INVESTOR PRESENTATION - Microsoft · 2018-12-07 · 26,0 50,7 40,3 56,3 49,2 47,5 53,4 44,3 52,4 59,3 55,3 64,0 25 30 35 40 45 50 55 60 65 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17

INVESTOR PRESENTATIONNovember, 2017

01REFINING INDUSTRY

02COMPANY OVERVIEW

03KEY FINANCIALS

04INVESTMENTS

CONTENTS

01 REFINING INDUSTRY

26,0

50,7

40,3

56,3

49,247,5

53,4

44,3

52,4

59,3

55,3

64,0

25

30

35

40

45

50

55

60

65

Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17

PROS

OPEC & Non OPEC Supply Cut

Political Instabilities

Healthy PMI data in US and Europe

Expectation of high global GDP

Inventory levels

Brent Crude Oil Prices ($/bbl)

4

CONS

Increase in number of rigs & production in US

Concerns about the impact of OPEC & Non OPEC

production cuts

Increase in Libya, Brazil, Nigeria & Canada prod.

High crude exports of OPEC

-3.000

-2.000

-1.000

0

1.000

2.000

3.000

China India Middle East Other Asia Other JapanNorth

America Europe

810 640

160 195 52-255

-543 -486

334

150

340 135

-145

-109 -266

160

250

18184

180

-240

65

-421

530

526

302

-775

-546

520

400

120

390

-140

305

-352

270

510

198

-443

63

-189

244

300 417

150

40

-130

364

-57

70

156

-220

76

-143

105

-268

Th

ou

san

ds

2009 2010 2011 2012

2013 2014 2015 2016

Refinery Capacity ChangeTh

ou

san

dB

arre

ls/D

ay

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2012 2013 2014 2015 2016 2017 2018 2019 2020

1.678 1.790

1.041

1.685

407

1.335

679

1.082 1.080

Source: Tüpraş, Reuters, Reports

Gross Capacity Additions

5

Turkish Economy Strengths

7980

8181

82

76

78

80

82

84

2016 2017 2018 2019 2020

Population (mn)

0-40 yrs >65%

9,28,8

2,1

4,2

3,0

4,0

2,9

5,0 5,1

0

2

4

6

8

10

2010 2011 2012 2013 2014 2015 2016 2017Q1 2017Q2

GDP (%)

127

134 176

213

0

50

100

150

200

250

2014 2015 2020 2030

Car ownership per thousand people

67%

Source: EMRA, TSI

1.4% growth in last 5 yrs2002-2014 4.9%2010-2014 5.4%

22

23

24

25

26

20

21

22

23

24

25

26

27

2016 2017 2018 2019 2020

Diesel Consumption 3.5%

annual

growth8.7% average growth in last 5 yrs

6

Competitive Advantages of Tüpraş

Added Value

Created by Tüpraş

Best Fit for the Market with high diesel yield

High Complexity of Tüpraş

Presence in all overTurkey through

refineries and terminals

Local Market Dynamics

High Growth

Short on Diesel

Import Parity Pricing(Freight advantage of

Tüpraş)

Cost Base of Tüpraş

Energy Efficient

Crude Oil & FeedstockCost Advantage

Economies of Scale

7

8

Middle Distillate Cracks ($/bbl)

Source: Platts*As of November 8th, 2017

15,1

14,514,8

7,67,27,8 8,6

7,3

9,7 8,9 8,79,4

12,0 11,5 10,010,4

11,110,0

11,210,6

10,412,4 12,9

14,113,5 12,0

0

4

8

12

16

20

Jan Feb Mar Apr May Jun Jul Agu Sep Oct Nov* Dec

Diesel

2014 2015 2016 2017

13,3

14,815,1

8,06,6

7,6 7,76,7

7,7 9,18,2 7,6 8,1

10,5 10,9 9,1

9,5 10,18,9

10,29,5 10,1

11,7

12,7 12,6 11,7 12,2

0

4

8

12

16

20


Jet Fuel

Light Distillate Cracks ($/bbl)

-7,9

-11,7

-7,3

-7,3

2,4

-4,0

-0,5

-0,7

-2,2 -2,0-3,2 -3,0

-2,2-1,3

-1,2 -0,70,4

-12

-8

-4

0

4


Naphta

-46,0

-31,0

-4,7-2,2

-21,9

-17,2

-12,2-10,2

-19,5

-19,8

-14,9

-20,5

-15,4-13,8

-10,9

-15,5

-50

-40

-30

-20

-10

0

Jan Feb Mar Apr May Jun July Agu Sep Oct Nov* Dec

LPG

9,8

15,7

18,6

11,7 12,8

9,111,4

13,411,9

13,514,1

12,2

15,913,7 13,4

14,3

15,9 14,8

11,7

11,8

0

6

12

18

24


Gasoline2014 2015 2016 2017

9Source: Platts*As of November 8th, 2017

Quarterly Product Crack Margins ($/bbl)

10

14,4

11,210,7

9,4

7,3 7,7 7,9

10,29,5 9,9

12,4

6

8

10

12

14

16

Q1 Q2 Q3 Q4

Jet Fuel

2015 2016 2017

13,0

19,418,9

13,5

15,214,5

10,9

12,8

13,314,3

15,0

10

12

14

16

18

20

Q1 Q2 Q3 Q4

Gasoline

2015 2016 2017

-11,6 -12,0

-13,1

-12,5

-13,2

-15,0

-10,6

-5,7

-9,1

-7,0 -6,9

-16

-14

-12

-10

-8

-6

-4

Q1 Q2 Q3 Q4

Fuel Oil

2015 2016 2017

15,715,2

14,6

10,8

7,99,2 8,9

11,210,5 10,7

13,1

6

8

10

12

14

16

Q1 Q2 Q3 Q4

Diesel

2015 2016 2017

Source: Platts

11

Crude Price Differentials (USD/bbl)

-1,23 -1,46

-1,73

-1,12 -1,37 -0,96

-0,67 -0,28

-1,11 -0,63

-0,43

-4

-3

-2

-1

0

1

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

2012-2017 Differental Range 2015 2016 2017

Brent

Ural Differentials

Price Differentials

-12

-8

-4

0

Ural Iran Heavy Kirkuk Kuwait Basra Heavy Arab Heavy

Brent

Source: Platts*As of November 7th, 2017

Turkish Consumption (Million tons) 2014-2016

17,43

20,56

22,31

10 12 14 16 18 20 22 24

2014

2015

2016

Diesel

4,10

4,58

4,40

0,0 1,0 2,0 3,0 4,0 5,0

2014

2015

2016

Jet Fuel

1,92

2,10

2,23

0,8 1,0 1,2 1,4 1,6 1,8 2,0 2,2

2014

2015

2016

Gasoline

0,71

0,60

0,58

0,0 0,2 0,4 0,6 0,8

2014

2015

2016

Fuel Oil*

12Source: EMRA*bunker excluded.

+8.5 %

+15.8 %

+9.1 %

+6.5 %

-14.6%

-3.5%

+12 %

-4%

2,94

3,01

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5

2016

2017

Jet Fuel

+2.5%

8 Months 2017 - Turkish Consumption (Million tons)

14,46

15,67

0 4 8 12 16

2016

2017

Diesel

1,49

1,55

0,0 0,4 0,8 1,2 1,6

2016

2017

Gasoline

+4.3%

0,37

0,31

0,00 0,10 0,20 0,30 0,40

2016

2017

Fuel Oil*

Source: EMRA*bunker excluded.

13

+8.4%

-15.9%

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

-3,0

2,1

-10,0

1,5

-3,0

2,5

-10,8

1,6

-3,1

2,4

-12,0

1,0

-3,1

2,5

-12,7

1,8

-3,0

3,0

-12,3

1,6

-3,4

2,8

-13,0

0,3

-14

-12

-10

-8

-6

-4

-2

0

2

4

LPG Gasoline Diesel Fuel

2011 2012 2013 2014 2015 2016

Export

Import

14

02 COMPANY OVERVIEW

Kırıkkale

• 5.0 MT Capacity

• NC: 6.32

• Storage Capacity: 1.41

mn m3

Tüpraş Refining Assets & Distribution Network

İzmir

İzmit

Ankara

İstanbul

Kırıkkale

Batman

Kirkuk

Baku

Terminal Refinery

OPETGiresun Terminal

OPETMersin Terminal

OPETAntalya Terminal

OPETMarmara Terminal

Total Capacity: 28.1 mn. tonNelson Complexity: 9.5Tüpraş Storage Cap.: 7.2 mn. mᶟOPET Storage Cap.: 1.1 mn. mᶟ

19,392 m3 240,000 m3

721,000 m343,130 m3

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

Batman

• 1.1 MT Capacity

• NC: 1.83

• Storage Capacity:0.25

mn m3

Crude Pipeline

TurkeyStorage Capacity

16

4.1, 33%

7.2, 58%

1.1, 9%Other

Companies

OPET

Tüpraş

OPET

1.553 Stations

Market positions: 17.9% in White product; 16.6% in black product

1.1 Million M3 Storage

• Marmara, Aegean, Black Sea & Mediterranean

International Trading

• London

Jet Fuel Sales

• Turkish Airlines JV

• 66% Market Share

Lubricants

• Fuchs JV

2nd Biggest Distribution Companyby Volume

• # 1 Brand Royalty Award

17

Tüpraş Share 40.0%

DİTAŞ, Marine Transport

DİTAŞ Financials 2016 (mn $)

Net Sales 151,3

Op. Profit 40,5

13 tugboats

10 mooring boats

2 service boats

1 pilot boat

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.

19,314,8

6,4 4,8 6,69,3

2,6

3,1

3,13,5

5,2

5,9

21,9

18,0

9,68,4

11,8

15,2

0

5

10

15

20

25

2011 2012 2013 2014 2015 2016

Mill

ion

Ton

s

Crude Oil Product

18

Tüpraş Share 79.98%

Products►2011

►6,3 K DWT

Leyla

Bitumen►2x20 K DWT

►Esra 2014

►Aylin 2015

Esra & Aylin

Products►2009

►10,9 K DWT

Caroline

Products►2009

►11,5 K DWT

Nevbahar

Crude►2001

►164,9 K DWT

Cumhuriyet

Products►Sevgi 2008

►Gönül 2009

►2x11 K DWT

Gönül&Sevgi

Products►2012

►51,5 K DWT

SunaSadberk

Crude►2017

►159 K DWT

Crude Suppliers of TÜPRAŞ (Million Tons)

9,7

2,1

2,0

2,4

3,1

1,1 0

,1

0,0

0,3

7,2

2,0

2,8 2

,3

3,8

1,5

0,3

1,0 0

,6

5,1

1,5

2,9 2

,4

6,1

1,5

0,3

0,7

0,6

5,3

0,6

1,9

2,4

5,7

1,6

0,2

0,1

2,6

5,4

7

3,1

1

2,3

9

2,5

7

11

,54

0,5

9

0,3

0

0,0

0 1,4

3

6,9

8

3,2

4

2,2

6

2,5

8

9,2

5

0,6

0

0,0

3

0,0

0

2,8

0

0

2

4

6

8

10

12

I RAN RUSSI A S. ARABI A TURK EY I RAQ K AZ AK STAN I TAL Y L İ BYA OTHER

2011 2012 2013 2014 2015 2016 19

In 2016, Tüpraş purchased 18 different types of crude oil from 10

countries, with gravities ranging between 19-48 API

6,3%

41,7%

52,0%

Crude Type - 2016

>34 30-34 30>

Margin Environment ($/bbl)

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

5,54

1,95

2,89

1,17

4,21

1,671,95

4,83

3,97

5,70

-0,5

1,5

3,5

5,5

7,5

9,5

J-08

M-0

8M

-08

J-08

S-0

8N

-08

J-09

M-0

9M

-09

J-09

S-0

9N

-09

J-10

M-1

0M

-10

J-10

S-1

0N

-10

J-11

M-1

1M

-11

J-11

S-1

1N

-11

J-12

M-1

2M

-12

J-12

S-1

2N

-12

J-13

M-1

3M

-13

J-13

S-1

3N

-13

J-14

M-1

4M

-14

J-14

S-1

4N

-14

J-15

M-1

5M

-15

J-15

S-1

5N

-15

J-16

M-1

6M

-16

J-16

S-1

6N

-16

J-17

M-1

7M

-17

J-17

S-1

7

MonthAnnual

Med Complex

20

9,610,6

11,911,2

13,0

2,453,21

6,47 6,03

8,50

1,67 1,95

4,833,97

5,80

0

4

8

12

16

2013 2014 2015 2016 2017 9M

Tüpraş Gross Margin Tüpraş Net Margin Med Margin

Capacity Utilisation* (%)

Production

21*Nameplate capacity calculated by standard 330 days of operations.

64,9

99,6 96,8108,9

4,1

4,4 5,2

7,6

69,0

104,0 102,0

116,5

0

20

40

60

80

100

120

2014 Q2 2015 Q2 2016 Q2 2017 Q2

Crude Oil Other Total

Quarterly Production Volume (Mil. Tons)

MAINTENANCE SHUTDOWN

Izmir Refinery Crude Unit (Capacity: 6,5 mtons/year)

• The maintenance shutdown in Q4 is expected to be completed in

January 2018.

• The effect of this maintenance shutdown has been included in

our year-end estimations.

4,54,6

5,4 5,5

5,6

6,9

7,37,4

6,6 6,7

7,27,4

7,1

7,8 7,7

4

5

6

7

8

Q1 Q2 Q3 Q4

2014 2015 2016 2017

Gasoline20%

Naphtha1%

Jet17%

ULSD34%

Other6%

Coke3%

Fuel Oil8%

ASRFO+Vac0% Bitumen

11%Gasoline21%

Naphtha1%

Jet17%

ULSD32%

Other6%

Coke2%

Fuel Oil8%

ASRFO+Vac1%

Bitumen12%

9M Product Yields

22

Light Distil.22,2%

Mid. Distil.49,5%

Other 5,5%

Black Prod.22,7%

White Product %76,98Production : 22,43 mn tons

API: 30,32


API: 30,81

% +1

20172016

1,7

0,0

Light Distil.21,3%

Mid. Distil.51,2%

Other 5,6%

Black Prod.21,9%

-0,8 -0,8

0,8 0,9 1,0 0,8 1,0 1,3 1,2 1,1 1,2 1,5 1,3 1,50,9 1,1 1,0

0,2 0,3 0,4 0,3 0,40,6 0,9 0,9 0,8

1,1 1,21,3

0,50,9 0,90,4 0,4

0,50,4

0,50,5 0,6 0,6 0,5

0,6 0,60,7

0,40,5 0,51,5

1,72,3

2,3 1,7

2,22,8 2,8

1,8

2,6 2,93,2

1,7

2,6 2,92,9

3,3

4,1 3,93,5

4,6

5,4 5,4

4,3

5,8 6,06,7

3,6

5,1 5,3

0

2

4

6

8

14 15 16 17 14 15 16 17 14 15 16 17 14 15 16

Domestic sales of selected productsJet Fuel

Bitumen

Gasoline

Diesel

Tüpraş Sales (Million Tons)

23

Q1 Q2 Q3 Q4

3,6 3,95,1 5,0

4,15,4

6,4 6,6

4,9

6,8 6,97,7

4,3

6,2 6,4

1,11,7

1,8 2,3

0,9

1,91,3 1,4

1,5

1,2 1,21,2

1,8

1,7 1,3

4,75,6

6,9 7,2

4,7

7,37,7 8,1

6,4

7,9

6,1

7,9 7,6

0

2

4

6

8

10

14 15 16 17 14 15 16 17 14 15 16 17 14 15 16

Total SalesDomestic

Export 8,9

Q1 Q2 Q3 Q4

All Time High

Domestic

Sales

8,1

23

274355 400

186 177

628

974

1.213

959

344213

124

*125

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

Investments (mn $)

24

Ongoing Projects

•New Power Plant

•Revamp of Crude Unit

•FCC Modernization

•New Sulphur Units

•Energy Saving Projects

•Optimization of

conversion units

Avg 943 mn $

Avg 278 mn $Avg. 279 mn $

• 9.5 Nelson complexity• High white product yield• Process more heavier and sour

crudes• Run all refineries with 100% capacity utilization

RUPTotal Investment: $ 3,2 Billion Total Incentive: TL 3,78 Billion Remaining: TL 3,18 Billion

03 KEY FINANCIALS

Financial Highlights (mn $)

95 79 150 150 114

427153 78

-27

415237

431

361315 226

410

294

435

10689

-11

422

480715560

338

1.397

1.1251.292

-50

250

550

850

1.150

1.450

1.750

2012 2013 2014 2015 2016 2017

EBITDA1st Q 2nd Q 3rd Q 4th Q Total

16172

231112

27235

7575

171273

113

405309 435

175 268

197

283271

47 91

285

256

817

629 667

938

594

923

-50

200

450

700

950

1.200

2012 2013 2014 2015 2016 2017

Net Income1st Q 2nd Q 3rd Q 4th Q Total

551

1.3401.869

1.5981.663

2.577

2.748

2.370 2.391

1.7511.729

1.555

1.680

1.2

40

0,8

2,4

3,5 3,6

4,9

3,32,8

1,7

2,01,6

1,51,1

1,00,7

0

1

2

3

4

5

0

500

1.000

1.500

2.000

2.500

3.000

Net Debt Net Debt/*R. EBITDA

0,3

0

0,3

2

0,2

4

0,2

6

0,3

5

0,0

4 0,1

1 0,1

6 0,2

2

0,4

5

0,5

5

0,4

9

0,0

0,1

0,2

0,3

0,4

0,5

0,6

Return on Average Equity

26• For P&L, USD/TL rates: 2016 Q3 2,96; 9M 2,93; 12M 3,02 and 2017 Q3 3,51; 9M 3,59.

• For Balance Sheet, USD/TL rates: 2016 Q3 3,0; 9M 2016: 3,0; 12M 2016: 3,52 and 2017 Q3 3,55; 9M 3,55 USD/TL

• Net Debt/Rolling EBITDA was calculated with USD figures.

Balance Sheet Analysis

1,721,69

1,30

1,641,68

1,211,04

0,821,04

1,641,59

2,45

1,72

2,02

1,58

2,19

0

1

2

3

Cash & Equivalents (Billion $)

0,93

0,710,520,51

0,090,20

0,66

1,070,88

0,70

0,910,75

0,911,091,15

1,57

0,0

0,4

0,8

1,2

1,6

2,0

Receivables (Billion $)

2,6 2,8 2,9 2,9 3,0 3,3 3,1 3,0 2,8 2,9 2,8 3,1 2,892,95

2,1 2,1

0,5

0,90,3 0,3 0,3

0,4 0,5 0,60,6

1,0 1,21,1

0,56 0,63

1,1 1,3

3,1

3,7

3,2 3,2 3,33,7 3,6 3,6 3,4

3,9 4,04,2

3,453,573,3

3,4

0

1

1

2

2

3

3

4

4

5

Financial Loans (Billion $)

LT Loans ST Loans

3,2

2

3,1

0 3,2

8

3,0

4

2,4

6

1,7

4

1,7

0

1,5

9

1,3

6

1,2

3

1,6

9 1,9

8

2,0

2

2,6

2

2,1

9 2,7

1

0

1

2

3

4

Payables (Billion $)

27

• For P&L, USD/TL rates: 2016 Q3 2,96; 9M 2,93; 12M 3,02 and 2017 Q3 3,51; 9M 3,59.


Tüpraş Balance Sheet



Million USD 30.09.2007 31.12.2016 Diff. % Diff.Current Assets 5.522 3.884 1.638 42

Cash & C. Equivalents 2.185 1.719 466 27

Receivables 1.568 911 657 72

Derivatives 90 10 80 812

Inventories 1.255 1.025 229 22

Pre-paid expenses 29 28 1 4

Other Current Assets 395 190 204 107

Long Term Assets 4.985 4.987 -2 0

Financial Assets & Subsidiaries 294 264 31 12

Fixed Assets 3.377 3.338 40 1

Derivatives 23 105 -82 -78

Pre-paid expenses 66 68 -1 -2

Deferred Tax 930 917 13 1

Other Long Term Assets 294 296 -3 -1

Total Assets 10.507 8.871 1.636 18

Short Term Liabilities 5.486 3.597 1.889 52

Financial Loans 1.304 556 747 134

Payables 2.709 2.020 689 34


Deferred Incomes 2 4 -2 -57

Provisions 46 18 27 149

Other ST Liabilities 1.328 990 338 34

Long Term Liabilities 2.184 2.953 -768 -26

Financial Loans 2.122 2.892 -770 -27

Payables & Provisions 60 59 1 2


Other LT Liabilities 1 2 0 -8

Equity 2.808 2.298 510 22

Minority Interests 28 22 6 26

Total Liabilities 10.507 8.871 1.636 18

1,73

3,242,94

4,96

5,83

4,78

0

10,18

7,16

2,31 2,502,98

3,93 3,85

1,58

6,506,22

579626

746

985 964

396

1.6281.557

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

0

2

4

6

8

10

12

2008 2009 2010 2011 2012 2013 2014 2015 2016

Total Payout (Mn. TL)Earnings per Share Gross Dividend Total Payout

2012/2013 EPS includes the tax incentive 29

One of the highest dividend yield in BIST

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.

Dividend

Foreign Currency

Long Term

Tüpraş BBB-(IG) Ba1 (Pos.)

Turkey BB+ (stable) Ba1 (Neg.) BB

Koç Holding Baa3- (IG) BBB (IG)

BUY67%

HOLD; 33%

Analyst Recommendations

Tüpraş has one of the highest Corporate Governance Ratings

92,86

98,59

94,00

95,51

94,67

B O A R D

S T A K EH O L D ER S

T R A N S P A R EN C Y

S H A R EH O L D ER S

O V ER A L L

CORPORATE GOVERNANCE RATING

30

Creating Competitive & Sustainable Shareholder Value

https://www.standardandpoors.com/en_US/web/guest/home

•A significant portion of the Group'scrude oil and refined product purchasesare denominated in US Dollars. Inaddition, the Group finances its capitalexpenditures mostly throughborrowings denominated in US Dollars.

•Natural Hedge: The Group is able tomitigate some of the impact of volatilityin exchange rates through naturalhedges: crude oil and refined productinventories are US Dollar denominatedassets.

•Cash flow Hedge: RUP Facility financingloans designated as hedginginstruments of highly probable exportrevenues.

•As a general Koç Holding financialpolicy, Group companies are allowed tokeep foreign exchange positions withincertain limits.

31

FX Risk Exposure (30 Sept. 2017)

*Cash flow hedge accounting : 1,212 mn $

Consolidated Assets

Consolidated Liabilities

LT Financials: 1,935

RUP Loans: 1,111

Other credits 825

ST Financials 1.144

• RUP 296

•Eurobond 700

Payables

1,688

Forward & CFH

2,459

Stock

1,211

Receivables & other assets

24

Cash

960

Million $

-113 million $

Future Expectations

Brent Price Estimation

• The average Brent price in 2017 is expected to be 50-55 dollars per barrel.

Med Complex Margin

• We expect Med Complex margins to be between

5,25 - 5,75 dollars per barrel band in 2017.

Tüpraş Net Margin

• Net Tüpraş refinery margin is expected to be in the region of 7,50 - 8,00 dollars per barrel

Operations

Expectations for 2017;

• Full Capacity Utilization on average even after taking IzmirMaintenance shut down into consideration

• Production: approximately 29.2 million tons

• Imports of finished products will be minimal, as we focus on selling increased volumes of production

• Total sales: 30.6 million tons

Investment • Refining investments is expected to be around 200 Million dollars. Additionally, around 125 million dollars investment is planned for increasing the marine tanker fleet capacity.

32

04 INVESTMENTS

8,7 8,2 8,9

5,05,4 6,5

0

1

2

3

4

5

6

7

8

9

10

17 Q1 17 Q2 17 Q3 17 Q4

Tupras Net Refinery Margin Med Margin

2017 Expectations vs 9 Months Results

54,7 55,1

51,652,5

50,4

46,5

48,6

51,6

56,0

40

45

50

55

60

J-17 F-17 M-17 A-17 M-17 J-17 J-17 A-17 S-17 O-17 N-17 D-17

Brent Price ($/bbl)

114,8

0

40

80

120

0

40

80

120

160

14

'Q1

14

'Q2

14

'Q3

14

'Q4

15

'Q1

15

'Q2

15

'Q3

15

'Q4

16

'Q1

16

'Q2

16

'Q3

16

'Q4

17

'Q1

17

'Q2

17

'Q3

Capacity Utilization (%)

• The average Brent in 2017 is expected to be in 50-55 $/bbl• In 9M, the average was 51,9 $/bbl

• Expected Capacity Utilization in 2017 - above 100 %• In 9M, 112.6% capacity utilization was achieved.

Net Tüpraş refinery margin for 9M: 8,5 $/bbl(Target is 7,50 - 8,00 $/bbl)

344

213124,3

73,5

0

100

200

300

400

2015 2016 2017 9M

Tüpraş Ditaş

Planned Tüpraş investments for 2017 - 200 Million dollars

74,9

102,5 105,3 112,6

197.7

Mil. $

34

Gasoline19%

Naphtha2%

Jet19%

ULSD32%

Other5%

Coke3%

Fuel Oil5%

ASRFO+Vac0%

Bitumen15%Gasoline

21%

Naphtha0%

Jet18%

ULSD34%

Other5%

Coke3%

Fuel Oil5%

Bitumen14%

Q3 Product Yields

35

Light Distil.22,5%

Mid. Distil.51,4%

Other 5,4%

Black Prod.20,7%


API: 29,57


API: 30,48

% -2

20172016

Light Distil.20,8%

Mid. Distil.50,8%

Other 5,1%

Black Prod.23,2%

Gasoline20%

Naphtha1%

Jet17%

ULSD34%

Other6%

Coke3%

Fuel Oil8%

ASRFO+Vac0% Bitumen

11%Gasoline21%

Naphtha1%

Jet17%

ULSD32%

Other6%

Coke2%

Fuel Oil8%

ASRFO+Vac1%

Bitumen12%

9M Product Yields

36

Light Distil.22,2%

Mid. Distil.49,5%

Other 5,5%

Black Prod.22,7%


API: 30,32


API: 30,81

% +1

20172016

1,7

0,0

Light Distil.21,3%

Mid. Distil.51,2%

Other 5,6%

Black Prod.21,9%

-0,8 -0,8

Sales By Customer (2016)

37

Total: 30.3 mn tons Distributors: 15.2 mn tons

Customer Groups Sales to Distributors

Income Statement (In USD)

Q3 Q3% Diff. Million USD 2016 9M 2017 9M % Diff.

2016 20173.199 4.068 27 Net Sales 8.215 10.946 33311 458 47 Gross Profit 699 1.339 92-83 -84 1 Operating Expenses -239 -221 -8-23 -6 -72 Income/Loss from other operations 8 16 118205 367 80 Operating Profit 467 1.135 143

21 19 -9 Income/Loss from equity investment 44 48 9

225 386 71 Operating Profit Before Fin. Income/Loss 512 1.183 13168 63 -8 Financial Income 113 125 10

-106 -98 -7 Finance Expenses -268 -273 2188 351 87 Profit Before Tax & Minorities 357 1.035 190197 283 43 Net Profit 338 923 173

250,7 408,1 62,8 EBITDA (mn.$)-CMB 605,8 1.253,9 107,0

235,5 340,2 44,4 EBITDA (mn.$)-CMB- CCS 496,0 1.155,2 132,9

• In our EBITDA calculation, FX related items are not included, whereas CMB rules is that these should be included in operating profit.


• For Balance Sheet, USD/TL rates: 2016 Q3 3,0; 9M 2016: 3,0; 12M 2016: 3,52 and 2017 Q3 3,55; 9M 3,55

294,12 434,67 47,79 EBITDA *(mn. $) 644,70 1.292,28 100,45

278,92 366,75 31,49 EBITDA* (mn. $) CCS 534,90 1.193,60 123,14

Product Price Effect on Tüpraş in Q3 (FOB Italy Prices)

Product Price, $/ton Tüpraş Production

Yield %

Crack Margin, $/bbl

2017 2016 2017 2016

LPG 399,0 291,5 3,4% -16,6 -19,9

Gasoline 544,5 461,0 20,2% 15,0 11,0

Naphtha 447,4 366,1 0,4% -1,6 -4,5

Jet Fuel 506,7 423,3 16,7% 12,4 8,0

Diesel 485,4 408,1 31,4% 13,1 9,0

Diesel 1000 467,2 397,8 1,1% 10,7 7,6

Fuel Oil 1% 300,1 247,0 0,4% -5,8 -7,8

Fuel Oil 3,5% 292,7 228,5 3,9% -6,9 -10,6

Others 272,9 220,7 18,7% -6,8 -9,3

Total Crack Margin,$/bbl 7,2 3,6

Dated Brent Avg. $/bbl 52,1 45,9

Margin Differences, $/bbl 3,6

Total Raw Materials Charge, mn bbl 57,3

Total Effect of Product Price, mn $ 206,3

Total Effect of Price Ratio, mn TL 724,3

39

High Complexity #1 (Nelson Complexity of Refinining Companies)

40

14,5

13,012,6

11,8 11,6 11,511,0

10,49,9 9,8 9,6 9,5 9,4 9,2 9,2 9,0 8,8 8,7

8,48,0

7,3 7,1 7,1 7,1 7,16,8

6,5

5,9 5,8 5,8

0

2

4

6

8

10

12

14

16

Tüpraş Before RUP

Tüpraş After RUP

İzmitAfter RUP

High Complexity # 2 (Resid Upgrading Units Production-(Thousand Tons))

Raw Materials

Natural Gas 246

Vacuum Resid1,214

Atm. StraightRun Fuel Oil

3,036

Total Feed 4,496 Total Production 4,250

(kton)

Products(kton)

Diesel

2.883

Gasoline

522

LPG

69

PetroCoke

690

Sulphur

86

41

High Complexity # 3 (Tüpraş Total Production Change After RUP)

4,7

3,6

5,6

1,4

2,9

1,7

0,9

5,5

0,3

0,35

0,7

0 2 4 6 8 10 12

Gasoline&Naptha

Jet Fuel

Diesel

Others

Fuel Oil

Coke

Bitumen

Before RUP After

%35

%25

%19

%-87

Million ton42

2,7

RUP production + 4 Refineries Capacities increase 9,1 mn tons,

instead of 4,2 mn ton

42

Flexibility & Reliability; Multiple routes to maksimum capacity

43

CRUDE OIL 970008

VACUUM 423208

NAPHTHA

SPLITTER8

LPG MEROX 6

ISOMERISATION 64003

UNIFINER REFORMER 169007

LPG

GASOLINE

NAPHTHA

JET

FUELOİL

DIESEL

LUBE

OIL

VA

CU

UM

MH

C2

22.0%

33.9%

0.5%

19.9%

Number

of unitsKey unitsCapacity

(m3/d)

Increased conversion capacity

Strong integration among refineries

KERO/DIES

EL (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.

NAFTA

SPLITTER UNIFINER

REFORMER

KERO /

DIESEL

HDS

HYDROC.

FCC

COKER

ISOMER.

Benzen Saturation

FCC Benzin HDS

Lube Oil

Bitumen

CRUDE OIL

Flow Diagram

HYDROCRACKER

202

142 136

191

133

229

154 144

53 5842

23 49

223 247 264 278 301

266 357348

425443

457470 475

495

534 541

0

100

200

300

400

500

600

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

Tax Distr. Mar. Pump No Tax

Competition # 1 (European Pump Price Comparison)

Gasoline (Krş / Lt) Diesel 10 (Krş / Lt)

44

206

144 148 138 142194 189

145

48 23 41 53 53

269 315 355 356352 357

402 404

475507

526 536 547 551

592 603

0

100

200

300

400

500

600

700

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

Tax Distr. Marg. Pump No Tax

Note: Prices valid on 17 July 2017

Competition # 2 (Regional Competition)

Mediterranean Black Sea

Ukraine

Russia

Georgia

Turkey

Bulgaria

Romania

Moldova

EgyptLibya

Tunisia

Algeria

Morocco

Portugal

Spain

France

Italy

Israel

Syria

TurkeyGreece

Albania

Croatia

54 Refineries

7.8mn bpd

17 Refineries

1.8mn bpd

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.

45

Competition # 3 (SOCAR-STAR Refinery)

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

• Goldman Sachs has the right to resell 10 percent of its stakes to Socar, and the remaining 3 percent to ‘SermayeInvestments Limited’ owned by SOCAR within 6 year at the same price.

Credit : 3.3 Billion $

Equity : 2.4 Billion $

Total Investment : 5.7 Billion $

STAR Refinery (Total Cap. 10 mn ton)• 3,3 billion dollar credit aggrement. First 4 year grace

period total 15-18 year term.• Project finance is supplied to company (US$ 1.5 billion)• It is planned to be commissioned in 2018.

Fuels

• Diesel 5.000

• Jet Fuel 1.700

• Sulphur 158

• Petrocoke 698

• LPG 260

• Naptha 1.300

• Mixed xylene 460

• Reformate 524

Petrochemical Feedstock

46

2019, mn ton

ProductionTurkish

DemandBalance

Tüpraş Star Total

LPG 1,2 0,3 1,5 4,2 -2,8

Petchem Feeds 0,3 2,6 2,9

Gasoline 5,8 5,8 2,4 3,4

Jet Fuel 5,4 1,6 7,0 5,0 2,0

Diesel 10,2 4,8 15 24,5 -9,5

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

Fuel Oil 1,5 1,5 1,3 0,2

Bitumen 3,1 3,1 3,3 -0,2

Production (K Ton)

Marine Bunker Specification Changes and Its Effects

• 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.

Bunker fuels account for; ~5% of global oil demand40% of oil related sulphur

emissions.

80% of global trade is done via marine transportation.

50.000 vessels are in operation.

HS Fuel Oil Diesel LS FO HS FO

Scrubbed

Mn

b/d

LS Fuel Gap

2,1

1,8

Source: IEA, Oil Sector Report, 2017

%19 Install

Scrubber

%5 switch

to LNG

%2 Other

%74 Buy

Low Sulphur

Fuel

Ship Owners Intention Survey

Requirements of spec change can be achieved through;

Use of lower sulphur blendstocks like ULSD (Diesel)

Low Sulfur Fuel Oil production with light crudes

Sulphur Fuel Reduction Systems (Scrubber)

LNG

Source: UBS, 2017

47

7,1

3,5

1,9

1,7

1,9

1,7

2,4

2,8

3,4

3,1

3,6

3,2

1,8

2,6

1,4

0,8

1,3

2,0

0,9

3,6

2,5

1,72,2

1,51,1

1,6

2,51,9

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Tüpraş Contractor Total

48

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

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

Incident Frequency

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

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

İncluding contractors

4273

135

240

345376

398 407 416

0

50

100

150

200

250

300

350

400

450

2008 2009 2010 2011 2012 2013 2014 2015 2016

49

Energy Index 116,1 101,8

Energy Saving Projects , mn$

2008 2009 2010 2011 2012 2013 2014 2015 2016 Total

Tüpraş Energy consumption (TJ) 76.653 65.265 67.010 70.792 71.086 69.147 67.034 90.796 102.156 679.939

Energy-saving(TJ) 978 10.891 3.155 3.053 5.255 2.841 1.772 1.031 1.054 30.029

Energy Efficiency Project 36 52 65 92 97 40 22 21 18 443

Savings (mn $) 42 32 62 105 106 31 22 10 9 416

Updated information can be found in the Investor Relations section of the company website

www.tupras.com.tr

Investor Relations and Reporting DepartmentTel. : 262 316 3269Fax : 262 316 30 10-11Güney Mah. Petrol Cad. No .25 PK.41790 Körfez-Kocaeliwww.tupras.com.trE-mail: [email protected]

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.

http://www.tupras.com.tr/

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INVESTOR PRESENTATION - Microsoft · 2018-12-07 · 26,0 50,7 40,3 56,3 49,2 47,5 53,4 44,3 52,4 59,3 55,3 64,0 25 30 35 40 45 50 55 60 65 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17