Investor Presentaiton
Selling, general and administrative expenses
Management's Discussion and Analysis
Nine months ended September 30, 2011
Selling, general and administrative expenses decreased as a percentage of
revenue to 10% in the first nine months of 2011 compared to 12% in the
corresponding period of 2010. The following table sets out our operating
expenses for the periods presented below:
Russia
Nine-month period ended
30 September
Change
in %
reflecting the pattern of consumption of the related economic benefits. Staff
costs and other expenses increased U.S.$4 million and U.S.$5 million
respectively.
Europe. An increase in selling, general and administrative expenses in the
European division reflects higher sales activities in the European division
which caused a U.S.$3 million growth in freight expenses in the first nine
months of 2011 compared to the corresponding period of 2010. The effect
of translation from the functional to the presentation currency and changes
in staff costs accounted for U.S.$2 million and U.S.$1 million, respectively.
The table below provides a breakdown of our total selling, general and
administrative expenses for the periods presented below:
2011
2010
Change
in millions of U.S. dollars
in millions of U.S. dollars
393
339
53
16%
America
108
112
(3)
(3)%
Europe
31
25
6
22%
TOTAL SELLING, GENERAL
AND ADMINISTRATIVE
EXPENSES
532
476
56
12%
Staff costs
Freight
Depreciation
Professional services
Nine-month period ended
30 September
2011
2010
Change
Change
in millions of U.S. dollars
171
132
in millions of U.S. dollars
39
in %
29%
164
156
8
5%
60
71
(11)
(15)%
52
50
2
5%
85
67
18
26%
TOTAL SELLING, GENERAL
AND ADMINISTRATIVE
532
476
56
12%
EXPENSES
Russia. The increase was mainly attributable to the growth in sales staff
costs in the first nine months of 2011 compared to the corresponding period
of 2010. Growing salaries and related social security contributions resulted
in a U.S.$27 million growth in the selling, general and administrative
expenses. The increase in freight tariffs was fully offset by a decrease of
freight expenses under certain sales contracts that resulted in a
U.S.$3 million decline in the selling expenses. The effect of translation
from the functional to the presentation currency and changes in other
expenses accounted for U.S.$19 million and U.S.$10 million of the total
increase, respectively.
America. Selling, general and administrative expenses in the division
declined reflecting primarily an U.S.$12 million decrease in depreciation
expenses mainly due to the amortisation of an intangible asset "Customer
relationships": the asset is amortized using the diminishing balance method
Other expenses
13View entire presentation