Migros Ticaret A.Ş.

Honored shareholders,

Welcome to the annual general meeting at which the results of our company’s operations in 2011 will be discussed.

Among the G-20 countries, Turkey’s growth performance ranked second only to that of China last year. Despite global uncertainties prevailing almost everywhere in the world, particularly in the eurozone, national and international investors continued to invest in Turkey. Rising domestic demand supported production capacity utilization rates. Exports were up; unemployment rates continued to go down. Having grown by 9.2% in 2010, the national economy came close to that with an 8.5% growth rate in 2011. That said, imports grew relatively faster than did exports and, triggered by a bigger foreign trade deficit, the size of the current account deficit continued to increase. In the second half of the year, it became necessary to bring that current account deficit under control in view of increasingly greater risks in the global economy. The Central Bank therefore began taking a series of measures aimed at restraining the growth both in banks’ consumer lending and in credit card expenditures in order to achieve a “soft landing”.

As for the current situation, international economic circles have begun to talk about the possibility of a second recession while worries about the economic future of the eurozone continue to worsen. Here in our own country, inflation returned to the double-digit range once again and reached 10.45% in 2011. The Central Bank and the government have declared their intention to return to single-digit inflation levels in 2012. Our own view is that inflation will indeed begin to subside, especially in the second half of the year, and will once again be back in the single-digit zone. We believe that low levels of inflation are important for sustainable growth. The government has set a 2012 growth target for the Turkish economy that is on the order of 4%. While that is a growth rate that is lower than those which prevailed in previous years, given the difficult economic conditions in the world today, it will still be satisfactory.

According to figures published by the Turkish Statistical Institute, the Turkish economy grew by 8.5% last year while expenditures on food and beverages increased by 6.3%. Considered from the standpoint of operational strategies, 2011 was a year of restructuring for our company. Last year we converted a large number of Tansaş stores outside the Aegean region and Antalya to the Migros format. In the part of the country where the Tansaş name was born and still remains the strongest, we repositioned the brand. We sold off the “Şok” chain of discount retailing outlets and focused instead on our supermarket operations. Having made that decision, we also made revisions in our supermarket growth program. We doubled planned openings of supermarkets and we are currently growing in the supermarket segment at the rate of two new store openings a week. We took our “Macrocenter” brand outside İstanbul for the first time. Located in Antalya, our newly opened Macrocenter store has so far fulfilled our expectations. That being so, we may start seeing the “Macrocenter” name gradually appearing in other parts of the country in the period ahead as well. In 2011 we opened 76 new stores in our home market and one abroad. These additions bring the total number to 745. We continue to operate successfully at the international level through our investments in Kazakhstan and Macedonia. Migros’s consolidated sales increased by 11.5% year-on and reached TL 5,753 million in 2011. Gross profit increased by 12.8% and reached TL 1,494 million last year. Our consolidated gross profit margin was 26.0%. Our consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to TL 386 million, which gave us an EBITDA margin of 6.7%. However as the company suffered a serious rise in its currency translation losses owing to its EUR-denominated financial obligations, it booked a net loss of TL 163 million in 2011. Despite this however, I want to make it clear that I consider the company’s operational results and sales growth to have been quite satisfactory.

In our home market we are positioned in our principal business line–the supermarket segment–with three strong brands. “Migros”, which is our company’s flagship, is the bedrock underlying our future growth. “Tansaş”, which is the apple of our eye in the Aegean region, distinguishes itself by its ability to “act local while thinking global”. “Macrocenter”, which appeals to upper-income groups, will continue to grow along with Turkey. We have already begun taking the Macrocenter format outside the confines of İstanbul. Although we are positioned with three brands in our principal business line–the supermarket segment, we continued to grow with 5M format, with the opening of 5 new hypermarkets in 2011. Needless to say, we continue to give the utmost attention to service quality in all of our formats.

More than half a century of experience gives us an unrivalled competitive advantage in our sector. Nevertheless, the quality of Migros employees and the upper hand that we gain through such quality really matter. At the same time, our growth strategy is both clear and explicit: we shall continue to grow along with our country and we shall continue to create employment opportunities for our country men.

In closing, I thank you for the interest and confidence you have expressed by attending this general meeting and I extend my best regards to you all.

F. Bülend Özaydınlı
Chairman