Investor Presentation March 2018 - Microsoft · Investor Presentation Disclaimer This presentation...

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


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


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


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


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


Light Distillate Cracks ($/bbl)

7

0

6

12

18

24


10,2 10,6

2015 2016 2017 2018

-8

-6

-4

-2

0

2

4


-4,9 -4,8

Gasoline Naphta

REFINING INDUSTRY

Source: Platts

-40

-30

-20

-10

0


-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


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


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


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%


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.


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.


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


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


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


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


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


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


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


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


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


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


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


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


12M Product Yields

26

White Product %76.56

Production 27,93 mn tons

API 30,62



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


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


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


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


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


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


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


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


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)


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


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


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


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


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 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


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


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


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


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


Q4 Product Yields

47

White Products %77.57


API 30,1

White Products %73.74


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


12M Product Yields

48



API 30,62



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


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


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


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


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


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


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


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


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


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

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