Consolidated Annual Prospectus

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Consolidated Annual Prospectus Table of contents 1 CEO’S WORD 2 ABOUT AVIA SOLUTIONS A) coMPANY IN BRIEF B) business PHilosoPHY C) MAIN BRANDS AND services D) THE GROUP 3 RESULTS A) KEY indicators B) OPERATING FIGURES C) IMPORTANT EVENTS 4 MARKET A) OVERALL coMPANY PROFILE BY business SEGMents B) AIRCRAFT MAINTENANCE, REPAIR AND overHaul (MRO) C) AIRCRAFT GROUND HANDLING AND FUELING D) Pilot AND CREW TRAINING 5 CORPORATE GOVERNANCE A) THE board B) toP MANAGEMENT C) Personnel 6 SHARES AND SHAREHOLDERS 7 INFORMATION A) CONTACTS 1 CEO’S Word 2013 was a notable year, marking the milestone between the initial active spur of our businesses and the future development of the Group. In the beginning of 2013 we divested the most risky of our segments – the commercial charter flights business. Once Avia Solutions Group completed the main stage of strengthening its presence in new markets, we felt that it was the right time to focus on further development of aviation support activities, including the MRO, aircraft handling and aviation training segments. Hence, we made a strategic decision to enter the helicopter MRO business by acquiring an already well-established MRO centre Helisota. Backed by the long-standing expertise of the Helisota’s team, we are confident that the synergy of our experience is a solid basis to expect a great future with regard to our performance in the global helicopter maintenance segment. KlasJet is yet another business which emerged within the Group last year. Unlike the commercial passenger airline industry, business aviation is much more stable and allows to achieve higher margins. Moreover, as the regional economy is on a path of recovery, the improving climate is paving the way for higher demand for business charter aviation as the most convenient means of transportation for various corporate and private clients. The third major project launched in 2013 lies within the airport management segment. We were very delighted and proud to win the tender for the construction and development of the fourth Moscow airport – Ramenskoye International, also known as Ramport. Without any doubt, this is one of the most ambitious projects we had. Moreover, its success is vital for the entire airport infrastructure of the Russian capital which is currently struggling with serious undercapacity. Along the development of Ramport, we are also plan- ning to add new airport projects to our portfolio over the following several years. Apart from new acquisitions, we also spent the year developing our current businesses. For instance, in December 2013 we completed the construction of a brand new 8400 sq. m. MRO centre in Kaunas, Lithuania. The size of the brand new hangar allows fitting both narrow- and wide-body aircraft, including Boeing 747 and Boeing 787 Dreamliner. Furthermore, we made an important breakthrough in the Asian Pacific market by establishing a strategic partnership with an Indonesian carrier Cardig Air. In the meantime, endeavouring to support the latest changes and the upcoming development, the Group welcomed new top manag- ers to its team. We are certain that their long-standing executive experience, unprecedented knowledge and outstanding personal skills will lead our products, companies and the entire Group towards new achievements and even better performance over the fol- lowing years. With regard to future development, we see 2014 as a certain transition year in the course of which we will be carefully monitoring, evaluating and discussing the direction that the entire global aviation industry is moving towards. Sticking to the philosophy of an organic growth, we believe it is the time for us to focus on the stronger development of our existing services and the efforts to strengthen our position in the current markets rather than continue with further expansion to new segments and regions. It is the time for us to provide our customers, partners and investors with an even higher value through the enhanced quality, flexibility and reliability of our services. Nevertheless, we will stay open for new opportunities and ideas, as we always do. General Manager Linas Dovydėnas 2 About AVIA SOLUTIONS GROUP A) What is Avia Solutions Group? Avia Solutions Group AB is a group of companies globally providing aviation business solutions for aircraft owners and operators. The Group integrates MRO services & supply chain, crew training, aviation staff leasing, ground handling & aircraft fuelling, aircraft management and business charter service providers. Shares of Avia Solutions Group AB are listed on the Warsaw Stock Exchange (ticker- AVIASG). Via the services of its subsidiaries the group acts across Europe, the CIS and Asia-Pacific regions with its representative offices located in Lithuania, Poland, Italy, the United Kingdom, Russia and Malaysia. The Head Office is situated at Smolensko st. 10, Vilnius, Lithuania. The group provides a wide range of aviation services and thus generates big cross-selling opportunities. Moreover, being cost-effec- tive, all subsidiaries have a competitive edge over its competitors. The group operates in four business segments: • Aircraft Maintenance, Repair and Overhaul (MRO) • Crew Training • Aircraft Ground Handling & Aircraft Fueling • Business Charter Operations B) Business Philosophy One- stop- shop for the integrated aviation services. To create value for hareholders and customers by providing professional and high quality of aviation related services. Our activities are based on the following values: Professionalism – we explore every situation with precision and treat every case uniquely when creatingn solutions. Responsibility – we take 100% responsibility for our solutions and services. Flexibility – we work without any prejudices. That is the major success factor in finding the best way to improve any situation C) Main Brands and Services MRO Services and Supply Chain Solutions Ground Handling and Fuelling Crew Training & Aviation Staff Leasing Private Jet Charter Flights & Aircraft Management D) The Group (effective holding of the companies in %) Avia Solutions Group AB MRO Services and Supply Chain Solutions Ground Handling and Fuelling D) The Group (effective holding of the companies in %) Charter operations, Business Charter Operations Crew training Aviation staff leasing 3 RESULTS A) Key Indicators B) Operating Figures C) Important Events In 2013 Avia Solutions Group AB and its subsidiaries (hereinafter – the Group) earned net profit from continuing operations of LTL 15.3 million (in 2012: LTL 26.1 million). Comparing with 2012 the consolidated revenue from continuing operations has increased up to LTL 554 million, or by 3.4 % as compared with LTL 536 million in 2012. Key events during 2013 are summarized below: FL Technics AB became an exclusive sales and marketing representative of the global aviation components supplier Seal Dynamics in Russia, the CIS and February twelve CEE states FL Technics AB received ISO 9001:2008 certificate. The project was funded by European Regional Development Fund (ERDF) under European Growth Programme’s second priority ‘Increasing business productivity and improving August the business environment’ measure ‘Process LT’ October New subsidiary Verslo skrydžiai UAB was established FL Technics AB became the first Tronair authorized service center in Eastern November Europe, Russia and the CIS FL Technics AB has signed an agreement with Lithuanian Business Support Agency regarding LTL 10 million (EUR 2.9 million) European Union Structural Funds grant. The EU Structural Funds grant will finance part of equipment cost for the new FL Technics hangar facility in Kaunas, Lithuania Avia Solutions Group AB completed the acquisition of 100% of the share November capital in Helisota UAB and its subsidiary Kauno aviacijos gamykla UAB 4 MARKET A) Overall Company Profile by Business Segments The group operates in three business segments: Aircraft Maintenance, Repair and Overhaul (MRO), Crew Training and Aircraft Ground Handling & Aircraft Fueling. Avia Solutions Group: Sales breakdown by segments in 2009-2013 in % , LTL in millions Avia Solutions Group: Sales geographical segmentation in 2013 in % B) Aircraft Maintenance, Repair and Overhaul (MRO) Segment Activities in MRO business segment are conducted by FL Technics AB, FL Technics Jets UAB, Locatory.com AB, FL Technics Line OOO, Storm Aviation Ltd and include: • Base maintenance services • Line maintenance services • Components Maintenance • Engineering services • Spare parts and consumable sales • Technical training and consulting services • Engine management services • Aircraft parts marketplace services • Business jet maintenance and repair services • Other related services In December 2013 the Group acquired a new subsidiary Helisota UAB (Helisota) to increase the presence in the MRO business seg- ment in the new Helicopter MRO sub-segment. MRO business segment: Sales geographical segmentation in 2013 in % Key Events in MRO Business Segment during 2013: • FL Technics AB became an exclusive sales and marketing representative of the global aviation components supplier Seal Dynamics in Russia, the CIS and twelve CEE states • FL Technics received ISO 9001:2008 certificate. The project was funded by European Regional Development Fund (ERDF) under European Growth Programme’s second priority ‘Increasing business productivity and improving the business environment’ measure ‘Process LT’ • FL Technics Jets UAB became the first Tronair authorized service center in Eastern Europe, Russia and the CIS • FL Technics AB has signed an agreement
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