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Message from the Chairman | Olmuksan

Message from the Chairman

Dear Shareholders,

The year 2020 was marked by the COVID-19 pandemic that heavily impacted economies, businesses and people around the globe. The Turkish economy however was among the few to grow in 2020, achieving a plus of 1.8% in GDP over the year due to industry investments and strong consumer spend. The year had started strong with an increase of 4.5% in Q1 before the first Covid-19 cases appeared in the country in March, followed by a drop of -9% in Q2 and Q3, ending with a strong finish of +5.9% in the final quarter. The Turkish Lira remained under pressure and very volatile seeing significant swings in foreign exchange rate vs. the USD from 5.96TL at the start of the year up to the historical peak of 8.48TL in November.

At Olmuksan IP, in 2020, despite the difficult circumstances, we were able to increase our sales volume by 12% and our sales revenues by 21% compared to 2019, resulting in a profitability improvement of 87%. Key drivers were strong and reliable operations along with our business development efforts specifically in the Marmara region, with exports, and in the HQP segment.

At all times, we continued to deliver corrugated packaging for our customers, therefore playing a key role in ensuring the continuity of the supply chains for critical goods in the country. We have taken and will continue to take all necessary measures to protect the health and safety of our employees, contractors and visitors.

Finally, in 2020 International Paper announced their intent to explore strategic options regarding their majority shareholding in Olmuksan IP, resulting in an agreement being reached in January 2021 between International Paper and the Mondi Group. This move reflects the International Paper strategy to focus on investments in the Packaging business in EMEA that enable the group to have an advantaged position serving attractive markets. It is expected that the transaction will be completed in Q2 2021, subject to certain closing conditions and regulatory approvals. Becoming part of the Mondi Group, already a well-established corrugated packaging operator in Turkey, would be good news for the Olmuksan team and customers. Mondi is one of the world’s leading packaging companies. They operate globally, employing around 26,000 people with some 100 production sites across more than 30 countries.

On behalf of the Board of Directors, I sincerely thank all of our employees for their efforts and loyalty to continuously improve the performance of Olmuksan International Paper, all our partners for their support, all our customers for their loyalty, and all our suppliers and other business partners for the reliable cooperation. I sincerely believe that Olmuksan IP has very favorable years and continued success ahead of it.

Best regards.

Eric Gerard Michel Chartrain

Chairman of the Board of Directors

The IP Way Forward

The IP Way Forward is our strategic framework to pursue our vision to be one of the most successful, sustainable and responsible companies in the world and create value for all stakeholders for generations to come.

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