # 1 (SOCAR-STAR Refinery)

50

• Goldman Sachs has acquired a 13 percent stake in SOCAR Turkey for $1.3 billion.

• Goldman Sachs has the right to resell 10 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.

STAR Refinery (Total Cap. 10 mn ton)

2019

mn ton

ProductionTurkish

DemandBalance

Tüpraş Star Total

LPG 1,1 0,3 1,4 4,1 -2,7

Petchem Feeds 0,2 2,6 2,8

Gasoline 6,1 6,1 2,4 3,7

Jet Fuel 5,2 1,6 6,8 5,2 1,6

Diesel 10,7 4,5 15,2 26,5 -11,3

Coke 0,8 0,7 1,5 4,6 -3,1

Fuel Oil 1,8 1,8 1,3 0,5

Bitumen 3,1 3,1 3,1Star Refinery Production Numbers (K Ton)

Diesel 4.500

Jet Fuel 1.600

Sulphur 158

Petrocoke 698

LPG 260

Naptha 1.600

Mixed xylene 460

Reformate 524

Fuels

Petrochemical

Feedstock

• 3,3 billion dollar credit agreement. First

4 year grace period total 15-18 year

term.

• Project finance is supplied to company

(US$ 1.5 billion)

• It is operational as of October 2018

Credit : 3.3 Billion $

Equity : 2.4 Billion $

Total Investment : 6.3 Billion $

OUTLOOK


www.tupras.com.tr

Competition # 2 (Regional Competition)

51

• 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

54 Refineries

7.8mn bpd

17 Refineries

1.8mn bpd

OUTLOOK


www.tupras.com.tr

Marine Bunker Specification Changes and Its Effects

52

IMO, at the meeting held in October 2016, lowered the sulphur emission cap from marine bunkers

from 3.5% to 0.5% (5000ppm): effective from 1 January 2020.

• Use of lower sulphur blend stocks like ULSD (Diesel)

• Low Sulfur Fuel Oil production with light crudes

• Sulphur Fuel Reduction Systems (Scrubber)

• LNG

Requirements of spec change can be achieved through; • 80% of global trade is done via

marine transportation.

• 50.000 vessels are in operation.

Bunker fuels account for;• ~5% of global oil demand

• 40% of oil related sulphur emissions.

2016

%74

Buy Low Sulphur Fuel

%19

Install Scrubber

switch %5

to LNG

%2

Other

Ship Owners Intention Survey2020 2022

OUTLOOK

Appendix


www.tupras.com.tr

Crack Margin Effect on Tüpraş in Q3 (FOB Italy Prices)

54

Product Price, $/ton Tüpraş Crack Margin, $/bbl

2018 20172018 Production

Yields2018 2017

LPG 567 399 3.4 -24.8 -16.6

Gasoline 712 544 18.3 12.5 15.0

Naphtha 638 447 1.2 -3.3 -1.6

Jet Fuel 697 507 17.7 13.4 12.4

Diesel 669 485 29.4 14.5 13.1

Diesel 1000 658 467 1.2 13.1 10.7

Fuel Oil 1% 433 300 0.2 -8.5 -5.8

Fuel Oil 3.5% 422 293 5.0 -10.1 -6.9

Others 376 270 19.0 -12.5 -7.1

Dated Brent,$/bbl 75.27 52.08 95.6

Total Crack Margin,$/bbl 5.3 6.6

Margin Difference, $/bbl -1.3

Total Processed, mn bbl 57.06

Total Effect, mn $ -75.7

Total Effect, mn TL -425.2

Weighted average of crack margin difference in Q3 2018 over Q3 2017 indicates a -1.3 $/bbl, yielding -

425.2 million TL crack margin impact.

APPENDIX


www.tupras.com.tr

High Complexity (Resid Upgrading Units Production-(Thousand Tons)

55

Doğal Gaz 246

Vakum Resid

1,214

Atm. Dip

3,036

Total Feed 4,496

Total Production

4,250

Raw Materials Products

APPENDIX


www.tupras.com.tr

Flexibility & Reliability; Multiple routes to maksimum capacity

56

• Increased

conversion capacity

• Strong

integration among

refineries

APPENDIX


www.tupras.com.tr

Competition (European Pump Price Comparison)

57

Not: Prices valid on 13 Aug 2018 - Turkey price as of Aug 16th 2018

Gasoline (Krş / Lt)

329440

319 331414

339 348416

53 5476 75 71

304

484 627623 637 663

715 729686

924

1.0001.030 1.051 1.077

1.134 1.145

0

200

400

600

800

1000

1200

1400

0

250

500

750

1000

1250

TR Spa. UK Ger Eu19 Fra. Ita. Gre.

Pump No Tax Distr. Marg. Tax

Diesel 10 (Krş / Lt)

339

451

338433

490

342 328 362

5391 81

7365

231

403 468 509494 585 633 621

623

854897

942984

1.0081.034 1.048

0

200

400

600

800

1000

1200

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

TR Spa. Ger. EU19 Gre. Fra. UK Ita.

APPENDİX


www.tupras.com.tr

Tüpraş HSE KPI: Loss Time Incident Frequency and Severity Frequency Ratios

58

loss time incident freaquency rate =number of incident *1000000/man hours

loss severity frequency rate = loss time*1000000/man hours

APPENDİX


www.tupras.com.tr

Koç Holding

59

Turkey’s Leading Investment Holding Company

Turkey’s largest industrial and services group in terms

of revenues, exports, employees, taxes paid

and market capitalization.

Leading positions with clear competitive advantages in

sectors with long-term growth potential such as energy,

automotive, consumer durables and finance.

Pioneer in its Sectors

• The only Turkish company in Fortuna 5001

• 16% CARG in consolidated profit2 the last five years

Notes : Data as of YE17, 2017 GDP reflects the projection of Turkish government’s Medium Term Program

(1)2017 Report

(2)In TL terms between

Turkey’s Leading Investment Holding Company Combined Revenues / GDP

Total Exports / Turkey’s Exports

Total MCap on Borsa İstanbul

7%

10%

19%

APPENDİX

Documents

Investor Presentation December - Microsoft · Investor Presentation 58.2 0 10 20 30 40 50 60 70 80 90 100 Brent Brent Crude Oil Prices ($/bbl) 5 CONS •Increase in number of rigs