Hizmete Özel / Confidential
Investor Presentation
January 2021
Hizmete Özel / Confidential
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 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.
www.tupras.com.trJan-21Investor Presentation 2
Disclaimer
Disclaimer
Hizmete Özel / Confidential
Refining Market
Hizmete Özel / Confidential
30.7
81.2
67.0
55.4
31.8
18.5
29.0
40.1
43.4
40.8 40.2
42.7
49.9
10
20
30
40
50
60
70
80
90
Jan
-16
Mar
-16
May
-16
Jul-
16
Sep
-16
No
v-16
Jan
-17
Mar
-17
May
-17
Jul-
17
Sep
-17
No
v-17
Jan
-18
Mar
-18
May
-18
Jul-
18
Sep
-18
No
v-18
Jan
-19
Mar
-19
May
-19
Jul-
19
Sep
-19
No
v-19
Jan
-20
Mar
-20
May
-20
Jul-
20
Sep
-20
No
v-20
Brent Crude Prices
www.tupras.com.trJan-21Investor Presentation 4
Refining Market
$/bbl
+ OPEC ++ production cut+ Impact of Iran & Venezuela sanctions+ Escalating regional tension
- Concerns on global economic development- Covid-19 related demand drop- Storage capacity fill up
2016 ave.43.7 $/bbl
2017 ave.54.3 $/bbl
2018 ave.71.0 $/bbl
2019 ave.64.3 $/bbl
All waivers expired on
Iran
OPEC Production
Cut Decision
Iran Sanctions
DroneAttack to
Saudi Fields
data as of 31 December 2020
Covid-19 & OPEC+
disagreement
OPEC++ Production Cut Decision
2020 ave.41.7 $/bbl
Hizmete Özel / Confidential
Global Refinery Capacity Changes
www.tupras.com.trJan-21Investor Presentation 5
Refining Market
Expectations until 2024:
• ~80% of net capacity additions will come from Asia & Middle East
• Net capacity and demand in Europe will remain roughly unchanged
2.10
0.98
1.68
0.49
1.30
-0.95
0.22
-1.41
-2 -1 0 1 2 3
China
India
Middle East
Other Asia
Other
Japan
N. America
Europe
2012-2018 Net Capacity Additions by Region
2.0
0.9
1.71.3
0.9
0.2
1.97
0.89
1.93 1.96
1.50
0.51
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
2019 2020 2021 2022 2023 2024
2019-2024 Net Capacity Additions
Asia & Middle East Other Total
Hizmete Özel / Confidential
Middle Distillate Cracks
www.tupras.com.trJan-21Investor Presentation 6
Refining Market
14.9
16.2
15.0
12.2
12.9
11.4
14.1
16.2 16.6
17.9
13.9
11.311.210.1
12.5
9.7
5.0 4.8
6.4
4.7
2.4
4.3 4.85.4
0
5
10
15
20
25
1 2 3 4 5 6 7 8 9 10 11 12
Diesel
5yr range 2019 2020 5 yr ave
14.4 13.813.2
10.3
10.9 11.2
14.816.4
17.0 17.4
12.5
9.3
10.4
7.9
5.8
-1.7
-3.9
-1.6-0.6
-2.3
-3.3
0.5
2.23.1
-10
-5
0
5
10
15
20
25
1 2 3 4 5 6 7 8 9 10 11 12
Jet Fuel
5yr range 5 yr ave 2019 2020
5 yr between 2015-2019, data as of 31 December 2020
$/bbl
Hizmete Özel / Confidential
Gasoline and High Sulphur Fuel Oil Cracks
www.tupras.com.trJan-21Investor Presentation 7
Refining Market
$/bbl
7.7
9.8
3.32.4
3.1
4.3 4.65.1
7.7
6.4
4.1
3.4
1.72.9
9.0
12.1
10.09.4
14.7
12.010.6
11.0
9.9
4.3
0
5
10
15
20
25
1 2 3 4 5 6 7 8 9 10 11 12
Gasoline
5yr range 2020 2019 5 yr ave
-22.4
-15.8
-8.4
-4.8
-7.8 -8.1
-7.1
-7.5-5.5
-3.8 -4.4
-7.4-7.0
-5.0 -5.5
-8.6
-11.3-9.8
-6.9
-13.4-16.9
-22.5
-31.6-32.9
-40
-30
-20
-10
0
1 2 3 4 5 6 7 8 9 10 11 12
High Sulphur Fuel Oil
5yr range 2020 2019 5 yr ave
5 yr between 2015-2019, data as of 31 December 2020
Hizmete Özel / Confidential
Crude Price Differentials to Brent
Jan-21Investor Presentation 8
Refining Market
-12
-10
-8
-6
-4
-2
0
2
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018 2019 2020
Arab Heavy
Basrah Heavy
Kirkuk
Ural
Average*
0
OPEC+ Cut Decision
Iran Sanctions
*Simple average of listed differentials
OPEC+ agreement on supply cuts in May and extension of initial cut target to the end of July led to sizeablenarrowing in differentials in Q3.
OPEC+disagreement
OPEC+ Cut Decision
www.tupras.com.tr
Hizmete Özel / Confidential
Turkish Market
Hizmete Özel / Confidential
Turkish Consumption 2016-2019
www.tupras.com.trJan-21Investor Presentation 10
Turkish Market
Source: Tüpraş and EMRA ¹Bunker excluded
22.324.2 23.6 22.5
0
14
28
2016 2017 2018 2019
Diesel
-4.4%+8.3%
MillionTons
-2.4%
4.4 4.55.0 5.3
0
4
8
2016 2017 2018 2019
Jet Fuel
+10.5%+2.6%
2.2 2.3 2.3 2.4
0
2
4
2016 2017 2018 2019
Gasoline
+3.0%+1.2%+3.1%
0.60.5
0.4 0.3
0
1
2
2016 2017 2018 2019
Fuel Oil¹
-3.2%-27%-16%
+6.5%
Hizmete Özel / Confidential
Turkish Market, 10M 2020
www.tupras.com.trJan-21Investor Presentation 11
Turkish Market
Covid-19 impact on demand started to ease as of June. While Diesel seems to be in lead, Jet is lagging far behind.
¹Transit flight consumption included²Bunker excluded
MillionTons
0.32 0.24
0.0
0.5
1.0
2019 2020
²Fuel Oil
20.60 20.76
0
5
10
15
20
25
2019 2020
Diesel
+0.8%
2.03 2.00
1
2
2019 2020
Gasoline
4.57
2.04
0.0
1.0
2.0
3.0
4.0
2019 2020
¹Jet Fuel
-24.6%-1.6%
-55.3%
Hizmete Özel / Confidential
Turkey’s Net Import / Export Balance
www.tupras.com.trJan-21Investor Presentation 12
Turkish Market
-3.4
2.8
-12.3
0.1
-3.0
3.0
-8.7
0.3
-16
-12
-8
-4
0
4
LPG Gasoline Diesel Jet
2016 2017 2018 2019
Export
Import
MillionTons
Hizmete Özel / Confidential
Company Overview
Hizmete Özel / Confidential
Tüpraş Shareholder Structure
www.tupras.com.trJan-21Investor Presentation 14
Company Overview
¹As of December 31th,2019
Tüpraş is Turkey’s biggest industrial company and leading refiner.
Domestic Ownership
22%
Foreign Ownership1
78%
Free Float49%
Ditaş79.98%
Opet40%
Körfez Ulaştırma100%
Tüpraş Trading Ltd100%
Koç Holding77%
Aygaz20%
Opet3%
Energy Investments Inc. (SPV)51%
Hizmete Özel / Confidential
Tüpraş’s Refining Assets & Distribution Network
www.tupras.com.trJan-21Investor Presentation 15
Company Overview
İzmit
• 11.3 MT Capacity• NC: 14.5• Storage Capacity: 3.0 mn m3
İzmir
• 11.9 MT Capacity• NC: 7.66• Storage Capacity:2.5 mn m3
Kırıkkale
• 5.4 MT Capacity• NC: 6.32• Storage Capacity: 1.3 mn m3
Batman
• 1.4 MT Capacity• NC: 1.83• Storage Capacity:0.3 mn m3
Turkey‘s Storage Capacity
Tüpraş & Opet
57%
Others 43%
Railway
Iraq-Turkey Oil Pipeline
Baku-Tbilisi-Ceyhan Oil Pipeline
+ Tüpraş supplies ~55% of Turkey’s petroleum
product needs
+ Tüpraş benefits from an integrated system
optimization with its
high complexity,
procurement and
logistics flexibility
Total Capacity
30 mntons
Nelson Complexity
9.5
Tüpraş Storage Cap.
7 mnm3
Hizmete Özel / Confidential
Nelson Complexity of Refining Companies
www.tupras.com.trJan-21Investor Presentation 16
Company Overview
Hizmete Özel / Confidential
Tüpraş Subsidiaries
www.tupras.com.trJan-21Investor Presentation 17
Company Overview
OPET, Distribution, Tüpraş Share: 40%
• 1,749 stations as of 30 Sep 2020• As of Aug 2020 Market share: 20.1% in white products; 22.3% in black
products
DİTAŞ, Marine Transport, Tüpraş Share: 79.98%
• 3 Crude Oil Tanker: 479,765 DWT• 1 Crude Oil - Product Tanker: 51,532 DWT• 10 Product Tanker: 171,453 DWT“
Körfez Ulaştırma, Railway Transport, Tüpraş Share: 100%
• ~7% share in Turkish rail freight market• ~1.8 mn ton of product and semi-product carried in 2019.• Operates with 10 diesel locomotives and over 600 cistern wagons
Tüpraş Trading UK, Trading, Tüpraş Share: 100%
• Trading Office in London will be an important step into wider integration with the global energy landscape by allowing to:
Closely monitor international market opportunities Support import and export operations Create additional value from supply chain and sales activities
Hizmete Özel / Confidential
Operations
Hizmete Özel / Confidential
6 610
2 2 3
12
3 3 1 0 0
12 13 13 10 10 10
2 0
17 1511
14 14
7
14
34
65 67 63
7176
7981
55
2012 2013 2014 2015 2016 2017 2018 2019
Africa America Europe CIS Middle East
Main Crude Suppliers in 2019
Crude Suppliers of Tüpraş
www.tupras.com.trJan-21Investor Presentation 19
In 2019, Tüpraş purchased 15 different types of crude from 8 countries with gravities ranging between 20-47 API.
Operations
Crude Oil Imports by Region (%)
Hizmete Özel / Confidential
9M Product Yields
www.tupras.com.trJan-21Investor Presentation 20Operations
LPG3%
Gasoline20%
Naphtha1%
Jet13%
Gasoil45%
Fuel Oil2%
Kok3%
Bitumen12%
Other1%
LPG Gasoline Naphtha Jet Gasoil
Fuel Oil Kok Bitumen Other
Light Distil.24%
Mid. Distil.58%
Black Prod.17%
Other White
1%
2020 9M
White Product Yield (%) 81.7%
Production 17.3 mn tons
API 31.4
LPG4%
Gasoline20%
Naphtha1%
Jet17%
Gasoil35%
Fuel Oil11%
Kok2%
Bitumen8%
Other2%
LPG Gasoline Naphtha Jet Gasoil
Fuel Oil Kok Bitumen Other
Light Distil.25%
Mid. Distil.52%
Black Prod.21%
Other white
2%
2019 9M
White Product Yield (%) 78.1%
Production 21.2 mn tons
API 32.1
Hizmete Özel / Confidential
Annual Product Yields
www.tupras.com.trJan-21Investor Presentation 21Operations
LPG3%
Gasoline20%
Naphtha1%
Jet19%
Gasoil33%
Fuel Oil7%
Kok3%
Asphalt12%
Other2%
LPG Gasoline Naphtha Jet Gasoil
Fuel Oil Kok Asphalt Other
Light Distil.25%
Mid. Distil.52%
Black Prod.21%
Other white
2%
2018
White Product Yield (%) 77.4%
Production 25.7 mn tons
API 31.0
LPG4%
Gasoline20%
Naphtha1%
Jet17%
Gasoil36%
Fuel Oil9%
Kok3%
Asphalt8%
Other2%
LPG Gasoline Naphtha Jet Gasoil
Fuel Oil Kok Asphalt Other
Light Distil.25%
Mid. Distil.53%
Black Prod.20%
Other White
2%
2019
White Product Yield (%) 79.0%
Production 28.1 mn tons
API 32.0
Hizmete Özel / Confidential
Capacity Utilization1 (%)Quarterly Production (Mn tons)
Capacity Utilization and Quarterly Production Volume
www.tupras.com.trJan-21Investor Presentation
22
¹Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards.
• Tüpraş produced 6.4 million tons in Q3 2020.
• Capacity utilization for Q3 2020 was 89% - supported by post-lockdown recovery as well as seasonality.
Operations
6.76.9
7.5
6.9
6.0
4.9
6.4
4
5
6
7
8
Q1 Q2 Q3 Q4
2016 2017 2018 2019 2020
10
1
10
1
87 91 9
6
87
79
64
80
4 7
9 79
9
6
5
9
105 108
96 98
105
96
85
69
88.5
2016 2017 2018 2019 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20
Crude Oil Semi Product Feedstock Total
Hizmete Özel / Confidential
Sales
www.tupras.com.trJan-21Investor Presentation
23
• Tüpraş generated 29.2 million tons of total sales 2019.
Operations
Distributors46%
THY Opet5%
Jet9%
LPG3%
Other6%
Export23%
Bitumen6%
Military2%
22.2 24.825.7 25.6
22.4
6.55.5 5.8 4.2
6.8
28.7 30.331.5 29.8 29.2
2015 2016 2017 2018 2019
Exports
Domestic Sales
9.2 10.811.3 11.9 10.4
4.84.5 4.5
4.94.3
2.02.2 2.2
2.22.3
2.93.4 3.5
2.91.8
2015 2016 2017 2018 2019
Bitumen
Gasoline
Jet Fuel
Diesel
Total Sales
Domestic Sales of Key Products
Customer Groups 2019mn tons
mn tons
Sales to Distributors
2019
13.3 mn tons
Total Sales, 2019
29.2 mn tons
POAŞ27%
OPET31%
SHELL19%
BP13%
OTHER10%
Hizmete Özel / Confidential
Key FinancialsFinancials
Hizmete Özel / Confidential
Refining Margin
www.tupras.com.trJan-21Investor Presentation 25
2.53.2
6.5 6.0
8.1
9.3
3.7
1.51.71.9
4.84.0
5.34.6
1.7
-0.2
2013 2014 2015 2016 2017 2018 2019 2020-9M
Tüpraş Net Margin MediterraneanPremium to the benchmark Mediterranean
peers’ refining margin due to:
• Ability to use heavier and sour crudes with higher
complexity
• Access to a wide range of cheaper sources of crude
oil
• Close proximity to major suppliers reduces
transport costs
• Lower cost basis and more efficient energy usage
• Ability to produce a broad range of refined products
with higher value added
• Direct pipeline connections with domestic clients
5.5
2.0 2.9 1.2
4.2
1.7 2.0
4.8 4.05.4 4.6
1.7-0.2
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
Med Complex
Month Annual
Financials
$/bbl
$/bbl
Hizmete Özel / Confidential
Tüpraş and Med Refining Margins
www.tupras.com.trJan-21Investor Presentation 26
Financials
($/bbl)Gross
MarginInventory
EffectClean Gross
MarginClean NET
MarginNet
MarginMed Margin
2020 Q3 6.7 2.9 3.8 -0.8 2.1 -1.9
2020 9M 6.7 -0.2 7.0 1.7 1.5 -0.2
2019 Q3 9.1 -1.4 10.6 5.4 4.0 3.3
2019 9M 9.0 -0.1 9.1 3.8 3.7 2.9
8.19.3
3.7 3.7
1.5
5.34.6
1.72.9
-0.2-2
0
2
4
6
8
10
2017 12M 2018 12M 2019 12M 2019 9M 2020 9M
Average Margins
Tüpraş Net Margin Med Margin
Hizmete Özel / Confidential
Income Statement
www.tupras.com.trJan-21Investor Presentation
27
*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.
Financials
EBITDA realized as 977 mn TL in Q3 2020.
Million TLQ3 Q3
%9M 9M
%2020 2019 2020 2019
Net Sales 17,035 23,309 -27% 43,254 67,970 -36%
COGS -15,845 -22,152 28% -42,083 -64,150 34%
Gross Profit 1,190 1,157 3% 1,171 3,820 -69%
Operating Expenses -500 -451 -11% -1,477 -1,244 -19%
Income/Loss from other operations -492 -98 -400% -933 -407 -129%
Operating Profit 199 608 -67% -1,239 2,169 -157%
Income/Loss from equity investment 78 63 25% -147 172 -186%
Operating Profit Before Fin. Income/Loss 277 671 -59% -1,386 2,341 -159%
Financial Income/Expense -833 -817 -2% -2,297 -2,214 -4%
Profit Before Tax -556 -146 -280% -3,683 127 -2995%
Net Profit (excluding minority interest) -420 -155 -170% -2,870 340 -945%
EBITDA* 977 956 2% 163 3,301 -95%
Inventory Gain/Loss 1,439 -692 -308% -585 283 -306%
EBITDA* CCS -463 1,648 -128% 747 3,018 -75%
Hizmete Özel / Confidential
Financial Highlights
www.tupras.com.trJan-21Investor Presentation 28
Financials1) Excluding minority interest 2) Calculation based on rolling EBITDA3) Calculation based on rolling net income
1.11.2
1.3 1.0
1.11.8
1.11.3 2.1
19.7
2.1 1.2 1.9 2.2
11.3
2016 2017 2018 2019 Q3 2020
Current Ratio & Net Debt / R. EBITDA2
Current Ratio
Net Debt / R. EBITDA
Net Debt / R. EBITDA CCS
3351,575
1,033 851
-1,291
688
1,542 2,2101,495
477
867
1,528
3,778
956
977
1,505
1,237
1,887
7383,396
5,882
8,908
4,039
163
2016 2017 2018 2019 2020
EBITDA (mn TL) Q4Q3
Q2
Q1
79
869378
-375
-2,265
331
1,457
1,027
870
-185
581
992
542
-155
-420
803
493
1,766
186
1,793
3,812 3,713
526
-2,870
2016 2017 2018 2019 2020
Net Income¹ (mn TL) Q4Q3
Q2
Q1
22%
41% 37%
5%
-24%
2016 2017 2018 2019 Q3 2020
Return on Average Equity3
Hizmete Özel / Confidential
Balance Sheet Analysis
www.tupras.com.trJan-21Investor Presentation 29
Financials
-0.2
2.1
4.7
-3.6
-2.0-3.0
2.6
Dec-16 Dec-17 Dec-18 Dec-19 Mar-20 Jun-20 Sep-20
Working Capital Requirement (Billion TL)
6.1 6.2
12.0
8.4
12.211.0
17.8
1.7 1.72.3
1.41.9
1.6
2.3
0
1
2
3
4
5
6
0
5
10
15
20
Dec-16 Dec-17 Dec-18 Dec-19 Mar-20 Jun-20 Sep-20
Net Debt
In Billion TL In Billion $
Proactive Financial Management
• Utilized ample liquidity in the market to increase the share of TL in our borrowing and extended maturities.
• Lower rates achieved in new loans, re-negotiated some of the existing loans with better rates.
7.2
12.1
2.21.4
5.6
0.2
1 year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years
Redemption Schedule (Billion TL)
TL Hard Currencybn TL bn $
Hizmete Özel / Confidential
Q3 Profit Before Tax Bridge (2019-2020)
www.tupras.com.trJan-21Investor Presentation 30
Financials
Inventory gain was off set by weaker crack margins and narrower differentials as well as higher fx loss leading to decline in PBT compared to Q3 2019.
Million TL
Hizmete Özel / Confidential
Annual Profit Before Tax Bridge (2018-2019)
www.tupras.com.trJan-21Investor Presentation 31
2019 PBT was lower mainly due to narrow differentials, weaker crack margins and natural gas price hikes.
Million TL
Financials
Hizmete Özel / Confidential
Dividend (TL)
www.tupras.com.trJan-21Investor Presentation 32
3.2 2.9
5.05.8
4.85.8
10.2
7.2
15.2 14.8
2.12.53.0
3.9 3.9
1.6
6.5 6.2
13.615.2
0.0
77%
101%
79%
66%
33%
0%
64%
87%89%
102%
0%
0%
40%
80%
120%
0
2
4
6
8
10
12
14
16
18
20
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EPS DPS Dividend Payout
Financials
Hizmete Özel / Confidential
Investments (Million $)
www.tupras.com.trJan-21Investor Presentation 33
274355
400
186 177
628
974
1213
959
344
213 185138 157
69
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20209M
Ongoing Projects
• Revamp of Crude Units
• FCC Modernization
• New Sulphur Units
• Energy Saving Projects
• Optimization of conversion
units
• c6.7 bn USD investments since privatization
• Reached 9.5 Nelson Complexity
• Capability to process heavier and more sour crude
Avg. 278 Mn$
Avg. 943 Mn$
Avg. 207 Mn$
Financials
Hizmete Özel / Confidential
9M 2020 Results
www.tupras.com.trJan-21Investor Presentation 34Financials
1.5
-0.2
-1.0 0.0 1.0 2.0 3.0 4.0
9M
20
20
Refining Margins ($/bbl)
Med Margin
Tüpraş Net Margin
80.9 % total capacity utilization in 9M 2020
17.3 18.222 23
Production Sales
Operationals9M FY Target
18.2 mn tons of sales and 17.3 mn tons of production in 9M 2020
69115
9M 2020 Target
Refining Capex (mn $)
69 mn $ refining CAPEX in 9M 2020
80.9
0 20 40 60 80 100
9M2020
Capacity Utilization (%)
1.5 $/bbl net refining margin in 9M 2020
Med FY Exp
Tüpraş FY Target
Hizmete Özel / Confidential
Tüpraş Balance Sheet (Million TL)
www.tupras.com.trJan-21Investor Presentation 35Financials
30.09.2020 31.12.2019 Diff. Diff. (%)Current Assets 25,054 27,919 -2,865 -10
Cash & C. Equivalents 10,891 10,652 239 2
Trade Receivables 4,676 4,788 -112 -2
Derivatives 1,064 304 760 250
Inventories 7,234 9,469 -2,235 -24
Pre-paid expenses 224 237 -13 -6
Other Current Assets 965 2,470 -1,504 -61
Long Term Assets 28,560 27,593 968 4
Financial Assets & Subsidiaries 1,129 1,363 -234 -17
Fixed Assets 20,785 20,587 198 1
Derivatives 123 99 25 25
Pre-paid expenses 124 199 -75 -38
Deferred Tax 4,753 3,768 986 26
Other Long Term Assets 1,646 1,578 69 4
Total Assets 53,614 55,512 -1,897 -3Short Term Liabilities 21,890 28,120 -6,230 -22
Financial Loans 7,220 5,178 2,042 39
Trade Payables 9,351 17,816 -8,465 -48
Derivatives 147 79 68 86
Provisions 292 117 175 150
Other ST Liabilities 4,879 4,930 -51 -1
Long Term Liabilities 21,854 14,255 7,599 53
Financial Loans 21,440 13,898 7,542 54
Payables & Provisions 346 316 29 9
Derivatives 57 32 25 78
Other LT Liabilities 11 9 3 30
Total equity attributable to equity holders of the parent 9,663 12,963 -3,300 -25
Minority Interests 207 174 34 19
Total Liabilities & Equity 53,614 55,512 -1,897 -3
Hizmete Özel / Confidential
Foreign Currency Long Term
Tüpraş B+ (Negative) B2 (Negative)
Turkey BB- (Negative) B2 (Negative) B+ (Stable)
Koç Holding B2 (Negative) BB- (Stable)
Leading Corporate Governance Score
www.tupras.com.trJan-21Investor Presentation 36
93.3
99.5
97.2
95.5
95.8
0 25 50 75 100
Board
Stakeholders
Transparency
Shareholders
Overall
Tüpraş BIST Corporate Governance Rating Score
Source: Bloomberg
54%
27%
19%
Buy
Hold
Sell
Analyst Recommendations
Credit Rating Scores
Source: SAHA Corporate Governance and Rating Services Inc. (October 2020)
Financials
Hizmete Özel / Confidential
Proactive in liquidity risk management & targets/limits for financial ratios:
• Net financial debt/EBITDA
• Net financial debt/Equity
Financial Policy
www.tupras.com.trJan-21Inestor Presentation 37
Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counterparty risk, commodity, interest rate and currency exposure.
Leverage & Liquidity
• Current ratio
• Share of long term debt
Deposit is kept within bank-based limits:
• Credit rating assessment and strong capital base.
• Cap on the maximum deposit allocated to a single bank.
• Threshold for deposits subject to banks shareholders’ equity.
Counterparty Risk Policy
• The fixed/floating profile of financial debt.
• Proactive management of FX risk with derivative instruments
• Zero FX exposure target.
Interest Rate & Fx
Inventory Hedging Policy:• Operational hedge: Optimum stock policy & forward pricing mechanism.• Financial hedge: Expected inventory exposure for the year end is hedged by using derivatives.• Hedging ratio increasing throughout the year.
Crack Margin Hedging Policy:• Financial hedge: Crack margin (gasoline, diesel, jet fuel, fuel oil) risk mitigation by using derivatives.• Hedge ratio between %0-%50 with up to 1 year hedge tenor
CommodityHedging
Policy
Financials
Hizmete Özel / Confidential
FX Exposure Management (30 September 2020)
www.tupras.com.trJan-21Investor Presentation 38
• 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.
Tüpraş continues to employ strict FX policies to mitigate currency risks stemming from volatility.
Financials
Cash
1,082
Forward 584CFH* 647
Stock932
Receivables & Other Assets
63
Payables & OtherLiabilities
1,074
ST Financial Loans458
• RUP: 170• Other: 288
LT Financial Loans1,755
• RUP: 449• Eurobond: 700• Other Loans: 607
Consolidated Hard Currency Assets
Consolidated Hard Currency Liabilities
Million $
+21 mn $
*Cash Flow Hedge
Hizmete Özel / Confidential
Appendix
Hizmete Özel / Confidential
2020 Refinery Maintenance Schedule
www.tupras.com.trJan-21Investor Presentation 40Appendix
* This activity had started in Q4-19. Duration figure indicates the portion carried out in 2020
Refinery Unit Quarter Duration (weeks) Status
Batman Plt 100/1100 Crude Oil & VacuumQ1 10-12 Completed
2019 Q4-2021 Q1 8 Planned
İzmir
U-100 Crude Q1 9* Completed
U-9200 CCR Q1 3 Completed
U-4000 FCC Q4 6 Planned
U-9200 CCR Q4 7 Postponed to 2021
U-9600 Isomerization Q4 8 Postponed to 2021
U-9900 MQD Q4 7 Postponed to 2021
İzmit
Plt-6 Desulphurizer Q4 4 Postponed to 2021
Plt- 5 Crude &Vakum Q4 2 Planned
Plt-47 Hydrocracker Q4 2 Planned
Plt-147 Hydrocracker Q4 4-5 Completed
Kırıkkale
Hizmete Özel / Confidential
2020 Expectations(*)
www.tupras.com.trJan-21Investor Presentation 41Appendix
• Weak outlook for mid-distillate cracks
• Ural-Brent differential slightly wider compared to 2019
Med Complex Refining Margin ~-0.5 $/bbl
• Weak performing mid-distillate cracks
• Strong HSFO and relatively resilient gasoline cracks
• ~22 mt production, ~23mt sales and 75 - 80% capacity utilization
Tüpraş Net Refining Margin ~1.0 $/bbl
• Process improvement projects
Refining Capex ~115 million $
*Due to the ongoing negative impact of the Covid-19 outbreak on petroleum products demand globally and significant deterioration in crack margins due to the elevated global product inventories, our 2020 expectations were revised.
Hizmete Özel / Confidential
Competition - STAR Refinery
www.tupras.com.tr 42Jan-21Investor Presentation
• Feasibility studies began in 2010 and construction kicked off in 2011
• Goldman Sachs has acquired a 13% stake in SOCAR Turkey for $1.3 billion.
• Total investment size 6.3 bn USD, with 3.3 bn USD credit agreement.
• Following the completion of construction late 2018, reached full capacity utilization in August 2019
Turkish Market Structure (mn tons)Timeline
Turkey Demand
Tüpraş STAR TotalTurkishMarket
DemandBalance
LPG 1.1 0.3 1.4 4.1 -2.7
Petchem F. 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
Fuel Oil 1.8 1.8 1.3 0.5
Bitumen 3.1 3.1 3.1
Pet coke 0.8 0.7 1.5 4.6 -3.1
Total ~30 ~10 ~40
Appendix
Hizmete Özel / Confidential
Competition - Regional Competition
www.tupras.com.tr 43Jan-21Investor Presentation
• Tüpraş competes 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 flows
17 Refineries ~1.8mbd
Mediterranean Black Sea
54 Refineries ~7.8mbd
Appendix
Hizmete Özel / Confidential
IMO 2020: Changes in Bunker Specification and Its Effects
www.tupras.com.trJan-21Investor Presentation 44
Current compliant fuels
Cu
rren
t O
utl
oo
kB
eyo
nd
20
20
Demand shift beyond 2020
HSFO replacement expectations
Long term outlook for marine fuels
• Marine Gasoil (Diesel): Easiest solution as it is already available
• Very Low Sulphur Fuel Oil (VLSFO): Either through FCC with sweet crudes or by blending
• Scrubbers: As of 17/07/20, ~3.9K vessels are either fitted or scheduled to be fitted and ~0.5K vessels are on order book to be delivered with scrubbers
• LNG: requires significant investments at ports
0
1
2
3
4
5
6
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Compliant HSFO Non-compliant HSFO VLSFO MGO LNG
• VLSFO is the initial choice, followed by MGO• Fuel choice might change through the years as
availability & compatibility issues get resolved• Compliant HSFO use grows as scrubber numbers rise
from ~2K after Jan 1st, 2020 (some ports started bans on open-loop scrubbers thus this projection might change)
Source: Market Reports
Appendix
Hizmete Özel / Confidential
Tüpraş Production Flow and Yield Breakdown
www.tupras.com.trJan-21Investor Presentation 45
• Tüpraş has 30 million tons of production capacity
• Tüpraş operates 4 refineries with an integrated system optimization program
Appendix
Key Units# of
UnitsCapacity(m3/d)
CRUDE OIL 8 99,420
VACUUM DIST. 8 42,752
HYDROCRACKER 4 18,032
ISOMERATION 3 7,804
UNIFINER REFORMER
5 16,225
KERO/DIESEL (HDS)
9 37,265
FCC 2 4,650
COKER 1 9000
NAPHTASPLITTER
8
LPG MEROX 6
Flow Diagram
LPG MEROX
NAPHTHASPLITTER
ISOMER.
VACUUMDIST.
UNIFINERREFORMER
KERO/DIESEL (HDS)
FCC
HYDROCRACKER
COKER
Bitumen
Lube Oil
FCCGasolineHDS
BenzenSaturation
Multiple distillation
and production
units
Other, 3.8%
Bitumen & Fuel Oil, 19.9%
Lube Oil, 0.5%
Diesel,
33.9%
Jet Fueloil, 16.5%
GasolineNaphtha,
22.0%
LPG, 3.5%
Hizmete Özel / Confidential
RUP Feedstock and Production
www.tupras.com.trJan-21Investor Presentation 46
• Residuum Upgrade Plant (RUP) was completed in 2015 and it is the main conversion unit of Tüpraş.
• First periodic maintenance was completed in Q2 2019.
Total Output ~4.25mn tonsTotal Processing ~4.50 mn tons
Appendix
Hizmete Özel / Confidential
European Pump Price Comparison
www.tupras.com.trJan-21Investor Presentation 47
2.833.93
2.373.02
3.562.79
3.722.73
0.70
0.00
0.870.54
0.000.96
0.000.95
3.45
4.55 5.696.14 5.86
6.15 6.64 6.60
0
2
4
6
8
10
12
TR Spa. Ger UK Eu19 Fra. Gre. Ita.
Gasoline (TL/Lt)
Refinery Price Dist. Margin Tax
3.174.10
2.893.94
4.52
3.02 3.05 3.18
0.760.00
0.910.00
0.00
0.92 0.80 0.73
2.58
3.85 4.374.78
4.49 5.55 5.756.21
0
2
4
6
8
10
12
TR Spa. Ger. EU19 Gre. Fra. Ita. UK
Diesel (TL/Lt)
Refinery Price Dist. Margin Tax
European prices as of 16th December - Turkeys prices as of 24th December 2019
Turkish fuel prices are highly competitive with other European countries.
Appendix
Hizmete Özel / Confidential
Tüpraş’s Sustainability Efforts Over a Decade of Dedication
www.tupras.com.trJan-21Investor Presentation 48
Appendix
Tüpraş kicked off its sustainability
program back in 2008 and
achieved many milestones in a
decade
~500energy efficiency
projects leading to
~35,000 TJ saving and
2.4 mt CO2 reduction
11.5%increase in solid waste recovery
20.7 points drop in Energy
Intensity
45.5% decrease in fresh
water usage
~209 MTL donations and sponsorships
76.5% increase in female
employee numbers
~1.2 mnworkhours dedicated to
OHS training
+1.3 points increase in Corporate
Governance rating
17% female representation in senior and mid-level
management
See our Sustainability Report for details
From our investment decisions to our
working methodology, we placed
sustainability at the forefront of our
operations, as a core management
aspect. Accordingly, we adopted the UN
Sustainable Development Goals (SDGs)
as a significant guidance mechanism
seeking creative solutions to global
challenges.
Hizmete Özel / Confidential
2019 Achievements
www.tupras.com.tr 49
• Tüpraş won the first and jury special awards in Energy Efficiency category of Industry Project Competition.
• Kırıkkale Refinery New Power Plant project was selected as the “Project of the Year” at the ICCI International Energy and Environment Fair and Conference.
• Achieved 69.6% water recycle ratio
• Achieved 69.5% solid waste recovery
Environmental Responsibility
• ~12,000 students have received robotic coding training within Our Energy to the Future; I Code, Model, Produce CSR Project .
• 80% of ex-crude procurement activities were conducted through local businesses.
Social Support
• 9.50 Corporate Governance Rating
• 18% Female Representation at the Board,
• 17% Female Representation in Upper and Mid-Level Management.
Governance Excellence
AppendixJan-21Investor Presentation
Hizmete Özel / Confidential
Koç Holding
www.tupras.com.tr 50
• Koç Holding is Turkey’s largest industrial and services group in terms of revenues, exports, employees, taxes paid and market capitalization
• The only Turkish company in Fortuna 5001.• 26% CAGR in consolidated profit2 the last five years
Turkey’s Leading Investment Holding Company
• 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
8%
Combined Revenues /
GDP
9%
Total Exports / Turkey’s Exports
15%
Total Market Cap in Borsa
Istanbul
Notes : Data as of YE19(1) 2019 Report (based on consolidated revenues)(2) In TL terms between 2015-19
AppendixJan-21Investor Presentation
Hizmete Özel / Confidential
Investor Presentation
Latest Webcast
Sustainability Report
contact us: [email protected]