Esteemed Investors, Dear Business Partners and Employees,

2020 significantly transformed countries, communities, companies and consumers around the globe. Many nations across the world faced major crises during these unprecedented times under the shadow of the COVID-19 pandemic. Turkey felt the significant effects of this pandemic as well.

From the day of the first domestic detected case of coronavirus, Turkey has endured a period where production became far more difficult, barriers to trade skyrocketed and consumer confidence plunged. The Turkish economy contracted 9.9% in second quarter – a stark demonstration of this adverse environment. In third quarter, strong signals indicated that Turkey’s economy had returned to its sustainable growth path. Despite the many challenges of the pandemic throughout the entire year, there are now signs of hope. The industrial sector’s solid performance, robust exports, high production capacity utilization, a strong recovery in consumer confidence and encouraging results from vaccine trials are cause for optimistic macro expectations in 2021.

While facing the myriad challenges from the coronavirus pandemic, Sabancı Group put the health and well-being of its employees at the heart of all its business activities. In line with our approach of “Not leaving anyone behind,” we immediately took necessary measures to counter the pandemic and implemented them with determination.

Sabancı Group managed to exit this unprecedented year with successful results. Key factors underlying our success included the technology investments and digital transformation processes implemented across Sabancı Group in recent years. Our innovative approach started to yield positive returns during the pandemic. We are proud to have reached our annual targets in all our strategic business units. In addition, we successfully implemented transformation processes for our areas of activity.

In 2020, Sabancı Group achieved yet another milestone in its efforts to integrate its rapid and exemplary transformation based on technology and sustainability across the organization. As an indicator of our vision on this journey, we changed our Group’s purpose to “We unite Turkey and the World for a sustainable life with leading enterprises.” We also recorded great progress in terms of environmental, social and governance aspects of sustainability. Sabancı Holding boosted its sustainability rating by one notch in the MSCI index. In addition, Sabancı Holding was admitted as the only Turkish member to the World Business Council for Sustainable Development (WBCSD) in 2020. These major achievements demonstrate that we are on the right track in the sustainability arena.

In 2020, our combined EBITDA reached TL 20.9 billion, up by 22% year on year.

This reporting period, we clearly maintained our strong performance in our core business areas. At the same time, we took further steps to consolidate the global leadership of our Group companies. In our Energy business, the operational excellence and financial restructuring efforts of Enerjisa Enerji and Enerjisa Üretim moved forward with success. Our investments of recent years ensured the long term financial sustainability of these two companies. As a result, our Energy business forms the foundation of the Group’s sound business model today.

While struggling with pandemic-related challenges, we put the health and well-being of our employees at the heart of all our business activities in line with our approach of “Not leaving anyone behind.”

In addition to these transformation efforts, Enerjisa Üretim expanded its renewable energy portfolio to 45% of its total – a key indicator of our Group’s sustainability targets. We expect this percentage to reach 50% following the completion of Aydın WPP and Çanakkale WPP projects, which were awarded to us in 2019.

Enerjisa Üretim entered into a significant financing agreement that will support its renewable energy investments. The transaction is Turkey’s largest sustainability loan agreement with total financing of EUR 650 million and features the participation of seven banks.

During the year, Sabancı Group once again demonstrated its determination to expand in advanced material technologies and composites. Consolidating its global competitive position, Kordsa reached the competence to produce reinforcement materials for Orion – NASA’s multi-purpose spacecraft – via its subsidiary Fabric Development Inc. based in the United States. Efforts are underway to transform Kordsa into an innovation-oriented company that produces, develops and markets technology on its own. The undisputed leader of the Turkish tire market, Brisa moved ahead on its transformation journey to become a company providing mobility solutions in 2020. During the pandemic, Brisa has developed innovative solutions and became central to our strategy of providing customers with a comprehensive experience. Another major development in our Industrials business was the reacquisition of Temsa by Sabancı Group. The formal process related to the transfer of Temsa in partnership with Sabancı Holding – PPF Group was finalized in 2020. With the support of Skoda Transportation, a PPF Group affiliate, we aim to transform Temsa into a service provider operating in various areas of public transportation and a company that shapes the future of transportation by embracing electrification.

In 2020, the Building Materials Group decided to set up a structure that will position Çimsa as a leader in the global white cement market. We will further bolster our global position in this market with our Netherlands-based company Çimsa Sabancı Cement BV, established in partnership with Çimsa and Sabancı Holding, as well as finalization of the Buñol Factory acquisition we made in Spain a year earlier.

Akbank achieved the lowest cost/income ratio in the banking industry thanks to its smart digital banking applications. Despite the many challenges due to the COVID-19 pandemic, Akbank maintained its strong balance sheet and remained the best in its class in terms of operational efficiency. We are also delighted to see Akbank rank among the industry’s leading banks in sustainability. By 2030, we plan to provide TL 200 billion of sustainable project funding to Turkey via Akbank. In addition, we aim to grow Akbank’s mutual funds in the sustainable investment category to TL 15 billion. With advanced technologies developed by Aksigorta, such as robotic process automation, artificial intelligence and digital twin, we provided all our stakeholders, including customers, distribution channels and employees, with a productive and need-oriented insurance experience. Teknosa and Carrefoursa were the first retail companies to take action to meet the many challenges arising from the coronavirus pandemic. Teknosa attracted attention as the first technology retailer to close all its stores in response to the fast-spreading pandemic. Some of our Teknosa staff also started work at Carrefoursa stores to meet increased demand there.

SabancıDx is the driving force behind Sabancı Group’s digital processes and efforts. In 2020, we completed SabancıDx’s transformation from a system integration company into a next-generation solution provider. Combining its competencies in data analytics, IoT and cyber security under different products and solutions, SabancıDx leads the generation of Sabancı Big Data Lake and value creation with the Sabancı ecosystem. SabancıDx is also charged with facilitating and accelerating digital and analytical transformation across the Group.

Sabancı Holding’s corporate venture capital fund (Sabancı Ventures), which boasts a fund size of USD 30 million, obtained its operating permit in 2020. We made our first investment through Sabancı Ventures in a wearable-electronics firm: Thread in Motion (TIM). We aim to make additional investments via Sabancı Ventures in the future.

We recorded in consolidated net income (share of parent company) of TL 4.8 billion.