Page 8 - Annual Report 2018

MESSAGE FROM THE CHAIRMAN OF BOARD

Esteemed Shareholders, Business Partners and Distinguished Employees,

2018 was a year of slow growth in the global economy, while optimism for the future diminished. Increases in
tension due to inter-country mercantile problems, in particular the enmity between the United States and China,
the high borrowing rates set by developing countries and also the developments in the United Kingdom related to
Brexit are all important for Turkey.

In addition to the economic shrinkage and the impacts of uncertainty in the wake of the decreasing trend in growth
rates on a global scale, coupled with the fluctuations in currency in recent months in Turkey, have lead to perceptions
that 2019 will also be a difficult year. The growth rate in the construction sector that for many years was the
impetus behind the development of Turkish economy has reduced almost to a standstill when compared to the
past due to the incremental changes in currency and interest rates and fiscal discipline policies. Another adverse
situation that has hit the sector is in the housing segment, with sales of housing in Turkey decreasing by 2.4
percent in 2018 when compared to the previous year. In the upcoming period, it is expected that investments will
decrease in number due to the increasing costs of financing, the difficult lending terms, geopolitical risks and the
global slowdown.

Inflation and currency fluctuations, as the most important item on the agenda at the moment in Turkey, are at the
top of the list of the most worrying factors. It is expected that economic growth will be around 1 percent this year,
compared to the 2.6 percent seen last year. The steps taken under the new economic program announced just after
the local elections are vital for the balancing of the economy.

In brief, 2019 is looking to be a year of both risks and opportunities.

As Nurol Holding, our primary objective is to manage the risks by maintaining a balanced portfolio, and by utilizing
the full capacity of our company. We are continuing our product development and diversification activities, and
have established a considerable R&D structure in the technology field. We are now working to maximize on quality
while reducing costs in existing products, backed by a search for new products. We are seeking to increase the
brand recognition of the Nurol Group not only in Turkey but also in the global markets, believing that we can
achieve this together with our shareholders, and with the efforts and support of our business partners and
associates, as always.

NUROL continues to operate with around 40 subsidiaries, affiliate companies, branches and project partnerships,
established both at home and abroad, primarily in the defense sectors, but also in such industries as technology,
real estate investment, energy, tourism, mining, finance, trade and services, and particularly, construction and
contracting. As of December 31, 2018, the Group has consolidated assets amounting to TRY 20.3 billion and we
have set a 2019 year-end target of TRY 21.2 billion. Planning, coordinating and executing its operations in line with
the goal of sustainable growth in parallel to developing markets and economic changes, the NUROL GROUP OF
COMPANIES has today a workforce numbering over 10,000, a turnover of TRY 7.2 billion and, by the end of 2019, an
increased budget of TRY 11.1 billion, representing an increase of 54 percent.

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