In 2020, Borusan Cat continued to fulfill customers' expectations through value-added solutions during its operations in six countries.

"We Create Solutions for a Better World" was the approach that drove Borusan Cat to continue developing effective solutions for customers in different parts of the world with a team of some 3 thousand professionals in Turkey, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, and Far East of Russia. Ranking among the world's leading Caterpillar dealers, Borusan Cat runs operations in six countries successfully. Despite all the challenges faced in 2020, the Company continued to satisfy all stakeholders through strategic initiatives aimed at creating solutions, which is embedded in its DNA. The Company realized its priority targets in full thanks to its robust financial structure, rigorous management approach, rapid integration of digital tools developed, and sustainable, transparent communications.
Borusan Cat ran a dynamic process and successfully tackled the negative impact of the pandemic and the economic, social, and political uncertainties witnessed in its regions of operation through a robust governance approach.

In its operations spanning six countries, Borusan Cat fulfilled customers' expectations through value-added solutions. The Company navigated this period prioritizing the protection of its team, its customers, its business, and society. Boasting a professional team who demonstrate all the traits for resilience, Borusan Cat takes firm steps towards the future.

The Company continued its investments in advanced technologies and digitalization while striving to enhance its operational excellence in the 2020 operating period.

Strategic Positioning
Borusan Cat sustains its strong presence and successful operations, driven by the following competitive strengths:

A reliable consultant for customers with solution provider identity, • Unique expertise gained in different territories,
• Value-added sales and aftersales solutions reinforced by innovation and digitalization,
• Strong engineering capabilities, project management skills, and integrated turnkey solutions,
• Process and analysis of continuous data flow from the field with artificial intelligence tools,
• A customer-oriented, agile and lean organization working with the founder’s mentality.

In 2020, Borusan Cat addressed all the requirements of customers and succeeded in increasing customer satisfaction scores.

Construction Industry
• Despite excessive fluctuations in market conditions throughout the year, Borusan Cat construction industry reached its market share goals. Progress was attained in the market share of machinery with high customer support potential. In Far East of Russia, the Company broke a record in market share thanks to the contributions from the sales performance of a heavy machinery brand SEM, for which it acts as a distributor.
• In all regions, STU (Sales to Users) market share was expanded steadily thanks to the Company's focus on HEXLG on the side of prime products. Levels that go beyond the 2022 targets as mutually agreed with Caterpillar have been attained in Turkey operations.
• In Kazakhstan, Azerbaijan, Georgia, Kyrgyzstan, and Far East of Russia, Borusan Cat expanded its share in the backhoe loader market, ensuring that one out of every three machines is Cat in a rather competitive region of the world.
• As for the road construction segment, the customer-oriented approach and the broad Caterpillar product range allowed Borusan Cat to deliver new cold planers, rotary mixers, and asphalt pavers to clients.
• While the Company ventured into new partnerships in the marble industry, the market share of HEXLG (excavators over 35 tons) was expanded, and thus the leading position was maintained.
• Serving as a single contract for large multinational clients, the Company was a solution partner in their global projects.
• One out of every two machines was sold with Customer Value Agreements (CVA), while a contract renewal ratio of 60% was attained for ongoing CVAs.
• Rebuilt component (Exchange) sales doubled and half of the sales were made through PCC.
• IMC (Interactive Management Center) process and the reporting infrastructure were completed, being ready for roll out in all Borusan Cat regions.
• As for Used and Rental segments, ideal solutions were offered to customers at high standards which were crowned with silver and bronze awards in "Used and Rental Excellence" certification audits by Caterpillar. Borusan Used and Rental business has transferred its know-how and high standards attained in Turkey onto five other regions of activity and succeeded in becoming a solution partner with service delivery at the same standards in all Borusan Cat regions.
• Trimble Navigation Limited's SITECH is a local distribution channel in charge of delivering technology solutions in large scale construction and highway projects. It continued to set itself apart from the market with its products and solutions while providing high-quality service for clients to finalize projects in rather difficult regions of the world in a fast and efficient manner. Therefore SITECH remained an indispensable and reliable solution partner for customers in this period.
• Benim Filom's transformation has been completed successfully. In addition to the restructuring efforts and the synergy created within Borusan Cat, the supply network has been systemically enhanced in line with strategic goals during the year. Benim Filom carried on its path with a business model that addresses the requirements of projects end to end.

Resource Industry
• The resource industry team of Borusan Cat continued to deliver tailor-made solutions through a customer-centric approach in 2020.
• Key account management policies and practices have been merged with digital solutions and production capabilities, helping the company maintain its leadership in the market.
• The high market share in the underground and open pit mining segment were maintained, and the position as Caterpillar's leading dealer was sustained in the operating regions.
• Most innovative Caterpillar products were provided to the highlight projects of 2020 in Kazakhstan, Far East of Russia, Kyrgyzstan, and Turkey.
• Kazakhstan's resource industry prime product market share, which was 82% in 2019, rose to 92% in 2020.
• The Company sustained continuous service delivery in all mining sites in Kazakhstan, Far East of Russia, Kyrgyzstan, and Turkey. Even when faced with the most challenging times, the Company safeguarded the health of its teams, customers, and the adjacent communities, and adapted to the new normal in providing services of outstanding quality with no compromise on rigorous measures for safety.
• The Company made sure that work sites could operate without respite.
• The Company felt the deserved pride of having built on the long-standing ties with key business partners in the operating regions.
• Efficient management of resources, rules of the new normal, and implementation of digital solutions enabled continuous product and service delivery.
• The first sales in underground mining were performed in Turkey. This significant achievement will help the Company attain major success in the Turkish underground mining market.

Energy and Transportation Industry
• Borusan Cat Energy and Transportation Industry provide sales, project management, and customer support services to address customers' growing need for energy and transportation solutions in different regions and sectors.
• Digital projects were brought live to continue with activities centered on customer satisfaction in six countries. These projects helped re-adjust and organize work in line with emerging conditions successfully.
• Borusan Cat's share in the Turkish marine market grew considerably, while the tugboat market share rose to 82%.
• Renewable power generation and cogeneration systems that use landfills gas and biogas have enabled clients to cut costs and reduce emissions that harm the environment. Significant references have been garnered, with the market share in this area rising to 39%.
• In Far East of Russia, strategic oil segment projects that had been planned for 2020 were successfully delivered despite all the challenges that came along, and high quality solutions were offered to global clients.
• Power plants that belong to Turkey's large healthcare complexes were successfully commissioned during the pandemic.
• In 2020, the Company reached 88 MW of installed power, the highest commissioning experience gained in natural gas, landfill, and biogas projects to.
• In Azerbaijan, the data center project was successfully delivered and petroleum pipelines and offshore platforms received continuous services.
• In Kazakhstan, customer support operations grew significantly compared to the previous year. The number of Customer Value Agreements, which have high strategic importance, grew by 30%.
• Borusan Cat started creating value for customers through artificial intelligence tools. In Turkey and Far East of Russia, the number of connected units that enabled data collection from machinery increased rapidly.
• Thanks to the partnerships with other Cat dealers, significant references were garnered in the projects for boats manufactured for use in North European countries.
• Rig up Turkey's first domestic onshore drilling rig with a 350-ton capacity were performed successfully. • The Company received the first diesel generator order from the strategic partner in Kyrgyzstan.
• Seven diesel generators, designed specifically for locomotive projects, have been deployed.

Digital Solutions Lie in the Heart of Our Business
With its focus on customer experience and proactive solutions, Borusan Cat continues its digital transformation journey successfully. The Digital and Technology team of 40 engineers allowed the Company to utilize mobile, web, AI, and robotic process automation technologies in generating solutions and value as well as spearheading digital transformation as a business partner for customers during the 2020 operating period.
In 2020, significant progress was attained towards process automation and optimization and their autonomation through AI algorithms. Via the use of the latest technologies, applications were successfully developed that produce foresight from data. Deliverables of these efforts turned into value-creating solutions for Borusan Cat customers. With its digital gains, Borusan Cat delivered on its promise and purpose: "We Create Solutions for a Better World.”

Rising on R&D and Digital Investments
In 2020, investments and gains in R&D and digital spheres continued:

• An AI and IoT app Müneccim is a global award winner. Its new revision model adopts a proactive approach and predicts the need for revision that may occur in the machine. This has helped the Company create value for all stakeholders successfully. Müneccim's roll-out in Turkey, Kazakhstan, Far East of Russia, and Azerbaijan has been completed and brought live.
• RFM-S is an artificial intelligence app that identifies customers that may pose a selling potential and their probable purchasing periods after sensitivity analyses were incorporated into the criteria of customers' shopping frequency, time passed since last purchase, and purchase amount. The roll-out of the app has been completed in Turkey, Kazakhstan, and Azerbaijan.
• Used for Spare Parts and Service, FM (Frequency Monetary) is a segmentation model based on customers' shopping frequency and purchase amount and displays customer value. This model has been deployed in Turkey, Kazakhstan, and Azerbaijan. Actions required specifically for these groups have been determined to increase customers' effective use of spare parts and services.
• "Commodore" is a software-driven robot that processes data from IoT in a rule based manner to match them with error codes that may be encountered in the machinery and share the outputs with relevant teams. This application has been brought live in Turkey, Kazakhstan, Far East of Russia, and Azerbaijan. Redirecting error codes to relevant teams has made it easier to detect machine failures and improved the efficiency of technicians out on the field.

R&D and Innovation
Driven by its vision to create value for customers, the Company continued with innovative apps and R&D initiatives developed using the most advanced technologies to date in 2020. A new R&D project, under which customers' past behavior and data are assessed from a broader perspective and scored in terms of the value created at Borusan Cat, has been deployed in Turkey, with the plans for roll out in other countries made ready. Project deliverables will prove useful in getting to know customers better, customer targeting, customer retention, preventing customer losses, and prioritizing action.

• Anywhere Anytime: As new features were still introduced to WeKing, a technician planning tool available on the digital platform, the app was also launched in Far East of Russia. Deployment of over 120 RPA (Robotic Process Automation) helped the Company gain speed and efficiency with a 3,135 person/day saving per annum. These robots contributed significantly to the business processes of finance and operation departments.

• Digital Counter has been introduced to eliminate the need for physical contact during the pandemic. This service handles customer requests quickly while protecting the health of customers and employees and contributing to business continuity.

• B’SAFE:It is a Health Application that helps protect the health of colleagues in offices, workshops, and all working sites. Especially during the pandemic, employees used the "B'Safe" app to share, on a daily basis, how they felt and their location with the Workplace Doctor. This also helps employees isolate themselves at home as and when necessary, keep a social distance in the working areas, and quickly identify the individuals who have had close contact with a positive COVID-19 case and whether there is any exposure to the virus within the working place.

E-Commerce
• PCC (part.cat.com) online part sales platforms were launched in the 2020 operating period. Actively used by 730 customers in Turkey, Kazakhstan, Azerbaijan, and Far East of Russia, the online sales channel PCC has delivered a sales performance above the targets set for the 2020 operating period.

Continuity in Transformation
• The Company completed Turkey's first SAP HEC (SAP Hana Enterprise Cloud) transformation project under which SAP systems were moved to SAP cloud. This transformation project moved the entire SAP infrastructure to the cloud, while Premium support began to be delivered by expert SAP teams for the management of SAP systems.
• Data is a corporate value that must be protected in all circumstances. This is the principle that the Company pursued when deploying the digital documentation classification and protection app and successfully renewing its ISO 27001 Information Security Management Certificate.
• One national and three international patent applications were filed to protect the intellectual rights of the technologies developed by the R&D team. “Industry 4.0 Application on Diagnosis Prediction of Construction Machinery: A New Model Approach” is an article that was penned as a result of R&D projects. This article was published in the Civil Engineering and Architecture journal. “Customer Segmentation with RFMS Analysis” is also a scientific article that is currently being reviewed for publication in refereed journals.