CELEBI GROUND HANDLING ANNUAL REPORT 2018

2 Çelebi Ground Handling 2018 Annual Report Dear stakeholders, Celebrating its 60 th anniversary in 2018, Çelebi Ground Handling is the leader of its sector with its strategy-oriented organizational structure, quality service concept supported by sophisticated management systems and its ability to keep up with change. Çelebi Ground Handling, founded 60 years ago with a broad vision and accurate foresight, is a respected participant of the national and international markets and competes on the same basis with the world’s leading companies. We have built our history, which is one full of successes, by working intensively, attaching importance to investing in new technologies and people, and by very closely monitoring our sector and global markets. We have achieved many firsts creating value for the Turkish economy, and have demonstrated the necessary flexibility when it comes to adapting to a changing world and the conditions in the country. Rounding off a year of slowing growth rates in developed and developing countries As a global player, Çelebi Ground Handling’s operations are strongly affected by economic, geopolitical and sectoral developments both in Turkey and in the world. On this occasion, we would like to briefly touch on some of the key issues that stood out in the country and in the global economy. After starting the year with positive expectations, 2018 turned out to be a year marked by the risk of escalating protectionist trade measures being used as a policy tool, especially in relations between the US and China and increasing geopolitical risks adversely affecting global economic activity, especially from the second half of the year. Growth rates in both developed and developing countries slowed at the same time. Nevertheless, although the global economy grew at a slightly slower pace than had been forecasted at the beginning of the year, according to the World Economic Outlook Report published by the IMF in January 2019, the world economy managed to maintain the growth rate of 3.7% which had been recorded in the previous year. Although the Euro Zone maintained its previous year’s growth performance in 2018, growth started to slow in the third quarter. In addition to uncertainty inherent in the Brexit process, anti-government protests in France and the budget dispute in Italy had a negative impact on the markets. On the other hand, the trade war which escalated between the US and China in 2018, despite a temporary halt for negotiations, had a negative impact on the Chinese economy, which had earlier exhibited signs of recovery. Developments in global markets in the second half of the year precipitated significant losses in the value of currencies in some emerging markets, including Turkey. This took a toll on corporate balance sheets, with economic activity disrupted due to the tightening of financial conditions and increased resource costs. In 2019, the policies to be taken by the central banks of developed countries along with global liquidity conditions will bear importance for Turkey and other developing countries. On the assumption that the gradual tightening in liquidity conditions continues, however, these central banks would be expected to broadly act in line with expectations - as such, no significant flows of hot money into emerging markets are envisaged, with 2019 expected to be a more moderate year. An eventful and volatile year for Turkey both politically and financially A series of events steered the markets in 2018, including Operation Olive Branch, the transition to the new Presidential system following the June 24 Presidential elections, downward revisions to the country’s credit ratings and the banking sector, the resumption of sanctions against Iran, the CBRT’s interest rate hike and the announcement of the program to tackle inflation following the unveiling of the New Economy Program. After having posted a 7.4% rate of economic growth in the first quarter of 2018, the turbulence in domestic financial markets in August weakened confidence in the economy, and negatively affected consumption and investment demand. As a result, growth slowed to 1.8% in the third quarter of the year. The rate of economic growth slowed by 3% in the fourth quarter when compared to the same quarter of the previous year, and year-end economic growth came in at 2.6%. Gross Domestic Product, calculated according to the production method, stood at TL 3,701 billion, increasing by 19.1% at current prices in 2018 when compared to the previous year. MESSAGE FROM THE BOARD OF DIRECTORS