INVESTOR PRESENTATION March 2018
CONTENT A - Overview G - Other participations B - World LPG market H - Financial highlights C - Turkish LPG market & Aygaz I - Appendix D - The LPG value chain J - Glossary E - Participation portfolio K - Disclaimer F - Natural gas L - Contacts
3 A Aygaz overview 2017 8.5 billion REVENUE SALES OF LPG 2.2 m tons LEADING 28% LPG MARKET SHARE LPG DISTRIBUTOR of TURKEY NATURAL GAS REFINERY DIVERSIFIED PARTICIPATION PORTFOLIO IN ENERGY POWER GENERATION
4 > Overview SUMMARY FINANCIALS (Cons. in m TL) 2017 2016 2015 2017-2016 Change 25% 8,469 6,420 Revenue 6,749 -11% 352 337 EBITDA 394 39% 577 418 Net Profjt 416 -2 4% 5% EBITDA Margin 6% +1 7% 7% Net Profjt Margin 6% SHAREHOLDERS (%) 2% 2,154 2,057 Volume (000 tons) 2,109 As of 31/12/2017 PUBLICLY TRADED 24 .3 51 .2 24 .5 KOÇ GROUP LIQUID PETROLEUM GAS DEVELOPMENT CO.
5 > Core business - LPG distribution 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 MARKET SHARES (%) AYGAZ VOLUMES (000 tons) 42 31 72 24 37 933 41 46 1,029 865 707 589 792 777 759 662 688 28 AUTOGAS CYLINDER 359 342 343 342 335 2013 2014 2015 2016 2017 TOTAL CYLINDER BULK GAS EMRA, Aygaz EMRA data December 2017 AUTOGAS OTHER (wholesale & export)
6 B World LPG market WORLD LPG CONSUMPTION (m tons) 298 2016 285 2015 Fastest - growing energy source after 275 2014 renewable energy 268 2013 300 billion USD business size worldwide 2012 257 2011 256 Sources of LPG production; 2010 249 2009 240 38% 62% 2008 240 2007 236 NATURAL GAS CRUDE OIL 2006 227 LPG AS A COMMODITY Mixture of Portable and Low GHG Diversity of Cleaner, safer hydrocarbons versatile emission; supply sources; and cheaper (Butane and Eco-friendly Abundant at home & Propane) reserves transportation WLPGA Statistical Review of Global LP Gas Report, 2017
7 > World LPG consumption World LPG Consumption World LPG Consumption By Sectors 2016 (%) By Regions 2016 (%) 44 41 Domestic Asia Pasifjc 17 1 28 4 North America Chemical Agriculture Africa 17 10 10 8 Europe&Eurasia S.&C. America Refjnery Industry 11 9 Autogas Middle East WLPGA Statistical Review of Global LP Gas Report, 2017
8 > Prices of LPG and brent 140 1.200 1.100 113 120 108 1.000 900 100 977 894 800 $/Barrel $/Ton 80 700 64 600 56 60 500 539 48 32 400 40 421 368 300 321 20 200 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 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. Sonatrach / Market data
9 C Turkish LPG market 4.1 m tons #2 in Europe #11* in the World LPG consumption in Europe (m ton) 4.7 RUSSIA ~90 distribution companies Leading 3 players in the cylinder market and fjrst 8 players TURKEY 4.1 in the autogas market hold over 80% of the total market ITALY 3.2 Serving; • 7.5 m houses • 4.6 m cars POLAND 2.4 Liberal market with regulatory body-EMRA FRANCE 1.8 * when p. chemical and refjnery is excluded GERMANY 1.7 EVOLVING FROM CYLINDER TO AUTOGAS (000 tons) SPAIN 1.5 42% 20% U.K. 1.1 1,557 3,117 GREECE 0.5 811 2017 10% 2005 383 1,752 152 DOMESTIC INDUSTRY TRANSPORT 48% 4% 76% WLPGA Statistical Review of Global LP Gas Report, 2017 EMRA data
10 > LPG market ranking 1- ITALY 1.3 m tons 2- SPAIN 1.2 m tons 3- RUSSIA 1.1 m tons 1.0 m tons 4- FRANCE 0.8 m tons 5- TURKEY THE 5th BIGGEST DOMESTIC LPG MARKET IN EUROPE 1- SOUTH KOREA 3.5 m tons 2- TURKEY 3.1 m tons 3.0 m tons 3- RUSSIA 4- POLAND 1.8 m tons 1.7 m tons 5- ITALY THE 2nd BIGGEST AUTOGAS MARKET IN THE WORLD WLPGA Statistical Review of Global LP Gas Report, 2017
12 > > Cylinder market starting to stabilize CYLINDER MARKET RATES OF CHANGE (YoY) Turkish 4% 842 821 market 816 801 811 2% 0 (000 tons) -2% 2013 2014 2015 2016 2017 -4% -6% Aygaz 359 342 343 342 335 -8% -10% 2013 2014 2015 2016 2017 TURKISH MARKET AYGAZ 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 EMRA data
13 > > Aygaz; leader in cylinder market since its foundation CYLINDER MARKET SHARES Generic brand Market maker 41.3% AYGAZ Largest dealer network with high SHV 28.9% sales effjciency 60% market share in residential use DEMİRÖREN 15.9% Fully integrated production cycle; Cylinder OTHER 13.9% and gas appliances factory in Gebze plant Aygaz Ekspres; digital solutions for optimizing dealers’ business&delivery Aiming to maximize customer satisfaction&loyalty 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 *EMRA data
15 > World’s second biggest autogas market RATES OF CHANGE (YoY) 14% AUTOGAS MARKET 12% 10% 3,142 3,117 3,069 8% 2,838 Turkish 2,727 6% market 4% (000 tons) 2% 792 0 777 759 688 -2% 662 Aygaz -4% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 TURKISH MARKET AYGAZ 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 EMRA data
16 > Price economy of autogas %50 %40 %30 %20 %10 0 -%10 -%20 -%30 price advantage -%40 to gasoline 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 PUMP PRICE OF AUTOGAS ACROSS THE WORLD (%)* 39 Ratio of autogas NETHERLANDS 50 39 pump price to gasoline GERMANY 46 39 ITALY 44 Ratio of autogas 42 POLAND pump price to diesel 44 52 SOUTH KOREA 62 62 UNITED KINGDOM 61 54 FRANCE 64 TURKEY 56 66 JAPAN 65 77 *WLPGA Statistical Review of Global LP Gas Report, 2017
17 > > Autogas; most widely-used passenger car fuel of Turkey RATIO OF CARS REGISTERED TO TURKISH CAR PARK (m cars) TRAFFIC ACC. TO FUEL TYPE 4.6 4.4 4.3 4.1 3.9 3.8 4.3 35% 3.3 75% 3.1 3.1 5% 39% 2.9 2.9 2.9 2.9 15% 2.5 26% 2013 2014 2015 2016 2017 2017 GASOLINE DIESEL AUTOGAS 2004* GASOLINE DIESEL AUTOGAS * Fuel type unknown: 5% CAR OWNERSHIP PER PERSON • Most widely-used passenger car fuel since 2011 575 /1000 150 /1000 • With 4.6 million cars, 4 out of 10 passenger cars run on LPG EUROPE TURKEY • Largest LPG vehicle fmeet in the world; 16% of the world • 10,000+ autogas stations all over Turkey Turkstat, ACEA
18 > > Aygaz; leader of the second biggest autogas market in the world AUTOGAS MARKET SHARES MARKET SHARE & STATION NUMBER SHARE (%) 24,4 MARKET SHARE 24.4% AYGAZ STATION NUMBER SHARE OMV PO 12.3% 16 SHELL 11.8% 12 12,3 11,8 10,5 10 9 DEMİRÖREN GROUP* 10.5% 8 7,2 7,1 5 BP 7.2% 4,2 4 4 2,9 SHV GROUP** 7.1% AYGAZ OMV PO SHELL DEMİRÖREN GROUP BP SHV GROUP AYTEMİZ AKPET AYTEMİZ 4.2% AKPET 2.9% OTHER 19.6% *Milangaz & Total ** İpragaz & Yıldırım Number of Sales Volume Avg dealer Largest dealer network with high sales effjciency 2016 Dealers (tons) sales (tons) Creating network synergy with sister company Opet Aygaz autogas dealers 1,741 791,758 455 Total autogas dealers Core business is LPG unlike other fuel distributors 10,426 3,141,932 301 EMRA data
19 > > Autogas car park growth 1,000+ conversion points 177,000 OEM ; original equipment $500 average cost of conversion manufacturer conversions Payback in 15,000 km • Some major car manufacturers per year are providing guaranteed conversion currently AUTOGAS CONVERSIONS (m cars) 12 10.6 11.3 9.9 9.3 4.6 4.1 4.3 4.4 3.9 2013 2014 2015 2016 2017 PASSENGER CAR PARK AUTOGAS CAR PARK Turkstat
20 D The LPG value ~ 230 1,710 auto gas stations tankers 1,000,000 vehicles chain using Aygaz Otogaz Fixed storage Moving&fmoating capacity of storage capacity 178,400 m3 via AUTOGAS of 37,000 m3 20 facilities 3,000+ bulk gas customers BULK 3 LPG ships CYLINDER belonging to 2.2 million the fmeet of tons of LPG Anadoluhisarı supply Tankercilik Gebze Facility; exports of cylinders and gas devices ~ 190 cylinder 2,359 cylinder gas vehicles dealers As of end of 2017
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