ANNUAL REPORT 2020 WE PROTECT all the values you produce with care With our innovative, sustainable, recyclable and customized solutions, we protect all the values you produce. Driving for Better Together! STRONG LEADERSHIP, STRONG COMMITMENTS Aiming to be one of the most successful, sustainable and responsible companies in the world, International Paper strives to improve people’s lives, the planet and our company’s performance by transforming renewable resources into products people depend on every day. OUR FACTORIES Annual Report 2020 3 2013 MILESTONES 2010 2001 Purchased DS Smith Group’s Turkey International Paper acquired Hacı operations and Ömer Sabancı Holding’s shares 1998 expanded into new and became the majority owner. Acquisition of Kav Ambalaj Sanayi geographic areas with ve Ticaret (Kav Packaging Industry The company was renamed facilities in Çorlu and Olmuksan International Paper and Trade), adding their Bursa and Çorum. 1984 Hacı Ömer Sabancı Manisa Plants. Ambalaj Sanayi ve Ticaret Holding established (Olmuksan International Paper an equal partnership Packaging Industry and Trade). 1968 Acquired by Hacı Ömer joint venture with Sabancı Holding and International Paper. registered as Olmuksa Mukavva Sanayi ve Founded as Olmuk Ticaret (Olmuk Cardboard Mukavva Sanayi Industry and Trade). ve Ticaret (Olmuk Cardboard Industry and Trade). The IP WAY We do the right things, in the right ways, for the right reasons, all of the time. We call this the IP Way. THE IP WAY FORWARD is how we go beyond just doing the right things; it’s how we create value for all stakeholders. We do this by: • Sustaining Forests • Investing in People • Improving the Planet • Creating Innovative Products • Delivering Inspired Performance A reliable business partner At Olmuksan International Paper we turn paper into corrugated cardboard, and corrugated cardboard into packaging. Our distinguishing feature is our principled approach. We believe that the key to the success of Olmuksan International Paper, with its half century history, is its customer-focused approach. We will always continue to be a reliable business partner, produce to highest standards, maintain our growth targets, and develop innovative solutions that create value for our customers with more than 800 engaged employees. THE IP WAY FORWARD is our strategic framework to pursue our vision to be among the most successful, sustainable and responsible companies in the world. We do this by: Sustaining FORESTS Our entire business depends upon the sustainability of forests. We will continue to lead the world in responsible forest stewardship to ensure healthy and productive forest ecosystems for generations to come. Investing in PEOPLE We make sustainable investments to protect and improve the lives of our employees and mobilize our people, products and resources to address critical needs in the communities where our employees live and work. Improving our PLANET We tackle the toughest issues in our value chain, reduce our environmental footprint and promote the long-term sustainability of natural capital. Innovative PRODUCTS We create innovative, sustainable and recyclable products that help our customers achieve their objectives. Inspired PERFORMANCE We deliver long-term value for all stakeholders by establishing advantaged positions in attractive, fi ber-based market segments with safe, effi cient manufacturing operations near sustainable fi ber sources. IPWF Flyer A6lang final EN.indd 1 04.08.17 14:55 NORTH AMERICA $ 17 billion ties ivi ct EUROPE, MIDDLE A EAST & AFRİCA Printing LATIN AMERICA Papers :15% $ 2.8 billion founded $ 0.8 billion 1898 Packaging: Global 73% Cellulose Fibers:12% GLOBAL NET SALES 2020 48,000 TOTAL: $ 20,6 BILLION employees INTERNATIONAL PAPER IN BRIEF • With its history of well over a century, International Paper is a world leader in packaging and paper. • Headquartered in Memphis, Tennessee, USA; serving more than 25.000 customers in 150 countries. • One of Fortune Magazine’s Most Admired Companies list 18 times • Chosen World’s Most Ethical Company for 15 consecutive years by the Ethisphere Institute. • Awarded the Climate Leadership Award by the USA’s Environmental Protection Agency in 2011. • We have reduced air emissions by 46 % and waste sent to landfill by 15 % compared with 2010. • Planted approximately 10 billion trees and donated 1.5 million hectares of forestry land for conversation. • 100% of its timber-based raw material is certified from lawful and monitored sources. THE IP WAY FORWARD is our strategic framework • Reduced greenhouse gas emission by 73% in Europe since 1990. to pursue our vision to be among the most • Meets 71% of its global energy needs with renewable biomass. successful, sustainable and responsible companies in the world. We do this by: Annual Report 2020 5 Sustaining FORESTS Our entire business depends upon the sustainability of forests. We will continue to lead the world in responsible forest stewardship to ensure healthy and productive forest ecosystems for generations to come. Investing in PEOPLE We make sustainable investments to protect and improve the lives of our employees and mobilize our people, products and resources to address critical needs in the communities where our employees live and work. Improving our PLANET We tackle the toughest issues in our value chain, reduce our environmental footprint and promote the long-term sustainability of natural capital. Innovative PRODUCTS We create innovative, sustainable and recyclable products that help our customers achieve their objectives. Inspired PERFORMANCE We deliver long-term value for all stakeholders by establishing advantaged positions in attractive, fi ber-based market segments with safe, effi cient manufacturing operations near sustainable fi ber sources. IPWF Flyer A6lang final EN.indd 1 04.08.17 14:55 THE AGENDA OF THE ORDINARY GENERAL ASSEMBLY OLMUKSAN INTERNATIONAL PAPER AMBALAJ SANAYİ VE TİCARET ANONİM ŞİRKETİ AGENDA OF THE ORDINARY GENERAL ASSEMBLY MEETING FOR THE YEAR 2020 to be held on 29 March 2021 1. Commencement of the meeting and designation of the Presiding Board, 2. Authorising the Presiding Board to sign the minutes of the General Assembly meeting, 3. Reading and discussion of the activity report of the Board of Directors for the year 2020, 4. Reading of the report of the independent auditing firm for the year 2020, 5. Giving information to the shareholders about the amounts and beneficiaries of the donations and contributions made during the year 2020, 6. Reading, discussion and approval of the financial statements for the year 2020, 7. Discharge of the members of the Board of Directors from liability for their activities in the year 2020, 8. Determination of the use of the net profit and decision about distributing or not distributing a dividend for the year 2020, 9. Appointment of the members of the Board of Directors and determination of their terms of office, 10. Determination of the gross directorship fees of the members of the Board of Directors, 11. Determination of the upper limit for donations in the year 2021, 12. Approval of the proposal of the members of the Board of Directors regarding the designation of the independent auditing firm for auditing the 2021 financial statements and reports, 13. Giving permission to the chairman and the members of the Board of Directors for transactions as listed in Articles 395 and 396 of the Turkish Commercial Code in the year 2021; providing information to the shareholders regarding any such transactions that took place in the year 2020 in line with the Corporate Governance Communiqué issued by the Capital Markets Board, 14. Submission of information on the profit and benefits in returns of collaterals, liens, encumbrances and sureties granted in favor of third parties in the year 2020 in line with the regulations issued by the Capital Markets Board. OLMUKSAN INTERNATIONAL PAPER AMBALAJ SANAYİ VE TİCARET ANONİM ŞİRKETİ Annual Report 2020 7 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.