Turkiye Petrol Rafinerileri A.s. · BIST:TUPRS

Turkiye Petrol Rafinerileri A.s — Q3 2015 Earnings Presentation

49 slides from Turkiye Petrol Rafinerileri A.s's earnings presentation, 2015

  1. Slide 1: Q3 2015 Investor Presentation

    Q3 2015 INVESTOR PRESENTATION

  2. Slide 2: Agenda

    01 Refining Industry 02 Company Overview 03 Investments 04 Key Financials

  3. Slide 3: Refining Industry

    Refining Industry

  4. Slide 4: Brent Crude Oil Prices

    100 105 110 115 40 50 55 60 65 75 80 85 90 95 45 70 2.1.14 23.1.14 13.2.14 108,0 $/Barrel 6.3.14 27.3.14 17.4.14 8.5.14 29.5.14 19.6.14 10.7.14 31.7.14 115,3 Brent Crude Oil Prices 21.8.14 11.9.14 106,1 2.10.14 101,2 23.10.14 65,7 13.11.14 45,2 4.12.14 94,6 84,3 25.12.14 55,0 60,4 55,0 15.1.15 71,7

  5. Slide 5: Net Refinery Capacity Change

    Net Refinery Capacity Change 3.000 200 270 2.000 520 880 530 Thousand Barrels/Day 526 510 309 160 1.000 334 250 198 400 150 0 390 181 0 810 120 0 84 302 20 640 340 135 180 305 63 0 160 195 40 52 65 -255 -145 -543 -486 -240 -109 -266 -5 -140 -1.000 -443 -775 -421 -100 -546 -2.000 -352 -189 2009 2010

  6. Slide 6: Refinery Value

    Refinery Value Market Position •Proportion of products sold domestically •Local Competition •Infrastructure Value Added Local Market Dynamics •Ability to upgrade •Growth trends •Correlated to complexity •Supply / Demand balance Cost Base •Energy Efficiency •Raw Material costs •Scale •Automation 6

  7. Slide 7: Product Ratios (Barrel/Barrel)

    Product Ratios (Barrel/Barrel) Gasoline Diesel 1,55 1,40 1,35 1,45 1,30 1,35 1,25 1,25 1,20 1,15 1,15 1,10 1,05 1,05 2010 - 2014 Min Max 2012 2013 2014 2015 2010 - 2014 Min Max 2012 2013 2014 2015 0,95 1,00 Sep Oct Jan Jan Feb Sep Nov Nov Apr May Jul Dec Mar Mar Jun Jun Aug Jan Jan Oct Feb Sep Sep D

  8. Slide 8: Crude Differentials $/Barrel

    Crude Differentials $/Barrel 1,0 Ural Crude Differentials $/Barrel 1,0 0,5 0,5 0,0 0,0 -0,5 -0,5 -1,0 -1,0 -1,5 -1,5 -2,0 -2,0 -2,5 -2,5 -3,0 2009-2012 Min/Max 2012 2014 2011 2013 2015 -3,0 -3,5 -3,5 -4,0 -4,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Differentials Trends 2,0 0,0 -2,0 -4,0 -6,

  9. Slide 9: Med Complex Refining Margins

    Med Complex Refining Margins 9,00 8,00 7,00 6,00 5,00 Gross Margin $/bbl 4,00 3,00 2,00 1,00 0,00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -1,00 -2,00 Max-Min 2004-2009 Average 2011 2012 2013 2014 2015 9

  10. Slide 10: Turkish Sector Outlook

    Turkish Sector Outlook Air Passengers - Million  Primary driver of demand is 180 165,7 growing vehicle parc 160 149,5 140,4 130,0 128,4  Auto sales continue to massively 140 117,6 120 102,8 80,3 outstrip removals 73,4 66,8 100 79,4 85,5 65,4 63,8  Very high gasoline tax has led to LPG 80 59,4 52,

  11. Slide 11: Turkish Consumption (Million ton)

    Turkish Consumption (Million ton) Diesel Gasoline 20,0 4.2% 2,50 7.0% 3.2% 2,00 0.5% 15,0 +17.1% +9.2% 1,50 10,0 15,6 16,7 17,4 1,00 1,92 1,85 1,86 11,2 13,1 1,39 5,0 1,27 0,50 0,0 0,00 2012 2013 2014 2014 (8M) 2015 (8M) 2012 2013 2014 2014 (8M) 2015 (8M) Jet Fuel Fuel Oil 5,0 5.5% 11.2% -23.0% 0,80

  12. Slide 12: Turkey's Import / Export Balance (Net)

    Turkey’s Import / Export Balance (Net) Million Ton 4,0 Export 3,0 2,1 2,5 2,4 2,5 1,8 1,5 1,6 1,8 2,0 1,6 1,0 1,0 0,0 -1,0 -2,0 -3,0 -4,0 -3,1 -3,0 -3,0 -3,1 -3,1 -5,0 -6,0 -7,0 -8,0 -9,0 -10,0 -9,0 -11,0 Import -10,0 -10,8 -12,0 -13,0 -12,0 -12,7 -14,0 LPG Gasoline Diesel Fuel oil 2010 2011 2012 20

  13. Slide 13: Company Overview

    Company Overview

  14. Slide 14: TÜPRAŞ Refining Assets

    TÜPRAŞ Refining Assets Black Sea Baku İstanbul MARMARA İzmit Ankara Kırıkkale İzmir Batman Total Refining Capacity: 28.1 Million Tons – 100% of Turkey’s refining Capacity Kirkuk Current Nelson Complexity(NC): 9.9 İzmit İzmir Kırıkkale Batman  11.0 MT Capacity  11.0 MT Capacity  5.0 MT Capacity 

  15. Slide 15: OPET - Tüpraş Share 40.0%

    OPET Tüpraş Share 40.0 % 1.424 İstasyon 1.1 Million M3 Storage International Trading  994 Opet Marka •Major Terminals in Marmara, Agean, •London  430 Sunpet Marka Black Sea & Mediteranean Jet Fuel Sales Lubricants A Sector Leader •Turkish Airlines JV •Fuchs JV •2nd Biggest Player •# 1 Brand 15

  16. Slide 16: DİTAŞ – Deniz Taşımacılığı

    DİTAŞ – Deniz Taşımacılığı – Tüpraş Share %79.98 Cumhuriyet Sevgi Gönül Leyla Suna Esra & Aylin • Crude • Products • Products Products Products • Bitumen • 2001 • 2008 • 2009 2012 • 2x20 K DWT 2011 • 164,86 K DWT • 10,98 K DWT • 10,98 K DWT 55 K DWT • Esra 2014 6 K DWT • Aylin 2015 19 Tugboats 25 21

  17. Slide 17: Crude Suppliers of TÜPRAŞ (Million Tons)

    Crude Suppliers of TÜPRAŞ (Million Tons) In 2014, Tüpraş purchased 18 different types of crude oil from 11 9,7 countries, with gravities ranging between 19-46 API 7,4 7,2 6,1 5,67 5,28 5,1 3,8 3,1 2,9 2,57 2,9 2,8 2,37 2,5 2,4 2,4 2,3 1,87 2,2 2,1 2,1 2,0 1,63 2,0 1,8 1,5 1,5 1,5 1,1 1,0 0,61 0,7 0,

  18. Slide 18: Med & Tüpraş Net Margins, $/bbl

    Med & Tüpraş Net Margins, $/bbl 1st Quarter 2nd Quarter 7,51 8,0 8,0 6,28 6,13 5,98 5,73 4,89 4,88 4,69 6,0 6,0 4,34 3,87 3,70 3,65 3,50 3,55 3,44 2,97 2,83 2,63 2,62 4,0 2,41 2,52 4,0 1,96 1,72 1,57 1,65 1,37 1,40 0,90 2,0 0,44 0,42 2,0 0,06 0,0 0,0 2008 2009 2010 2011 2012 2013 2014 2015 2008 2009

  19. Slide 19: Capacity Utilisation, %

    Capacity Utilisation,% 120 +26,9% 99,5 100 4,2 95,3 93,2 91,1 90,7 79,9 81,6 79,1 87,2 86,1 77,1 80 2,9 2,4 74,9 72,6 5,5 78,7 69,2 7,5 3,6 76,8 3,8 74,4 71,3 69,6 68,8 8,7 60 40 60,4 20 Crude Oil Other 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 / 9M 2015 / 9M 19

  20. Slide 20: Quarterly Production Volumes (Million Tons)

    Quarterly Production Volumes (Million Tons) 8 6,82 7,32 7 6,47 6,25 6,07 5,71 6 5,51 5,51 5 4,63 5,41 4,55 4 4,19 4,32 4,06 3 3,31 2 Min / Max 2007/2014 2014 2015 1 0 1Q 2Q 3Q 4Q 20

  21. Slide 21: 9M Product Yields

    9M Product Yields 2014 2015 Asphalt Asphalt 10,2% 10,4% Gasoline Gasoline 21,4% 20,5% Light Fuel Oil Black Light Black 12,8% Distil. Prod. Distil. Prod. Fuel Oil Naphtha 21,7% Naphtha 26,6% 21,9% 24,5% 16,4% 0,5% 1,1% Coke 1,3% LPG Other LPG Other 3,3% 5,3% 3,6% 5,8% Mid. Other Jet 2,0% Mid. Other D

  22. Slide 22: 3rd Quarter Product Yields

    3rd Quarter Product Yields 2014 2015 Asphalt Asphalt 11,7% 13,0% Gasoline Gasoline 22,6% 20,4% Fuel Oil Black Light Black Light 4,7% Prod. Distil. Prod. Distil. Coke Fuel Oil 20,9% 21,4% Naphtha 25,8% 22,5% Naphtha 3,1% 14,1% 1,0% -0,2% LPG 3,5% Other Other 4,7% LPG Other 1,2% 3,7% 5,5% Other Mid. M

  23. Slide 23: Domestic Sales, million tons

    Domestic Sales, million tons Gasoline Jet Fuel 2,0 1,81 1,82 1,83 5,0 1,78 1,54 3,83 3,62 1,39 4,0 3,55 1,5 3,29 2,76 2,92 3,0 1,0 2,0 0,5 1,0 0,0 0,0 2011 2012 2013 2014 9M 2014 9M 2015 2011 2012 2013 2014 9M 2014 9M 2015 Diesel Bitumen 10,0 3,5 8,57 8,11 2,95 2,93 7,87 3,0 2,81 8,0 6,70 6,58 2,5 1

  24. Slide 24: 9M Trading Activities

    9M Trading Activities Exports, Ton*000  Exports 3.000  High CUR = big increases in export 2.483 2.500 2.121 9M 2014  Finished Products 2.000 1.697 1.697 9M 2015  Despite high CUR, diesel imports 1.500 continued, in order to take market share prior to RUP completion 1.000  Intermediates 500 83 1

  25. Slide 25: Sales By Customer 2014

    Sales By Customer 2014 Customer Groups Sales to Distributors Military 2% Asphalt 9% OMV POAŞ Distributors Other 23% Export 37% 32% 24% OPET 19% Other 7% THY Opet BP 12% 5% Shell TOTAL 14% 3% TP 4% Petkim LPG Dist. Jet Fuel 1% 4% 4% Total: 22,2 million ton Distributors : 9,6 million ton 25

  26. Slide 26: Corporate Governance

    Corporate Governance Corporate Governance Rating  One of the top rated companies in Turkey OVERALL 94,41  Committed to continuous improvement in this area  Member of the Corporate Governance Association SHAREHOLDERS 95,51 TRANSPARENCY 97,94 STAKEHOLDERS 90,52 BOARD 92,77 26

  27. Slide 27: Sustainability

    Sustainability Accident Frequency Rate Recycled Water % 2,5 40,4% 2,2 37,0% 36,3% 32,2% 1,7 1,6 1,5 1,1 2009 2010 2011 2012 2013 2014 2011 2012 2013 2014 GHG Emissions Reduction Energy Intensity Index 348 120,9 317 186 107,4 105,4 105,3 126 102,1 101,6 2011 2012 2013 2014 2009 2010 2011 2012 2013 20

  28. Slide 28: Corporate Social Responsibility

    Corporate Social Responsibility Education Culture Health Environment •Aliağa - Menemen •23rd April Events • Purchase of Relief for • Support for Turkish Highway Tree Planting •Umbrella Action Geyre Foundation Family Planning •Natural İzmit Project Programme Foundation •Safety Week •Fire Fly Programm

  29. Slide 29: Investments

    Investments

  30. Slide 30: Investments (Million USD)

    Investments (Million USD) 1400 1201 1200 974 959 1000 800 628 600 395 400 290 188 177 200 0 2008 2009 2010 2011 2012 2013 2014 2015 E 30

  31. Slide 31: RUP - Mile Stones

    RUP- Mile Stones Tüpraş Technical Snam Progetti Investment Coker Chosen Department Feasibility Alternatives Evaluation • Dec 2007 Report • May 2007 • May 2006 Tecnicas Reunidas Support from Spanish & Turn Key Agreement Contract Signed Italian ECAs • Aug 2011 • Dec 2009 • Aug 2011 Finance Agreement F

  32. Slide 32: Residuum Upgrade Performance

    Residuum Upgrade Performance • As expected: – The whole refining system is profitably running at full capacity utilization – Diesel production and market share has been significantly boosted – The expected boost in EBITDA is in line with the $550 million per annum originally expected 32

  33. Slide 33: İzmit Waste Water Treatment

    İzmit Waste Water Treatment Project Aims • To reduce the need for fresh water What the Project Entails • A water treatment plant to process municipal & refinery waste water • Two temporary systems were built to serve until the main system was completed • Project completed in 2015 Investment • 22 Mil

  34. Slide 34: İzmir Crude Unit Revamping Project

    İzmir Crude Unit Revamping Project Project Aims • Eliminating low energy efficiency in the furnaces • Enables sustainable full capacity utilization What the Project Entails • Configuration Changes • De-salter & Pre-flash column • Heat recycling – Heat Exchanger • Replace column internals • New pre-f

  35. Slide 35: Kırıkkale Power Plant

    Kırıkkale Power Plant Project Aims • Improving Energy Efficiency at Kırıkkale with a combined heat & power plant • The other refineries are already equipped • Expected completion: 2016 What the Project Entails • A new gas turbine • New steam turbines • New boilers • One existing steam turbine will b

  36. Slide 36: R&D

    R&D  The R&D department was set up Membrane Deaerator in 2009  It works primarily on process improvements  One of the first commercial successes was the Membrane Deaerator Project  The Project maximizes the use of waste Conventional Deaerator heat in the refinery by utilizing cold feed water  U

  37. Slide 37: Key Financials

    Key Financials

  38. Slide 38: Profitability Indicators, 9M & 3Q

    Profitability Indicators , 9 M & 3Q 2014 2015 2014 2015 (%) (%) 3Q 3Q 9M 9M 101,85 50,26 -51 Dtd.Brent Price, ($/bbl) 106,57 55,39 -48,0 31,79 30,25 -4,8 Processed Crude API 32,44 31,75 -2,1 73,50 77,79 4,3 White Product Yield, (%) 72,8 74,6 1,8 3,45 4,92 43,0 Med. Complex Margin,($/bbl) 1,31 5,26 3

  39. Slide 39: Financial Highlights (mn $)

    Financial Highlights (mn $) EBITDA Net Income 1.329,4 1.400 1000 900 817 1.200 272 976 740 1.000 830 800 667 653 715 700 629 800 468 174 271 169 560 410 91 106 600 490 47 600 1.099 271 338 500 268 89 47 206 175 400 779 328 361 315 415 400 309 435 200 256 226 230 171 262 153 78 300 165 134 95 79 150

  40. Slide 40: Balance Sheet Analysis

    Balance Sheet Analysis Cash & Equivalents (Billion $) Receivables (Billion $) 2,5 2,16 2,0 2,0 1,83 1,81 1,45 1,72 1,69 1,64 1,68 1,5 1,34 1,33 1,19 1,41 1,03 1,5 1,30 1,21 0,93 1,04 1,0 0,71 0,66 1,0 0,82 0,52 0,51 0,5 0,20 0,5 0,09 0,0 0,0 Dec.12 Mar.13 Jun 13 Sep13 Dec 13 Mar-14 Jun.14 Sep.14 Dec

  41. Slide 41: FX Risk Exposure (30 September 2015)

    FX Risk Exposure (30 September 2015 ) Consolidated Consolidated Assets Liabilities Million $ Cash Payables 219 1,141 Receivables ST Financials 377 16 • RUP 318 Stock LT Financials: 2,501 852 RUP Loans: 1,773 Eurobond: 700 Forward Other credits: 28 1,007 -152 million $ FX Risk with RUP : -1,925 milli

  42. Slide 42: Income Statement

    Income Statement 3Q 3Q 9M 9M % Diff. Million USD % Diff. 2014 2015 2014 2015 5.467, 3.685, -33 Net Sales 14.190,6 10.539,4 -26 1 4 277,4 435,6 57 Gross Profit 479,4 1.081,2 126 -81,6 -81,8 0 Operating Expenses -226,6 -223,8 -1 -126,1 -143,8 14 Income/Loss from other operations -66,8 -267,2 300 69,7

  43. Slide 43: Tüpraş Balance Sheet-Assets

    Tüpraş Balance Sheet-Assets % Million USD 30.09.2015 31.12.2014 Difference Difference Current Assets 3.213 3.015 199 7 Cash & C. Equivalents 817 1.681 -864 -51 Receivables 1.073 87 986 1140 Derivatives 166 28 138 494 Inventories 895 1.022 -128 -12 Pre-paid expenses 46 53 -8 -14 Other Current Assets

  44. Slide 44: Tüpraş Balance Sheet-Liabilities

    Tüpraş Balance Sheet-Liabilities Million USD 30.09.2015 31.12.2014 Difference % Difference Short Term Liabilities 3.232 3.692 -460 -12 Financial Loans 564 335 229 68 Payables 1.589 2.464 -874 -35 Derivatives 13,79 0,03 13,76 46.927 Deferred Incomes 16 7 8,96 120 Provisions 39 47 -8 -18 Other ST Liab

  45. Slide 45: 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 a variety of variables and c

  46. Slide 46: Future Expectations

    Future Expectations Crude Oil Prices (Brent) • Previous expectations were for 55-57 dollars per barrel • This has been revised to 52-55 dollars per barrel Med Complex Margin • Our previous expectations for Med Complex margin is 4.3-4.7 dollars per barrel range. Tupras Net Margin • For Tupras’ net re

  47. Slide 47: Dividends and Total Payout

    Dividends (TL) 7 1.200 6 985 1.000 5,83 964 5 Total Payout (Million TL) 4,96 800 4,78 746 4 626 3,93 3,85 579 600 3 3,24 2,94 2,98 2,50 396 400 2 2,31 1,73 1,58 200 1 0 0 2008 2009 2010 2011 2012 2013 2014 Earnings per Share Gross Dividend Total Payout 2012/2013 EPS includes the tax incentive 47

  48. Slide 48: 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 a variety of variables and c

  49. Slide 49: Investor Relations Contacts

    Turgut Tuncay Önbilgin Jonathan Lamb Investor Relations and Reporting Investor Relations Officer Director The Investor Relations section of our company website has a wealth of constantly updated information of interest to investors www.tupras.com.tr Investor Relations and Reporting Directors Tel. :

Türkiye Petrol Rafinerileri A.Ş. (Tüpraş) — Q3 2015 Earnings Presentation on 6ix