SUSTAINABILITY REPORT 2019 RESPONSIBLE MANAGEMENT STEADY GROWTH, ADDED-VALUE DEVELOPING PEOPLE ENVIRONMENTALLY CLIMATE CHANGE, CARING 2 FOCUSED ON SUSTAINABLE CONTINUOUS FOCUSED TOGETHER WITH ORIENTED FRIENDLY ENERGY AND FOR THE DEVELOPMENT DEVELOPMENT INNOVATION VALUE CHAIN WORKPLACE PRODUCTION EMISSIONS SOCIETY We transparently share our activities with our stakeholders through sustainability reports we publish while ABOUT THE REPORT continuing to create value for our stakeholders. Once again, in our 7th sustainability report we publish this year, we share our responsible governance approach, business strategies, impacts of our activities and the performance results we obtain. This report has been prepared in accordance with the GRI Standards: Core option. The framework of the reports consists of Otokar Sustainability Priorities identified based on the principles specified in GRI Standards. The clarifications on material topics are based on clarification sets offered in these Standards. This report also includes improvements on United Nations Global Compact and United Nations Women's Empowerment Principles. Industry-wide performance criteria are used in the performance areas not covered by the GRI Standards. The scope of the Otokar Sustainability Report involves data on activities of Otokar Otomotiv ve Savunma Sanayi A.Ş. conducted in Turkey between January 1st, 2019 and December 31st, 2019. In the content of this report, the performance of the organizations in which our company is a shareholder is not included, except for financial figures. The commentaries for these companies are intended merely for general information purposes. You can reach the Otokar 2019 Sustainability Report and the reports of previous periods at www.otokar.com.tr You can send your comments and suggestions about the report by e-mailing to [email protected] or through our website. 102-4 ■ 102-12 ■ 102-45 ■ 102-46 ■ 102-49 ■ 102-50 ■ 102-51 ■ 102-54 ABOUT THE REPORT | ABOUT OTOKAR | MESSAGE FROM THE GENERAL MANAGER | PERFORMANCE DATA | GRI CONTENT INDEX RESPONSIBLE MANAGEMENT STEADY GROWTH, ADDED-VALUE DEVELOPING PEOPLE ENVIRONMENTALLY CLIMATE CHANGE, CARING 3 FOCUSED ON SUSTAINABLE CONTINUOUS FOCUSED TOGETHER WITH ORIENTED FRIENDLY ENERGY AND FOR THE DEVELOPMENT DEVELOPMENT INNOVATION VALUE CHAIN WORKPLACE PRODUCTION EMISSIONS SOCIETY performed in the last decade reached 1.1 MESSAGE FROM THE GENERAL MANAGER billion TL. While taking steps on alternative fuel vehicles in the field of commercial and military vehicles, we also focused on digitalization projects. The year 2019 has become a year that we Esteemed Stakeholders, The year 2019 has become a year that we contributed and maintain to development signed precious achievements. We obtained Covid-19 pandemic started as of the end of our employees, our most important capital, 2.4 billion TL turnover and accomplished a 2019 and spread widely went beyond a global egalitarian and participant business climate, record growth of 45% in 2019 in which we health crisis and impacted economic and we gave 43,756 personxhour occupational focused on long term targets. 80% of our total social development deeply. Covid-19 process and personal training in this regard. Also, we turnover consists of exportation revenues. proved us the importance of sustainability conducted 17,416 personxhour training for our studies in constructing more equal, inclusive We continued to strengthen sustainability- employees and suppliers occupational health and sustainable economies and societies. oriented corporate governance approach and safety, which we consider as one of the while sustaining economic growth both At Otokar, we took necessary precautions critical areas of the Covid-19 process. domestically and internationally. We ranked from the very beginning of the Covid-19 At Otokar, we continue to progress towards among companies in the BIST Sustainability process to protect the health of our our goals by focusing on sustainability and Index, for the fifth time. We have advanced our employees, to ensure the continuity of our innovation unwaveringly. goal of creating long-term value by combining work, to reduce the impact of the epidemic economic, environmental and social factors We would like to extend our gratitude to and to prevent its spread. Specially to ensure with corporate governance principles. our employees investors and shareholders, regular operation in personnel transportation, suppliers, business partners and all other public transportation and vehicles that serve In 2019, we saved 150,350 m3 water and stakeholders, accompanying us, for their trust for logistics in the service sector and in recovered 98% of solid wastes during our and support in this journey. critical areas such as health, we ceaselessly activities in terms of reducing environmental continued to provide service. We prepared impacts and the protecting of the our alternative plans for all possible situations environment. In addition, we saved 1,469 to maintain our sustainable growth. GJ energy and prevented 259 tons of CO2e greenhouse gas emission thanks to efficiency We believe that the impacts of global crisis projects we conducted. will sag with the correct steps that will be taken, and the automotive sector which is our Within the framework of the importance area of operation will prove its strength and we attach to R&D, I would like to proudly Serdar Görgüç | General Manager durability in this crisis as it did in many crises. announce that the R&D investments we 102-14 ■ 102-15 ABOUT THE REPORT | ABOUT OTOKAR | MESSAGE FROM THE GENERAL MANAGER | PERFORMANCE DATA | GRI CONTENT INDEX RESPONSIBLE MANAGEMENT STEADY GROWTH, ADDED-VALUE DEVELOPING PEOPLE ENVIRONMENTALLY CLIMATE CHANGE, CARING 4 FOCUSED ON SUSTAINABLE CONTINUOUS FOCUSED TOGETHER WITH ORIENTED FRIENDLY ENERGY AND FOR THE DEVELOPMENT DEVELOPMENT INNOVATION VALUE CHAIN WORKPLACE PRODUCTION EMISSIONS SOCIETY 1963-2019 MILESTONES... 1963 1980 2002 2007 The company was founded in Turkey’s first armored cash-in- Istanbul Fruehauf A.Ş. has been Medium size bus, “Vectio”, was Bahçelievler under the name transit vehicle was designed and taken over. designed and included in the “Otobüs Karoseri A.Ş.”. manufactured. The design and production of small production plan. Turkey’s first buses started under the name of electric bus was manufactured. Sultan, in the first year, second 2000’s 1964 1984 2000’s place in the market has been The title of the company was achieved. First intercity buses of Turkey 2008 1960’s & 1970’s & 1960’s 1980’s & 1990’s amended as “Otokar Otobüs were manufactured under Magirus Karoseri Sanayii A.Ş.”. The company was named as the license. prime contractor for the modern 2003 tank production with national 1987 Turkey’s first ADR-certified tanker resources project in order to meet was produced. the current requirements of Turkish 1967 The production of tactical wheeled Armed Forces. The production area The first small buses were vehicles launched under Land Rover was increased to 552,000 m2 area. manufactured and exported. Defender licence. 2004 1990 The R&D studies of Otokar were 2009 1968 consolidated under the R&D The production and exportation Centre. Mine-resistant armored vehicle The legendary buses of the period, of Turkey’s first tactical wheeled “Kaya” and 12-meter city bus Havalı Apollo were manufactured. armored vehicle were realised. “Kent” were added to the product range. “Doruk” was entitled to 2005 “Design Turkey Design Award” 1970 1995 Semi-trailer under the brand Otokar in Turkey and “Busworld Kortrijk was designed and manufactured. Grand Award” in Europe. Minibuses suitable for public IPO of Otokar shares were realized. transportation were designed and Armored homeland security vehicle joined the product range. manufactured. 1997 The factory was relocated to an 2 1976 86,000 m plant in Sakarya. The company joined Koç Group. 1999 Otokar Marketing Inc. has been taken over. ABOUT THE REPORT | ABOUT OTOKAR | MESSAGE FROM THE GENERAL MANAGER | PERFORMANCE DATA | GRI CONTENT INDEX RESPONSIBLE MANAGEMENT STEADY GROWTH, ADDED-VALUE DEVELOPING PEOPLE ENVIRONMENTALLY CLIMATE CHANGE, CARING 5 FOCUSED ON SUSTAINABLE CONTINUOUS FOCUSED TOGETHER WITH ORIENTED FRIENDLY ENERGY AND FOR THE DEVELOPMENT DEVELOPMENT INNOVATION VALUE CHAIN WORKPLACE PRODUCTION EMISSIONS SOCIETY 1963-2019 MILESTONES... 2010 2014 2016 2017 The company legal name was Otokar has been the most sold bus Otokar developed the Smart Bus Renewed Doruk T was introduced amended as “Otokar Otomotiv ve brand in Turkey for the 5th time. ISO application in cooperation with to the European Market under the Savunma Sanayi A.Ş.”. “Arma 6x6” the 10002 certification for customer İSBAK and KoçSistem as part of the name Ulyso. first multi-wheeled armored vehicle satisfaction was received. CoMoSeF Project. platform was added to product range. Activities launched to shift in focus Otokar R&D Centre was entitled The company won the tender for the toward Industry 4.0, the fourth as the “The Most Successful R&D 2010's 2010's 2010's 2010's purchase of 100 articulated buses industrial revolution. Centre” in the automotive industry. by ESHOT – a subsidiary of Izmir 2011 Otokar Electromagnetic Compatibility Metropolitan Municipality and the City bus “Kent” won Jury’s Special Test Centre was accredited. delivery was completed. 2018 Award at the “European Coach Week.” Otokar R&D Test Centre Climatic In terms of digital transformation Chamber named the first and only Armored combat vehicle “Arma 8x8” projects, Otokar mobile application