Turkiye Petrol Rafinerileri A.s. · BIST:TUPRS
Turkiye Petrol Rafinerileri A.s — Tüpraş — Investor Presentation (November 2024)
52 slides from Turkiye Petrol Rafinerileri A.s's investor presentation, November 2024
Slide 1: Investor Presentation
Investor Presentation November 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 90,2 86,2 90 82,8 83,9 85,5 82,0 82,6 85,3 83,2 - Continued Non OPEC supply 80,9 77,9 - Geopolitical tension
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 30 28,2 29,5 40 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 18,0 16,4 17,4 26,2 20,8 23,8 15 14,9 17,6
Slide 7: Gasoline and High Sulphur Fuel Oil Cracks
Gasoline and High Sulphur Fuel Oil Cracks $/bbl Gasoline High Sulphur Fuel Oil 5 yr range 2024 2023 5 yr ave 5 yr range 2024 2023 5 yr ave 50 0 45 -5 -4,2 -6,9 -7,6 40 -10,1 -10 -12,1 -10,0 35 -14,4 -12,0 -13,3 -15 -15,4 -13,4 -11,7 -14,3 30,6 -15,3 -18,2 30 28,5 -18,3 -19,4 -18,8 -18,1 25,2 -20 -19
Slide 8: Heavy Crude Differentials to Brent ($/bbl)
Heavy Crude Differentials to Brent ($/bbl) 5 2019 2020 2021 2022 2023 2024 0 -5 -10 -15 Iran OPEC+ Cut OPEC+ OPEC+ Cut Russia Ukraine 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, 8M 2024
Turkish Market, 8M 2024 Q1 Q2 Jul+Aug Diesel Million 16,9 17,0 17,1 Jet1 Tons 15,8 15,9 4,9 4,9 4,8 3,8 4,9 4,5 3,6 3,1 1,1 1,3 6,3 6,5 6,5 2,1 1,0 5,3 6,1 0.0% 1,5 0,8 1,4 1,5 +6.7% 0,4 1,2 0,2 0,7 5,6 5,6 5,4 5,6 5,8 1,1 1,1 0,9 0,6 0,9 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Gasoline 3,
Slide 10: Turkey’s Net Import / Export Balance
Turkey’s Net Import / Export Balance Million Import Export Market Share of Tüpraş Tons 0,1 -0,2 2023 12M Jet -0,2 0,4 0,3 Diesel 42% -9,5 Jet 73% -7,3 Diesel -8,0 -5,9 Gasoline 98% -8,8 0,9 2,0 Gasoline 1,6 Fuel Choice of Passenger Cars 2023 1,9 3,0 EV/Hybrid 2% -3,5 LPG -2,8 Diesel LPG -2,9 Diesel;
Slide 11: Company Overview
Company Overview Hizmete Özel / Confidential
Slide 12: 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 13: 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 14: Nelson Complexity of Refining Companies
Nelson Complexity of Refining Companies Nov- 24 Hizmete Özel / Confidential Investor Presentation Company Overview www.tupras.com.tr
Slide 15: Tüpraş Subsidiaries
Tüpraş Subsidiaries OPET – Distribution (%41.7) Tüpraş Trading UK – Trading (%100) DİTAŞ Marine Transport (%79.98) Market Share: 18.8% 24.7% • Transportation of 10.8 million tons crude cargoes and 7.2 White Products Black Products million tons products cargoes. 470,067 DWT 4 Crude Oil Tanker • Over
Slide 16: 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 1,451 1,334 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 Hyd
Slide 17: Operations
Operations Hizmete Özel / Confidential
Slide 18: Q2 Product Yields
Q2 Product Yields Q2 2023 Q2 2024 Other Other 2% LPG Bitumen 1% LPG Bitumen 4% 3% Kok 10% 12% Gasoline 1% Gasoline Kok Other Other 20% 22% 4% white white Light Light Black Prod. 2% Fuel Oil Black Prod. 1% Fuel Oil Distil. Distil. 20% 14% 25% 4% 24% Naphtha 26% Naphtha 1% 1% Mid. Distil. Mid. Distil.
Slide 19: Capacity Utilization and Quarterly Production Volume
Capacity Utilization and Quarterly Production Volume • Tüpraş produced 6.8 million tons in Q2 2024. • Capacity utilization for Q2 2024 was 93%, higher y/y despite RUP maintenance. Quarterly Production (Million Tons) Capacity Utilization (%) 2022 2023 2024 Crude Oil Semi Product Feedstock Total 8 98
Slide 20: 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 21: Product Sales in Q2 2024 (Million Tons)
Product Sales in Q2 2024 (Million Tons) • Tüpraş’ sales are up by 7% compared to Q2 2023 reaching to 7.8 million tons. • International sales grew by 56% y/y driven by gasoline and HSFO. Total Product Sales Domestic Sales of Selected Products Domestic Sales International Sales Diesel Jet Fuel Gasolin
Slide 22: Financials
Financials Hizmete Özel / Confidential
Slide 23: Income Statement (Million TL)
Income Statement (Million TL) Q2 Q2 H1 H1 Million TL % % 2024 2023 2024 2023 Net Sales 190,716 183,630 4% 370,097 357,349 4% COGS -173,284 -154,319 12% -338,383 -302,275 12% Gross Profit 17,432 29,310 -41% 31,714 55,074 -42% Operating Expenses -6,861 -5,265 30% -13,206 -10,957 21% Income/Loss from o
Slide 24: Financial Highlights
Financial Highlights EBITDA (mn TL) Net Income* (mn TL) Cash Currency Redemption Schedule Breakdown bn TL bn TL TL Hard Currency 120 120 88,0 80 80 40 40 29,9 2,9 0 0 Hard Currency TL 1 year Over 1 year * Excluding minority interest Net Debt & Net Debt / EBITDA Working Capital (bn TL) Financial Mana
Slide 25: Profit Before Tax Bridge (2023 Q2 – 2024 Q2)
Profit Before Tax Bridge (2023 Q2 – 2024 Q2) Higher sales, lower energy expenses and strong net interest income supported the PBT despite narrower differentials and scheduled RUP maintenances negative impact. Million TL Sales Energy P Periodic Crack argin Crude In entory Net Interest onetary Other I
Slide 26: 2024 Expectations
2024 Expectations Tüpraş Crack Margin expectation ~12 $/bbl • ~26 mn tons annual production, ~30 mn tons annual sales and 85-90% average capacity utilization Consolidated Capex ~400 million $ Nov- 24 Hizmete Özel / Confidential Investor Presentation Financials www.tupras.com.tr 26
Slide 27: Q2 2024 Results
Q2 2024 Results Tüpraş Crack Margin ($/bbl) Capacity Utilization (%) Tüpraş Crack argin 100 16,0 Tüpraş Y 80 Target 12,0 Tüpraş Y Target 60 8,0 14,5 87,8 11,5 40 4,0 20 0,0 Q1 2024 Q2 2024 0 1H 2024 Operationals (million tons) Total Capex (mn $) 400 1H 2024 FY Target 400 30 26 178 200 12,7 14,8 0 Pr
Slide 28: Tüpraş Balance Sheet (Million TL)
Tüpraş Balance Sheet (Million TL) 31.06.2024 31.12.2023 Diff. Diff. (%) Current Assets 211,849 250,904 -39,055 -16 Cash & C. Equivalents 88,003 122,270 -34,267 -28 Trade Receivables 44,952 50,442 -5,490 -11 Derivatives 1,053 2,575 -1,522 -59 Inventories 65,206 55,462 9,743 18 Pre-paid expenses 1,678
Slide 29: Dividend (TL)
Dividend (TL) 128% 104% Strategic Transition 99% 99% 97% 100% Dividend Plan 91% 92% 91% 86% 11,9 80% Our new business model enables us to pay ~80% 7,5 average dividends and we 10,4 will remain as a high dividend payer 1,9 2,2 0,9 0,4 0,9 6,5 0,4 0,6 0,6 0,2 0,0 0,0 0,0 0,0 0% 0% 0% 0% 2009 2010 2011
Slide 30: 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 31: 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 32: Strategy
Strategy Hizmete Özel / Confidential
Slide 33: Turkey’s Transportation Energy Demand
Turkey’s Transportation Energy Demand Nov- 24 Hizmete Özel / Confidential Investor Presentation Strategy www.tupras.com.tr
Slide 34: 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 35: 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 36: 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 37: 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 ~$7bn total CF until 2035 and With ample CF, Net Debt
Slide 38: Strategic Transition Plan - Financials
Strategic Transition Plan - Financials Cumulative Cash Flow Bridge ($ bn) 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
Slide 39: ESG
ESG Hizmete Özel / Confidential
Slide 40: 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 41: Appendix
Appendix Hizmete Özel / Confidential
Slide 42: 2024 Refinery Maintenance Schedule
2024 Refinery Maintenance Schedule Refinery Unit Starting Quarter Duration (weeks) Purpose Planned Crude Oil & Vacuum Q4 5 Postponed Desulphurizer Q4 5 Periodic Maintenance Postponed İzmit RUP Q1 13 Completed FCC Q2 6 Periodic Maintenance Completed FCC Q3&Q4 21 Revamp Planned İzmir Crude Oil , Vacuu
Slide 43: 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 44: 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 45: 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 Nov-
Slide 46: 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 47: Tüpraş - Ratings
Tüpraş - Ratings Tüpraş BIST Corporate Governance Rating Score Credit Rating Scores Average 96.8 Foreign Currency Long Term Tüpraş BB- (Stable) Ba3 (Positive) Shareholders 95.9 Turkey BB- (Stable) B1 (Positive) B (Positive) Koç Holding Ba3 (Positive) BB(Positive) Transparency 98.0 Analyst Recommenda
Slide 48: Tüpraş Production Flow and Yield Breakdown
Tüpraş Production low and Yield Breakdown • Tüpraş has million tons of production capacity • Tüpraş operates 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 42,75
Slide 49: RUP Feedstock and Production
RUP Feedstock and Production • Residuum Upgrade Plant (RUP) was completed in 2015 and it is the main con ersion 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 O
Slide 50: 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 -5 -6,4 -5,1 -9,0 -6,1 -10 -8,9 -11,6 -9,6 -12,6 -12,3 -11,7 -15 -14,0 -11,2 -11,5 -15 -14,3 -12,1 -15,4 -18,5 -23,4 -23,8 -17,0 -17,8 -17,6 -20 -18,7 -20,0 -25 -23,4 -22,3 -30,4 -32,1 -25 -33,
Slide 51: Koç Holding
Koç Holding Turkey’s Leading Investment Holding Company • Koç Holding is Turkey’s largest industrial and ser ices group • The only Turkish company in Fortune Global 5002. ~8% ~7% ~22% Koç Group’s Pioneer in its Sectors Combined Total Exports / Market Cap/ Revenues / Turkey’s Borsa Istanbul GDP1 Expo
Slide 52: Latest Webcast
Investor Presentation Latest Webcast 2023 Integrated Annual Report Strategic Transition Plan tim@tupras.com.tr Hizmete Özel / Confidential