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Investor Presentation
www.tupras.com.tr
Hizmete Özel / Confidential
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.
2
Investor Presentation
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Content
3CONTENT
• Refining Market Slides
• Turkish Market Slides
• Company Overview Slides
• Operations Slides
• Key Financials Slides
• Outlook Slides
• Appendix Slides
4-10
11-14
15-19
20-24
25-39
40-45
46-51
Investor Presentation
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54.5
66.0
0
10
20
30
40
50
60
70
80
90
100Brent
Brent Crude Oil Prices ($/bbl)
CONS
• Increase in number of rigs & shale
production in US
• Inventory Levels
• Impact of trade tariff negotiations
• Weak PMI in Europe and China
PROS
• OPEC+ supply cut through 2018 – 1H 2019
• Political instabilities in Middle East, Africa
and Latin America
• Healthy PMI data in developing countries
• Potential impact of sanctions
REFINING INDUSTRY
Source : Platts
As of July 16th.
5
Investor Presentation
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Refinery Capacity Change (mb/d)
6
2.7
0.5
1.9 2.0
1.5
0.5
2019 2020 2021 2022 2023 2024
Asia & Middle East Other
Source:, Reuters, International Energy Agency, Tüpraş, sector reports and news.
2019-2024 Net Capacity Additions
REFINING INDUSTRY
2.1
1.0
1.7
0.5
1.3
-1.0
0.2
-1.4
China
India
Middle East
Other Asia
Other
Japan
N. America
Europe
2012-2018 Net Capacity Additions by Region
1.2
1.1
0.6
1.1
0.8
-0.1
0.9 0.91.0
0.9
0.6
0.4
2019 2020 2021 2022 2023 2024
RefineryThroughput
Refinery Products Demand
2019-2024 Additional Refinery Throughput vs. Demand
Expectations until 2024:
• ~78% of net capacity additions to come from Asia & Middle East
• Global utilization rate to decline from 82% (2018) to 79% (2024)
• Net capacity and demand in Europe to remain roughly unchanged
Investor Presentation
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Middle Distillate Cracks ($/bbl)
7
7.2
10.0
10.4
11.5
12.1 12.212.6
13.6
14.3
13.7 13.6
15.9
14.1
15.5
19.5
15.014.9
16.2
15.0
12.2
12.9
11.413.0*
0
5
10
15
20
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
2016 2017 2018 2019
6.6
9.19.5
11.411.9
14.413.7
14.413.9
13.2 13.3
14.4
12.5
14.3
18.1
15.214.4
13.813.2
10.310.9
11.2
13.3*
0
5
10
15
20
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Diesel Jet Fuel
REFINING INDUSTRY
Source : Platts
*As of July 16th
Investor Presentation
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18.6
11.913.5
9.7
10.210.6
12.012.1
13.0 13.1
13.4
14.4
9.6
5.55.0
3.5
1.7
2.9
9.0
12.1
10.0
9.4
14.4*
0
5
10
15
20
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
2016 2017 2018 2019
Gasoline and High Sulphur Fuel Oil Cracks ($/bbl)
8
-12.5
-10.2
-8.7
-12.2
-13.2
-11.9
-12.7
-15.2
-13.0
-9.1
-8.3 -8.5
-13.2
-10.9
-3.7
-6.8
-7.0
-5.0-5.5
-8.6
-11.3
-9.8
-6.7*
-20
-15
-10
-5
0
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Gasoline High Sulphur Fuel Oil
REFINING INDUSTRY
Source : Platts
*As of July 16th
Investor Presentation
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Quarterly Crack Margin Comparison in 2015 – 2019 ($/bbl)
9
Compared to Q1 2018, mid-distillate and HSFO remained strong in Q1 (Diesel:+25%, Jet: +4%, HSFO: +54%) while
Gasoline cracks were weaker (-59%)
13.0
19.4 18.9
13.5
1515
11
1313
14
15
11
11
13
13
54.5
4
6
8
10
12
14
16
18
20
Q1 Q2 Q3 Q4
Gasoline
1615 15
11
8
9 9
1111 11
131212.3
13.914.5
16.7
15.4
6
8
10
12
14
16
18
Q1 Q2 Q3 Q4
Diesel
14
1111
9
78 8
1010
10
12 12
13.3 13.813.4
15.9
13.8
6
8
10
12
14
16
18
Q1 Q2 Q3 Q4
Jet Fuel
-12
-12-13
-16
-13
-15
-11-9
-9
-7 -7
-10
-12.6 -12.4
-10.2
-7.1-5.8
-20
-16
-12
-8
-4
Q1 Q2 Q3 Q4
High Sulphur Fuel Oil
2015 2016 2017 2018 2019
Low stock levels
Strong demand
growth in both
developed and
emerging markets
Shale oil boosted
light product
production
High stock levels &
low demand in US
Limited heavy crude
availability post Iran
sanctions with OPEC+
production cut curbing HSFO
supply
New fuel oil conversion units
starting in Asia & Middle East
Low stock levels
Strong demand
growth in Asia
Investor Presentation
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Crude Price Differentials ($/bbl)
10
Heavy Crude differentials continued narrowing in Q1 with lower availability mainly due to OPEC+ cuts,
Iran sanctions and limitations on Venezuelan supply.
-10
-8
-6
-4
-2
0
2
1Q
20
14
2Q
20
14
3Q
20
14
4Q
20
14
1Q
20
15
2Q
20
15
3Q
20
15
4Q
20
15
1Q
20
16
2Q
20
16
3Q
20
16
4Q
20
16
1Q
20
17
2Q
20
17
3Q
20
17
4Q
20
17
1Q
20
18
2Q
20
18
3Q
20
18
4Q
201
8
Q1 2
01
9
Brent
Heavy Crude Price Differentials
İran Heavy
Ural
Kirkuk
Arab Heavy
Kuwait
Basra HeavyOPEC
Cut Decision
Iran
Sanctions
OPEC
Cut Decision
Investor Presentation
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4.99
4.52
4.40
4.58
2018
2017
2016
2015
Turkish Consumption 2015-2018 (Million tons)
12
Diesel
-3.9%
Jet Fuel
0.39
0.49
0.58
0.60
0 0 0 0 1 1
2018
2017
2016
2015
Fuel Oil*Gasoline
+6.5% -3.5%
23.58
24.17
22.31
20.56
0 4 7 11 14 18 21 25
2018
2017
2016
2015+8.5%
+8.3% +2.7%
+3.1%
-20.1%
REFINING INDUSTRY
2.34
2.30
2.23
2.10
2018
2017
2016
2015
*Bunker excluded.
-2.4% +10.4%
+1.8%
-15.7%
Investor Presentation
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1.35
1.38
0 1 1 2 2 3 3
2019 4M
2018 4M
0.18
0.16
0 0 0 1 1 1
2019 4M
2018 4M
Turkish Market, 4M 2019 (Million tons)
13
Diesel & Jet Fuel consumption contracted in first 4M of 2019.
*Bunker excluded
7.18
7.77
0 2 4 6 8 10
2019 4M
2018 4M
0.71
0.71
0 1 1 2
2019 4M
2018 4M
Diesel
-2.1%
Jet Fuel
Fuel Oil*Gasoline
-7.5%
+0.6% +12.1%
Investor Presentation
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Turkey’s Import / Export Balance (Net) (Million Tons)
14
-3.1
2.4
-12.0
1.0
0.0
-3.2
2.4
-13.6
1.4
-0.4
-16
-12
-8
-4
0
4
LPG Gasoline Diesel Fuel Oil Jet
2013 2014 2015 2016 2017 2018
Import
Export
REFINING INDUSTRY
Investor Presentation
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16%
84%
Tüpraş Shareholder Structure
16
Energy Investments Inc. (SPV)
Free Float
*Distribution of Domestic/
Foreign Ownership of Tüpraş
Shares
*As of December 31st, 2018.
Foreign
Ownership
Domestic
Ownership
COMPANY OVERVIEW
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Tüpraş Refining Assets & Distribution Network
17
Turkey Storage
Capacity
Tüpraş : 50%
Opet : 7%
Other Companies : 43%
İzmit
• 11.3 MT Capacity
• NC: 14.5
• Storage Capacity: 2.99 mn m3
İzmir
• 11.9 MT Capacity
• NC: 7.66
• Storage Capacity:2.51 mn m3
• Base oil 400 k tons
Kırıkkale
• 5.4 MT Capacity
• NC: 6.32
• Storage Capacity: 1.27 mn m3
Batman
• 1.4 MT Capacity
• NC: 1.83
• Storage Capacity:0.27 mn m3
Total Capacity : 30.0 mn ton
Nelson Complexity : 9.5
Tüpraş Storage Cap. : 7.0 mn m3
OPET Storage Cap. : 1.0 mn m3
COMPANY OVERVIEW
Investor Presentation
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Tüpraş Subsidiaries
3 Crude Oil Tanker: 480,859 DWT
1 Crude Oil - Product Tanker: 51,532 DWT
9 Product Tanker: 155,535 DWT“
1,634 stations as of 31 March 2019
As of February 2019 Market share: 18.3% in white products; 32.5% in black
products
OPET, Distribution, Tüpraş Share: 40%
Körfez Ulaştırma, Railway Transport, Tüpraş Share: 100%
~7% share in Turkish rail freight market
Operates with 491 cistern wagons and 5 diesel locomotives.
Ordered 5 locomotives to be delivered for Q2-2019.
DİTAŞ, Marine Transport, Tüpraş Share: 79.98%
๏ We have opened a trading office in London to:
๏ Trading office will be an important step in Tüpraş’s integration to global energy market.
Closely monitor
international market
opportunities,
Support import and
export operations,
Create additional value
from supply chain and sales
activities.
Tüpraş Trading UK, Trading, Tüpraş Share: 100%*
* Tüpraş Trading UK is a direct branch of Tüpraş19
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Crude Suppliers of Tüpraş (Million Tons)
21
6 610
2 2 33 3 1 0
12 13 1310 10 10
2
1715
1114 14
7
14
65 6763
7176
7981
0
10
20
30
40
50
60
70
80
90
2012 2013 2014 2015 2016 2017 2018
Africa America Europe CIS Middle East
In 2018, Tüpraş purchased 20 different types of crude oil from 12 countries, with gravities ranging between
19-47 API.
OPERATIONS
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Q1 Product Yields
22
2018
LPG4%
Gasoline22%
Naphtha0%
Jet19%ULSD
34%
Other0%
Coke4%
Fuel Oil7%
Bitumen10%
Light Distil.26.0%
Mid. Distil.53.6%
Other 0.0%
Black Prod.20.4%
LPG4%
Gasoline21%
Naphtha2%
Jet17%
ULSD33%
Other2%
Coke2%
Fuel Oil15%
Bitumen5%
Light Distil.25.8%
Mid. Distil.50.9%
Other 1.7%
Black Prod.21.6%
2019
White Products 78.5%
Production 5.2 mn tons
API 31.33
White Products 77.4%
Production 6.7 mn tons
API 32.36
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Capacity Utilization and Quarterly Production Volume
23
Tüpraş achieved 94% Capacity Utilization in Q1 2019 (78% in Q1 2018).
*Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards.
Quarterly Production (Million Tons)
6
7
7 7
7 7
77
78
8
6
5
6
8
77
4
5
6
7
8
9
Q1 Q2 Q3 Q4
2015 2016 2017 2018 2019
Capacity Utilization* (%)
71
98101 101
90
67
85
107
89 89
4
44 7
5
11
7
7
9 4
75
103 105 108
95
78
93
115
9994
2014 2015 2016 2017 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19
Crude Oil Semi Product Feedstock
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Sales (Million Tons)
24
Tüpraş generated 29.8 million tons of total sales 2018. Jet fuel and diesel sales increased by 7.4% and
5.3% compared to 2017, respectively.
16.9
22.224.8 25.7 25.6
5.3
6.55.5 5.8 4.2
22.2
28.730.3 31.5 29.8
-1
5.25
11.5
17.75
24
30.25
2014 2015 2016 2017 2018
Domestic Sales
Export
6.79.2 10.8 11.3 11.9
3.9
4.84.5 4.5 4.9
1.8
2.02.2 2.2 2.2
1.9
2.93.4 3.5 2.9
14.3
18.920.9 21.6 21.9
2014 2015 2016 2017 2018
Diesel
Jet Fuel
Gasoline
Bitumen
Total Sales
Domestic Sales of
Key Products
OPERATIONS
Dist.; 50%
THY Opet; 10%
Jet; 6%
LPG; 3%
Other; 6%
Export; 14%
Bitumen; 10% Military;
1%
POAŞ27%
OPET30%
SHELL17%
BP13%
TP1%
AKPET4%
OTHER8%
Customer
Groups
Sales to
Distributors
29.8 mn tonnes
14.8 mn tonnes
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5.5
2.02.9
1.2
4.2
1.7 2.0
4.84.0
5.44.6
3.2
-2
0
2
4
6
8
10
12
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Month
Annual
Margin Environment ($/bbl)
26
Tüpraş’ 4,2 $/bbl Net Refining Margin in Q1 2019 was higher than 3,6 $/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
9.610.6
11.911.2
12.9
14.7
11.0
2.53.2
6.56.0
8.1
9.3
4.2
1.7 2.0
4.84.0
5.34.6
3.6
0
2
4
6
8
10
12
14
16
2013 2014 2015 2016 2017 2018 Q1 2019
Tüpraş Gross Margin Tüpraş Net Margin Mediterranean
KEY FINANCIALS
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Income Statement (Million TL)
27
Narrowing differentials and RUP maintenance led to the 18% decline in EBITDA in Q1 2019 compared to Q1 2018.
Million TL Q1 2019 Q1 2018 % 12M 2018 12M 2017 %
Net Sales 20,708 13,421 54 88,552 53,948 64
COGS -19,717 -12,352 60 -79,328 -47,734 66
Gross Profit 991 1,069 -7 9,224 6,214 48
Operating Expenses -372 -268 39 -1,307 -1,150 14
Income/Loss from other operations -390 -111 251 -2,181 -206 958
Operating Profit 228 690 -67 5,736 4,857 18
Income/Loss from equity investment 63 52 21 257 234 9
Operating Profit Before Fin. Income/Loss 291 742 -61 5,993 5,092 18
Financial Income /Expense -601 -271 122 -2,268 -618 267
Profit Before Tax -310 472 -166 3,724 4,474 -17
Net Profit (including minority interest) -375 378 -199 3,761 3,841 -2
EBITDA (*) 851 1,033 -18 8,908 5,882 51
Inventory Gain/Loss 301 267 13 2,741 612 348
EBITDA CCS (*) 550 766 -28 6,167 5,270 17
* 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.
KEY FINANCIALS
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Financial Highlights (Million TL)
28
Current Ratio & Net Debt/ R.EBITDA
EBITDA
Tüpraş generated 851 MTL EBITDA in Q1 2019.
Net Income
Return of Average Equity*
26%35%
22%
41% 37%46%
0
0
0
0
0
1
1
2014 2015 2016 2017 2018 2019
513 278 83
876387
-375
361 713
335
1,464
1,035379
751
586
1,000
551217
822
809
501
1,789
1,470
2,564
1,813
3,841 3,761
2014 2015 2016 2017 2018 2019
*Rolling net income
-77 367 3351,575 1,033 851-66
1,080 688
1,542 2,210
489
1,144867
1,528
3,778
340
1,2081,505
1,237
1,887
685
3,7993,396
5,882
8,908
2014 2015 2016 2017 2018 2019
4th Q
3rd Q
2nd Q
1st Q
1.2
5.6
1.8 1.8
1.1 1.0 1.2
0.90.8
1.01.1
1.2
1.3
1.1
0.0
0.3
0.6
0.9
1.2
1.5
0
1
2
3
4
5
6
2013 2014 2015 2016 2017 2018 1Q 2019
Net Debt/R.EBITDA Current Ratio
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Balance Sheet Analysis (Billion TL)
29
1.1 1.2
0.2 0.5
1.8
3.32.6
2.02.6
2.2
3.24.0 4.0
5.65.1
5.7
6.9
9.4
5.5
6.5
0.0
2.0
4.0
6.0
8.0
10.0
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
De
c-1
8
Ma
r-1
9
7 6.95.7
4.5 4.6 4.84 3.5
4.95.9
7.1
9.5
7.7
9.68.4
10.5
12.6
16.7
7.7
13.3
0
5
9
14
18
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-1
6
Dec-1
6
Ma
r-17
Jun
-17
Se
p-1
7
Dec-1
7
Ma
r-18
Jun
-18
Se
p-1
8
Dec-1
8
Ma
r-1
9
0.6 0.7 0.7 1.0 1.3 1.8 1.7 2.9 3.5 3.3 2.1 2.3
7.4 7.59.8 9.7
11.214.2 13.8
16.4
6.2 6.6 7.0 8.6 8.3 9.1 8.18.3 8.1 9.3
10.2 10.7
4.0 4.6
5.3 6.53.6
5.4 4.1
5.6
6.8 7.3 7.79.7 9.7
11.09.9
11.2 11.612.6 12.4 13.0
11.4 12.2
15.116.1
14.8
19.617.9
-2.9
0.0
2.9
5.7
8.6
11.4
14.3
17.1
20.0
Jun-1
4
Sep-1
4
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
Dec-1
6
Ma
r-17
Jun-1
7
Sep-1
7
Dec-1
7
Ma
r-18
Jun-1
8
Sep-1
8
Dec-1
8
Ma
r-19
ST Loans LT Loans
Working capital improved in Q1 with tight balance sheet discipline and payables management.
Cash & Cash Equivalents Receivables
PayablesFinancial Loans
2.83.7 3.9
3.22.8 2.5
3.0
4.7 4.6
7.3
6.1
7.4
5.5
7.8
8.8
6.85.9
10.0
6.0
11.3
0.0
2.4
4.8
7.2
9.6
12.0
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
De
c-1
8
Ma
r-1
9
22.0
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Q1 Profit Before Tax Bridge (2018-2019)
30
PBT decline driven by narrowing differentials, natural gas price hikes, RUP maintenance, interest
expense and FX loss compared to Q1 2018.
Million TL
472
192
270 -224
-216
-320
-253
-334
102
-310
2018 Q1 PBT Production Crack Margin Differential RUP
MaintenanceNatural Gas Interest
ExpenseFX Loss Other 2019 Q1 PBT
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2018 Profit Before Tax Bridge
31
2018 PBT was lower mainly due to Crude Oil Differential and Crack Margin impacts. With the help of FX
based pricing, FX losses incurred from payables were recovered with Inventory Gains.
Million TL
KEY FINANCIALS
4.474
3.724
2.129
164
311
660
293
1.779
2017 Inventory Gain Crack Margin Crude OilDifferential
Production FX Other 2018
,
,
,
,
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Dividend (TL)
32
1.73
3.24 2.94
4.96
5.83
4.78
0.00
10.18
7.16
15.2214.83
2.31 2.502.98
3.93 3.85
1.580.00
6.50 6.20
13.60
15.15
-500
500
1500
2500
3500
4500
0
2
4
6
8
10
12
14
16
18
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Earings per Share Gross Dividend Total Payout
One of the highest dividend
yield in BIST
2012/2013 EPS includes the tax incentive.
KEY FINANCIALS
Investor Presentation
www.tupras.com.tr
Investments (Million $)
33
• Revamp of Crude Unit
• FCC Modernization
• New Sulphur Units
• Energy Saving Projects
• Optimization of conversion units
• 9.5 Nelson complexity
• High white product yield
• Process more heavier and sour crudes
• Run all refineries with 100% capacity utilization
• 6.5 bn USD investments since privatization
Ongoing Projects
Avg. 220 mn$
Avg. 943 mn$
Avg. 278 mn$
274
355400
186177
628
974
1,213
959
344
213185 138
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
KEY FINANCIALS
33
2019Q1
Investor Presentation
www.tupras.com.tr
Q1 2019 Results
34
2018 Refining Margins ($/bbl)
9.3
4.6
0
2
4
6
8
10
Tüpraş Net Margin Med Margin
99
104
113
96
94
2015
2016
2017
2018
Q1 2019
Axis Title
Capacity Utilisation (%)
Q1 2019 Operational (mn ton)
Capex (mn $)
213
185
138
33
2016
2017
2018
Q1 2019
• 94% Total Capacity
Utilization in Q1 2019
• 7.2 mn tons of sales and 6.7 mn
tons of production in Q1 2019
• 33 mn $ CAPEX in Q1 2019
KEY FINANCIALS
6.7
7.2
Production
Sales
Q1 Refining Margins ($/bbl)
4.23.6
0
1
2
3
4
5
6
Tüpraş Net Margin Med Margin
Investor Presentation
www.tupras.com.tr
Tüpraş Balance Sheet
35
Million TL 31/03/2019 31/12/2018 Difference % Difference
Current Assets 28,062 20,962 7,100 34
Cash & C. Equivalents 11,329 5,983 5,346 89
Receivables 6,429 5,429 1,000 18
Derivatives 329 176 153 87
Inventories 8,410 6,765 1,646 24
Pre-paid expenses 106 109 -3 -3
Other Current Assets 1,459 2,502 -1,043 -42
Long Term Assets 25,544 19,074 6,471 34
Financial Assets & Subsidiaries 1,260 1,271 -11 -1
Fixed Assets 19,298 12,397 6,900 56
Derivatives 210 168 42 25
Pre-paid expenses 365 378 -13 -4
Deferred Tax 2,789 3,566 -777 -22
Other Long Term Assets 1,934 1,293 642 50
Total Assets 53,606 40,036 13,570 34
Short Term Liabilities 25,145 15,950 9,196 58
Financial Loans 5,555 4,113 1,442 35
Payables 15,214 7,663 7,551 99
Derivatives 272 236 36 15
Deferred Incomes 7 5 2 41
Provisions 183 80 102 127
Other ST Liabilities 3,915 3,852 63 2
Long Term Liabilities 28,461 24,086 4,375 18
Financial Loans 16,368 13,836 2,532 18
Payables & Provisions 249 257 -9 -3
Derivatives 23 42 -19 -46
Other LT Liabilities 7 5 2 53
Equity 11,688 9,825 1,864 19
Minority Interests 126 121 5 4
Total Liabilities 53,606 40,036 13,570 34
Investor Presentation
www.tupras.com.tr
Creating Competitive & Sustainable Shareholder Value
36
69%
31%
Buy Hold
Foreign Currency
Long Term
Tüpraş BB+(Neg.) B1 (Negative)
Türkiye BB- (Neg.) B1 (Negative) B+ (Stable)
Koç Holding B1 (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
Investor Presentation
www.tupras.com.tr
Financial Policy
37
Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counterparty risk, commodity,
interest rate and currency exposure.
KEY FINANCIALS
Leverage
& Liquidity• Net financial debt/EBITDA
• Net financial debt/Equity
Proactive in liquidity risk management & targets/limits for financial ratios:
• Current ratio
• Share of long term debt
Counterparty
Risk Policy
• Credit rating assessment 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 bank-based limits
Interest
Rate & Fx
• The fixed/floating profile of financial debt.
• Proactive management of FX risk with derivative instruments
• Zero FX exposure target.
Commodity
Hedging
Policy
• Operational hedge: Optimum stock policy & forward pricing mechanism.
• Financial hedge: Expected inventory exposure for the year end is hedged by using derivatives.
• Hedging ratio increasing throughout the year.
Inventory Hedging Policy:
• Financial hedge: Crack margin (gasoline, diesel, jet fuel, fuel oil) risk mitigation by using derivatives.
• Statistical / mechanical approach: Historical average prices + standard deviations.
• Hedge ratio between %0-%50 with up to 1 year hedge tenor.
Crack Margin Hedging Policy:
Investor Presentation
www.tupras.com.tr
FX Exposure Management (31 March 2019)
38
* Cash flow hedge accounting : 942 mn $
Tüpraş continues to employ strict FX policies to mitigate currency risks stemming from
volatility.
Tüpraş continues to employ strict FX policies to
mitigate currency risks stemming from volatility.
• 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.
Consolidated
Assets
Consolidated
Liabilities
Cash
1,689
Receivables &
other assets
148
Stock
1,514
Forward & CFH
1,388
Payables
1,987
ST Financial
643• RUP : 209• Other: 434
LT Financial
1,996• RUP : 764
• Eurobond 700
• Other Loans : 532
+113 mn $
Million $
Investor Presentation
www.tupras.com.tr
Growing
Tüpraş: Growing, Resilient, Profitable
39
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.
• 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
Resilient Profitable
Investor Presentation
www.tupras.com.tr
2019 Refinery Maintenance Schedule
41
Unit QuarterDuration
(weeks)Reason
İzmir
Plt 100 CDU Q4 *2-3 Periodic Maintenance
Plt 9200 CCR Q1 3 Maintenance Completed
İzmit
RUP Q1&Q2 11 Maintenance Completed
Plt 2 Crude Oil & Vacuum Unit Q4 7-8 Periodic Maintenance
Plt 7 FCC Q4 5-6 Periodic Maintenance
Kırıkkale - - - -
Batman Plt 100 / 1100 Crude Oil & Vacuum Q1 10 Maintenance Completed
RUP Maintenance
Preparation and
planning phase: 2018
Maintenance Start: Feb 26
• Catalyst changes
• Checks on distillation columns, heat
exchangers and furnaces
• Detailed planned maintenance
Completed as of 13 May 2019
Investor Presentation
www.tupras.com.tr
2019 Expectations
42
Med Complex margin expectation in 2019 is 3.75 – 4.25 $/bbl.
Net Tüpraş refinery margin expectation in 2019 is 6.0 – 7.0 $/bbl.
• Capacity utilization target is 95-100%.
• Production: ~28 million tons
• Total sales: ~30 million tons
Refining investments expectation is 250 Million $.
Med Complex
Margin
Tüpraş
Net Margin
Operations
Investment
Investor Presentation
www.tupras.com.tr
Competition # 1 (SOCAR-STAR Refinery)
• Goldman Sachs has acquired a 13% stake in SOCAR Turkey for $1.3 billion.
• Goldman Sachs has the right to resell 10% of its stakes to Socar, and the remaining 3% to
‘Sermaye Investments Limited’ owned by SOCAR within 6 years at the same price.
STAR Refinery (Total Cap. 10 mn ton)
2019
mn ton
Production
Turkish
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 3.1
Star Refinery Production Numbers (k ton)
Fuels
Petrochemical
Feedstock
Diesel 4,500
Jet Fuel 1,600
Sulphur 158
Petrocoke 698
LPG 260
Naptha 1,600
Mixed xylene 460
Reformate 524
• 3.3 billion $ credit agreement. First
4 years grace period total 15-18
years term.
• Project finance is supplied to company
(1.5 Billion $).
• It is expected to be operational as of
2019.
Credit : 3.3 Billion $
Equity : 2.4 Billion $
Total
Investment: 5.7 Billion $
OUTLOOK 43
Investor Presentation
www.tupras.com.tr
Competition # 2 (Regional Competition)
44
• 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
7.8 mn bpd
17 Refineries
1.8 mn bpd
OUTLOOK
Investor Presentation
www.tupras.com.tr
0
3
6
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Compliant HSFO Non-compliant HSFO ULSFO MGO LNG
Marine Bunker Specification Changes and Its Effects
45
IMO 2020: the sulphur cap for marine bunkers is reduced from 3.5% to 0.5% (5000ppm)
- effective from 1 Jan 2020.
• Marine Gasoil (Diesel)
• Ultra Low Sulphur Fuel Oil (ULSFO)
• Scrubbers
• LNG
Compliance can be met with:
OUTLOOK
HSFO Replacement Expected in 2020, million b/d Gradual Change in Marine Bunker Fuels, thousand b/d
Expectations 2020 and beyond:
• MGO (Diesel) is expected to be the no.1 choice in 2020
• ULSFO/blend becomes more widespread through the years as
availability & compatibility issues get resolved
• Compliant HSFO use grows as scrubber numbers rise from
~2,000 after Jan 1st, 2020 (some ports started bans on open-loop scrubbers
thus this projection might change)
3.5
0.6
0.5
1.1
1.3
Current
HSFO
HSFO
Scrubbers
HSFO
Non-complianceULSFO MGO
Source : Market Reports
Investor Presentation
www.tupras.com.tr
RUP feedstock and production (000 Tons)
47
Natural Gas 246
Vacuum Resid
1,214
Atm. Resid
3,036
Total Feed 4,496
Total Production
4,250
Raw Materials Products
APPENDİX
Investor Presentation
www.tupras.com.tr
Tüpraş Production Flow and Yield Breakdown
48
• Increased
conversion capacity
• Strong
integration among
refineries
APPENDİX
Investor Presentation
www.tupras.com.tr
European Pump Price Comparison
49
Not: Prices valid on 11 February 2019.
Gasoline (Krş / Lt)
211
324
210 233292
236294
242
62 65 4764 61
330
409 516 529 528554 595 596
604
733
791 809 820854
889 898
0
100
200
300
400
500
600
700
800
900
1,000
0
250
500
750
1000
TR Spa. Ger UK Eu19 Fra. Gre. Ita.
Pump No Tax Distr. Marg. Tax
Diesel 10 (Krş / Lt)
266
360
263347
395
273 286 275
63 78 69 55 63
272
349 398434
406 504 524 540601
709739
782 801847 865 878
0
100
200
300
400
500
600
700
800
900
1,000
0
100
200
300
400
500
600
700
800
900
1000
TR Spa. Ger. EU19 Gre. Fra. Ita. UK
APPENDİX
Investor Presentation
www.tupras.com.tr
Tüpraş - ESG
50ESG
92.9
99.5
94.0
95.5
94.8
0 25 50 75 100
Board
Stakeholders
Transparency
Shareholders
Overall
Foreign
Currency
Long Term
Tüpraş BB+ B1
Türkiye BB- B1 B+
Koç
HoldingB1 BB-
One of the highest Corporate
Governance Ratings3
Amount of water recycled:
20.8 mn m3
Water recycle ratio:
69.5%
Amount of solid waste recycled:
28.9 ktons
Solid waste recycle ratio:
88.6%
Energy cost saved:
36 million $
Greenhouse Gas Emission Reduced:
244 ktons CO2e
Environmental Training Provided:
10,391 person-hrs
Gender Equality
HeForShe (Global cooperation with UN Women
and Fenerbahçe Sports Club)
I Support Social Gender Equality for My
Country- (collaboration with Koç Holding)
Father Support Program in Batman Refinery
Education
Operational sponsorship for TEGV’s1 «Firefly
Mobile Learning Units Project» (262,627
students in 10 years)
Scholarship fund for TEV2 : «Our Energy For
Equality Never Ends»
Culture & Sports
Young Musicians on World Stages
Support for the Batman Disabled Sports Club
Association and Batman Tüpraşspor Football
Club
1 Education Volunteers Foundation of Turkey2 Turkish Education Foundation
In 2018
Environmental Responsibility Social Support Governance Excellence
3 Provided by CMB compliant SAHA Corporate Governance and Rating
Services Inc. (October 2018)
Investor Presentation
www.tupras.com.tr
Koç Holding
51
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.
• 20% CAGR in consolidated profit2 the last five years.
Notes : Data as of YE18, 2018 GDP reflects the projection of Turkish government’s New Economic Program.
(1) 2018 Report
(2) In TL terms between 2014-18
Turkey’s Leading Investment Holding Company
APPENDİX
Combined Revenues / GDP 8%
Total Exports / Turkey’s Exports 10%
Total MCap on Borsa Istanbul 16%