Esteemed Shareholders, Business Partners and Colleagues,
The year 2011 proved to be a period of hardship for the world’s economy. The public debt crisis in the Eurozone left its mark on the global economy. The problems in Greece especially popularized a cautious approach that shunned risks and sped up the flight of capital from developing countries. To compensate for this and to boost growth, central banks changed their monetary policies; unfortunately, inflation rates surpassed projected figures. The crisis inevitably affected both the financial as well as the real sector.
Growth projections for 2012 were scaled down in light of the expected global economic turndown. It is expected that the Eurozone will experience a slight recession because of its ongoing debt crisis, with developing countries also facing a decreased growth rate because of their commercial and financial ties to the zone.
The white goods sector continued to grow in Turkey and the world.
The white goods sector in which we operate experienced a global growth when compared to last year. Eastern European market and developing countries grew, despite weak and even declining performance of Western European countries. The consumer confidence index took a turn for the worse in the second period of the year, with demand in some European countries waning. Our industry showed limited growth, in part because of these developments. The increase in raw material prices reflected in lower profit margins. In comparison, Turkey’s increased demand resulted in a record- breaking growth of 6,5 million units in the white goods market. The built-in appliances market grew 31 percent when compared to 2010. Built-in oven and dishwasher categories showed the strongest growth. Retail sales of air conditioners remained the same as last year. The LCD TV market grew 50 percent compared to 2010, fueled by the ever-increasing transition to flat panel displays.
Our brands continued to increase their market shares in many categories.
In 2011, thanks to our brands, we increased our shares in most of our markets. Our growth in Turkey was above industry standards, helping us maintain our leading position in the categories of LCD TVs, air conditioners, white goods and built-in appliances. We also increased our market share in the shrinking PC market. Arçelik’s growing success was also evident in the international market; based on unit sales, our company placed third among 26 Western and EasternEuropean market countries, including Turkey.
We posted the highest growth rate in Western Europe’s white goods market. We became market leaders in the UK market’s washing machine segment thanks to our Beko brand, which already dominated UK’s freezer and refrigerator markets. We retained our undisputed lead in the Romanian market due to the continued success of our brand Arctic. Beko helped us become the company with the highest growth in France and Poland’s white goods market.
With the contribution of our brand Grundig, we achieved a 40 percent turnover growth in consumer electronics and gained market shares in Germany and Nordic countries. We increased our activities in target markets such as Africa, the Middle East and the Commonwealth of Independent States, resulting in an increase of turnover and unit sales.
Our successful financial results for 2011 once again demonstrate that our strategies and policies have paid off. Our consolidated turnover increased 21.6 percent and reached 8.4 billion Turkish lira. Our international sales made up 53 percent of our turnover.
We have taken important steps in expanding global presence.
We have taken important steps in our bid for global presence, in line with our 2011 strategies and policies. We have established our subsidiaries Beko Australia and Beko New Zealand after signing an agreement with Australia’s biggest supply chain. We opened our Taiwan office to develop our procurement and R&D activities in the Far East. We acquired Defy Appliances Ltd., the leading household appliances company of South Africa and a key component of our growth strategy for the African continent. Through Defy we plan to gain access to new markets in the African continent and make the most of the potential of Sub-Saharan countries.
We contribute to our innovation and sustainability goals with our R&D investments.
Our R&D Department, which celebrated its 20th year in 2011, plays a key role in our current sustainable competitiveness and has contributed immensely to Arçelik's global leading position with innovative products that were developed using its unique technological know-how. With the patents that were granted to our company as a result of investments allocated to R&D, we have taken our place as the only Turkish company amongst the “Top 500 Companies” filing applications to the World Intellectual Property Organization, ranked as 95th in the list. We developed innovative production solutions to conserve resources as part of our sustainability approach. We produced Turkey’s first A+++ energy class No-Frost refrigerator, the most energy-efficient model of its kind in the world; the first and only A++ energy class dishwasher with six liter water consumption and a dish capacity for 13 sets; and the first A++ energy class 45 cm dishwasher with nine liter water consumption and a dish capacity for 10. We also added a dryer that consumes 50 percent less energy than class A models, and a steam-assisted dishwasher to our product line.
We continued to operate on an environmentally-conscious and socially responsible level.
We have continued to operate on an environmentally-conscious and socially responsible levels, as part of our company’s sustainability approach that completes and makes our “Respects the Globe, Respected Globally” vision possible. We continued to implement environmental management mechanisms in all our operations. We strived to reduce waste production in our facilities, to recycle waste products and to reduce our greenhouse emissions as part of our annual improvement goals. We calculated the 2010 Greenhouse Gas emissions, sourced by our Headquarters and production facilities in Turkey in accordance with ISO 14064-1 GHG Emission Reporting Standard and our values were verified by an independent accredited organization.
In 2010, eight of our plants were awarded a “gold certificate” as a result of the energy efficiency practices that we implement in all our plants. This was a first in the global white goods industry. And in 2011, our refrigerator, washing machine, cooking appliances and compressor plants surpassed this record by receiving the “platinum certificate,” again a first in the global white goods industry. Our plant in China also received a “gold certificate.”
In 2011, we continued to support domestic and international campaigns aimed at combatting global climate change. We became a member and term speaker of the “Turkish Climate Platform of the Corporate Leaders Network for Climate Action,” a movement aiming to implement domestic and international policies to pioneer the transition to low carbon economies. We signed “The 2˚C Challenge Communiqué” that specifies guidelines to limit the global threat of climate change to 2 degrees. We represented Turkey during The United Nations Climate Change Conference held in Durban, South Africa.
In 2011, we continued to contribute to society through social responsibility projects conducted with the help of our employees, authorized dealers and services.
We will firmly continue to implement our vision of becoming a global player.
The uncertainties that 2012 poses demand that we tread cautiously during this period. But I am confident that we will make the best use of opportunities, based on our experience and the competitive edge our flexible and rapid business model provides us. We will continue to pursue our goal of becoming a global player as part of the vision that will carry our company into the future; by investing into technology, R&D, innovation and human resources; and by focusing on new markets and increasing our presence in existing ones.
I would like to thank all the stakeholders: Our employees, authorized dealers, authorized services, suppliers and business partners for the profound impact they have had on Arçelik’s success; our customers for the confidence they have shown in our products; and our shareholders for their unwavering support.