#1Tüpras Investor Presentation KOC January 2020#2Disclaimer 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 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. February 20 Investor Presentation Disclaimer www.tupras.com.tr 2#3Refining Market#4Brent Crude Prices + OPEC and its allies increasing output cuts + Impact of Iran & Venezuela sanctions + Escalating regional tension $/bbl 86 - - Concerns on global economic development China's purchases to slow as approaching LT reserve targets Coronavirus related demand drop 80 88 74 68 62 56 50 44 38 32 26 30.7 20 20 2016 ave. 43.7 $/bbl OPEC i Production Cut Decision Jan-16 Mar-16 May-16 Jul-16 Sep-16 data as of 11 Feb 2020 February 20 Investor Presentation Refining Market Nov-16 I I I Jan-17 2017 ave. 54.3 $/bbl 2018 ave. 71.0 $/bbl Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 www.tupras.com.tr Mar-18 May-18 Jul-18 Sep-18 Nov-18 81.2 2019 ave. 64.3 $/bbl 67.0 I I I i All waivers Iran I iSanctions | · Iran I expired on i Drone Attack to i Saudi Fields I I I I Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 53.8 4#5Global Refinery Capacity Changes Expectations until 2024: ~80% of net capacity additions will come from Asia & Middle East • Net capacity and demand in Europe will remain roughly unchanged 2012-2018 Net Capacity Additions by Region Europe -1.41 N. America 0.22 Japan -0.95 Other Other Asia Middle East 2019-2024 Net Capacity Additions Asia & Middle East Other Total 2.5 1.97 1.93 1.96 2.0 0.89 1.0 2.0 M 1.50 1.7 1.3 0.51 0.9 0.9 0.2 1.5 1.30 0.49 1.68 0.5 0.98 0.0 2.10 India China -2 -1 0 1 2 February 20 Investor Presentation Refining Market -0.5 3 2019 2020 2021 2022 2023 2024 www.tupras.com.tr 5#6Middle Distillate Cracks $/bbl 20 20 Diesel Jet Fuel 5yr range 2019 2020 5 yr ave 5yr range 5 yr ave 2019 2020 20 16.2 14.9 15.0 15 14.1 12.9 12.2 12.1 11.2 10 16.6 16.2 17.9 15 13.9 14.4 13.8 13.2 11.3 11.4 10 10.4 10.7 10.3 14.8 17.0 17.4 16.4 12.5 10.9 11.2 9.3 5 5 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 5 yr between 2015-2019, data as of 11 Feb 2020 February 20 Investor Presentation Refining Market www.tupras.com.tr 6#7Gasoline and High Sulphur Fuel Oil Cracks $/bbl Gasoline 5yr range 2020 2019 5 yr ave 25 0 20 20 15 11.8 12.1 14.7 -10 -20 11.0 12.0 10 10.6 10.0 9.4 9.0 7.7 -30 5 4.3 High Sulphur Fuel Oil 5yr range 2020 2019 5 yr ave -5.0 -5.5 -6.9 -7.0 -8.6 -9.8 -11.3 -22.4 -15.6 -13.4 -16.9 -22.5 -31.6 -32.9 2.9 0 1.7 1 -40 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 5 yr between 2015-2019, data as of 11 Feb 2020 February 20 Investor Presentation Refining Market www.tupras.com.tr 7#8Crude Price Differentials to Brent -10 -12 -8 -2 -4 -6 о 2 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 1Simple average of listed differentials February 20 Investor Presentation Refining Market Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 - Arab Heavy Basrah Heavy Kirkuk Kuwait Supply Shocks on Heavy Crude Iran Sanctions •Venezuela Sanctions •OPEC+ cut decision and over- compliance •Druzhba contamination •Drone attack to Saudi fields Ural ¹Average www.tupras.com.tr A total of ~4 mbd is missing from heavy crude pool since December 2018, leading to price increases and narrowing differentials 8#9Turkish Market Tüpras#10Turkish Consumption 2015-2018 Million Tons Diesel 24.20 -2.4% 23.60 +8.5% 22.30 +8.5% 20.60 2015 2016 Gasoline Jet Fuel 4.99 +10.4% 4.58 -3.9% +2.7% 4.52 4.40 2017 2018 2015 2016 +1.8% 2.34 0.6 2.30 +3.1% 2.23 +6.5% 2.10 2015 2016 2017 2018 Source: Tüpraş and EMRA 'Bunker excluded February 20 Investor Presentation Turkish Market www.tupras.com.tr Fuel Oil¹ 2017 2018 0.58 0.49 0.39 -3.5% -15.7% -20.1% 2015 2016 2017 2018 10#11Turkish Market, 11M 2019 Contraction in diesel demand is softening following weak 1H. Aviation driven jet demand remains healthy. Million Tons 30.0 20.0 Diesel -1.6% 6.0 5.0 4.0 23.15 22.79 10.0 4.61 3.0 3 2 'Jet Fuel +7.3% 4.94 0.0 2.0 2018 2019 2018 2019 Gasoline 2Fuel Oil 1.5 1.0 +3.0% 0.5 2.16 2.23 2018 'Transit flight consumption included 2Bunker excluded February 20 Turkish Market Investor Presentation 2019 +1.5% 0.34 0.35 0.0 2018 2019 www.tupras.com.tr 11#12Turkey's Net Import / Export Balance Million Tons 4 Export 3.0 2.4 0 -3.0 -4 -3.2 -8 -12 Import -16 LPG February 20 Investor Presentation Turkish Market Gasoline 2015 2016 2017 2018 -12.3 Diesel -13.6 www.tupras.com.tr 1.6 1.4 0.2 Fuel Oil Jet -0.4 12#13Company Overview SAWA WATAA#14Tüpraş Shareholder Structure Tüpraş is Turkey's biggest industrial company and leading refiner. 'As of December 31th, 2019 February 20 Investor Presentation Koç Holding 77% Ditaş 79.98% Aygaz 20% Energy Investments Inc. (SPV) 51% Opet 3% Opet 40% Tüpras Free Float 49% Körfez Ulaştırma 100% Company Overview www.tupras.com.tr Domestic Ownership 22% Foreign Ownership 78% 14#15Tüpraş's Refining Assets & Distribution Network OPET Marmara İstanbul Terminal 721,000 m3 Aoizmir İzmit Ankara Kırıkkale OPET Antalya Terminal 19,392 m3 OPET Mersin Terminal 240,000 m3 OPET Giresun Terminal 43,130 m3 Baku Baku-Tbilisi-Ceyhan Oil Pipeline Batman Iraq-Turkey Oil Pipeline + Tüpraş supplies ~60% of Turkey's petroleum product needs + Tüpraş benefits from an integrated system optimization with its high complexity, procurement and logistics flexibility Turkey's Storage Capacity Tüpraş & 57% Opet Others 43% İzmit • 11.3 MT Capacity • NC: 14.5 • Storage Capacity: 2.99 mn m³ February 20 Investor Presentation İzmir •11.9 MT Capacity • NC: 7.66 Storage Capacity: 2.51 mn m³ Company Overview Kirkuk Total Capacity 30 mn tons ■Railway Crude Pipeline Terminal Refinery Batman Nelson Complexity 9.5 Tüpraş Storage 7 mn m³ 3 Cap. Kırıkkale • 5.4 MT Capacity • NC: 6.32 • Storage Capacity: 1.27 mn m³ www.tupras.com.tr • 1.4 MT Capacity • NC: 1.83 • Storage Capacity:0.27 mn m³ 15#16Nelson Complexity of Refining Companies February 20 Investor Presentation FL9.7 CANADA 8.9 NWE 8.2 RUSSIA EAST 11.6 USA 9.7 EUROPE İzmit Refinery 14.5 TÜPRAŞ 9.5 10.4 8.9 MED 7.7 EAST ASIA 9.9 JAPAN CHINA 7.2 MIDDLE EAST F9.0 SOUTH ASIA FL7.1 LATIN AMERICA 5.0 AFRICA Company Overview www.tupras.com.tr 7.9 AUSTRALLIA 16#17Tüpraş Subsidiaries OPET, Distribution, Tüpraş Share: 40% DDEX opet DİTAŞ, Marine Transport, Tüpraş Share: 79.98% T.GONUL 1,670 stations as of 31 December 2019 As of November 2019 Market share: 19.0% in white products; 35.6% in black products Körfez Ulaştırma, Railway Transport, Tüpraş Share: 100% · 3 Crude Oil Tanker: 479,765 DWT • 1 Crude Oil - Product Tanker: 51,532 DWT 10 Product Tanker: 171,453 DWT" Tüpraş Trading UK, Trading, Tüpraş Share: 100% EXIB ~7% share in Turkish rail freight market ~1.8 mn ton of product and semi-product carried in 2019. Operates with 10 diesel locomotives and over 600 cistern wagons February 20 Investor Presentation Company Overview www.tupras.com.tr Tupras Trading Trading Office in London will be an important step into wider integration with the global energy landscape by allowing to: - Closely monitor international market opportunities - Support import and export operations ■ Create additional value from supply chain and sales activities 17#18Operations 11#19Crude Suppliers of Tüpraş In 2019, Tüpraş purchased 15 different types of crude from 8 countries with gravities ranging between 20-47 API. February 20 Investor Presentation Main Crude Suppliers in 2019 LA A 65 95 LA Crude Oil Imports by Region (%) Africa America Europe CIS ■Middle East 81 79 76 71 67 40 63 34 17 12 135 13 14 14 14 12 10 10 10 10 6 7 3 23 21 02 00 2012 2013 2014 2015 2016 2017 2018 2019 Operations www.tupras.com.tr 55 19#20Annual Product Yields 2018 LPG Other Asphalt 2% 3% 12% Gasoline Kok Other 20% 3% white Light Fuel Oil 7% 2% Black Prod. Distil. 21% 25% Naphtha 1% Mid. Distil. 52% Jet 19% Gasoil 33% White Product Yield (%) Production API February 20 Investor Presentation Operations 77.4% 25.7 mn tons 31.0 www.tupras.com.tr 2019 Asphalt Kok 8% OtherPG 2% 4% 3% Gasoline Other 20% Fuel Oil White 9% Black Prod. 2% Light 20% Distil. 25% Naphtha 1% Mid. Distil. 53% Jet 17% Gasoil 36% White Product Yield (%) Production ΑΡΙ 79.0% 28.1 mn tons 32.0 20#21Capacity Utilization and Quarterly Production Volume Total production volume in Q4 2019 realized as 6.9 mn tons. Full year capacity utilization for 2019 was 97.8%, in line with our guidance. Quarterly Production 5.2 Q1 2015 2016 2017 6.9 6.7 Q2 6.2 Q3 63 7.7 7.5 1Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards. February 20 Investor Presentation Operations 2018 2019 Capacity Utilization 1 (%) Crude Oil Semi Product Feedstock -Total 108 105 103 105 4 98 96 96 96 4 94 7 6.9 9 5 4 9 6.6 86 98 Q4 2015 2016 2017 2018 www.tupras.com.tr 87 2019 91 68 91 96 96 Q1 19 Q2 19 Q3 19 Q4 19 87 21#22Sales • Tüpraş generated 29.2 million tons of total sales 2019. Total Sales mn tons 30.3 31.5 28.7 29.8 29.2 5.8 5.5 4.2 6.5 6.8 Exports 24.8 25.7 25.6 I Domestic Sales 22.2 22.4 mn tons 2015 2016 2017 2018 2019 Domestic Sales of Key Products Total Sales, 2019 29.2 mn tons Customer Groups 2019 Other LPG 6% Export 23% 3% Jet 9% THY Opet 5% Distributors 46% OTHER 3.5 2.9 10% POAŞ 3.4 BP 2.9 2.2 1.8 27% 2.2 2.2 2.3 13% Bitumen 2.0 4.9 4.5 4.5 4.3 Sales to Gasoline 4.8 Distributors 2019 Jet Fuel 10.8 11.3 11.9 9.2 10.4 13.3 mn tons Diesel SHELL 19% 2015 2016 2017 2018 2019 OPET 31% February 20 Operations Investor Presentation www.tupras.com.tr Bitumen 6% Military 2% 22#23Financials 41#24Refining Margin Tüpraş' Net Refining Margin in 2019 was 2.0 $/bbl higher than Med Complex margin (1.7 $/bbl). ■Tüpraş Net Margin $/bbl Premium to the benchmark Mediterranean peers' refining margin due to: Ability to use heavier and sour crudes with higher complexity 3.2 • Access to a wide range of cheaper sources of crude oil 2.5 1.9 1.7 Close proximity to major suppliers reduces transport costs Lower cost basis and more efficient energy usage Ability to produce a broad range of refined products with higher value added • Direct pipeline connections with domestic clients February 20 Financials Investor Presentation 6.5 6.0 4.8 Mediterranean 9.3 8.1 5.3 4.6 4.0 3.7 2013 2014 2015 2016 2017 2018 2019 Med Complex Month Annual 1.7 $/bbl 5.5 5.4 4.8 4.6 4.0 2.9 2.0 1.7 2.0 1.7 1.2 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 www.tupras.com.tr 24#25Tüpraş and Med Refining Margins $/bbl 6.5 2015 12M Margins Tüpraş Net Margin Med Margin 6.0 5.3 2016 3.6 8.1 2017 5.8 9.3 2018 4.5 3.7 1.7 2019 Gross Inventory Clean Gross Clean NET ($/bbl) Margin Effect Margin Margin Net Margin Med Margin 2019 Q4 9.7 0.7 9.0 2.9 3.6 -1.9 2019 12M 9.2 0.1 9.1 3.6 3.7 1.7 2018 Q4 10.8 -4.0 14.9 9.0 5.0 4.7 2018 12M 14.7 0.8 13.9 8.5 9.3 4.6 February 20 Financials www.tupras.com.tr Investor Presentation 25#26Income Statement Tüpraş generated 738 MTL EBITDA in Q4 2019. Q4 Q4 FY FY Million TL % % 2019 2018 2019 2018 Net Sales COGS 21,631 24,803 -13 89,601 88,552 -20,566 -22,778 -10 -84,716 -79,328 Gross Profit 1,065 2,025 -47 4,884 9,224 -47 Operating Expenses -540 -438 23 -1,783 -1,307 36 Income/Loss from other operations -464 1,591 -871 -2,181 Operating Profit 61 3,178 -98 2,230 5,736 -61 Income/Loss from equity investment 25 72 -66 197 257 -23 Operating Profit Before Fin. Income/Loss 86 3,249 -97 2,427 5,993 -59 Financial Income/Expense -525 -1,600 -2,739 -2,268 Profit Before Tax -439 1,649 -311 3,724 Net Profit (excluding minority interest) 186 1,766 -89 526 3,713 -86 EBITDA *(mn.TL) Inventory Gain/Loss EBITDA (mn. TL) CCS 738 1,887 -61% 4,039 8,908 -55 -89 -297 194 2,653 827 2,185 3,845 6,255 *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. February 20 Investor Presentation Financials www.tupras.com.tr 26#27Financial Highlights Tüpraş recorded 4,039 MTL EBITDA in 2019. EBITDA Net Income¹ IQ1 Q2 Q3 Q4 IQ1 Q2 Q3 Q4 8,908 3,812 Mn TL 3,713 Mn TL 1,887 493 5,882 2,550 992 1,766 3,799 1,237 3,778 4,039 1,793 815 3,396 1,528 738 1,457 542 750 803 526 1,208 1,505 956 1,144 1,542 2,210 1,027 186 710 581 867 1,495 869 870 1,080 688 1,575 275 331 378 367 1,033 851 -375 335 -155 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Current Ratio & Net Debt / R. EBITDA Net Debt/ R. EBITDA 1.8 1.8 Current Ratio 2.1 1.3 1.0 1.1 1.2 1.3 1.1 1.0 2015 2016 2017 1) Excluding minority interest 2) Calculation based on rolling net income February 20 Investor Presentation Financials 2018 2019 www.tupras.com.tr Return on Average Equity² 35% 22% 41% 37% 5% 2015 2016 2017 2018 2019 27#28Balance Sheet Analysis Strong balance sheet maintained despite weaker operational profitability Net Debt Redemption Schedule Billion TL 6.9 6.1 6.2 12.0 10.6 10.1 Billion TL 8.7 6.0 8.4 5.2 Loan Eurobond TL bond 1.6 1.6 4.6 0.2 Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 1 year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years Working Capital Requirement Billion TL 2.1 0.8 -0.2 Dec-15 Dec-16 Dec-17 4.7 1.6 -0.7 -2.3 -3.6 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 February 20 Financials Investor Presentation www.tupras.com.tr Proactive Financial Management • Deleveraging continues despite • operational headwinds Dynamic liquidity management ensures optimal cash and receivables management 28#29Q4 Profit Before Tax Bridge (2018-2019) Decline in Profit Before Tax was driven by weaker crack margins, narrower differentials and FX loss. Million TL 1,649 51 -1,104 -528 -207 +208 Inventory -921 FX -713 209 203 -439 2018 PBT Production Cracks Differential Natural Gas & Other OPEX FX & Inventory Interest Expense Other 2019 PBT February 20 Financials Investor Presentation www.tupras.com.tr 29#30Annual Profit Before Tax Bridge (2018-2019) 2019 PBT was lower mainly due to narrow differentials, weaker crack margins and natural gas price hikes. Million TL 3,724 468 -1,723 -1,114 -912 -587 -311 -431 461 -198 2018 Production Differentials Crack Margin Energy Costs RUP Maintanence Interest Expense FX & Inventory Other 2019 February 20 Financials Investor Presentation www.tupras.com.tr 30#31Dividend (TL) 20 18 16 14 77% 12 10 8 6 4 Earnings per Share Gross Dividend Dividend Payout 101% 102% 79% 66% 33% 5.8 5.0 4.8 2 3.9 3.9 3.2 2.9 3.0 2.5 0 2009 2010 2011 2012 64% 10.2 89% 87% 120% 80% 15.2 14.8 15.2 13.6 40% 7.2 6.5 6.2 (*) 5.8 0% 1.6 2.10% 0.0 0% 2013 2014 2015 2016 2017 2018 2019 (*) 2019 dividend payment decision was announced on Feb 12, 2020 and is subject to approval at AGM. February 20 Investor Presentation Financials www.tupras.com.tr 31#32Investments (Million $) • 6.5 bn USD investments since privatization Reached 9.5 Nelson Complexity Capability to process heavier and more sour crude Avg. 278 Mn$ 400 355 274 186 177 628 Avg. 943 Mn$ 1213 974 959 Avg. 220 Mn$ 344 213 185 138 157 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 February 20 Financials Investor Presentation www.tupras.com.tr • Ongoing Projects Revamp of Crude Units • FCC Modernization • New Sulphur Units • . Energy Saving Projects Optimization of conversion. units 32#3312M 2019 Results 12M 1.7 Refining Margins ($/bbl) Tüpraş Net Margin Med Margin Med FY Exp 3.7 0 1 2 3 Tüpraş FY 12M Target 5 3.7 $/bbl net refining margin in 2019 2.8 Med Margin ($/bbl) -3.1 -5.3 Oct-19 Nov-19 Dec-19 February 20 Investor Presentation Financials 9 Capacity Utilization (%) 97.8 97.8% total capacity utilization in 2019 0 20 40 60 80 100 www.tupras.com.tr Operationals 12M 2019 Target 29.2 mn tons of sales and 28.1 m tons of 28.1 28 29.2 30 production in 2019 Production Sales Capex (mn $) 157 mn$ refining CAPEX in 2019 157 150 12M 2019 Target 33#34Tüpraş Balance Sheet (Million TL) 31.12.2019 31.12.2018 Diff. Diff. (%) Current Assets 27,919 20,962 6,957 33 Cash&C. Equivalents 10,652 5,983 4,669 78 Trade Receivables 4,788 5,429 -641 -12 Derivatives 304 176 128 73 Inventories 9,469 6,765 2,704 40 40 Pre-paid expenses 237 109 128 118 Other Current Assets 2,470 2,502 -32 -1 Long Term Assets 27,627 19,074 8,554 45 Financial Assets & Subsidiaries 1,397 1,271 126 10 Fixed Assets 20,587 12,397 8,190 66 Derivatives 99 168 -70 -41 Pre-paid expenses 199 378 -179 -47 Deferred Tax 3,768 3,566 201 6 Other Long Term Assets 1,578 1,293 285 22 Total Assets 55,546 40,036 15,510 39 Short Term Liabilities 28,120 15,950 12,171 76 Financial Loans 5,178 4,113 1,064 26 Trade Payables 17,816 7,496 10,320 138 Derivatives Provisions 79 236 -157 -66 117 80 37 46 Other ST Liabilities 4,930 4,024 906 23 Long Term Liabilities 14,255 14,140 3,340 1 Financial Loans 13,898 13,836 62 0 Payables & Provisions 316 257 59 23 Derivatives 32 42 -10 -24 Other LT Liabilities 9 5 4 89 Total equity attributable to equity holders of the parent 12,998 9,825 3,173 32 Minority Interests Total Liabilities & Equity 174 55,546 121 53 43 40,036 15,510 39 February 20 Financials www.tupras.com.tr Investor Presentation 34#35Leading Corporate Governance Score Tüpraş BIST Corporate Governance Rating Score Credit Rating Scores Overall 95.0 Foreign Currency Fitch Ratings MOODY'S S&P Global Long Term Ratings Shareholders 95.5 Tüpraş Türkiye BB- (Stable) BB- (Stable) Koç Holding B1 (Negative) B1 (Negative) B1 (Negative) B+ (Stable) BB- (Stable) Transparency 95.3 Stakeholders Board 0 25 50 50 92.6 99.5 75 100 Source: SAHA Corporate Governance and Rating Services Inc. (October 2019) February 20 Investor Presentation Financials www.tupras.com.tr Analyst Recommendations 44% 11% Buy 45% Hold ■Sell Source: Bloomberg 35#36Financial Policy Financial Discipline: Risk management policies focusing on areas such as leverage, liquidity, counterparty risk, commodity, interest rate and currency exposure. Leverage & Liquidity Proactive in liquidity risk management & targets/limits for financial ratios: • Net financial debt/EBITDA Net financial debt/Equity • Current ratio • Share of long term debt Counterparty Risk Policy Deposit is kept within bank-based limits: Interest Rate & Fx • • 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. The fixed/floating profile of financial debt. Proactive management of FX risk with derivative instruments • Zero FX exposure target. Inventory 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. Crack Margin Hedging Policy: . • Financial hedge: Crack margin (gasoline, diesel, jet fuel, fuel oil) risk mitigation by using derivatives. Hedge ratio between %0-%50 with up to 1 year hedge tenor . Commodity Hedging Policy • February 20 Financials Inestor Presentation www.tupras.com.tr 36#37FX Exposure Management (31 December 2019) 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 flow hedge accounting: 813 mn $ February 20 Investor Presentation Financials www.tupras.com.tr Consolidated Hard Currency Assets Cash 202 Receivables & Other Assets 84 Stock 1,537 Forward & CFH 2,740 -30 mn $ Consolidated Hard Currency Liabilities Payables 2,114 ST Financial Loans 792 RUP: 191 Other: 602 LT Financial Loans 1,687 RUP: 707 Eurobond: 700 Other Loans: 280 37#38Tüpras Tüpras Tüpras Tüpraş Tüpraş Tüp Tüpraş as Appendix#392020 Refinery Maintenance Schedule Refinery Unit Quarter Duration (weeks) Status Batman Plt 100/1100 Crude Oil & Vacuum Q1-Q2 İzmir U-100 Crude U-4000 FCC 5 Q1 6* Q4 6 U-9200 CCR Q1 & Q4 3 & 7 U-9600 Isomerization Q4 8 U-9900 MQD Q4 7 İzmit Plt-6 Desulphurizer Q4 4 Kırıkkale * This activity had started in Q4-19. Duration figure indicates the portion carried out in 2020 February 20 Investor Presentation Appendix www.tupras.com.tr 39#402020 Expectations Med Complex Refining Margin 1.5-2.5 $/bbl • Ural-Brent differential widening compared to 2019 • Weak outlook for HSFO Tüpraş Net Refining Margin 4.5-5.5 $/bbl • IMO driven growth in mid-distillate cracks • Gasoline cracks remain flat, HSFO to remain weak Heavy Crude Differentials to widen • ~28 mt production, ~29mt sales and 95 - 100% capacity utilization Refining Capex 200 million Sulphur treatment units, improvement in storage units February 20 Investor Presentation Appendix www.tupras.com.tr 40#41Competition - STAR Refinery Timeline Turkish Market Structure (mn tons) Turkish 11411 Turkey Demand Tüpraş STAR Total Market Balance Demand LPG 1.1 0.3 1.4 4.1 -2.7 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 5.2 1.6 construction kicked off in 2011 Diesel 10.7 4.5 15.2 26.5 -11.3 • Goldman Sachs has acquired a 13% stake in SOCAR Turkey for $1.3 billion. Fuel Oil 1.8 1.8 1.3 0.5 Bitumen 3.1 3.1 3.1 • Total investment size 6.3 bn USD, with Pet coke 0.8 0.7 1.5 4.6 -3.1 3.3 bn USD credit agreement. • Following the completion of construction late 2018, reached full Total ~30 ~10 ~40 capacity utilization in August 2019 February 20 Investor Presentation Appendix www.tupras.com.tr 41#42Competition - 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 Portugal France Croatia Spain Italy Albani Greece Turkey Morocco Algeria Tunisia Moldova Ukraine Romania Bulgaria Syria Israel Libya Egypt 54 Refineries ~7.8mbd February 20 Investor Presentation Appendix www.tupras.com.tr Turkey 17 Refineries ~1.8mbd Russia Georgia 42#43IMO 2020: Changes in Bunker Specification and Its Effects Beyond 2020 Current Outlook 4.0 3.5 3.5 3.0 2.5 2.0 1.5 1.0 0.5 6 5 43 0.0 2 1 0 HSFO replacement expectations -0.6 -0.5 1.3 -1.1 Current compliant fuels • Marine Gasoil (Diesel): Easiest solution as it is already available • Very Low Sulphur Fuel Oil (VLSFO): Either through FCC with sweet crudes or by blending • Scrubbers: As of 07/02/20, ~3.4K vessels are either fitted or scheduled to be fitted and ~0.6K vessels are on order book to be delivered with scrubbers • Current HSFO HSFO w/ scrubbers HSFO Non-compliance VLSFO MGO LNG: requires significant investments at ports Long term outlook for marine fuels Compliant HSFO Non-compliant HSFO VLSFO MGO LNG Demand shift beyond 2020 • VLSFO is the initial choice, followed by MGO • Fuel choice might change through the years as availability & compatibility issues get resolved • Compliant HSFO use grows as scrubber numbers rise from ~2K after Jan 1st, 2020 (some ports started bans on open-loop scrubbers thus this projection might change) February 20 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Investor Presentation Appendix www.tupras.com.tr Source: Market Reports 43#44Tüpraş Production Flow and Yield Breakdown • Tüpraş has 30 million tons of production capacity Tüpraş operates 4 refineries with an integrated system optimization program # of Capacity Key Units Units (m³/d) CRUDE OIL 8 99,420 Flow Diagram LPG MEROX LPG, 3.5% Gasoline Naphtha, 22.0% VACUUM DIST. 8 42,752 HYDROCRACKER 4 18,032 ISOMER. NAPHTHA SPLITTER Benzen Saturation UNIFINER REFORMER ISOMERATION 7,804 Jet Fueloil, 16.5% UNIFINER 5252 5 16,225 5252 REFORMER 5252 KERO/DIESEL (HDS) 5254 KERO/DIESEL 9 37,265 (HDS) 5252 FCC Diesel, FCC Gasoline HDS 33.9% FCC 2 4,650 VACUUM DIST. COKER 1 9000 Multiple distillation HYDROCRACKER ΝΑΡΗΤΑ SPLITTER and production units Lube Oil LPG MEROX 6 COKER Bitumen Lube Oil, 0.5% Bitumen & Fuel Oil, 19.9% Other, 3.8% February 20 Investor Presentation Appendix www.tupras.com.tr 44#45RUP 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. February 20 Investor Presentation Appendix Natural Gas ~0.25 mt Vacuum Resid ~1.2 mt Atm. Resid ~3.0 mt Total Processing ~4.50 mn tons www.tupras.com.tr Diesel 2.883 Gasoline 522 LPG 69 PetroCoke 690 Sulphur 86 Total Output ~4.25mn tons 45#46European Pump Price Comparison Turkish fuel prices are highly competitive with other European countries. Gasoline (TL/Lt) Refinery Price ■Dist. Margin Tax 12 12 10 8 6.64 6.60 6.15 6.14 5.86 4.55 6 5.69 3.45 Diesel (TL/Lt) Refinery Price ■Dist. Margin Tax 12 10 60 6.21 4.49 5.55 5.75 4.78 3.85 4.37 2.58 4 0.00 0.70 0.00 -0.00 0.54 0.96 0.95 0.00 0.00 0.00 0.76 0.91 0.92 0.80 0.73 0.87 4.52 2 3.93 2 4.10 3.56 3.72 3.94 2.83 3.02 3.17 2.79 2.73 2.89 3.02 3.05 3.18 2.37 0 TR Spa. Ger UK Eu19 Fra. European prices as of 16th December - Turkeys prices as of 24th December 2019 February 20 Investor Presentation Appendix Gre. Ita. www.tupras.com.tr TR Spa. Ger. EU19 Gre. Fra. Ita. UK 46#47Tüpraş - ESG - Over a Decade of Dedication ~480 energy efficiency projects leading to ~35,000 TJ saving and 2.4 mt CO2 reduction 31% increase in solid waste recovery 20 points drop in Energy Intensity 36% decrease in fresh water usage Tüpraş kicked off its sustainability program back in 2008 and achieved many milestones in a decade ~205 MTL donations and sponsorships February 20 Investor Presentation +1.3 points increase in Corporate Governance rating Appendix www.tupras.com.tr 75% increase in female employee numbers ~1mn workhours dedicated to OHS training 17% female representation in senior and mid-level management See our Sustainability Report for details 47#48Tüpraş - ESG - 2018 Achievements Environmental Responsibility HeForShe leFo Social Support BİRLİKTE EŞİTİZ HeFor HeForS HeFor HeForShe ForShe HeF halley 1341 NYAMAYARO HeForShe Governance Excellence • Kırıkkale Refinery won the first place, İzmit Refinery the second and Batman Refinery the third in the Industrial Energy Efficiency Project Competition. İzmit Refinery won the first prize in the Sustainable Business Awards - Water Management Category. Achieved 69.5% water recycle ratio Achieved 88.6% solid waste recovery February 20 Appendix Investor Presentation • Signed agreement to support HeForShe (Global cooperation with UN Women and Fenerbahçe Sports Club) • 62% of ex-crude procurement activities were conducted through local businesses. www.tupras.com.tr • 9.50 Corporate Governance Rating • 13% Female Representation at the Board, • 17% Female Representation in Upper and Mid-Level Management. 48#49Koç Holding . Turkey's Leading Investment Holding Company Koç Holding is Turkey's largest industrial and services. group in terms of revenues, exports, employees, taxes paid and market capitalization • The only Turkish company in Fortuna 5001. • 20% CAGR in consolidated profit2 the last five years 8% 10% Pioneer in its Sectors Leading positions with clear competitive advantages in sectors with long-term growth potential such as energy, automotive, consumer durables and finance. 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 February 20 Appendix Investor Presentation www.tupras.com.tr Combined Revenues/ GDP Total Exports / Turkey's Exports 16% Total Market Cap in Borsa Istanbul Koc 49#50Investor Presentation Tüpras Koç Latest Webcast contact us: [email protected] Sustainability Report