INVESTOR PRESENTATION June 2017
CONTENT A - Overview G - Other participations B - World LPG market H - Financial highlights C - Turkish LPG market & Aygaz I - Disclamier D - The LPG value chain J - Contacts E - Participation portfolio K - Appendix F - Natural gas L - Glossary
3 A Aygaz overview 2016 6.7 billion REVENUE SALES 2.1 m tons LEADING 29% 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) 2016 2015 2014 2016-2015 Change 5% 6,749 6,420 7,061 Revenue 17% 394 337 188 EBITDA -0.6% 416 418 218 Net Profjt +1 6% 5% 3% EBITDA Margin -1 7% 3% 6% Net Profjt Margin SHAREHOLDERS (%) 3% 2,109 2,057 1,791 Volume (000 tons) As of 31/03/2017 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 with 55 years of history Most preferred LPG brand in Turkey since its foundation Market leader with 3 brands MARKET SHARES (%) 42 AYGAZ VOLUMES (000 tons) 72 37 60 933 46 865 25 707 42 668 589 792 777 621 662 688 29 AUTOGAS CYLINDER 382 359 342 343 342 2016 2012 2013 2014 2015 CYLINDER BULK TOTAL AUTO OTHER (wholesale & export & P. Chemicals) EMRA, Aygaz EMRA data March 2017
6 B World LPG market WORLD LPG CONSUMPTION (m tons) 285 2015 2014 275 Fastest growing energy source after 2013 268 renewable energy 2012 257 300 billion USD business size worldwide 2011 256 2010 249 Sources of LPG production; 2009 240 2008 240 38% 62% 2007 236 2006 227 NATURAL GAS CRUDE OIL 2005 220 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, 2016
7 > World LPG consumption World LPG Consumption World LPG Consumption By Sector 2015 (%) By Region 2015 (%) 44 37 Domestic Asia Pasifjc 1 26 21 5 Chemical North America Agriculture Africa 17 10 12 8 Europe&Eurasia S.&C. America Refjnery Industry 10 9 Autogas Middle East WLPGA Statistical Review of Global LP Gas Report, 2016
8 > LPG price versus brent 1.200 140 113 1.100 108 120 1.000 900 100 977 800 894 700 $/Barrel 80 $/Ton 600 56 60 500 32 48 49 400 40 421 368 300 355 321 200 20 JAN 13 APR 13 JUL 13 OCT 13 JAN 14 APR 14 JUL 14 OCT 14 JAN 15 APR 15 JUL 15 OCT 15 JAN 16 APR 16 JUL 16 OCT 16 JAN 17 APR 17 SP (Algeria) Petroleum (Brent) • There is a correlation with LPG and petroleum price • Seasonality can also affect LPG price Sonatrach / Market data
9 C Turkish LPG market 4.1 m tons #3* in Europe #15 in the World EUROPE (m ton) RUSSIA 4.4 ~80 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 • 4.4 m cars POLAND 2.1 Liberal market with regulatory body-EMRA GERMANY 1.6 * when p. chemical consumption is included FRANCE EVOLVING FROM CYLINDER TO AUTO (000 tons) 1.5 SPAIN 1.4 42% 20% U.K. 1.0 1,557 3,142 GREECE 0.5 821 2016 10% 2005 383 1,752 143 DOMESTIC INDUSTRY TRANSPORT 47% 3% 77% WLPGA Statistical Review of Global LP Gas Report, 2016 EMRA data
10 > Turkish LPG market ranking 1- ITALY 1.3 m tons 2- FRANCE 1.2 m tons 3- RUSSIA 1.0 m tons 1.1 m tons 4- SPAIN 0.8 m tons 5- TURKEY TURKEY IS THE 5th BIGGEST DOMESTIC LPG MARKET IN EUROPE 1- SOUTH KOREA 3.7 m tons 2- TURKEY 3.1 m tons 3.0 m tons 3- RUSSIA 4- THAILAND 1.7 m tons 1.7 m tons 5- POLAND TURKEY IS THE 2nd BIGGEST AUTOGAS MARKET IN THE WORLD WLPGA Statistical Review of Global LP Gas Report, 2016
12 > > Cylinder market starting to stabilize CYLINDER MARKET CYLINDER YoY CHANGES 4% Turkish 2% market 890 842 0 821 816 801 2012 2013 2014 2015 2016 -2% (000 tons) -4% -6% 382 Aygaz 359 342 -8% 343 342 -10% TURKISH MARKET AYGAZ 2012 2013 2014 2015 2016 Growth continued in 2016 after 2015, after 15 years of contraction Factors affecting cylinder market; • Slow down of expansion in natural gas grid • Low LPG prices supported demand stability • Population upsurge due to Syrian refugees (approx. 3 m people) EMRA data
13 > > Aygaz; leading cylinder market since its foundation CYLINDER MARKET SHARES Generic brand Market maker 42% AYGAZ Largest dealer network with highest SHV 29% sales effjciency 60% market share in residential use DEMİRÖREN 16% Fully integrated production cycle; Cylinder OTHER 13% 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 > Autogas market keeping its steady growth AUTOGAS MARKET AUTOGAS YoY CHANGES 3,142 14% 3,069 2,838 Turkish 2,727 12% 2,695 market 10% 8% (000 tons) 792 6% 777 688 4% 662 Aygaz 621 2% 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 TURKISH MARKET AYGAZ Steady growth since 2003 Factors affecting autogas market; • Offers 30%+ economical advantage to gasoline • International&local players in a price competitive environment • Strong and regulated conversion business supports autogas car park growth • Guaranteed conversion support from car manufacturers is progressing EMRA data
16 > Economy of autogas PRICE ADVANTAGE OF AUTOGAS 40% 30% 20% 10% 0 -10% -20% price advantage -30% NOV-12 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 DEC-16 to gasoline To gasoline To diesel PUMP PRICE OF AUTOGAS ACROSS THE WORLD* 40% Ratio of autogas NETHERLANDS 50% 43% pump price to gasoline GERMANY 52% 45% ITALY Ratio of autogas 48% 48% POLAND pump price to diesel 49% 53% SOUTH KOREA 62% 53% UNITED KINGDOM 52% 58% FRANCE 68% 59% TURKEY 73% 65% JAPAN 76% *WLPGA Statistical Review of Global LP Gas Report, 2016
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 4.4 4.3 4.1 3.9 3.8 3.6 3.3 34% 3.3 2.9 2.9 2.9 2.9 3.0 3.0 75% 5% 39% 2.9 2.5 15% 1.8 2.1 2011 2012 2013 2014 2015 2016 27% GASOLINE DIESEL AUTOGAS 2016 2004 GASOLINE DIESEL AUTOGAS CAR OWNERSHIP PER PERSON • Most widely-used passenger car fuel since 2011 564 /1000 134 /1000 • With 4.4 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, Eurostat
18 > > Aygaz; leader of World’s second biggest Autogas Market AUTOGAS MARKET SHARES MARKET SHARE & STATION NUMBER SHARE (%) 25 25% AYGAZ PO 13% 17 SHELL-TURCAS 12% 1213 12 11 SHV 8% 8 8 8 6 6 DEMİRÖREN 8% 4 4 3 MARKET SHARE BP 6% STATION NUMBER SHARE AYGAZ PO SHELL-TURCAS DEMİRÖREN SHV BP TOTAL TOTAL 4% OTHER 24% Number of Sales Volume Avg dealer Largest dealer network with highest 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 10,426 3,141,932 301 Core business is LPG unlike fuel distributors EMRA data
19 > > Autogas car park growth 1,000+ conversion points 160,000 OEM ; original equipment $500 average initial cost manufacturer conversions Payback in 15,000 km • Some major car manufacturers per year are providing guaranteed conversion currently AUTOGAS CONVERSIONS (m cars) 10.6 11.2 9.9 9.3 8.6 8.1 7.5 7.1 4.1 4.3 4.4 3.9 3.6 3.3 2.9 2.5 2009 2010 2011 2012 2013 2014 2015 2016 PASSENGER CAR PARK AUTOGAS CAR PARK Turkstat
20 D The LPG value ~ 200 1,741 auto gas stations tankers 1,000,000 + vehicles chain using Aygaz Euro LPG+ Fixed storage Moving&fmoating capacity of storage capacity 178,400 m3 via AUTOGAS of 45,000 m3 23 facilities 3,000+ bulk gas clients BULK 4 LPG ships CYLINDER belonging to Supplying the fmeet of 2 million Anadoluhisarı tons Tankercilik of LPG Gebze Facility Exports of cylinders and gas devices 195 cylinder 2,192 vehicles cylinder gas dealers As of end of 2016
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