INVESTOR PRESENTATION March 2013 AN AFFILIATE OF THE TURKISH AGRICULTURAL CREDIT COOPERATIVIES
Gübre Fabrikaları T.A.Ş Date of Establishment 25.12.1952 Share Capital 83.500.000TL Listing Istanbul Stock Exchange Ticker Symbol GUBRF 2 2
GÜBRE FABRİKALARI T.A.Ş 3 3
OWNERSHIP STRUCTURE Main Shareholder - The Central Union of Turkish Agricultural Credit Cooperatives Public Shares 24,05% 75,95% 4 4
THE CENTRAL UNION OF TURKISH AGRICULTURAL CREDIT COOPERATIVES Strategic Relationship • Leading agricultural cooperatives with Gübretaş • Founded in 1863 Procure all fertilizer needs 16 of its partners from • 6.000 employees Regional Gübretaş with the Unions exclusive agreement • 19 Subsidiaries 1.676 Cooperatives • S upport farmers’ various procurement needs all 1.100.000 the way from Farmer Partners fertilizers to tractors 3.000.000 Total Farmers 5 5
CURRENT BUSINESS Gübretaş Razi Petrochemical TURKEY • Compound Fertilizer Production • Liquid Fertilizer Production • Marketer of fertilizer IRAN • Pesticide Production • Feedstock Production • Shipping • Fertilizer Production 6 6
TURKISH FERTILIZER OUTLOOK Main Drivers Feedstock Scarcity Growth Potential • Scarcity of main nutrients: • Fertilizer Prices Fertilizer (nutrient based) • Agricultural Product Nitrogen (N) use per hectare of arable Prices land for selected countries Phosphorus (P) • General Financial Potassium (K) • Turkey: 80 kg Conditions • Greece: 144 kg • Dependency on raw • Farmers’ Purchasing • UK: 208 kg material rich countries Power • Germany: 160 kg • Irrigation • USA: 103 kg • Weather Conditions • Goverment’s Agricultural Policies 7 7
FERTILIZER PRICES World Fertilizer Prices (FOB US$ / Ton) 1.250 1.000 750 500 250 0 DAP (Tunisia) UREA (Black Sea) AN (Black Sea) SULPHUR (Middle East) AMMONIA (Middle East) 8 8
MARKET OVERVIEW Turkish Fertilizer Sector (1.000tons) 6.000 5.367 5.340 5.263 5.199 5.175 5.148 5.094 4.968 4.766 5.000 4.129 3.750 4.000 3.661 3.400 3.318 3.192 3.158 3.133 3.113 2.961 2.878 3.000 3.007 2.710 2.661 2.478 2.377 2.000 2.242 2.177 2.126 2.078 2.086 1.000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Consumption Production Import 9 9
OPERATIONS IN TURKEY Tekirdağ 40.000t import Samsun F W P W R W R 30.000t Yarımca 140.000t R Ankara İzmir 62.000t F W R Diyarbakır İskenderun R 119.000t production Antalya sale P W R R F : Production Facility • 2 Ports P : Port • 5 Warehouses W : Warehouse • 7 Regional Sale Offices R • 2.720 dealer : Regional Sale Office • 391.000 ton Warehouse Capacity 10 10
PRODUCTS Products - General Use SOLID LIQUID POWDER SPECIAL AN TSP 15.15.15 CAN MAP 15.15.15 ZN CAN GR PS GR 15.15.15 S AS PATENT KALI 15.15.15 ZNS URE 20.20.0 15.15.10 2ZNS URE GR 20.20.0 ZN 13.18.25 2MG Products - Specific Use 13.24.12 23.12.9 13.25.5 (Corn) (Sunflower) (Crop) 10.25.20 12.30.12 25.5.10 (Potato) (Sugar beet) (Tea) 10.25.5 15.20.10 25.5.0 (Crop) (Paddy) (Tea) 130 Type of Products 11 11
PRODUCTION FLOW CHART YARIMCA PRODUCTION FACILITIES Main Products Main Inputs • AMMONIA • TSP • UREA • 20.20.0 • AS • 20.20.0.ZN • PHOSPHATE ROCK • 15.15.15 • S.ACID • 15.15.15.ZN • F.ACID • 12.30.12 • POTASSIUM • 13.24.12 Liquid Fertilizer TSP NPK 1 NPK 2 PRODUCTION CTION CAPACITY CITY: : Production 185.000 200.000 300.000 685.00 .000 TON/Y /YEAR 25.000 ton/year ton/year ton/year ton/year 12 12
MARKET SHARE 1.800 Gübretaş Sales ('000tons) 50% 1.600 45% 1.538 1.600 1.532 1.449 1.394 1.371 40% 1.354 1.400 1.238 1.204 35% 1.200 1.120 30% 32% 1.000 30% 898 29% 29% 25% 27% 27% 26% 800 25% 24% 23% 20% 600 15% 18% 400 10% 200 5% 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E GÜBRETAŞ Market Share % 13 13
PRODUCTION & CUR Gübretaş Production ('000tons) 600 100% 529 515 90% 514 511 510 506 499 481 500 463 80% 422 77% 70% 75% 75% 74% 75% 400 70% 348 60% 58% 57% 300 50% 53% 51% 48% 40% 200 30% 20% 100 10% 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E GÜBRETAŞ Capacity Utilisation Rate 14 14
RAZI PETROCHEMICAL CO. • Established in 1968 • The largest fertilizer complex • Producer of Ammonia, Urea, Sulphur, Sulphuric Acid, Phosphoric Acid and DAP. • Located near the Mahsahr city located at The Khuzestan province of Iran. • Advantage of sour and sweet natural gas 15 15
RAZI PETROCHEMICAL CO. • The consortium led by Gübretaş purchased 95.62% of Razi Petrochemical Co. shares from Iranian Privatization Organization in 2008(approximately 656 million USD). • Gübretaş has 48,88% stake in Razi Petrochemical Co. • 3 members out of 5 at the board. • Full consolidation 16 16
RAZI PETROCHEMICAL CO. FERTILIZER RAW FEEDSTOCK FERTILIZER MATERIAL UREA SWEET GAS AMMONIA SULPHUR SOUR GAS SULPHURIC ACID PHOSPHATE DAP PHOSPHORIC ACID ROCK 17 17
RAZI PETROCHEMICAL CO. PRODUCTION CAPACITY Number Plant Capacity (tons) of Plant Ammonia 3 1.336.000 Urea 1 594.000 DAP 2 450.000 Sulphuric Acid 2 627.000 Phosphoric Acid 1 255.000 Sulphur Granul. 1 508.000 Total 10 3.770.000 18 18
RAZI PETROCHEMICAL CO. 100% Production-Sales (1.000tons) Capacity Utilization Rate 2.500 83% 1.999 78% 80% 76% 2.000 1.855 75% 1.816 1.632 1.552 1.548 69% 1.505 1.486 70% 1.500 69% 1.315 1.313 60% 64% 57% 1.000 58% 55% 55% 52% 500 40% 0 2009 2010 2011 2012 2013E 2009 2010 2011 2012 2013E AMMONIA SULPHUR UREA Production Sales 19 19
RAZI PETROCHEMICAL CO.- 2012 PRODUCTION SALES AMMONIA DAP 48% AMMONIA 0,12% 47% SULPHUR 23% SULPHUR 24% SULPHURIC SULPHURIC UREA ACID 7% ACID 7% UREA 22% 18% Export Domestic SALES 77% 23% COMPOSITION 20 20
RAZI PETROCHEMICAL CO. Production Estimates (Ton) Sales Estimates (Ton) Product CUR 2013E Product 2013E Ammonia 64% 850.000 Ammonia 560.000 Urea 76% 450.000 Urea 450.000 Sulphur 69% 350.000 Sulphur 290.000 Sulphuric Acid 28% 175.000 Sulphuric Acid 175.000 DAP 7% 30.000 DAP 30.000 Total 49% 1.855.000 Total 1.505.000 Sales Price Assumptions (US$/Ton) Sales Revenues (US$/Mil) Product 2013E Product 2013E Ammonia 325 Ammonia (CIF) 580 Urea 129 Urea (FOB) 287 Sulphur 41 Sulphur (FOB) 140 Sulphuric Acid 11 Sulphuric Acid (FOB) 60 DAP 17 DAP (FOB) 550 Total 521 21 21
RAZI PETROCHEMICAL CO. OPERATING PROFORMA 2013E Production '000 Ton 1.855 Sales '000 Ton 1.505 Revenues US$ Mil. 521 EBITDA US$ Mil. 208 EBITDA Margin 40% Net Income US$ Mil. 180 Net Income Margin 35% 22 22
2004 - 2013 ECONOMIC PROFILE Consolidated Income Statement (Million TL) 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E Revenues 428 414 481 610 1.412 1.045 1.385 2.276 2.432 2.360 Sales Growth 68% -3% 16% 27% 131% -26% 33% 64% 7% -3% COG 374 371 421 529 943 930 952 1.582 1.866 1.780 Gross Profit 54 43 60 81 469 115 433 695 566 580 Gross Margin 13% 10% 12% 13% 33% 11% 31% 31% 23% 25% G & A Expenses 36 36 38 42 72 79 104 182 182 204 G & A / Sales 9% 9% 8% 7% 5% 8% 8% 8% 7% 9% EBIT 18 7 22 39 398 36 329 513 384 376 EBIT Margin 4% 2% 5% 6% 28% 3% 24% 23% 16% 16% Net Other Income/Exp. 6 6 7 -10 136 78 49 120 -62 13 Earnings Before Tax 11 1 15 49 262 -42 280 392 446 363 Net Income 7 1 9 39 282 -48 245 375 400 355 Net Income Margin 2% 0,3% 2% 6% 20% -5% 18% 16% 16% 15% Adjusted Net Income 7 1 9 39 103 -59 120 130 197 190 Adjusted Net Income Margin 2% 0,3% 2% 6% 7% -6% 9% 6% 8% 8% EBITDA 19 8 24 46 449 106 402 606 485 417 EBITDA Margin 4% 2% 5% 8% 32% 10% 29% 27% 20% 18% Adjusted EBITDA 19 8 24 46 238 71 224 316 246 204 Adjusted EBITDA Margin 4% 2% 5% 8% 17% 7% 16% 14% 10% 9% 23 23
NEW INVESTMENT IN YARIMCA • NPK/DAP Plant • 500.000Ton/Year capacity • Ammonia Tank • 25.000Ton Capacity • 60.000.000 € Capex • Launch in April 2014 • Capacity Increase • NPK & DAP Production • Liquid Raw Material Usage • Cost Advantage 24 24
SUBSIDIARIES Negmar Shipping Company Tarkim Pesticide Company • 40% Stake • 5 Dry Cargo Vessels RAZİ Petrochemical • Partnership with Turkish Agricultural • 3 Ro-Ro Vessels Credit Cooperatives • 40% Stake • 25.000Ton/year production capacity • 52 Trucks 25 25
GÜBRETAŞ INVESTMENT THESIS “ • Strong market position and potential to become a regional market leader G übretaş remains well • TACC strategic relationship positioned on its way to • A proven management track record become a global player • Unique assets including dedicated natural ” gas • Ideal geographic positioning and logistic capabilities 26 26
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