2015: RESULTS
39 months 2015*The Concern unites 133 enterprises (except the enterprises in ATO zone and the Autonomous Republic of Crimea region, and others)** no exchange rate differences
enterprises*99
FOR THE MINISTRY OF DEFENCE AND THE NATIONAL GUARD
IN NUMBERS:
UAH net profit ** UAH average wageUAH budget payments
bln blnmln
mlnUAH
1 3 100626 5 333
348 4074For comparison:UAH loss for the same
period in 2014**
For comparison:
produced and modernized weapons and military
equipment
overhauled and repaired weapons and military
equipment
repaired nodes and aggregates
units1 441 1 963 3 794
mln
for the same period in 2014
unitsunits
49 months 2015
FOR THE MINISTRY OF DEFENCE AND THE NATIONAL GUARD
Armored vehicles
Nodes and aggregates
673
3794
units
Missiles and rockets
Aircrafts and other aviation machinery Radar
1830 53 3
Vehicles
275Air Defense
Engineering equipment
Communications and encoding
equipmentFueling
machinery
30 59 346 135
units units units
units units units units units units
MADE INUKRAINE
59 months 2015
THE RESULTS OF WORK OF 99 ENTERPRISES (6 CLUSTERS)
Exporters
Clusters
Aircraft construction and repair
High precision armament and munitions
Armored vehicles and artillery armament
Radar-location and air defense
Shipbuilding and marine engineering
925 49
4914 332
926 62
1084 -45
608 97
1989 173
2140 355
5528 951
1315 56
1746 47
556 116
3147 1216
131% 621%
12% 187%
42% -9%
61%
-9% 20%
58% 603%
NET REVENUE, mln UAH EBITDA, mln.UAH
9 months 2014 9 months 20149 months 2015 9 months 2015Growth Growth
MADE PROFITABLE!
69 months 2015
AIRCRAFT
Net revenue
Gross operating profit
EBITDA
EBITDA return
Net profit
4914
375
332
7%
51
187
5528
31470
894
951
17%
642
279
12%
138%
187%
1165%
50%
employees
AN -178
AN-148
AN-70
TOP PRODUCTSCLUSTER
CAPEX
9 months 2014 9 months 2015 Growth
79 months 2015
Net revenue
EBITDA
EBITDA return
Net profit
CAPEX
233,6 2408,1
61,1 105,4
26% 4,38%
58
7,1
29,8
90,5
461 2600,6
203 453,4
44% 17,43%
207,2 274,3
3 115,5
97% 8%
232% 330%
257%
-57%
822%
28%
SE “AVIAKON” SE “ANTONOV”
914 12702employees employees
2013 2014 2015Helicopters transferred
Serial production / modernization / repair
MI-24PU1
MI-24P
MI-8MTB
AIRCRAFTCLUSTER
9 months 2014 9 months 2015 Growth 9 months 2014 9 months 2015 Growth
89 months 2015
PLANT 401 CA
252,4
-8,95
-3,5%
-23,3
1,671
290,9
4,85
1,7%
1,3
2,035
15%
22%
1069 employees
MOTOR
193,42
26,54
14%
40
417,08
139,57
33%
183,3
72,28
116%
426%
358%
166%
1094 employees
27,16
Serial production / modernization / repair
MI-8MSB
MI-8MSB-B
AN-26
MADE PROFITABLE!
MADE PROFITABLE!
AIRCRAFTCLUSTER
Net revenue
EBITDA
EBITDA return
Net profit
CAPEX
9 months 2014 9 months 2015 Growth 9 months 2014 9 months 2015 Growth
AN-30
99 months 2015
272,14 232,67
11,5 22,3
4% 9,59%
29,55 28,57
17,1 3,05
294,29 462,9
17,47 37,39
6% 8,08%
39,27 49,79
29,4 29,11
8% 99%
52% 68%
33%
72%
74%
853%
SE “IVCHENKO-PROGRESS” SE “NOVATOR”
21012929 employeesemployees
Serial production / modernization / repair
AI-450B
GARANT
BURAN-A
9 months 2014 9 months 2015 Growth 9 months 2014 9 months 2015 Growth
Net revenue
EBITDA
EBITDA return
Net profit
CAPEX
AIRCRAFTCLUSTER
109 months 2015
ARMORED
1083,8
-44,9
-75,5
17,32
1746,1
12066
46,8
19,6
66,1
61%
282%
9 місяців 2014 9 місяців 2015 Приріст
employeesOPLOT
BTR-4 and its modifications
TOP PRODUCTS
Net revenue
EBITDA
Net profit
CLUSTER
CAPEX
DOZOR-BMADE
PROFITABLE!
MADE PROFITABLE!
119 months 2015
18,07 50,9
0,52 19,7
2,9% 38,7%
-0,09 0,92
3,77
184,4 217,1
8,24 46
4,5% 21,2%
11,3 0,81
1,51 10,49
921% 326%
1479% 133%
-12%
178%755%
SE “KHARKIV ARMORED PLANT” SE “LVIV ARMORED PLANT”
220 780employees employees
0,18
Serial production / modernization / repair
DOZOR-B
BTR-3 and its modifications
BULAT
ARMORED CLUSTER
9 months 2014 9 months 2015 Growth 9 months 2014 9 months 2015 Growth
Net revenue
EBITDA
EBITDA return
Net profit
CAPEX
MADE PROFITABLE!
129 months 2015
4,93
-1,32
-26,7%
-2,07
25,98
4,1
15,8%
3,05
2,99
427%
1443%
SE “ARTILLERY ARMAMENT”
178 employees
0,19
187,7
15,17
8,1%
5,24
0,44
143,6
25,09
17,5%
10,19
1,43
-23%
65%
95%
224%
SE “KYIV ARMORED PLANT”
955 employees
11 months of the year
2014
11 months of the year
2015
Armored vehicles transferred*
67
197* Kyiv Armored Plant and Lviv Armored Plant
ARMORED CLUSTER
9 months 2014 9 months 2015 Growth 9 months 2014 9 months 2015 Growth
Net revenue
EBITDA
EBITDA return
Net profit
CAPEX
MADE PROFITABLE!
MADE PROFITABLE!
139 months 2015
926
101
61,7
7%
62,9
20,7
1315
80
56,2
4%
33,8
46,4
42%
-21%
-9%
-46%
124%
HIGH PRECISION ARMAMENT AND MUNITIONS 12296 employees
ANTITANK GUIDED MISSILE “STUGNA”
TOP PRODUCTS
ANTITANK GUIDED MISSILE LAUNCHER “SKIF”
Net revenue
Financial results
EBITDA
EBITDA return
Net profit
CAPEX
ANTITANK GUIDED MISSILE “KOMBAT-621”9 months 2014 9 months 2015 Growth
149 months 2015
608
77
96,7
16%
15,1
32,2
555,8
68,1
115,8
21%
38,4
28,4
-9%
-11%
20%
154%
-12%
RADAR-LOCATION AND AIR DEFENSERADAR STATION 80K6
RADAR STATION “DELTA”
TOP PRODUCTS
RADAR STATION “36D6-M”
6698 employees
Net revenue
Financial results
EBITDA
EBITDA return
Net profit
CAPEX
9 months 2014 9 months 2015 Growth
159 months 2015
REASONS FOR GROWTH:
MANAGEMENT DECISIONS
169 months 2015
MANAGEMENT DECISIONS: LAUNCHING SERIAL PRODUCTION
AUTHORIZED FOR ARMED FORCES, MASTERED AND PUT INTO SERIAL PRODUCTION
Main battle Tank light armored personnel carrier armored personnel carrier with Deutz engine
OPLOT DOZOR-B BTR-4UAV
SPECTATOR-Mmodernization to NATO standarts
SU-25/27
production growth by 2.5 times automatic grenade launcher modernization to NATO standarts30 MM AUTOMATIC GUNS KBA-117 L-39
navigation systemSN-4215
armored personnel carrierBTR-3
and dozens of other developments
179 months 2015
SAVING
mln UAH375
MANAGEMENT DECISIONS: PREVENTION OF CORRUPTION
* procurement through electronic trade platform
mln UAH***223,6 within the protection of property rights
85,5 mln UAH
by reducing the tariffs for freight logistic services
30
saving on insurance contracts
due to verification of documents related to the write-off, alienation and lease of state property
due to termination of cooperation with private contractors, where the nature of the rendered
services had signs of fictitious
30
1,4
5,3new suppliers6800
470for comparison:
in 2014
attracted
tenders**14405
conducted
* Launched on November 6 by The State Concern (one of the first in Ukraine)** 730 - 2014. The average number of tenders in 2015 in the quarter - 4.8 thousand*** 12.5 million - for the fourth quarter of 2014. The average amount of savings per quarter in 2015 - 75 mln UAH
mln UAH
mln UAH
mln UAH
mln UAH
189 months 2015
MANAGEMENT DECISIONS: PREVENTION OF CORRUPTION
conducted 78 control measures of financial and economic activities of enterprises to identify signs of possible violations and illegal acts
65 cases submitted to law enforcement and special agencies
part of them is being checked by the law enforcement authorities within 22 criminal proceedings
7 cases are already brought to the court
10 heads of enterprises suspended from their positions (the results of revealed violations in the field of financial and economic activity, rental relations)
18 employees brought to disciplinary liability on the basis of materials of official checks, including 2 of them, brought to material liability
199 months 2015
MANAGEMENT DECISIONS: DESIGN AND DEVELOPMENT OF NEW PRODUCTS
tactical UAV
120mm self-propelled mortar on the BTR-4E chassis base
and other projects
155mm self-propelled howitzer on the battle tank «Oplot» shassis
Antitank guided missiles RK-3, RK-2M,
«Corsar» complex, helicopter rocket
«Alta»
Modern 3D surveillance radar
system
Underwater Forces and Facilities Detection
Sonar
Artillery fire control systems and
automated sound reconnaissance
system
30mm automatic cannon LVG-30
Antonov
SE «SCIENTIFIC AND PRODUCTION COMPLEX «ISKRA»
KIEV SCIENTIFIC AND RESEARCH INSTITUTE OF UNDERWATER DEVICES
LVIV STATE PLANT «LORTA»
KIEV STATE DESIGN BUREAU «LUCH»
JOINT PROJECT OF KHARKIV MOROZOV MACHINE BUILDING DESIGN BUREAU AND HUTA STALOWA WOLA (POLAND)
209 months 2015
MANAGEMENT DECISIONS:
More than 40 technical proposals within modernisation of T-64, T-72, BMP, BTR-80, BTR-70, BRDM tanks have been submitted to the Ministry of Defence of Ukraine. Most of them have been accepted.
Tanks: restoration of technical condition of 140 T-72 tanks project (program) was proposed and implemented, in order to cover the lack of armored vehicles and armament of the Armed Forces of Ukraine and repair facilities utilization.
Rocket shells 9M55 recovery and extension of their life terms project (program) has been organized, increasing combat readiness of the Armed Forces of Ukraine and contributing to 1 bln cost savings for the national budget.
We proposed equipping Mi-24 helicopters with optoelectronic stations of domestic production. That will give an opportunity to save millions of euro for State budget.
MODERNISATION AND REPAIR OF ARMAMENT AND MILITARY EQUIPMENT
219 months 2015
MANAGEMENT DECISIONS: IMPORT SUBSTITUTION
In the framework of memoranda, cooperation is maintained with the following administrations:Lviv Regional State AdministrationTernopil Regional State AdministrationKherson Regional State AdministrationMykolayiv Regional State AdministrationChernihiv Regional State AdministrationKhmelnytskyi Regional State AdministrationZaporizhia Regional State AdministrationCherkasy Regional State AdministrationZhytomyr Regional State AdministrationIvano-Frankivsk Regional State Administration
INITIATIVE ON COOPERATION OF ALL PRODUCTION FACILITIES WITHIN UKRAINE
Soon Kyiv, Chernivtsi, Volyn, Rivne, Vinnytsia, Poltava Regional Sate Administrations, as well as Kharkiv region, will join this program. The work is in process...
Development of technical competency centres chain, related to
import substitution issues, is already in progress: rubber
goods, radioelements, aircraft components
Manufacturing facilities of 178 enterprises-
potential partners are examined
11 Memoranda on cooperation are signed with
Regional State Administrations: 114 companies, which are
not members of the Concern, deliver 247 components to 37
companies of the Concern
The component list is prepared and contains 8 000 itemswhich are subject to import substitution.Ukroboronprom is open for cooperation withcompanies all legal forms of incorporation: private, stock, state;the companies which are ready to execute set framework.
229 months 2015
MANAGEMENT DECISIONS: NATO
The Concern representatives together with representatives of MoD of Ukraine on a regular basis take part in Conference of National Armament Directors (CNAD, 29.11.2015) and their groups:
NAAG LCMG JCG UAS JCG GBAD Smart Defence
Participation in NATO Industrial Forum, NIF
40 meetings of NATO-Ukraine Joint Working Group on defence and technical cooperation - participation or organization of events in order to implement NATO standards in Ukraine:
Seminar «Cooperation Ukraine-NATO on standardization policy» within NATO-Ukraine Logistics and Standardization Trust Fund Defence standardization experts course with participation of Alliance specialists multinational conference on logistics - Logistics in Armed Forces - development of the multinational logistics capabilities;
Military equipment compliance with NATO standards:
monitoring of standardization in Military Industrial Complex (NATO Trust Fund) access to the NATO standardization data base temporary access for the 23 companies to the NATO Main Catalogue of References for Defence production scientific seminar on standardization with participation of NATO specialists education of more than 50 specialists of the Concern on NATO standardization with certificate issue
239 months 2015
MANAGEMENT DECISIONS: INTERNATIONAL COOPERATION
USA
Canada
France Italy Poland
Turkey Flir Systems Textron Systems Worlwide Aeros Corporation Barret
Pratt & Whitney Canada Inkas
Airbus DS Geo SA Thales Group Sagem
Iveco WB Electronics HSW Lubawa SA
PCO PGZ
ASELSAN ТАI HAVELSAN Roketsan
Thermal-imaging devices and systems Armored vehicles Early detection and warning systems Aviation engines for AN aircraft Field recovery vehicles and ambulance cars UAV Antiaircraft missile systems 155 mm self-propelled artillery system Steel armored plates High definition snapshot satellite reception Patrol aircraft and long-range radar detection
aircraft Airspace control system Engines for armored vehicles Fire control systems Aviation engines: turbojet, turbine, turbofan Radiolocation stations and modernization of
passive radars Armor vests and multispectral camouflage means
India HAL TATA
249 months 2015
MANAGEMENT DECISIONS: SCIENTISTS RECRUITMENT
INTERACTION WITH HIGHER EDUCATION INSTITUTES (45+), IN PARTICULAR:
COOPERATION WITH UKRAINIAN TOP BUSINESS SCHOOLS
TASKS
• Taras Shevchenko National University of Kyiv• National University “Kyiv-Mohyla Academy”• National University “Kyiv Polytechnic Institute”• National Technological University “Kharkiv Polytechnic Institute”• Karazin Kharkiv National University• Zhukovsky Kharkiv National Aerospace University• Kharkiv National University of Radioelectronics• Kozhedub Kharkiv Airforce University
Recruitment of scientists for resolving import substitution
issue
Recruitment of young spesialists
Use of scientific and technologic potential for further production of new weapons and military equipmentMore than 20 top managers have graduated with or are going to get MBA degree
Kyiv Mogylyanska Business School Kyiv International Institute of Management MiM
MAXIMUM DEVELOPMENT OF R&D SECTOR
259 months 2015
NEXT GOALS TO PURSUE
REFORMING OF DEFENCE INDUSTRIAL COMPLEX
269 months 2015
CAPITALIZATION IN THE MARKET THROUGH COOPERATION AND ORGANIZATION OF JOINT VENTURES WITH THE WOLRD LEADING COMPANIES
IMPORT SUBSTITUTION OF RUSSIAN COMPONETNS THROUGH COOPERATION WITH ENTERPRISES OF ALL LEGAL FORMS OF INCORPORATION
DEFENCE INDUSTRY REFORM: GOALS OF “UKROBORONPROM”
INVESTING IN DEVELOPMENT OR PROCUREMENT OF ADVANCED TECHNOLOGIESUkrainian army with the military
equipment, services and training in order to restore sovereignty and territorial integrity of Ukraine.
the Top-5 (list) of the world’s biggest exporters of innovative weaponry and aerospace products.
TO PROVIDE
TO ENTER
279 months 2015
DEFENCE INDUSTRY REFORM: RETROSPECTIVE AND THE FUTURE
PRIORITY: IMMEDIATE REPAIR AND RENEWAL OF THE MILITARY EQUIPMENT FOR THE ANTI-TERRORIST OPERATION ZONE (ATO)
PRIORITY: ORGANIZATION OF THE MASS PRODUCTION OF THE EXISTING DEVELOPMENTS. MODERNIZATION OF EQUIPMENT. PRODUCTION PROCESSES ESTABLISHED. PRODUCTION OF NEW EQUIPMENT FOR THE UKRAINIAN ARMED FORCES.
PRIORITY: DEVELOPMENT OF NEW TYPES OF EQUIPMENT WITH INVOLVEMENT OF GLOBAL PARTNERS. IMPORT SUBSTITUTION.
THE RESTRUCTURIZATION AND UNIFICATION OF THE DEFENCE INDUSTRY COMPLEX. VERTICAL INTERGRATION. LAUNCHING OF THE NEW SECTORS (FOR EXAMPLE CYBER-SECURITY). COMPLETE TRANSITION TO NATO STANDARDS.
2014 2015 2016 2017-2020
1555 units of Weapons and military equipment repaired:
Airplanes – 39 Helicopters – 9 Aircraft engines – 28 Equipment and armored combat vehicles – 916 Rocket and artillery armament and machinery – 563
2043 units of new and modernized examples of weaponry and military equipment including:
Armored vehicles – 35 pcs aircraft – 11 pcs aviation equipment – 32 pcs Rocket and artillery armament and machinery – 492 pcs Rockets and armament – 1 135 pcs Radar systems, air defence systems, communication and navigation equipment – 338
Establishment of the production of ammunition Production of multi-target Unmanned aircraft Establishment of the production of AN-family airplanes together with world’s leading companies.
Development of new innovative examples of armored vehicles
Development of new air defence systems
Global approach to the development of unmanned and robotized complexes for preserving life of the military personnel.
289 months 2015
2016: PRIORITY ACTIONS
Mastering gear cases overhaul and helicopter blade sets manufacturing
Mastering the production of barrels for artillery systems, armored vehicles and small arms
Design and production of AN-148 aircraft in command, ambulance and patrol variants, modernization of other modifications of AN aircraft
Development of ammunition production facilities for callibers various
Modernization of manufacturing facilities for mass production of OPLOT MBT and component parts for
armored vehicles, in particular, running gear and transmission (Dozor, BTR-4)
THERE IS A NEED FOR GOVERNMENT INVESTMENT INTO STRATEGIC PROGRAMS
Development of modern ammunition loading production facility
Development of modern production facility for manufacturing of armored vehicles parametric
engine line
Development of modern production facility for loading missile and ammunition combat parts with explosives
299 months 2015
TO ATTRACT STRATEGIC PARTNERS AND CREATE INNOVATIVE ARMAMENT THAT HAS NEVER BEEN PRODUCED IN UKRAINE
2016-2020: PROGRAM DEVELOPED
309 months of the year 2015
• Defence budget - USD 5 bln in 2015 and announced over USD10+ bln by 2020 - 30% CAGR (2014-2020)
• The total area of 604 000 sq km with 2295 km of borders with Russia to be protected
• Over 100 years of weaponry development and production traditions
• Strong fundamental and applied science schools• TOP European country for graduates in engineering;• Significant discount• Median EV/EBITDA only 4.3x, 50-60% discount to
Poland, Bulgaria, Turkey• Median P/E only 4.6x, ~70% discount to Greece• Excellent logistic location• Free trade area with over 730m consumers
WHY UKRAINE: GOOD COUNTRY INDEX:
Science and Technology parameters reported to GDP, rank
United Kingdom 1Hungary 9Ukraine 13Belgium 15United States 26Poland 32Italy 38Romania 48India 56Philippines 115
WORKFORCE:Hourly wages in manufacturing industry in select
countries, USD35.7US26.8Spain19.4Greece11.9Czech11.3Slovakia8.3Poland2.1China1.2Ukraine
Established and active Arms trading connections
with 90+ countries
TRADITIONS IN ARMS TRADE
8th world largest arms exporter in 2009-2013
50%+ export growth between 2004-2008
and 2009-2013
UKROBORONPROM IS OPEN FOR INVESTMENTS
11engineering, R&D centres
80 000qualified personnel, including
10+% engineering
9 000 000sq m equipped on 25 500 ha,
available for production
New defence designs and ideas,
waiting for investors
WHAT WE OFFER:
Invest in our new products and ideas
Use our trade experience and power to market your products
Develop your ideas with our R&D centers
Use our capacities and experience to produce your products
Combine your products with ours
Bring your technologies to our production sites
WE MAKE UKRAINE STRONGER!
36, Dehtiarivska str., Kyiv, 04199, Ukrainetel.: +38044-458-46-81 / fax: +38044-586-24-77
[email protected] / www.ukroboronprom.com