SASA POLYESTER SANAYİ A.Ş. — Investor Presentation 2021

Jun 7, 2021

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SASA IS AN

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ESTABLISHMENT

June 2021

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Disclaimer

This presentation (“ Presentation ”) was prepared exclusively by Sasa Polyester San. A.S (“ Sasa ”) solely for informational purposes and has not been independently verified and no representation or warranty, express or implied, is made or given by or on behalf of Sasa. This Presentation contains selected information about the activities of Sasa and its subsidiaries and affiliates (together the “ Group ”). It does not purport to be a comprehensive overview of the Group or contain all information necessary to evaluate an investment in the Group. As this Presentation only contains general, summary and selected information about the Group, it may omit material information about the Group and is not a complete description of the Group’s business and the risks relating to it. Nothing in this Presentation is, or should be relied upon as, a promise or representation as to the future. This Presentation is being communicated to selected persons who have professional experience in matters relating to investments for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, any other publicly available information and discussions with Sasa. Neither this Presentation nor any of its contents may be used for any other purpose without the prior written consent of Sasa.

This Presentation does not constitute or form part of, and should not be construed as, an offer or invitation or inducement to subscribe for, underwrite or otherwise acquire, any securities of Sasa, nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Sasa, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This Presentation is not an advertisement and not a prospectus for the purposes of Regulation (EU) 2017/1129 or Regulation (EU) 2017/1129 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

Certain statements in this Presentation are forward-looking statements. These statements may be identified by words such as "expectation", "belief', "estimate", "plan", "target“ or "forecast" and similar expressions, or by their context. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. Actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, but not limited to, future global economic conditions, changed market conditions affecting the industry, intense competition in the markets in which Sasa operates, costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditions affecting Sasa’s markets, and other factors beyond the control of Sasa). Neither Sasa nor any of its directors, officers, employees, advisors, or any other person is under any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak of the date of this Presentation. Statements contained in this Presentation regarding past trends or events should not be taken as a representation that such trends or events will continue in the future. No obligation is assumed to update any forward-looking statements. The information contained in this Presentation is provided as at the date of this document and is subject to change without notice.

[This Presentation contains data sourced from and the views of independent third parties. In placing such data in this document, Sasa makes no representation, whether expressed or implied, as to the accuracy of such data. The replication of third party views in this Presentation should not necessarily be treated as an indication that Sasa agrees or concurs with such views.]

Neither Sasa nor any of its directors, officers, employees or advisors, nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance should be placed on, the fairness, accuracy or completeness of the information contained in the Presentation or of the views given or implied. Neither Sasa nor any of its directors, officers, employees or advisors nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of or reliance on any information contained in or omitted from or otherwise arising in connection with this Presentation. It should be noted that certain financial information relating to Sasa contained in this document has not been audited and in some cases is based on management information and estimates.

This Presentation is intended to provide a general overview of Sasa’s business and does not purport to include all aspects and details regarding Sasa. This Presentation is furnished solely for your information, should not be treated as giving investment advice and may not be printed or otherwise copied or distributed. Subject to limited exceptions described below, the information contained in this Presentation is not to be viewed from nor for publication or distribution in nor taken or transmitted into the United States of America (“ United States ”) or any jurisdiction where such distribution is unlawful and this Presentation does not constitute an offer of securities for sale in any of these jurisdictions.

This Presentation does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

In particular, any securities offered by Sasa have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), or the securities laws of any state or other jurisdiction of the United States and such securities may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws.

By receiving this Presentation, you agree to be bound by the foregoing limitations. This Presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice and does not take into account your individual investment objectives. No recommendation is made as to how investors should exercise any investment decision. Any investor that intends to deal in any existing or prospective securities of the Group is required to make its own independent investigation and appraisal of the business and financial condition of the Group and the nature of the securities at the time of such dealing.

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SASA – Executive Summary

SASA is a pioneer in the polyester sector with more than 55 years market presence, #1 in Turkey and ranks among the leading global producers for specialty polyester polymers, staple fibers and filament yarns

SASA‘s significant incessant investments serve its vision to “become the largest supplier of high-value added polyester in the region and beyond”

SASA has been listed at the BIST since 1996 and is majority owned by anchor shareholder Erdemoğlu Holding while being managed by a highly experienced, long-serving management team

SASA’s planned investments in capacity addition (+2,200 ktons) to support creating a vertically integrated specialty polyester manufacturer in Turkey serving both high domestic and international demand

The Turkish polyester market is expected to outgrow the global market with c. 10% (vs. 3% global market) until 2030 driven by domestic secular growth trends additionally fueled by COVID19

Promising Turkish market fundamentals with strong GDP growth and stock market recovery expectations while Lira exchange rate to follow mean reversion in the medium term

Source: Company information, Wood Mackenzie Aromatics

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Content

I		Company Profile
II		Financial Indicators
III		Market Outlook
IV		Turkey Macroeconomic Outlook
V		Appendix

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SASA – Mission, Vision and Values

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	SASA has identified the polyester market as its key area of
	focus for investment. Its strategic target is to be one of the
Mission	world’s largest, fully integrated polyester companies by 2030
	and«to make Turkey the largest polyester producing
	country»after China and India
	By increasing sales and production capacity as well as
	developing new products, SASAaims at creating a strong
Vision	brand value,protecting its leadership position in Turkey
	and strengthening it’s position as a global player in EMEA
	region
	SASA carries on its activities withhighest safety standards by
	adopting the principle of working in compliancewith global
Values	and local ethic values, fulfilling social responsibilities with an
	environmental consciousness and making customer
	satisfaction it’s first priority

“Becoming the largest supplier of high-value added polyester in the region and beyond“

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SASA – At a Glance

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Business Description

Key Facts

• Leading producer in the world for polyester staple fibers, filament yarns, polyester-based and specialty polymers and intermediates

• Financial profile : USD 720 m with a 24% EBITDA Margin

• FTE : 4,103 employees (5,300+ employees post envisaged investments)

• Combining and blending a powerful technical inheritance and innovation culture with a high production capacity

• Customers/end-markets: Strong and blue chip customer base and well diverse market penetration

• Fully integrated operations from design to production and distribution

• Technology: State-of-art technology investment and manufacturing setup in every production line

• Investment oriented high growth, especially in high value-added product range

• Transformation: At the edge of transforming to a global specialty player

• ESG are determining priority in business model

With its proven business model and its distinct, winning features, SASA has all the necessary ingredients to deliver up on our vision: ”Becoming the largest supplier of high-value added polyester in the region and beyond”

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SASA – Key Milestones

Erdemoğlu Holding A.Ş. acquired all SASA shares of H.Ö. Sabancı Holding and became Start-up of new Initial Public the main shareholder Polyester Fiber Offering with 84,8% ownership plant 1996 2015 2019 1966 2002-04 2016-17 2020 Establishment The Company named Planning of new New investments DUPONTSA after fiber investment go in to production: the JV with DuPont New POY/DTY/PET Resin 2017 investments became 2004 Planning of new operational and beginning H.O Sabancı Holding investments in POY, of PTA investment. Factory acquired shares of DTY, PET resin plants site designated and EPC-M DuPont and renamed the agreement signed with Company as ADVANSA Técnicas Reunidas. The license and technical service 2011 agreement has been signed Company title with American Invista (Koch changed into SASA Industries).

Source: Company information

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SASA – Shareholder Structure

SASA Shareholder Structure

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85%
15,2%
7,5% 62,8%
14,5%
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Erdemoğlu Holding Merinos Dinarsu Free Float

Deep dive into Erdemoğlu Holding

• Erdemoğlu Holding, operates in different sectors including machinery carpet, specialty polymers and chemicals, home textile and yarn with 50 years of experience

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• Erdemoğlu Holding became the main shareholder of SASA, by acquiring the shares of H.O. Sabancı Holding in 2015

Key Group Indicators:

• USD 2.7 b total asset size

• USD 1.4 b sales

• USD 353 m EBITDA

Home Textile

Carpet

Yarn

• Among the 5 largest carpet manufacturers of the world with 69.6 million m[2]

• In the sector since 2007  In the sector since 1992

• Facility in Uşak with 18.000 tons  Facility in Gaziantep and Tekirdağ production capacity with 102.4 tons production capacity

• Exports to 65 countries

• 72 % of revenues is generated from export markets

Anchor Shareholder Base

Erdemoğlu Holding A.Ş. and subsidiaries (Merinos Halı Sanayi ve Ticaret A.Ş. and Dinarsu İmalat ve Ticaret T.A.Ş.) together own 84.8% of SASA total shares

Brands

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Market 5% 30% Share in Global in Local

Product Range

Brands

• Ak-Al iplik joined the Holding in 2011, operates under Dinarsu

• Production plant in Zonguldak

i. Rugs v. Towel ii. Duvet sets vi. Bathrobe sets iii. Sleep sets vii. Bathroom sets iv. Quilts

Market 1% 20% Market 5% 30% Share in Global in Local Share in Global in Local

Source: Company information

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SASA – Senior Management

Board of Directors

	1	Name İbrahim ERDEMOĞLU	Title Chairperson	Total Experience 38 Years	With SASA 6 Years
	2	Ali ERDEMOĞLU	Deputy Chairperson	50 Years	6 Years
	3	Mehmet ŞEKER	Board Member	18 Years	4 Years
	4 5	Mehmet ERDEMOĞLU Kadir BAL	Board Member Independent Board Member	11 Years 20 Years	6 Years 1 Year
	6	Hacı Ahmet KULAK	Independent Board Member	25 Years	3 Years
	7	Mahmut BİLEN	Independent Board Member	18 Years	5 Years
	8	İrfan BAŞKIR	Board Member	28 Years	28 Years
				>208 years	>59 years

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Management Board

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CEO
Dr. Mustafa Kemal ÖZ >98
years
 22 years with SASA
 Holds PhD in Chemistry
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Advisors to Board of Directors

Prof.Dr. İbrahim M. Turhan

• Holds PhD in Economics

• Previously Deputy Governor of CBRT, Chairman and CEO of Borsa Istanbul

• Chairman of Turkish Settlement Bank

• Member of Global Agenda Council , World Economic Forum

Dr. Ersin Acar

• Holds PhD in Chemistry

• CFO CIO COO COO

• Şakir S. YENER Güven KAYA Alper SÖĞÜT Sivakumar NATARAJAN

• Responsible for financial  Responsible for  Responsible for Polymers  Responsible for Filament operations and reporting investments and technical &Chemicals Business Units Business Units

• 30 years with SASA coordination  20 years with SASA  2 years with SASA  Holds BA degree in  24 years with SASA  Holds BS in mechanical  Holds BS in textile Business Administration  Holds MS in Chemistry engineering technology

• Previously researcher of General Electric R&D Center in US, Albany for 5 years

• Owns more than 12 patents

Source: Company information

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SASA – Product Portfolio and End-markets Served

Key products (FYE 2020)

End-markets served (FYE 2020)

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Home
33% Polyester Chips 44%
textile &
of sales (Specialty Polymers and Chemicals) of sales
clothing
 Polyethylene Terephthalate
 Dimethyl Terephthalate 37% Technical
 Polybutylene Terephthalate of sales textile
 Thermoplastic Elastomers
 Dioctyl Terephthalate
 Differentiated Co-Polymers 13% Film and
of sales packaging
18%
Filament
of sales
2% Industrial
 Drawn Textured Yarn of sales end uses
 Partially oriented yarn
2%
49% Automotive
of sales Staple Fiber of sales
 Fiberfill
 Nonwoven 2%
Plasticizer
of sales
 Textile
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Our fiber products are rendered as pillow, padding into toys, quilt, all kind of coats, furniture padding, bed, decorative toss pillows after the paddings are combed, rendered in bead form or fiber tying

We create value with special solutions and special products for our customers in textile sector providing services for very different and wider sectors

Our film type PET products are used in the production of film and packaging materials which shall or shall not be in contact with food

Our high viscosity polyester polymer products are used in industrial applications requiring higher strength by depending on their final use places

Our polymer, fiber and filament products are used in the production of automotive parts

Our high viscosity polyester polymer products are used in industrial applications requiring higher strength by depending on their final use places

Core offering

Differentiated and high value-add

polyester

solutions for targeted endmarkets

Source: Company information

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SASA – Key Strength Factors

Operating in the industry of polyester polymers, staple fibers and filament yarns , SASA constitutes a major share of global production capacity with its polymerization capacity of 1,365,000 t/year in 2020 based on both DMT[(1)] and PTA[(2)] technology

As #1 market leader in Turkey, SASA provides highly tailored and specialty polyester solutions for demanding, resilient end-markets both domestic and international . Its plan to become a fully vertical integrated polyester producers will provide SASA with an additional competitive edge vs. peers cementing its leadership position

SASA’s R&D Department was formed in 2000 and certified as « R&D Centre » by The Ministry of Industry and Technology in 2018. With 30+ employees headed by a very experienced new advisor and with USD 1.3 m+ budget in 2021 , SASA plans to add additional patents/IP and expertise to its existing product pipeline

SASA activities in polyester production dates back to 1966. Since its establishment , the company has been one of the pioneer corporations in its field, demonstrating rapid growth thanks to the incessant investments

Source: Company information, Notes: (1) DMT = dimethyl terephthalate, (2) PTA = purified terephthalic acid

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SASA – Recent Capital Expenditure

SASA’s total capacity (tons p.a.)

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1,365,000 1,365,000
2 3
1 525,000
350,000
2018 2019 2020 2021
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Rationale

• Regional strategy of SASA : Rank among top producer and become production base in MENA region

• International vision of SASA: Be the biggest polyester producer after China and India

	Fiber Investment 1	POY/TEXTURIZE 2	MTR 3
Rationale	Commitment of new shareholder to deliver upon SASA’s mission
Investment Amount	EUR 210 M	EUR 315 M	EUR 65 M
Contribution to Capacity	350K tons	350K tons	315K tons
Completion Date	2019 – 2Q	2020 – 2Q	2020 – 3Q
Completion Time	3 years after public disclosure announcements of investments	3 years after public disclosure announcements of investments	3 years after public disclosure announcements of investments
Contribution to Sales	USD 480 M	USD 450 M	USD 250 M
Financing Details	15% Capital, 85% Debt ECA Credit - 10 years maturity with 2 years grace period Other investment loans with 3 to 10 years maturity	25% Capital, 75% Debt 10 years maturity with 2 years grace period Other investment loans with 3 to 10 years maturity	25% Capital, 75% Debt ECA Credit, 10 years maturity with 2 years grace period Other investment loans with 3 to 10 years maturity
Breakdown of Loans	EUR 60 M - 2+6 Years – 4.84% - Commercial Loan EUR 60 M - 2+10 Years – 3.16% - ECA EUR 20 M - 2+8.5 Years – 2.85% - ECA EUR 20 M – 10 Years – 4.74% - EXIM Investment Loan EUR 20 M – 5 Years – 5.68% - Investment Loan EUR 30 M Equity	EUR 220 M - 2+10 Years - 2.50% - ECA Loan EUR 35 M - 2+3 Years - 4.95% - EXIM Investment Loan EUR 10 M - 3 to 10 Years - 1.80% - Loans from various financial institution TL 150 M - 3 to 10 Years - 17.50% - Loans from various financial institution EUR 90 M Equity
Loan Amount Repaid	EUR 58 M (27.6% of total)	EUR 35 M (9.2% of total)

Source: Company information, KPMG report, Deloitte Audit Report

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SASA – Customer Base

SASA Sales Split[(1)] (2020)

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26%
USD
720m
74%
Domestic Export
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Selected customers

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Well diversified and loyal customer base both domestically and internationally reduces concentration risk

Domestic	Customer Weight in Sales Product
	1 16% Fiber-Yarn-POY
	2 4% Fiber
	3 4% Fiber-POY
	4 4% Textile Chips
	5 4% Textile Chips-Yarn-POY
	6 3% Yarn-POY
	7 3% Textile Chips
	8 2% Textile Chips
	9 2% POY
	10 2% Yarn,POY
	Sum top 10 44%

	Customer	Country	Weight in Sales	Weight in Export(1)	Product
	1 2	Germany Germany	3.6% 1.7%	13.8% 6.3%	Textile Chips Textile Chips
	3	Germany	1.3%	4.9%	Fiber
	4 5 6 7	Germany Italy Israel Finland	1.0% 0.6% 0.6% 0.6%	3.6% 2.4% 2.3% 2.1%	Textile Chips Fiber Fiber Fiber
	8 9	Germany Israel	0.6% 0.5%	2.1% 1.8%	Textile Chips Fiber
	10	France	0.4%	1.7%	Textile Chips
	Sum top 10		10.9%	41.0%

• Domestic clients are mostly export oriented producers

• 99% of all sales are priced in hard currency and this gives SASA a solid ground against FX fluctuations

• Geographical distribution of SASA sales ensures company's profitability against any kind of non-systematic risks

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Exports sales and export
percentage in sales (USD m)
183 189
170
150
141
40% 41%
37%
29%
26%
2016 2017 2018 2019 2020
Exports sales (USD m) Export percentage in sales
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Source: Company information, Notes: (1) including exports and sales subject to export

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SASA – ESG Governance

Transparency and Accountability

All financial reports and material event disclosures are announced at Public Disclosure Forum and Website www.sasa.com.tr

Management Board and Committees

Erdemoğlu Holding Internal Audit Unit is responsible for internal audit of SASA. Management Structure is formed by related regulations and ESG policies

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Policies and Regulatory Framework

Corporate governance is at the center of the management philosophy of SASA. As a requirement of being a listed company, SASA also fulfils the Capital Markets Board Corporate Governance Principles

Monitoring and Internal Control

Audit Committee, Committee of Early Detection of Risk, Corporate Governance Committee actively operate with the Company’s Management Board

Audit Committee

• Disclose company’s financial reports and oversight efficiency of internal audit and control systems

• Submits suggestions and evaluations to the SASA’s Board of Directors within its capacity

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Early Detection of Risk Committee

• Focus on strategic, operational and financial risks which could affect company’s operations

• Committee directly reports to the Board of Directors its findings, risk management actions and suggestions

Corporate Governance Committee

• Make sure that SASA’s operations are based on ethic principals, responsibility for internal or external stakeholders, transparency, and sustainable management

• Makes evaluations and suggestions to the Board of Directors in order to set corporate governance principals for SASA in line with Capital Markets Board of Turkey’s corporate governance principals and international best practices

Source: Company information

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SASA – ESG Policies (1/2)

SASA’s initiative

Intern. environmental policies

SASA‘s ESG mission

• Environment management unit consists of

• 3 engineers and 9 operators

• Waste water treatment facility has 7k tons of water treatment capacity

• Recycling: Existing PET recycling facility (current capacity 9k tons p.a. in 2020) to be ramped up to 50k tons by 2025

• Recycling: SASA /UIF (Uhde Inventa Fischer) to recycled 20% polyester in PET chips production with 66k tons p.a. by 2023

• Consistent emission measurements

• Greenhouse gas emission[(1)] is certified by The Ministry of Environment and Urbanization’s laboratories

• Temporary storage areas for hazardous

• wastes

• Zero Waste Commitment[(2)] certified by The Ministry of Environment and Urbanization

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IS0 14001:2015 “Our aim is to prevent all injuries, occupational 0 illnesses, major incidents and environmental pollution. We WASTE ISO 50001:2011 believe in The Goal Of Zero and that it is achievable and sustainable. ESG is a fundamental component of ISO 9001:2015 0 SASA’s long-term business strategy. We consider ESG DAMAGE implications in the full spectrum with the intent to ISO 27001: 2013 protect associates, neighbours, business assets, natural resources and the 0 environment.” ISO 45001:2018 ACCIDEN T

Notes: (1) Measured by SASA and verified by The Ministry of Environment and Urbanization‘s accredited laboratories, (2) Qualified for “Zero Waste Certification” in Mar-2020 with validity upto 2025 and subject to periodic audits

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SASA – ESG Policies (2/2)

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Education projects

• Mehmet Erdemoğlu Foundation has financed 11 different education projects including faculties, dormitories and schools

• The Foundation has provided scholarships for over 18,000 students since 1998

• Total funds spent for education projects amounts to USD 25 M

Health projects

• Two Family Health Centers are built by Foundation in Adıyaman, South Eastern Turkey

• Total funds spent for health projects amounts to USD 1 M

Social projects

Other projects

• The Foundation also  Police stations, foot bridges, implemented social projects via parks and museums are building social facilities for amongst other projects funded deprived people, mosques and by Mehmet Erdemoğlu condolence houses Foundation

• 13 different projects were  Total funds spent for other funded by the Foundation projects amounts to USD 20 M

• Total funds spent for social projects amounts to USD 20 M

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SASA – Recap of Investment Highlights

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1 market positioning with strong fundamentals… + …combined with specialty portfolio = …to accomplish its vision
Polyester Producers
Capacities in Turkey SASA’s sweet spot High
(Tons/year), 2021E
2025E
210.000
35.000
122.500 “Becoming the
192.500
largest supplier
Tod
1.365.000 Today of high-value
ay
280.000 added polyester
in the region and
beyond“
2015
Turkey to become largest
Polyester Producer from Low
America to India by 2024E Commodity Specialty
Profitability
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…to accomplish its vision
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Source: Company information, Wood Mackenzie Aromatics

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Content

I Company Profile II Financial Indicators III Market Outlook IV Turkey Macroeconomic Outlook V Appendix

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SASA – Targeted expansion for vertical integration

	Vertical integration Upstream Downstream	Vertical integration Upstream Downstream	Vertical integration Upstream Downstream	Vertical integration Upstream Downstream	Vertical integration Upstream Downstream	Vertical integration Upstream Downstream	Vertical integration Upstream Downstream	Vertical integration Upstream Downstream
	PTA	MTR				Fiber		POY
Rationale	Vertical integration / feedstock certainty	High-value added downstream products						Capacity increase
Investment Amount	USD 639 m	USD 120 m				USD 330 m		USD 400 m
Contribution to Capacity	New Capacity: 1.500K Ton	Capacity Increase: 330K Ton				Capacity Increase: 367.5K Ton		Capacity increase: 350K Ton
Completion Date	2023 – 1Q	2023 – 4Q				2023 – 4Q		2026
Contribution to Sales & EBITDA	Contribution of Internal PTA usage: 16% raw material cost advantage EBITDA Contribution: USD 250 m (+7% margin)	Sales: USD 400 m EBITDA: USD 110 m % margin: 27.5%				Sales: USD 550 m EBITDA: USD 170 m % margin: 30.9%		Sales: USD 525 m
Financing Details	25% Capital, 75% Debt Machinery and Equipment, USD 270 m with ECA Credits Construction and instalment, USD 210 m Negotiations are proceeding	25% Capital, 75% Debt Machinery and Equipment, USD 60 m with ECA Credits Construction and instalment, USD 30 m Negotiations are proceeding				25% Capital, 75% Debt Machinery, Equipment, Construction and instalment, USD 204 m with ECA Credits Negotiations are proceeding		Project to be initiated 2024
Expenditure Breakdown (USD m)	199 415 23 2021 2022 2023 Construction Machinery & equipment Others	18 84 2021 2022 Construction Machinery & equipment	18	84	18 2023 Others			Project to be initiated 2024
	~~The targeted investments an~~	~~d upstream integration are key to SA~~				~~SA medium term perspectives~~
	~~,~~ both in terms of sales growth and profitability

Source: KPMG report

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SASA – Financial Performance & Indicators

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Historical Financials Potential impact [(2)]
Net Sales (USD m) EBITDA – EBITDA Margin (%) [(1)] Sales
Impacted by one off factors: (1)
accident delaying capacity
800 720 200 ramp-up, (2) volatility in 30,0% c. +20% p.a.
feedstock prices , (3) trade war 173
700 180
25,0%
600 160 22.0% 25.7% 19.3%
500 455 451 485 140 18.3% 116 24.0% 20,0%
120
100
372
400 344 100 15,0% EBITDA
10.5%
300 80 68 66
51 10,0%
60
200
40 c. +30% p.a.
5,0%
100
20
0 0 0,0%
2016 2017 2018 2019 2020 Q1-2021 2016 2017 2018 2019 2020 Q1-2021
Net Profit (USD m) Net Debt - Net Debt/EBITDA EBITDA margin
Drop in profitability partly
200 mitigated by government’s 188 800 702 716 16,0
180 investment in subsidies 700 645 14,0 c. 25% target
160
600 12,0
140 124 Effect of recent investment 13.7
120 projects’ capitalization due to 500 10,0
depreciation and financing 375
100 400 8,0 EBITDA to net debt
expenses
80
56 300 218 6,0
60 45 45
200 4,0
40 95 4.1 c. ≥25%
20 15 100 2.5 3.2 2.4 2,0
1.4
0 0 0,0
2016 2017 2018 2019 2020 Q1-2021 2016 2017 2018 2019 2020 Q1-2021
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Source: Company information, Deloitte Audited Reports; Notes: (1) 2020 EBITDA figure includes USD 6.8 million one-off land sale; (2) Post targeted investments, as per p. 20, and continued ramp up of recent investments

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20

PTA Investment – Timeline and Expenditure Breakdown

The new PTA Investment has a forecast;

PTA Investment Expenditure Plan (USD m)

• Start-up of February 2023

• With approximately USD 639 m investment value and 1,500 kt/year capacity

• Estimated CAPEX pay-off within four years

• Financial contributions: +7ppts increase in EBITDA margin and USD 250m increase in EBITDA mainly due to the reduction in feedstock costs

PTA Investment Timeline

Year	2020	2020	2020	2021	2021	2021	2021	2021	2021	2021	2021	2021	2021	2021	2021	2021	2022	2022	2022	2022	2022	2022	2022	2022	2022	2022	2022	2022	2023	2023	2023
PTA _Month _	_10 _	_11 _	12	1	2	3	4	5		6	7	8	9	_10 _	_11 _	12	1	2	3	4	5	6	7	8	9	_10 _	_11 _	12	1	2	3
PTA Project
Commercial Agreement
Project Design
CED Report
Design and Construction
Electronic and Mechanical Installation
Machinery Delivery
Construction Permissions
Start-up Date

Today

Source: KPMG report

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23 639
415
199
2
2020 2021 2022 2023 Total
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Expenditure Breakdown (%)

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16.5%
32.1%
51.4%
Construction Capex
Machinery and Equipment Capex
Other Capex
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21

SASA – Debt Maturity Profile and Covenants

Total Loans & Costs and Currency Breakdown (2021-Q1)

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Currency Principal [Weighted Avr.] Total % of total Collateral
Interest Rate
USD 57,574 2.47 % 57,686 8% Unsecured
EUR 451,093 1.91 % 453,506 74% Secured
TL 1,045,596 18.64 % 1,077,011 18% Unsecured
Total
712,695 719,523
(in USDk)
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• Loan figures include leasing debt as well (fully secured by machinery/ equipment)

Additional comments

• Company’s factory land, with USD 68,633 asset value, has been pledged for EUR credit (with 2020-Q1 year-end USD/TL exchange rate)

• There is a pledge over machinery and equipment equivalent to EUR 367 m (with 2020-Q1 year-end EUR/TL exchange rate)

Loan’s Principals in Years (in USDk)

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Total Loans in USDk
301,945 99,133 73,209 65,827 41,264 131,317
161,567
123,899
84,119 84,124
64,245
56,259 56,559
39,145
13,694
8,963 9,268 7,418
1,315 - - - 2,120 -
1 year 2 year 3 year 4 year 5 year 5 year+
USD EUR TL
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Source: Deloitte Audit Report

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22

Content

I Company Profile II Financial Indicators III Market Outlook IV Turkey Macroeconomic Outlook V Appendix

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23

Global Polyester Market – Market Dynamics

Global Polyester Market Growth Trend (mtons)

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113
84
55
30
16 19
1980 1990 2000 2010 2020E 2030E
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Market Drivers/Trends

• Proportion of Asia in global production has increased over recent years

• Due to global dynamics (i.e. lessons-learnt from Covid-19, West-China tension, logistics and geographical proximity factors, among others), EU demand has and will further migrate to Turkey

• Polyester consumption rises mainly due to increasing purchasing power through GDP growth and rising disposable income, growing population as does per capita income, which makes EMs more vibrant markets

Global Polyester Capacity (ktons)

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129.881
123.149
117.701
106.196 109.601 112.282
2020E 2021E 2022E 2023E 2024E 2025E
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• Recent and anticipated market growth in end-use industries particularly in (i) Plastic industry (especially packaging sector) and (ii) Textile and leather industry impacted by post-COVID dynamics

• Higher demand for polyester products in comparison to other textile or plastic materials

Positive market tailwind from globally robust growth expectation combined with changing dynamics post COVID

Source: Company information, Wood Mackenzie Aromatics

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24

Global Polyester Market – Key Competitors

Key Global Polyester Players

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• Largest polyester producer in North America

• Sales in 2020: USD 5.3 bn

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• Petrochemicals, Petrol & Gas, Digital Services, Retail and Textiles

• Sales in FY2021 (Mar 21 YE): USD 62.9 bn

• The biggest integrated fiber and yarn producer

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• Petrochemicals, Textile products, Chips, DTY, POY, FDY and other chemicals

• Strong distribution channel within China, Taiwan, South Korea, Malaysia, Thailand, Indonesia, Mexico, Spain and Italy

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• Polyester Chips, POY, FDY, DTY producer

• Petrochemicals, Polyester Chips, POY, FDY, DTY, PSF, PTA producer

• Formed by Hengyi and Rongsheng

• Sales in 2020: USD 5.4 bn

• Sales in 2020: USD 12.5 bn

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• Polyester Chips, POY, DTY, FDY and PTA producer

• Sales in 2020: USD 6.6 bn

• Operates in Turkey under «Suneast» brand

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• Feedstock, PET, Packaging, Fibers and Recycled products

• Sales in 2020: USD 10.6 bn

• Production Sites: Africa, Americas, Asia-Pacific and Europe

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• Pet Chips, Film and Polyester Yarn producer

• Sales in FY2019 (Mar 19 YE): USD 0.4 bn

• Production sites: India, UAE, Bahrain, Belgium

Source: Company information, Wood Mackenzie Aromatics

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25

Turkish Market – Polyester/PTA (1/2)

Domestic PTA Capacity (ktons)

Domestic PTA consumption (ktons)

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1.595
1.150
95 95 105 105 105
2018 2019 2020F 2021F 2022F 2023F 2024F
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2.489
1.579
1.010 1.074
831
671 721 751
2015 2016 2017 2018 2019 2020 2025 2030
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PTA Imports (ktons)

Turkey PTA Trade (ktons)

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500
1.381 250
1.294
0
928 (250)
(500)
630 578 594
506 533 (750)
(1.000)
(1.250)
(1.500) Imports Exports Net-exports
2018 2019 2020 2021F 2022F 2023F 2024F 2025F
2015 2020 2025 2030 2035 2040
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• The Turkish PTA market is currently the world third largest importer and is expected to remain a net importer of PTA going forward despite the recent expansion of SASA – hence, there is still domestic demand to serve

Source: Company information, Turkish Statistical Institute, Wood Mackenzie Aromatics, Técnicas Reunidas

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26

Turkish Market – Polyester/PTA (2/2)

Turkey: Polyester Prod. & Import (kt)

Turkish Polyester Market Import Amounts

Volume (ktons)	2015	2016	2017	2018	2019	2020
Polyester Yarn	441.4	480.7	516.3	504.8	615.5	520.3
Polyester Chips	173.2	207.3	325.1	325.4	341.0	345.9
Polyester Staple Fiber	164.0	152.2	192.0	211.8	214.3	184.4
Total Imports	778.6	840.2	1,033.4	1,042.0	1,170.8	1,050.6
+6.2%

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1.500
1.000
500
0
2015 2016 2017 2018 2019 2020
Import of polyester products
Domestic polyester polymer production
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Global PSF Imports by Regions (2019)

Global PET Resin Imports by Regions (2019)

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2% [[1%]]
7%
45%
18% 4,018kt
27%
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2% [[1%]] 1%
6%
7%
7% 35%
45%
18% 4,018kt
10,382kt
20%
31%
27%
Europe Asia Americas Middle East Africa Oceania
Asia Europe America Middle East Africa Oceania
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Growing domestic polyester demand mostly covered by increasing import volume provide a significant outlet for Turkish PTA production

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+
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Additionally, EMEA remains an attractive and net importing market to which Turkey is geographically well positioned

Source: Turkish Statistical Institute, Wood Mackenzie Aromatics, Trade Map, International Trade Centre, https://www.trademap.org

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27

Content

I		Company Profile
II		Financial Indicators
III		Market Outlook
IV		Turkey Macroeconomic Outlook
V		Appendix

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28

Turkey - Macroeconomic Outlook (1/2)

Turkey: Real GDP Growth Rate (%)

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5.9 [(1)]
5,0 5,0
vs. China: +2.3%
1,8
0,9
2019 2020 2021 2022 2023
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Turkey: Export, USD b, FOB

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Based on YTD
estimated to 214
181 reach USD 184 198
170 206bn by YE
2019 2020 2021 2022 2023
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Strong GDP growth recovery post COVID19 shutdowns expected; second highest growth rate after China in 2020

Strong export estimates thanks to Turkey’s geographic advantage as well as diversified market access

MSCI Emerging Markets ETF vs. BIST100-5 year, USD)

BIST Traded Volume – USD m, Mar 2016 – Mar 2021

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400 BIST100 MSCI EM 60
300 50
200 40
Conversion
potential
100 30
12.03.2016 12.09.2017 12.03.2019 12.09.2020
Strong signs of over performance after having been underweighted for the
last 2-years – conversion expected in the medium term
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7.500
6.000
4.500
3.000
1.500
-
12.03.2016 12.09.2017 12.03.2019 12.09.2020
BIST is one of most liquid emerging stock exchange allowing for
transaction efficiency and certainty
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Source: CBRT, Bloomberg, Government’s Medium Term Economic Program (Sep. 2020); Notes: (1) OECD Forecast (Mar. 2021)

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29

Turkey - Macroeconomic Outlook (2/2)

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CPI Based Real Effective Exchange Rate (20 years)
150
EM 20-year Average: 88.82
100
50
0
March-01 September-03 March-06 September-08 March-11 September-13 March-16 September-18 March-21
Though short term volatility may seem high, in the medium term Turkish lira assets always follow mean reversion
Comparing BIST100 vs. S&P500 (calculated in USD terms, divided by S&P500 levels)
40% General underperformance of EM exchange given global Turkey specific factor
liquidity conditions
30%
20%
10%
0%
Mar 2011 Feb 2012 Jan 2013 Dec 2013 Nov 2014 Oct 2015 Sep 2016 Aug 2017 Jul 2018 Jun 2019 May 2020 Apr 2021
BIST has suffered from underperformance the global capital markets but is expected to recover to pre-2018 levels in the medium term
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Source: CBRT, MarketWatch

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30

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Ankara Office

Söğütözü Mahallesi 2176. Cadde No 9 /17-18 Çankaya / Ankara

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31

Content

I		Turkey Macroeconomic Outlook
II		Company Profile
III		Financial Indicators
IV		Market Outlook
V		Appendix

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32

SASA – Corporate Structure Chart

Erdemoğlu Holding

Sasa Polyester

Merinos Halı

Dinarsu Imalat

Erdemoğlu Foreign Trd.

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----- Start of picture text -----

7.0 [5.5]
46.7
40.8
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İbrahim Erdemoğlu Ali Erdemoğlu Gülsüm Erman

Mustafa Erman

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----- Start of picture text -----

15.2 7 [5.5]
7.5 46.7
40.8
14.5
62.8
96.82 100
Erdemoğlu Holding İbrahim Erdemoğlu İbrahim Erdemoğlu
Ali Erdemoğlu
Merinos Ali Erdemoğlu
Gülsüm Erman Erdemoğlu Holding
Dinarsu Gülsüm Erman
Mustafa Erman
Free Float Erdemoğlu Holding Mustafa Erman
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İbrahim Erdemoğlu Ali Erdemoğlu Gülsüm Erman Mustafa Erman Erdemoğlu Holding

Shareholders	Erdemoğlu Holding	Erdemoğlu Holding	SASA Polyester	SASA Polyester	Merinos Halı	Merinos Halı	Dinarsu İmalat	Dinarsu İmalat	Erdemoğlu Foreign Trd.	Erdemoğlu Foreign Trd.
	Capital	Shares %	Capital	Shares %	Capital	Shares %	Capital	Shares %	Capital	Shares %
İbrahim Erdemoğlu	420,300,000.00	46.70			4,181,288.00	1.98			934,000.00	46.70
Ali Erdemoğlu	367,200,000.00	40.80			1,939,395.00	0.92			816,000.00	40.80
Gulsum Erman	63,000,000.00	7.00			328,486.00	0.16			140,000.00	7.00
Mustafa Erman	49,500,000.00	5.50			258,096.00	0.12			110,000.00	5.50
Erdemoğlu Holding			703,402,931.00	62.80	204,142,735.00	96.82	60,000,000.00	100.00
Merinos Halı			162,399,989.00	14.50
Dinarsu Imalat			83,999,994.00	7.50
Free Float			170,197,086.00	15.20
TOTAL	900,000,000.00	100.00	1,120,000,000.00	100.00	210,850,000.00	100.00	60,000,000.00	100.00	2,000,000.00	100.00

Source: Company information

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33

PTA Investment of SASA

• PTA is the primary feedstock for the production of polyester-based products

• The envisaged PTA investment is to be made as part of developing and expanding SASA’s polyester business and support recent investments in PET resin and polyester fiber and filament products

• PTA cost competitiveness between regions largely determined by choice of process technology, plant scale, acquisition cost of feedstock of paraxylene, freight, duties and tariffs

• SASA’s PTA project has a cost-advantaged position based upon the deployment of Invista’s latest version of its PTA production technology, reducing PX usage on a ton per ton basis relative to older PTA Technologies

• SASA has advantage in being able to consume a large portion of its output into its co-located polyester assets. Furthermore, by 2024, Turkey is to have PTA demand over 1,500 ktons which means SASA’s capacity will be absorbed fully in domestic market

• The mid-term strategy for SASA’s PTA investment is to use 100% of its PTA output in its integrated polyester assets in Adana. SASA will have access to paraxylene feedstock from Middle East suppliers where paraxylene price assessment is Asian contract price minus freight assessed at USD 40/ton

• And finally SASA operates within Turkey, a largely duty protected market in petrochemical sector

• Government’s strong incentive support will is the way for investments such as corporate tax discount, Income tax withholding, Energy consumption incentive, employer's national insurance contribution support, qualified personnel support, interest rate support

Mainly due to time spent in transportation, inventory adjustment and duty costs, SASA will gain a competitive advantage

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Potential Markets for PTA

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567 ktons 287 ktons Germany Spain 545 ktons 193 ktons Lithuania Italy 541 ktons 172 ktons Oman Egypt

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Source: KPMG report

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34

Glossary & disclaimer from data providers

CMBT:	Capital Markets Board of Turkey
CBRT:	Central Bank of the Republic of Turkey
DMT:	Dimethyl terephthalate, a feedstock used for polyester production
DTY:	Drawn Texturized Yarn
EMEA:	Europe, the Middle East and Africa
ESG:	Environmental, Social and Governance
FDY:	Fully Drawn Yarn
PET:	Polyethylene Terephthalate, raw material for film and packaging sectors.
POY:	Partially Oriented Yarn
PSF:	Polyester Staple Fiber
PTA:	Purified Terephthalic Acid, main feedstock for polyester production
PX:	Paraxylene, main feedstock for PTA production

The data and information provided by Wood Mackenzie should not be interpreted as advice and you should not rely on it for any purpose. You may not copy or use this data and information except as expressly permitted by Wood Mackenzie in writing. To the fullest extent permitted by law, Wood Mackenzie accepts no responsibility for your use of this data and information except as specified in a written agreement you may have entered into with Wood Mackenzie for the provision of such data and information.

This output is acquired from the Report dated February 23, 2021, which is prepared to be used internally by SASA Polyester Snayi A.Ş. as per the signed Agreement Letter between SASA Polyester Sanayi A.Ş. and KPMG Yönetim Danışmanlığı A.Ş. All the persons and institutions to whom this output is revealed, are obligated to not to disclose, copy, distribute or make any kind of referral to these outputs, and keep them confidential. All the persons and institutions to whom this output is revealed acknowledge and accept that KPMG Yönetim Danışmanlığı A.Ş. does not have any liability or obligation against any person or institution in relation to the services or outputs subject to the Agreement Letter to the extent permitted by the relevant legislation.

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35