Committed to growth

7 Segment information
The Group continues optimization of its management and organizational structure by developing a new economic model, the implementation
of which started in 2014. According to this economic model the grouping into segments is based on business divisions. This represents a
change from the earlier practice of reporting operating results just by products.
Starting 1 January 2015, the Group’s business is conducted by five operating divisions, which are Mining, Oil & Gas, Fertilizers, Logistics and
Sales. With the implementation of the division-based economic model, the Group realigned the development and approval of strategies,
market and risk analysis, investment focus, technological process changes, as well as the setting of goals and priorities mostly in accordance
with the new model which resulted in the following segment classification:
• Mining division encompasses the extraction of ores to obtain apatite, baddeleyite and iron ore concentrates, phosphorite; as well as the
development of potassium salts deposits (potash);
• Oil & Gas division represents the exploration and production of natural gas and gas condensate;
• Fertilizers division includes the production of mineral fertilizers (nitrogen, phosphate and complex) and organic synthesis products;
• Logistics division covers all supply chain operations including transportation services, the purchase and delivery of raw materials and
finished goods, as well as freight forwarding and other logistics services;
• Sales division is responsible for the sale of the complete range of products produced by the Group as well as third-party products through
the Group’s global distribution network spanning across Europe, Russia, the CIS, North, Central and South America, and Central and
South East Asia.
Activities not assigned to a particular division are reported in ‘Other’. These include certain service activities, central management and
other items.
The Management Board (considered to be the chief operating decision maker in the Group) reviews the financial reports of the Group,
evaluates the operating results and allocates resources between the operating divisions described above. Budgets and financial reports
are prepared in a standard format according to the IFRS accounting policy adopted by the Group. Sales between divisions are carried
out on an arm’s length basis.
The Management Board assesses the performance of the operating divisions based on, among other factors, a measure of profit before
taxation adjusted by interest expense, depreciation and amortization, financial foreign exchange gain or loss, other non-cash and one-off
items, excluding net profit for the period attributed to non-controlling interests (EBITDA). EBITDA of each division is analytically adjusted
according to internal rules based on the Divisional economic model and responsibility areas. Since this term is not a standard IFRS measure,
EuroChem Group’s definition of EBITDA may differ from that of other companies.
The division results for the year ended 31 December 2015 were:
Strategic Report Corporate Governance Financial Statements
External sales Internal sales Total sales EBITDA
Mining 113,447 499,917 613,364 305,894
Oil & Gas 31,248 57,568 88,816 21,945
Fertilizers 593,140 2,843,795 3,436,935 1,101,307
Logistics 26,578 121,445 148,023 56,957
Sales 3,737,654 9,519 3,747,173 95,609
Other 38,276 60,979 99,255 73,177
Elimination – (3,593,223) (3,593,223) (78,178)
Total 4,540,343 – 4,540,343 1,576,711
The division results for the year ended 31 December 2014 were:
External sales Internal sales Total sales EBITDA
Mining 162,758 578,756 741,514 251,430
Oil & Gas 54,645 89,817 144,462 40,209
Fertilizers 710,259 3,087,448 3,797,707 1,003,846
Logistics 17,933 166,494 184,427 52,773
Sales 4,036,240 253,808 4,290,048 101,583
Other 105,665 76,963 182,628 136,574
Elimination – (4,253,286) (4,253,286) (73,423)
Total 5,087,500 – 5,087,500 1,512,992
EuroChem Annual Report and Accounts 2015 83