Hizmete Özel / Confidential
Q4 2019 Earnings Presentation
12 February 2020
Hizmete Özel / Confidential
Disclaimer
www.tupras.com.tr04/03/2020Earnings Presentation 2
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.
Hizmete Özel / Confidential
40
70
100
01/10/2018 01/01/2019 01/04/2019 01/07/2019 01/10/2019
Q4 2019 Key Market Highlights
www.tupras.com.tr04/03/2020Earnings Presentation 3
Diesel-2.3
Jet Fuel-2.7
HS Fuel Oil-21.8
Gasoline+3.8
Gradual incline in Brent in Q4 2019
Glo
bal
Oil
Mar
ket
Turk
ish
Mar
ket
Contraction in diesel demand is softening
Mid-distillate and HSFO cracks were under pressure
Diesel
-1.6% +1.5%
Fuel Oil
+7.3%
Jet Fuel*
+3.0%
Gasoline
*Including transit flight consumption
Crack margins compared to Q4 2018, $/bbl Q4 2018 Ave.67.8 $/bbl
Q4 2019 Ave.63.3 $/bbl
11M 2019 vs 11M 2018
5.66
5.74 5.74
5.94
30/9 10/10 20/10 30/10 9/11 19/11 29/11 9/12 19/12 29/12
$/TL
TL closed with deprecation after a fairly steady episode
+0.08 TL 0.00 TL +0.20 TL
Hizmete Özel / Confidential
Q4 2019 Tüpraş Highlights
www.tupras.com.tr 404/03/2020Earnings Presentation
In Q4 20196.9 7387.0
Million tons of
Total Production
Million TL
EBITDA
Million tons of
Total Sales
• With the majority of the maintenances completed, capacity utilization was 96% in Q4 and 97.8% for the full year, meeting our guidance range.
Freight cost increase creating opportunities
• Sharp rises in freight costs expanded CIF-FOB spread, supporting competitiveness against imports.
Widening Asphalt-HSFO spread provides a cushion
• Asphalt-HSFO spread widened to ~10$/bbl in Q4 2019.
• Bitumen cargo exports reached ~800 k tons in 2019 utilizing both our refinery and trading office capabilities.
Strong capacity utilization8
9 91 96
87
4 59
9
94 96105
96
Q1 19 Q2 19 Q3 19 Q4 19
0.0
1.0
2.0
3.0
4.0
Jan
-19
Feb
-19
Mar
-19
Ap
r-1
9
May
-19
Jun
-19
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
CIF-FOB Price Difference ($/bbl)
-30
-20
-10
0
Jan
-19
Feb
-19
Mar
-19
Ap
r-1
9
May
-19
Jun
-19
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
Asphalt Cracks HSFO Cracks
Hizmete Özel / Confidential
Market
Hizmete Özel / Confidential
12.3
13.9
14.5
16.715.4
12.2
15.6
14.5
Q1 Q2 Q3 Q4
Diesel
Quarterly Crack Margin Comparison ($/bbl) in 2015 - 2019
www.tupras.com.tr3/4/2020Earnings Presentation 6
Compared to Q4 2018, Mid-distillate and HSFO cracks performed weaker, while Gasoline cracks were stronger.
13.3
13.8
13.4
15.9
13.8
10.8
16.1
13.1
Q1 Q2 Q3 Q4
Jet Fuel
Sluggish demand on the back of underperforming global economy / milderwinter
10.912.7 12.5
4.64.5
10.512.4 8.5
Q1 Q2 Q3 Q4
Gasoline
2019 2018 2019-2015 Min - Max
Usage of FCC feedstock in VLSFO production
Increased de-stocking activity closer to IMO 2020 implementation
-+
Increased exports from Asia and Middle East
-12.6 -12.4
-10.1-7.1-5.8
-9.9
-12.4
-28.9
Q1 Q2 Q3 Q4
High Sulphur Fuel Oil
-
-
-
-
Excess supply due to return of refineries from maintenance and new capacity additions
Increased consumption of NG substituting FO in power generation
-Mild winter conditions supporting passenger car transport demand
Weak heating demand due to mild winter conditions
+
Hizmete Özel / Confidential
Heavy Crude Price Differentials to Brent ($/bbl)
www.tupras.com.tr 7
-12
-10
-8
-6
-4
-2
0
2
Q1
20
16
Q2
20
16
Q3
20
16
Q4
20
16
Q1
20
17
Q2
20
17
Q3
20
17
Q4
20
17
Q1
20
18
Q2
20
18
Q3
20
18
Q4
20
18
Q1
20
19
Q2
20
19
Q3
20
19
Q4
20
19
Arab Heavy
Basrah Heavy
Kirkuk
Kuwait
Ural
Average*
0
OPEC+ Cut Decision
OPEC+ Cut Decision
Iran Sanctions
*Simple average of listed differentials
• IMO driven demand shift to lighter crude widened differentials in Q4 2019 compared to Q3 2019.• Substantial portion of global heavy crude supply remains out of the market.
04/03/2020Earnings Presentation
Drone Attack to
KSA
•Iran Sanctions
•Venezuela Sanctions
•OPEC+ Cut decision and over-compliance
•Drone attack to Saudi fields
Supply Shocks on Heavy Crude
A total of ~4 mbd is missing from heavy crude pool since December
2018, leading to price increases and narrowing differentials
Hizmete Özel / Confidential
Operations
Hizmete Özel / Confidential
Capacity Utilization and Quarterly Production Volume
www.tupras.com.tr04/03/2020Earnings Presentation 9
5.2
6.2
7.7
6.66.76.9
7.5
6.9
Q1 Q2 Q3 Q4
Quarterly Production (Million Tons)
2015 2016 2017 2018 2019
98
10
1
10
1
87 91
89 91 96
87
4 4 7
9 7 4 59
9
103 105 108
96 9894 96
105
96
2015 2016 2017 2018 2019 Q1 19 Q2 19 Q3 19 Q4 19
Capacity Utilization (%)
Crude Oil Semi Product Feedstock Total
*Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards.
• Total production volume in Q4 2019 realized as 6.9 mn tons.
• Full year capacity utilization for 2019 was 97.8%, in line with our guidance.
Hizmete Özel / Confidential
Sales in Q4 (Million Tons)
www.tupras.com.tr 10
6.2 6.4 6.4 6.15.3
1.7 1.3 0.9 1.5
1.7
7.97.6
7.37.6
7.0
Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019
Total Sales
Domestic Sales Exports
2.6 2.9 2.9 2.92.5
1.11.0 1.0 1.1
0.9
0.5 0.5 0.5 0.5
0.6
0.9 0.9 1.0 0.6
0.5
Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019
Domestic Sales of Selected Products
Diesel Jet Fuel Gasoline Bitumen
04/03/2020Earnings Presentation
Tüpraş generated 7.0 million tons of total sales in Q4 2019.
Hizmete Özel / Confidential
Financials
Hizmete Özel / Confidential
Tüpraş Net Margin and Med Complex Margin Comparison ($/bbl)
www.tupras.com.tr04/03/2020Earnings Presentation 12
5.2
10.1
6.7
5.0
3.63.5
5.04.1
4.7
-1.9
Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019
Q4 Margins
Tüpraş Net Med Margin
• Narrow differentials and weaker crack margin environment were the main factors behind the decrease in net margin compared to Q4 2018.
• Tüpraş-Med gap widened mainly due to HSFO cracks that have plummeted and more advantageous crude slate of Tüpraşcompared to Ural.
Effect of hedging operations excluded from above calculations.
Hizmete Özel / Confidential
Income Statement (Million TL)
www.tupras.com.tr04/03/2020Earnings Presentation 13
Tüpraş generated 738 MTL EBITDA in Q4 2019.
*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 TLQ4 Q4
%FY FY
%2019 2018 2019 2018
Net Sales 21,631 24,803 -13 89,601 88,552 1
COGS -20,566 -22,778 -10 -84,716 -79,328 7
Gross Profit 1,065 2,025 -47 4,884 9,224 -47
Operating Expenses -540 -438 23 -1,783 -1,307 36
Income/Loss from other operations -464 1,591 -871 -2,181
Operating Profit 61 3,178 -98 2,230 5,736 -61
Income/Loss from equity investment 25 72 -66 197 257 -23
Operating Profit Before Fin. Income/Loss 86 3,249 -97 2,427 5,993 -59
Financial Income /Expense -525 -1,600 -2,739 -2,268
Profit Before Tax -439 1,649 -311 3,724
Net Profit (excluding minority interest) 186 1,766 -89 526 3,713 -86
EBITDA *(mn.TL) 738 1,887 -61% 4,039 8,908 -55
Inventory Gain/Loss -89 -297 194 2,653
EBITDA* (mn. TL) CCS 827 2,185 3,845 6,255
Hizmete Özel / Confidential
Q4 Profit Before Tax Bridge (2018-2019)
www.tupras.com.tr04/03/2020Earnings Presentation 14
Decline in Profit Before Tax was driven by weaker crack margins, narrower differentials and FX loss.
Million TL
Inventory
FX
+208
-921
Hizmete Özel / Confidential
Annual Profit Before Tax Bridge (2018-2019)
www.tupras.com.tr04/03/2020Earnings Presentation 15
Decline in profit before tax in 2019 was driven by narrow differentials, weaker crack margins and natural gas price hikes
Million TL
FX
Inventory
+2,261
-2,459
Hizmete Özel / Confidential
Financial Highlights
www.tupras.com.tr04/03/2020Earnings Presentation 16
Tüpraş recorded 4,039 MTL EBITDA in 2019.
367335
1,575 1,033 8511,080 688
1,542 2,2101,4951,144
867
1,528
3,778
9561,2081,505
1,237
1,887
738
3,799 3,396
5,882
8,908
4,039
2015 2016 2017 2018 2019
EBITDA (mn TL)
Q1 Q2 Q3 Q4
275 79869
378-375
710331
1,457
1,027870
750
581
992
542
-155
815
803
493
1,766
186
2,550
1,793
3,812 3,713
526
2015 2016 2017 2018 2019
Net Income¹ (mn TL)
Q1 Q2 Q3 Q4
1.8 1.8
1.11.3
2.1
1.0 1.1 1.21.3
1.0
2015 2016 2017 2018 2019
Current Ratio & Net Debt / R. EBITDA
Net Debt / R. EBITDA Current Ratio
35%
22%
41%37%
5%
2015 2016 2017 2018 2019
Return on Average Equity²
1) Excluding minority interest 2) Calculation based on rolling net income
Hizmete Özel / Confidential
Balance Sheet Analysis (Billion TL)
www.tupras.com.tr04/03/2020Earnings Presentation 17
Strong balance sheet maintained despite weaker operational profitability
0.8
-0.2
2.1
4.7
1.6
-0.7
-2.3-3.6
Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19
Working Capital Requirement (Billion TL)
6.96.1 6.2
12.010.6 10.1
8.7 8.4
Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19
Net Debt (Billion TL)
Proactive Financial Management
• Deleveraging continues despite operational headwinds
• Dynamic liquidity management ensures optimal cash and receivables management
5.26.0
1.6 1.6
4.6
0.2
1 year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years
Redemption Schedule (Billion TL)
Loan Eurobond TL bond
Hizmete Özel / Confidential
FX Exposure Management (31 December 2019)
www.tupras.com.tr04/03/2020Earnings Presentation 18
Cash
202
Forward & CFH2,740
Stock1,537
Receivables & Other Assets
84
Payables2,114
ST Financial Loans792
• RUP: 191• Other: 602
LT Financial Loans1,687
• RUP: 707• Eurobond: 700• Other Loans: 280
Consolidated Hard Currency Assets
Consolidated Hard Currency Liabilities
Million $
-30 mn $
Tüpraş continues to employ strict FX
policies to mitigate currency risks
stemming from volatility.
* Cash flow hedge accounting : 813 mn $
Hizmete Özel / Confidential
Outlook for 2020
Hizmete Özel / Confidential
12M 2019 Results
www.tupras.com.tr04/03/2020Earnings Presentation 20
3.7
1.7
0 1 2 3 4 5 6
12
M
Refining Margins ($/bbl)
Med Margin Tüpraş Net Margin97.8% total capacity utilization in 2019
28.1 29.228 30
Production Sales
Operationals12M 2019 Target
29.2 mn tons of sales and 28.1 m tons of production in 2019
157 150
12M 2019 Target
Capex (mn $)
157 mn$ refining CAPEX in 2019
97.8
0 20 40 60 80 100
12M
Capacity Utilization (%)
3.7 $/bbl net refining margin in 2019
Med FY Exp
Tüpraş FY Target
2.8
-3.1-5.3
Oct-19 Nov-19 Dec-19
Med Margin ($/bbl)
Hizmete Özel / Confidential
2020 Refinery Maintenance Schedule
www.tupras.com.tr04/03/2020Earnings Presentation 21
Refinery Unit Quarter Duration (weeks) Status
Batman Plt 100/1100 Crude Oil & Vacuum Q1-Q2 5
İzmir
U-100 Crude Q1 6*
U-4000 FCC Q4 6
U-9200 CCR Q1 & Q4 3 & 7
U-9600 Isomerization Q4 8
U-9900 MQD Q4 7
İzmit Plt-6 Desulphurizer Q4 4
Kırıkkale
* This activity had started in Q4-19. Duration figure indicates the portion carried out in 2020
Hizmete Özel / Confidential
2020 Expectations
www.tupras.com.tr04/03/2020Earnings Presentation 22
• Ural-Brent differential widening compared to 2019
• Weak outlook for HSFO
Med Complex Refining Margin 1.5-2.5 $/bbl
• IMO driven growth in mid-distillate cracks
• Gasoline cracks remain flat, HSFO to remain weak
• Heavy Crude Differentials to widen
• ~28 mt production, ~29mt sales and 95 - 100% capacity utilization
Tüpraş Net Refining Margin 4.5-5.5 $/bbl
• Sulphur treatment units, improvement in storage units
Refining Capex 200 million $
Hizmete Özel / Confidential www.tupras.com.tr04/03/2020Earnings Presentation 23
Appendix
Hizmete Özel / Confidential
Turkish Market, Jan-Nov 2018/19 (Million tons)
www.tupras.com.tr04/03/2020Earnings Presentation 24
0.34 0.35
0.0
0.5
1.0
1.5
2018 2019
²Fuel Oil
2.16 2.23
1
2
3
2018 2019
Gasoline
4.61 4.94
2.0
3.0
4.0
5.0
6.0
2018 2019
¹Jet Fuel
23.15 22.79
0.0
10.0
20.0
30.0
2018 2019
DieselMillionTons
¹Transit flight consumption included²Bunker excluded
-1.6%+7.3%
+1.5%+3.0%
Hizmete Özel / Confidential
OPET
www.tupras.com.tr04/03/2020Earnings Presentation 25
Opet has 1,670 fuel stations as of December 2019.
885 915 938 966 1,009 1,073 1,126 1,152 1,175
394 410 418 427435
431434 463 4951,325 1,325 1,356 1,393
1,4441,504
1,5601,615
1,670
2011 2012 2013 2014 2015 2016 2017 2018 2019
Opet Sunpet
Market Shareas of November 2019
18.99 %
White Product
35.55 %
Black Product
Hizmete Özel / Confidential
Crack Margin Effect on Tüpraş in Q4 (FOB Italy Prices)
www.tupras.com.tr04/03/2020Earnings Presentation 26
ProductProduct Price ($/ton) Tüpraş 2019 Crack Margin ($/bbl)
2019 Q4 2018 Q4 Production Yields 2019 Q4 2018 Q4
LPG 410 513 3.0% -26.8 -22.09Gasoline 582 588 19.5% 8.5 4.64Naphtha 488 521 0.7% -8.1 -8.95Jet Fuel 601 657 16.8% 13.1 15.85Diesel 578 629 36.1% 14.5 16.71Diesel 1000 565 616 1.1% 12.7 15.01Fuel Oil 1% 404 410 0.8% -1.0 -4.58Fuel Oil 3.5% 223 393 2.5% -28.9 -7.14Others 221 352 14.7% -26.4 -9.04
Dated Brent ($/bbl) 63,3 67,8 95.3%
Total Crack Margin ($/bbl) Total Processed 2019 Q4 (mn bbl)
Total Effect (mn $) Total Effect (mn TL)2019 Q4 2018 Q4 Difference
3.7 7.5 -3.8 50.8 -191 -1,104
Hizmete Özel / Confidential
LPG3%
Gasoline20%
Naphtha1%
Jet18%
Gasoil39%
Fuel Oil4%
Kok3%
Asphalt10%
Other2%
LPG Gasoline Naphtha Jet Gasoil
Fuel Oil Kok Asphalt Other
Light Distil.24%
Mid. Distil.57%
Black Prod.17%
Other white
2%
Q4 Product Yields
www.tupras.com.tr04/03/2020Earnings Presentation 27
2019 Q4
White Product Yield (%) 81.7%
Production 6.9 mn tons
API 31.9
LPG3%
Gasoline19%
Naphtha3%
Jet17%
Gasoil35%
Fuel Oil9%
Kok3%
Asphalt9%
Other2%
LPG Gasoline Naphtha Jet Gasoil
Fuel Oil Kok Asphalt Other
Light Distil.25%
Mid. Distil.53%
Black Prod.21%
Other white
1%
2018 Q4
White Product Yield (%) 77.85%
Production 6.6 mn tons
API 31.1
Hizmete Özel / Confidential
Annual Product Yields
www.tupras.com.tr04/03/2020Earnings Presentation 28
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
Tüpraş Balance Sheet (Million TL)
www.tupras.com.tr04/03/2020Earnings Presentation 29
31.12.2019 31.12.2018 Diff. Diff. (%)Current Assets 27,919 20,962 6,957 33
Cash & C. Equivalents 10,652 5,983 4,669 78
Trade Receivables 4,788 5,429 -641 -12
Derivatives 304 176 128 73
Inventories 9,469 6,765 2,704 40
Pre-paid expenses 237 109 128 118
Other Current Assets 2,470 2,502 -32 -1
Long Term Assets 27,593 19,074 8,519 45
Financial Assets & Subsidiaries 1,363 1,271 92 7
Fixed Assets 20,587 12,397 8,190 66
Derivatives 99 168 -70 -41
Pre-paid expenses 199 378 -179 -47
Deferred Tax 3,768 3,566 201 6
Other Long Term Assets 1,578 1,293 285 22
Total Assets 55,512 40,036 15,476 39Short Term Liabilities 28,120 15,950 12,171 76
Financial Loans 5,178 4,113 1,064 26
Trade Payables 17,816 7,496 10,320 138
Derivatives 79 236 -157 -66
Provisions 117 80 37 46
Other ST Liabilities 4,930 4,024 906 23
Long Term Liabilities 14,255 14,140 114 1
Financial Loans 13,898 13,836 62 0
Payables & Provisions 316 257 59 23
Derivatives 32 42 -10 -24
Other LT Liabilities 9 5 4 89
Total equity attributable to equity holders of the parent 12,963 9,825 3,138 32
Minority Interests 174 121 53 43
Total Liabilities & Equity 55,512 40,036 15,476 39
Hizmete Özel / Confidential
Tüpraş and Med Margins ($/bbl)
www.tupras.com.tr 30
($/bbl)Gross
MarginInventory
EffectClean Gross
MarginClean NET
MarginNet
MarginMed Margin
2019 Q4 9.7 0.7 9.0 2.9 3.6 -1.9
2019 12M 9.2 0.1 9.1 3.6 3.7 1.7
2018 Q4 10.8 -4.0 14.9 9.0 5.0 4.7
2018 12M 14.7 0.8 13.9 8.5 9.3 4.6
6.5 6.0
8.1
9.3
3.7
5.3
3.6
5.8
4.5
1.7
2015 2016 2017 2018 2019
12M Margins
Tüpraş Net Margin Med Margin
04/03/2020Earnings Presentation
Hizmete Özel / Confidential
Capacity Utilization (%)
www.tupras.com.tr 3104/03/2020Earnings Presentation
*Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards. Nameplate capacity calculated by standard 330 days of operations.
98 101 101
87 91
44 7
97
103105
108
96 98
2015 2016 2017 2018 2019
12M Capacity Utilization* (%)
Crude Oil Semi Product Feedstock Total
106 108
90 89 87
5 3
5 9 9
112 111
9599 96
Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019
Q4 Capacity Utilization* (%)
Crude Oil Semi Product Feedstock Total
Hizmete Özel / Confidential
Annual Sales
www.tupras.com.tr 3204/03/2020Earnings Presentation
Distributors46%
THY Opet5%
Jet9%
LPG3%
Other6%
Export23%
Bitumen6%
Military2%
• Tüpraş generated 29.2 million tons of total sales 2019.
22.2 24.8 25.7 25.622.4
6.55.5 5.8 4.2
6.8
28.7 30.3 31.5 29.8 29.2
2015 2016 2017 2018 2019
Exports
Domestic Sales
9.2 10.8 11.3 11.9 10.4
4.84.5 4.5 4.9
4.32.0
2.2 2.2 2.22.3
2.93.4 3.5 2.9
1.8
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
Finished Product and Semi Product Imports
04/03/2020Earnings Presentation 33
311 430
939
2,655
185
HS Diesel ULSD Jet Fuel
Product Imports (Thousand Tons)
12M 2019 12M 2018
573
887
506
0
126
607
1237
483
20
120
HVGO ASR F. Oil LSFO Naphtha MTBE
Intermediate Imports (Thousand Tons)
12M 2019 12M 2018
www.tupras.com.tr
Hizmete Özel / Confidential www.tupras.com.tr04/03/2020Earnings Presentation 34
www.tupras.com.tr