eurochem-annual-report-2011

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Overview Highlights Unlocking growth Our main production segments are nitrogen and phosphate fertilizers, to which we plan to add potash. EuroChem will then be one of only four fertilizer producers in the world with a significant presence in all three primary nutrient segments, and one of the top five fertilizer producers globally by total nutrient capacity. However, capacity isn’t everything in a commodity business. The cost of producing and delivering product to customers is critical. We continued making progress in our quest to seek vertical integration in our operations throughout the last 12 months. To build on our competitive advantages, we acquired natural gas assets, broadened our raw material base, and expanded on international markets, while working to further refine our product offering. Sustainable competitive advantages > Vertically integrated business model benefiting from access to lower-cost raw materials such as apatite and natural gas, and backed by our own rail stock, dedicated repair and service centres, port infrastructure and ocean freight capability. > Established distribution network in Russia’s Black Earth Region and the CIS, two of the world’s fastest-growing fertilizer markets. > Iron ore production as a co-product of apatite beneficiation at the Kovdorskiy GOK mine substantially adds to the Phosphate segment’s profitability while mitigating cash flow exposure to fertilizer cyclicality. > Flexible production and a comprehensive product range comprising more than 100 unique products allow EuroChem to quickly adapt and maximise margins according to market demand. > Future global cost leadership in potash supported by the unique features of EuroChem’s Gremyachinskoe potash development and the attractive characteristics of the well-developed Verkhnekamskoe deposit. 02 EuroChem Annual Report and Accounts 2011 i 76% of our sales are outside Russia See page 9 Over 100 unique products allow EuroChem to quickly adapt and maximise margins 2.3 MMT p.a. debut of Tuapse Transhipment Terminal
2011 Operational highlights > Successful operational debut of the 2.3 MMT p.a. Tuapse Transhipment Terminal > Sinking operations at the Gremyachinskoe skip shaft #1 reached a depth of 400 metres > Activation of environmental monitoring stations at our production facilities Financial highlights Sales RUBm 2011 2010 2009 EBITDA RUBm 2011 2010 2009 Capex RUBm 2011 2010 2009 Net profit RUBm 2011 2010 2009 16,516 11,075 73,577 29,937 20,052 97,788 18,702 20,464 131,298 49,656 23,805 32,031 Gross margin % 2011 2010 2009 EBITDA margin % 2011 2010 2009 Net debt/EBITDA ratio x 2011 2010 2009 Capex in potash projects RUBm 2011 2010 2009 1.13 22 1.35 6,401 6,922 42 31 49 52 38 2.21 10,558 Annual Report and Accounts 2011 EuroChem 03 Overview
Page 1 and 2: Enabling our future Annual Report a
Page 3: ...by supplying world markets Our s
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 and 18: 4. Global economy Emerging economie
Page 19 and 20: Ranking by nutrient capacity MMT p.
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
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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
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8 Intangible assets Note Acquired s
Page 97 and 98:
10 Mineral rights continued As of 3
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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
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