Tekfen Holding Investor Presentation March 2017

Transcription

1 Tekfen Holding Investor Presentation March 2017

2 Tekfen Group At a glance 1956 Feyyaz Berker, Nihat Gökyiğit and Necati Akçağlılar formed an engineering consulting company 1957 The three partners establish Tekfen Construction Ltd Tekfen Industry and Trading Co., Inc. is founded to produce incandescent lamps Foundation of Tekfen Holding 1975 Iraq-Turkey pipeline 1976 Mis Süt (Dairy products) enters the market 1978 Tekfen Construction goes overseas 1981 Toros Fertilizer starts production 1987 TAG Highway project 1989 Tekfenbank Acquisition of Akgübre fertilizer 1992 Tekfen Philarmonics 2000 Tekfen Real Estate Development Group 2001 Acquisition of Bank Ekspres 2003 Tekfen Tower opens 2005 Acquisition of Samsun Gübre fertilizer plant 2006 Completion of BTC crude oil pipeline 2007 Partnership with Eurobank EFG in Tekfenbank Acquisition of EFG Istanbul Securities IPO of Tekfen Holding 2012 Sale of Eurobank Tekfen 2 Tekfen Group Contracting Agri Industry Real Estate

3 Tekfen Group Corporate Governance Ownership structure s 5% Akçağlılar 7% Berker 22% Free Float 44% Gökyiğit 23% Share Classes Single type of shares (one share one vote) Composition of the Board 4 out of 11 members are independent. Board members to be elected for max. of three years Dividends 30% of the distributable income has to be paid out Ownership Structure No cross ownership within the group 3 Tekfen Group Contracting Agri Industry Real Estate

4 Tekfen Group At a glance Contracting Agri Industry Real Estate Main Operations Construction Engineering Fabrication Main Companies Tekfen Construction Tekfen Engineering Tekfen Manufacturing & Engineering Main Operations Fertilizer production and distribution Terminal services Seed, sapling and seedling production and distribution Free zone operations Main Companies Toros Agricultural Industry & Trade Toros-Adana Yumurtalık Free Zone Hishtil-Toros Seedling Industry & Trade Black Sea Fertilizer Trade Main Operations Real Estate Development Construction & Marketing of Real Estate Projects Facility Management Main Companies Tekfen Real Estate Development Tekfen Tourism & Facility Management Tekfen Real Estate Investment Florya Real Estate Inv. Const. Tourism Co., Inc Tekfen Insurance Authorised agent of 18 insurance and 3 pension fund companies Share in consolidated revenues*: 60% Share in consolidated revenues*: 39% Share in consolidated revenues*: 1% Share in consolidated revenues*: 1% * As of Tekfen Group Contracting Agri Industry Real Estate 4

5 Tekfen Group Strategic focus Tekfen Holding is devoted to the motto do what you know best in the best way possible which was determined by its founding shareholders. In this framework Tekfen has focused on Contracting, Agri-industry / Terminal Services and Real-Estate Development sectors. Contracting is an activity that Tekfen Holding operates in since its foundation and has gained first class expertise. The potential demand for contracting activities of the countries in Middle East, Caspian Region and North Africa which have been developing and enriching in the recent years has played a key role in the determination of this activity as a strategic focus. Agri-industry sector addresses to the most basic need of the mankind, namely nutrition. Fertilizer, on the other hand, is an indispensable input for agri sector. Due to the growing world population in addition to the alternative uses like bio-fuel production, it is anticipated that demand for agricultural production and for fertilizers will grow. As a result, this activity has a strategic focus for the Group. 5 Tekfen Group Contracting Agri Industry Real Estate

6 Tekfen Group Strategic focus Terminal activities are undertaken in the framework of Agri-industry segment comprising of two marine terminals strategically located in the Mediterranean and the Black Sea regions. It is observed that in parallel to the development and enrichment of every country, demand for modern, luxurious and high standard residential and commercial housing increases. Hence, Real Estate Development is another strategic focus for Tekfen Group. 6 Tekfen Group Contracting Agri Industry Real Estate

7 Tekfen Group Vision / Mission Our Vision To be one of the leading forces of Turkey s growth in our areas of operations namely, Contracting, Agri-Industry and Real-Estate Development. Our Mission While remaining commited to our traditional values, we aim to focus on our core operations, deliver the highest quality products and services, become the leader of our segments, and at the same time, generate value for all of our stakeholders, namely, our customers, suppliers, employees, shareholders and society. 7 Tekfen Group Contracting Agri Industry Real Estate

8 Tekfen Group Social Responsibility Tekfen Group believes that supporting social culture and environmental activities are the natural extentions of its corporate structure. All the companies under the Tekfen Group umbrella emphasize usefulness, harmony and protection principles as a prerequisite for the activities in their own fields. Believing that supporting social development and improvement is everybody s common task Tekfen continues its efforts for this end for decades. These activities which are the common values for all employees, from top executives to entry level employees of the Group coincides with the philosophy which puts human and the environment as the focal value. With the purpose of continuing its contribution to social and cultural activities, Tekfen established Tekfen Foundation for Education Health, Culture, Arts, and Protection of Natural Habitat in Supporting a variety of projects in the fields of education, culture and art since its establishment, Tekfen Foundation obtained status as an institution that works for the benefit of society through the Cabinet s decision in Tekfen Group Contracting Agri Industry Real Estate

9 Tekfen Group Human resources Number of employees Tekfen Holding has a dynamic and professional workforce of over employees Number of employees (breakdown by segment) Contracting Agri Industry Real Estate Total Tekfen Group Contracting Agri Industry Real Estate

10 Contracting

11 Contracting Overview Founded in 1956 as an engineering and consultancy firm. One of the largest contracting groups in Turkey. Main area of specialization is construction projects in the oil and gas industry. Is among the leading international construction companies in the world and ranks at number 118 among the world s 250 biggest international contractors, based on contracting revenue from projects outside home country, in a list published by Engineering News-Record magazine in Over 350 projects with a total amount of US$14 billion completed. Successfully completed US$8 billion worth of projects abroad. The Group has broken records for working hours without LTI (lost time incident) in Azerbaijan, Kazakhstan and Ceyhan projects. Tekfen Group Contracting Agri Industry Real Estate 11

12 Contracting Selected Clients TURKISH TCK, Turkish State Highways Authority EÜAŞ, Electricity Production Co. PETKİM, Petrochemical Co. TÜPRAŞ, Turkish Petroleum Refineries Co. BOTAŞ, Petroleum Pipeline Co. Ministry of Public Works and Settlement Several Municipalities TPAO, Turkish Petroleum Co. DSI, State Hydraulic Works Turkish State Railways Authority Turkish Olympic Committee Ministry of Energy and Natural Resources DLH, State Harbours and Airports Authority INTERNATIONAL SAUDI ARABIA Saudi Aramco Ma aden Petro Rabigh WCC, Saline Water Conversion Co. Min. of Agriculture & Water Min. of Municipal & Rural Affairs KUWAIT Ministry of Public Works KOC, Kuwait Oil Co. IRAQ SCOP, State Company for Oil Projects North Refineries Company QATAR Qatar Petroleum QAPCO Ashghal (Public Works Authority) MOROCCO OCP, State Phospate Company SAMIR, Refinery Company of Morocco OTHER AGIP Shell BP BTC, Baku Tbilisi Ceyhan Pipeline Co. Uzbekneftegas, Uzbekistan Kazakturkmunay, Kazakhstan CPC, Caspian Pipeline Consortium, Kazakhstan AIOC (Azerbaijan Operating Co. led by BP) BP Exploration Shah Deniz Ltd. Georgian Pipeline Co. MMRA, Libya (Man Made River Authority) SOCAR (State Oil Company of Azerbaijan) 12 Tekfen Group Contracting Agri Industry Real Estate

13 Contracting Selected International Project Partners Alstom, France AMEC, UK Babcock Borsig Power, Germany Chiyoda Corp., Japan Fluor, USA Foster Wheeler, Italy Hitachi Plant Technologies, Japan Impregilo, Italy Itochu, Japan JGC, Japan John Brown, UK Lurgi GmBH, Germany Marubeni Corp., Japan Mitsubishi Corp., Japan Mitsui Corp. Japan Mitsubishi Heavy Ind., Japan NEC, Japan Nippon Signal, Japan Parsons Inc., USA Petrofac, UAE SAE, France Saipem, Snamprogetti, Italy Siemens, Germany Skoda Export, Czech Republic Sofregaz, France Spie Batignolles, France Technip, Germany Technicas Reunidas, Spain Toyo Engineering, Japan Uhde GmbH, Germany Vinci, France Williams Brothers, USA Tekfen Group Contracting Agri Industry Real Estate 13

14 Contracting Overview Overview With its sister companies Tekfen Engineering, Tekfen Manufacturing, Hallesche Mitteldeutsche Bau-AG (HMB) (Germany), AZFEN (Azerbaijan) and strategic partnerships, Tekfen is positioned to extend its services to a large range of clients on three continents. The Group has one of the largest equipment fleets in Turkey with a replacement value of US$ 350 million. As of 2016-end, Tekfen Contracting Group had an active portfolio of US$ 3.7 billion, 79% of which were outside of Turkey, located in 5 different countries. In February 2017, Tekfen added two new projects to its backlog. First, a unit price contract has been signed with BP Iraq NV concerning the provision of personnel and machinery required for the installation services of dehydrators and desalters in the Rumalia oil field. Contract size is expected to reach US$ 99 million at the end of the project. Second, Tekfen-Al Jaber Engineering (%50-%50) Joint Venture, was awarded the turnkey delivery of the engineering and construction works of the Main Works for the Fifth Precinct Stadium Project in Qatar, where the 2022 Qatar World Cup finals will be held. Tekfen s share in the project is USD171 million. Tekfen Group Contracting Agri Industry Real Estate 14

15 Contracting Manpower Total Manpower: * TURKEY:2.395 ABROAD: Morocco 33 Azerbaijan Qatar Iraq 1 Turkmenistan 5 Saudi Arabia Uzbekistan 1 Kazakhstan 46 * Including subcontractors. 15 Tekfen Group Contracting Agri Industry Real Estate

16 Contracting Manpower Structure DISIPLINE&DIVISION ENGINEERS 295 1,8% MANAGEMENT 225 1,4% PROCUREMENT 23 0,1% ADMIN 275 1,7% QA&QC/HSE 225 1,4% TECHNICIANS 105 0,6% FOREMEN 366 2,2% OPERATORS&DRIVERS 850 5,2% CIVIL WORKS ,3% ELECTRICAL WORKS 300 1,8% PIPE&WELDING WORKS ,8% MECHANICAL WORKS ,7% STEEL&ERECTION WORKS 225 1,4% NATIONALITY TURKISH ,7% AZERBEIJANI ,0% TURKMEN 3 0,0% MOROCCAN 15 0,1% INDIAN 260 1,9% NEPALESE 167 1,0% PHILIPIN 117 0,7% ETHIOPIAN 505 3,1% KAZAKH 39 0,2% IRAQI 1 0,0% OTHER ,6% TOTAL % OTHERS ,8% SUBCONTRACTORS ,8% TOTAL % Tekfen Group Contracting Agri Industry Real Estate 16

17 Contracting Areas of Expertise BASIC ENGINEERING* E E : Engineering P : Procurement DETAILED ENGINEERING E + P C : Construction E + P + F PROCUREMENT FABRICATION CONSTRUCTION START UP E + P + C PMS F : Fabrication PMS : Project Management Services * In pipelines, tank farms / terminals, motorways, bridges, tunnels, infrastructure and civil projects. Tekfen Group Contracting Agri Industry Real Estate 17

18 Contracting Backlog Growth Backlog (US$ million) Turkey Abroad Thanks to its increasing investments in oil and gas producing countries, starting from 2005, the backlog of Tekfen Contracting Group abroad increased significantly. Tekfen Group Contracting Agri Industry Real Estate 18

19 Contracting Backlog (as of 31 December 2016) Project Location Expected End Dates Current Contract Price Tekfen Portion Revenue Based Completion Rate Remaining Amount (US$) Prov. of Pipeline and Facilities Repair Services for BTC Turkey Turkey $ $ 92,7% TANAP Project Lot3 Turkey $ $ 58,0% TANAP Compressor and Metering Stations Turkey $ $ 9,6% Afyon - Uşak Rapid Train Project and Afyon Direct Pass Infrastructure Turkey $ $ 8,4% TURKEY TOTAL New Management Office Project of SOCAR Azerbaijan $ $ 99,2% Shah Deniz Stage 2 Fabrication of Offsite Facilities Azerbaijan $ $ 92,9% Shah Deniz Stage 2 Onshore Terminal Facility - Sangachal Terminal Azerbaijan $ $ 85,2% Ministry of Tax Tower Azerbaijan $ $ 0,0% AZFEN Projects* Azerbaijan $ $ 85,2% AZERBAIJAN TOTAL Propylene Oxide Process Unit S. Arabia $ $ 95,9% Jeddah Janbu Pipeline S. Arabia $ $ 0,0% SAUDI ARABIA TOTAL Al Khor Expressway Qatar $ $ 0,0% Design and Construct Service Road Enhancement to North Road Corridor Qatar $ $ 79,0% QATAR TOTAL Construction Compound Main Works Kazakhstan $ $ 0,0% KAZAKHSTAN TOTAL TOTAL TOREN & Gazdepo Underground Gas Storage Project** Turkey $ $ 0,0% * Not included in the consolidated revenues. Consolidated using equity method. ** The contracted work for this project will start as soon as the investor companies complete the project financing. Tekfen Group Contracting Agri Industry Real Estate 19

20 Contracting Ongoing projects (as of 31 December 2016) Backlog Breakdown by Regions Backlog Breakdown by Project Types Middle East 71% Turkey 21% Caspian Region 8% Buildings 3% Industrial Facilities 5% Pipelines 26% Transporta tion 24% Region US$ (million) Middle East Turkey 782 Caspian Region 286 Total Project Type US$ (million) Transportation Pipeline 966 Industrial Facilities 190 Buildings 105 Total Tekfen Group Contracting Agri Industry Real Estate 20

21 Contracting Overview Currently, the tenders entered into typically have a contract size of over US$ 200 million, compared to the US$ 25 million threshold prior to Tekfen bids for projects per year and the average success rate for winning tenders is around 10%. The bid price is calculated as cost plus a mark-up, which is between 15-25%. Average project completion period is approximately 2.5 years. Tax rates that the Group is exposed to in the countries it operates vary between 0-35%. Tekfen Group Contracting Agri Industry Real Estate 21

22 Contracting Engineering Tekfen Engineering Co., Inc. Founded in Undertakes the engineering (E) of EPC projects and the detailed engineering in other projects of Tekfen Contracting Group. Has experience on a wide spectrum of projects, with an emphasis on pipelines, industrial, process plants and motorways. The company employs a professional staff of over 100 engineers who utilize advanced software in the preparation of all design and contract documents. Also serves non-group clients, mainly the General Directorate of Highways and municipalities. Non-group clients generate around 35% of Tekfen Engineering s business volume. Disciplines: Industrial Plants Pipelines and Piping Motorways and Highways Bridges and Viaducts Mass Transit Systems and Railways Mass Housing Commercial Buildings Harbour & Offshore Structures Infrastructure Tekfen Group Contracting Agri Industry Real Estate 22

23 Contracting Tekfen Manufacturing Co., Inc. Founded in Specialized mainly in engineering, manufacturing and construction of high quality process and storage equipment related to petroleum, petrochemical, chemical and fertilizer industries and power plants, such as cylindrical and spherical storage tanks, heat exchangers, pressure vessels, process columns, waste heat recovery boilers and pressurized piping for industrial plants to respond to Tekfen s increasing steel production and fabrication needs. 188 skilled manpower. Design and fabrication are carried out according to International Codes such as ASME, API, TEMA, AD-2000, EN 13445, BS etc. and the company is qualified to work with all sorts of carbon steel materials (including high tensile quenched and tempered), clad carbon steels, all types of stainless steels, non-ferrous materials such as Monel, Brass, Aluminum etc. Heavy manufacturing facility in Derince (Kocaeli), Turkey. Kuwait, Saudi Arabia, Iraq, Iran, Pakistan, Libya, Syria, Jordan, Oman, Lebanon, Israel, Northern Cyprus, Morocco, Tunisia, Senegal, Sudan, Russia, Kazakhstan, Turkmenistan and Azerbaijan are the countries that the company exports. Spread on an area of 48,500 m 2, of which 18,000 m 2 is covered. Tekfen Group Contracting Agri Industry Real Estate 23

24 Contracting Fabrication Plants Ceyhan Steel Structure Fabrication Plant Spread on an area of 160,000 m 2, of which 30,000 m 2 is covered, Annual capacity of 30,000 tons, 650 skilled manpower, Production space consisting of 5 fabrication shops, An open material handling storage area, A welding school, Materials divisions Social facility quarter. The plant is equipped with full shot blast, CNC flame cutting and coping facilities, Sawing and drilling lines, Automated beam welding line Training Center & Welding School Bayil Steel Construction Manufacturing Plant Tekfen s manufacturing facility in Baku, Azerbaijan Spread on an area of 290,000 m 2, of which 26,000 m 2 is covered, Capable of meeting exceptionally high standards of the oil and gas projects Equipped with high end machinery and advanced technology to serve manufacturing of Topsides and Modules Easy access is provided to the plant through the main highway, being at a distance of 7 km from the city center of Baku, materials and equipment can also be delivered to the quaysides of the facility by the sea. Tekfen Group Contracting Agri Industry Real Estate 24

25 Contracting Revenues and EBITDA Margin Revenues (MTRY) and EBITDA Margin (%) Revenue EBITDA Margin ,0% ,2% 14,0% 11,0% 9,3% 9,3% 8,3% ,6% ,0% ,2% 5,9% ,6% ,0% ,0% -1,4% E -4,3% -6,0% Expected project-end EBITDA margin on project basis varies from 10% to 25% at the beginning of each project. Tekfen Group Contracting Agri Industry Real Estate 25

26 Contracting Ongoing projects Turkey TURKEY TRANS ANATOLIAN 56 NAUTRAL GAS PIPELINE (TANAP) PROJECT (Lot 3) The project scope includes Detail Engineering, partial procurement, construction, installation, testing, pre-commissioning, providing commissioning assistance and training the client s personnel. Project consists of approximately 509 km 56 of pipelines, starting from Yıldızeli (Sivas) to Eskişehir, including 14 Block valve stations, 2 Pig Stations and other required facilities. Duration of work is 36 months from commencement date of the contract. Tekfen Group Contracting Agri Industry Real Estate 26

27 Contracting Ongoing projects - Turkey TANAP Project (Lot 3) Tekfen Group Contracting Agri Industry Real Estate 27

28 Contracting Ongoing projects Caspian Region AZERBAIJAN MINISTRY of TAXATION TOWER One of the Newest Landmark of Baku, The New Management Office of Ministry of Taxation of Azerbaijan will be constructed by Tekfen Construction. Five monumental cube shaped high rise Tower has 33 floors with 169 meter height. High Tech Office Building has 44,300 square meter gross floor area with unique shaped 35,400 m2 façade. Design of The Management Office also contains recreation areas, conference halls, helipad, underground car park and special floor gardens together with the Auditorium Building. Steel Structure, Reinforced Concrete and Facade Works of the Project will be Completed in 24 Months. Tekfen Group Contracting Agri Industry Real Estate 28

29 Contracting Ongoing projects Caspian Region Shah Deniz Stage 2 Tekfen Projects OFFSHORE PLATFORMS The contract signed on between ATA Consortium (AMEC Tekfen Azfen) of which Tekfen is a member and BP Exploration (Shah Deniz) Ltd. comprises fabrication, installation and delivery of 2 offshore platforms of total weight of tonnes, and associated platform connection bridge. Duration of work is 42 months from commencement date of the contract. SANGACHAL TERMINAL The contract signed on between Tekfen Azfen Consortium of which Tekfen is a member and BP Exploration (Shah Deniz) Ltd. comprises construction of Shah Deniz Stage 2 Onshore Terminal Facilities at Sangachal, Baku,Azerbaijan. Scope of work includes construction and installation of gas and condensate processing facilities, power generation, storage tanks, utility systems, connections and upgrade works within existing facilities, control systems, onshore pipelines between caspian sea shore and terminal, compression facilities. Duration of work is 43 months from commencement date of the contract. Tekfen Group Contracting Agri Industry Real Estate 29

30 Contracting Shah Deniz Stage 2 Fabrication of Offshore Platforms Tekfen Group Contracting Agri Industry Real Estate 29

31 Contracting Ongoing projects Caspian Region Shah Deniz Stage 2 Project Overall Scope Tekfen Group Contracting Agri Industry Real Estate 31

32 Contracting Ongoing projects - Middle East SAUDI ARABIA - PROPYLENE OXIDE PROCESS UNIT Tekfen was awarded the construction of LSPB contract for Propylene Oxide Plant at Sadara Petrochemical Complex. The scope of work covers all civil works, erection of prefabricated columns and vessels, installation of electrical and instrumentation including central control building. Project location is in Jubail, and is part of the SADARA Chemical Company's petrochemical plant. The works are scheduled to be completed in 30 months and the project size is US$172 million. Tekfen Group Contracting Agri Industry Real Estate 32

33 Contracting Ongoing projects - Middle East QATAR DESIGN AND BUILD OF AL KHOR EXSPRESSWAY Awarded by Private Engineering Office of Qatar, the Project comprises the Design and Build of a 34 km long expressway with a total of 10 lanes in both directions and various junctions, viaducts, and over- and under-passes. Project size is ~US$2.1 billion. The carriageways shall be divided by a central median which includes provision for the future Qatar Rail Metro Red Line. A network of service roads is required adjacent to the main alignment which connects the upgrade to existing and future developments. A shared pedestrian/ cycle way shall be constructed along the length of one side of the expressway in addition to a seperate fast cycle track adjacent to the service roads on the other side of the expressway. The Works also include Landscape, Hardscape and Artscaping. *Concept design. Tekfen Group Contracting Agri Industry Real Estate 33

34 Contracting North Road Qatar Tekfen Group Contracting Agri Industry Real Estate

35 Contracting Strategic Direction Tekfen Contracting Group consistently works on the following in line with the goals of its Strategic Plan: Existing and new projects will be undertaken within the framework of the adopted business principles and occupational health, safety and environment (HSE) policies. Maximizing work quality and maintaining accident-free operations in line with occupational safety standards are the main priorities. The company will continue to focus on projects that emphasize the EPC concept and it will continue to improve its competency in this area. Engineering and procurement functions will be key areas to be improved. To achieve this, required personnel recruitments are done both in our engineering company and in procurement departments. The emphasis will be on increasing business volume in countries where operations continue. The goal is to secure new projects that at least maintain the current level of revenue generated from projects in these countries. Addition of new subcontractors to our existing subcontractor portfolio and increasing the share of South East Asia origined personnel in our total work force are considered as strategy implementations. Activities geared towards increasing efficiency and profitability will continue. All requirements to preserve Tekfen s strong and prestigious brand image in existing markets will be met. Tekfen Group Contracting Agri Industry Real Estate 35

36 Agri Industry Agri Industry Tekfen Group Contracting Agri Industry Real Estate

37 Agri Industry Overview The pioneer in Turkey s agricultural industry Symbol of quality and trust In business since 1981 under TOROS brand name Over 1,000 employees Seasoned well experienced employees 37 Tekfen Group Contracting Agri Industry Real Estate

38 TRY Million TRY Million Agri Industry Overview Active in fertilizer, seed, seedling and sapling production and distribution, as well as marine terminal services and free zone operations Consolidated turnover of TRY 1,851 million as of 2016 Significant player in port activities, providing services to third parties in two ports strategically located at the Eastern Mediterranean and the Black Sea Coast Turnover Breakdown EBITDA Breakdown % 5% % 7% 7% Terminal % % Terminal 95% 95% 95% 93% 93% Agri % % % Agri 80% 74% 83% 50% 71% Tekfen Group Contracting Agri Industry Real Estate

39 Agri Industry Fertilizers Supplying every type of fertilizer Turkish farmers need Market leader since 1986 Vast dealers network with over 800 dealers Marketing and Sales Team located in 7 regions Constant contact with dealers and farmers Timely delivery to dealers via 8 warehouses 39 Tekfen Group Contracting Agri Industry Real Estate

40 Agri Industry Regional Offices & Units TEKİRDAĞ REGIONAL OFFICE Warehouse İSTANBUL Head Office ANKARA REGIONAL OFFICE Warehouse SAMSUN REGIONAL OFFICE Warehouse İZMİR REGIONAL OFFICE Warehouse Grain Silos Seed Processing ŞANLIURFA REGIONAL OFFICE Warehouse ANTALYA REGIONAL OFFICE Seedling Nurseries Warehouse KONYA Warehouse NEVŞEHİR Underground Potato Seed Warehouse ADANA & CEYHAN REGIONAL OFFICE Bag Manufacturing Plant Free Zone Micropropagation Warehouse Grain Silos Seed Processing 40 Tekfen Group Contracting Agri Industry Real Estate

41 Agri Industry Fertilizers Product Types Nitrogen fertilizers: AN26 (CAN) - Calcium Ammonium Nitrate AN33 - Ammonium Nitrate AS - Ammonium Sulphate Urea Phosphate fertilizers: TSP - Triple Super Phosphate SSP - Single Super Phosphate Potash fertilizers: PS - Potassium Sulphate Compound fertilizers (NPs and NPKs): DAP - Di-Ammonium Phosphate NP NP Zn NPK NPK Zn Special grade compound fertilizers: NPK NPK Gold NPK Tekfen Group Contracting Agri Industry Real Estate

42 Agri Industry Fertilizers Sales 2015 Total Sales: 1.5 million tons 2016 Total Sales: 1.75 million tons AN33 21% AS 4% Urea 8% DAP 8% AS 4% Urea 16% DAP 12% AN33 17% AN26 15% NP/NPK (Compound) 44% AN26 12% NP/NPK (Compound) 39% 42 Tekfen Group Contracting Agri Industry Real Estate

43 1,000 tons 1,000 tons 1,000 tons Agri Industry Fertilizers Leader in Turkish Fertilizer Market* Consumption and Toros Sales Volume/Marketshare % 30% 28% 31% 28% Consumption Toros Sales Marketshare 35% 30% 25% 20% 15% 10% 5% 0% Turkey s Total Production and Toros Share % 39% 39% 42% 50% % 40% % % % 0 0% Total Production Toros Production Toros Share Turkey s Total Imports and Toros Share % 8% 6% 11% 8% 15% 10% % % * 2016 market data is not yet available. Total Imports Toros Imports Toros Share 43 Tekfen Group Contracting Agri Industry Real Estate

44 Agri Industry Fertilizers Production Facilities Three fertilizer plants located in Mersin, Ceyhan and Samsun Total installed capacity is 2 million tpa of which 1,85 million tpa is in operation Leading producer with the largest share in Turkey s total installed production capacity SAMSUN PLANT MERSIN PLANT CEYHAN PLANT 44 Tekfen Group Contracting Agri Industry Real Estate

45 Agri Industry Fertilizers Production Capacity MERSIN PLANT AN and CAN production CAPACITY 660,000 tpa CAN NITRIC ACID CAPACITY 405,000 tpa CEYHAN PLANT NPK and DAP production CAPACITY 2 x 330,000 tpa NPK or 330,000 tpa NPK & 200,000 tpa DAP SAMSUN PLANT NPK and DAP production CAPACITY 300,000 tpa NPK 227,000 tpa DAP PHOSPHORIC ACID CAPACITY 210,000 tpa (100% P 2 O 5 ) SULPHURIC ACID CAPACITY 726,000 tpa (100% H 2 SO 4 ) 45 Tekfen Group Contracting Agri Industry Real Estate

46 Agri Industry Fertilizers - Integration Investments Place: Samsun Plant Scope: Sulphuric and phosphoric acid investments, NPK revamp investment Amount: $335 million Period: Aim: Ensuring raw material supply security Self sufficiency in acid production Decreasing production costs 46 Tekfen Group Contracting Agri Industry Real Estate

47 Agri Industry Fertilizers DAP/NP/NPK Production Diagram In Samsun Plant, Toros produces sulphuric and phosphoric acid for all its DAP/NPK units. AMMONIA SULPHUR SULPHURIC ACID PHOSPHORIC ACID DAP/NP/NPK UREA/AS* PHOSPHATE ROCK POTASH** *Either Urea or AS is added as nitrogen (N) source in addition to ammonia. **Potash is added as potassium (K) source for NPKs. 47 Tekfen Group Contracting Agri Industry Real Estate

48 Agri Industry Fertilizers CAN/AN Production Diagram In Mersin Plant, Toros produces nitric acid for its CAN/AN unit. AMMONIA AIR WATER NITRIC ACID AMMONIUM NITRATE AMMONIUM NITRATE CALCIUM AMMONIUM NITRATE LIME STONE 48 Tekfen Group Contracting Agri Industry Real Estate

49 Agri Industry Fertilizers Production and Imports Production - Breakdown by Products 52% 49% 47% 47% 23% 24% 21% 21% 19% 20% 18% 19% 11% 11% 11% 8% 55% 17% 16% 12% Compund (NP/NPK) AN 26 (CAN) AN33 DAP 2012: 1.42 mn tons 2013: 1.41 mn tons 2014: 1.49 mn tons 2015: 1.37 mn tons 2016: 1.30 mn tons Procurement - Breakdown by Products 77% 62% 51% 50% 36% 40% 33% 27% 21% 20% 22% 15% 16% 11% 12% 3% 0% 2% 0% 2% 0% 0% 0% 0% 0% Urea AS AN33 DAP 2012: 171K tons 2013: 189K tons 2014: 360K tons 2015: 232K tons 2016: 385K tons 49 Tekfen Group Contracting Agri Industry Real Estate

50 Agri Industry Marine Terminal Services Providing loading/unloading and storage services to third parties Ceyhan Port: Turkey s 5 th largest dry bulk & general cargo port One of the largest transit terminals for petroleum products in Eastern Mediterranean Samsun Port: Black Sea region s 3 rd largest port Strong brand name associated with highquality customer service, technical know-how and seasoned employees 50 Tekfen Group Contracting Agri Industry Real Estate

51 Agri Industry Marine Terminal Services 1 jetty with 2 berths handling 14,000 tons of dry bulk cargo per day Closed storage area capacity: 210,000 tons Open storage area capacity: 300,000 tons SAMSUN PORT CEYHAN PORT 1 jetty with 3 berths handling 45,000 tpd of dry bulk cargo 1 jetty with 5 berths loading 1,300 tpd and discharging 1,000 tpd bulk liquids Closed storage area capacity: 300,000 tons Open storage area capacity: 1,000,000 tons Tank farm capacity: 236,000 m 3 51 Tekfen Group Contracting Agri Industry Real Estate

52 Agri Industry Marine Terminal Services Dry&Liquid Bulk and General Cargo * Handled Quantity (mn tons) Petroleum Products Occupancy Rate 70% 3,66 5,36 4,48 5,60 6,00 40% 55% 60% 14% *Does not include petroleum products handling volume 52 Tekfen Group Contracting Agri Industry Real Estate

53 Agri Industry Complementary Products and Services Specialty Fertilizers: Leading brand in specialty fertilizers in Turkey since 2000 Procurement from globally known leading producers Blending soluble NPKs for the high growth local market Field Crop Seeds: Cooperating with two state research institutes to produce and distribute certain types of wheat Wheat seed breeding program receiving support from TÜBİTAK (The Scientific and Technological Research Council of Turkey) Vegetable Seedlings: Operating under Hishtil-Toros Seedlings brandname A JV with Hishtil Holdings since 1999 Producing high quality grafted and standard vegetable seedlings for the growing local and foreign markets Nurseries located in Antalya and Adana 53 Tekfen Group Contracting Agri Industry Real Estate

54 Agri Industry Complementary Products and Services Micropropagation: Targets to meet the sector's demand for high quality, high-yield and disease-free homogenous seed, saplings and young plants First local successful producer of potato seeds on commercial scale by using micropropagation techniques in Turkey Serving to a market which is historically dominated by imported potato seeds Free zone operations: Founding partner and operator of the largest free zone in Turkey 4.5 million m 2 of area Strategically located in Ceyhan region which is becoming the energy hub for Turkey 54 Tekfen Group Contracting Agri Industry Real Estate

55 Agri Industry Environmentally Conscious Production MERSIN PLANT CEYHAN PLANT SAMSUN PLANT Catalytic reduction system to keep NO X emission in exhaust gases released to atmosphere from nitric acid unit under 200 ppm ISO 14001:2004 Environment Management ISO 9001:2000 Quality Management OHSAS 18001:1999 Occupational Health and Safety Management Emission Certificate 55 Tekfen Group Contracting Agri Industry Real Estate

56 Agri Industry Social Responsibility Supporting farmers; Educational seminars and training programs to improve agricultural productivity and product quality Raising awareness; Supporting UNFPA s Improving health conditions of seasonal workers in agriculture program in Turkey Wheat documentary based on field trials done by Toros throughout Turkey Sponsorships for scientific research and academic seminars on agriculture and fertilizers Balanced Fertilization with Right Fertilizers Project with the support of the Ministry of Food, Agriculture and Livestock Toprak Ana (Mother Earth) documentary about agricultural production in Turkey Supporting local communities; Sponsoring sporting activities in Samsun and Mersin Toros Primary School and Toros Secondary School in Adana, and Toros Tarım Necati Akçağlılar High School in Samsun 56 Tekfen Group Contracting Agri Industry Real Estate

57 Real Estate

58 Tekfen Real Estate Development Group Real Estate Development Business Structure Tekfen Real Estate Development Investment and Trade Co., Inc Business Line: Investment, development, project management, asset management Tekfen Tourism and Facility Management Co., Inc Business Line: Facility Management Florya Real Estate Inv. Const. Tourism Co., Inc Business Line : Investment, development 58 Tekfen Group Contracting Agri Industry Real Estate

59 Real Estate Development Projects Project Project Function Start Date of Project End Date of Project Estimated Revenue* (million) Total/Tekfen Share Izmir Project Mixed Use Mar.16 May 20 TRY1.287 / 644 Esenyurt Project Residential Sep.14 Apr.17 TRY568 Topkapı Project Residential Apr.16 Jun.19 TRY379 Residential Office Retail Izmir Project* Esenyurt Project Topkapi Project Total * Tekfen share is 50%. 59 Tekfen Group Contracting Agri Industry Real Estate

60 Real Estate Development Ongoing Projects Izmir Mixed Use Transaction Overview: 50%-50% partnership with Renaissance Shopping Malls The largest mixed use project in Izmir Total Project Size (Revenues, TRY millions): Tekfen Share : 50 % Project Summary: Total Sellable/Leasable area (GLA) : o Shopping Mall 46,000 m² o Home Office 62,247 m² o Residential 32,519 m² Est. Contruction period: Q1/2016 Q4/2019 Landmark project for the city of Izmir Investment Rationale: Location within the new planned CBD of Izmir High accesibility and visibility through the main arteries 60 Tekfen Group Contracting Agri Industry Real Estate

61 Real Estate Development Ongoing Projects HEP Istanbul Project Transaction Overview: Being developed on m² land which is purchased on May 2013 Construction permit granted on December 2013 for the project including residential and 25 retail units Project has been launched in 4Q2014. Total Project Size (Revenues, TRY millions): 590 Tekfen Share : 100 % Project Summary: Total Sellable Space: Housing: m², Retail: m² Construction Period- Start: Q1/2015 Complete: Q2/2017 Investment Rationale: Project has been launched on October 30th, residential units having a total area of m² have been sold as of December 31st Total sales amount is TRY306 million. Project property is in a sought-after area (Esenyurt) because of its developing transportation infrastructure, the city s growth dynamics, and its situation on the intersection between the E5 highway and TEM motorway Esenyurt has great potential for the development having a predominantly middle-class area which is tha target segment. 61 Tekfen Group Contracting Agri Industry Real Estate

62 Real Estate Development Ongoing Projects Topkapı Housing Project Transaction Overview: A total of m2 net land area has reached with the acquisition of the adjusted plots of Toros Tarım and Topkapı Vitaminli Yem Sanayi A.Ş. in Nov The residential project supported by retail units is planned to be completed within 24 months following the construction permit obtained in April 2017 Total Project Size (Revenues, TRY millions): 387 Tekfen Share : 100 % Project Summary: Total Sellable Space: Housing: m², Retail: m² Construction Period- Start: Q2/2017 Complete: Q2/2019 Investment Rationale: Design works are ongoing. Construction permit is planned to be obtained in Apr /1000 zoning plan is approved by municipality and submitted to environment and urban ministry for approval. Demolishment works have been already started following the urban transformation approval. Pre-launch sales is planned to be started in Apr 2017, after the sales office constructed in Aug.2017, the main launch will be announced. High accessibility, near E-5 highway and intersection point for tram, light metro and metrobus Rapid transformation of light industrial area to residential units supported by the zoning plans Residential demand is increased after operational of the universities and hospitals, 62 Tekfen Group Contracting Agri Industry Real Estate

63 Real Estate Development Tekfen Services - Facility Management Facility Management of Tekfen Tower, Taksim Residences, Tekfen Offices, Yalıkavak Tekfen Houses, Gumusluk Muskulum Ciftligi, Kagithane Office Park, Levent Office and S-Cafe are directed and operated by Tekfen Tourism & Facility Management Co., Inc. under the brand name of Tekfen Services. Facility Management for the ongoing and the potential projects of Tekfen Real Estate Development Group is planned to be operated by Tekfen Services. Tekfen Services professional facility management improves the values of Real Estate Development Group projects. 63 Tekfen Group Contracting Agri Industry Real Estate

64 Real Estate Development Assets Tekfen Holding earns rental income from the offices it owns in Akmerkez and Tekfen Tower. Tekfen Tower has m² rentable area, of which, 25% is used by Group Companies, while the rest is rented to various institutions. Total rental income from Tekfen Tower amounted to USD 12 million in Tekfen Group Contracting Agri Industry Real Estate

65 Real Estate Development Social Responsibility The concept of environmental friendly / sustainable building is becoming more and more important everyday as the awareness and consciousness for energy use and environment increases. Tekfen Real Estate Group, as in its all other projects, is aiming LEED-CS (core&shell) of The U.S. Green Building Association (USGBC) for its new projects, Tekfen-OZ Kagithane OfisPark & Tekfen Bomonti Apartments. In accordance with this policy, Tekfen-OZ LeventOfis - completed in is the first project of the Group rewarded with LEED-CS Gold Certificate. The projects aim to achieve LEED certification by introducing sustainable solution to design elements such as encouraging public transportation, collection and reusing of storm water and grey water within the system, decreasing overall water consumption, efficiency in energy consumption with shell design and decreasing the load of the cooling system via plantation integrated within the facade system. 65 Tekfen Group Contracting Agri Industry Real Estate

66 Tekfen Group Appendix Financial Highlights 67 Net Cash Position 68 Capital Expenditures 69 Disclaimer 70 Contact Info Tekfen Group Contracting Agri Industry Real Estate

67 Tekfen Group Financial Highlights Segmental Breakdown TRY Million Revenues 2015 % in Total 2016 % in Total 2017E % in Total Contracting % % % Agri Industry % % % Real Estate 28 1% 33 1% 534 7% 48 1% 30 1% 35 0% Total % % % EBITDA 2015 Margin 2016 Margin 2017E Margin Contracting 164 7,6% 261 9,3% 320 6,6% Agri Industry 145 8,7% ,6% ,2% Real Estate -6-21,0% ,8% 74 13,9% -9-18,0% ,2% ,2% Total 294 7,6% ,2% 656 8,7% Net Income 2015 Margin 2016 Margin 2017E Margin Contracting 42 2,0% 81 2,9% 189 3,9% Agri Industry 75 4,5% 140 7,5% ,2% Real Estate -2-7,5% 11 33,0% 45 8,3% ,0% ,0% 6 18,3% Total 193 5,0% 330 7,0% 454 6,1% * Net asset write-off in Libya had a negative impact of TRY139,8 million on EBITDA and TRY189,7 million on Net Profit figures in Tekfen Group Contracting Agri Industry Real Estate

68 Tekfen Group Net Cash Position Tekfen Group Net Cash Position (TRY million) Net Cash Position by segment (TRY million) Contracting Agri Industry Real Estate 68 Tekfen Group Contracting Agri Industry Real Estate

69 Tekfen Group Capital Expenditures Million TRY Capital Expenditures (Segmental Breakdown, Million TRY) Contracting Agri Industry Real Estate Total ,4 11,4 0,3 6,4 96, ,6 49,9 0,3 0,4 193, ,7 158,4 0,4 0,6 184, ,0 371,2 2,6 0,7 401, ,3 275,0 1,9 1,9 296, ,7 120,0 2,6 1,4 169,7 69 Tekfen Group Contracting Agri Industry Real Estate

70 Tekfen Group Disclaimer Tekfen Holding A.S. (the Company ) has prepared this presentation (the Presentation ) in order to provide investors with general information about the Company. The contents of this Presentation is based on public information and on data provided by the Company management. Neither the Company 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. This Presentation does not constitute an offer or invitation to purchase the securities of the Company. Investors and prospective investors interested in the securities of the Company are required to conduct their own independent investigations and appraisal of the business, financial condition of the Company and the nature of its securities. Except for the historical information contained herein, the statements made in this Presentation with respect to the Company s plans, strategies, beliefs and other prospective matters are forward-looking statements that involve risk and uncertainty that are not under the Company s control which may cause actual results to differ materially from those anticipated. Except where otherwise indicated, this Presentation speaks as of the date hereof. We undertake no duty to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. 70 Tekfen Group Contracting Agri Industry Real Estate

71 Tekfen Group Contact Information For General Questions and Requests for Reports: Çağlar Gülveren, CFA - Investor Relations and Corporate Governance Coordinator cgulveren@tekfen.com.tr Tel: Tekfen Group Contracting Agri Industry Real Estate