RU EN
Selected: Clear list

Transparent corporate
strategy contributes
to open business
relationships

Chapter 1.
General

General Information Concerning TVEL Fuel Company

Fuel company comprises subsidiaries for fabrication of nuclear fuel, uranium conversion and enrichment, production of gas centrifuges, as well as research, design and development organizations.

JSC “TVEL” is a parent company of the Fuel Company of ROSATOM State Atomic Energy Corporation.

The full company name: Joint Stock Company “TVEL”.

Abbreviated company name: JSC “TVEL”.

The company is registered by Moscow Registration Chamber on September 12, 1996.

Location: 24 Bolshaya Ordynka St, Moscow 119017, Russian Federation

Mailing address: 49, Kashirskoe Highway, Moscow 115409, Russian Federation

History of the Company: see official website www.tvel.ru.

Electronic versions of TVEL FC 2014 Report and prior reports are available at: http://www.tvel.ru/wps/wcm/connect/tvel/tvelsite/finance/annual_report/.

Basic Characteristics

The core activity of TVEL FC is development, production and sale of nuclear fuel for power and research reactors in Russia and abroad, as well as of associated nuclear and non-nuclear products. All activities comply with safety requirements: nuclear, radiation, industrial, fire, environmental, labor safety, physical protection of nuclear facilities and emergency preparedness.

TVEL FC takes a central place in the structure of ROSATOM State Corporation at the front end nuclear fuel cycle.

TVEL FC Position in Nuclear Technological Chain

TVEL Fuel Company is the only supplier of nuclear fuel to Russian nuclear power plants. It provides with nuclear fuel 78 power reactors in 15 countries all over the world, research reactors in 9 countries worldwide and transportation reactors of the Russian Nuclear Powered Fleet.

One out of every six power reactors in the world operates with fuel manufactured by TVEL FC [ i ].

TVEL FC in the Global Market of Nuclear Fuel

Specialization of TVEL FC Subsidiary Enterprises in Nuclear Products Manufacture

Regions of presence of JSC “TVEL” enterprises

SC “TVEL” is the management center of the Fuel Company.

Subsidiaries of the Fuel Company are located in 11 regions of the Russian Federation.

Social environment of TVEL FC operation is characterized by the fact that three enterprises of the Company are located within Closed Administrative Territorial Units [ i ] (Seversk, Novouralsk, Zelenogorsk), and one is located within a mono-town (Glazov). Those enterprises are town-forming organizations and major taxpayers [ i ].

Core business of the Company involves production of nuclear fuel, besides TVEL FC supplies the Russian and international market with the wide range of non-nuclear products:

  • zirconium
  • lithium
  • calcium
  • magnets
  • thin-walled pipes
  • polishing powders
  • pinch rolls, zeolite catalysts
  • superconductor materials

Hydrometallurgical, metalworking, machine-building and rolling facilities operate successfuly at TVEL FC enterprises supported by research and development subdivisions.

The Fuel Company consists of four complexes for type-specific production of the front end of nuclear fuel cycle (FE NFC).

Separation-Sublimation Complex comprises of a group of integrated plants for enrichment and conversion of uranium

11
The Fuel Company subsidiaries are located in 11 regions of the Russian Federation.

Enterprises of the Separation-­Sublimation Complex

Indicator, unit of measurement SC “AECC” SC “PA ECP” SC “SGChE” SC “UEIP”
Revenue (net) from sales, RUB mln 4,405 12,134 14,722 20,543
Gross profit, RUB mln 2,141 3,448 3,532 9,022
Profit tax, RUB mln 182 556 247 1,533
Net profit, RUB mln 581 444 316 6,114
Net assets, RUB mln 15,327 33,543 29,659 57,676
Labor efficiency, RUB mln/person [ i ] 3.5 5.6 3.4 7.8
Environment expenses of TVEL FC subsidiaries, RUB mln 57.9 59.2 892.2 775.8
Average headcount [ i ] , persons 1,253 2,181 4,400 2,640

Nuclear Fuel Fabrication Complex comprises of industrial enterprises that manufacture nuclear fuel for various reactors

Enterprises of the Nuclear Fuel Fabrication Complex

Indicator, unit of measurement MSZ NCCP CHMZ MZP
Revenue (net) from sales, RUB mln 19,844 5,453 11,925 661
Gross profit, RUB mln 7,228 1,955 3,250 28
Profit tax, RUB mln 1,144 307 426 15
Net profit, RUB mln 5,105 655 1,222 2
Net assets, RUB mln 32,929 15,788 14,507 3,009
Labor efficiency, RUB mln/person. 4.5 3.2 3.34 3.2
Environment expenses of TVEL FC subsidiaries, RUB mln 105.2 155.5 217.8 0.1
Average headcount, persons 4,226 1,674 3,543 205

Gas Centrifuge Complex is a group of enterprises producing gas centrifuges and accessories for enterprises of the separation-sublimation complex

Key Performance Indicators of the Subsidiaries

Indicator, unit of measurement PJSC “KMP” VPA “Tochmash” UGCMP LLC
Revenue (net) from sales, RUB mln 3,388 2,390 1,583
Gross profit, RUB mln 643 372 252
Profit tax, RUB mln 10 33 2
Net profit, RUB mln 39 130 6
Net assets, RUB mln 3,542 3,509 4,551
Labor efficiency, RUB mln/person. 2.4 1.5 3.5
Environment expenses of TVEL FC subsidiaries, RUB mln 20.3 24.2 0
Average headcount, persons 1,402 1,588 455

Enterprises of tahe Research and Engineering Complex

Novouralsk Research Design Centre LLC (NRDC LLC), Novouralsk, the Sverdlov Region.
www.nrdc.ru

SC EDB-Nizhniy Novgorod, Nizhny Novgorod.
www.okb-nn.ru

SC “Centrotech-SPb”, Saint Petersburg.
www.ecrgc.ru

Uralpribor LLC, Novouralsk, the Sverdlov Region.
www.uralpribor.com

Stock Company “A.A. Bochvar High-technology Research Institute of Inorganic Materials” (SC “VNIINM”), Moscow.
www.bochvar.ru

SC VNIINM is a leading organization of ROSATOM State Corporation on the issues related to material engineering and fuel cycle technologies, fissile and nuclear materials processing.

Key Performance Indicators

Indicator, unit of measurement 2012 2013 2014
Revenue (net) from sales, RUB mln 3,200 4,379 3,996
Gross profit, RUB mln 771 829 375
Profit tax, RUB mln 108 94 16
Net profit, RUB mln 415 306 -21
Net assets, RUB mln 5,602 5,968 5,372
Labor efficiency, RUB mln/person. 2.7 4.2 1.9
Environment expenses of TVEL FC subsidiaries, RUB mln 7.3 39.3 57.8
Average headcount, persons 1,179 1,158 1,125

Business Model and Value Creation [ i ]

Value (integrated value) generated by the Fuel Company involves both obtaining of marketable product and increase of profitability of TVEL FC enterprises, and also a great variety of economic, social and environmental effects of activities. TVEL FC seeks to enhance positive effects of its activity.

The Fuel Company holds an important place in the national economy and has a considerable impact on the regions of its presence.

The Company activity is marked with a specific uncontaminating environmental impact of its production facilities and indirect environmental impact of its key products, in particular, at the back end of the nuclear fuel cycle.

The Company activity depends on a great number of external and internal factors, it provides for close cooperation with stakeholders.

This cooperation is characterized by the fact that tangible and intangible resources (financial, environmental, production, human, social and intellectual capitals) used by the Company, are controlled by TVEL FC and its stakeholders . Therefore, conversion of capital in the course of activities is of great importance to the Company and its team.

Business model describes the activity for integrated value creating as a system to the capital employed, production process, products and results obtained. The purpose of the system is to achieve strategic goals through implementation of competitive advantages. The business model considers activity-specific risks, possibilities and risk-management capabilities of the Company.

TVEL FC Operational Resources

Capitals Internal Resources of TVEL FC External Resources
Financial
  • Undistributed profits and monetary assets
  • Accumulated reserves of TVEL FC
  • Consolidated investment resources
  • Sectoral reserves
  • Means of the Federal target programs
  • Loans, credits, subsidies
Natural
  • Proprietary and leasable land resources
  • Environment
  • Natural raw materials
Industrial
  • High technology production base, materials (including regenerated and waste uranium)
  • Public infrastructure (roads, communication facilities etc.)
Human
  • Staff
  • Subsidiaries personnel
  • Potential workers
  • Youth
  • Experts, consultants
  • Long-service employees, retirees
Social
  • Reputation of the Fuel Company and its enterprises
  • Position in the Global Market of FE NFC
  • Established relations with domestic and foreign customers and suppliers.
  • Competitive and high quality outputs
  • Recognisable and reputable brand name
  • Internal relations of TVEL FC
  • Public image of the country and nuclear industry
  • Interrelations in supply chain
  • Initiatives of the state, ROSATOM State Corporation
Intellectual
  • Intellectual property assets of TVEL FC
  • Global achievements in science and engineering
  • Domestic projects
  • National intellectual resources

Business model presents: capitals (resources and relations) of the Fuel Company, performance results ensuring changes of capitals, including increment of resources and consolidation of relations with stakeholders.

Results 2014 affecting changes of the Company capitals

Capital Results 2014
Financial
  • Net income: RUB 20,870 mln
  • Increase in labor efficiency in 2014/2013: 22.2%
  • Dividends paid in 2014: RUB 16,291 mln
  • EBITDA margin: 35.5%
  • General savings in procurement: RUB 2,601 mln
Natural
  • Radionuclide contamination of new territories: none
  • INES-rated events: 0
  • Environmental expenses: RUB 2,371.2 mln
  • Water consumption: decrease by 3.5%
  • Power and heat consumption: decrease by 4.6%
  • Total primary energy consumption: decrease by 2.9%
Industrial
  • Production plan: 100%
  • Net assets gain in 2014/2013: 2%
  • Investment program financing volume: RUB 29,466 mln
Human
  • Average salary rate growth in 2014/2013: 11.3 %
  • Growth of submitted/implemented suggestions for improvement: 68,488/55,373
  • Growth of submitted and implemented suggestions for improvement in 2013/2014: 70%
  • Social programs expenditures per 1 employee: RUB 56.0 thous.
  • Labor safety expenditures per 1 employee: RUB 79 thous
  • Trained: 11,227 employees
  • Twofold LTIFR [ i ] reduction in 2014/2013
  • Growth of personnel involvement in 2014/2013: 5% from 76% to 81%
Social
  • Gross tax allowances to Federal, regional and local budgets: RUB 25,774 mln
  • Financing of charity and social initiatives: 245.3 mln RUB
  • Reclamations from the products consumers: 0
  • Internship at TVEL FC enterprises: 746 students
  • Employed graduates of secondary specialized colleges and universities: 81
Intellectual
  • Number of intellectual property objects registered in 2014: 83
The main target of the business is profit earning for sustainable development of the Company and its stakeholders.

Business Model of TVEL FC

* Refer to the tables “TVEL FC Operational Resource” and “Results 2014 affecting changes of the Company capitals” of this Chapter.

Financial Capital is most vital to TVEL FC. Capital gains ensure current operations and promote investments thereby generating growth of other capitals used by the Fuel Company.

Natural Capital is transformed in the course of productive activities of the Fuel Company. There are two core businesses of the Company, i.e. nuclear and non-nuclear products manufacture. The business model scheme represents detailed nuclear production chain from uranium concentrate processing to nuclear fuel assemblies and customers servicing. Emphasis is placed on the Company’s competence in the use of both natural, and regenerated, waste uranium.

One of the most important factors ensuring efficient business is availability of high technology base, modern equipment, machinery and materials (Production Capital) that enable timely and full implementation of production plans.

Research and development activity (Intellectual Capital) related to improvement of the industrial and technological base has considerable impact on TVEL FC business and the entire nuclear industry and Russian science on the whole.

Priorities for the nuclear industry involve development and enhancement of personnel qualification (Human Capital). It is impossible to overestimate the degree of business dependence on competent staff and impact of human capital on the Company.

The relationship between TVEL FC and its stakeholders determines the Social Capital which has a considerable impact on the business. The most important elements of social capital are relationships in supply chain, interaction with authorities and local population in terms of development of regions of presence, and finally, relations with the Customers. TVEL FC is a reliable supplier notwithstanding the political environment, ready to offer a flexible and sustainable solution to its partners.

TVEL FC is a responsible company that interacts with the environment and generates both intrinsic value and value to its stakeholders.

The positive effects of TVEL FC activities on the stakeholders:

  • dividends;
  • taxes and deductions;
  • promotion of nuclear and radiation safety;
  • development of sectoral research and fundamental science;
  • development of personnel within the regions of presence;
  • promotion of social accord and business activity in the regions of presence (for more detailed information refer to “Respect” Section).
Management system and Corporate Values are the central elements of business model of TVEL FC, since they contribute to effective use of resources by the Company and generate positive effects of the Company’s activity.
2
core businesses

Mission, Goals, Values of TVEL FC

Mission of TVEL FC is to meet the requirements of the customers of the Fuel Company in the sphere of nuclear fuel cycle and in the related sectors, in strict compliance with requirements of safety, security, environmental and social awareness.

Strategic vision of TVEL FC is focused on global leadership in FE NFC and achievement of global competitiveness in NFC in an atmosphere of social cohesion.

Workers of the Fuel Company are governed by the Values shared by all organizations and enterprises of ROSATOM State Corporation. These core values were formed throughout the course of history of nuclear sector in Russia and conform with global approach to determination of fundamental principles of sector performance. In 2014 TVEL FC has implemented a pilot project of ROSATOM State Corporation for translation and strengthening of ROSATOM State Corporation’s values in corporate culture of the Fuel Company (for details about the project please refer to Corporate Culture Section) [ i ].

Values of TVEL FC

Chapter 2.
Global Presence