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

kanc@ukroboronprom.com / www.ukroboronprom.com