Turkiye Petrol Rafinerileri A.s. · BIST:TUPRS
Turkiye Petrol Rafinerileri A.s — Tüpraş — Investor Presentation (April 2024)
56 slides from Turkiye Petrol Rafinerileri A.s's investor presentation, April 2024
Slide 1: Investor Presentation
Investor Presentation April 2024 Hizmete Özel / Confidential
Slide 2: Disclaimer
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 variables and changes in und
Slide 3: Refining Market
Refining Market Hizmete Özel / Confidential
Slide 4: Brent Crude Prices
Brent Crude Prices $/bbl + Russian-Ukraine war 5 yr range 5 yr ave 2023 2024 130 + Impact of sanctions + Post-pandemic demand recovery + OPEC+ cut decisions 110 + New trade dynamics 94.0 91.0 86.2 90 82.8 83.9 85.5 84.9 83.2 - Continued Non OPEC supply 80.1 77.9 - Geopolitical tensions 75.6 74.7 80.
Slide 5: Global Refinery Capacity Changes
Global Refinery Capacity Changes Expectations until 2025: • In the 2019-2025 period, 79% of the net capacity increase comes from Asia and 46 % from the Middle East Region. • 63 % of the closures intensified after the pandemic come from the OECD region. 2019-2025 Net Capacity Additions Capacity Addit
Slide 6: Middle Distillate Cracks
Middle Distillate Cracks $/bbl Diesel Jet Fuel 5 yr range 5 yr ave 2023 2024 5 yr range 5 yr ave 2023 2024 50 60 45 55 43.3 40 50 35 34.3 45 40.5 32.6 28.2 29.5 40 30 34.8 35.1 35 26.1 29.2 25 25.2 26.3 29.3 25.0 22.7 30 29.6 27.2 25.6 24.6 25.2 20 19.8 25 26.2 18.0 13.5 17.6 23.8 20.8 15 20 14.8 15
Slide 7: Gasoline and High Sulphur Fuel Oil Cracks
Gasoline and High Sulphur Fuel Oil Cracks $/bbl Gasoline High Sulphur Fuel Oil 5 yr range 2024 2023 5 yr ave 5 yr range 2024 2023 5 yr ave 50 0 45 -5 -6.9 -7.6 40 -10 -10.0 -11.7 35 -14.4 -13.4 -15 30.6 -15.3 -18.2 30 28.5 -18.3 -19.4 -18.1 -18.8 25.2 -20 -19.0 25 26.1 24.4 21.3 20.4 19.9 23.1 -25 2
Slide 8: Heavy Crude Differentials to Brent ($/bbl)
Heavy Crude Differentials to Brent ($/bbl) 5 2019 2020 2021 2022 2023 2024 0 -5 -10 -15 Iran OPEC+ Cut OPEC+ OPEC+ Cut Ukraine Russia OPEC+ Cut sanctions Decision Disagreement Decision War Decision -20 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9
Slide 9: Turkish Market, 1M 2024
Turkish Market, 1M 2024 Jan Diesel Jet Fuel1 Milion 2.0 tons 0.3 0.3 0.3 0.3 1.8 1.8 1.7 0.2 1.7 2.0 0.3 0.3 0.3 +8.3% 0.3 - 2.0% 1.8 1.8 1.7 1.7 0.2 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Gasoline LPG 0.3 0.4 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.3 0.3 0.4 0.3 0.3 +30.0% 0.3 0.3 - 12.8% 0.2
Slide 10: Turkish Market, 12M 2023
Turkish Market, 12M 2023 Q1 Q2 Q3 Q4 Diesel 26.3 Jet Fuel1 Million 24.9 25.2 26.0 24.5 5.4 Tons 5.3 6.8 7.0 6.7 4.7 6.7 6.5 1.3 1.3 3.4 1.2 7.0 7.4 7.4 6.6 7.2 1.7 1.7 2.4 1.0 1.4 6.3 6.5 +6.0% 0.6 +16.8% 6.1 5.3 6.1 1.3 1.1 1.4 0.7 1.2 0.2 0.8 5.2 5.6 5.6 5.4 5.6 1.0 0.9 0.6 0.9 1.1 2019 2020 2021
Slide 11: Turkey’s Net Import / Export Balance
Turkey’s Net Import / Export Balance Million Import Export Market Share of Tüpraş Tons -0.2 -0.2 2022 12M Jet 0.4 0.3 -0.4 Diesel 48% -7.3 Jet 85% -8.0 Diesel -5.9 -8.8 Gasoline 98% -13.6 2.0 1.6 Gasoline 1.9 Fuel Choice of Passenger Cars 2023 3.0 2.4 EV/Hybrid 2% -2.8 LPG -2.9 Diesel LPG -2.9 Diese
Slide 12: Company Overview
Company Overview Hizmete Özel / Confidential
Slide 13: Tüpraş Shareholder Structure
Tüpraş Shareholder Structure Tüpraş is Turkey’s biggest industrial company and leading refiner. Koç Holding Aygaz Opet Koç Holding andGroup Other Koç Other Koç 77% 20% 3% 6.82% 6.83% Energy Investments Inc. (SPV) 46.4% 79.98% 41.7% Foreign Ownership 43%1 100% Free Float2 46.78% 100% 99.23% Domestic
Slide 14: Tüpraş’ Refining Assets & Distribution Network
Tüpraş’ Refining Assets & Distribution Network İzmit Capacity: 11.3 mn t Nelson Compl.: 14.5 Storage: 3.0 mn m3 Kırıkkale Capacity: 5.4 mn t Nelson Compl.: 6.32 Storage: 1.3 mn m3 İzmir Capacity: 11.9 mn t Nelson Compl.: 7.66 Batman Storage: 2.5 mn m3 Capacity: 1.4 mn t Nelson Compl.: 1.8 Storage: 0
Slide 15: Nelson Complexity of Refining Companies
Nelson Complexity of Refining Companies Apr-24 Hizmete Özel / Confidential Investor Presentation Company Overview
Slide 16: Tüpraş Subsidiaries
Tüpraş Subsidiaries OPET - Distribution Tüpraş Share: 41.7% • 1,866 stations as of 31 December 2023. • As of December 2023 Market share: 19.0% in white products; 28.4% in black products Tüpraş Trading UK - Trading Tüpraş Share: 100% Over 8 million tons of product trade More than 10 million tons of s
Slide 17: Tüpraş Subsidiaries
Tüpraş Subsidiaries DİTAŞ - Marine Transport Tüpraş Share: 79.98% • 4 Crude Oil Tanker: 470,067 DWT • 8 Product Tanker: 130,437 DWT • 4 Bitumen Tanker: 61,450 DWT Körfez Ulaştırma - Railway Transport Tüpraş Share: 100% • ~5% share in Turkish rail freight market • ~2.5 mn ton of product and semi-prod
Slide 18: Tüpraş Subsidiaries
Tüpraş Subsidiaries Entek Electricity Tüpraş’s Share : %99.23 • Entek’s installed power: 492 MW • 2 WPP with 116 MW capacity , 1 CCGT with 112 MW capacity, 8 Hydro Power Plants with total capacity of 264 MW. • Entek’s sales from production was 1.3 GWh • EBITDA figure was TL 1.6 bn Tüpraş Ventures Tü
Slide 19: Tüpraş Subsidiaries
Tüpraş Subsidiaries Entek - Electricity (Tüpraş Share: 99.23%) Entek’s Installed Capacity Production (000 MWh) 66 17.5 MW 112 MW MW 1,800 1,600 1,400 1,200 50 1,000 1,359 1,341 1451 1334 MW 178 1,542 28 MW 800 16.4 MW 600 MW 400 200 24.4 MW - 2019 2020 2021 2022 2023 Natural Gas Combined Cycle Hydro
Slide 20: Operations
Operations Hizmete Özel / Confidential
Slide 21: Annual Product Yields
Annual Product Yields 12M 2022 12M 2023 Other Other Bitumen 2% LPG Bitumen 2% LPG 10% 3% 10% 3% Coke Coke 3% Gasoline Gasoline Other 3% Other 21% 21% white white Fuel Oil Light Fuel Oil Black Prod. 2% Light Black Prod. 2% 6% Distil. 5% 14% Distil. 19% 26% 25% Naphtha Naphtha 1% 1% Mid. Distil. Mid.
Slide 22: Capacity Utilization and Quarterly Production Volume
Capacity Utilization and Quarterly Production Volume Quarterly Production (Million Tons) Capacity Utilization (%) 2021 2022 2023 Crude Oil Semi Product Feedstock Total 8 98 100 98 99 97 7.1 7.1 7.0 92 7 7 7 88 87 7 10 8 7.0 7.0 82 85 84 83 6.9 8 7 10 6.5 7 8 9 71 12 6.0 10 6 6.0 5.9 91 93 91 89 90 8
Slide 23: Sales
Sales • Tüpraş generated 30.1 million tons of total sales in 2023. Total Sales Customer Groups 2023 mn tons 24.5 29.5 30.1 Other 29.5 10% International 27.6 6.3 sales 4.7 6.0 6.0 21% 5.9 Jet 14% Bitumen Exports Total Sales 23.5 23.8 6% 19.8 23.5 Domestic Sales 21.7 2023 30.1 mn tons 2019 2020 2021 2
Slide 24: Quarterly Product Sales (Million Tons)
Quarterly Product Sales (Million Tons) Total Product Sales Domestic Sales of Selected Products Domestic Sales International Sales Diesel Jet Fuel Gasoline Bitumen 8.1 7.7 7.0 7.2 2.0 0.5 6.3 1.7 0.9 0.4 0.5 1.7 0.8 1.2 0.9 1.0 0.5 0.6 0.6 0.6 0.9 0.8 1.0 0.9 0.6 6.0 6.3 6.1 5.3 5.1 3.2 3.3 2.7 2.9 2
Slide 25: Financials
Financials Hizmete Özel / Confidential
Slide 26: Income Statement – IAS 29 Applied (Million TL)
Income Statement – IAS 29 Applied (Million TL) Million TL 2023 2022 % Net Sales 686,529 916,751 -25% COGS -576,796 -803,671 -28% Gross Profit 109,732 113,080 -3% Operating Expenses -19,556 -16,159 21% Income/Loss from other operations -16,549 -20,668 -20% Operating Profit 73,628 76,253 -3% Inc./Loss
Slide 27: Financial Highlights
Financial Highlights EBITDA (mn TL) Net Income* (mn TL) Current Ratio & Net Debt / EBITDA Net Return on Average Equity (%) Net Debt/EBITDA Current Ratio 1.5 1.3 43% 28% 2022 2023 -0.3 -0.6 2022 2023 Apr-24 * Excluding minority interest Hizmete Özel / Confidential Investor Presentation
Slide 28: Balance Sheet Analysis
Balance Sheet Analysis Net Debt (Cash) Cash Currency Redemption Schedule In Billion TL In Billion $ bn TL Breakdown TL Hard Currency bn TL 60 4 120 120 40 3 98.0 20 2 -27.2 -62.7 80 80 1 0 0 -20 -1 40 30.0 -40 40 -2 -60 2.5 0.5 2.4 -1.6 -3 -2.6 0 -80 -4 0 1 year 1-2 years 2-3 years Over 3 Dec-22 Dec
Slide 29: Profit Before Tax Bridge (2022 – 2023)
Profit Before Tax Bridge (2022 – 2023) Lower energy costs and wider differentials were not able to compensate monetary and inflationary adjustments and weakness in crack margins. As a result, 2023 PBT ended lower than 2022 PBT. Million TL Apr-24 Hizmete Özel / Confidential Investor Presentation
Slide 30: 2024 Expectations
2024 Expectations Tüpraş Crack Margin expectation ~14 $/bbl • ~26 mn tons annual production, ~30 mn tons annual sales and 85-90% average capacity utilization Consolidated Capex ~500 million $ Apr-24 Hizmete Özel / Confidential Investor Presentation
Slide 31: 2023 Results
2023 Results Refining Margins ($/bbl) Capacity Utilization (%) Tüpraş Net Refining Margin 100 16.0 Tüpraş FY Tüpraş FY 80 Target Target 12.0 60 8.0 16.0 40 87.5 4.0 20 0.0 12M 2023 0 12M 2023 Operationals (million tons) Total Capex (mn $)(*) 12M 2023 FY Target 400 354 350 30 25 30.1 24.9 29 200 24 0
Slide 32: Tüpraş Balance Sheet (Million TL)
Tüpraş Balance Sheet (Million TL) 31.12.2023 31.12.2022* Diff. Diff. (%) Current Assets 201,149 197,510 3,639 2 Cash & C. Equivalents 98,024 82,008 16,016 20 Trade Receivables 40,439 35,290 5,149 15 Derivatives 2,064 5,927 -3,863 -65 Inventories 44,464 59,453 -14,989 -25 Pre-paid expenses 1,278 1,43
Slide 33: Dividend (TL)
Dividend (TL) 128% 104% Strategic Transition 99% 99% 97% 100% Dividend Plan 91% 92% 91% 86% 7.5 Our new business model enables us to pay ~80% average dividends and we will remain as a high dividend payer 1.9 2.2 0.9 6.5 0.4 0.9 0.4 0.6 0.6 0.2 0.0 0.0 0.0 0.0 0% 0% 0% 0% 2009 2010 2011 2012 2013 201
Slide 34: Investments (Million $)
Investments (Million $) Avg. 460 Mn$ Avg. 350 Mn$ 296 980 230 320 400 300 7 After privatization Billion $ invesment 2006-2010 2011-2014 2015-2022 2022-2030 2031-2035 2035-2050 CURRENT PROJECTS ∼50% • FCC Modernization in İzmir of total capex • New Sulphur Recovery Unit in Kırıkkale ESG related • Sol
Slide 35: Financial Policy
Financial Policy Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counterparty risk, commodity, interest rate and currency exposure. Liquidity risk management & targets/limits for financial ratios: Leverage & • Net financial debt/EBITDA • Current ratio Li
Slide 36: Strategy
Strategy Hizmete Özel / Confidential
Slide 37: Turkey’s Transportation Energy Demand
Turkey’s Transportation Energy Demand Apr-24 Hizmete Özel / Confidential Investor Presentation Strategy
Slide 38: Strategic Transition Plan
Strategic Transition Plan 2022-2030 2031-2035 Capex EBITDA Capex EBITDA Sustainable Refining ~60% ~90% ~30% ~70% Sustainable Aviation Fuel Zero Carbon Electricity ~40% ~10% ~70% ~30% Green Hydrogen Base Year: 2017 27% %35 Scope 1&2 Emission Reduction Sustainable & Profitable Tüpraş 2035 Average EBIT
Slide 39: Strategic Transition Plan – Investment Areas
Strategic Transition Plan – Investment Areas SUSTAINABLE REFINING ZERO CARBON ELECTRICITY Energy Efficiency and Decarbonization Projects Integrating Zero Carbon Electricity to produce Green H2 • Remain as a Major EBITDA Contributor • Ensure affordable green H2 production, capturing • Improve energy
Slide 40: Strategic Transition Plan – Emission Reduction
Strategic Transition Plan – Emission Reduction EMISSION REDUCTION SCOPE 1 & 2 BASE YEAR SCOPE 1 + 2 7.3 MN TONNES -15% -27% -35% -49% We will invest in energy efficiency & decarbonization Projects, green hydrogen & zero carbon electricity usage in refining to reduce scope 1 & 2 emissions 2017 2023 2
Slide 41: Strategic Transition Plan - Financials
Strategic Transition Plan - Financials Will eliminate our scope 1 & 2 emissions by 2050 while executing our plan and achieving these results. We are $350mn average CAPEX until 2035, totaling $5 bn. sustainable ROACE will remain above 25% creating ~$7bn total CF until 2035 and With ample CF, Net Debt
Slide 42: Strategic Transition Plan - Financials
Strategic Transition Plan - Financials Sound Financial Plan • Superior EBITDA generation and disciplined capex plan leads to very low external funding requirement. • Strong FCF generation ensures strong dividend potential • 80% dividend payout on average according to our new business model ~5 bn $ D
Slide 43: ESG
ESG Hizmete Özel / Confidential
Slide 44: Tüpraş’s Environmental Highlights
Tüpraş’s Environmental Highlights Water Consumption per processed crude oil (m3/ton) Energy Intensity Achievements Ratio of recovered water to total water consumption (%) 98.4 99.1 70% 64% 94.9 64% 59% 76% 93.5 92.4 91.2 0.82 0.66 0.64 0.72 0.69 2019 2020 2021 2022 2023 2030 Target 2019 2020 2021 20
Slide 45: Appendix
Appendix Hizmete Özel / Confidential
Slide 46: 2024 Refinery Maintenance Schedule
2024 Refinery Maintenance Schedule RUP Maintenance Refinery Unit Starting Quarter Duration (weeks) Purpose Planned Preparation and planning phase: 2022 Crude Oil & Q4 5 Planned Vacuum Periodic Desulphurizer Q4 5 Maintenance Planned Maintenance start: March 1 İzmit • Catalyst changes RUP Q1 13 Planne
Slide 47: Turkish Market Fuel Consumption 2018-2023
Turkish Market Fuel Consumption 2018-2023 Million Tons Diesel Jet Fuel* +6.0% -4.4% +10.1% -1.6% 28 +0.5% 24.9 26.0 8 23.6 24.5 22.5 22.7 +16.8% +6.5%5.3 +38.0% 5.4 5.0 4.7 -54.4% +39.4% 14 4 3.4 2.4 0 0 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 Gasoline LPG +23.6% 4.1 4 5 +0.8% -7
Slide 48: Competition - STAR Refinery
Competition - STAR Refinery Timeline Turkish Market Structure (mn tons, 2023) Turkish Turkey Tüpraş STAR Total Market Balance Demand Demand* LPG 0.9 0.2 1.1 4.4 -3.3 Petchem F. 0.2 1.7 1.9 Gasoline 5.1 5.1 4.1 1.0 • Feasibility studies began in 2010 and Jet Fuel 4.6 1.3 5.9 5.4 2.1 construction kick
Slide 49: Competition - Regional Competition
Competition - Regional Competition • Tüpraş competes with 69 refineries in the Mediterranean and Black Sea markets. • Mediterranean regional product balance is also affected from Middle East, North West Europe and Asia flows Mediterranean Black Sea 54 Refineries ~7.7 mbd 15 Refineries ~1.5 mbd Apr-2
Slide 50: European Pump Price Comparison
European Pump Price Comparison Turkish fuel prices are highly competitive with other European countries. Gasoline (TL/Lt) Diesel (TL/Lt) Tax Without Tax Pump Price Without Tax Tax Pump Price 56.53 57.04 60 56.36 56.29 60 55.2 55.8 53.6 53.26 53.5 51.9 49.08 32.0 48.9 45 45 30.0 29.5 38.9 28.2 27.1 2
Slide 51: Tüpraş - Ratings
Tüpraş - Ratings Tüpraş BIST Corporate Governance Rating Score Credit Rating Scores Average 96.8 Foreign Currency Long Term Tüpraş B+ (Stable) B2 (Positive) Shareholders 95.9 Turkey B + (Positive) B3 (Positive) B (Positive) Koç Holding B2 (Positive) BB-(Positive) Transparency 98.0 Analyst Recommenda
Slide 52: Tüpraş Production Flow and Yield Breakdown
Tüpraş Production Flow and Yield Breakdown • Tüpraş has 30 million tons of production capacity • Tüpraş operates 4 refineries with an integrated system optimization program Flow Diagram # of Capacity Key Units Units (m3/d) LPG LPG 3.5% MEROX CRUDE OIL 8 99,420 Gasoline / Naphtha 22.0% VACUUM DIST. 8
Slide 53: RUP Feedstock and Production
RUP Feedstock and Production • Residuum Upgrade Plant (RUP) was completed in 2015 and it is the main conversion unit of Tüpraş. • The second scheduled maintenance began in Q1 2024, is expected to be completed in 92 days. 3192 665 184 ~2.4 mt & Jet ~2.8 mt 909 132 Total Processing ~5.5 mn tons Total
Slide 54: LPG and Naphtha Cracks
LPG and Naphtha Cracks $/bbl LPG Naphta 5yr range 2023 5 yr ave 2024 5yr range 2023 5 yr ave 2024 5 5 0 -5 -6.4 -5 -8.9 -10 -9.0 -12.3 -12.6 -11.7 -15 -11.5 -15 -14.3 -15.4 -18.5 -14.0 -17.8 -17.6 -20 -18.7 -20.0 -25 -23.4 -22.3 -30.4 -32.1 -25 -33.0 -31.7 -34.9 -35 -34.9 -30 -36.4 -38.6 -39.9 -40.6
Slide 55: Koç Holding
Koç Holding Turkey’s Leading Investment Holding Company • Koç Holding is Turkey’s largest industrial and services group • The only Turkish company in Fortune Global 5002. ~9% ~7% ~19% Koç Group’s Pioneer in its Sectors Combined Total Exports / Market Cap/ Revenues / Turkey’s Borsa Istanbul GDP1 Expo
Slide 56: Latest Webcast
Investor Presentation Latest Webcast 2023 Integrated Annual Report Strategic Transition Plan tuprasir@tupras.com.tr Hizmete Özel / Confidential