Slide 1: Q1 2015 Investor Presentation
Q1 2015 INVESTOR PRESENTATION
Slide 2: Agenda
01 Refining Industry 02 Company Overview 03 Investments 04 Key Financials
Slide 3: Refining Industry
Refining Industry
Slide 4: Brent Crude Oil Prices
Brent Crude Oil Prices $/Barrel 115 108,0 115,3 110 106,1 Reasons 105 101,2 • Falling Demand Growth 100 • Chinese slowdown 94,6 • Japanese Recession 95 • US weakness 90 84,3 • Lower Risk Perception 85 • ISIS 80 • Ukraine 71,7 • Iran 75 • No Problems 70 Materialised 65 65,7 62,0 61,2 • Excess Supply
Slide 5: Net Refinery Capacity Change
Net Refinery Capacity Change 3.000 270 2.000 520 530 300 Thousand Barrels/Day 526 510 160 368 1.000 334 250 400 150 0 60 390 181 810 120 0 84 302 640 340 135 195 180 305 0 160 40 52 63 45 -255 -103 -195 -100 -576 -120 -5 -140 -775 -280 -1.000 -161 -463 -546 -352 -2.000 -54 2009 2010 2011 2012 2013 2
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
Slide 7: Diesel & Gasoline ratios are still high
Product Ratios (Barrel/Barrel) Gasoline Diesel 1,35 1,40 2010 - 2014 Min Max 2012 1,35 2013 2014 2015 1,25 1,30 1,25 1,15 1,20 1,15 1,05 2010 - 2014 Min Max 2012 1,10 2013 2014 1,05 2015 1,00 0,95 Sep Oct Jan Jan Feb Sep Nov Nov Jul Apr May Dec Mar Mar Jun Jun Aug Jan Jan Oct Feb Sep Sep Dec Jul Apr
Slide 8: Crude Differentials $/Barrel
Crude Differentials $/Barrel 1,5 Ural Crude Differentials $/Barrel 2,0 1,0 0,5 1,0 0,0 -0,5 0,0 -1,0 -1,0 -1,5 -2,0 -2,0 -2,5 -3,0 2009-2012 Min/Max 2012 -3,0 -3,5 2014 2011 -4,0 2013 -4,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Differentials Trends 2,0 0,0 -2,0 -4,0 -6,0 -8,0 -10,0 Ural Ira
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
Slide 10: Turkish Sector Outlook
Turkish Sector Outlook Air Passengers - Million Primary driver of demand is 180 166,0 growing vehicle parc 160 149,5 130,0 Auto sales continue to massively 140 117,6 120 102,8 80,4 outstrip removals 85,5 73,4 100 79,4 65,4 Very high gasoline tax has led to LPG 80 59,4 52,2 & Diesel substitutio
Slide 11: Turkish Consumption (Million ton)
Turkish Consumption (Million ton) Diesel Gasoline 18,0 1,94 4,2% 17,4 1,92 17,5 1,92 17,0 16,7 1,90 16,5 7,0% 1,88 3,2% 0,5% 1,86 16,0 15,6 1,86 1,85 15,5 1,84 15,0 1,82 14,5 1,80 2012 2013 2014 2012 2013 2014 Jet Fuel Fuel Oil 5,0 0,80 0,69 -23,0% 11,2% 4,1 3,7 -1,1% 4,0 3,5 5,5% 0,60 0,53 0,53 3,0
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
Slide 13: Company Overview
Company Overview
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): 7.25 İzmit İzmir Kırıkkale Batman 11.0 MT Capacity 11.0 MT Capacity 5.0 MT Capacity
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 & Singapore 430 Sunpet Marka Black Sea & Mediteranean Jet Fuel Sales Lubricants A Sector Leader •Turkish Airlines JV •Fuchs JV •2nd Biggest Player •#
Slide 16: DİTAŞ – Deniz Taşımacılığı
DİTAŞ – Deniz Taşımacılığı – Tüpraş Hisse Payı %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
Slide 17: Crude Suppliers of TÜPRAŞ
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,
Slide 18: Med & Tüpraş Net Margins, $/bbl
Med & Tüpraş Net Margins, $/bbl 4th Quarter 1st Quarter 8,0 8,0 5,98 5,82 4,56 5,46 4,69 6,0 6,0 4,42 3,87 3,70 3,50 3,84 3,44 3,45 2,97 2,83 3,05 4,0 2,92 2,41 2,76 4,0 1,96 1,72 1,57 2,03 1,37 1,72 0,90 1,41 1,34 2,0 0,44 0,42 2,0 0,30 0,0 0,0 2008 2009 2010 2011 2012 2013 2014 2015 2008 2009 2010
Slide 19: Capacity Utilisation
Capacity Utilisation,% 100 +17,9% 90 85,9 93,2 91,1 90,7 79,9 81,6 87,2 79,1 5,2 86,1 80 77,1 2,9 2,4 74,9 80,7 5,5 78,7 76,8 69,2 7,5 3,6 68,0 74,4 70 71,3 2,9 69,6 8,7 65,1 60 60,4 50 40 30 20 Crude Oil Other 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 / 1q 2015 / 1q 19
Slide 20: Quarterly Production Volumes
Quarterly Production Volumes (Million Tons) 7 6,47 6,25 6,07 5,71 6 5,51 5,51 5,41 5 4,55 4,63 4 4,32 4,19 4,06 3 3,31 2 Min / Max 2007/2014 2014 2015 1 0 1Q 2Q 3Q 4Q 20
Slide 21: 1st Quarter Product Yields
1st Quarter Product Yields 2014 2015 Asphalt Asphalt 9,3% 7,3% Gasoline Gasoline 20,6% 21,5% Light Fuel Oil Light Black Black Distil. 19,2% Distil. Prod. Naphtha Prod. Fuel Oil 21,7% 22,4% 28,2% 1,2% 26,5% Naphtha 18,9% 0,8% LPG Other LPG Other 6,1% Mid. Jet 3,2% 6,7% Mid. Jet 3,6% Distil. 16,7% Oth
Slide 22: Domestic Sales, million tons
Domestic Sales, million tons Gasoline Jet Fuel 2,0 1,81 1,78 1,82 1,83 5,0 3,83 4,0 3,29 3,55 1,5 2,76 3,0 1,0 2,0 0,39 0,43 0,86 0,5 0,76 1,0 0,0 0,0 2011 2012 2013 2014 1st Q 1st Q 2011 2012 2013 2014 1st Q 1st Q 2014 2015 2014 2015 Diesel Bitumen 10,0 8,57 3,5 2,95 7,87 8,11 2,81 2,93 3,0 8,0 6,7
Slide 23: 1Q Trading Activities
1Q Trading Activities Finished Products Intermediates High Sulfur Diesel imports were Additional HVGO imported to stable but buy more ULSD increase Capacity Utilisation in High / Low sulphur diesel conversion units differentials were too low for desulphurisation arbitrage profits. Product Impo
Slide 24: 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 Jet Fuel 1% LPG Dist. 4% 4% Total: 24.1 million ton Distributors : 10,3 million ton 24
Slide 25: Corporate Governance
Corporate Governance Corporate Governance Rating One of the top rated companies in Turkey OVERALL 93,10 Committed to continuous improvement in this area Member of the Corporate Governance Association SHAREHOLDERS 95,51 TRANSPARENCY 93,96 STAKEHOLDERS 86,82 BOARD 93,46 25
Slide 26: 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
Slide 27: 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
Slide 28: Investments
Investments
Slide 29: Investments (Million USD)
Investments (Million USD) 1400 1201 1200 974 959 1000 800 628 600 395 400 188 177 200 0 2008 2009 2010 2011 2012 2013 2014 28
Slide 30: Investing in Efficiency
Investing in Efficiency 200 188 Operational Excellence 180 Programme 42 Hydrocarbon Margin 160 143 Integrity and Reliability 140 Health, Safety and Environment 120 111 106 Miyon USD 62 105 100 32 80 Energy Efficiency Projects 146 Boiler and Furnace Modernization at 60 the İzmit Refinery
Slide 31: RUP Flow Chart
RUP Flow Chart To Gas Treatment Atmospheric Dip Gas 7500 m3/g LVGO New Vacuum Distillation To Unit HVGO Gas Treatment Gas LPG LPG Vacuum Dip Delayed Treating 8200 m3 /g Naphtha Coker 1200 m3/ g Unit LCGO To Gas Vacumm Dip HCGO Treatment From Existing Refineries LPG 4000 m3/ g New Hydro- Light Naphth
Slide 32: Resid Upgrading Project Production
Resid Upgrading Project Production – (Thousand Tons) Raw Materials Products (kton) (kton) Natural Gas 246 Vacuum Resid 1,214 Atm. Dip 3,036 Total Feed 4,496 Total Production 4,250 32
Slide 33: Residuum Upgrade Financing
Residuum Upgrade Financing Structure / Conditions Bank Consortium CESCE Spanish ECA Banco Bilbao Vizcaya Argentaria, S.A. • $1.08 Billion The Bank Of Tokyo-Mitsubishi Ufj, Ltd. • Tenor 4+8; LIBOR+%3.05 BNP Paribas SACE Italian ECA Crédit Agricole Corporate And Investment Bank • $597 Million • Tenor
Slide 34: Financial Summary
Financial Summary Assumptions Returns 1,5 85 $/varil Crude Oil Milyar $ NPV 2.70 Equity &Project Milyar $ Investment % 29.7 % 17,9 IRR ~Libor 550 + Interest Rates Million $ EBITDA 3% 34
Slide 35: RUP - Mile Stones
RUP- Mile Stones Tüpraş Technical Snam Progetti Coker Chosen Department Feasibility Investment • Dec 2007 Report Alternatives Evaluation • May 2006 • May 2007 Tecnicas Reunidas Support from Spanish Turn Key Agreement Contract Signed & Italian ECAs • Aug 2011 • Dec 2009 • Aug 2011 Finance Agreement F
Slide 36: RUP Opening Ceremony – 15th December 2014
RUP Opening Ceremony – 15th December 2014 36
Slide 37: Key Financials
Key Financials
Slide 38: Tax Incentive
Tax Incentive • Previously – Large Scale – Valued at 30% of project cost – Realised after completion – Tax rate of 10% on project earnings until total incentive is reached • Currently – Strategic – Valued at 50% of project cost – Partly realised during construction – Tax rate of 2% on project earnin
Slide 39: Profitability Indicators
Profitability Indicators , 12 M 2013-2014 & 1Q-2014-15 2014 1Q 2015 1Q (%) 2013 2014 (%) 108,22 53,97 -50 Dtd.Brent Price, ($/bbl) 108,7 98,99 -8,9 32,54 33,14 1,8 Processed Crude API 32,54 32,29 -0,8 71,27 72,84 1,6 White Product Yield, (%) 72,4 72,2 -0,2 0,44 5,98 1259 Med. Complex Margin,($/bbl)
Slide 40: Income Statement
Income Statement 1Q 1Q 12 M % Diff. Million USD 12 M 2014 % Diff. 2014 2015 2013 21.594, 4.186,2 2.829,3 -32,4 Net Sales 18.164,9 -16 7 184,5 203,1 10,1 Gross Profit 774,5 577,5 -25 -71,3 -70,0 -1,8 Operating Expenses -367,8 -334,6 -9 - 9,6 -90,8 Income/Loss from other operations -385,0 -43,6 -89 1.
Slide 41: Tüpraş Balance Sheet-Assets
Tüpraş Balance Sheet-Assets % Million USD 31.03.2015 31.12.2014 Difference Difference Current Assets 2.778 3.015 -237 -8 Cash & C. Equivalents 1.206 1.681 -475 -28 Receivables 201 87 115 132 Derivatives 105 28 77 277 Inventories 1.081 1.022 59 6 Pre-paid expenses 44 53 -9 -18 Other Current Assets 14
Slide 42: Tüpraş Balance Sheet-Liabilities
Tüpraş Balance Sheet-Liabilities % Million USD 31.03.2015 31.12.2014 Difference Difference Short Term Liabilities 3.044 3.692 -648 -18 Financial Loans 377 335 42 13 Payables 1.740 2.464 -724 -29 Derivatives 3,22 0,03 3,19 10.873 Deferred Incomes 20 7 Provisions 33 47 -14 -29 Other ST Liabilities 871
Slide 43: Financial Highlights (mn $)
Financial Highlights (mn $) EBITDA Net Income 1.329,4 1.400 1200 1.200 272 1000 1.000 830 753,5 715 800 800 468 169 115 106 560 271 600 174 91 1.099 271 89 600 47 373 338 400 779 328 361 47 206 175 256 315 226 400 309 200 153 153 230 435 171 262 78 150 150 522 165 134 113 95 79 200 0 -27 -11 331 75
Slide 44: Balance Sheet Analysis
Balance Sheet Analysis Cash & Equivalents (Billion $) Receivables (Billion $) 2,5 2,16 2,0 2,0 1,83 1,81 1,72 1,69 1,5 1,34 1,45 1,33 1,64 1,68 1,19 1,41 0,93 1,5 1,30 1,21 1,0 0,71 0,52 0,51 1,0 0,5 0,20 0,09 0,5 0,0 0,0 Dec.12 Mar.13 Jun 13 Sep13 Dec 13 Mar.14 Jun.14 Sep.14 Dec.14 Mar.15 Financial
Slide 45: FX Risk Exposure (31 March 2015)
FX Risk Exposure (31 March 2015 ) Consolidated Consolidated Assets Liabilities Million $ Cash Payables 82 1,157 Receivables* ST Financials 235 21 RUP 141 Stock LT Financials: 2,655 1,076 RUP Loans: 1,839 Eurobond: 700 Forward Other credits: 116 1,010 +127 million $ FX Risk with RUP : -1,858 million
Slide 46: 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
Slide 47: Future Expectations
Future Expectations Med Complex Margin • We expect Med Complex margins to be 3.0-3.2 dollar per barrel band in 2015. Tupras Net Margin • For Tupras net refinery margins, we expect this to be in the region of 3.7-4.5 dollars per barrel Capacity Utilisation • Following the RUP fully commissioned in Ma
Slide 48: Competition Board Evaluation
Competition Board Evaluation The Period 11th October 2008 – 1st January 2009 (2 months 20 Days) 850 Million TL loss in the October-December period Prices reduced more rapidly than Europe • Gasoline 10 times • Diesel 9 times 30% Currency Depreciation • 26 Sept – 1.2316 TL/$, 20th Nov – 1.7038 TL/$ •
Slide 49: Total Payout (Million TL)
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 0 2008 2009 2010 2011 2012 2013 2014 Earnings per Share Gross Dividend Total Payout 2012/2013 EPS includes the tax incentive 49
Slide 50: 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
Slide 51: Investor Relations Contacts
Turgut Tuncay Önbilgin Jonathan Lamb Investor Relations and Reporting Investor Relations Manager 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. :