76 Corporate Governance 95 98 Share Capital and 103 106 Sustainable Development 115 118 Supplements Information Disclosure Annual 2013 Report 1 www.uacrussia.ru/en Content JSC UAC at a Glance Aircraft production dynamics, units Revenue dynamics by types of activity, mln RUB 126 220,065 Total volume 104 of production 171,019 Total 2 Transport aircraft Joint Stock Company United Aircraft Aircraft production for military use, both The Corporation’s assets are located Corporation (UAC) comprises some for the Defence Ministry of Russia (heavy in various regions of Russia; there are 4 5 EBITDA 30 companies representing Russia’s multirole fighters Su-30 and Su-35, heavy also joint ventures with foreign partners Special aircraft 6,228 5,140 dynamics aviation manufacturing sector and strike fighter Su-34, medium multirole operating in Italy and India. Companies ranks among the major players in fighter MiG-29 and fighter trainer Yak-130), that are part of UAC provide employment to 30 2.3% (3.6%) Other the global market for civil and military and for the global market (the export a total of 93,950 people. 23 29,467 aircraft. The companies that are part versions of Su-30, MiG-29 and Yak-130), 19,473 of the Corporation hold titles to such occupies a leading share in the composition Under the Presidential Decree No. 122 13.4% (11.4%) dated February 3, 2007 “On Some Civil aircraft Revenue earned on modernisation universally renowned aircraft brands as of the Corporation’s production and and overhaul services SSJ, MS-21, Sukhoi, MiG, Ilyushin, Tupolev revenues. Since 2013 the bulk of UAC’s Aspects of Joint Stock Company United 8.3 and Yak. military aircraft production has been Aircraft Corporation”, UAC was included 32,265 33,397 intended for the domestic market. on the list of strategic enterprises and The Corporation was established according joint stock companies. Pursuant to 91 15.2% (18.9%) 2.6 EBITDA margin, % to the Presidential Decree No. 140 The Corporation strives to expand Decree No. 1092-r by the Government Revenue earned on research of February 20, 2006 “On Joint Stock the share of civil aircraft in its portfolio: of the Russian Federation dated August 23, and development services Company United Aircraft Corporation” in the rates of serial production of SSJ 100 2007, UAC was included on the list of open 24,117 26,266 order to maintain and develop further are being stepped up; a project to joint stock companies in respect of which 75 18,178 the scientific and production potential design a family of advanced narrow- the position of the shareholder – the Russian 11.9% (14.1%) of Russia’s aircraft sector, to contribute to body 150- to 180-seat MS-21 aircraft is Federation – on a number of important Revenue on sales of aircraft components and related products safeguarding national security and defence implemented; the prospects of designing issues related to management is determined capability and to achieve the concentration a narrow-body 120- to 140-seat aircraft by the Government of the Russian Federation. 125,795 EBITDA, of intellectual, industrial and financial on the basis of SSJ 100 and МS-21 and mln RUB resources with a view to implementing a wide-body aircraft, in collaboration with As of December 31, 2013, 87.67% aircraft development programmes. foreign partners, with a capacity of 200- of UAC’s outstanding ordinary Military aircraft 4,483 350 passengers are being examined. shares are owned by the Russian 88,936 The business areas of the production The substantial contractual backlog Federation, 8.91% of shares are held and other facilities making up UAC for UAC’s core civil aircraft products by the Vnesheconombank and include development, construction, represents workload for the Corporation’s 6.42% are in free-float. Under testing and maintenance support, as the state privatization program 2012 2013 serial production facilities in the mid-term. 57.2% (52.0%) well as service support for military, civil, it is planned to sell part Revenue earned on aircraft transport and special aircraft. UAC’s The Corporation focuses on of the UAC stock owned construction contracts business also embraces aircraft equipment the implementation of new aircraft by the state before modernisation, overhauling and recycling, engineering technologies and designs, 2024 and reduce training and retraining of human resources, fostering cooperation with Russian its share to 50% and professional development of flying and foreign R&D establishments and plus 1 share. personnel. universities. 2012 2013 2012 2013 Source: ОАО “ОАК”. Key DISCLAIMER 2 Figures Key Events 4 of the Reporting Period This Annual Report of JSC UAC (hereinafter the “Annual Report”) is not an offer or invitation 126 Geography to make an offer (advertisement) in relation to aircraft 10 of Operations purchase of, or subscription to securities of manufactured JSC UAC (hereinafter – Corporation). by UAC in 2013 Corporation Neither the Annual Report, nor any of its part, 11 Structure 25 nor the fact of its presentation or distribution SSJ 100 aircraft serves as a basis for entering into any Product delivered contract or taking an investment decision, Statement 12 Portfolio to customers in 2013 so the Annual Report should not be relied on in this respect. JSC UAC does not bear by Senior Management responsibility for the consequences of use of Statement by the Chairman the opinions contained herein or in statement, or incompleteness of the information. 18 of UAC Board of Directors Statement by the President Forward-looking statements This Annual Report includes statements that 20 and Chairman of UAC Board are, or may be deemed to be, “forward-looking of Management statements”. These forward-looking statements can be identified by the fact that they do not only relate to historical or current events. Forward-looking statements often use words such as “intend”, “anticipate”, “target”, “expect”, “estimate”, “expected”, “plan”, Strategy “goal”, “believe”, or other words of similar Overview of Domestic meaning. By their nature, forward-looking 26 and External Aircraft Markets statements involve risk and uncertainty because they relate to future events and Strategy circumstances, a number of which are 31 Overview % beyond Corporate’s control. As a result, actual future results may differ materially CAGR20 of UAC’s revenue Summary of Results Priority for last 6 years from the plans, goals and expectations set Operational out in these forward-looking statements. Any 36 Projects forwardlooking statements made by or on 56 Results Business Model: behalf of JSC UAC speak only as at the date Financial 220 of this announcement. Save as required by 40 Aircraft Development Stages bln RUB 66 Results any applicable laws or regulations, JSC UAC Investment consolidated revenue undertakes no obligation publicly to release in 2013 according to the IFRS 42 Programme the results of any revisions to any forward- looking statements in this document that may R&D occur due to any change in its expectations 43 or to reflect events or circumstances after the date of this document. over Risk Information obtained from third parties 650 Management aircraft 50 Besides the official information on the activity of JSC UAC, this Annual Report contains firm order backlog 93,950 information obtained from third parties. This employees information has been received from sources UAC’s total headcount which, in the opinion of JSC UAC, are reliable. Corporate as of December 31, 2013 Nevertheless, we do not guarantee accuracy of this information which can be shortened or Governance incomplete. Corporate Using management accounting and 76 Governance Principles reporting The information contained in this Annual Structure of Corporate Governance Share Capital Sustainable Report is based also on the Corporation’s 1,174 77 and Management Bodies and Information Developmentе management accounting and reporting, so it may deviate from the rules and principles that bln RUB Disclosure General Meeting firm order backlog HR apply under IFRS. The Corporation believes 78 of Shareholders Share 106 Policy that these management accounting and reporting indicators may provide investors 98 Capital Structure Board Sponsorship with additional information about the current 78 of Directors UAC Shares 113 and Charity business of the Corporation. The indicators of 101 on Stock Exchanges management accounting and reporting should Committees Ecology not be considered without or as replacement 85 of the Board of Directors Dividend 114 of relevant norms and principles of IFRS. In 101 Policy addition, other companies in the industry may President keep a record of these indicators in other 89 and the Management Board Disclosure ways. The Corporation encourages investors 102 and Investor Relations to review all financial statements of JSC UAC Monitoring in their entirety and not to rely on any single 94 and Audit financial figure in this Annual Report. 118 Supplements About 18 Statement 23 26 Strategy 53 56 Summary of Results 73 the Corporation by Senior Management Key Figures Key Operational and Financial Figures of Corporation in 2008 –2013 Unit Indicator 2008 2009 2010 2011 2012 2013 of measurement Aircraft delivery units 53 95 74 102 94 111 Revenue mln RUB 87,465 98,572 140,682 161,653 171,019 220,065 Gross profit (loss) mln RUB 28,229 22,090 36,439 50,317 35,887 44,401 Gross margin % 32.3 22.4 25.9 31.1 21.0 20.2 Profit (loss) from operations mln RUB (8,501) (14,986) (11,845) 3 602 2,826 Operating margin % –9.7 –15.2 –8.4 0.0 0.4 1.3 Profit (loss) for the