Transforming for the Future
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Transforming for the Future 2019 INTEGRATED ANNUAL REPORT ÇİMSA 2019 Integrated Annual Report ABOUT THE INTEGRATED ANNUAL REPORT CONTENTS QUALITY, PERIOD AND EXTENT OF THE REPORT With this report, Çimsa reviews the current output of its activities and its future plans and goals in the scope of the capital framework proposed by the IIRC (International Integrated Reporting Council) of which it has been a member for 5 years; the Company also views, analyses and reports 02 Message from the Chairman of the Board of Directors to its stakeholders from an integrated perspective. FROM THE MANAGEMENT 04 Message from the CEO 06 Board of Directors This integrated annual report covers the period from 1 January - 31 December 2019. 07 Senior Management All information in the Integrated Annual Report, which also includes the Annual Report of the Board of Directors, refers to the end of 2019 unless otherwise stated. PUBLICATION OF THE REPORT Ensuring that the integrated annual report is accessible by all stakeholders is crucial and a top priority for Çimsa. Within this framework, the report was produced under an environmentally friendly perspective and was shared electronically. The report can be accessed from the ABOUT ÇİMSA www.cimsa.com.tr website and through the link on Sustainability and Investor Relations, as well as through Çimsa’s sustainability website: www.cimsadasurdurulebilirlik.org. COMPLIANCE WITH LEGISLATION AND THE REGULATORY FRAMEWORK This report complies with the International Integrated Reporting Framework suggested by the IIRC. The report has been prepared in accordance with the core option of the GRI Standards published by the Global Reporting Initiative (GRI). The content of the report has been compiled according to the methods for content determination, primarily the principle of prioritization, described in the GRI Standards. Performance notifications were generally presented in the scope of the GRI Standards disclosures, as well as the United Nations Global Compact (UNGC) development reporting principles, which Çimsa signed up to in 2013, and the principles of the World Business Council For Sustainable Development (WBCSD)’s Cement Sustainability Initiative (CSI) were also taken into consideration. The 2019 Integrated Annual Report of Çimsa is also in accordance with the minimum annual reporting requirements of the Turkish Code of Commerce and the Capital Market Law. AUDIT The financial statements presented in Çimsa’s 2019 Integrated Annual Report were audited by Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Ernst&Young). Independent Assurance Declarations concerning other matters are presented on Pages 222-224. To access the PDF copy of Çimsa’s 2019 Integrated Annual Report, scan the QR code in your browser. Legal Disclaimer: Çimsa 2019 Integrated Annual Report (“The Report”) was prepared by Çimsa Çimento San. ve Tic. A.Ş. (Çimsa) in accordance with the requirements of informing stakeholders, the Turkish Code of Commerce (TTK), Capital Markets Board of Turkey (SPK), UNGC Progress Report, CSI, IIRC and the GRI (Global Reporting Initiative) reporting principles. All the information, opinions and considerations which are included in this Report and do not qualify to be complete, were provided by Çimsa and were not independently verified for the purposes of this Report. This report is for information purposes only and does not constitute any foundation for any investment decision, nor it is intended to influence investors in any decisions they may make. The information contained in this Report does not constitute any proposal, part of proposal, or invitation for a similar sales process regarding sales of Çimsa shares, and the publication of this report can not be deemed as the establishment of such a legal relationship. 211 Çı̇ msa 2018-2019 Performance Tables As of the preparation date of this report, it is believed that all the information and the related documents included in the report are accurate, 88 Prepared With Respect To Communiqué No: Series: II- 221 Independent Assurance Declarations and the information is disclosed in good faith and depends on reliable sources. However, Çimsa does not make any statements, guarantees, or 14.1 1 January - 31 December 2019 Annual Report of the 225 GRI Index commitments regarding this information. The report also reflects the views of Çimsa Management, including forward-looking expectations in Board of Directors 235 UN Global Compact - 2019 Communication on Progress line with the predicted events in the future, as well as information and analyses about the company. Although it is believed that the information and analyses provided here are accurate and the expectations are realistic, the outcomes in the future may deviate from the predictions herein depending on the changes in the underlying factors. In this context, neither Çimsa, its affiliated companies, subsidiaries, main company/holding nor their members of the board of directors, executives, consultants, employees or other related parties can be held responsible for any direct or indirect losses and damages suffered as a result of any information disclosed within the scope of this Report, the use thereof, or for issues based on the information herein or not included in this Report. The contents of this report cannot be copied, changed, or distributed without an open 120 Independent Auditor’s Report and Consolidated written consent of Çimsa. Financial Statements 209 Profit Distribution Proposal and Results All rights of Çimsa are reserved. 210 Profit Distribution Table 102-46 1 ÇİMSA 2019 Integrated Annual Report ÇİMSA 2019 Integrated Annual Report MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS Esteemed Stakeholders, ÇİMSA TOOK STRATEGIC STEPS IN 2019 IN LINE WITH We play a part in the lives of millions of end users with SABANCI OF NEW GENERATION VISION. our products. As a business partner, we contribute to TURKEY RANKS AS ONE OF THE WORLD’S LEADING Çimsa continued to take strategic steps and create the value generation processes of our customers, and COUNTRIES IN TERMS OF ITS CEMENT PRODUCTION value for its stakeholders in 2019 in line with the offer the necessary support to achieve their goals. CAPACITY. Sabancı of New Generation vision. The Turkish cement industry is one of the leading We are focused on building the positive impact we players in the global league with an annual cement The projects we have undertaken on the axis of being have imbued in the cement industry with our business production capacity of 100 million tonnes. While an integrated global player, which is one of the most methodologies, R&D, digitalization investments and the contraction in domestic market continued important components of our vision, will carry Çimsa business processes. during 2019, exports in the industry recorded a 70% to a position of global leadership in the field of white increase, with exports of cement and clinker reaching cement. Based on integrated thinking, our business model will a historical high of 23 million tonnes according to enable us to crown our sustainable growth journey figures released by the Turkish Cement Manufacturers’ In the second quarter of 2019, Çimsa signed the with new successes in the medium and long term, as Association. This success marks a milestone which contract for the acquisition of Buñol, a white cement well as in the short term. makes us all proud. We have full belief that our plant with the most advanced production technology industry will continue to stake its claim in the global in Europe. The legal approval process for the ÇİMSA IS DETERMINED TO PROGRESS TO THE league and with further successful moves in the future. acquisition Buñol Plant is still ongoing. This strategic FUTURE WITH THE CONTINOUS AND POWERFUL acquisition will provide a significant contribution to SUPPORT OF THE SABANCI GROUP. ÇİMSA ACCOMPLISHED SIGNIFICANT SUCCESSES IN Çimsa’s geographical effectiveness and spread as As we press ahead in Turkey’s growth and 2019. well as its production capacity. Our breakthrough in development journey, we are aware that we have In 2019, Çimsa continued to generate value for its Spain will also play a part in moving our added value duties and responsibilities for the future, just as in stakeholders by evaluating its resources within the contribution to Turkish economy to a much higher the past and the present. In addition to the Sabancı scope of its efficiency-oriented business model. point, in addition to strongly supporting shareholder Group’s powerful support, our competent human value. resources and our production and trading power on a Çimsa has maintained production operations at all global scale will enable us to successfully fulfil the new of its plants, fully meeting the product and service The Çimsa Americas investment and test production tasks we will undertake. requirements of its domestic customers on time with works were completed in 2019 in line with our its market-oriented approach and wide distribution strategic plans. Our subsidiary in the US started its I am delighted to present our fourth integrated annual network. commercial operations in the final quarter of 2019, report for your information and reviews, which outlines The projects we have undertaken on the and its contribution to the value Çimsa generates the value Çimsa has generated in 2019 for the Turkish axis of being an integrated global player, Çimsa recorded successful financial and operational started to become clear. economy and for its stakeholders. We believe we are which is one of the most important results which are in line with its goals, with clinker an inspiration to many companies in Turkey given components of our vision, carry Çimsa to a and cement sales exceeding 6 million tonnes. The THE VALUE WE GENERATE AND SHARE IS THE how far we have come both in terms of adopting position of global leadership in the field of Company has also continued to improve its export ESSENCE OF ÇİMSA’S BRAND COMMITMENT. sustainability in our business processes and in the field white cement.