The Moon Brent Yee Lindsey Seu. The Moon Brent Yee Lindsey Seu.
Investor Presentation December - Microsoft · Investor Presentation 58.2 0 10 20 30 40 50 60 70 80...
Transcript of Investor Presentation December - Microsoft · Investor Presentation 58.2 0 10 20 30 40 50 60 70 80...
Investor Presentation December 2018
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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.
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Content
3
• Refining Market Slides 4-10
• Turkish Market Slides 11-15
• Company Overview Slides 16-26
• Operations Slides 27-33
• Key Financials Slides 34-46
• Outlook Slides 47-52
• Appendix Slides 53-60
CONTENT
REFINING
MARKET
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58.2
0
10
20
30
40
50
60
70
80
90
100Brent
Brent Crude Oil Prices ($/bbl)
5
CONS • Increase in number of rigs & production
in US
• OPEC production increase announced
in Summer 2018
• Inventory Levels
• Impact of trade tariff negotiations
PROS
• OPEC & non OPEC supply cut through
2017–mid 2018
• Political instabilities in Middle East
• Future of nuclear agreement
• Healthy PMI data in developing countries
• Expectation of high global GDP
• Potential impact of sanctions
36.5
REFINING INDUSTRY
Source : Platts
As of December 17th
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Refinery Capacity Change
6
530 526
0 0302
-5
-775-546
520
0
400120
390
-140
305
-352
270
0
510
0
198
-443
63
-189
244
300
417
150
40
-130
364
-57
70
0
156
-220
76
-143
105
-268
420
120
-116
244
46
-91
0
200
36
330
200
343
160
200
-2750
-1600
-450
700
1850
3000
China India Middle East Other Asia Other Japan North America Europe
2018 2017 2016 2015 2014 2013 2012
1,7 1,8
1,01,3
0,3 0,6
1,51,3
0,6
1,8
1,1
1,5
0,0
0,5
0,9
1,4
1,8
2,3
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Thousand Barrels/Day
Source:, Reuters, International Energy Agency, Tüpraş, sector reports and news
Net Capacity Additions (mb/d)
REFINING INDUSTRY
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Middle Distillate Cracks ($/bbl)
7
12,1 12,2 12,613,6
14,313,7 13,6
15,9
14,1
15,5
19,5
15,0
0
4
8
12
16
20
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
2015 2016 2017 2018
10,4
7,2
14,8
11,5
10,0
7,6
11,9
14,413,7
14,413,9
13,2 13,3
14,4
12,5
14,3
18,1
15,0
0
4
8
12
16
20
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
9,5
6,6
15,1
11,4
9,1
8,0
Diesel Jet Fuel
REFINING INDUSTRY
Source : Platts
As of December 17th
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10,2 10,6
12,0 12,113,0 13,1 13,4
14,4
9,6
5,5 5,0
3,1
0
6
12
18
24
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
2015 2016 2017 2018
Gasoline and High Sulphur Fuel Oil Cracks ($/bbl)
8
-13,2
-11,9-12,7
-15,2
-13,0
-9,1-8,3 -8,5
-13,2
-10,9
-3,7
-6,0
-20
-17
-14
-10
-7
-4
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
10,4
18,6
9,89,7
11,9
15,7
Gasoline High Sulphur Fuel Oil
-8,7
-12,2
-10,2
-12,5
10,9
-16,7
REFINING INDUSTRY
Source : Platts
As of December 17th
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Quarterly Product Crack Margins ($/bbl)
9REFINING INDUSTRY
Diesel and jet fuel cracks increased by 11% and 9% respectively; while gasoline and fuel oil cracks
were weaker compared to 2017 Q3.
13,0
19,418,9
13,5
1515
11
1313,3
14,315,0
10,910,9
12,7
12,5
10
12
14
16
18
20
Q1 Q2 Q3 Q4
Gasoline
1615
15
11
8
9 9
1111 11
1312
12,313,9
14,5
6
8
10
12
14
16
Q1 Q2 Q3 Q4
Diesel 2015 2016 2017 2018
14
1111
9
7 8 8
109,5 9,9
12,412,0
13,3
13,8
13,4
6
8
10
12
14
16
Q1 Q2 Q3 Q4
Jet Fuel
-12 -12
-13 -16
-13 -15
-11-9
-9,1
-7,0 -6,9
-10,0
-12,6-12,4
-10,2
-20
-16
-12
-8
-4
Q1 Q2 Q3 Q4
High Sulphur Fuel Oil
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Crude Price Differentials ($/bbl)
10
Ural differentials narrowed with higher Chinese demand while Heavy Crude differentials narrowed
with lower Venezuelan and Iranian crude availability.
Heavy Crude Price Differentials Ural Differentials
-0,6
-2,1-2,3 -2,4
-1,7
-0,9
-1,4-1,1
-0,5
-1,1
-0,20,0
-4
-3
-2
-1
0
1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012-2017 Min. 2015 2016 2017 2018
-0,3
-1,2
-1,3
-1,6
Brent
-10
-8
-6
-4
-2
0
15
Q1
15
Q2
15
Q3
15
Q4
16
Q1
16
Q2
16
Q3
16
Q4
17
Q1
17
Q2
17
Q3
17
Q4
18
Q1
18
Q2
18
Q3
Iran Heavy Kirkuk Kuwait Basra Heavy Arab Heavy
Brent
Kirkuk
Iran Heavy
Kuwait
Basra Heavy
Arab Heavy
Chinese demand towards Ural crude narrowed differentials in Q3 Following decrease in Iranian exports, alternate heavy crude differentials
narrowed in Q3
Source : Platts
As of December 17th
TURKISH
MARKET
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Turkish Economy Strengths
12
7980
81 8182
77
78
79
80
81
82
83
2016 2017 2018 2019 2020
Population (mn)
1.4% growth in last 5 yrs
0-40 yrs >65%
9,28,8
2,1
4,2
3,0
4,0
2,9
7,4
0
2,5
5
7,5
10
2010 2011 2012 2013 2014 2015 2016 2017
GDP (%)
22
2425
26
28
21
22
23
24
25
26
27
2016 2017 2018 2019 2020
Diesel Consumption (mn ton)
8.8% average growth in
last 5 yrs
4% annual
growth
Car ownership per thousand people
127 134176
213
0
50
100
150
200
250
2014 2015 2016 2017
2002-2014 4.9%
2010-2014 5.4%
Source: EMRA, TSI
67%
REFINING INDUSTRY
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Turkish Consumption (Million tons) 2015-2017
13
Diesel
-4%
Jet Fuel
0,49
0,58
0,60
0 0 0 0 1 1
2017
2016
2015
Fuel Oil*Gasoline
+6.5%-3.5%
24,17
22,31
20,56
10 14 17 21 24
2017
2016
2015+8.5%
+8.3%+2.7%
+3.1%-15.7%
Source: EMRA
*Bunker excluded.
REFINING INDUSTRY
2,30
2,23
2,10
2017
2016
2015
4,52
4,40
4,58
2017
2016
2015
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Strong Turkish Market, 9M 2018 (Million tons)
14REFINING INDUSTRY
• Tüpraş is well positioned in a growing, short market.
• Diesel and jet fuel consumption in Turkey grew significantly the first 9 months of 2018 driven by infrastructure
projects and aviation growth.
*Bunker excluded
Source: EMRA
3,85
3,50
0 1 1 2 2 3 3 4 4 5 5
2018
2017
Diesel
+9.9%
Jet Fuel
0,27
0,34
0 0 0 0 0 0 0
2018
2017
Fuel Oil*
1,80
1,75
2018
2017
Gasoline
+6.7%
+2.6% -21.7%
18,99
17,79
14 17 20
2018
2017
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Turkey’s Import / Export Balance (Net) (Million Tons)
15
-3,1
2,4
-12,0
1,0
0,0
-3
3
-13
10
-16
-12
-8
-4
0
4
LPG Gasoline Diesel Fuel Oil Jet
2013 2014 2015 2016 2017
Source EMRA
Import
Export
REFINING INDUSTRY
COMPANY
OVERVIEW
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16%
84%
Tüpraş Shareholder Structure
17
Energy Investments Inc. (SPV)
Free Float
*Distribution of Domestic/
Foreign Ownership of Tüpraş
Shares
*As of December 31th, 2017
Foreign
Ownership
Domestic
Ownership
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Tüpraş Refining Assets & Distribution Network
18
Turkey Storage
Capacity
Tüpraş : 58%
Opet : 9%
Other Companies : 33%
İzmit
• 11.0 MT Capacity
• NC: 14.5
• Storage Capacity: 3.03 mn m3
İzmir
• 11.0 MT Capacity
• NC: 7.66
• Storage Capacity:2.51 mn m3
• Base oil 400 k tons
Kırıkkale
• 5.0 MT Capacity
• NC: 6.32
• Storage Capacity: 1.41 mn m3
Batman
• 1.1 MT Capacity
• NC: 1.83
• Storage Capacity:0.25 mn m3
Total Capacity : 28.1 mn ton
Nelson Complexity : 9.5
Tüpraş Storage Cap. : 7.2 mn m3
OPET Storage Cap. : 1.1 mn m3
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High Complexity (Nelson Complexity of Refining Companies)
19
14,5
13,012,6
11,8 11,6 11,511,0
10,49,9 9,8 9,6 9,4 9,2 9,2 9,0 8,8 8,7 8,4
8,07,7
7,1 7,1 7,1 7,1 6,8 6,5 6,35,9 5,8 5,8
1,30
5
10
15
20
İzm
it R
ef.
Va
lero
Relia
nce
Essa
r
Ma
rath
on
Oil
Ho
lly-F
ron
tie
r
Ne
ste
BP
Te
so
ro
Th
ai O
il
IOC
L
He
llen
ic
PK
N
MO
L
SH
ELL
Pe
tro
m
Galp
Sara
s
Pe
tro
bra
s
İzm
ir R
ef.
Luko
il
HP
CL
CP
CL
BC
P
Esso
(Th
ai)
S-O
il
Kır
ıkka
le R
ef.
MR
PL
SK
En
erg
y
BP
CL
Ba
tma
n R
ef.
Tüpraş After
RUP
Tüpraş
Before RUP
İzmit After
RUP
14,5
9,5
7,3
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Crude Suppliers of TÜPRAŞ (Million Tons)
20
Crude Type 2017
6 610
2 23 3 112 13 13
10 10 10
1715
1114 14
7
65 6763
7176
79
0
10
20
30
40
50
60
70
80
90
2012 2013 2014 2015 2016 2017
Africa America Europe CIS Middle East
5,3%
58,8%
36%
>34 30> 30 - 40
In 2017, Tüpraş purchased 25 different types of crude oil from 14 countries, with gravities ranging between
18-47 API.
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Sales By Customer (9M 2018)
21
Dist.; 50%
THY Opet; 11%
Jet; 6%
LPG; 3%
Other; 6%
Export; 13%
Bitumen; 11%
Military; 1%
POAŞ26%
OPET31%
SHELL17%
BP13%
TP1%
AKPET4%
OTHER8%
Customer Groups Sales to Distributors
Total : 22.3 mn tons Distributors : 11.1 mn tons
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Competitive Advantages of Tüpraş
22COMPANY OVERVIEW
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OPET
23
830 885 915 938 966 1.009 1.073 1.126 1.150
394394
410 418 427435
431434 455
1.2791.325
1.325 1.3561.393
1.4441.504
1.5601.605
0
200
400
600
800
1000
1200
1400
1600
1800
2010 2011 2012 2013 2014 2015 2016 2017 9M 2018
Opet Sunpet
Opet expanded its retail footprint from 1.560 stations in December 2017 to 1.605 stations in
September 2018.
Market share as of
August 2018
White
Product
32.26%
Black
Product
17.85%
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DİTAŞ, Marine Transport -Tüpraş Share 79.98%
24
• One of the biggest Turkish marine transportation companies of crude oil and petroleum products
• Carries mainly Tüpraş’ crude oil purchases and makes the transfer operations of product and semi-products
19,0
15,0
6,05,0
7,0
9,0
17,0
3,0
3,0
3,0 4,0
5,0
6,0
6,0
0
5
10
15
20
25
2011 2012 2013 2014 2015 2016 2017
Product Crude Oil
11 tugboats
8 mooring boats
2 service boats
1 pilot boat
253,7 mn $Net Sales
49,6 mn $Op. Profit
3 Crude Oil Tanker :479.765 DWT
1 Crude Oil - Product Tanker : 51.532 DWT
7 Product Tanker : 90.534 DWT
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Körfez Ulaştırma A.Ş.- Tüpraş Share 100%
25
Körfez Ulaştırma A.Ş.
• On June 16th, Freight Train Operator Certificate,
• On September 20th, Safety Management
Certificate received
• Operates with 491 cistern wagons and 5 diesel
• locomotives2,5 mn
tons/year tran
sport
% 10 Market share
Turkey's First
Private Railway Operator
2018
Target
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Enhancing our Trading Capabilities
26
๏ We are opening a trading office in London to
๏ London office is planned to be opened until the end of the year
Closely monitor
international market
opportunities,
Support import and
export operations,
Create additional value
from supply chain and sales
activities.
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Capacity Utilization and Quarterly Production Volume on Track in Q3
28
Capacity utilization reached 115% in Q3.
*Nameplate capacity calculated by standard 330 days of operations.
Quarterly Production (Million Tons)
4,5 4,6
5,4 5,5
5,6
6,9
7,3 7,4
6,6 6,7
7,27,4
7,1
7,8 7,7
6,3
5,2
6,2
7,7
4
5
6
7
8
9
Q1 Q2 Q3 Q4
2014 2015 2016 2017 2018
Capacity Utilization* (%)
71,3
98,1 100,9 101,4
67,3
85,4
107,2
3,6
4,4 4,4 6,7
10,7
7,1
7,3
75
103 105 108
78
93
115
2014 2015 2016 2017 Q1 2018 Q2 2018 Q3 2018
Crude Oil Semi Product Feedstock
9M 2018 CUR: 95%
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Q3 2018 Product Yields
29
White Products %75.70
Production 7.6 mn tons
API 29.6
White Products %75.75
Production 7.7 mn tons
API 30.7
2017
LPG3%
Gasoline19%
Naphtha2%
Jet19%
ULSD32%
Other2%
Coke3%
Fuel Oil5%
Bitumen15%
Light Distil.24,2%
Mid. Distil.50,8%
Other 1,7%
Black Prod.23,2%
LPG4%
Gasoline19%
Naphtha1%
Jet19%
ULSD32%
Other2%
Coke3%
Fuel Oil7%
Bitumen13%
Light Distil.24,2%
Mid. Distil.50,8%
Other 1,9%
Black Prod.23,1%
2018
OPERATIONS
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9M 2018 Product Yields
30
White Products %77
Production 22.5 mn tons
API 30.3
White Products %77
Production 18.9 mn tons
API 31.0
2017
LPG4%
Gasoline20%
Naphtha1%
Jet17%
ULSD34%
Other2%
Coke3%
Fuel Oil8%
Bitumen11%
Light Distil.25,0%
Mid. Distil.51,2%
Other 1,9%
Black Prod.21,9%
LPG4%
Gasoline20%
Naphtha1%
Jet19%
ULSD33%
Other2%
Coke3%
Fuel Oil6%
Bitumen13%
Light Distil.24,5%
Mid. Distil.52,0%
Other 1,8%
Black Prod.21,6%
2018
OPERATIONS
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Domestic Sales (Million Tons)
31
We generated 22.3 million tons of total sales in 9M 2018. Jet fuel and diesel sales increased by 8.5%
and 6.7% compared to last 9M 2017 respectively.
12,6
16,0
18,419,3 19,5
3,5
4,8
4,24,9
2,7
16,1
20,9
22,6
24,2
22,3
9M 2014 9M 2015 9M 2016 9M 2017 9M 2018
Domestic Sales Export
57
8 8 9
2,9
3,6
3,5 3,53,8
1
2
22
2
1,4
2,0
2,52,6
2,4
11
14
1616
17
9M 2014 9M 2015 9M 2016 9M 2017 9M 2018
Diesel Jet Fuel Gasoline Bitumen
Total Sales in 9M Domestic Sales of Key Products in 9M
OPERATIONS
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Investments (Million $)
32
• Revamp of Crude Unit
• FCC Modernization
• New Sulphur Units
• Energy Saving Projects
• Optimization of conversion units
• 9.5 Nelson complexity
• High white product yield
• Process more heavier and sour crudes
• Run all refineries with 100% capacity utilization
Ongoing Projects
Avg. 247 mn$
Avg. 943 mn$
Avg. 278 mn$
274
355400
186177
628
974
1.213
959
344
213185
97
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 9M 2018
OPERATIONS
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9M 2018 Results
33
Refining Margins ($/bbl)
Brent Price ($/bbl)
6965 66
7277
74 74 73
79
55
60
65
70
75
80
J-18 F-18 M-18 A-18 M-18 J-18 J-18 A-18 S-18
Brent ($/bbl) Tüpraş Expectation Min Tüpraş Expectation Max
10,7
4,5
0
2
4
6
8
10
Tüpraş Net Margin Med Margin
99
104
113
95
2015 9M
2016 9M
2017 9M
2018 9M
Axis Title
Capacity Utilisation (%)
18,9
22,3
Production
Sales
2018 Operational (mn ton)
Capex (mn $)
213,0
185,0
97,0
2016
2017
9M 2018
• 72.1 $/bbl Brent Price average in 9M
• 95% Total Capacity
Utilization in 9M
• 22.3 mn tons of sales 18.9
m tons of production in 9M
• 97 mn $ CAPEX in 9M
OPERATIONS
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-2
0
2
4
6
8
10
12
Oca-08 May-09 Eyl-10 Oca-12 May-13 Eyl-14 Oca-16 May-17 Eyl-18
Month
Annual
Margin Environment ($/bbl)
35
Tüpraş’ 13.5 $/bbl Net Refining Margin in Q3 2018 was higher than 8.4 $/bbl Med Complex margin.
Premium to the benchmark Mediterranean
peers’ refining margin due to:
• Refined products deficit characteristic to
the Turkish market
• Access to cheaper sources of crude oil
• Ability to use heavier and sour crudes
• Proximity to major suppliers
• Reduces transport costs
• Implemented cost reduction measures
• Energy efficiency programs
• Capacity to produce higher value added range
of refined products
• Direct pipeline connections with domestic clients
• High export capability
Med Complex
4,57
5,30
3,97 4,83
1,67 1,95
4,21
1,17
2,89
1,95
5,54
9,610,6
11,911,2
12,9
16,0
2,53,2
6,5 6,0
8,1
10,7
1,7 2,0
4,84,0
5,34,5
0
2
4
6
8
10
12
14
16
18
2013 2014 2015 2016 2017 9M 2018
Tüpraş Gross Margin Tüpraş Net Margin Mediterranean
KEY FINANCIALS
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Income Statement
36
Strong EBITDA generation continued in Q3 2018
Million TL Q3 2018 Q3 2017 % 9M 2018 9M 2017 %
Net Sales 30.247 14.344 111 63.749 39.344 62
Gross Profit 3.910 1.610 143 7.200 4.813 50
Operating Expenses -324 -296 9 -870 -793 10
Income/Loss from other operations -2.783 -24 -3.771 59
Operating Profit 802 1.290 -38 2.559 4.079 -37
Income/Loss from equity investment 47 67 -30 185 173 6
Operating Profit Before Fin. Income/Loss 849 1.356 -37 2.743 4.253 -35
Net Financial Income /Expense -171 -123 39 -668 -533 25
Profit Before Tax 678 1.234 -45 2.075 3.720 -44
Net Profit (including minority interest) 551 1.000 -45 1.973 3.339 -41
EBITDA *(mn.TL) 3.778 1.528 147 7.021 4.645 51
EBITDA* (mn. TL) CCS 1.745 1.290 35 3.463 4.284 -19
* On CMB reports, EBIT includes extra items such as FX impacts of trade receivables and payables. In our EBITDA calculation, FX related items are excluded from EBIT as customary in international practices.
Million $ Q3 2018 Q3 2017 % 9M 2018 9M 2017 %
Net Sales 5,672 4,068 39 13,868 10,946 27
Gross Profit 761 458 66 1,566 1,339 17
Operating Expenses -56 -84 -34 -189 -221 -14
Income/Loss from other operations -579 -6 -820 16
Operating Profit 127 367 -65 557 1,135 -51
Income/Loss from equity investment 6 19 -66 40 48 -17
Operating Profit Before Fin. Income/Loss 133 386 -65 597 1,183 -50
Net Financial Income /Expense -24 -35 -33 -145 -148 -2
Profit Before Tax 110 351 -69 451 1,035 -56
Net Profit (including minority interest) 81 285 -72 429 929 -54
EBITDA* (mn.$) 734 435 69 1,527 1,292 18
EBITDA* (mn.$) CCS 333 368 -10 753 1,192 -37
KEY FINANCIALS
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Financial Highlights (Million $)
37
Net Debt- Net Debt/ Rolling EBITDA*
EBITDA
551
1.340
1.869
1.598 1.663
2.5772.748
2.370 2.391
1.751 1.7291.555
1.680
1.240
1.657
2.331
1.957
1.613
0
500
1.000
1.500
2.000
2.500
3.000
201
2_
R
201
3
201
4 H
1
201
49
M
201
4
201
5 H
1
201
59
M
201
5
201
6 H
1
201
69
M
201
6
201
7Q
1
201
7 H
1
201
79
M
201
7
201
8Q
1
201
8 H
1
201
89
M
Tüpraş achieved 734 mn USD EBITDA in Q3 2018 with high capacity utilization and inventory gain.
Net Income
Return of Average Equity
30% 32%
24% 26%
35%
4%
11%16%
22%
45%
55%
49%
41%
17%
31% 29%
0
0
0
0
0
1
1
201
1
201
2
201
3
201
4
201
5
201
6 Q
1
201
6 H
1
201
6 9
M
201
6
201
7 Q
1
201
7 H
1
201
7 9
M
201
7
201
8 Q
1
201
8 H
1
201
8 9
M
29%
161 72 231 112 27 235 99
7575
171273
113
405
244
309 435 175268
197
283
81
271
47 91
285
256
123
-50
200
450
700
950
1200
2012 2013 2014 2015 2016 2017 2018
1.046
594
938
667629
817
95 79150 150 114
427271153
78 -27
415
237
431 522
361315
226
410
294
435
734
10689
-11
422
480
321
-50
242
533
825
1117
1408
2012 2013 2014 2015 2016 2017 2018
4th Q
3rd Q
2nd Q
1st Q
715560
338
1.397
1.125
1.614
*Rolling EBITDA is calculated with dollar terms
1.527
423
1.613
0,8
2,4
3,5 3,6
4,9
3,32,8
1,72,0
1,6 1,51,1 1,0
0,71,0
1,6 1,51,2
Net Debt/R. EBITDA
KEY FINANCIALS
Net Debt
Investor Presentation
www.tupras.com.tr
Balance Sheet Analysis (Billion $)
38
0,71
0,52 0,51
0,090,20
0,66
1,07
0,880,70
0,910,75
0,911,09 1,15
1,57
1,36 1,421,52 1,57
0,0
0,5
1,0
1,5
2,0
Ma
r.1
4
Jun
.14
Se
p.1
4
De
c.1
4
Ma
r.1
5
Jun
.15
Se
p.1
5
De
c.1
5
Ma
r.1
6
Jun
.16
Se
p.1
6
De
c.1
6
Ma
r.1
7
Jun
.17
Se
p.1
7
De
c.1
7
Ma
r.1
8
Jun
.18
Se
p.1
8
2,91
3,263,03
2,42
1,72 1,69 1,581,33 1,21
1,671,96 1,99
2,18 2,17
2,68
2,18 2,19
2,75 2,8
0
1
2
3
4
Ma
r.14
Jun
.14
Se
p.1
4
Dec.1
4
Ma
r.15
Jun
.15
Se
p.1
5
Dec.1
5
Ma
r-16
Jun
-16
Se
p-
16
Dec.1
6
Ma
r.17
Jun
.17
Se
p.1
7
Dec.1
7
Ma
r.18
Jun
.18
Se
p.1
8
2,8 2,9 2,9 3,0 3,3 3,1 3,0 2,8 2,9 2,8 3,1 2,9 3,0
2,1 2,12,6 2,4 2,5 2,4
0,9 0,3 0,3 0,30,4
0,5 0,60,6 1,0 1,2
1,10,6 0,6
1,1 1,3
1,41,6 0,8 0,9
3,7
3,2 3,2 3,33,7 3,6 3,6
3,4
3,9 4,04,2
3,4 3,53,3 3,4
4,0 4,0
3,2
0,0
0,7
1,4
2,1
2,9
3,6
4,3
5,0
Ma
r.1
4
20
14 1
h
20
14
9M
Dec 1
4
Ma
r.1
5
Jun.1
5
Sep.1
5
Dec.1
5
Ma
r-16
Jun-1
6
Sep-1
6
De
c.1
6
Ma
r.1
7
Jun.1
7
Sep.1
7
Dec.1
7
Ma
r.1
8
Jun.1
8
Sep.1
8
ST Loans LT Loans
Strong operational FCF generation and tight working capital management led to an increase in our cash
position.Cash & Cash Equivalents Trade Receivables
Trade PayablesFinancial Loans
1,7
1,3
1,6 1,7
1,21,0
0,81,0
1,6 1,6
2,5
1,7
2,0
1,6
2,22,3
1,7
1,3
1,7
0,0
0,6
1,2
1,8
2,4
3,0
Ma
r.1
4
Jun
.14
Se
p.1
4
De
c.1
4
Ma
r.1
5
Jun
.15
Se
p.1
5
De
c.1
5
Ma
r.1
6
Jun
.16
Se
p.1
6
De
c.1
6
Ma
r.1
7
Jun
.17
Se
p.1
7
De
c.1
7
Ma
r.1
8
Jun
.18
Se
p.1
8
1.6
1.57
2.803.3
KEY FINANCIALS
Investor Presentation
www.tupras.com.tr
Q3 Profit Before Tax Bridge (2017-2018)
39
Decline in profit before tax was mostly driven by FX loss, partially offset by inventory gain.
Million TL
KEY FINANCIALS
Investor Presentation
www.tupras.com.tr
Dividend (TL)
40
1,73
3,24 2,94
4,96
5,83
4,78
0,00
10,18
7,16
15,22
2,31 2,502,98
3,93 3,85
1,580,00
6,50 6,20
13,60
0
1000
2000
3000
4000
0
2
4
6
8
10
12
14
16
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Earings per Share Gross Dividend Total Payout
One of the highest dividend
yield in BIST
2012/2013 EPS includes the tax incentive
KEY FINANCIALS
Investor Presentation
www.tupras.com.tr
Tüpraş Balance Sheet
41
Million $ 31.12.2017 30.09.2018 Difference %
Current Assets 5,399 5,050 -349 49
Cash & C. Equivalents 2,334 1,662 -671 -29
Receivables 1,333 1,556 223 17
Derivatives 92 79 -13 -14
Inventories 1,403 1,418 15 1
Pre-paid expenses 17 22 5 33
Other Current Assets 222 313 91 41
Long Term Assets 4,718 3,141 -1,577 40
Financial Assets & Subsidiaries 304 207 -97 -32
Fixed Assets 3,279 2,059 -1,221 -37
Derivatives 27 44 17 64
Pre-paid expenses 26 53 27 102
Deferred Tax 813 587 -226 -28
Other Long Term Assets 268 191 -77 -29
Total Assets 10,118 8,191 -1,927 89
Short Term Liabilities 4,686 4,523 -163 211
Financial Loans 1,398 907 -491 -35
Payables 2,219 2,796 577 26
Derivatives 47 155 109 231
Deferred Incomes 5 6 0 6
Provisions 24 28 5 19
Other ST Liabilities 993 630 -363 -37
Long Term Liabilities 5,432 3,668 -1,763 106
Financial Loans 2,592 2,368 -224 -9
Payables & Provisions 59 40 -19 -32
Derivatives 1 4 3 301
Other LT Liabilities 1 1 -1 -49
Equity 2,750 1,241 -1,509 -55
Minority Interests 28 14 -14 -51
Total Liabilities 10,118 8,191 -1,927 316
Million TL 31.12.2017 30.09.2018 Difference %
Current Assets 20,366 30,250 9,884 430
Cash & C. Equivalents 8,802 9,958 1,156 13
Receivables 5,027 9,319 4,292 85
Derivatives 347 474 127 37
Inventories 5,291 8,495 3,204 61
Pre-paid expenses 62 131 69 111
Other Current Assets 837 1,872 1,036 124
Long Term Assets 17,797 18,816 1,019 417
Financial Assets & Subsidiaries 1,148 1,239 91 8
Fixed Assets 12,369 12,332 -37 0
Derivatives 101 262 162 161
Pre-paid expenses 99 318 219 220
Deferred Tax 3,068 3,519 451 15
Other Long Term Assets 1,013 1,146 134 13
Total Assets 38,163 49,066 10,903 847
Short Term Liabilities 17,676 27,093 9,417 688
Financial Loans 5,274 5,434 160 3
Payables 8,370 16,749 8,379 100
Derivatives 177 931 754 426
Deferred Incomes 20 34 14 68
Provisions 90 170 81 90
Other ST Liabilities 3,745 3,774 30 1
Long Term Liabilities 20,487 21,973 1,486 520
Financial Loans 9,777 14,188 4,411 45
Payables & Provisions 224 242 18 8
Derivatives 3 21 18 537
Other LT Liabilities 5 4 -1 -20
Equity 10,373 7,437 -2,937 -28
Minority Interests 104 81 -23 -22
Total Liabilities 38,163 49,066 10,903 1,208
KEY FINANCIALS
Investor Presentation
www.tupras.com.tr
Creating Competitive & Sustainable Shareholder Value
42
75%
25%
Buy Hold
Foreign Currency
Long Term
Tüpraş BB+(Neg.) Ba2 (Negative)
Türkiye BB (Neg.) Ba3 (Negative) B+ (Stable)
Koç Holding Ba2 (Negative) BB- (Stable)
Analyst Recommendations
92,9
99,5
94,0
95,5
94,8
0 25 50 75 100
Board
Stakeholders
Transparency
Shareholders
Overall
Tüpraş has one of the highest Corporate Governance Ratings
KEY FINANCIALS
Investor Presentation
www.tupras.com.tr
Financial Policy
43
Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counter
party risk, interest rate, commodity and currency exposure
Threshold
and limits
• Net financial debt/EBITDA
• Net foreign currency position/shareholders' equity
• Inventory and crack margin exposure
• Current ratio
• The fixed/floating profile of financial debt
• Liquidity: share of long term debt
• Counter party risk limits
Counter party
Risk Policy
Deposit is kept, within certain limits, by banks that comply with the criteria
determined in our policy
• Credit rating and strong capital base
• Cap on the maximum deposit allocated to a single bank
• Threshold for deposits subject to banks shareholders’ equity
KEY FINANCIALS
Investor Presentation
www.tupras.com.tr
Inventory & Crack Margin Hedge
44
Operational Hedge:
• Maintaining minimum amount of stock required for the refining activities
• Forward Pricing: Purchasing crude oil through forward-priced contracts
Financial Hedge: Proxy Hedging (both crude oil and refined product inventories)
• Expected inventory exposure for the year end is hedged
• Derivative transactions: Asian swap, Zero Cost Collar
• Hedging ratio increasing throughout the year
• Crack margins: Gasoline, Diesel, Jet Fuel and Fuel Oil Cracks
• Derivative transactions: Asian Swaps
• Hedging Parameters: Budget figures, historical average prices of the cracks + standard
deviations, market expectations
• Maximum hedge ratio: 50%,
• Tenor: up to next 4 quarters
Inventory
Hedging
Policy
Margin
Hedging
Policy
KEY FINANCIALS
Investor Presentation
www.tupras.com.tr
FX Exposure Management (30 September 2018)
45
* Cash flow hedge accounting : 928 mn $
Active management of FX exposure kept
the risk level within our limits.
• A significant portion of the Group's crude oil and refined
product purchases are denominated in US Dollars. In
addition, the Group finances its capital expenditures
mostly through borrowings denominated in US Dollars.
• Natural Hedge: The Group is able to mitigate some of the
impact of volatility in exchange rates through natural
hedges: crude oil and refined product inventories are US
Dollar denominated assets.
• Cash flow Hedge: RUP Facility financing loans
designated as hedging instruments of highly probable
export revenues.
• As a general Koç Holding financial policy, Group
companies are allowed to keep foreign exchange
positions within certain limits.
KEY FINANCIALS
Consolidated
Assets
Consolidated
Liabilities
Cash
1,410
Receivables &
other assets
53
Stock
1,412
Forward & CFH
2,414
Payables
2,539
ST Financial
717• RUP : 263
• Other: 454
LT Financial
2,097• RUP : 859
• Eurobond 700• Other Loans : 538
-64 mn $
Million $
Investor Presentation
www.tupras.com.tr
Tüpraş: Growing, Resilient, Profitable
46
Tüpraş is a compelling investment case with strong sales growth, resilient and profitable operational
and financial structure.
• Operating in a diesel short market
(supplies 45% of the market) , along with
strong jet growth
• Well poised to capture future
opportunities including IMO 2020 with its
output complexity
• Continuous investment in logistics,
infrastructure and trading capabilities
• Strong balance sheet with no
immediate rollover requirement for the
rest of the year
• Secure receivables portfolio, tight
working capital management
• Pricing mechanism in place to address
commodity and FX fluctuations
• Benefits from full system optimization
given high complexity, procurement and
logistics flexibility
• Prudent hedging practices to ensure
stable earnings outlook
• High dividend pay-out ratio annually
Growing Resilient Profitable
KEY FINANCIALS
OUTLOOK
Investor Presentation
www.tupras.com.tr
2018 Refinery Maintenance Schedule & Capacity Utilization
48
• We are completing our 2018 maintenance schedule with only two remaining maintenances in Q4
• We are planning maintenance in RUP unit in the 1H 2019. We will provide more details in the beginning of 2019.
Unit Quarter Duration (weeks) Reason
İzmir
*Plt 7000 Crude Oil Unit Q4 ’17 - Q2’ 18 17 in 2018 Revamp
*Hydrocracker Q1 3Periodic Maintenance
*Plt 4000 FCC Q2 7
İzmit
*Plt 5 Crude Oil & Vacuum Unit Q2 8,5
Periodic MaintenancePlt 25 Crude Oil & Vacuum Unit Q4 8-9**
*Plt 47 Hydrocracker Complex Q3 11
Plt 63 CCR & DHP Q4 6-7**
Kırıkkale *All Units Q1- Q2 10 Battery Shutdown
Batman *Plt. 100/Crude Oil & Vacuum Q1 4-5 Periodic Maintenance
* Completed Maintenances
** Revised
2018 Crude Capacity Utilization ~25 mn tons 88%**
2018 Total Capacity Utilization 95-100%**
OUTLOOK
Investor Presentation
www.tupras.com.tr
Future Expectations
49
Average Brent price expectation in 2018 is unchanged at 70 - 75 $/bbl
Med Complex margin expectation is revised to 4.25 – 4.75 $/bbl in 2018
Net Tüpraş refinery margin expectation is revised to 9.5 – 10.5 $/bbl
• Capacity utilization target is revised to 95-100%
• Production: ~27 million tons
• Total sales: ~30 million tons
Refining investments expectation is revised to 150 Million $
Brent Price
Estimation
Med Complex
Margin
Tüpraş
Net Margin
Operations
Investment
Slight revision to our 2018 targets.
OUTLOOK
Investor Presentation
www.tupras.com.tr
Competition # 1 (SOCAR-STAR Refinery)
50
• Goldman Sachs has acquired a 13 percent stake in SOCAR Turkey for $1.3 billion.
• Goldman Sachs has the right to resell 10 percent of its stakes to Socar, and the remaining
3 percent to ‘Sermaye Investments Limited’ owned by SOCAR within 6 year at the same
price.
STAR Refinery (Total Cap. 10 mn ton)
2019
mn ton
ProductionTurkish
DemandBalance
Tüpraş Star Total
LPG 1,1 0,3 1,4 4,1 -2,7
Petchem Feeds 0,2 2,6 2,8
Gasoline 6,1 6,1 2,4 3,7
Jet Fuel 5,2 1,6 6,8 5,2 1,6
Diesel 10,7 4,5 15,2 26,5 -11,3
Coke 0,8 0,7 1,5 4,6 -3,1
Fuel Oil 1,8 1,8 1,3 0,5
Bitumen 3,1 3,1 3,1Star Refinery Production Numbers (K Ton)
Diesel 4.500
Jet Fuel 1.600
Sulphur 158
Petrocoke 698
LPG 260
Naptha 1.600
Mixed xylene 460
Reformate 524
Fuels
Petrochemical
Feedstock
• 3,3 billion dollar credit agreement. First
4 year grace period total 15-18 year
term.
• Project finance is supplied to company
(US$ 1.5 billion)
• It is operational as of October 2018
Credit : 3.3 Billion $
Equity : 2.4 Billion $
Total Investment : 6.3 Billion $
OUTLOOK
Investor Presentation
www.tupras.com.tr
Competition # 2 (Regional Competition)
51
• Tüpraş is competing with 71 refineries in the Mediterranean and Black Sea markets.
• Mediterranean regional product balance is also affected from Middle East, North West Europe and Asia.
Mediterranean Black Sea
54 Refineries
7.8mn bpd
17 Refineries
1.8mn bpd
OUTLOOK
Investor Presentation
www.tupras.com.tr
Marine Bunker Specification Changes and Its Effects
52
IMO, at the meeting held in October 2016, lowered the sulphur emission cap from marine bunkers
from 3.5% to 0.5% (5000ppm): effective from 1 January 2020.
• Use of lower sulphur blend stocks like ULSD (Diesel)
• Low Sulfur Fuel Oil production with light crudes
• Sulphur Fuel Reduction Systems (Scrubber)
• LNG
Requirements of spec change can be achieved through; • 80% of global trade is done via
marine transportation.
• 50.000 vessels are in operation.
Bunker fuels account for;• ~5% of global oil demand
• 40% of oil related sulphur emissions.
2016
%74
Buy Low Sulphur Fuel
%19
Install Scrubber
switch %5
to LNG
%2
Other
Ship Owners Intention Survey2020 2022
OUTLOOK
Appendix
Investor Presentation
www.tupras.com.tr
Crack Margin Effect on Tüpraş in Q3 (FOB Italy Prices)
54
Product Price, $/ton Tüpraş Crack Margin, $/bbl
2018 20172018 Production
Yields2018 2017
LPG 567 399 3.4 -24.8 -16.6
Gasoline 712 544 18.3 12.5 15.0
Naphtha 638 447 1.2 -3.3 -1.6
Jet Fuel 697 507 17.7 13.4 12.4
Diesel 669 485 29.4 14.5 13.1
Diesel 1000 658 467 1.2 13.1 10.7
Fuel Oil 1% 433 300 0.2 -8.5 -5.8
Fuel Oil 3.5% 422 293 5.0 -10.1 -6.9
Others 376 270 19.0 -12.5 -7.1
Dated Brent,$/bbl 75.27 52.08 95.6
Total Crack Margin,$/bbl 5.3 6.6
Margin Difference, $/bbl -1.3
Total Processed, mn bbl 57.06
Total Effect, mn $ -75.7
Total Effect, mn TL -425.2
Weighted average of crack margin difference in Q3 2018 over Q3 2017 indicates a -1.3 $/bbl, yielding -
425.2 million TL crack margin impact.
APPENDIX
Investor Presentation
www.tupras.com.tr
High Complexity (Resid Upgrading Units Production-(Thousand Tons)
55
Doğal Gaz 246
Vakum Resid
1,214
Atm. Dip
3,036
Total Feed 4,496
Total Production
4,250
Raw Materials Products
APPENDIX
Investor Presentation
www.tupras.com.tr
Flexibility & Reliability; Multiple routes to maksimum capacity
56
• Increased
conversion capacity
• Strong
integration among
refineries
APPENDIX
Investor Presentation
www.tupras.com.tr
Competition (European Pump Price Comparison)
57
Not: Prices valid on 13 Aug 2018 - Turkey price as of Aug 16th 2018
Gasoline (Krş / Lt)
329440
319 331414
339 348416
53 5476 75 71
304
484 627623 637 663
715 729686
924
1.0001.030 1.051 1.077
1.134 1.145
0
200
400
600
800
1000
1200
1400
0
250
500
750
1000
1250
TR Spa. UK Ger Eu19 Fra. Ita. Gre.
Pump No Tax Distr. Marg. Tax
Diesel 10 (Krş / Lt)
339
451
338433
490
342 328 362
5391 81
7365
231
403 468 509494 585 633 621
623
854897
942984
1.0081.034 1.048
0
200
400
600
800
1000
1200
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
TR Spa. Ger. EU19 Gre. Fra. UK Ita.
APPENDİX
Investor Presentation
www.tupras.com.tr
Tüpraş HSE KPI: Loss Time Incident Frequency and Severity Frequency Ratios
58
loss time incident freaquency rate =number of incident *1000000/man hours
loss severity frequency rate = loss time*1000000/man hours
APPENDİX
Investor Presentation
www.tupras.com.tr
Koç Holding
59
Turkey’s Leading Investment Holding Company
Turkey’s largest industrial and services group in terms
of revenues, exports, employees, taxes paid
and market capitalization.
Leading positions with clear competitive advantages in
sectors with long-term growth potential such as energy,
automotive, consumer durables and finance.
Pioneer in its Sectors
• The only Turkish company in Fortuna 5001
• 16% CARG in consolidated profit2 the last five years
Notes : Data as of YE17, 2017 GDP reflects the projection of Turkish government’s Medium Term Program
(1)2017 Report
(2)In TL terms between
Turkey’s Leading Investment Holding Company Combined Revenues / GDP
Total Exports / Turkey’s Exports
Total MCap on Borsa İstanbul
7%
10%
19%
APPENDİX