51 slides from Turkiye Petrol Rafinerileri A.s's investor presentation, October 2021
Slide 1: Investor Presentation
Investor Presentation October 2021 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 5yr range 5 yr ave 2020 2021 90 + OPEC ++ production cut + Impact of Iran & Venezuela sanctions 80 75.0 74.6 + Escalating regional tension 73.0 70.8 68.7 + Covid 19 vaccine discovery 70 65.6 64.7 63.5 62.2 - Concerns on global economic 60 54.8 development - Covid-19 related
Slide 5: Global Refinery Capacity Changes
Global Refinery Capacity Changes Expectations until 2024: • 73% of net capacity additions will come from Asia & Middle East • Net capacity and demand in Europe will remain roughly unchanged 2019-2024 Net Capacity Additions Net Capacity Additions by Region Closures Expected Closures Openings Asia 41%
Slide 6: Middle Distillate Cracks
Middle Distillate Cracks $/bbl Diesel Jet Fuel 5yr range 5 yr ave 2020 2021 5 yr range 5 yr ave 2020 2021 20 20 15 15 10 10.4 12.5 6.6 11.2 7.9 5 5.8 4.1 10 9.7 9.5 3.0 2.7 2.3 2.5 10.1 1.8 1.9 0.9 3.1 2.2 6.4 6.8 0 5.7 5.4 0.5 5.0 4.7 4.8 -0.6 5 4.3 -1.7 -1.6 -2.3 4.9 4.8 5.0 4.8 5.1 -3.3 4.1 2.4 -
Slide 7: Gasoline and High Sulphur Fuel Oil Cracks
Gasoline and High Sulphur Fuel Oil Cracks $/bbl Gasoline High Sulphur Fuel Oil 5yr range 2021 2020 5 yr ave 5 yr range 2021 2020 5 yr ave 20 -3.8 -4.4 -4.8 -5.5 -5 -6.4 15.7 -8.4 -7.8 -8.1 -7.1 -7.5 -7.4 15.1 15 -9.7 -10.4 13.7 -11.0 -11.7 -10.7 10.8 -12.9 -15 -13.9 9.8 11.5 -15.8 -14.5 10 10.4 10.6
Slide 8: Heavy Crude Price Differentials to Brent ($/bbl)
Heavy Crude Price Differentials to Brent ($/bbl) 2 00 -2 -4 -6 Arab Heavy -8 Basrah Heavy Kirkuk -10 Ural Iran OPEC+ Cut OPEC+ OPEC+ Cut Average* Sanctions Decision disagreement Decision -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 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 2
Slide 9: Turkish Market
Turkish Market Hizmete Özel / Confidential
Slide 10: Turkish Market, 7M 2021
Turkish Market, 7M 2021 July Q2 Q1 Diesel Jet1 1.7 14.4 13.5 -3.3% +131.1% 0.4 2.5 1.3 2.6 0.2 +18.4% 0.2 +258.5% 5.3 6.3 0.7 +0.6% 0.9 -36.2% 5.6 5.6 0.6 2020 2021 2020 2021 LPG Gasoline 2.2 2.2 +7.6% 0.4 0.4 1.5 +28.7% 1.3 +9.6% 0.4 0.8 0.9 0.3 +40.4% 0.5 0.6 -7.9% -5.0% 0.9 0.8 0.5 0.5 2020 2021
Slide 11: Turkey’s Net Import / Export Balance
Turkey’s Net Import / Export Balance Million Import Export Tüpraş’ Market Share Tons 0.4 0.3 2020 12M Jet -0.4 0.3 0.1 Diesel 41% -5.9 Jet 87% -8.8 Diesel -13.6 -13.2 Gasoline 97% -12.3 1.9 3.0 Gasoline 2.4 Fuel Choice of Passenger Cars 3.2 2.8 -2.9 -3.0 Diesel; LPG -3.2 LPG; -3.1 40% 40% -3.4 -16 -
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 77% 20% 3% Energy Investments Inc. (SPV) 51% Ditaş 79.98% Foreign Ownership¹ 48% Opet 40% Free Float 49% Körfez Ulaştırma 100% Domestic Ownership 52% Tüpraş Trading Ltd 100% ¹As of
Slide 14: Tüpraş’ Refining Assets & Distribution Network
Tüpraş’ Refining Assets & Distribution Network İzmit İzmir Kırıkkale Batman Total Capacity (mn tons) 11.3 11.9 5.4 1.4 30 Turkey’s petroleum Nelson Complexity 14.5 7.66 6.32 1.83 9.5 product needs Storage Capacity (mn m3) 3.0 2.5 1.3 0.3 7.0 Baku Others; Tüpraş; OPET Marmara Terminal İstanbul 45% 55
Slide 15: Nelson Complexity of Refining Companies
Nelson Complexity of Refining Companies Oct-21 Hizmete Özel / Confidential Investor Presentation Company Overview www.tupras.com.tr 15
Slide 16: Tüpraş Subsidiaries
Tüpraş Subsidiaries OPET, Distribution, Tüpraş Share: 40% DİTAŞ, Marine Transport, Tüpraş Share: 79.98% • 1,789 stations as of 31 August 2021 • 3 Crude Oil Tanker: 479,765 DWT • As of July 2021 Market share: 17.4% in white products; 10.2% in black • 1 Crude Oil - Product Tanker: 51,532 DWT products
Slide 17: Operations
Operations Hizmete Özel / Confidential
Slide 18: Crude Suppliers of Tüpraş
Crude Suppliers of Tüpraş In 2020, Tüpraş purchased 18 different types of crude from 11 countries with gravities ranging between 20-47 API. Main Crude Suppliers in 2020 Crude Oil Imports by Region (%) Middle East CIS Europe Africa America 3 3 1 2 3 2 2 10 12 12 10 10 10 14 3 14 7 13 14 21 34 11 79 8
Slide 19: Annual Product Yields
Annual Product Yields 2019 2020 LPG Other LPG BitumenOther 4% 2% Bitumen 1% 3% 8% 12% Coke Gasoline Gasoline Coke 3% Other 20% Other 21% 3% Fuel Oil white White Light Fuel Oil Light 9% Black Prod. 2% 2% Black Prod. 1% Distil. Distil. 20% 17% 25% 25% Naphtha Naphtha 1% 1% Mid. Distil. Mid. Distil. Je
Slide 20: H1 Product Yields
H1 Product Yields H1 2020 H1 2021 LPG Other LPG Other 3% Bitumen 5% 3% Bitumen 4% 7% 10% Gasoline Kok Gasoline Kok Other 19% 4% Other 20% 4% white Fuel Oil white Fuel Oil Light Light Black Prod. 2% 1% Black Prod.2% Distil. 3% 14% Distil. 13% 25% Naphtha 25% 1% Naphtha 2% Mid. Distil. Jet Mid. Distil
Slide 21: Capacity Utilization and Quarterly Production Volume
Capacity Utilization and Quarterly Production Volume Quarterly Production (Mn tons) Capacity Utilization1 (%) 8 2017 2018 2019 2020 2021 Crude Oil Semi Product Feedstock Total 108 7 7 96 98 89 91 6.5 6.4 9 7 84 82 6 6.1 9 6 6.0 6 69 6 65 5 9 101 91 87 86 80 78 75 5 64 57 4.9 4.6 4 Q1 Q2 Q3 Q4 2017 2
Slide 22: Sales
Sales • Tüpraş generated 24.5 million tons of total sales in 2020. Total Sales Customer Groups 2020 mn tons 31.5 30.3 29.8 29.2 Other 12% Export 5.5 5.8 4.2 24.5 18% 6.8 4.7 Jet Bitumen 8% Exports Total Sales, 10% 24.8 25.7 25.6 Domestic Sales 22.4 19.8 2020 24.5 mn tons 2016 2017 2018 2019 2020 Dis
Slide 23: Product Sales in Q2 (Million Tons)
Product Sales in Q2 (Million Tons) Tüpraş generated 6.9 million tons of sales in Q2 2021. Mid-distillate sales were strong by resilient domestic demand. Total product sales increased 30% y-o-y, almost reached to pre-pandemic 2019 levels. Total Product Sales Domestic Sales of Selected Products Domest
Slide 24: Financials: Key Financials
Financials Key Financials Hizmete Özel / Confidential
Slide 25: Tüpraş and Med Refining Margins
Tüpraş and Med Refining Margins Average Margins Average Margins Tüpraş Net Margin Med Margin Tüpraş Net Margin Med Margin 9.3 8.1 6.0 5.3 4.6 4.6 3.6 3.7 1.7 1.3 2.1 0.9 0.7 0.3 -0.2 -0.6 -1.9 -0.1 2016 2017 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q2 2021 Clean Clean Premium to the benchmark Mediterr
Slide 26: Income Statement (Million TL)
Income Statement (Million TL) EBITDA realized as 2,512 mn TL in Q2 2021. Q2 Q2 H1 H1 Million TL % % 2021 2020 2021 2020 Net Sales 33,688 9,280 263% 53,509 26,219 104% COGS -30,724 -8,390 266% -49,018 -26,239 87% Gross Profit 2,964 890 233% 4,491 -20 - Operating Expenses -691 -520 33% -1,248 -977 28%
Slide 27: Financial Highlights
Financial Highlights EBITDA (mn TL) Q4 Net Income¹ (mn TL) Q4 3,242 Q3 3,812 Q3 3,713 Q2 493 Q2 1,887 Q1 992 1,766 Q1 939 3,116 1,457 542 526 1,237 3,778 1,027 186 2,345 -2,494 1,700 3,681 1,528 869 870 738 378 376 -375 956 -155 -760 1,542 545 2,512 2,210 1,495 383 -2,265 1,575 977 1,033 851 1,170 4
Slide 28: Balance Sheet Analysis
Balance Sheet Analysis Net Debt Redemption Schedule (Billion TL) bn TL bn $ In Billion TL In Billion $ TL Hard Currency 20 17.8 6 12.3 5 15 9.8 12.0 12.2 12.5 11.0 11.3 4 9.4 6.5 10 8.4 3 6.2 2 5 2.3 2.3 1.7 1.7 1.9 1 1.4 1.6 1.5 0.1 0.3 1.3 1.3 0 0 Dec-17 Dec-18 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 M
Slide 29: Annual Profit Before Tax Bridge (2019-2020)
Annual Profit Before Tax Bridge (2019-2020) 2020 PBT was adversely affected from historically low crack margins, lower production and inventory losses due to Covid19 Oct-21 Hizmete Özel / Confidential Investor Presentation Financials www.tupras.com.tr 29
Slide 30: Q2 Profit Before Tax Bridge (2021-2020)
Q2 Profit Before Tax Bridge (2021-2020) Despite much narrower differentials and elevated FX, Q2 2021 PBT performed strongly with inventory gains, increase in total sales volume, better crack margins and lower interest expenses. Million TL Oct-21 Hizmete Özel / Confidential Investor Presentation Fina
Slide 31: 2021 Expectations
2021 Expectations Med Complex Refining Margin 0.0 - 0.5 $/bbl Tüpraş Net Refining Margin 2.5 - 3.5 $/bbl 25-26 mt production, 26-27 mt sales and 85 - 90% capacity utilization Consolidated Capex ~200 million $ • ~40% of capex for sustainability focused energy efficiency and environmental projects Oct
Slide 32: H1 2021 Results
H1 2021 Results Capacity Utilization (%) Refining Margins ($/bbl) H1 2021 77.8 78% total capacity utilization in H1 2021 Med Margin Tüpraş Net Margin 0 10 20 30 40 50 60 70 80 90 100 Med FY Tüpraş FY Exp Target Operationals 0.0 H1 2021 FY Target 6.9 mn tons of sales and H1 2021 26 27 6.5 mn tons of
Slide 33: Investments (Million $)
Investments (Million $) • c6.9 bn USD investments since privatization • Reached 9.5 Nelson Complexity • Capability to process heavier and more sour crude Ongoing Projects Avg. 980 Mn$ • Revamp of FCC 1,246 • Periodic Maintenance of Vacuum & Lube Complex in 1,061 979 Izmir is postponed to 2022 • Peri
Slide 34: Financial Policy
Financial Policy Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counterparty risk, commodity, interest rate and currency exposure. Proactive in liquidity risk management & targets/limits for financial ratios: Leverage & • Net financial debt/EBITDA • Cur
Slide 35: FX Exposure Management (30 June 2021)
FX Exposure Management (30 June 2021) Tüpraş continues to employ strict FX policies to mitigate Consolidated Hard Consolidated Hard currency risks stemming from volatility. Currency Assets Million $ Currency Liabilities Payables & Other • A significant portion of the Group's crude oil and refined Ca
Slide 36: Appendix
Appendix Hizmete Özel / Confidential
Slide 37: Tüpraş Balance Sheet (Million TL)
Tüpraş Balance Sheet (Million TL) 30.06.2021 31.12.2020 Diff. Diff. (%) Current Assets 43,653 30,663 12,990 42 Cash & C. Equivalents 19,365 19,825 -460 -2 Trade Receivables 6,005 1,736 4,269 246 Derivatives 420 380 40 10 Inventories 15,065 7,701 7,364 96 Pre-paid expenses 313 234 80 34 Other Current
Slide 38: 2021 Refinery Maintenance Schedule
2021 Refinery Maintenance Schedule Refinery Unit Starting Quarter Duration (weeks) Purpose Status Batman Crude Oil & Vacuum Q1 7* Seasonal Done Crude Unit Q1 9 Done CCR Q1 10 Done Revamp / Opportunity FCC Q1 9 Done Maintenance İzmir Isomerization Q1 10 Done Desulphurizer Q1 11 Done Vacuum Q4 6 Perio
Slide 39: Tüpraş - Ratings
Tüpraş - Ratings Tüpraş BIST Corporate Governance Rating Score Credit Rating Scores Overall 95.8 Foreign Currency Long Term Tüpraş B+ (Negative) B2 (Negative) Shareholders 95.5 Turkey BB- (Negative) B2 (Negative) B+ (Stable) Koç Holding B2 (Negative) BB- (Stable) Transparency 97.2 Analyst Recommenda
Slide 40: Turkish Consumption 2016-2020
Turkish Consumption 2016-2020 Million Tons Diesel Jet Fuel* 28 +8.3% 24.2 -2.4% -4.4% 8 22.3 23.6 22.5 +0.5% 22.7 +2.6% +10.5% +6.5% 5.0 5.3 4.5 -54.4% 4.4 14 4 2.4 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Gasoline LPG +0.8% -7.4% 4 5 -0.6% +1.6% 4.1 4.1 4.1 4.2 3.9 +3.0% -2.5% 4 +3.1%
Slide 41: Competition - STAR Refinery
Competition - STAR Refinery Timeline Turkish Market Structure (mn tons) Turkish Turkey Tüpraş STAR Total Market Balance Demand Demand* LPG 1.1 0.3 1.4 4.2 -2.8 Petchem F. 0.2 2.6 2.8 Gasoline 6.1 6.1 2.4 3.7 • Feasibility studies began in 2010 and Jet Fuel 5.2 1.6 6.8 5.3 1.5 construction kicked off
Slide 42: Competition - Regional Competition
Competition - Regional Competition • 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 Mediterranean Black Sea 54 Refineries ~7.8mbd 17 Refineries ~1.8mbd Oct-21
Slide 43: Dividend (TL)
Dividend (TL) 120% 19 EPS DPS Dividend Payout 101% 102% 14 89% 87% 77% 79% 80% 9 66% 15.2 14.8 15.2 64% 13.6 10.2 4 7.2 6.2 5.8 5.8 6.5 5.0 3.9 4.8 3.2 2.5 2.9 3.0 3.9 1.6 2.1 0.0 0.0 -1 40% 33% -10.0 -6 0% 0% 0% -11 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Oct-21 Hizmete Özel
Slide 44: 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, VACUUM DIST. 8 42,75
Slide 45: 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. • First periodic maintenance was completed in Q2 2019. Total Processing ~4.50 mn tons Total Output ~4.25mn tons Oct-21 Hizmete Özel / Confidential Investor Presentation App
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) Refinery Price Dist. Margin Tax Refinery Price Dist. Margin Tax 12 12 10 10 8 8 6.15 6.64 6.60 6.21 6.14 5.86 4.49 5.55 5.75 6 4.55 5.69 4.78 6 3.85 4.37 3.45 2.58
Slide 47: Tüpraş’s Sustainability Efforts Over a Decade of Dedication
Tüpraş’s Sustainability Efforts Over a Decade of Dedication ~500 11.5% energy efficiency increase in solid 45.5% projects leading to waste recovery decrease in fresh Tüpraş kicked off its sustainability ~35,000 TJ saving water usage and 20.7 points program back in 2008 and achieved many milestones i
Slide 48: 2020 Achievements
2020 Achievements Environmental Responsibility Social Support Governance Excellence • In the Industrial Energy Efficiency • In the first days of the pandemic, we • 9.58 Corporate Governance Rating (SENVER) Project Competition, Kırıkkale quickly coordinated with 60 • 18% Female Representation at the
Slide 49: LPG and Naphtha Cracks
LPG and Naphtha Cracks $/bbl LPG Naphtha 5yr range 2021 2020 5 yr ave 5yr range 2021 2020 5 yr ave 10 5 1.6 0.8 0 0.3 0.2 -0.3 -5.4 0 -1.0 -7.5 -8.1 -2.1 -2.0 -10 -11.4 -11.2 -11.4 -3.2 -3.6 -1.8 -13.7 -13.7 -4.1 -4.2 -2.4 -15.2 -3.6 -3.5 -2.8 -15.9 -15.7 -5 -6.4 -6.4 -19.6 -20 -17.2 -21.4 -7.6 -17.
Slide 50: 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 5001. 6.4% 6.7% 19.4% Koç Group’s Combined Total Exports / Pioneer in its Sectors Revenues / Turkey’s Market Cap/ Borsa Istanbul GDP Ex
Slide 51: Latest / Contact us
Investor Presentation Latest Webcast Sustainability Report contact us: tuprasir@tupras.com.tr Hizmete Özel / Confidential