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Investor Presentation

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Hizmete Özel / ConfidentialHizmete Özel / Confidential

Investor Presentation September 2019


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Hizmete Özel / ConfidentialHizmete Özel / Confidential

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

changes in underlying assumptions that could cause actual results to differ materially.

Neither Tüpraş nor any of its directors, managers or employees nor any other person shall have

any liability whatsoever for any loss arising from use of this presentation.

2


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Content

3CONTENT

• Refining Market Slides

• Turkish Market Slides

• Company Overview Slides

• Operations Slides

• Key Financials Slides

• Outlook Slides

• Appendix Slides

4-10

11-14

15-19

20-24

25-39

40-45

46-51

REFINING

MARKET


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64.0

0

10

20

30

40

50

60

70

80

90

100Brent

Brent Crude Oil Prices ($/bbl)

CONS

• Increase in shale production in US

• Inventory Levels

• Impact of trade disputes

• Weak PMI in Europe and China

PROS

• OPEC+ supply cut

• Political instabilities in Middle East, Africa

and Latin America

• Impact of sanctions

REFINING INDUSTRY

Source : Platts

As of September 24th

5


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Refinery Capacity Change (mb/d)

6

2.7

0.5

1.9 2.0

1.5

0.5

2019 2020 2021 2022 2023 2024

Asia & Middle East Other

Source:, Reuters, International Energy Agency, Tüpraş, sector reports and news.

2019-2024 Net Capacity Additions

REFINING INDUSTRY

2.1

1.0

1.7

0.5

1.3

-1.0

0.2

-1.4

China

India

Middle East

Other Asia

Other

Japan

N. America

Europe

2012-2018 Net Capacity Additions by Region

1.2

1.1

0.6

1.1

0.8

-0.1

0.9 0.91.0

0.9

0.6

0.4

2019 2020 2021 2022 2023 2024

RefineryThroughput

Refinery Products Demand

2019-2024 Additional Refinery Throughput vs. Demand

Expectations until 2024:

• ~78% of net capacity additions to come from Asia & Middle East

• Global utilization rate to decline from 82% (2018) to 79% (2024)

• Net capacity and demand in Europe to remain roughly unchanged


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Middle Distillate Cracks ($/bbl)

7

7.2

10.0

10.4

11.5

12.1 12.212.6

13.6

14.3

13.7

13.6

15.9 14.1

15.5

19.5

15.014.9

16.2

15.0

12.2

12.911.4

14.1

16.2 16.5*

0

5

10

15

20

Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

2016 2017 2018 2019

6.6

9.19.5

11.411.9

14.413.7

14.413.9

13.2

13.3

14.4

12.5

14.3

18.1

15.214.4

13.813.2

10.310.9

11.2

14.8

16.4 16.7*

0

5

10

15

20


Diesel Jet Fuel

REFINING INDUSTRY

Source : Platts

*As of September 24th


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18.6

11.913.5

9.7

10.210.6

12.012.1

13.0 13.1

13.4

14.4

9.6

5.55.0

3.5

1.7

2.9

9.0

12.1

10.0

9.4

14.7

12.0 10.4*

0

5

10

15

20


2016 2017 2018 2019

Gasoline and High Sulphur Fuel Oil Cracks ($/bbl)

8

-12.5

-10.2

-8.7

-12.2

-13.2

-11.9

-12.7

-15.2

-13.0

-9.1

-8.3

-8.5

-13.2

-10.9

-3.7

-6.8

-7.0

-5.0-5.5

-8.6

-11.3

-9.8

-6.9

-13.4

-17.4*

-20

-15

-10

-5

0


Gasoline High Sulphur Fuel Oil

REFINING INDUSTRY

Source : Platts

*As of September 24th


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Quarterly Crack Margin Comparison in 2015 – 2019 ($/bbl)

9

Compared to Q2 2018, Mid-distillate (Diesel: -12%, Jet -22%) and Gasoline (-17%) performed weaker in Q2 while HSFO

(+20%) cracks were stronger.

12.3

13.914.6

16.815.4

12.2

Q1 Q2 Q3 Q4

Diesel

2019 2019-2015 Min - Max2019

Slow down in economic activities

High product flows from Asia & US to Europe

10.9

12.7 12.6

4.74.5

10.5

Q1 Q2 Q3 Q4

GasolineLighter shale gas processing leading to increase in gasoline yields globally

Lower naphtha demand due to decreased petrochemical driven consumption

13.3

13.8 13.4

15.9

13.8

10.8

Q1 Q2 Q3 Q4

Jet

Lower Asian air traffic

Imports from Asia to Europe kept markets well supplied

Lower supply due to decreased heavy crude availability

Higher HSFO demand in power generation replacing crude oil

-12.6 -12.4

-10.0

-7.2

-5.8

-9.9

Q1 Q2 Q3 Q4

High Sulphur Fuel Oil


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Crude Price Differentials to Brent ($/bbl)

10

Heavy crude differentials continued narrowing in Q2 with lower availability mainly due to OPEC+ cuts, Iran sanctions and limitations

on Venezuelan supply. Ural and CPC differentials both widened in June due to ample oil supplies in the European Market.

*Simple average of listed differentials

-12

-10

-8

-6

-4

-2

0

2

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

15

Q1

20

16

Q2

20

16

Q3

20

16

Q4

20

16

Q1

20

17

Q2

20

17

Q3

20

17

Q4

20

17

Q1

20

18

Q2

20

18

Q3

20

18

Q4

20

18

Q1

20

19

Q2

20

19

Arab Heavy Basrah Heavy CPC Kirkuk Kuwait Libya Ural Average*

OPEC Cut Decision

OPEC Cut Decision

Iran Sanctions

TURKISH

MARKET


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4.99

4.52

4.40

4.58

2018

2017

2016

2015

Turkish Consumption 2015-2018 (Million tons)

12

Diesel

-3.9%

Jet Fuel

0.39

0.49

0.58

0.60

0 0 0 0 1 1

2018

2017

2016

2015

Fuel Oil*Gasoline

+6.5% -3.5%

23.58

24.17

22.31

20.56

0 4 7 11 14 18 21 25

2018

2017

2016

2015+8.5%

+8.3% +2.7%

+3.1%

-20.1%

REFINING INDUSTRY

2.34

2.30

2.23

2.10

2018

2017

2016

2015

*Bunker excluded.

-2.4% +10.4%

+1.8%

-15.7%


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1.13

1.12

0 1 1 2

2019 6M

2018 6M

2.35

2.28

0 1 1 2 2 3 3

2019 6M

2018 6M

0.22

0.20

0 0 0 1 1 1

2019 6M

2018 6M

Turkish Market, 6M 2019 (Million tons)

13

Diesel contracted in the first 6M of 2019.

* Transit flight consumption included

** Bunker excluded

11.28

12.19

0 2 4 6 8 10 12 14

2019 6M

2018 6M

Diesel

+2.9%

Jet Fuel*

Fuel Oil**Gasoline

-7.5%

+1.1%+8.0%


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Turkey’s Import / Export Balance (Net) (Million Tons)

14

-3.1

2.4

-12.0

1.0

0.0

-3.2

2.4

-13.6

1.4

-0.4

-16

-12

-8

-4

0

4

LPG Gasoline Diesel Fuel Oil Jet

2013 2014 2015 2016 2017 2018

Import

Export

REFINING INDUSTRY

COMPANY

OVERVIEW


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16%

84%

Tüpraş Shareholder Structure

16

Energy Investments Inc. (SPV)

Free Float

*Distribution of Domestic/

Foreign Ownership of Tüpraş

Shares

*As of December 31st, 2018.

Foreign

Ownership

Domestic

Ownership

COMPANY OVERVIEW


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Tüpraş Refining Assets & Distribution Network

17

Turkey Storage

Capacity

Tüpraş : 50%

Opet : 7%

Other Companies : 43%

İzmit

• 11.3 MT Capacity

• NC: 14.5

• Storage Capacity: 2.99 mn m3

İzmir

• 11.9 MT Capacity

• NC: 7.66

• Storage Capacity:2.51 mn m3

• Base oil 400 k tons

Kırıkkale

• 5.4 MT Capacity

• NC: 6.32

• Storage Capacity: 1.27 mn m3

Batman

• 1.4 MT Capacity

• NC: 1.83

• Storage Capacity:0.27 mn m3

Total Capacity : 30.0 mn ton

Nelson Complexity : 9.5

Tüpraş Storage Cap. : 7.0 mn m3

OPET Storage Cap. : 1.0 mn m3

COMPANY OVERVIEW


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Nelson Complexity of Refining Companies


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Tüpraş Subsidiaries

3 Crude Oil Tanker: 480,859 DWT

1 Crude Oil - Product Tanker: 51,532 DWT

9 Product Tanker: 155,535 DWT“

1,635 stations as of 30 June 2019

As of May 2019 Market share: 18.6% in white products; 28.5% in black

products

OPET, Distribution, Tüpraş Share: 40%

Körfez Ulaştırma, Railway Transport, Tüpraş Share: 100%

~7% share in Turkish rail freight market

~780 kton of product and semi-product carried in H1 2019.

Operates with 491 cistern wagons and 9 diesel locomotives.

DİTAŞ, Marine Transport, Tüpraş Share: 79.98%

Tüpraş Trading UK, Trading, Tüpraş Share: 100%*

* Tüpraş Trading UK is a direct branch of Tüpraş.19

Trading Office in London will be an important step into wider integration with the

global energy landscape by allowing to:o Closely monitor international market opportunities

o Support import and export operations

o Create additional value from supply chain and sales activities


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Crude Suppliers of Tüpraş

21

6 610

2 2 33 3 1 0

12 13 1310 10 10

2

1715

1114 14

7

14

6567

63

71

7679

81

0

10

20

30

40

50

60

70

80

90

2012 2013 2014 2015 2016 2017 2018

Crude oil imports by region (%)

Africa America Europe CIS Middle East

In 2018, Tüpraş purchased 20 different types of crude oil from 12 countries, with gravities ranging between

19-47 API.

OPERATIONS

Main crude suppliers in 2018


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Q2 Product Yields

22

2018 2019

White Products 78.0%

Production 6.1 mn tons

API 30.98

White Products 77.4%

Production 6.9 mn tons

API 32.39

LPG4%

Gasoline20%

Naphtha1%

Jet20%

Gasoil32%

Other3%

Kok3%

Fuel Oil3%

Asphalt14%

Light Distil.23.7%

Mid. Distil

.52.2

%

Other 3.2%

Black Prod.

20.9%

LPG4%

Gasoline20%

Naphtha1%

Jet16%

Gasoil36%

Other1.6%

Kok2%

Fuel Oil10

Asphalt10%

Light Distil.25.1%

Mid. Distil

.51.5

%

Other 1.6%

Black Prod.

21.7%


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Capacity Utilization and Quarterly Production Volume

23

96.5% capacity utilization was achieved in Q2 2019 despite RUP maintenance.

*Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards.

Quarterly Production (Million Tons) Capacity Utilization* (%)

5.2

6.2

6.76.9

Q1 Q2 Q3 Q4

Quarterly Production (Million Tons)

2015 2016 2017 2018 2019

98 101

101

87

67

85

107

89 89 91

4 4 7

9

11

7

7

9 4 5

103 105 108

96

78

92

115

9994 97

2015 2016 2017 2018 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19

Capacity Utilization (%)

Crude Oil Semi Product Feedstock Total


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Sales (Million Tons)

24

Tüpraş generated 29.8 million tons of total sales 2018. Jet fuel and diesel sales increased by 7.4% and

5.3% compared to 2017, respectively.

16.9

22.224.8 25.7 25.6

5.3

6.55.5 5.8 4.2

22.2

28.730.3 31.5 29.8

-1

5.25

11.5

17.75

24

30.25

2014 2015 2016 2017 2018

Domestic Sales

Export

6.79.2 10.8 11.3 11.9

3.9

4.84.5 4.5 4.9

1.8

2.02.2 2.2 2.2

1.9

2.93.4 3.5 2.9

14.3

18.920.9 21.6 21.9

2014 2015 2016 2017 2018

Diesel

Jet Fuel

Gasoline

Bitumen

Total Sales

Domestic Sales of

Key Products

OPERATIONS

Dist.; 50%

THY Opet; 10%

Jet; 6%

LPG; 3%

Other; 6%

Export; 14%

Bitumen; 10% Military;

1%

POAŞ27%

OPET30%

SHELL17%

BP13%

TP1%

AKPET4%

OTHER8%

Customer

Groups

Sales to

Distributors

29.8 mn tonnes

14.8 mn tonnes


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5.5

2.02.9

1.2

4.2

1.7 2.0

4.84.0

5.44.6

2.7

-2

0

2

4

6

8

10

12

Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Month

Annual

Margin Environment ($/bbl)

26

Tüpraş’ 3.5 $/bbl Net Refining Margin in H1 2019 was higher than 2.7 $/bbl Med Complex margin.

Premium to the benchmark Mediterranean

peers’ refining margin due to:

• Refined products deficit characteristic to

the Turkish market

• Access to cheaper sources of crude oil

• Ability to use heavier and sour crudes

• Proximity to major suppliers

• Reduces transport costs

• Implemented cost reduction measures

• Energy efficiency programs

• Capacity to produce higher value added range

of refined products

• Direct pipeline connections with domestic clients

• High export capability

Med Complex

9.610.6

11.911.2

12.9

14.7

11.0

2.53.2

6.56.0

8.1

9.3

3.5

1.7 2.0

4.84.0

5.34.6

2.7

0

2

4

6

8

10

12

14

16

2013 2014 2015 2016 2017 2018 H1 2019

Tüpraş Gross Margin Tüpraş Net Margin Mediterranean

KEY FINANCIALS


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Income Statement (Million TL)

27

We generated 1.5 bn TL EBITDA and 870 mn TL net income in Q2 2019.

* On CMB reports, EBIT includes extra items such as FX impacts of trade receivables and payables. In our EBITDA calculation, FX related items are excluded from EBIT as customary in international practices.

KEY FINANCIALS

Q2 2019

Q2 2018

%6M

20196M

2018%

Net sales 23,953 20,081 19% 44,661 33,502 33%

COGS -22,282 -17,860 25% -41,998 -30,212 39%

Gross Profit 1,671 2,221 -25% 2,662 3,290 -19%

Operating Expenses -420 -277 52% -793 -545 46%

Income/Loss from other operations 82 -877 -309 -988

Operating Profit 1,333 1,066 25% 1,561 1,756 -11%

Income/Loss from equity investment 47 86 -45% 110 138 -20%

Operating Profit before financial income/loss 1,379 1,152 20% 1,671 1,894 -12%

Financial income/expense -796 -227 -1,397 -497

Profit Before Tax 584 925 -37% 274 1,397 -80%

Net Profit (excluding minority interest) 870 1,027 -15% 495 1,405 -65%

EBITDA* 1,495 2,210 -32% 2,346 3,243 -28%

Inventory Gain/Loss 675 1,016 -34% 976 1,283 -24%

EBITDA CCS* 820 1,194 -31% 1,370 1,960 -30%


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Financial Highlights

28

Tüpraş generated 851 MTL EBITDA in Q1 2019.

*Excluding minority interest

**Calculation based on rolling net income

367 3351,575 1,033 851

1,080 688

1,542 2,2101,4951,144

867

1,528

3,778

1,2081,505

1,237

1,887

2015 2016 2017 2018 2019

EBITDA (mn TL)

Q1 Q2 Q3 Q4

3,799

275 79869

378-375

710331

1,457

1,027870

750

581

992

542815

803

493

1,766

2015 2016 2017 2018 2019

Net Income* (mn TL)

Q1 Q2 Q3 Q4

1.8 1.8

1.1

1.3

1.3

1.01.1 1.2

1.3

1.1

2015 2016 2017 2018 Q2 2019

Current Ratio & Net Debt / R. EBITDA

Net Debt / R. EBITDA Current Ratio

35%

22%

41%37%

27%

2015 2016 2017 2018 Q2 2019

Return on Average Equity**

3,396

5,882

8,908

2,346

2,550

1,793

3,812 3,713

495


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Balance Sheet Analysis

29

Tight balance sheet management improved working capital.

4.0

7.5

1.6 1.5 1.0

4.4

1 year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years

Redemption Schedule (Billion TL)

Loan Eurobond TL bond

0.8

-0.2

2.1

4.7

1.6

-0.7

Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19

Working Capital Requirements (Billion TL)

6.96.1 6.2

12.010.6 10.1

Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19

Net Debt (Billion TL)

Proactive Financial Management • Ensured diverse funding base with

favorable rates

• Working Capital continues to improve with better payable terms


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Q2 Profit Before Tax Bridge (2018-2019)

30

Decline in profit before tax was driven by weaker cracks, narrower differentials and RUP maintenance.

Million TL


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2018 Profit Before Tax Bridge

31

2018 PBT was lower mainly due to Crude Oil Differential and Crack Margin impacts. With the help of FX

based pricing, FX losses incurred from payables were recovered with Inventory Gains.

Million TL

KEY FINANCIALS

4.474

3.724

2.129

164

311

660

293

1.779

2017 Inventory Gain Crack Margin Crude OilDifferential

Production FX Other 2018

,

,

,

,


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Dividend (TL)

32

1.73

3.24 2.94

4.96

5.83

4.78

0.00

10.18

7.16

15.2214.83

2.31 2.502.98

3.93 3.85

1.580.00

6.50 6.20

13.60

15.15

-500

500

1500

2500

3500

4500

0

2

4

6

8

10

12

14

16

18

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Earings per Share Gross Dividend Total Payout

One of the highest dividend

yield in BIST

2012/2013 EPS includes the tax incentive.

KEY FINANCIALS


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Investments (Million $)

33

• Revamp of Crude Unit

• FCC Modernization

• New Sulphur Units

• Energy Saving Projects

• Optimization of conversion units

• 9.5 Nelson complexity

• High white product yield

• Process more heavier and sour crudes

• Run all refineries with 100% capacity utilization

• 6.5 bn USD investments since privatization

Ongoing Projects

Avg. 220 mn$

Avg. 943 mn$

Avg. 278 mn$

274

355400

186177

628

974

1,213

959

344

213185 138

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

KEY FINANCIALS

70

2019Q1


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H1 2019 Results

34KEY FINANCIALS

3.5

2.7

0 1 2 3 4 5 6 7 8

H1

Refining Margins ($/bbl)

Med Margin Tüpraş Net Margin

+3.5 $/bbl net refining margin in H1 2019.

Med FY Exp

Tüpraş FY Target

95% total capacity utilization in H1 2019.

13.7

28

14.4

30

H1 2019 Target

Operationals

Production Sales 14.4 mn tons of sales and 13.7 m tons of production in H1 2019.

70

200

H1 2019 Target

Capex (mn $)

70 mn$ CAPEX in H1 2019.

95.0

0 20 40 60 80 100

H1

Capacity utilization (%)


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Tüpraş Balance Sheet

35

Million TL 30.06.2019 31.12.2018 Diff. Diff. (%)Current Assets 29,731 20,962 8,769 42

Cash & C. Equivalents 9,889 5,983 3,907 65Receivables 8,700 5,429 3,271 60Derivatives 270 176 95 54Inventories 8,384 6,765 1,620 24

Pre-paid expenses 256 109 148 136Other Current Assets 2,230 2,502 -271 -11

Long Term Assets 26,550 19,074 7,477 39Financial Assets & Subsidiaries 1,308 1,271 37 3

Fixed Assets 20,260 12,397 7,863 63Derivatives 140 168 -28 -17

Pre-paid expenses 257 378 -121 -32Deferred Tax 3,131 3,566 -435 -12

Other Long Term Assets 1,455 1,293 162 13

Total Assets 56,281 40,036 16,245 41

Short Term Liabilities 26,992 15,950 11,042 69Financial Loans 4,063 4,113 -50 -1

Payables 17,949 7,663 10,286 134Derivatives 193 236 -43 -18Provisions 206 80 126 156

Other ST Liabilities 4,581 3,857 724 19Long Term Liabilities 16,264 14,140 5,203 15

Financial Loans 15,968 13,836 2,132 15Payables & Provisions 259 257 2 1

Derivatives 28 42 -14 -34Other LT Liabilities 9 5 4 91

Total equity attributable to equity holders of the parent 12,885 9,825 3,060 31Minority Interests 140 121 19 16Total Liabilities & Equity 56,281 40,036 16,245 41


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Creating Competitive & Sustainable Shareholder Value

36

73%

27%

Buy Hold

Foreign Currency

Long Term

Tüpraş BB- (Neg.) B1 (Negative)

Türkiye BB- (Neg.) B1 (Negative) B+ (Stable)

Koç Holding B1 (Negative) BB- (Stable)

Analyst Recommendations

92.9

99.5

94.0

95.5

94.8

0 25 50 75 100

Board

Stakeholders

Transparency

Shareholders

Overall

Tüpraş has one of the highest Corporate Governance Ratings.

KEY FINANCIALS


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Financial Policy

37

Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counterparty risk, commodity,

interest rate and currency exposure.

KEY FINANCIALS

Leverage

& Liquidity• Net financial debt/EBITDA

• Net financial debt/Equity

Proactive in liquidity risk management & targets/limits for financial ratios:

• Current ratio

• Share of long term debt

Counterparty

Risk Policy

• Credit rating assessment and strong capital base.

• Cap on the maximum deposit allocated to a single bank.

• Threshold for deposits subject to banks shareholders’ equity.

Deposit is kept within bank-based limits

Interest

Rate & Fx

• The fixed/floating profile of financial debt.

• Proactive management of FX risk with derivative instruments

• Zero FX exposure target.

Commodity

Hedging

Policy

• Operational hedge: Optimum stock policy & forward pricing mechanism.

• Financial hedge: Expected inventory exposure for the year end is hedged by using derivatives.

• Hedging ratio increasing throughout the year.

Inventory Hedging Policy:

• Financial hedge: Crack margin (gasoline, diesel, jet fuel, fuel oil) risk mitigation by using derivatives.

• Statistical / mechanical approach: Historical average prices + standard deviations.

• Hedge ratio between %0-%50 with up to 1 year hedge tenor.

Crack Margin Hedging Policy:


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FX Exposure Management (30 June 2019)

38

* Cash flow hedge accounting : 899 mn $

Tüpraş continues to employ strict FX policies to mitigate currency risks stemming from

volatility.

Tüpraş continues to employ strict FX policies to

mitigate currency risks stemming from volatility.

• A significant portion of the Group's crude oil and refined

product purchases are denominated in US Dollars. In

addition, the Group finances its capital expenditures

mostly through borrowings denominated in US Dollars.

• Natural Hedge: The Group is able to mitigate some of the

impact of volatility in exchange rates through natural

hedges: crude oil and refined product inventories are US

Dollar denominated assets.

• Cash flow Hedge: RUP Facility financing loans

designated as hedging instruments of highly probable

export revenues.

• As a general Koç Holding financial policy, Group

companies are allowed to keep foreign exchange

positions within certain limits.

Cash

1,057

Forward & CFH2,082

Stock1,406

Receivables & Other Assets

97

Payables2,193

ST Financial Loans528

• RUP: 179• Other: 349

LT Financial Loans1,919

• RUP: 688• Eurobond: 700• Other Loans: 531

Consolidated Assets Consolidated Liabilities

Million $

+2 mn $


www.tupras.com.tr

Growing

Tüpraş: Growing, Resilient, Profitable

39

Tüpraş is a compelling investment case with strong sales growth, resilient and profitable operational and

financial structure.

• Operating in a diesel short market (supplies

45% of the market) , along with strong jet

growth

• Well poised to capture future opportunities

including IMO 2020 with its output

complexity

• Continuous investment in logistics,

infrastructure and trading capabilities

• Strong balance sheet with no

immediate rollover requirement.

• Secure receivables portfolio, tight

working capital management

• Pricing mechanism in place to address

commodity and FX fluctuations

• Benefits from full system optimization

given high complexity, procurement and

logistics flexibility

• Prudent hedging practices to ensure

stable earnings outlook

• High dividend pay-out ratio annually

Resilient Profitable

OUTLOOK


www.tupras.com.tr

2019 Refinery Maintenance Schedule

41

RUP Maintenance

Preparation and

planning phase: 2018

Maintenance Start: Feb 26

• Catalyst changes

• Checks on distillation columns, heat

exchangers and furnaces

• Detailed planned maintenance

Completed as of 13 May 2019

Unit QuarterDuration(weeks)

Reason Status

İzmir

Plt 100 CDU Q4 2-3 Periodic

Plt 9200 CCR Q1 3 Completed

İzmit

RUP Q1&Q2 11 Completed

Plt 2 Crude Oil & Vacuum Q4 7-8 Periodic

Plt 7 FCC Q4 5-6 Periodic

Kırıkkale

BatmanPlt 100/1100 Crude Oil &

VacuumQ1 10 Completed


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2019 Expectations

42

Med Complex margin expectation in 2019 is 3.75 – 4.25 $/bbl.

Net Tüpraş refinery margin expectation in 2019 is 6.0 – 7.0 $/bbl.

• Capacity utilization target is 95-100%.

• Production: ~28 million tons

• Total sales: ~30 million tons

Refining investments expectation is revised as ~200 Million $.

Med Complex

Margin

Tüpraş

Net Margin

Operations

Investment


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Competition # 1 (SOCAR-STAR Refinery)

• Goldman Sachs has acquired a 13% stake in SOCAR Turkey for $1.3 billion.

• Goldman Sachs has the right to resell 10% of its stakes to Socar, and the remaining 3% to

‘Sermaye Investments Limited’ owned by SOCAR within 6 years at the same price.

STAR Refinery (Total Cap. 10 mn ton)

2019

mn ton

Production

Turkish

DemandBalance

Tüpraş Star Total

LPG 1.1 0.3 1.4 4.1 -2.7

Petchem Feeds 0.2 2.6 2.8

Gasoline 6.1 6.1 2.4 3.7

Jet Fuel 5.2 1.6 6.8 5.2 1.6

Diesel 10.7 4.5 15.2 26.5 -11.3

Coke 0.8 0.7 1.5 4.6 -3.1

Fuel Oil 1.8 1.8 1.3 0.5

Bitumen 3.1 3.1 3.1

Star Refinery Production Numbers (k ton)

Fuels

Petrochemical

Feedstock

Diesel 4,500

Jet Fuel 1,600

Sulphur 158

Petrocoke 698

LPG 260

Naptha 1,600

Mixed xylene 460

Reformate 524

• 3.3 billion $ credit agreement. First

4 years grace period total 15-18

years term.

• Project finance is supplied to company

(1.5 Billion $).

• It is expected to be operational as of

2019.

Credit : 3.3 Billion $

Equity : 2.4 Billion $

Total

Investment: 5.7 Billion $

OUTLOOK 43


www.tupras.com.tr

Competition # 2 (Regional Competition)

44

• Tüpraş is competing 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.

Mediterranean Black Sea

54 Refineries

7.8 mn bpd

17 Refineries

1.8 mn bpd

OUTLOOK


www.tupras.com.tr

0

3

6

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Compliant HSFO Non-compliant HSFO ULSFO MGO LNG

Marine Bunker Specification Changes and Its Effects

45

IMO 2020: the sulphur cap for marine bunkers is reduced from 3.5% to 0.5% (5000ppm)

- effective from 1 Jan 2020.

• Marine Gasoil (Diesel)

• Ultra Low Sulphur Fuel Oil (ULSFO)

• Scrubbers

• LNG

Compliance can be met with:

OUTLOOK

HSFO Replacement Expected in 2020, million b/d Gradual Change in Marine Bunker Fuels, thousand b/d

Expectations 2020 and beyond:

• MGO (Diesel) is expected to be the no.1 choice in 2020

• ULSFO/blend becomes more widespread through the years as

availability & compatibility issues get resolved

• Compliant HSFO use grows as scrubber numbers rise from

~2,000 after Jan 1st, 2020 (some ports started bans on open-loop scrubbers

thus this projection might change)

3.5

0.6

0.5

1.1

1.3

Current

HSFO

HSFO

Scrubbers

HSFO

Non-complianceULSFO MGO

Source : Market Reports

Appendix


www.tupras.com.tr

RUP feedstock and production (000 Tons)

47

Natural Gas 246

Vacuum Resid

1,214

Atm. Resid

3,036

Total Feed 4,496

Total Production

4,250

Raw Materials Products

APPENDİX


www.tupras.com.tr

Tüpraş Production Flow and Yield Breakdown

48

• Increased

conversion capacity

• Strong

integration among

refineries

APPENDİX


www.tupras.com.tr

European Pump Price Comparison

49

Not: Prices valid on 11 February 2019.

Gasoline (Krş / Lt)

211

324

210 233292

236294

242

62 65 4764 61

330

409 516 529 528554 595 596

604

733

791 809 820854

889 898

0

100

200

300

400

500

600

700

800

900

1,000

0

250

500

750

1000

TR Spa. Ger UK Eu19 Fra. Gre. Ita.

Pump No Tax Distr. Marg. Tax

Diesel 10 (Krş / Lt)

266

360

263347

395

273 286 275

63 78 69 55 63

272

349 398434

406 504 524 540601

709739

782 801847 865 878

0

100

200

300

400

500

600

700

800

900

1,000

0

100

200

300

400

500

600

700

800

900

1000

TR Spa. Ger. EU19 Gre. Fra. Ita. UK

APPENDİX


www.tupras.com.tr

Tüpraş - ESG

ESG

92.9

99.5

94.0

95.5

94.8

0 25 50 75 100

Board

Stakeholders

Transparency

Shareholders

Overall

Foreign

Currency

Long Term

Tüpraş BB- B1

Türkiye BB- B1 B+

Koç

HoldingB1 BB-

One of the highest Corporate

Governance Ratings3

Amount of water recycled:

20.8 mn m3

Water recycle ratio:

69.5%

Amount of solid waste recycled:

28.9 ktons

Solid waste recycle ratio:

88.6%

Energy cost saved:

36 million $

Greenhouse Gas Emission Reduced:

244 ktons CO2e

Environmental Training Provided:

10,391 person-hrs

Gender Equality

HeForShe (Global cooperation with UN Women

and Fenerbahçe Sports Club)

I Support Social Gender Equality for My

Country- (collaboration with Koç Holding)

Father Support Program in Batman Refinery

Education

Operational sponsorship for TEGV’s1 «Firefly

Mobile Learning Units Project» (262,627

students in 10 years)

Scholarship fund for TEV2 : «Our Energy For

Equality Never Ends»

Culture & Sports

Young Musicians on World Stages

Support for the Batman Disabled Sports Club

Association and Batman Tüpraşspor Football

Club

1 Education Volunteers Foundation of Turkey2 Turkish Education Foundation

In 2018

Environmental Responsibility Social Support Governance Excellence

3 Provided by CMB compliant SAHA Corporate Governance and Rating

Services Inc. (October 2018) 50


www.tupras.com.tr

Koç Holding

51

Turkey’s Leading Investment Holding Company

Turkey’s largest industrial and services group in terms

of revenues, exports, employees, taxes paid

and market capitalization.

Leading positions with clear competitive advantages in

sectors with long-term growth potential such as energy,

automotive, consumer durables and finance.

Pioneer in its Sectors

• The only Turkish company in Fortuna 5001.

• 20% CAGR in consolidated profit2 the last five years.

Notes : Data as of YE18, 2018 GDP reflects the projection of Turkish government’s New Economic Program.

(1) 2018 Report

(2) In TL terms between 2014-18

Turkey’s Leading Investment Holding Company

APPENDİX

Combined Revenues / GDP 8%

Total Exports / Turkey’s Exports 10%

Total MCap on Borsa Istanbul 16%

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