eurochem-annual-report-2011

More documents

Recommendations

Info

Business review The global industry – peer analysis EuroChem is unique within the fertilizer sector. Already a major player, it stands out both as a privately-held business and as a company with exceptional strategic vision and significant expansion plans. No other company of this scale in the sector boasts a comparable potential for purely organic growth. Today, EuroChem represents 1.9% of annual global mineral fertilizer production measured by MMT of nutrient content. By growing faster than the market and adding potash to our product mix, we aim to account for 3.3% of annual global production within the next five years. Production in nutrient content (MMT p.a.) 2006 2011 2016 10-year CAGR Nitrogen (N) 2.0 2.2 3.5 5.8% Phosphates (P O ) 2 5 0.9 1.1 1.7 6.0% Potash (K 2O) 0.1 0.1 1.3 32.3% Total EuroChem 3.0 3.4 6.4 8.0% Nitrogen (N) 96.3 106.9 113.0 1.6% Phosphates (P 2 O 5 ) 38.0 40.7 44.9 1.7% Potash (K 2O) 26.7 29.2 36.3 3.1% Total world 161.0 176.9 194.3 1.9% EuroChem market share 1.9% 1.9% 3.3% Sources: Company data, CRU, Fertecon, IFA. We view Europe and the CIS as our core markets. In 2011, we further developed our distribution capabilities in the CIS and set out to expand our production geography with facilities in Belgium. In sales of nutrient content, our 2011 market share was 2.6% in Europe and 14.2% in the CIS. 16 EuroChem Annual Report and Accounts 2011 Data on 2011 sales in MMT of nutrients Europe Total market EuroChem EuroChem’s share Nitrogen (N) 11.23 0.22 1.99% Phosphates (P O ) 2 5 2.64 0.21 8.02% Potash (K 2O) 3.07 0.00 0.10% Total N, P, K 16.94 0.44 2.59% CIS ex-Russia Total market EuroChem EuroChem’s share Nitrogen (N) 2.34 0.18 7.84% Phosphates (P 2 O 5 ) 0.58 0.10 17.08% Potash (K 2O) 0.84 0.01 1.49% Russia Total market EuroChem EuroChem’s share Nitrogen (N) 1.58 0.44 27.59% Phosphates (P 2 O 5 ) 0.55 0.14 26.12% Potash (K 2O) 0.36 0.01 3.21% Russia and CIS Total market EuroChem EuroChem’s share Nitrogen (N) 3.91 0.62 15.81% Phosphates (P 2 O 5 ) 1.13 0.24 21.47% Potash (K 2O) 1.20 0.02 2.01% Total N, P, K 6.24 0.89 14.18% Sources: Company data, CRU, Fertecon, IFA. * Because of rounding, some figures may not exactly add up to the totals. We use the trailing 12 months (LTM) figures provided by those fertilizer companies which publicly report their financial information as one of the ways to benchmark EuroChem’s performance. For 2011, EuroChem ranked eighth in terms of revenues and seventh by EBITDA and operating cash flow – providing it with a 38% EBITDA margin, the fourth highest in the sector on an LTM basis. Our solid cash flow generation provided us with the flexibility to pursue both organic and M&A growth opportunities. As in the previous year, EuroChem ranked third globally in term of capital expenditure. In 2011, we spent an aggregate USD 810m on upgrading existing production capacity, launching new product lines and on our ambitious potash strategy.
Ranking by nutrient capacity MMT p.a. PotashCorp Mosaic Yara Uralkali CF Industries Belaruskali Agrium OCP ICL K+S EuroChem PhosAgro TogliattiAzot UralChem Acron 2.6 1.9 1.4 4.3 3.6 2.7 Ammonia (N) Phosphoric Acid (P 2 O 5 ) Potash (K 2 O) Post completion of both potash projects 1 12 months ended 31 December 2011. 2 12 months ended 30 November 2011. 3 12 months ended 30 September 2011. 4 12 months ended 30 June 2011. 5.5 4.7 4.4 4.4 Sources: Company data, CRU, Fertecon, IFA. Operating cash flow USDm PotashCorp 1 Mosaic 2 CF 1 ICL 3 Agrium 1 Yara 1 EuroChem 1 K+S 1 Uralkali 4 PhosAgro 4 Acron 3 114 983 1,226 1,200 1,193 1,352 1,350 1,315 7.2 6.9 6.7 4.8 2,079 2,411 11.1 13.2 3,485 Sales USDm Agrium 1 Yara 1 Mosaic 2 PotashCorp 1 K+S 1 ICL 3 CF 1 EuroChem 1 PhosAgro 4 Acron 3 Uralkali 4 EBITDA USDm PotashCorp 1 Mosaic 2 CF 1 Yara 1 Agrium 1 ICL 3 EuroChem 1 K+S 1 Uralkali 4 PhosAgro 4 2,074 2,054 Acron 3 635 Capex USDm PotashCorp 1 Mosaic 2 EuroChem 1 Agrium 1 Yara 1 ICL 3 PhosAgro 4 K+S 1 Acron 3 Uralkali 4 290 250 CF 1 247 3,038 1,039 1,008 400 457 423 518 4,468 663 1,690 1,687 6,098 810 7,006 6,776 2,070 8,219 2,665 3,239 11,173 3,291 1,456 3,600 14,329 15,470 4,795 2,176 Annual Report and Accounts 2011 EuroChem 17 Business review
Page 1 and 2: Enabling our future Annual Report a
Page 3 and 4: ...by supplying world markets Our s
Page 5 and 6: 2011 Operational highlights > Succe
Page 7 and 8: Potash 912 MMT of proven and probab
Page 9 and 10: 16 Estonia Lithuania 7 14 15 Belaru
Page 11 and 12: Raw materials Up to 80% self-suffic
Page 13 and 14: Ten years of performance Ten years
Page 15 and 16: A record RUB 131bn in revenues 66%
Page 17: 4. Global economy Emerging economie
Page 21 and 22: Despite the significant breakthroug
Page 23 and 24: Business review Our strategy Our st
Page 25 and 26: Enabling our future... ...by supply
Page 27 and 28: 7billion World population in 2011 9
Page 29 and 30: Severneft-Urengoy Novy Urengoy, Yam
Page 31 and 32: Environmental footprint -16% decrea
Page 33 and 34: Our commitment We have committed US
Page 35 and 36: Vertical integration > 2.8 MMT p.a.
Page 37 and 38: Employee participation Our employee
Page 39 and 40: The following table highlights our
Page 41 and 42: Nitrogen segment RUBbn, or as indic
Page 43 and 44: Over the next five years (2012-2016
Page 45 and 46: Phosphate segment RUBbn or as indic
Page 47 and 48: EuroChem’s main planned investmen
Page 49 and 50: i Along with nitrogen and phosphate
Page 51 and 52: Distribution RUBbn, or as indicated
Page 53 and 54: i At Tuapse, one of our priorities
Page 55 and 56: Cost of sales and gross margin As i
Page 57 and 58: 2011 2010 2009 RUBm % of total % ch
Page 59 and 60: Balance sheet Working capital Worki
Page 61 and 62: Environment We’ve come a long way
Page 63 and 64: Occupational health and safety We s
Page 65 and 66: Strategic risks We classify as stra
Page 67 and 68: Area Ref. code Nature Description S
Page 69 and 70:
Richard Sheath Audit Committee Chai
Page 71 and 72:
Nikolay Pilipenko Audit Committee Q
Page 73 and 74:
Where did we focus in 2011? The Boa
Page 75 and 76:
The Strategy Committee The Strategy
Page 77 and 78:
1 Andrey Melnichenko (39) Chairman
Page 79 and 80:
Financial information Consolidated
Page 81 and 82:
Financial information Consolidated
Page 83 and 84:
Financial information Notes to the
Page 85 and 86:
2 Basis of presentation and signifi
Page 87 and 88:
2 Basis of presentation and signifi
Page 89 and 90:
3 Critical accounting estimates, an
Page 91 and 92:
4 Adoption of new or revised standa
Page 93 and 94:
6 Segment information continued The
Page 95 and 96:
8 Intangible assets Note Acquired s
Page 97 and 98:
10 Mineral rights continued As of 3
Page 99 and 100:
13 Cash and cash equivalents and fi
Page 101 and 102:
15 Bank borrowings continued Intere
Page 103 and 104:
17 Derivative financial assets and
Page 105 and 106:
22 Distribution costs Distribution
Page 107 and 108:
26 Income tax continued The movemen
Page 109 and 110:
29 Business combinations Acquisitio
Page 111 and 112:
31 Contingencies, commitments and o
Page 113 and 114:
32 Financial and capital risk manag
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Financial information Main producti
Page 121 and 122:
Q4 2010 Q3 2010 Q2 2010 Q1 2010 201
Page 123 and 124:
Forward-looking statements This ann
show all

eurochem-annual-report-2011

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?