Koc : KOÇ HOLDING POSTS TL 70.9 BILLION CONSOLIDATED TURNOVER AND TL 3.5 BILLION NET PROFIT FOR PARENT COMPANY IN 2016

February 17, 2017

K O Ç HO LDING POST S T L 70 . 9 BILLI O N CO NSOLIDA T ED T URNO VER AND TL 3. 5 BI LLI O N NET PROFIT FOR PARENT COMPANY IN 2016

KOÇ HOLDING CEO LEVENT ÇAKIROĞLU: "THANKS TO OUR BRAVE RESOLVE IN LINE WITH OUR GLOBAL VISION AND STRATEGIC OBJECTIVES, WE HAVE INVESTED TL 6.2 BILLION DESPITE THE UNCERTAINTIES AND CHALLENGES OF 2016. OUR EMPLOYMENT LEVEL HAS GROWN BY 6.4% YEAR ON YEAR WITH THE RECRUITMENT OF 6,000 NEW COLLEAGUES. WE HAVE BEEN, FOR THE PAST 90 YEARS, THE SYMBOL OF LEADERSHIP, SUCCESS AND TRUST IN TURKEY. WE SHALL CONTINUE TO CREATE VALUE FOR THE COUNTRY AS WE MAXIMISE THE OPPORTUNITIES OFFERED BY DIGITAL TECHNOLOGIES."

Koç Holding has closed 2016 with a strong financial performance and successful results, having posted a total consolidated turnover of 70.9 billion Turkish liras and net profits of 3.5 billion Turkish liras for the parent company in 2016. Evaluating Koç Holding's financial results for 2016, Koç Holding CEO Levent Çakıroğlu remarks on the historic developments of the year in Turkey and the world at large and adds: "Extraordinary developments such as the coup attempt - a black mark in our political history - and terrorist attacks in the country and around the world, have all forestalled activity in the region and on the global scale."

Levent Çakıroğlu: "The single greatest factor in our sustained success is the strength of our human resources."

Drawing attention to the solid results and careful risk management that ensured Koç Holding's steady performance in this challenging environment, Levent Çakıroğlu continues: "Thanks to our brave resolve in line with our global vision and strategic objectives, we have invested 6.2 billion liras despite the uncertainties and challenges of 2016. The single greatest factor in our sustained success is undoubtedly the strength of our human resources. That resource has continued to grow and develop in 2016. Our staffing level has grown by 6.4% year on year with the recruitment of nearly 6,000 new colleagues. Total number of employees in Group companies that are included in consolidation was around 89,000 the previous year and exceeded 95,000 in 2016. Investors appreciate our balanced portfolio, diversity of income streams and markets, strong balance sheet and steady performance. We had, previously, managed to be the most valuable holding company on the Istanbul Stock Market. In 2016, we not only repeated that accomplishment, but also rose to become the most valuable company overall. Thanks to our technology and innovation-focused growth strategy, we have reinforced our leading positions in every sector of activity. We are

Turkey's top investor in R&D with the greatest number of patent applications. Koç Holding and three Koç Group companies are listed in the EU Industrial R&D Scoreboard, an analysis of the 2,500 companies with the most sums invested in R&D in the world. We have also in 2016 launched a Digital Transformation Programme throughout the Koç Group; led by Koç Holding, this initiative aims to maximise the opportunities offered by digital technologies. It has the capacity to transform radically products, services, business processes and business models, to create added value for our businesses, to further strengthen our companies in a rapidly changing environment of competition and to create new business areas. As the symbol of leadership, success and trust in the country for 90 years, we intend to lead digital transformation in Turkey and add value to the future of our country.'

Levent Çakıroğlu: "We continued to be the engine driving the national economy in 2016."

Pointing to Koç Holding's continued position as the driving force of growth in every sector of activity in 2016, Levent Çakıroğlu summarises the developments in these sectors:

• We have had a highly successful year in the automotive sector. The Fiat Aegea Project, a Tofaş intellectual and industrial property, now includes the Hatchback and Station Wagon along with the Sedan. The Fiat Aegea Sedan was the best-selling car of 2016 in Turkey. Tofaş closed 2016 as Turkey's most productive automotive company with a total of 383,000 vehicles built, as well as the greatest exporter in the sector, having shipped over 70% of its output abroad. Ford Otosan, in the meanwhile, started the mass production of the new generation Ecotorq, the first and only lorry engine developed from scratch and manufactured in Turkey.

• We continue to invest in other parts of the world in the home appliances market. Arçelik's Beko maintains its second top brand in Europe position, as it reinforces its global position with the acquisition of Dawlance, Pakistan's leading home appliances manufacturer. Arçelik has also extended until 2023 the agreement with LG Electronics for the manufacture of air conditioners.

• Tüpraş refineries worked at full capacity in 2016, and with a sales total of 30.3 million tonnes, grew sales by 5% year-on-year. Opet continued to invest in petrol stations as Aygaz LPG sales topped 2.1 million tonnes and sales income rose 5% year-on-year.

• With total assets exceeding 217 billion liras, Yapı Kredi has been the third largest private bank to contribute to the national economy with a total loan volume of 245 billion liras. Yapı Kredi launched eye-scanning technology in 2016, being the first European (and therefore Turkish) bank to do so. Yapı Kredi's mobile banking customer base grew by 62% and online banking customer numbers grew by 27%.'

Levent Çakıroğlu: 'We continue to create shared values with our social responsibility activities.'

Underlining the Koç Group view that economic and social development is an inseparable whole, Levent Çakıroğlu continues: "The Vehbi Koç Foundation grows more effective every year in education, health and culture, not only through direct action but also in partnership

with NGOs. We have, in 2016, continued to create social value not only with our foundation and related establishments, but also through the social responsibility activities carried out by Koç Holding and Group companies. We are delighted at the results of these long term and strategic projects conducted by our personnel and distributors. Launched in 2015, the 'Gender Equality for My Country' project has been an outstanding success. Our awareness- raising seminars have reached 65,000 around the country, and we shall continue to work diligently to change minds in order to achieve gender equality."