[PPT] - INVESTOR PRESENTATION March 2018 CONTENT A - Overview G - Other PowerPoint Presentation

SLIDE 1

INVESTOR PRESENTATION

March 2018

SLIDE 2

A- Overview B- World LPG market C- Turkish LPG market & Aygaz D- The LPG value chain E- Participation portfolio F- Natural gas G- Other participations H- Financial highlights I- Appendix J- Glossary K- Disclaimer L- Contacts

CONTENT

SLIDE 3

A

SALES OF LPG 2.2 m tons 8.5 billion REVENUE LPG MARKET SHARE 28%

REFINERY NATURAL GAS POWER GENERATION

DIVERSIFIED PARTICIPATION PORTFOLIO IN ENERGY

Aygaz overview

LEADING LPG DISTRIBUTOR

f TURKEY

2017

3

SLIDE 4

(Cons. in m TL)

2017 2016 2015 2017-2016 Change

Revenue

8,469 6,749 6,420 25%

EBITDA

352 394 337

11%

Net Profjt

577 416 418 39%

EBITDA Margin

4% 6% 5%

2

Net Profjt Margin

7% 6% 7% +1

Volume (000 tons)

2,154 2,109 2,057 2%

SUMMARY FINANCIALS

Overview

SHAREHOLDERS (%)

LIQUID PETROLEUM GAS DEVELOPMENT CO. PUBLICLY TRADED KOÇ GROUP

51

.2

24.5 24.3

>

As of 31/12/2017

4

SLIDE 5

Core business - LPG distribution

OTHER (wholesale & export) AUTOGAS CYLINDER

MARKET SHARES (%)

EMRA data December 2017

CYLINDER

24

AUTOGAS

41

TOTAL

28

EMRA, Aygaz

BULK GAS

Generic brand for LPG 14th largest industrial company of Turkey, as of 2016 Most preferred LPG brand in Turkey since its foundation Market leader with 3 brands

AYGAZ VOLUMES (000 tons)

>

589 707 865 46 37 359 342 342 335 343 2013 2014 2015 662 688 777 933 1,029 2016 2017 792 759 42 31 72

5

SLIDE 6

World LPG market

WORLD LPG CONSUMPTION (m tons)

298 285 275 268 257 256 249 240 240 236 227

Cleaner, safer and cheaper at home & transportation Mixture of hydrocarbons (Butane and Propane) Portable and versatile Low GHG emission; Eco-friendly Diversity of supply sources; Abundant reserves

LPG AS A COMMODITY

B

WLPGA Statistical Review of Global LP Gas Report, 2017

Fastest - growing energy source after renewable energy 300 billion USD business size worldwide Sources of LPG production;

NATURAL GAS CRUDE OIL

62% 38%

2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

6

SLIDE 7

World LPG consumption

World LPG Consumption By Sectors 2016 (%)

Chemical Autogas Industry Agriculture Domestic Refjnery

44 28 9 10 1 8

World LPG Consumption By Regions 2016 (%)

North America Europe&Eurasia Middle East S.&C. America Asia Pasifjc Africa

41 17 17 11 10 4

WLPGA Statistical Review of Global LP Gas Report, 2017

>

7

SLIDE 8

Prices of LPG and brent >

Sonatrach / Market data

SP (Algeria) Crude oil (Brent)

There is a correlation between LPG and oil price
Seasonality can also affect LPG price
December 2017 Sonatrach LPG price is at USD 539

and 46% higher than December 2016 price.

$/Ton

1.200 1.100 1.000 900 800 700 600 500 400 300 200 JAN 13 MAR 13 MAY 13 JUL 13 SEP 13 NOV 13 JAN 14 MAR 14 MAY 14 JUL 14 SEP 14 NOV 14 JAN 15 MAR 15 MAY 15 JUL 15 SEP 15 NOV 15 JAN 16 MAR 16 MAY 16 JUL 16 SEP 16 NOV 16 JAN 17 MAR 17 MAY 17 JUL 17 SEP 17 NOV 17

$/Barrel

140 120 100 80 60 40 20

894 977 368 321 421 539 113 108 48 32 56 64

8

SLIDE 9

Turkish LPG market C

EVOLVING FROM CYLINDER TO AUTOGAS (000 tons)

EMRA data

INDUSTRY DOMESTIC TRANSPORT 1,752

42% 10% 48%

1,557 383

3,117

20% 76% 4%

811

152

2005

2017 4.1 m tons #2 in Europe #11* in the World ~90 distribution companies

Leading 3 players in the cylinder market and fjrst 8 players in the autogas market hold over 80% of the total market

Serving; • 7.5 m houses • 4.6 m cars Liberal market with regulatory body-EMRA

LPG consumption in Europe (m ton)

4.7 4.1 3.2 2.4 1.8 1.7 1.5 1.1 0.5

RUSSIA TURKEY ITALY POLAND FRANCE GERMANY SPAIN U.K. GREECE

WLPGA Statistical Review of Global LP Gas Report, 2017 * when p. chemical and refjnery is excluded

9

SLIDE 10

3.5 m tons 3.1 m tons 3.0 m tons 1.8 m tons 1.7 m tons 1- SOUTH KOREA 2- TURKEY 3- RUSSIA THE 2nd BIGGEST AUTOGAS MARKET IN THE WORLD 5- ITALY 4- POLAND

LPG market ranking >

WLPGA Statistical Review of Global LP Gas Report, 2017

1.3 m tons 1.2 m tons 1.1 m tons 1.0 m tons 0.8 m tons 1- ITALY 2- SPAIN 3- RUSSIA 5- TURKEY THE 5th BIGGEST DOMESTIC LPG MARKET IN EUROPE 4- FRANCE

10

SLIDE 11

SLIDE 12

> > Cylinder market starting to stabilize

CYLINDER MARKET

Growth in 2015 and 2016 in the cylinder market is interrupted by the 1% contraction in 2017. Factors affecting cylinder market;

Pressure on demand due to rising LPG prices
Continuation of natural gas grid expansion despite deceleration

RATES OF CHANGE (YoY)

EMRA data

TURKISH MARKET AYGAZ

Turkish market (000 tons) Aygaz

4% 2%

2%
4%
6%
8%
10%

2013 2014 2016 2015 2017

811 842 801 335 359 342 342 343 816 821

2017 2013 2014 2015 2016

12

SLIDE 13

> > Aygaz; leader in cylinder market since its foundation

*EMRA data

2016

Number of Dealers Sales Volume (tons) Avg dealer sales (tons)

Aygaz cylinder dealers

2,192 342,050 156

Total cylinder dealers

8,166 820,412 100

Generic brand Market maker Largest dealer network with high sales effjciency 60% market share in residential use Fully integrated production cycle; Cylinder and gas appliances factory in Gebze plant Aygaz Ekspres; digital solutions for optimizing dealers’ business&delivery Aiming to maximize customer satisfaction&loyalty

41.3% 28.9% 15.9% 13.9%

AYGAZ SHV DEMİRÖREN OTHER

CYLINDER MARKET SHARES 13

SLIDE 14

SLIDE 15

> World’s second biggest autogas market

EMRA data

Turkish market (000 tons) Aygaz

AUTOGAS MARKET RATES OF CHANGE (YoY)

Autogas market that showed a steady growth since 2003, contracted nearly by 1% in 2017 due to the pressure of rising LPG prices. Factors affecting autogas market;

30% more economic on average compared to gasoline
Fierce price competition among national and local players
Continuation of growth in autogas car park
Increasing interest of car manufacturers to LPG and conversions with car guarantees

2,727 2,838 3,069 3,142 759 662 688 777 792

2017 2013 2014 2015 2016

3,117

14% 12% 10% 8% 6% 4% 2%

2%
4%

2017 2013 2014 2015 2016 TURKISH MARKET AYGAZ

15

SLIDE 16

Price economy of autogas >

*WLPGA Statistical Review of Global LP Gas Report, 2017

price advantage to gasoline

39 39 39 42 52 62 54 56 65

NETHERLANDS GERMANY ITALY POLAND SOUTH KOREA UNITED KINGDOM FRANCE TURKEY JAPAN

PUMP PRICE OF AUTOGAS ACROSS THE WORLD (%)*

Ratio of autogas pump price to gasoline Ratio of autogas pump price to diesel

50 46 44 44 62 61 64 66 77 %50 %40 %30 %20 %10

%10
%20
%30
%40

JAN-13 MAR-13 MAY-13 JUL-13 SEP-13 NOV-13 JAN-14 MAR-14 MAY-14 JUL-14 SEP-14 NOV-14 JAN-15 MAR-15 MAY-15 JUL-15 SEP-15 NOV-15 JAN-16 MAR-16 MAY-16 JUL-16 SEP-16 NOV-16 JAN-17 MAR-17 MAY-17 JUL-17 SEP-17 NOV-17

To gasoline To diesel

16

SLIDE 17

> > Autogas; most widely-used passenger car fuel of Turkey

Turkstat, ACEA

GASOLINE DIESEL AUTOGAS 75%

5%

15%

35% 39% 26%

2017

2004*

TURKISH CAR PARK (m cars) RATIO OF CARS REGISTERED TO TRAFFIC ACC. TO FUEL TYPE

DIESEL AUTOGAS GASOLINE

CAR OWNERSHIP PER PERSON

EUROPE TURKEY

575/1000 150/1000

Most widely-used passenger car fuel since 2011
With 4.6 million cars, 4 out of 10 passenger cars run on LPG
Largest LPG vehicle fmeet in the world; 16% of the world
10,000+ autogas stations all over Turkey

2013 2014 2015 2016 2017

2.5 2.9 3.8 4.3 2.9 2.9 3.1 3.1 3.9 4.1 4.3 4.4 3.3 2.9 4.6

* Fuel type unknown: 5%

17

SLIDE 18

> > Aygaz; leader of the second biggest autogas market in the world

AUTOGAS MARKET SHARES MARKET SHARE & STATION NUMBER SHARE (%)

EMRA data

Largest dealer network with high sales effjciency Creating network synergy with sister company Opet Core business is LPG unlike other fuel distributors

STATION NUMBER SHARE MARKET SHARE 2016

Number of Dealers Sales Volume (tons) Avg dealer sales (tons)

Aygaz autogas dealers

1,741 791,758 455

Total autogas dealers

10,426 3,141,932 301

AYGAZ OMV PO SHELL DEMİRÖREN GROUP BP SHV GROUP AYTEMİZ AKPET

16 24,4 12 12,3 11,8 10,5 7,2 10 4,2 2,9 4 4 7,1 5 9 8

24.4% 12.3% 11.8% 10.5% 7.2% 7.1% 4.2% 2.9% 19.6%

AYGAZ OMV PO SHELL DEMİRÖREN GROUP* BP SHV GROUP** AYTEMİZ AKPET OTHER

*Milangaz & Total ** İpragaz & Yıldırım

18

SLIDE 19

> > Autogas car park growth

177,000

conversions per year 1,000+ conversion points $500 average cost of conversion Payback in 15,000 km AUTOGAS CONVERSIONS (m cars)

AUTOGAS CAR PARK PASSENGER CAR PARK

OEM; original equipment manufacturer

Some major car manufacturers

are providing guaranteed conversion currently

Turkstat

2017 2013 2014 2015 2016 9.3 9.9 10.6 11.3 4.6 3.9 4.1 4.3 4.4 12

19

SLIDE 20

The LPG value chain D

2.2 million tons of LPG supply 3 LPG ships belonging to the fmeet of Anadoluhisarı Tankercilik Moving&fmoating storage capacity

f 37,000 m3

Fixed storage capacity of 178,400 m3 via 20 facilities Gebze Facility; exports of cylinders and gas devices 1,710 auto gas stations 1,000,000 vehicles using Aygaz Otogaz 3,000+ bulk gas customers

~190 cylinder

vehicles 2,359 cylinder gas dealers

~230

tankers AUTOGAS BULK CYLINDER

As of end of 2017

20

SLIDE 21

Competitive Supply Chain

BIG PLAYER

#1 purchaser in Mediterranean #1 importer in Turkey #1 FOB player in Black Sea #1 exporter in Turkey #1 storage owner in Turkey (~24% of TR)

ADVANCED MODEL

Direct imports to 5 different locations Most diversifjed supply portfolio in Turkey Diversifjed supplier & origins Diversifjed supply pattern (ex-refjnery, FOB, CIF) Only company in Med capable of discharging a VLGC in single port 300+ cargos throughout the year

FLEET MANAGEMENT

Top-notch LPG fmeet owner Total capacity: 28,800 cbm, Average age: 12 yrs Single LPG vessel charterer (in/out) in Turkey Reduces logistics costs Provides fmexibility in sourcing and inventory management

OVERLAND TRANSPORTATION

Biggest LPG truck fmeet in Turkey >500 vehicles Transporting 1.3 million ton/year 40 million km/year

>

21

SLIDE 22

SLIDE 23

Participation Portfolio E

Aygaz Doğalgaz 100% Anadoluhisarı 100% Akpa 100% Opet-Aygaz Gayrimenkul 50% Entek 50% EYAŞ* 20%

*EYAŞ owns 51% of the shares of TÜPRAŞ

23

SLIDE 24

Natural gas F

SALES VOLUME (mcm)

LNG SALES PIPELINE NG SALES

sales: ~100 mcm

2017

Transportation and regasifjcation 16% market share, 300 industrial customers

PROJECTS

LNG & Pipeline gas import

LNG SALES

2017 sales: ~1,300 mcm

PIPELINE NATURAL GAS SALES

Started in 2010 2013

125 366

2015

92 837

2016

100 961 1,103

2014

94

2017

105 1,279

24

SLIDE 25

> Natural gas

STRATEGY

UPSTREAM WHOLESALE TRANSMISSION AND STORAGE

Wholesale Companies Power generation and industry Local Distribution Companies

IMPORT

CURRENT POSITION TARGET POSITION

LNG Companies

25

SLIDE 26

Other participations G

POWER GENERATION STRATEGY SALES AND MARKETING Direct sale of cylinder gas and carboy water throughout Turkey Fuel trade at its fuel stations OPET AYGAZ GAYRİMENKUL Founded in 2013 as a 50-50 partnership with Opet to purchase real estate and manage or lease these properties as fuel

r autogas stations

Currently owns 21 stations Selective growth depending

n opportunities and

liberalization in the market TOTAL INSTALLED CAPACITY: 244 MW İzmit Natural Gas Combined Cycle (NGCC): 157 MW 6 Hydro Assets: (HEPP): 87 MW

Menzelet and Kılavuzlu HEPP’s (178 MW) are aimed to be

perated within 2018.

26

SLIDE 27

Aygaz key takeaways >

STRATEGIC PRIORITIES

Sustain its market leadership in LPG by;

Investing in the future with the responsibility of being the industry’s highly reputable, reliable and consumer-oriented brand,
Prioritizing high safety standards and product quality,
Developing innovative products and services with solutions that place innovation and digitalization at the core.

Ensure sustainable growth to move its current position forward by:

Following and seizing opportunities for mergers, acquisitions and investments at home and abroad,
Improving effjciency in all processes from sourcing to selling LPG,
Aiming to create value for all stakeholders.

Consistent Market Leader Brand Power Strong Sales & Logistics Network Financial Strength Long-term Strategy Builder Diversifjer & Portfolio Investor

27

SLIDE 28

Shareholder value >

OUTPERFORMER OF BIST 30 STRENGTHS

DIVIDEND DIVIDEND PAY OUT

Sustainable operating profjtability from core business; LPG Resistant to economic fmuctuations and crises Regular dividend payments Corporate governance practices at international standards;

SAHA Corporate Governance and Credit Rating Services

confjrmed Aygaz’s corporate governance rating score as 9.36 on June 22, 2017.

BIST Code AYGAZ Bloomberg Code AYGAZ.TI Reuters Code AYGAZ.IS IPO Date 13.01.1988 Free float rate 24.3%

5500 5000 4500 4000 3500 3000 2500 2000 1500 1000

JAN 12 MAY 12 SEP 12 JAN 13 MAY 13 SEP 13 JAN 14 MAY 14 SEP 14 JAN 15 MAY 15 SEP 15 JAN 16 MAY 16 SEP 16 JAN 17 MAY 17 SEP 17 JAN 18

AYGAZ Mcap (mTL) BIST-30 INDEXED (mTL)

80% 85% 75%

* Proposed amount

460 m TL* 175 m TL 100 m TL 315 m TL 450 m TL 2017 2013 2014 2015 2016 46% 108%

28

SLIDE 29

H Financial highlights

REVENUE (m TL)

Revenue fjgure fmuctuations are mainly due to;

FX rate changes
Commodity price changes

2017 2013 2014 2015 6,005 7,061 6,420 2016 6,749 8,469 29

SLIDE 30

EBITDA EBITDA MARGIN

EBITDA AND EBITDA MARGIN

NET PROFIT NET PROFIT MARGIN GROSS PROFIT GROSS PROFIT MARGIN

GROSS PROFIT AND GPM

Bar fjgures: m TRY

Financial highlights >

NET PROFIT AND NPM PROFIT MARGINS

GP MARGIN NP MARGIN EBITDA MARGIN

10% 7% 2017 2013 2014 2015 2016 741 571 527 677 787 7% 3% 7% 6% 2017 2013 2014 2015 2016 577 205 218 418 416 3% 2017 2013 2014 2015 352 252 188 337 4% 4% 3% 5% 6% 2016 394 2017 2013 2014 2015 2016

12% 10% 8% 6% 4% 2% 0%

11% 12% 9%

30

SLIDE 31

Financial highlights >

NET CASH (m TL) WORKING CAPITAL (m TL) CURRENT RATIO RETURN ON EQUITY

TRADE PAYABLES INVENTORY WORKING CAPITAL TRADE RECEIVABLES

2015 2016 2017 2013 2014

267 182 297 187 230

324

670

276 367

376

110

319

186 183 483

372
471

390

2015 2017 2013 2014

1.24 1.30 1.00 1.21 1.38

2016

475

380
65
204
263

2015 2016 2017 2013 2014

63

2015 2017 2013 2014

9% 9%

2016

20% 15% 16%

577

31

SLIDE 32

> Financial highlights

DEBT PROFILE AS OF 31/12/2017

CREDIT RATING: Following the comparative analysis of the sector and examination of fjnancial/operational risks carried by the Company, as well as its domestic market position by SAHA Corporate Governance and Credit Rating Services, AYGAZ received a long term rating of (TR) AAA and a short term rating of (TR) A1+ and outlook as stable on June 22, 2017.

2016 2017

ST Borrowings

1 85

Current portion of LT Borrowings

229 305

LT Borrowings

400 583

Total Debt

630 973

Cash and cash equivalents (-)

568 593

= Net Debt

63 380

ST: Short-term LT: Long-term * FX position is actively monitored and managed including derivatives.

(m TL)

TL Loan; 51% TL Bond; 29% *FX Loan; 20%

32

SLIDE 33

Appendix I

33

SLIDE 34

1 Income statement summary

(m TL)

2013 2014 2015 2016 2017

Revenue

6,005 7,061 6,420 6,749 8,469

COGS

(5,434) (6,534) (5,743) (5,962) (7,728)

Gross Profjt

571 527 677 787 741

Operating Profjt

170 104 250 308 265

Profjt Before Tax

237 237 458 469 621

Net Profjt

205 218 418 416 577

EBITDA

252 188 337 394 352

GP margin

10% 7% 11% 12% 9%

OP margin

3% 1% 4% 5% 3%

NP margin

3% 3% 7% 6% 7%

EBITDA margin

4% 3% 5% 6% 4%

34

SLIDE 35

Balance sheet summary 2

(m TL)

2013 2014 2015 2016 2017

Cash & Cash Eq.

173 161 289 568 593

Trade Receivables

367 390 483 475 577

Inventories

276 110 186 183 324

Participations

1,377 1,677 1,867 1,922 2,273

Prop. Plant & Eq.

589 585 651 658 678

Financial Debt

(238) (365) (551) (630) (973)

Trade Payable

376 319 372 471 670

Equity

2,244 2,359 2,611 2,742 2,923

Total Assets

3,188 3,412 3,916 4,231 4,966

Net Cash (Debt)

(65) (204) (263) (63) (380)

Working Capital

267 182 297 187 230

35

SLIDE 36

2017 Q4 income statement summary

3

(m TL)

Q417 Q317

Change

Q417 Q416

Change

Revenue

2,307 2,216 4% 2,307 1,844 25%

Gross Profjt

185 223

17%

185 201

8%

Operating Profjt

46 100

55%

46 75

40%

Profjt Before Tax

97 183

47%

97 158

38%

Net Profjt

85 166

49%

85 139

39%

EBITDA

68 122

45%

68 97

30%

MARJLAR

Gross Profjt M.

8% 10%

2

%8 11%

3

Operating Profjt M.

2% 5%

3

%2 4%

2

Profjt Before Tax M.

4% 8%

4

%4 9%

5

Net Profjt M.

4% 8%

4

%4 8%

4

EBITDA M.

3% 6%

3

%3 5%

2

36

SLIDE 37

2017 Q4 Aygaz LPG sales

4

527 594 520 514

274 166 79 272 222 261 221 204 168

Q2 Q3 Q4 Q4 514

241 183 81

Q1

8 8 8 8 8 77 93 86

2017 2016

CYLINDER AUTOGAS BULK OTHER

(000 tons) Q4 sales volumes were realized as;

168 thousand tons in Autogas (-8% YoY)
77 thousand tons in Cylinder Gas (-5% YoY)

37

SLIDE 38

5

3% YoY

+2% YoY

Domestic LPG sales

+9% YoY

International and wholesale LPG sales Total LPG sales

Thousand tons

2,154

Thousand tons

1,029

Thousand tons

1,125

2017 sales volumes

Cylinder sales are 335 thousand tons (-2% YoY)
Autogas sales are 759 thousand tons (-4% YoY)

38

SLIDE 39

As of December 2017 EMRA report, Aygaz cylinder and autogas market shares are 41% and 24% respectively. (42% and 25% in December 2016) According to December 2017 EMRA report, Turkish cylinder sales volume is 811,471 tons and autogas volume is 3,116,569 tons. 2016/12 months*: Cylinder gas 819,912 tons Autogas 3,141,901 tons

DECEMBER 2017

DECEMBER 2016

3,141,901 819,912

3,116,569

1%
1%

811,471

Market shares

CYLINDER AUTOGAS

SALES VOLUME (Tons)

DECEMBER 2017

DECEMBER 2016

25% 42%

24%

41%

6

*EMRA 2017 report EMRA, Aygaz

39

SLIDE 40

7 Forward looking statements for 2018

SALES VOLUME MARKET SHARE

Cylinder: 320-335 thousand tons
Autogas: 750-785 thousand tons
Cylinder: 41.5%-43.5%
Autogas: 24.2%-25.4%

40

SLIDE 41

Glossary J

LPG Liquid Petroleum Gas EMRA Energy Market Regulatory Authority WLPGA World LPG Association SP Sonatrach Price PETDER Petroleum Industry Association FOB Free On Board CIF Cost, Insurance & Freight Med Mediterranean VLGC Very Large Gas Carrier EYAŞ Enerji Yatırımları A.Ş. LNG Liquid Natural Gas Mcm Million Cubic Meters Bcm Billion Cubic Meters NGCC Natural Gas Combine-Cycle MW Megawatt (one million watts) BIST Borsa Istanbul (Istanbul Stock Exchange) IPO Initial Public Offering GHG Greenhouse Gas Protocol

41

SLIDE 42

Disclaimer K

This presentation may contain forward-looking statements that refmect the company management’s current views with respect to certain future events. Although it is believed that the expectations refmected 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 Aygaz 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.

42

SLIDE 43

Contacts L

investor@aygaz.com.tr

ferda.erginoglu@aygaz.com.tr +90 212 354 1764 sebnem.yucel@aygaz.com.tr +90 212 354 1510 selin.sanver@aygaz.com.tr +90 212 354 1659

www.aygaz.com.tr

Ferda Erginoğlu, CFO Şebnem Yücel, Finance Manager Selin Sanver, Investor Relations Manager

43