#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. January 20 Investor Presentation Disclaimer www.tupras.com.tr 2#3Refining Market#420 20 Jan-16 38 32 30.7 26 Feb-16 Mar-16 Apr-16 56 62 68 50 50 2016 ave. 44 43.7 $/bb May-16 Jun-16 Jul-16 January 20 Investor Presentation Refining Market Aug-16 Sep-16 74 80 60 Brent Crude Prices + OPEC and its allies increasing output cuts + Impact of Iran & Venezuela sanctions + Escalating regional tension $/bbl 86 - Oct-16 Nov-16 Dec-16 Jan-17 I OPEC Production Cut Decision 2017 ave. 54.3 $/bbl Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 www.tupras.com.tr Apr-18 May-18 Jun-18 I Concerns on global economic development 81.2 2018 ave. 71.0 $/bbl Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 China's purchases to slow as approaching long-term reserve targets Iran Sanctions I I All waivers expired on Iran Drone Attack to ¦ Saudi Fields May-19 Jun-19 Jul-19 Aug-19 I Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 4 2019 ave. 64.3 $/bbl 67.0#5Refinery 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 2019-2024 Net Capacity Additions Europe -1.41 N. America 0.22 Japan -0.95 Other Other Asia Middle East Asia & Middle East Other Total 2.5 1.97 1.93 1.96 2.0 0.89 1.0 2.0 1.50 Min 1.7 0.9 1.3 0.51 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 January 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 13.7 10 14.1 12.9 12.2 16.6 16.2 17.9 15 13.9 14.4 13.8 13.2 12.0 11.3 11.4 10 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 6 Jan 2020 January 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 12.1 14.7 11.0 12.0 10 10.6 10.0 9.4 7.0 9.0 High Sulphur Fuel Oil 5yr range 2020 2019 5 yr ave -5.0 -5.5 -7.0 -6.9 -8.6 -9.8 -11.3 -26.6 -13.4 -16.9 -22.5 4.3 -31.6 2.9 0 1.7 1 -32.9 -35 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 6 Jan 2020 January 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 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 1Simple average of listed differentials January 20 Investor Presentation Refining Market 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#9Differentials Taking a Look at 2019... Cracks Weak Crack Margin Environment in 1H Diesel +5% Jet -9% Gasoline -36% HSFO -37% Elevated Concerns on Global Slowdown IMO Impact on Cracks IMO Impact on Differentials Sanctions on Iran crude All waivers expired on Iran OPEC Supply Cut <100% Compliance OPEC Supply Cut 100-120% Compliance Venezuela Crude Exports Druzba Pipeline Contamination January February March April May June January 20 Refining Market Investor Presentation OPEC Supply Cut >%120 Compliance Drone Attack to Aramco Oil Fields July August September October November December www.tupras.com.tr 9#10Turkish Market Tüpras#11Turkish 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 January 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 11#12Turkish Market, 10M 2019 Contraction in diesel demand is softening following weak 1H. Aviation driven jet demand remains healthy. Million Tons 24 22 242 20 20 21.20 18 16 2018 4 3 2 1.99 Diesel -2.8% 6 5 4 4.30 20.60 3 'Jet Fuel +6.4% 4.60 2 2019 2018 2019 Gasoline 2Fuel Oil +2.0% 2018 'Transit flight consumption included 2Bunker excluded January 20 Turkish Market Investor Presentation 1.0 0.8 0.6 +5.9% 0.4 0.2 2.03 0.30 0.32 0.0 2019 2018 2019 www.tupras.com.tr 12#13Turkey's Net Import / Export Balance Million Tons 4 Export 3.0 2.4 0 -3.0 -4 -3.2 -8 -12 Import -16 January 20 Investor Presentation LPG 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 13#14Company Overview SAWA WATAA#15Tüpraş Shareholder Structure Tüpraş is Turkey's biggest industrial company and leading refiner. Koç Holding 77% Ditaş 79.98% Aygaz 20% Energy Investments Inc. (SPV) 51% Opet 3% Opet 40% Tüpras Free Float 49% Körfez Ulaştırma 100% ¹As of September 30th, 2019 January 20 Investor Presentation Company Overview www.tupras.com.tr Publicly Traded 'Distribution of Domestic- Foreign Ownership of Tüpraş Shares Domestic Ownership 17% Foreign Ownership 83% 15#16Tüpraş'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 January 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 16#17Nelson Complexity of Refining Companies January 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 17#18Tüpraş Subsidiaries OPET, Distribution, Tüpraş Share: 40% DDEX opet DİTAŞ, Marine Transport, Tüpraş Share: 79.98% T.GONUL 1,640 stations as of 30 September 2019 · 3 Crude Oil Tanker: 479,765 DWT As of August 2019 Market share: 18.9% in white products; 31.7% in black products • 1 Crude Oil - Product Tanker: 51,532 DWT • 9 Product Tanker: 155,478 DWT" Körfez Ulaştırma, Railway Transport, Tüpraş Share: 100% EXIB January 20 ~7% share in Turkish rail freight market ~1.4 mn ton of product and semi-product carried in 9M 2019. Operates with 10 diesel locomotives and over 600 cistern wagons Investor Presentation Company Overview Tüpraş Trading UK, Trading, Tüpraş Share: 100% 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 18#19Operations 11#20Crude Suppliers of Tüpraş In 2018, Tüpraş purchased 20 different types of crude from 12 countries with gravities ranging between 19-47 API. Main Crude Suppliers in 2018 A 65 59 Crude Oil Imports by Region (%) Africa America Europe CIS ■Middle East 67 67 83 63 81 79 76 71 17 12 6 1315 10 1311 14 14 14 10 10 10 7 3 23 21 02 2 2012 2013 2014 2015 2016 2017 2018 January 20 Investor Presentation Operations www.tupras.com.tr 20#21Q3 Product Yields 2018 Q3 2019 Q3 LPG Asphalt Asphalt 4% LPG 4% 9% 13% Gasoline Fuel Oil 19% 7% Black Gasoline 19% Fuel Oil Light Kok 7% Black Light Prod. Distil. 3% Kok Prod. Distil. Other 20% 20% 3% 24% 21% Naphtha 2% Other White Other Other white 1% 4% Naphtha 1% 2% 4% Mid. Distil. 51% Jet 19% Mid. Distil. Jet 55% 18% Gasoil 32% White Product Yield (%) Production API January 20 Investor Presentation Operations 75.8% 7.7 mn tons 30.7 www.tupras.com.tr Gasoil 37% White Product Yield (%) Production ΑΡΙ 79.5% 7.5 mn tons 31.49 21#22Capacity Utilization and Quarterly Production Volume Capacity utilization returned to peak levels after completion of RUP Maintenance. Quarterly Production 2015 2016 -2017 2018 2019 7.7 7.5 6.9 6.7 5.2 Q1 6.2 Q2 Q3 6.6 'Capacity utilization calculation is based on 30 mn tons for Q1 2019 and onwards. January 20 Investor Presentation Operations Capacity Utilization ¹ (%) Crude Oil Semi Product Feedstock Total 115 108 105 103 7 96 7 99 92 42 99 105 97 94 4 9 7 78 11 98 101 101 87 85 55 67 107 89 89 91 96 96 10 Q4 2015 2016 2017 2018 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 www.tupras.com.tr 22#23Sales • 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. Customer Groups 2018 Total Sales mn tons 30.3 31.5 29.8 Other, 28.7 6% 5.8 5.5 4.2 22.2 6.5 22.2 LPG, 3% Jet, 6% Export, 14% 5.3 5.2 THY Opet, Exports 24.8 25.7 25.6 I Domestic Sales 22.2 Total Sales, 2018 10% 16.9 17.1 2014 2015 2016 2017 2018 2019 9M 29.8 mn tons Domestic Sales of Key Products Distributors, 50% mn tons 2.9 AKPET, OTHER, 3.4 3.5 8% 4% 2.9 2.2 2.2 2.2 TP, POAŞ, 27% Bitumen 2.0 1% 4.9 1.9 4.5 4.5 1.3 Gasoline 1.8 4.8 1.8 3.4 Sales to Distributors BP, 13% 3.9 Jet Fuel 2018 9.2 10.8 11.3 11.9 7.9 6.7 Diesel 14.8 mn tons SHELL, 17% 2014 2015 2016 2017 2018 2019 9M OPET, 30% January 20 Operations Investor Presentation www.tupras.com.tr Bitumen, 10% Military, 1% 23#24Financials 41#25Margin Environment Tüpraş' 3.7 $/bbl Net Refining Margin in 9M 2019 was higher than 2.9 $/bbl Med Complex margin. Med Complex 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 • Close proximity to major suppliers reduces transport costs • Lower cost basis and more efficient energy usage • Ability to produce higher value added range of refined products ⚫ Direct pipeline connections with domestic clients • High export capability January 20 Financials Investor Presentation $/bbl 5.5 2.9 2.0 1.2 Month Annual 4.2 1.7 2.0 5.4 4.8 4.6 4.0 2.9 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 ■Tüpraş Net Margin $/bbl 3.2 2.5 1.9 1.7 6.5 6.0 4.8 Mediterranean 9.3 8.1 5.3 4.6 4.0 3.7 2.9 2013 2014 2015 2016 6 2017 2018 9M 2019 www.tupras.com.tr 25#26Tüpraş and Med Margins 199/$ Tüpraş Net 9M Margins Med Margin 10.7 6.9 5.3 4.6 3.6 2015 2016 8.5 2017 5.8 4.5 3.7 2.9 2018 2019 ($/bbl) Gross Margin Inventory Effect Clean Gross Margin Clean NET Margin Med Margin 2019 Q3 9.1 -1.4 10.6 5.4 3.3 2019 9M 9.0 -0.1 9.1 3.8 2.9 2018 Q3 17.6 3.1 14.5 10.4 5.1 2018 9M 16.0 2.5 13.6 8.3 4.5 January 20 Financials Investor Presentation www.tupras.com.tr 26#27Income Statement Tüpraş recorded 956 mn TL EBITDA in Q3 2019. Q3 Q3 9M 9M Million TL % % 2019 2018 2019 2018 Net Sales COGS Gross Profit Operating Expenses 23,309 30,247 -23 67,970 63,749 7 -22,152 -26,337 -16 -64,150 -56,549 13 1,157 3,910 -70 3,820 7,200 -47 -451 -324 39 -1,244 -870 43 Income/Loss from other operations -98 -2,783 -407 -3,771 Operating Profit 608 802 -24 2,169 2,559 -15 Income/Loss from equity investment 63 47 34 172 185 -7 Operating Profit Before Fin. Income/Loss 671 849 -21 2,341 2,743 -15 Financial Income/Expense -817 -171 -2,214 -668 Profit Before Tax -146 678 127 2,075 Net Profit (excluding minority interest) -155 542 340 1,947 EBITDA *(mn.TL) Inventory Gain/Loss EBITDA* (mn. TL) CCS 956 3,778 -75 3,301 7,021 -53 -692 1,667 283 2,950 -90 1,648 2,111 -22 3,018 4,071 -26 *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. January 20 Investor Presentation Financials www.tupras.com.tr 27#28Financial Highlights Tüpraş recorded 3,301 MTL EBITDA in 9M 2019. EBITDA ¹Net Income Q1 Q2 Q3 10 Q4 Q1 Q2 Q3 Q4 8,908 3,812 Mn TL Mn TL 3,713 493 1,887 5,882 2,550 992 1,766 1,237 815 3,778 1,793 3,799 3,396 3,301 1,457 542 1,528 750 803 1,208 340 1,505 956 1,027 1,542 1,144 2,210 710 581 869 870 867 1,495 275 331 378 1,080 688 1,575 79 1,033 -375 851 -155 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 1.8 Current Ratio & Net Debt / R. EBITDA Net Debt/ R. EBITDA Current Ratio 1.8 2Return on Average Equity 1.7 35% 22% 1.3 1.1 1.2 1.0 1.3 1.1 1.1 2015 2016 2017 2018 Sep. 2019 1) Excluding minority interest 2) Calculation based on rolling net income January 20 Investor Presentation Financials www.tupras.com.tr 41% 37% 21% 2015 2016 2017 2018 Sep. 2019 28#29Balance Sheet Analysis Strong balance sheet maintained. Net Debt Billion TL 6.9 6.1 6.2 Loan 12.0 10.6 10.1 Billion TL 6.8 8.7 3.9 Redemption Schedule Eurobond TL bond Total 1.5 1.5 0.9 4.2 Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19 Sep-19 1 year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years Billion TL 0.8 Working Capital Requirement -0.2 2.1 4.7 1.6 -0.7 -2.3 Dec-15 Dec-16 Dec-17 Dec-18 Mar-19 Jun-19 Sep-19 January 20 Financials Investor Presentation www.tupras.com.tr Proactive Financial Management • • Delevering continues despite operational headwinds Dynamic liquidity management ensures optimal cash and receivables management 29#30Q3 Profit Before Tax Bridge (2018-2019) Decline in profit before tax was driven by narrow differentials and natural gas price hikes. Million TL 678 31 -549 -50 +2,473 FX -2,384 Inventory -385 -146 38 90 Q3 2018 PBT Crack Margin Differentials Production Natural Gas & Other OPEX Inventory & FX Other Q3 2019 PBT January 20 Financials Investor Presentation www.tupras.com.tr 30#31Annual Profit Before Tax Bridge (2017-2018) 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 4,474 2,129 -311 -660 -293 -1,779 164 3,724 2017 Inventory Gain Crack Margin Crude Oil Differential Production FX Other 2018 January 20 Financials Investor Presentation www.tupras.com.tr 31#32Dividend (TL) 20 18 16 14 77% 12 10 8 6 4 Earnings per Share Gross Dividend Dividend Payout 101% 79% 66% 5.8 5.0 4.8 2 3.9 3.9 3.2 2.5 2.9 3.0 33% 5.8 1.6 0% 0 2009 2010 2011 2012 2013 January 20 Financials Investor Presentation 64% 10.2 89% 87% 7.2 6.5 6.2 102% 120% 80% 15.2 14.8 15.2 13.6 40% 0% 2014 2015 2016 2017 2018 www.tupras.com.tr 32#33Investments (Million $) • 6.5 bn USD investments since privatization Reached 9.5 Nelson Complexity Capability to process heavier and more sour crude Avg. 278 Mn$ 628 Avg. 943 Mn$ 1213 974 959 Avg. 220 Mn$ 400 355 274 344 213 186 177 185 138 112 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 9M January 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 33#349M 2019 Results 9M Refining Margins ($/bbl) Med Margin ■Tüpraş Net Margin 2.9 3.7 Med FY Exp Tüpraş FY Target 0 1 2 3 4 5 6 3.7 $/bbl net refining margin in 9M 2019 January 20 Investor Presentation Financials 9M 0 www.tupras.com.tr Capacity Utilization (%) 98.3 98.3% total capacity utilization in 9M 2019 20 20 40 60 80 100 9M Operationals 2019 Target 30 28 21.2 22.2 22.2 mn tons of sales and 21.2 m tons of production in 9M 2019 Production Sales Capex (mn $) 112 mn$ refining CAPEX in 9M 2019 150 112 9M 2019 Target 34#35Tüpraş Balance Sheet (Million TL) 30.09.2019 31.12.2018 Diff. Diff. (%) Current Assets 28,945 20,962 7,983 38 Cash&C. Equivalents 10,106 5,983 4,123 69 Trade Receivables 6,063 5,429 635 12 Derivatives 350 176 174 99 Inventories 9,489 6,765 2,724 40 Pre-paid expenses 231 109 122 113 Other Current Assets 2,707 2,502 205 8 Long Term Assets 26,735 19,074 7,662 40 Financial Assets & Subsidiaries 1,368 1,271 97 8 Fixed Assets 20,290 12,397 7,893 64 Derivatives 122 168 -46 -28 Pre-paid expenses 349 378 -29 -8 Deferred Tax 3,114 3,566 -452 -13 Other Long Term Assets 1,492 1,293 199 15 Total Assets Short Term Liabilities 55,681 40,036 15,645 39 27,358 15,950 11,408 72 Financial Loans 3,860 4,113 -253 -6 Trade Payables 17,834 7,496 10,337 138 Derivatives Provisions 288 236 52 22 201 80 120 150 Other ST Liabilities 5,175 4,024 1,152 29 Long Term Liabilities 15,323 14,140 4,237 8 Financial Loans Payables & Provisions Derivatives 14,990 13,836 1,154 8 278 257 21 8 46 42 4 10 Other LT Liabilities 8 5 4 84 Total equity attr. to equity holders of the parent Minority Interests 12,839 161 55,681 9,825 121 40,036 3,014 31 40 33 15,645 39 Total Liabilities & Equity January 20 Financials Investor Presentation www.tupras.com.tr 35#36Leading 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) January 20 Investor Presentation Financials www.tupras.com.tr Analyst Recommendations 33% 4% Buy Hold 63% ■Sell Source: Bloomberg 36#37Financial 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 • January 20 Financials Inestor Presentation www.tupras.com.tr 37#38FX Exposure Management (30 September 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: 864 mn $ January 20 Investor Presentation Financials www.tupras.com.tr Consolidated Hard Currency Assets Cash 342 Consolidated Hard Currency Liabilities Million $ Payables 2,252 Receivables & Other Assets 98 ST Financial Loans 533 Stock 1,682 Forward & CFH 2,463 +11 mn $ • RUP: 191 Other: 342 LT Financial Loans 1,789 RUP: 707 Eurobond: 700 Other Loans: 382 38#39Tüpras Tüpras Tüpras Tüpraş Tüpraş Tüp Tüpraş as Appendix#402019 Refinery Maintenance Schedule Duration Refinery Unit Quarter Reason Status (weeks) Plt 100 CDU Q4 2-3 Periodic Plt-8200 Hydrocracker Q4 2-3 Periodic İzmir Plt-8100 Vacuum Q4 2 Periodic Plt 9200 CCR Q1 3 Completed RUP Q1&Q2 11 Completed İzmit Plt 2 Crude Oil & Vacuum Q4 7-8 Periodic Plt 7 FCC Q4 5-6 Periodic Kırıkkale Batman Plt 100/1100 Crude Oil & Vacuum Q1 10 January 20 Investor Presentation Appendix www.tupras.com.tr Completed 40#412019 Expectations Med Complex Refining Margin 2.75-3.25 $/bbl • Ural-Brent differential was mostly positive in 1H and remains narrow in 2H • HSFO cracks dropping sharply in 2H with IMO 2020 Production ~28 mt, Sales ~30 mt and capacity utilization (95 - 100 %) • Major maintenances completed Tüpraş Net Refining Margin 4.00-4.50 $/bbl • Mid distillate cracks are supported by IMO 2020 in 2H, but concerns on demand limits full potential • Gasoline cracks remain resilient • Heavy Crude Differentials remain narrow in 2H Refining Capex ~150 million $ • Some projects have been postponed in order to assess the full impact of IMO 2020 on feasibility and basic engineering studies. • Some TL based capex is reduced in USD terms January 20 Investor Presentation Appendix www.tupras.com.tr 41#42Competition - 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 January 20 Investor Presentation Appendix www.tupras.com.tr 42#43Competition - 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 January 20 Investor Presentation Appendix www.tupras.com.tr Turkey 17 Refineries ~1.8mbd Russia Georgia 43#44IMO 2020: Changes in Bunker Specification and Its Effects Beyond 2020 Current Outlook HSFO replacement expectations -0.6 -0.5 4.0 3.5 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 HSFO w/... VLSFO Current HSFO HSFO Non... MGO 6 5 43 2 1 0 1.3 -1.1 Long term outlook for marine fuels Compliant HSFO Non-compliant HSFO ULSFO MGO LNG 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 01/11/19, ~2.8K vessels are either fitted or scheduled to be fitted and ~0.6K vessels are on order book to be delivered with scrubbers • LNG: requires significant investments at ports Demand shift beyond 2020 • MGO is expected to be the initial choice in 2020 . • VLSFO becomes more widespread 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) January 20 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Investor Presentation Appendix www.tupras.com.tr Source: Market Reports 44#45Tüpraş Production Flow and Yield Breakdown. • 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. # of Capacity Key Units Units (m³/d) CRUDE OIL 8 99,420 Flow Diagram LPG MEROX LPG, 3.5% VACUUM DIST. 8 42,752 HYDROCRACKER 4 18,032 ISOMER. NAPHTHA SPLITTER Benzen Saturation UNIFINER REFORMER Gasoline Naphtha, 22.0% 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% January 20 Investor Presentation Appendix www.tupras.com.tr 45#46RUP Feedstock and Production • Residium Upgrade Plant (RUP) was completed in 2015 and it is the main conversion unit of Tüpraş. First periodic maintenance was completed in Q2 2019. January 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 LPG 522 69 PetroCoke 690 Sulphur 86 Total Output ~4.25mn tons 46#47European 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. Gre. Ita. European prices as of 16th December - Turkeys prices as of 24th December January 20 Investor Presentation Appendix www.tupras.com.tr TR Spa. Ger. EU19 Gre. Fra. Ita. UK 47#48Tüpraş - 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 January 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 48#49Tüpraş - ESG - 2018 Achievements Environmental Responsibility HeForShe HeF leFo Social Support BİRLİKTE EŞİTİZ HeFor HeForS HeFor HeForShe ForShe H HeFo halley 34 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 • 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. • 9.50 Corporate Governance Rating • 13% Female Representation at the Board, • 17% Female Representation in Upper and Mid-Level Management. January 20 Investor Presentation Appendix www.tupras.com.tr 49#50Koç 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 January 20 Appendix Investor Presentation www.tupras.com.tr Combined Revenues/ GDP Total Exports / Turkey's Exports 16% Total Market Cap in Borsa Istanbul Koc 50#51Investor Presentation Tüpras Koç Latest Webcast contact us: [email protected] Sustainability Report