CHAIRMAN'S MESSAGE

Ahmet Zorlu

Esteemed Stakeholders,

Although the COVID-19 pandemic still persists, we have left behind another year during which socioeconomic fluctuations have affected the world. 2021 was a year of increases in imbalances throughout the markets despite a consolidation in economic recovery. While normalization and recovery, which gained momentum in parallel with the pace of vaccination around the world, brought along a strong increase in demand, disruptions occurred in the supply chain due to insufficient supply. We observed that production had to be suspended from time to time in some sectors. Problems in logistics and raw material supply, record increases in commodity prices triggered by rising energy and food prices, combined with the aftereffects of the expansionary monetary policies of the central banks, caused the emergence of a global inflation wave risk. We continue to experience the negative impacts of this process on our sectors as well as in many other industries.

We left 2021 behind as a year throughout which the effects of the pandemic and fluctuations in the exchange rate set the agenda in Turkey as well. The recent cuts in interest rates have changed inflation expectations while they also increased the pressure on the exchange rate, real household income and external financing. However, improvements in industrial production have been seen as vaccination rates have increased. We, as Vestel, continued to contribute to the development of our country with our robust growth in export markets in 2021.

Thanks to Vestel’s flexible and agile structure, as well as our digital transformation and technology-oriented business model, we have successfully managed this challenging process. Comprehensive risk management and diversity in our supplier network have played an important role in tackling the global supply challenge. Our export-oriented business model, which has expanded to 158 countries, plays an important role in maintaining our success by minimizing the risks posed by the changes in Turkey’s economic conditions. 2021 was a year during which we achieved a far above the market growth in Europe in household appliances sales, strongly expanded in regions outside of Europe, including the American market, and launched new investments and completed some of the ongoing investments under our capacity expansion program.

In addition to this, we continued to grow steadily in the domestic market and focused on maintaining the success we had achieved in online channels as well. In this context, we are moving forward with the target of increasing the rate of online sales within our domestic turnover to 25% by 2030, in line with the digitalization trend accelerated by the pandemic.

The COVID-19 process has become a threshold where the importance of sustainability is better understood all over the world and sustainability-oriented transformations will shape the future. Being aware of this phenomenon, we have focused on integrating sustainability as a way of doing business at Vestel. Under the guidance of the Smart Life 2030 vision encompassing the entire value chain of Zorlu Group, highlighting business models that serve the climate-oriented and circular economy, and creating value for all stakeholders via a responsible investment approach, we have developed our strategy for Vestel and gathered it under three pillars of “human-oriented technological transformation”, “a net zero company” and “accessible and smart solutions that make life easier”.

Human-Oriented Technological Transformation

We aim to achieve a human-oriented transformation in the entire value chain by leveraging the power of technology and innovation. We lead the consumer electronics and household appliances sectors in Turkey in terms of Industry 4.0 and digitalization practices by integrating emerging technologies, especially artificial intelligence (AI), the internet of things (IoT) and autonomous systems, into our manufacturing processes.

Driven by this transformation culture, we have increased our global market share and strengthened our competitiveness. We support education and training programs through which our employees develop their intellectual knowledge and skills, and we encourage in-house innovation programs. We are proud of being the Turkish company with the highest number of registrations in patent offices across Europe. We adopt diversity, inclusion and social benefit for all stakeholders of Vestel as our fundamental principles and integrate technological innovations that add value to human life into our processes. In line with the equal opportunities approach, we aim to increase our female employee ratio to 40% by 2030.

A Net Zero Company

In order to manage the ever-increasing effects of the climate crisis, transition to an economy based on net zero emissions is of great importance. In order to achieve net zero emissions, especially in Vestel’s operations, we aim to be a net zero company in the entire value chain by 2050. We will continue to increase the use of different practices such as product recovery, repair and raw material recycling with a focus on the circular economy.

Accessible and Smart Solutions That Make Life Easier

We design innovative products and services; and we believe that our products and services will play a key role in the building of a sustainable society. We strive to develop products with reduced environmental impact and high savings through our R&D and innovation studies, and we devote a significant part of our R&D budget to developing smart products that create benefits. Through our products, we aim to achieve energy and water efficiency, reduce plastics pollution, and render accessible the “Smart Home” concept based on customer experience. In addition to automotive electronics, we produce and export batteries for e-mobility vehicles such as e-bikes and charging units for electric cars. Products in this group are critical for value-added exports.

I am very pleased to share Vestel’s first integrated report, through which we describe our activities in integration with our sustainability approach in the light of our Smart Life 2030 strategy.

I sincerely believe that Vestel will contribute to global problems with innovative and sustainable solutions under its new climate-friendly and social benefit-oriented strategy. I would like to express my gratitude to all our stakeholders, especially my colleagues, for their valuable cooperation and constant contributions.

Sincerely,

Ahmet Nazif Zorlu
Chairman