Evropeyskaya Elektrotekhnica has published its 2018 Annual Report (an example of voluntary disclosure)

Evropeyskaya Elektrotekhnica has published its 2018 Annual Report (an example of voluntary disclosure)

July 5, 2019 Moscow – PJSC Evropeyskaya Elektrotekhnica (hereinafter – the "Company" or the "Group"), a leader in the Russian engineering market, on July 2 published its 2018 Annual Report (an example of voluntary disclosure).

The Company's Report is posted on its corporate site in the section for Shareholders and Investors: link.

Ilya Kalenkov, General Director of PJSC Evropeyskaya Elektrotekhnica, remarked: "The last year was a challenging one for us, but it was very fruitful. We managed to achieve the best results in all 14 years of our time on the market. The positive operational and financial results of the Company's activity demonstrate the successful progressive implementation of our development strategy for the period to 2021, which we presented in autumn 2017 during the initial public offering (IPO) of the Company’s shares on the Moscow Exchange.

The growth in volume of our deliveries to customers in physical terms (+48%) significantly surpassed the growth of both the Russian economy as a whole (2018 GDP +2.3 %) and that of specialized markets, which has allowed the Company to gradually increase our market share.

We are playing an active role in the modernization of infrastructure and the production base on an unprecedented scale in Russia and neighboring countries. In general, it can be said that Russia is transitioning from a pattern of consumption growth to the model of industrial production growth. Our company significantly contributes to the success of hundreds of new construction and reconstruction projects in the manufacturing industry and other sectors of the economy.

The main drivers of the engineering market in Russia in 2018, and within the last five to six years, are the high-tech markets of the oil and gas and petrochemical industries, and also precision engineering. The launch of the CHPP Modernization Program in Russia (CDA-2) has created new, large-scale demand for engineering solutions in the electric power sector.

In 2018, the Company's total revenue increased by 26.6% to RUB 3,286.7 million. The net profit reached RUB 293.1 million, 2.1 times higher than in the previous year. We have simultaneously increased the scale of the Company's business volume (i.e. revenues) and its profitability indicators. The net profit margin increased to 8.9% in the reporting year (it was 5.2% in 2017), and the return on equity increased to 47.4% from 35.7% year-on-year. We are working towards growth in scale of business volume by continuing to develop the Company with no external borrowing.

We expect positive results for the Company's business development in 2019 and in the future. We are focused on a number of areas: continuous expansion of our order portfolio with both long-standing and new customers, continuation of our own R&D program, effective development of relations with key vendors on the engineering market, progressively bringing the subsidiary ROG-Engineering to nominal production volumes in 2019, expanding export of our high-technology products to the Middle East, Persian Gulf, Central Asia, Southeast Asia, North Africa and South America countries.”

As Stanislav Martyushev, Director of Corporate Communications and Investor Relations at Evropeyskaya Elektrotekhnica, commented: "We are continuing to keep the investment community updated about our progress in all aspects of our Company's development. Our Investor Relations program involves not only close cooperation with investors and analysts, but also regular publication of detailed IR materials, including quarterly operational IR releases, financial IR releases related to International Financial Reporting Standards, presentations for investors, and presentation versions of our annual reports. We are talking about the voluntary disclosure format, and, of course, the Company carries out full regulatory disclosure of information as an issuer of securities.

The 2018 Annual Report, now published, contains a number of new, contemporary components in terms of the document's content:

• For the first time, we publicly presented the Company's business model (pp. 26–27), which since 2018 includes the new area – Technological Systems; we expect it to show rapid growth and very high margins in the coming years. ROG-Engineering LLC is engaged in the development of technological equipment for the Oil&Gas and petrochemical industry at its industrial site in the Republic of Bashkortostan. This company is controlled by Evropeyskaya Elektrotekhnica Group of companies.

• the Report describes the main points which make the Company attractive to investors (p. 5),

• the document presents an analysis and describes the scope of the Company's core markets, their prospects, and also describes new large-scale sources of demand for engineering in Russia (pp. 17–23),

• it shows the Company's key assets and the geography of its activities (pp. 6–7),

• it provides information on the development of the Company's corporate governance system and achievements in this area in the reporting year (pp. 54–83),

• infographics are used to present the key information in the Report (pp. 2–3, 4–5, 6–7, 20–21, 26–27),

• the Annual Report's interactive table of contents  (p. 1) allows readers to quickly navigate to any section of the document (a quick return to the table of contents: Alt + Left Arrow).

Soon we will present the English version of the Report, as well as the interactive Annual Report (RUS, ENG), to foreign Stakeholders of the Company.

About Evropeyskaya Elektrotekhnica Group of Companies

• Evropeyskaya Elektrotekhnica Group of Companies (MOEX: EELT) offers comprehensive solutions in the field of engineering and technological systems for industrial, construction and infrastructural purposes: low and medium voltage distribution equipment, low current systems, lighting systems, industrial electric heating systems and equipment for the Oil&Gas and petrochemical industries.

• As a Russian joint-stock company with high corporate governance standards and financial sustainability, the Company's Mission is to improve people's quality of life with its entrepreneurial vigour and engineering competencies.

• The Company was founded in 2004 and unites a distribution center, engineering departments, an electrical laboratory and specialized production facilities. The company is one of the largest electrical equipment distributors in the Russian Federation and an industrial partner of leading companies on the international engineering market.

• The Company's logistics capabilities include delivery (including non-standard and oversize load) to customers throughout Russia, including hard-to-reach Northern areas, as well as to Central Asia, North Africa and the Middle East.

• The Company has its own production of the following equipment:

• Complete transformer substations;

• Medium voltage units;

• Low voltage panels of up to 6,300A (including metro solutions);

• Electric lighting systems;

• Industrial electric heating systems;

• Cabling and wiring products.

• Areas of application of the Company's competences:

• Oil&Gas industry;

• Electric power sector;

• Peaceful atom,

• Steel and mining industry;

• Engineering;

• Transport infrastructure, water supply and sanitation.

• Evropeyskaya Elektrotekhnica's customers include major Russian companies: Rosneft, Gazprom, NOVATEK, LUKOIL, Sibur and Nizhnekamskneftekhim. Supplies were successfully implemented for the following projects: Power of Siberia, Yamal LNG, Smolensk NPP, Data Center of Sberbank of Russia, the Domodedovo, Sheremetyevo, and Pulkovo Airports, etc.

• New areas of Company activity starting from 2018 include development and production of the following:

• Modular equipment for the Oil&Gas and petrochemical industries (Company subsidiary ROG-Engineering, Ufa, Republic of Bashkortostan, Russian Federation);

• Industrial specialized solutions for metro substations (currently being consolidated into the Group's structure: Metrotonnel, Moscow, Russian Federation);

• Industrial electric heating systems.

• Key financial indicators of PJSC Evropeyskaya Elektrotekhnica (IFRS):

The personnel headcount is around 350 people. Since September 2017, common shares of PJSC Evropeyskaya Elektrotekhnica are traded on the Moscow Exchange with trading code EELT.

In June 2018, the company was named Import Substitution Leader at the Leader of Competitive Sales annual national awards, in which 450 domestic suppliers from various industries took part.

Contacts:

PJSC Evropeyskaya Elektrotekhnica

Tel.: +7 (800) 600-71-18

Mailing address: 1 Lyotchika Babushkina Street, Building 3, Moscow, 129344

For more information, please contact:

Stanislav Martyushev

Director for Corporate Communications and Investor Relations

PJSC Evropeyskaya Elektrotekhnica

Tel. +7 (495) 660-71-18 ext. 164

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