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Investor Presentation March 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.
REFINING INDUSTRY
Investor Presentation www.tupras.com.tr
Brent Crude Oil Prices ($/bbl)
4
25
35
45
55
65
75
4.01
.201
613
.01.
2016
22.0
1.20
162.
02.2
016
11.0
2.20
1622
.02.
2016
2.03
.201
611
.03.
2016
22.0
3.20
164.
04.2
016
13.0
4.20
1622
.04.
2016
4.05
.201
613
.05.
2016
24.0
5.20
163.
06.2
016
14.0
6.20
1623
.06.
2016
4.07
.201
613
.07.
2016
22.0
7.20
162.
08.2
016
11.0
8.20
1622
.08.
2016
1.09
.201
612
.09.
2016
21.0
9.20
1630
.09.
2016
11.1
0.20
1620
.10.
2016
31.1
0.20
169.
11.2
016
18.1
1.20
1629
.11.
2016
8.12
.201
619
.12.
2016
30.1
2.20
1611
.01.
2017
20.0
1.20
1731
.01.
2017
9.02
.201
720
.02.
2017
1.03
.201
710
.03.
2017
21.0
3.20
1730
.03.
2017
10.0
4.20
1719
.04.
2017
27.0
4.20
179.
05.2
017
9.05
.201
718
.05.
2017
29.0
5.20
177.
06.2
017
16.0
6.20
1727
.06.
2017
6.07
.201
717
.07.
2017
26.0
7.20
174.
08.2
017
15.0
8.20
1724
.08.
2017
5.09
.201
714
.09.
2017
25.0
9.20
174.
10.2
017
13.1
0.20
1724
.10.
2017
2.11
.201
713
.11.
2017
22.1
1.20
171.
12.2
017
12.1
2.20
1721
.12.
2017
4.01
.201
815
.01.
2018
24.0
1.20
182.
02.2
018
13.0
2.20
1822
.02.
2018
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
PROS
• OPEC & Non OPEC Supply Cut
• Political Instabilities in Middle East
• Healthy PMI data in Developing Countries
• Expectation of high global GDP
REFINING INDUSTRY
Source:Platts
26,0
70,7
65,8
Investor Presentation www.tupras.com.tr
Refinery Capacity Change
5
-3000
-2000
-1000
0
1000
2000
3000
4000
China India Middle East Other Asia Other Japan North America Europe
80
-232
340
196
58120
460
-268
105
-143
76
-220
156
70
-57
364
-130
40
150
417300
244
-189
63
-443
198510
270
-352
305
-140
390120
400
520
-546
-775-4,7
302
526530
-421
65
-240
18084
181250
160
-266-109-145
40135340
150334
-486-543-25552195160
640810
2009 2010 2011 2012 2013 2014 2015 2016 2017
0
450
900
1350
1800
2012 2013 2014 2015 2016 2017 2018 2019 2020
1.0801.0821.0171.022
337
1.685
1.041
1.7901.678
Thousand Barrels/Day
REFINING INDUSTRY
Source:, Reuters, UEA , Tüpraş, sector reports and news
Gross Capacity Additions
Investor Presentation www.tupras.com.tr
Middle Distillate Cracks ($/bbl)
6
0
4
8
12
16
20
Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec
12,1 12,2
2015 2016 2017 2018
0
5
10
15
20
Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec
11,9
14,4
Diesel Jet Fuel
REFINING INDUSTRY
Source: Platts
7,6
14,8
7,2
10,010,4
11,5
15,1
8,0
9,1
6,6
11,4
9,5
Investor Presentation www.tupras.com.tr
Light Distillate Cracks ($/bbl)
7
0
6
12
18
24
Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec
10,2 10,6
2015 2016 2017 2018
-8
-6
-4
-2
0
2
4
Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec
-4,9 -4,8
Gasoline Naphta
REFINING INDUSTRY
Source: Platts
-40
-30
-20
-10
0
Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov Dec
-21,5 -22,3
LPG -2,2-4,7
-16,2
-20,6
-17,2-15,1
9,8
15,7
11,9
9,7
13,5
18,6
2,4 2,7
-4,0
-1,5
-7,3
-0,5
Investor Presentation www.tupras.com.tr
Quarterly Product Crack Margins in 2015 - 2017 ($/bbl)
8
Gasoline
10
12
14
16
18
20
Q1 Q2 Q3 Q4
13,314,3 15,0
10,9
15,214,5
10,9
12,813
19,4 18,9
13,5
Diesel
6
8
10
12
14
16
Q1 Q2 Q3 Q4
10,5 10,7
13,1 12,4
7,99,2 8,9
11,2
15,7 15,2 14,6
10,8
2015 2016 2017Jet Fuel
6
8
10
12
14
16
Q1 Q2 Q3 Q4
9,5 9,9
12,4 12,0
7,3 7,7 8
10,2
14,4
11,210,5
9,4
Fuel Oil
-16-14-12-10-8-6-4-2
Q1 Q2 Q3 Q4
-5,3-3,9
-5,8-7,8
-11,5-12,6
-7,8-5,7
-9,1-10,2
-12 -12,5
(0.01)
REFINING INDUSTRY
Source: Platts
Investor Presentation www.tupras.com.tr
Price DifferentialsUral Differentials
Crude Price Differentials ($/bbl)
9
-4
-3
-2
-1
0
1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2015 2016 2017 2018
-0,58
-2,06
-12
-9
-6
-3
0
11Q
111
Q2
11Q
311
Q4
12Q
412
Q2
12Q
312
Q4
13Q
113
Q2
13Q
313
Q4
14Q
114
Q2
14Q
314
Q4
15Q
115
Q2
15Q
315
Q4
16Q
116
Q2
16Q
316
Q4
17Q
117
Q2
17Q
317
Q4
Iran Heavy Kirkuk Kuwait Basra Heavy Arab Heavy Ural
-0,35
-1,30
2012-2017 Differential Range
Brent Brent
REFINING INDUSTRY
Source: Platts
Investor Presentation www.tupras.com.tr
Turkish Economy Strengths
10
78
79
80
81
82
2016 2017 2018 2019 2020
828181
8079
Population (mn)
1.4% growth in last 5 yrs
0-40 yrs >65%
0
3
6
9
12
2010 2011 2012 2013 2014 2015 2016 2017Q1 2017Q2 2017Q3
9,2 8,8
2,1
4,23,0
4,02,9
5,0 5,1
11,1
GDP (%)
21
22
23
24
25
26
27
2016 2017 2018 2019 2020
27,726,1
25,124,2
22,3
Diesel Consumption (mn tons)
8.8% average growth in last 5 yrs
4% annual growth
Car ownership per thousand people
0
55
110
165
220
2014 2015 2016 2017
127 134
176
213
REFINING INDUSTRY
2002-2014 4.9%2010-2014 5.4%
Source: EMRA, TSI
67%
Investor Presentation www.tupras.com.tr
Turkish Consumption (Million tons) 2015-2017
11
Diesel
-4%
Jet Fuel
2015
2016
2017
0 0 0 0 1
0,49
0,58
0,60
Fuel Oil*
2015
2016
2017
0 1 2 2 3
2,30
2,23
2,10
Gasoline
+6.5% -3.5%
2015
2016
2017
0 1 2 3 4 5
4,52
4,40
4,582015
2016
2017
10 14 17 21 24
24,17
22,31
20,56
+8.5%
+8.3% +2.7%
+3.1% -15.7%
REFINING INDUSTRY
Source: EMRA*Bunker excluded.
Investor Presentation www.tupras.com.tr
Turkish Petroleum Market - 12 Months 2017, (Million tons)
12
2017
2016
0 4 8 12 16
22,32
24,17
Diesel
+2.7%
Jet Fuel
2017
2016
0 0 0 0 1
0,58
0,49
Fuel Oil*
2017
2016
0 1 2 2 3
2,23
2,30
Gasoline
+8.3%
+3.1% -15.7%
2017
2016
0 1 2 3 4 5
4,40
4,52
REFINING INDUSTRY
Source: EMRA*Bunker excluded.
Investor Presentation www.tupras.com.tr
Turkey’s Import / Export Balance (Net) (Million tons)
13
-16
-12
-8
-4
0
4
LPG Gasoline Diesel Fuel
0,7
-13,2
3,2
-3,1
0,3
-12,3
2,8
-3,4
1,5
-10,0
2,1
-3,0
2011 2012 2013 2014 2015 2016 2017
REFINING INDUSTRY
Source: EMRA
Export
Import
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
Tüpraş Shareholder Structure
15
%77
%79,98
%40 %49
%100
%20
%51
%3
Energy Investments Inc. (SPV)
Free Float
%82,5
%17,5
Foreign OwnershipDomestic Ownership
*Distribution of Domestic/ Foreign Ownership of Tüpraş Shares
Publicly Traded
COMPANY OVERVIEW
*As of December 31th, 2017
Investor Presentation www.tupras.com.tr
Tüpraş Refining Assets & Distribution Network
16COMPANY OVERVIEW
Turkey Storage Capacity
Tüpraş : 58%Opet : 9%Other Companies : 33%
İzmir
İzmit
Ankara
İstanbul
Kırıkkale
Batman
Kirkuk
Baku
Terminal Refinery
OPETGiresun Terminal
OPETMersin Terminal
OPETAntalya Terminal
OPETMarmara Terminal
19,392 m3 240,000 m3
721,000 m343,130 m3
Crude Pipeline
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
Investor Presentation www.tupras.com.tr
High Complexity (Nelson Complexity of Refinining Companies)
17
0
5
10
15
İzm
it Re
f.
Vale
ro
Relia
nce
Essa
r
Mar
atho
n O
il
Hol
ly-F
ront
ier
Nes
te BP
Teso
ro
Thai
Oil
IOC
L
Tüpr
aş-2
015
Hel
leni
c
PKN
MO
L
SHEL
L
Petro
m
Gal
p
Sara
s
Petro
bras
Tüpr
aş
Luko
il
HPC
L
CPC
L
BCP
Esso
(Tha
i)
S-O
il
MRP
L
SK E
nerg
y
BPC
L
5,85,85,96,56,87,17,17,17,17,3
8,08,48,78,89,09,29,29,49,59,69,89,9
10,411,0
11,511,611,812,6
13,0
14,5 Tüpraş After Rup
Tüpraş Before Rup
İzmit After Rup
14,5
9,5
7,3
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
Crude Suppliers of TÜPRAŞ (Million Tons)
18
Crude Type 2017
0
10
20
30
40
50
60
70
80
90
2012 2013 2014 2015 2016 2017
7976
71
636765
7141411
1517101010131312
133 2210
66
Africa America Europe CIS Middle East
%36
%58,8
%5,3
>34 30> 30 - 40
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
Sales By Customer (2017)
19
Military%1Bitumen
%11
Export%18
Other%6
Petkim%1
LPG%4 Jet
%5 THY Opet%9
Distributors%45
Other%13
LUKOIL%4TP%3
BP%15
Shell%15
OPET%25
POAŞ%26
Customer Groups Sales to Distributors
Total : 31.5 mn tons Distributors : 14.3 mn tons
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
Competitive Advantages of Tüpraş
20
High Complexity of Tüpraş
Best Fit for the Market with high diesel yield
Presence in all over Turkey through
refineries and terminals
Short on Diesel
High Economic Growth
Import Parity Pricing (Freight advantage of
Tüpraş)
Crude Oil & Feedstock Cost Advantage
Energy Efficient
Economies of Scale
Added Value Created by Tüpraş
Local Market Dynamics
Cost Base of Tüpraş
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
OPET- Tüpraş Share 40.0%
21
# 1 Brand Royalty Award
๏Jet Fuel SalesTHY Opet- 50/50 joint venture with Turkish Airlines for air transport fuel sales in Turkey
1.560 Stations
Market positions: 17.8% in White product; 23% in black product
Marmara, Aegean, Black Sea &
Mediterranean
1.1 Million M3 Storage
2nd Biggest Distribution
Company by Volume ๏Lubricants
Opet Fuchs- 50/50 lubricant joint venture with Fuchs
๏International Trading London
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
DİTAŞ, Marine Transport -Tüpraş Share 79.98%
22
• 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
0
5
10
15
20
25
30
2011 2012 2013 2014 2015 2016 2017
6
65
43
3
3
17
97
56
15
19
Crude Oil Product
13 tugboats 10 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 DWT7 Product Tanker : 90.534 DWT
COMPANY OVERVIEW
21,9
18
9,6 8,411,8
15,2
23,3
Investor Presentation www.tupras.com.tr
Körfez Ulaştırma A.Ş.- Tüpraş Share 100%
23
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
locomotives
Target2,5 mn tons/year transport
% 10 Market share
Turkey's First Private Railway Operator
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
Margin Environment ($/bbl)
24COMPANY OVERVIEW
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
-2,5
0
2,5
5
7,5
10
J-08 J-08 J-09 J-09 J-10 J-10 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 18
Month Annual
0
3,2
6,4
9,6
12,8
16
2013 2014 2015 2016 2017
5,34,0
4,8
2,01,7
8,1
6,06,5
3,22,5
12,911,211,9
10,69,6
Tüpraş Brüt Marj Tüpraş Net Marj Akdeniz Marj
Med Complex Margin
Investor Presentation www.tupras.com.tr
Capacity Utilization and Quarterly Production Volume
25
*Nameplate capacity calculated by standard 330 days of operations.
Capacity Utilization* (%) Quarterly Production (Mil. Tons)Full Year Q4
0
30
60
90
120
2014 2015 2016 2017
101,4100,998,1
71,3
Crude Oil Other
0
30
60
90
120
2014 2015 2016 2017
89,7
107,5106,3
78,9
4
5
6
7
8
9
Q1 Q2 Q3 Q4
7,1
7,8 7,7
6,36,6 6,7
7,27,4
5,6
6,9
7,3 7,4
4,5 4,6
5,4 5,5
2014 2015 2016 2017
74,9
102,5 105,3 108,1
81,9
111,6 110,6
94,6
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
12M Product Yields
26
White Product %76.56
Production 27,93 mn tons
API 30,62
White Product %76.27
Production 28,88 mn tons
API 30,26
2016
Bitumen%12
Fuel Oil%7
Coke%3
Other%2
ULSD%33
Jet%17
Naphtha%1
Gasoline%20
LPG%4
Black Prod.%22,3
Mid. Distil.%50,4
Light Distil.%25,5
Other%1,7
Bitumen%12
Fuel Oil%7
Coke%3
Other%2
ULSD%33
Jet%17
Naphtha%1
Gasoline%20
LPG%4
Black Prod.%22,6
Mid. Distil.%50,3
Light Distil.%25,0
Other%2,1
2017
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
Tüpraş Sales (Million Tons)
27
Full Year Domestic Sales of Key Products (mt)
Full Year Total Sales (mt) Total Sales in Q4 (mt)
0
10
20
30
2014 2015 2016 2017
3,53,42,91,9
2,22,22,01,8 4,44,34,53,6 11,110,69,06,5
Diesel Jet Fuel Gasoline Bitumen
0
2
4
6
2014 Q4 2015 Q4 2016 Q4 2017 Q4
1,00,90,90,5
0,50,50,50,4 1,01,01,10,9 2,92,92,61,7
Domestic Sales of Key Products in Q4 (mt)
0
10
20
30
40
2014 2015 2016 2017
25,724,822,216,9
Domestic SalesExport
22,228,7 30,3 31,5
0
2
4
6
8
2014 Q4 2015 Q4 2016 Q4 2017 Q4
6,46,46,2
4,3
6,17,9 7,7 7,3
COMPANY OVERVIEW
All Time High Total Sales
Investor Presentation www.tupras.com.tr
Investments (mn $)
28
• New Power Plant
• Revamp of Crude Unit
• FCC Modernization
• New Sulphur Units
• Energy Saving Projects
• Optimization of conversion units
• 9.5 Nelson complexity• High white product yield• Process more heavier and sour crudes• Run all refineries with 100% capacity utilization
Ongoing Projects
Avg. 247 mn$
Avg. 943 mn$
Avg. 278 mn$
COMPANY OVERVIEW
274355 400
186 177
628
974
1.213
959
344213
185
250
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 E
Investor Presentation www.tupras.com.tr
Capex (mn $) Margins ($/bbl)
2017 Expectations vs 12 Months Results
29
40
45
50
55
60
65
70
J-17
F-17
M-1
7
A-17
M-1
7
J-17
J-17
A-17
S-17
O-1
7
N-1
7
D-1
7
64,262,657,456
51,648,646,550,452,551,655,154,7
Brent Price ($/bbl)
020406080
100120140
14'Q
1
14'Q
2
14'Q
3
14'Q
4
15'Q
1
15'Q
2
15'Q
3
15'Q
4
16'Q
1
16'Q
2
16'Q
3
16'Q
4
17'Q
1
17'Q
2
17'Q
3
17'Q
4
CPU Average
94,6114,8116,5106,4110,510910299,7111,6110,3104
84,181,980,76968
Capacity Utiliation (%)
Expected Full Capacity Utilization in 2017; achieved 108.1% capacity utilization. Our expectation was 50-55 $/bbl; 2017 average was 54.3 $/bbl.
0
2
4
6
8
10
17 Q1 17 Q2 17 Q3 17 Q4
4,1
6,55,45,0
6,7
8,98,28,7Tüpraş Net MarginMed Margin
Net Tüpraş refinery margin for 12M was 8,1 $/bbl above target of 7,50 - 8,00 $/bbl.
0
80
160
240
320
400
2015 2016 2017
117,6
185,4213,0
344,0 Tüpraş Ditaş
Tüpraş core refining business capex guidance for 2017 was 200 Million dollars.
74,9
102,5 105,3 108,1
COMPANY OVERVIEW
KEY FINANCIALS
Investor Presentation www.tupras.com.tr
2017 Key Highlights
31
31.5Million tons of
Sales
101.4 %
Crude Capacity Utilization
30.4Million tons
Processed(Total)
4.5Billion TL
Profit Before Tax
5.9Billion TL
EBITDA
8.1$/bbl
Net Refining Margin
KEY FINANCIALS
Investor Presentation www.tupras.com.tr
Financial Highlights (mn $)
32
EBITDA Net Income
-50
250
550
850
1150
1450
1750
2012 2013 2014 2015 2016 2017
123
256
2859147271
283
197
268175435309 405
113273171
7575
2352711223172161
1.046
594
938667629817
-50
250
550
850
1150
1450
1750
2012 2013 2014 2015 2016 2017
321
480
422
-11
89106
435
294
410
226315
361
431
237415
-27
78153427
11415015079951st Q2nd Q3rd Q4th Q
715 560
338
1.397
1.125
1.614USD USD
Net Debt- *Debt/Rolling EBITDA
0
500
1.000
1.500
2.000
2.500
3.000
2012
-R
2013
2014
H1
2014
9M
2014
2015
H1
2015
9M
2015
2016
H1
2019
9M
2016
2017
Q1
2017
H1
2017
9M
2017
1.7291.2401.6801.5551.7291.7512.3912.3702.7482.5771.6631.5981.8691.340551
Net Debt
0
1
2
3
4
5
6
0,8
2,4
3,5 3,6
4,9
3,32,8
1,7 2,01,6 1,5
1,1 1,0 0,71,1
Net Debt/*R. EBITDA
0
0
0
0
0
1
2011
2012
2013
2014
2015
2016
Q1
2016
H1
2016
9M
2016
2017
Q1
2017
H1
2017
9M
2017
0,41
0,490,55
0,45
0,220,16
0,110,04
0,35
0,260,24
0,320,3
Return of Average Equity
0,41
0,22
Net Debt/Rolling EBITDA was calculated with USD figures
KEY FINANCIALS
Investor Presentation www.tupras.com.tr
Balance Sheet Analysis
33
0,0
0,6
1,2
1,8
2,4
3,0
Mar
.14
Jun.
14
Sep.
14
Dec
.14
Mar
.15
Jun.
15
Sep.
15
Dec
.15
Mar
.16
Jun.
16
Sep.
16
Dec
.16
Mar
.17
Jun.
17
Sep.
17
Dec
.17
2,32,2
1,6
2,01,7
2,5
1,61,6
1,00,8
1,01,2
1,71,61,3
1,7
0,4
0,8
1,2
1,6
2,0
Mar
.14
Jun.
14
Sep.
14
Dec
.14
Mar
.15
Jun.
15
Sep.
15
Dec
.15
Mar
.16
Jun.
16
Sep.
16
Dec
.16
Mar
.17
Jun.
17
Sep.
17
Dec
.17
1,361,57
1,151,090,91
0,750,91
0,700,88
1,07
0,66
0,200,09
0,510,520,71
0
1
2
3
4
Mar
.14
Jun.
14
Sep.
14
Dec
.14
Mar
.15
Jun.
15
Sep.
15
Dec
.15
Mar
-16
Jun-
16
Sep-
16
Dec
.16
Mar
.17
Jun.
17
Sep.
17
Dec
.17
2,222,71
2,192,62
2,021,981,69
1,231,361,591,71,74
2,46
3,043,283,1
0,0
0,71,42,12,93,64,35,0
Mar
.14
2014
1h
2014
9M
Dec
14
Mar
.15
Jun.
15
Sep.
15
Dec
.15
Mar
-16
Jun-
16
Sep-
16
Dec
.16
Mar
.17
Jun.
17
Sep.
17
Dec
.17
1,41,31,1
0,60,61,11,21,00,60,60,50,4
0,30,30,30,9
2,62,12,13,02,93,12,82,92,83,03,13,33,02,92,92,8
LT Loans ST Loans
Cash & Cash Equivalents (Billion $) Receivables (Billion $)
Payables (Billion $)Financial Loans (Billion $)
2,22
1,362,3
4,03,7
3,2 3,2 3,33,7 3,6 3,6
3,43,9 4,0 4,2
3,43,6
3,2 3,4
KEY FINANCIALS
Investor Presentation www.tupras.com.tr
Tüpraş Balance Sheet
34
Million USD 31.12.2017 31.12.2016 Difference % DifferenceCurrent Assets 5.399 3.884 1.516 39
Cash & C. Equivalents 2.334 1.719 614 36Receivables 1.355 911 444 49Derivatives 92 10 82 832Inventories 1.403 1.025 377 37
Pre-paid expenses 17 28 -11 -41Other Current Assets 199 190 9 5
Long Term Assets 4.718 4.987 -269 -5Financial Assets & Subsidiaries 303 264 39 15
Fixed Assets 3.263 3.338 -75 -2Derivatives 27 105 -78 -75
Pre-paid expenses 26 68 -41 -61Deferred Tax 813 917 -104 -11
Other Long Term Assets 286 296 -11 -4Total Assets 10.118 8.871 1.247 14Short Term Liabilities 4.686 3.597 1.089 30
Financial Loans 1.398 556 842 151Payables 2.219 2.020 199 10
Derivatives 47 8 39 461Deferred Incomes 5 4 1 24
Provisions 24 18 5 29Other ST Liabilities 993 990 3 0
Long Term Liabilities 2.654 2.953 -299 -10Financial Loans 2.592 2.892 -300 -10
Payables & Provisions 59 59 0 1Derivatives 1 1 0 76
Other LT Liabilities 1 2 0 -8Equity 2.750 2.298 452 20
Minority Interests 28 22 5 24Total Liabilities 10.118 8.871 1.247 14
KEY FINANCIALS
Investor Presentation www.tupras.com.tr
Dividend
35
0
2
4
6
8
10
12
2008 2009 2010 2011 2012 2013 2014 2015 2016
Earnings per Share Gross 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.
One of the highest dividend yield in BİST
KEY FINANCIALS
2012/2013 EPS includes the tax incentive
579 626
746
985964
396
1.628 1.557
Total Payout (Mn. TL)
Investor Presentation www.tupras.com.tr
Creating Competitive & Sustainable Shareholder Value
36
%38
%62
BuyHold
Foreign Currency Long Term
Tüpraş BBB-(IG) Ba1 (Pos.)
Turkey BB+ (stable) Ba1 (Neg.) BB
Koç Holding Baa3- (IG) BBB (IG)
Analyst Recommendations
Board
Stakeholders
Transparency
Shareholders
Overall
0 25 50 75 100
94,7
95,5
94,0
98,6
92,9
Tüpraş has one of the highest Corporate Governance Ratings
KEY FINANCIALS
Investor Presentation www.tupras.com.tr
Financial Policy
37
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
Counterparty Risk 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
Deposit is kept, within certain limits, by banks that comply with the criteria determined in our policy
KEY FINANCIALS
Investor Presentation www.tupras.com.tr
Inventory & Crack Margin Hedge
38
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: 50%, • Tenor: up to next 4 quarters
KEY FINANCIALS
Investor Presentation www.tupras.com.tr
FX Risk Exposure (31 December 2017)
39
Cash flow hedge accounting : 1,254 mn $
Consolidated Assets
Consolidated Liabilities
Cash1.996
Receivables & other assets
35
Stock1,341
Forward & CFH2,410
Payables1,935
ST Financial 1.199
• RUP : 304• Eurobond : 700• Other : 195
LT Financial 2,510
• RUP Loans : 964• Eurobond 700• Other Credits : 846
139 mn $
Million $ • 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
OUTLOOK
Investor Presentation www.tupras.com.tr
2018 Refinery Maintenance Schedule & Capacity Utilization
41
Even after the 2018 maintenance schedule, we aim to exceed our full total capacity utilization target and reach 104.6%.
Unit Quarter Duration (weeks) Reason
İzmir
Plt 7000 Crude Oil Unit Q4 ’17- Q1’ 18 11-13 in 2018 Revamp
Hydrocracker, DHP & Platformer Q1 5-6Periodic Maintenance
Plt 4000 FCC Q2 5-6
İzmit
Plt 2 Crude Oil & Vacuum Unit Q4 5-6
Periodic Maintenance
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
Kırıkkale All Units Q1 6-7 Battery Shutdown
Batman Plt. 100/Crude Oil & Vacuum Q1 4-5 Periodic Maintenance
2018 Crude Capacity Utilization 26.8 mn tons (95.4%)
2018 Total Capacity Utilization 29.4 mn tons (104.6%)
OUTLOOK FOR 2018
Investor Presentation www.tupras.com.tr
2018 Expectations
42
The average Brent crude oil price in 2018 is expected to be 55-60 dollars per barrel.
We expect Med Complex margins to be between 4.75 – 5.00 dollars per barrel band in 2018.
Net Tüpraş refinery margin is expected to be in the region of 7,50 - 8,00 dollars per barrel
• Full Total Capacity Utilization using imported semi-products such as ASRFO and HVGO • Production: approximately 28.3 million tons • Total sales: 31.0 million tons
Refining investments is expected to be around 250 Million dollars.
Brent Price Estimation
Med Complex Margin
Tüpraş Net Margin
Operations
Investment
OUTLOOK FOR 2018
Investor Presentation www.tupras.com.tr
Competition # 1 (SOCAR-STAR Refinery)
43
• 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.
• Credit : 3.3 Billion $• Equity : 2.4 Billion $• Total Investment : 5.7 Billion $
• 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 planned to be commissioned in 2018.
STAR Refinery (Total Cap. 10 mn ton)
2019, mn ton Production Turkish Demand BalanceTüpraş Star Total
LPG 1,2 0,3 1,5 4,2 -2,8Petchem Feeds 0,3 2,6 2,9Gasoline 5,8 5,8 2,4 3,4Jet Fuel 5,4 1,6 7,0 5,0 2,0Diesel 10,2 4,8 15 26,1 -11,1
Coke 0,8 0,7 1,5 4,6 -3,1
Fuel Oil 1,5 1,5 1,3 0,2Bitumen 3,1 3,1 3,3 -0,2
Production (K Ton)
Diesel 4.800 Jet Fuel 1.600 Sulphur 158 Petrocoke 698
Fuels
Petrochemical Feedstock
LPG 260 Naptha 1.600 Mixed xylene 460 Reformate 524
OUTLOOK FOR 2018
Investor Presentation www.tupras.com.tr
Competition # 2 (Regional Competition)
44
Ukraine
Russia
Georgia
Turkey
Bulgaria
Romania
Moldova
EgyptLibya
Tunisia
AlgeriaMorocco
PortugalSpain
France
Italy
IsraelSyria
TurkeyGreece
Albania
Croatia
• 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 Refineries7.8mn bpd
17 Refineries1.8mn bpd
OUTLOOK FOR 2018
Investor Presentation www.tupras.com.tr
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.
Marine Bunker Specification Changes and Its Effects
45
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
• 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.
OUTLOOK FOR 2018
Ship Owners Intention Survey
%2%5
%19
%74Buy Low Sulphur Fuel
Install Scrubber
switch to LNG
Other
Source: IEA, Oil Sector Report, 2017
2016 2020 2022
1,82,1
HS Fuel Oil
Diesel
LS FO
HS FO Scrubbed
LS Fuel GapLS Fuel Gap
Mn
b/d
Source: UBS, 2017
Appendix
Investor Presentation www.tupras.com.tr
Q4 Product Yields
47
White Products %77.57
Production 7,3 mn tons
API 30,1
White Products %73.74
Production 6,3 mn tons
API 30,0
2016
Bitumen%13
Fuel Oil%5
Coke%3
Other%1
ULSD%39
Jet%14
Naphtha%1
Gasoline%20
LPG%3
Black Prod.%21,2
Mid. Distil.%52,8
Light Distil.%24,8
Other%1,2
Bitumen%16
Fuel Oil%6
Coke%3
Other%3
ULSD%31
Jet%16
Naphtha%1
Gasoline%21
LPG%3
Black Prod.%25,2
Mid. Distil.%47,0
Light Distil.%24,9
Other%2,9
2017
APPENDIX
Investor Presentation www.tupras.com.tr
12M Product Yields
48
White Product %76.56
Production 27,93 mn tons
API 30,62
White Product %76.27
Production 28,88 mn tons
API 30,26
2016
Bitumen%12
Fuel Oil%7
Coke%3
Other%2
ULSD%33
Jet%17
Naphtha%1
Gasoline%20
LPG%4
Black Prod.%22,3
Mid. Distil.%50,4
Light Distil.%25,5
Other%1,7
Bitumen%12
Fuel Oil%7
Coke%3
Other%2
ULSD%33
Jet%17
Naphtha%1
Gasoline%20
LPG%4
Black Prod.%22,6
Mid. Distil.%50,3
Light Distil.%25,0
Other%2,1
2017
COMPANY OVERVIEW
Investor Presentation www.tupras.com.tr
Income Statement (In USD)
49
Million USD FY 2016 FY 2017 % Diff. 4Q 2016 4Q 2017 % Diff.
Net Sales 11.547 14.801 28 3.332 3.855 16Gross Profit 1.209 1.705 41 510 366 -28Operating Expenses -330 -316 4 -91 -95 -5Income/Loss from other operations -98 -57 42 -106 -73 31
Operating Profit 781 1.333 71 314 198 -37
Income/Loss from equity investment 53 64 22 8 16 93
Operating Profit Before Fin. Income/Loss 834 1.397 68 322 214 -34
Net Financial Income /Expense -190 -170 11 -35 -21 40
Profit Before Tax & Minorities 644 1.227 91 287 192 -33
Net Profit 594 1.046 76 256 123 -52
* EBITDA (mn.$) 1.125 1.614 43 480 321 -33
* EBITDA (mn.$) CCS 972 1.453 50 418 235 -44
For P&L, USD/TL rates: 2017 12M 3,6450, 2016 12M 3,0186 *According to international standards, in our EBITDA calculation, FX related items are not included.
APPENDIX
Investor Presentation www.tupras.com.tr
Crack Margin Effect on Tüpraş in 12M (FOB Italy Prices)
50
Product Price, $/ton Tüpraş Crack Margin, $/bbl2017 2016 2016 Yield 2017 2016
LPG 435,2 308,3 %3,3 -15,5 -16,2Gasoline 549,0 462,3 %19,5 13,4 13,3Naptha 467,2 366,6 %1,0 -1,5 -2,3Jet Fuel 512,7 408,9 %15,4 10,9 8,3Diesel 491,0 394,6 %30,4 11,7 9,3Diesel 1000 478,0 384,9 %1,2 9,9 8,0Fuel Oil 1% 315,0 222,3 %0,9 -5,7 -9,4Fuel Oil 3,5% 298,5 205,2 %5,7 -8,2 -12,1Diğer 276,3 200,3 %16,8 -8,5 -10,5
94,4Total Crack Margin,$/bbl 5,5 3,7Dated Brent Avg. $/Bbl 54,3 43,7Margin Differences, $/bbl +1,86Total Processed, mn bbl 213.29Total Effect, mn $ 383.6Total Effect, mn TL 1.398,1
Higher product cracks in 2017 over 2016 indicates a +1.9 $/bbl margin difference, yielding a 1.4 billion TL contribution to Tüpraş Financials.
APPENDIX
Investor Presentation www.tupras.com.tr
High Complexity (Resid Upgrading Units Production-(Thousand Tons)
51
Natural Gas 246
Vacuum Resid1,214
Atm. Straight Run Fuel Oil
3,036
Total Feed 4,496
Diesel2.883
Gasoline522
LPG69
PetroCoke690
Sulphur86
Total Production
4,250
Raw Materials Products(kton)
APPENDIX
Investor Presentation www.tupras.com.tr
High Complexity (Tüpraş Total Production Change After RUP)
52
Gasoline&Naptha
Jet Fuel
Diesel
Others
Fuel Oil
Coke
Bitumen
Before RUP After RUP
RUP production + 4 Refineries Capacities increase 9,1 mn tons, instead of
4,2 mn ton
APPENDIX
mn tons
2,9
0,7
0,35 2,7 %-87
%191,4 0,3
5,6 5,5
3,6 0,9 %25
4,7 1,7 %35
Investor Presentation www.tupras.com.tr
Flexibility & Reliability; Multiple routes to maksimum capacity
53
CRUDE OIL 970008
VACUUM 423208
NAPHTHA SPLITTER 8
LPG MEROX 6
ISOMERISATION 64003
UNIFINER REFORMER 169007
LPG
GASOLINENAPHTHA
JET FUELOİL
DIESEL
LUBE OIL
VACU
UM
MHC
2
22.0%
33.9%
0.5%
19.9%
Numberof unitsKey units
Capacity(m3/d)
KERO/DIESEL (HDS) 3730010
3.5%
FCC 2 4700
182004
COKER 82001
LPG MEROX
Yields (%)
16.5%
BITUMEN &FUEL OİL
OTHER 3.8%
More than one distillation and production units
VACUMM DİST.
NAFTASPLITTER UNIFINER
REFORMER
KERO / DIESEL
HDS
HYDROC.
FCC
COKER
ISOMER.
Benzen Saturation
FCC Benzin HDS
Lube Oil
Bitumen
CRUDE OIL
Flow Diagram
HYDROCRACKER• Increased conversion
capacity • Strong integration
among refineries
APPENDIX
Investor Presentation www.tupras.com.tr
Competition (European Pump Price Comparison)
54APPENDIX
0
200
400
600
800
TR Spa. UK Ger Eu19 Fra. Gre. Ita.
473473439
419408413
317322
7262522651
190252
191244
174203267
180
Pump No Tax Distr. Marg. Tax
553 584
634 642 663691
725 735
0
175
350
525
700
TR Spa. Ger. EU19 Fra. Gre. UK Ita.
411416317
394
337308266
255
6426586055
201218303
199259
184274
186
Pump No Tax Distr. Marg. Tax
496540 552
596620
650660 675
Gasoline (Krş / Lt) Diesel 10 (Krş / Lt)
Not: Prices valid on 12 Feb 2018-Turkey Gasoline pirice as of 14th of February 2018
Investor Presentation www.tupras.com.tr
Tüpraş HSE KPI: Loss Time Incident Frequency and Severity Frequency Ratios
55
0
2
4
6
8
2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0,9
2,01,3
0,81,4
2,61,8
3,23,6
3,13,42,8
2,41,71,91,71,9
3,53,4
5,04,8
6,16,97,17,1
Tüpraş Contractor
Loss Time Severity Frequency Rate 2008 2009 2010 2011 2012 2013 2014 2015 2016
Tüpraş 92 44 40 53 65 61 59 719 101
Contractor 116 101 81 118 424 17 378 51 551
Total 105 73 57 83 290 26 308 315 354
loss time incident freaquency rate =number of incident *1000000/man hoursloss severity frequency rate = loss time*1000000/man hours
APPENDIX
Incident Frequency Including contractors
3,6
2,5 1,7 2,21,5 1,1 1,6
2,51,9
Total
Investor Presentation www.tupras.com.tr
Energy Saving Projects (mn$)
56
0
125
250
375
500
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
424416407398376345
240
1357342
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total
Tüpraş Energy consumption (TJ) 76.653 65.265 67.010 70.792 71.086 69.147 67.034 90.796 102.156 105.851 785.790
Energy-saving(TJ) 978 10.891 3.155 3.053 5.255 2.841 1.772 1.031 1.054 830 30860
Energy Efficiency Project 36 52 65 92 97 40 22 21 18 15 458
Savings (mn $) 42 32 62 105 106 31 22 10 9 5 424
APPENDIX
Investor Presentation www.tupras.com.tr
Koç Holding
57APPENDIX
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
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 5001
• 16% CARG in consolidated profit2 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%
10%
19%
Updated information can be found in the Investor Relations section of the company website www.tupras.com.tr