Capacity building 2014 INTEGRATED ANNUAL REPORT Short version 2014 INTEGRATED ANNUAL REPORT JSC ATOMENERGOMASH CAPACITY BUILDING THE COMPANY IN BRIEF ............................................................................ 2 2014 PERFORMANCE HIGHLIGHTS ........................................................... 3 KEY EVENTS IN 2014 ................................................................................... 4 MESSAGE FROM COMPANY MANAGEMENT ............................................. 6 BUSINESS MODEL .................................................................................... 12 BUSINESS GEOGRAPHY ........................................................................... 16 KEY PROJECTS .......................................................................................... 18 STRATEGIC VISION AND OBJECTIVES ..................................................... 19 ECONOMIC PERFORMANCE .................................................................... 20 COMMERCIAL ACTIVITIES ........................................................................ 22 INNOVATION ACTIVITIES .......................................................................... 23 ar2014.aem-group.ru RESULTS OF PRODUCTION ACTIVITIES .................................................. 24 OPTIMIZATION OF PRODUCTION PROCESSES ....................................... 25 JSC Atomenergomash provides access to the integrated interactive ENVIRONMENTAL IMPACT ....................................................................... 26 version of the annual report for 2014 for its stakeholders. This product PERSONNEL COMPOSITION .................................................................... 28 allows easy information presentation of the main annual results of the Company, as well as the access to additional data, which was not OCCUPATIONAL SAFETY .......................................................................... 30 included in the print version in a analysis-friendly format. SOCIAL RESPONSIBILITY ......................................................................... 31 CONTACT INFORMATION .......................................................................... 32 2014 PERFORMANCE HIGHLIGHTS THE COMPANY IN BRIEF Economic Operating performance performance JSC Atomenergomash (the «Company»), the Power Engineering Division Combined revenue 48.6 billion Products shipped to 13 nuclear power plants of Rosatom State Corporation (the «Division»), is one of the leading power EBITDA 4.1 rubles engineering companies in the Russian Federation and a provider of efficient Fulfillment of contractual obligations 97.1% integrated solutions for nuclear, thermal energy, gas and petrochemical industries, shipbuilding, and the market for special steels. Commercial activities Efficiency improvement The Division was formed to bring together the largest power engineering Market share in the Russian power Income from sales companies that possess unique technology and manufacturing expertise as well engineering industry 22% of non-core assets 2.4 billion rubles as a wealth of professional experience in order to address the need to reduce Share of revenue from new businesses 30% Effect of the RPS introduction 354 million rubles dependence on monopoly suppliers. Share of foreign orders in the total order book 24.3% Energy savings 1 million GJ Total value of concluded contracts 133.7 billion Transferred The Division is comprised of 30 businesses, including research, engineering, to outsourcing > 1,300 people Order book at the year-end 227.5 rubles manufacturing, construction and installation companies located in the Russian Labor productivity growth 12% Federation, Ukraine, the Czech Republic and Hungary. Equipment manufactured by the Division has been installed in more than Scientific Staff capacity 20 countries; 13% of the nuclear power plants in operation worldwide and 40% activities of the thermal power plants in the Russian Federation and FSU countries use Share of specialists under 32% 75 patents and intellectual property the Company’s equipment. 35 years old certificates 75% Engagement level 269 scientific publications Environmental Social responsibility responsibility Paid to the budget 3.8 billion rubles Environmental impact 190 million rubles mitigation costs Charity expenses 21.7 million rubles Reduction of CO2 emissions 10% 2 3 KEY EVENTS IN 2014 Commercial activities Staff capacity • JSC Atomenergomash concluded the first contract for complete delivery of • The A team of from the Volgodonsk branch of OJSC AEM Technologies won in reactor island equipment - nuclear steam supply systems (NSSS) for 4 units the TeMP-2014 tournament for young professionals TeMP-2014 organized by at Akkuyu NPP. Rosatom State Corporation and Rosatom Corporate Academy as part of work done to attract young professionals to work at the industry’s enterprises. • Following successful contract performance for the naval reactor for the new-generation icebreaker Arktika, two more contracts were concluded to • Two projects implemented by JSC Atomenergomash – the children’s energy supply two sets of RITM-200 reactor units to the Baltic Works for the other science and entertainment camp named NRJ-Camp and the knowledge new series icebreakers. continuity project tilted «The Generation Bridge» -– were awarded diplomas of the 1st All-Russian contest of employers’ best practices relating to work with • OJSC SverdNIIkhimmash signed a contract to design, manufacture and children, youth young people and the talent pool named called “Creating the supply equipment for production lines within the fuel fabrication module Future”, which was organized by the Ministry of Education and Science of the and refabrication facility under the Proryv Project undertaken to develop Russian Federation. technology for closing the nuclear fuel cycle loop. • The first Masters’ graduation ceremony was held at Department No. 76 “Power Engineering” of the Moscow Physics and Engineering Institute, at which diplomas were received by 10 employees of OJSC ZiO-Podolsk, JSC ZIOMAR EC and OJSC PZM. Scientific activities Efficiency improvement • The largest research center in the Russian power engineering industry • Manufacture of steam generators at the Volgodonsk branch of OJSC AEM is being created within the Division with a view to formatting a unified Technologies was restored, for which purpose – new production sites were technical policy in the industry and developing competitive import- set up and modern equipment was purchased. substituting power equipment through R&D. • PJSC EMSS successfully passed the first supervisory audit of the energy • JSC TsKBM has developed a new design of the main circulation pump management system based on ISO 50001:2011, which was conducted by the featuring a single-shaft arrangement with a water-cooled motor and official representative of the Certification Body for Management Systems water-cooled bearing units, which will increase the safety of nuclear power and Personnel of TUV-Turingen (Germany) in Ukraine. plants by replacing oil-based lubricants with water-based lubricants. • The RPS Industry Project “Creating a model workflow at the SUZ-ShEM-3 • Two teams of contributors from JSC NPO TsNIITMASH received drive case production site” enabled JSC OKB GIDROPRESS to increase the science and technology awards from the Russian Government for their quantity of manufactured products by 87% compared to the previous year. developments in 2013. 4 5 MESSAGE FROM COMPANY MANAGEMENT Dear colleagues and partners, I am pleased to present to you the Integrated Annual I would also like to acknowledge the excellent work done In recent years, Report of JSC Atomenergomash for 2014. The report by Atomenergomash and its enterprises in a number of focuses particularly on production, financial, social and strategic non-nuclear sectors. In particular, we received Atomenergomash has environmental issues related to the activities of the Power new contracts for the manufacture of reactor units for achieved sound operational Engineering Division of Rosatom State Corporation. the Russian icebreaking fleet. The Division is continuing to significantly expand its competencies in this market, results, acquired a In recent years, AEM has achieved sound operational results, including in the manufacture of non-power plant reputation as a reliable acquired a reputation as a reliable supplier of equipment, equipment. In the thermal power sector, two units with and integrated solutions for the nuclear and thermal power, equipment manufactured at the Division’s enterprises supplier of equipment, and shipbuilding, and gas and petrochemical industries. Among were successfully started at Yuzhnouralsk TPP in 2014. integrated solutions for the the major achievements of the Division in the year under Deliveries of equipment to Verkhnetagilskaya TPP review was the signing of the first contract for a set supply proceeded ahead of schedule. nuclear and thermal power, of reactor and turbine island equipment to Akkuyu NPP and shipbuilding, and gas and Hanhikivi NPP, which will allow us to deploy the production In terms of international relations, in 2014 an agreement chain designed within the Division. On the one hand, this is a was reached between an ALSTOM and Atomenergomash petrochemical industries. development of the capacities, but on the other hand - a high joint venture and a French partner concerning significant level of responsibility. In addition, in 2014, equipment was amendments to the terms of the previously