Arçelik Group and Arctic announce preventive measures to limit the effects of the Coronavirus outbreak

Bucharest, March 20, 2020 - Arçelik is closely monitoring the evolution of the Coronavirus 2019 epidemic (COVID-19). These are extremely challenging times for the whole world and for the business environment and require major changes to our normal working models. In accordance with the measures taken by Koç Holding and the Group's Emergency Coordination Center, we have taken several precautions to protect the health and safety of our employees while maintaining the ability to operate. 

In recent weeks, we have implemented a pandemic response plan and taken several serious actions to prevent infection in our offices and factories around the world and we applied proactive measures that ensure business continuity. We are increasing our restrictions regarding meetings, access to offices and facilities is suspended for everyone, and all meetings between employees are cancelled. We encourage employees in critical sectors to work from home and comply with travel restrictions, both internationally and domestically. 

With production facilities in 9 countries and operations in over 140 markets, Arçelik also faced the risks and uncertainty caused by COVID-19. 

China is an important supply hub for raw materials and finished products for Arçelik, as is it for many other companies in different industries. In the early stages, Arçelik suppliers faced some difficulties in resuming production after the extended Chinese New Year holiday. Our teams have been in constant contact with suppliers and we are pleased to see that almost all our suppliers in China have resumed their production activities. 

In addition to China, we are closely tracking our suppliers in South Korea and Italy, where some of the largest outbreaks have been recorded. Our Supply Chain teams have done their best to minimize production and sales losses, by also finding alternative suppliers. 

We are also manufacturing in China. Our factory in Changzhou produces washing machines for both China and export markets. We are glad to see that our employees have returned to work, and our factory resumed production in early March. 

Due to government measures and consumer behavior, we are noticing a demand decline in Asian markets, where our presence is still limited. 

With the spread of the virus in Europe, the situation becomes much more critical, as Europe is still the largest export market for Arçelik. Naturally, the reduction of consumer traffic in stores and the decreased demand in the retail segment could have a negative impact on the entire industry in the coming months. However, we note that Arçelik has continued to increase its sales in almost all European markets to date. 

In Turkey, which is still the largest market (about 30% of annual sales) for the company, the number of infected people is very limited. So far, the data provided by our network of distributors, indicates positive results in both wholesale and retail demand. 

Although the group's performance so far is in line with our annual estimates, it is difficult to predict the evolution for the rest of 2020, in the context of the global uncertainty surrounding the COVID-19 epidemic. It goes without saying that we are and will remain open to offer all the support that our business partners and customers expect from our company in this situation. 

Preventive measures taken by the Arctic company to limit the effects of the Coronavirus epidemic 

Protecting the employees 

The health and safety of our employees is our top priority. We have taken the following measures to protect both employees and customers: 

Offices and production facilities: 

• Our offices and production facilities have implemented all the necessary prevention measures recommended by governments and local health authorities. These include intensified cleaning, hygiene kits (surgical masks, disinfectant), informing employees about the importance of complying with the guidelines. We continue to closely monitor the situation in each unit, and employees who show any of the symptoms are advised to follow the instructions of the authorities.

• Our employees received the necessary IT equipment and all the information they need to be able to work from home. Meetings are held through the Teams application; online communication channels, calls and video conferencing are also used. We ensure access to files through cloud storage (One Drive) and we make sure that they are constantly updated. Outlook, OneDrive, Teams applications, which are cloud-based services, are accessible from all devices connected to the Internet. 

• In an effort to prevent the spread of the virus among our employees and shareholders, we have canceled events and meetings at Arctic locations until Wednesday, April 15 (the period may be extended if necessary). 

• All international and domestic trips have been canceled, except the mandatory ones. In the case of compulsory travel, it is recommended to use company or employee vehicles and avoid the use of public transportation. 

Communication with employees: 

• We have created a dedicated e-mail address for our employees to share concerns or to ask us questions; the e-mail address is constantly monitored. 

• We are sending daily newsletters to our employees, to ensure that they are informed about company policies and measures taken during this period. 

• We created a dedicated COVID-19 section on the company's intranet. This section is updated daily with information designed to help our employees: infographics, IT information, World Health Organization statistics. 

• The management team regularly sends out briefings regarding the health and prevention measures applied in our offices and production facilities. 

Currently, both production facilities and sales services are operational, and we do our best to maintain service as usual, with minimal disruption. The Ulmi factory will resume production on Monday, March 23. Our production facilities have implemented all necessary prevention measures set by the government and local health authorities: intensified cleaning, hygiene kits (surgical masks, disinfectant), informing employees about the importance of complying with the guidelines. 

In order to protect employees with critical roles, who need to be present in factories to ensure business continuity, additional work safety measures have been applied. All common areas of buildings and facilities are permanently disinfected, including buses used to transport employees. In factories, disinfectant carpets were installed at the access gates, and the warehouse of Găești factory was fitted with a cleaning installation for trucks coming from high-risk areas. 

All employees are informed about preventive protection measures and meetings are constantly held with production teams to raise awareness and accountability.

About Arctic

Arctic, the leader of the Romanian home appliance market, is one of the strongest companies in Romania, and one of the most important employers and exporters in the SE European country. With approximately 4,300 employees, the company exports 83% of its total production to over 85 countries.

With a history of almost half a century, Arctic became part of the Arçelik group in 2002, and has since continuously and significantly increased both its turnover and production capacity.

The company owns the largest household appliance factory in continental Europe, the Găești unit producing so far over 36 million refrigerators. It also owns the only Industry 4.0 factory in Romania and one of the few in Europe, the factory in Ulmi, Dâmbovița, with a production capacity of 2.2 million units per year.

About Arçelik

Founded in 1955, Arçelik is one of the leading players in the electronics and home appliances industries. The company is present in 146 countries, has 30,000 employees, 23 production units in 9 countries (Turkey, Romania, Russia, China, South Africa, Thailand, Pakistan, India, and Bangladesh) and 35 sales and marketing offices across the world. The company owns 12 brands (Arçelik, Beko, Grundig, Blomberg, ElektraBregenz, Arctic, Leisure, Flavel, Defy, Dawlance, Voltas Beko, Altus) and is listed on the Istanbul Stock Exchange.

www.arcelikglobal.com

Press contact: Irina Manole, OXYGEN / irinam@oxygencomms.ro/ 0735.010.902