K+S Aktiengesellschaft
Compendium
Facts worth knowing about K+S
January 2016
K+S Group
Source of Growth and Life through Nutrients and
Minerals
K+S is one of the world's leading suppliers of
specialty and standard fertilizers. In the salt
business, with sites in Europe as well as North and
South America, K+S is the world’s largest producer.
K+S offers a comprehensive range of goods and
services for agriculture, industry and private
consumers which provides growth opportunities in
virtually every sphere of daily life.
We assume active responsibility for the sustained
growth of our world. Our more than 14,000
employees display their commitment towards this
goal day by day – by applying their knowledge and
experience.
January 2016
K+S Group
1
K+S Group
Content
A.
Corporate Structure & Strategy
2
B.
Potash and Magnesium Products
12
C.
Salt
50
D.
Complementary Activities
68
E.
Financial Data
70
F.
K+S Capital Market Data
82
January 2016
K+S Group
2
K+S Group
Focus on Two Strong Pillars
K+S Group
Revenues 2014: € 3.8 billion
EBIT I 2014: € 641 million
Potash and Magnesium
Products Business Unit
Revenue / EBIT I in € billion
2.3
2.0
2.1
0.74
2011
0.77
2012
Salt Business Unit
Revenue / EBIT I in € billion
1.9
0.55
2013
1.7
0.48
2014
0.21
2011
1.8
1.8
1.5
0.06
2012
0.12
2013
0.17
2014
Complementary Activities (Revenues 2014: € 158 million; EBIT I 2014: € 24 million)
Waste Management & Recycling
January 2016
Logistics
Animal Hygiene Products
Trading business (CFK)
3
K+S Group
3
K+S Group
Main applications for our products
Potash and Magnesium Products
KCl (MOP) (45%)
Salt
De-icing salt (61%)
Industrial salt (24%)
Specialties (44%)
Food grade salt (6%)
Salt for chemical use (9%)
Industrial products (11%)
% of sales volumes of FY 2014
January 2016
K+S Group
4
K+S Group
Global Presence
Production Sites and Sales Offices
Kassel
Revenues by Region 2014
Asia
8%
South America
12%
Africa, Oceania
3%
Europe
42%
Production
Sales
North America
35%
January 2016
K+S Group
5
K+S Group
Board of Executive Directors
January 2016
Norbert Steiner
Dr. Burkhard Lohr
Dr. Thomas Nöcker
CEO
CFO
HR, IT, Logistics, Business Center
Dr. Andreas Radmacher
Mark Roberts
Potash and Magnesium Products
business unit
Salt business unit
K+S Group
6
K+S Group
Corporate Strategy
Differentiation and Sustainable Margin
Growth through Specialisation
➨ Consolidation and expansion of market
positions by increased marketing of
specialty products
➨ Realisation of more attractive margins
through refinement strategy
Expansion of a Balanced
Regional Portfolio
Expansion of Strategic Business Sectors
through Acquisitions and Cooperations
➨ External growth in the core business
sectors Fertilizers and Salt
Setting Standards for Quality,
Reliability and Service
➨ Reduction of seasonal and regional ➨ The goal is to be our customers’
fluctuations in demand for salt and
preferred partner
fertilizers due to a balanced
➨ Strengthening of customer loyalty
regional portfolio
through service efforts, e.g.
➨ Fertilizers: Expansion of market
targeted advice to customers in the
presence in important overseas
use of fertilizers
regions and tapping into new
attractive sales regions in future
growth regions
➨ Salt: Local production in the volumedriven Salt business
January 2016
Increasing Efficiency and
Exploiting Synergies
➨ Optimisation of the international
production network
➨ Generation of synergies in the
exchange of technical, geological
and logistics know-how between
the potash and salt production
K+S Group
7
K+S Group
Expansion of Core Business Segments
Start salt
joint venture
esco
2002
100%
acquisition
esco
Acquisition
SPL
(Chile)
2004
2006
 Acquisition
Potash One
(Canada)
Acquisition
Morton Salt  Divestment
COMPO
(USA)
2009
Divestment
K+S Nitrogen
2011
2012
Our business rests on the two pillars of potash and magnesium products and salt.
This combination gives us a nearly unique position in the international marketplace:
● Synergies on the production side (technology, mining and geology)
● Supplementation and seasonal equilibrium as to sales volumes (potash business depending
on agronomic cycles – relatively crisis-resistant, but weather-dependent salt business)
 With the acquisition of Potash One and the divestments of COMPO and K+S Nitrogen,
we consistently follow our two-pillar strategy
January 2016
K+S Group
8
K+S Group
K+S is Globally Well-Positioned
Salt
Potash and Magnesium Products
● Potassium chloride
● Europe
● Sulphate of potash and
● South America
magnesium sulphate
● North America
Strongly positioned worldwide
● Unique position in Europe
● Strong position worldwide
Diversified production network
and portfolio
● With esco No. 1 in Europe
● With K+S Chile No. 1 in South
America
● With Morton Salt an important supplier
in North America
Sources: IFA, Roskill, K+S
January 2016
K+S Group
9
K+S Group
Cost Discipline Will Remain
€ million
Initiated measures
unfolding full effect
>150
>120
>120
>120
Original
savings
30
30
 
2013
2014
30
30
2015
2016
2018
Additional savings
beyond scope of Fit for
the Future resolved
January 2016
K+S Group
10
K+S Group
Opportunities for growth
Kali 2.0
Salt 2020
Improve value creation by
implementing state of the art business
process management
Strengthen market position by
expansion into growth markets and
use of synergies
January 2016
K+S Group
11
K+S Group
Content
A.
Corporate Structure & Strategy
B.
Potash and Magnesium Products 12
C.
Salt
50
D.
Complementary Activities
68
E.
Financial Data
70
F.
K+S Capital Market Data
82
January 2016
2
K+S Group
12
Potash and Magnesium Products
Key drivers of the fertilizer business
Less arable land – but more protein consumption per capita
Jahr
1960
2010
2050

Each year additional 80m people need
to be fed – this equals to the population
of Germany

Available arable land per capita will
decrease at the same time

By 2050 an expanded world population
will be consuming two thirds more
animal protein than it does today
Global
population
development
3.0 bill.
6.9 bill.
9.7 bill.
Arable Land
per capita
4,300 m2
2,100 m2
1,800 m2
Protein
per capita
60 g/ day
80 g/ day
130 g/ day*
In 2050, less than half of a soccer field will be available to feed one person year round
Source: UN, World Population Prospects, 2015 Revision, UNDP, 2015; FAOStat 2014; *FAO 2014 - forecasts based on the expected increase in animal protein
January 2016
K+S Group
13
Potash and Magnesium Products
Strong Impact on Soybean Yield
under Continued Elimination of Potash
Grain yield (kg/ha)
● Regular potash application of
3500
approx. 80 kg/ha of K2O in 5
years before trial in Brazil
3000
● Climate conditions can cause
2500
volatility in yield
2000
1500
1000
3,135
2,965
(-5%)
2,223
(-29%)
2,214
(-29%)
last yield
with K
Year 1
without K
Year 2
without K
Year 3
without K
772 (-75%)
830 (-74%)
500
Year 4
without K
Year 5
without K
Years of cultivation under declining K effect
Source: Borkert, C.M., et al. 2005, Potash in soybean crop. In: Potassium in Brazilian agriculture, eds. T. Yamada and T.L. Roberts, 671-722. Piracicaba, Brazil: Potafos.
(In Portugese); Embrapa Soybean, IPNI, personal correspondence with Paul E. Fixen, Ph.D., Dr. Adilson de Oliveira Junior, Dr. Luís I. Prochnow; The experiment took
place in Ponta Grossa, Paraná, Brasil; Soil classification: Oxysol, clayed texture (clay content = 38%)
January 2016
K+S Group
14
Potash and Magnesium Products
Prices for Agricultural Products – Spot vs. Future
Prices for Agricultural Products – spot
Prices for Agricultural Products – future
115%
450%
400%
110%
350%
300%
105%
250%
100%
200%
150%
95%
100%
50%
Dec05
Dec06
Dec07
Dec08
Wheat
Dec09
Dec10
Soybeans
Dec11
Dec12
Corn
Dec13
Dec14
Palm Oil
● Price level for agricultural products
remains attractive and continues to
incentivise farmers to use fertilizers
Dec15
90%
Mar-16
Jun-16
Wheat
Sep-16
Soybeans
Dec-16
Corn
Mar-17
Palm Oil
● Future prices of agricultural products
indicate an improvement of farmers’
harvest outlook for the next months
Source: Bloomberg; as of 7 January 2016
January 2016
K+S Group
15
Potash and Magnesium Products
Profitability of Winter Wheat in Europe
2010
2.000
2011
Profit
2012
Cost
Sales
Cost
1,067
1,595
1,116 potential:
1,405
Sales
Profit
2013
potential:
Cost
Sales
Cost
1,205
1,909
1,194
704 €
2014
Sales
Cost
Sales
1,558
1,176
1,320
528 €
Profit
potential:
€704
1.500
Profit
potential:
€528
1.000
Profit
potential:
€237
Profit
potential:
€289
175
225
75
101
157
75
101
157
Profit
potential:
€144
Year
Fertilizer share of total costs
2010
16% fertilizer costs (3% K)
2011
20% fertilizer costs (2% K)
2012
21% fertilizer costs (3% K)
2013
20% fertilizer costs (3% K)
2014e
19% fertilizer costs (3% K)
248
242
223
82
121
82
121
82
121
Fertilization
162
162
162
(e.g. insurance, water)
Other costs
Seeds/plants
500
Plant protection agents
541
541
567
567
567
Variable costs
Fixed costs (inkl. lease)
0
Wheat price: 220 €/t Wheat price: 199 €/t Wheat price: 258 €/t Wheat price: 210 €/t Wheat price: 178 €/t
Yield: 7.25 t/ha
Yield: 7.06 t/ha
Yield: 7.40 t/ha
Yield: 7.42 t/ha
Yield: 7.42 t/ha
The current future curve of the wheat price should enable the farmer to realize a profit potential of around
€ 144 per hectare (excl. subsidies) in 2014e.
Assumptions 2014e: without agricultural subsidies, incl. interest expenses for pre-financing costs, 100% use of mineral fertilizers (no organic fertilizing), straw stays in the field (straw fertilizing);
fertilizer use for 8 t/ha yield: 80 kg/ha MOP, 536 kg/ha KAS and 139 kg/ha TSP; for lower yields, lower fertilizer requirement adjusted accordingly; Sources: costs (20 ha) according to Kuratorium
für Technik und Bauwesen in der Landwirtschaft e. V. (KTBL) for winter wheat – bread quality, rotating crop growing system; yield according to statistical year book for food nutrition, agriculture
and forestry 2013: 10-year average; nutrient extractions according to Guidelines for Fertilizer Use in Germany; fertilizer prices taken from LAND & Forst at the point of the upcoming fertilization
(general fertilization with potash and phosphate in September; nitrogen fertilization in September, February, April and June); wheat price (bread quality B; 2014) according to LAND & Forst
(average delivery from the yard from July to February) and Euronext price less transportation cost assumption.
January 2016
K+S Group
16
Potash and Magnesium Products
Meat Consumption per Capita
kg / person
150
North America
100
Europe
South America
50
Asia
Africa
0
1961
1970
1980
1990
2000
2007
Source: Food and Agriculture Organization of the United Nations (FAO)
● Rising prosperity goes along with rising meat consumption
● Production of 1 kilogram of meat requires multiple kilograms of animal feed
● We believe there is significant potential for rising fertilizer demand in emerging
market countries
January 2016
K+S Group
17
Potash and Magnesium Products
Potash Use by Crop
Potash use by crop EU-28
7
Million tonnes K2O
Fruits & Vegetables
14.4%
6
Other crops 31.2%
Other Coarse Grains
13.7%
5
4
Sugar crops 5.9%
Wheat 12.7%
Oil seed 10.2%
3
Corn 11.9%
2
1
0
China
India
Wheat
Soybeans
Fruits & Vegetables
Other crops
USA
EU-27
Brazil
Rice
Oil palm and other other oil seed
Cotton
Indonesia &
Malaysia
Corn
Sugar crops
Other coarse grains
Source: IFA 2007/08, published 2009
Other crops: roots, tubers, pulses, nuts, coffee, tea, tobacco, ornamentals, turf etc.
Other oil seed: rapeseed, mustard, sunflower, groundnut etc.
Other coarse grains: barley, oat, rye, triticale, sorghum etc.
January 2016
K+S Group
18
Potash and Magnesium Products
Europe (EU 28)
Potash Use by Crop *
Structure
Structure
Products
Private trade with countryspecific regulations
MOP standard, gran. and
specialties through spot
and contracts
Fruits & Vegetables
14%
Other Crops**
31%
14%
6%
Sugar Crops
13%
10%
Other
Coarse Grains
Wheat
12%
Oil Seeds
Corn
Agricultural Potash Consumption ***
Cultivated Crops ****
kt K2O
8.000
Wheat
Other Crops**
24%
6.000
Sugar Crops
4.000
Fruits &
Vegetables
24%
1%
8%
2.000
21%
7%
Corn
Other
Coarse Grains
15%
0
1979/80
January 2016
1990/91
2001/02
2012/13F
Oil Seeds
* Incl. sulphate of potash and low-grade potash, apparent consumption, % of total K2O, Source: IFA 2007/08, published 2009 ** incl.
potatoes, pastures and forestry *** Fertilizer years Western and Central Europe, Source: IFA December 2011 **** % of arable land,
Source: FAO 2009/2010
K+S Group
19
Potash and Magnesium Products
Brazil
Potash Use by Crop *
Structure
Other
Crops
Structure
Private trade
Products
MOP gran. through spot
and contracts
14%
Rice
4%
4%
Cotton
Fruits &
Vegetables
35%
Soybeans
5%
Corn
17%
21%
Sugar Crops
Agricultural Potash Consumption **
Cultivated Crops ***
Other
Cotton Crops
kt K2O
5.000
Rice
Fruits &
Vegetables
4.000
1%6%
5%
5%
3.000
43%
Sugar Crops
Soybeans
17%
2.000
1.000
23%
0
1979/80
January 2016
1990/91
2001/02
2012/13F
Corn
* Incl. sulphate of potash and low-grade potash, apparent consumption, % of total K2O, Source: IFA 2007/08, published 2009
** Fertilizer years Brazil, Source: IFA December 2011 *** % of total area harvested, Source: FAO 2010
K+S Group
20
Potash and Magnesium Products
Southeast Asia
Potash Use by Crop *
Structure
Other
Crops
Structure
Private trade
Products
MOP standard and
specialties through spot
and contracts
10%
Sugar Crops
6%
Corn
6%
49%
Fruits &
Vegetables
Oil Seeds
12%
17%
Rice
Agricultural Potash Consumption **
kt K2O
Cultivated Crops ***
Other
Crops
Sugar Crops
4.000
Fruits &
Vegetables
3.000
Corn
2.000
3%
6%
8%
11%
47%
Rice
1.000
Oil Seeds
25%
0
1979/80
January 2016
1990/91
2001/02
2012/13F
* Incl. sulphate of potash and low-grade potash, apparent consumption, % of total K2O, Source: IFA 2007/08, published 2009
** Fertilizer years East Asia excl. China, Japan, Source: IFA December 2011 *** % of total area harvested, Source: FAO 2010
K+S Group
21
Potash and Magnesium Products
India
Potash Use by Crop *
Structure
Structure
Predominantly centralised,
subsidised
Products
MOP standard through
contracts
Other Crops
Corn
11%
Other Coarse Grains
1%
3%
Cotton
5%
Oil Seeds
34%
Rice
6%
8%
Wheat
10%
Sugar Crops
22%
Fruits &
Vegetables
Agricultural Potash Consumption **
Cultivated Crops ***
kt K2O
Other
Crops
4.000
Oil Seeds
15%
20%
Sugar Crops
3.000
Corn
Cotton
2.000
11%
Other
Coarse Grains
0
January 2016
6%
20%
7%
Fruits &
Vegetables
1.000
1979/80
2%
4%
Rice
15%
Wheat
1990/91
2001/02
2012/13F
* Incl. sulphate of potash and low-grade potash, apparent consumption, % of total K2O, Source: IFA 2007/08, published 2009
** Fertilizer years India, Source: IFA December 2011 *** % of total area harvested, Source: FAO 2010
K+S Group
22
Potash and Magnesium Products
China
Potash Use by Crop *
Structure
Structure
Predominantly centralised
Products
MOP standard through
long-term contracts
Other Crops
Corn
7%
2%
4%
4%
5%
Oil Seeds
Wheat
Sugar Crops
50%
Rice
Fruits &
Vegetables
28%
Cultivated Crops ***
Agricultural Potash Consumption **
kt K2O
Other
Crops
7.000
12%
Sugar Crops
6.000
19%
1%
Corn
5.000
Wheat
4.000
14%
3.000
19%
2.000
Oil Seeds
1.000
17%
Fruits &
Vegetables
18%
0
1979/80
1990/91
2001/02
2012/13F
Rice
* Incl. sulphate of potash and low-grade potash, apparent consumption, % of total K2O, Source: IFA 2007/08, published 2009
** Fertilizer years China, Source: IFA December 2011 *** % of total area harvested, Source: FAO 2010
January 2016
K+S Group
23
Potash and Magnesium Products
North America
Potash Use by Crop *
Structure
Structure
Private trade
Products
MOP gran. and
specialties through
spot and contracts
Othe Crops
Sugar Crops
Cotton
Wheat
24%
48%
3%
3%
5%
Corn
6%
Fruits &
Vegetables
11%
Soybeans
Cultivated Crops ***
Agricultural Potash Consumption **
kt K2O
Other
Crops
7.000
Fruits &
Vegetables
6.000
5.000
Cotton
4.000
Other
Coarse Grains
15%
2%
3%
Corn
27%
7%
3.000
2.000
Wheat
1.000
21%
25%
Soybeans
0
1979/80
January 2016
1990/91
2001/02
2012/13F
* Incl. sulphate of potash and low-grade potash, apparent consumption, % of total K2O, Sources: IFA 2007/08, published 2009
** Fertilizer years North America, Source: IFA December 2011 *** % of total area harvested, Source: FAO 2010
K+S Group
24
Potash and Magnesium Products
World Potash Production and Sales by Region
Million tonnes
22.6
33.2
19.4
11.7
7.2
6.2
4.3
14.8
12.0
1.0
2.7
Year 2014
Incl. sulphate of potash
and low-grade potash
Sources: IFA, K+S
January 2016
World potash production:
2014: 66.7 million t
World potash sales:
2014: 68.4 million t
2013:
2013:
58.6 million t
58.7 million t
K+S Group
25
Potash and Magnesium Products
World Potash Supply and Demand
Production is driven by demand despite continuous excess capacity
80.000
Capacity by producer
70.000
Others
21%
Canpotex
34%
1,000 t (product)
60.000
ICL
8%
50.000
K+S
9%
Belaruskali
12%
40.000
30.000
Uralkali
16%
20.000
10.000
0
'93
'94
'95
'96
'97
'98
'99
'00
'01
'02
Technical available capacity
'03
'04
'05
'06
Sales volumes
'07
'08
'09
'10
'11
'12
'13
'14
Production
Source: IFA, Fertecon, K+S; Incl. potassium sulphate and potash grades with lower K2O content of around 4 million tonnes (product)
January 2016
K+S Group
26
Potash and Magnesium Products
World Potash Sales Volume by Region
Million tonnes
2014
2013
2012
2011
2010
2009
2008
Western Europe
6.2
5.7
5.6
5.9
6.7
2.7
6.3
Central Europe / FSU
4.3
4.9
5.1
4.4
4.9
3.1
5.0
Africa
1.0
0.8
0.7
0.7
0.8
0.3
0.6
North America
11.7
9.7
9.1
10.2
10.8
4.1
10.2
Latin America
12.0
11.0
10.5
10.5
9.7
6.0
8.6
Asia
32.5
25.9
23.4
28.0
24.9
14.6
23.2
- thereof China
~ 17
13.8
12.0
12.7
10.2
5.4
8.8
- thereof India
~4
3.5
2.8
5.0
6.1
5.5
6.2
0.7
0.5
0.4
0.5
0.5
0.2
0.6
68.4
58.5
54.8
60.2
58.3
31.0
54.5
Oceania
World total
Incl. potassium sulphate and potash grades with lower K2O content of around 4 million tonnes eff;
Sources: IFA, K+S
January 2016
K+S Group
27
Potash and Magnesium Products
Supplier Structure on the World Potash Market 2014
World Potash Sales Volumes:
2014:
68.4 million tonnes
2013:
58.7 million tonnes
28.7%
18.0%
14.8%
12.7%
8.3%
7.8%
3.0%
Canpotex Uralkali
• Potash
Corp
• Mosaic
• Agrium
Year 2014
Sources : IFA, K+S
January 2016
BPC
Belaruskali
K+S
ICL
SQM
participation
• DSW
of Potash
• CPL
Corp.
• Iberpotash
.
3.3%
APC
participation
of Potash
Corp.
3.4%
China
Others
> 20
producers
• Intrepid
•
•
•
•
Vale
Compass
Usbekistan
Laos
Incl. potassium sulphate and potash
grades with lower K2O content
K+S Group
28
Potash and Magnesium Products
MOP Price Development
US$/t
€/t
Brazil
600
600
(US$/t,
Granular, cfr)
500
500
South-East Asia
(US$/t,
Standard, cfr)
400
400
300
300
Europe
(€, Granular, cfr)
200
200
2011
2012
2013
2014
2015
Source: FMB
January 2016
K+S Group
29
Potash and Magnesium Products
Production Sites in Germany
Potash mining in the Werra Fulda Region
6
Kassel
5
7
4
1
2
3
Potash
Seam Hesse
Share of production capacity (in %)
1.
2.
3.
4.
5.
6.
7.
Wintershall
Unterbreizbach
Integrated Werra Plant
Hattorf
Zielitz
Neuhof-Ellers
Sigmundshall
Bergmannssegen-Hugo
(pure production site, no mining)
January 2016
~ 45
~ 24
~ 16
~ 10
~5
Potash Seam
Thuringia
Source: Mainova AG
K+S Group
30
Potash and Magnesium Products
Extraction Cycle Underground –
Conventional mining
0
4
Auger drilling
Blasting after
shift end
1
5
Muck pile load and dump
2
Cleaning
6
Drilling
Roof scaling
3
7
Loading with explosives
Roof bolting
0
January 2016
K+S Group
31
Potash and Magnesium Products
Potash Processing above Ground
Thermal
dissolution
Flotation
110 °C
mother brine
finely
ground
crude salt
undissolved
residue
+ dissolved
KCl
filtering
95 °C
-
filtering
and
drying
Residue
(NaCl)
Residue
(NaCl)
conditioning
triboelectric
charging
air
bubbles
filtering
January 2016
finely
ground
crude salt
flotation
agent
cooling
Potassium chloride
(KCl) and Kieserite
finely ground
crude salt
flotation
brine
heating
25 °C
Electrostatic
separation
(ESTA®)
Potassium chloride
(KCl) and Kieserite
+
separation
in a free
fall separator
Residue
(NaCl)
Potassium chloride
(KCl) and Kieserite
K+S Group
32
Potash and Magnesium Products
Major Sales Regions
Sales volumes by region
Europe
- of which: Germany
North America
South America
Asia
Africa, Oceania
January 2016
2014
56%
17%
2%
20%
18%
4%
2013
53%
14%
2%
21%
20%
4%
K+S Group
33
Potash and Magnesium Products
Our Unique Approach Makes Us More Robust
Broad portfolio of specialty products
Health Care &
Nutrition
Industrial
products
0.8
Industrial potash
KCL
(MOP)
3.1
6.9
Specialties
Kieserite

High purity salts for pharma-,
food- and feed industries

Wide range of products for
demanding industrial solutions
(e.g. K-Drill, KCL 99)

3.0
Korn-Kali
SOP


Unique position in Europe supplemented by
selected overseas regions
Europe
59%
Magnesium and sulfur
fertilizers. Main applications:
Palm Oil, NPK
Potash and magnesium
fertilizers. Increases droughtand frost resistance.
South
America
18%
• Logistical advantage with
established distribution
networks
Asia
16%
• Strong and long-standing
customer relationships
• Track record of being a
reliable supplier
Other
7%
Chloride sensitive crops
(e.g. Beans, Berries, Nuts,
Apples, Grapes)
Basis: 2014 Revenues
Basis: 2014 Sales volumes in million tonnes
K+S‘ diversified portfolio proven robust
K+S average selling price (solid blue line) versus selected peers
´Black Tuesday´
Phasing Specialty
shipments
Pending China
contract
Q1
Q22010
Q3
Q4
Q1
Q2 2011
Q3
Q4
Q1
Q2
Q4
Q1
Q22013Q3
Q4
Q1
Q22014Q3
Q4
Q12015Q2
2012Q3
2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015
January 2016
K+S Group
34
Potash and Magnesium Products
Broad Portfolio of Fertilizer Specialties
Crude Salt
• Leading position in Europe
• Strategic presence in most
important overseas regions
• Globally active in important product segments
Kieserite fine.
Highly
purified salts
Korn-Kali
MOP std.
Kieserite gran.
Kieserite
MOP
SOP
MOP gran.
Epsom salt
Industrial
Products
K+S revenues: ~50%
High potash content
January 2016
Patentkali
MgSO4 anhy.
K+S revenues: ~50%
Low potash content
No potash content
K+S Group
35
Potash and Magnesium Products
K+S fertilizer Portfolio – More than just potash
Product
Nutrients (%)
K 2O
MgO
S
Na
B
0-0.25
Mn; Zn
60
50
January 2016
18
30
10
17
40
6
5
3
11
5
4
20
25-27
20-22
16
13
13-15
12-13
0-0.9
1-4; 0-1
K+S Group
36
Potash and Magnesium Products
Non-fertilizer Products
High-quality raw materials for industrial purposes
Magnesium Sulphate
Potassium Chloride
Potassium Sulphate
Epsom Salt
Pulp and Paper
Detergents
Chlor-Alkali Electrolysis
Oil Drilling Muds
Construction Materials
Plasterboard Production
ABS/EPS Plastic Production
Detergents
High purity salts for health care and nutrition
Potassium Chloride
Magnesium Sulphate
Potassium Sulphate
Epsom Salt
Pharmaceutical, food and
feed industry
Feed industry
Pharmaceutical and
food Industry
Pharmaceutical and
food Industry
January 2016
K+S Group
37
Potash and Magnesium Products
Price Development: K+S Average Portfolio Prices
€/t
380
360
340
320
300
280
260
240
220
200
2011
K+S Ø - Portfolio price
2012
2013
K+S Ø - Portfolio price, Europe
2014
2015
K+S Ø - Portfolio price, Overseas*
* Conversion of currency using quarterly average exchange rates
Source: K+S
January 2016
K+S Group
38
Potash and Magnesium Products
Business Unit Performance
Revenues
EBIT (€ million)
(€ billion)
0.61
0.45
0.46
Q3/14
Q4/14
183
0.50
Q1/15
Q2/15
144
0.47
111
Q3/15
Q3/14
93
84
Q4/14
Q1/15
Q2/15
Q3/15
771
2.3
2.0
1.9
2012
2013
2014
Revenue split by product group (2014)
Industrial
products
13%
Fertilizer
specialties
45%
January 2016
Potassium
chloride
42%
2012
553
489
2013
2014
Revenue split by region (2014)
Africa, Asia
Oceania 16%
North 5%
America
2%
South
America
18%
Europe
59%
K+S Group
39
Potash and Magnesium Products
Sales volume, average price and total unit costs
314
310
310
291
280
271
279
262
268
239
231
230
211
212
206
189
Sales volume (Million
tonnes)
209
189
Average price (€)
1)
1.94
1.63
Q3/13
1)
1.72
1.51
Q4/13
Q1/14
Total unit costs (€)
1.94
Q2/14
1.62
1.59
Q3/14
Q4/14
1.61
Q1/15
Q2/15
1.52
Q3/15
Total unit costs are defined as revenues minus EBIT I divided by sales volumes (excl. OPEX Legacy).
January 2016
K+S Group
40
Potash and Magnesium Products
Currency Management
US dollar
● USD revenues are hedged excl. of overseas
freight costs, capital expenditure
for the Legacy Project and a safety margin.
● Use of options or futures, which
set a worst-case scenario, but provide
the opportunity to benefit from an
appreciation of the US dollar.
Canadian dollar
● Capital expenditure in Canadian dollar for the
Legacy Project are also hedged by using
options or futures, which set a worst-case
scenario.
January 2016
Realised hedging rate for the
fiscal year 2014:
EUR/USD 1.33 after premiums
„worst case“ for the fiscal year 2015
(for 90% of expected USD net exposure):
EUR/USD 1.35 after premiums
Realised hedging rate for the
fiscal year 2014:
EUR/CAD 1.43 after premiums
„worst case“ for the fiscal year 2015
(for 100% of expected capex in Canadian dollar):
EUR/CAD 1.47 after premiums
K+S Group
41
Legacy Project
Expansion of the Global Presence of K+S
Strengthen global presence
● Expansion of our existing production network by a
North American production site
 Potash supplier with production on two
continents
China
India
South East Asia
● Sale and distribution via existing distribution structures
North America
of the K+S Group
● Flexible multi-product strategy:
- MOP standard pink
- MOP granulated pink
South America
January 2016
- KCl 99 granulated
K+S Group
42
Legacy Project
Strategic Importance
● Growth
 Participation in the growing world
demand
Southern area of the potash belt of Saskatchewan
Diagram)
Located in the Heart of(Schematic
Saskatchewan’s
Potash-Rich Basin
● Production Costs
 Improved average cash costs
 Higher share of variable costs
● Substantial extension of average
mine life
● Diversification
 Broad product portfolio
 Diversified production network and
well-balanced regional mix
Regina
Two more potash exploration licences close to Esterhazy
● Specialisation
Two additional potash permit areas in the Esterhazy potash region
 High quality industrial products
Reserves and Resources
in mln. t KCl
% KCl
% K2O
Reserves (Proven and Probable Reserves)
Legacy Project area
160
29
18
Resources (Inferred and Indicated Resources)
Legacy Project area + KLSA 009
981
27
17
The reserves figures were determined in accordance with the requirements of the Canadian standard Nl 43-101 of the “Canadian Securities Regulators”.
January 2016
K+S Group
43
Legacy Project
Ramp-up Curve
Production capacity
in mln. t KCl/a
4,0
3,5
Outlook for Phase 3 –
Expansion of secondary mining
3,0
2,5
Phase 2 – Development of secondary mining
1.14
0.86
2,0
1,5
Phase 1 – Primary mining
1,0
2.00
0,5
0,0
2011
'16 '17 '18
'20
'25
'30
'35
● Development of infrastructure mainly for Phases 1 + 2, preparations for Phase 3
(Implementation: 2011 to 2017) ● Capacity development + ramp-up of production to 2.0 mln. t KCl/a through primary mining
Phase 1
Phase 2
(Implementation: 2016 to 2023)
● Capacity expansion and ramp-up of production by 0.86 to 2.86 mln. t KCl/a
through secondary mining (share of secondary mining in total capacity: 30%)
● Increase in share of secondary mining in total capacity to 50%
(Implementation: 2023 to 2034) ● Potential expansion of annual capacity by 1.14 to 4.0 mln. t KCl/a
Outlook for Phase 3
January 2016
K+S Group
44
Legacy Project
Course of Capex
Phase 2
Phase 1
Activity
Production
capacity after
implementation
Development of secondary mining,
expansion of production and
logistics facilities
Primary mining: Development of
first caverns and construction
of production and
infrastructure facilities
as of 2017:
2.00 million tonnes KCl/a
Capex
Phase 3
as of 2023:
2.86 million tonnes KCl/a
Further expansion of secondary
mining, construction of necessary
additional production and logistics
facilities
probably as of 2034:
4.00 million tonnes KCl/a
2011 to 2022: CAD 4.1 billion*
2023 to 2034: ~ CAD 0.7 billion
Indicative
course of
investment
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
* Approved by the Supervisory Board
January 2016
K+S Group
45
Legacy Project
Competitive production costs
~ 225 - 255
Mining taxes/ royalties: Fluctuate with potash price, e.g.
400 USD ex works = ~ 60 CAD
300 USD ex works = ~ 40 CAD
250 USD ex works = ~ 30 CAD
Depends on
potash price
~ 40 CAD/
tonne
D&A
Steady state, higher in first years of production
~ 65 CAD/
tonne
Logistics
Average from site to various target destinations
~ 90 CAD/
tonne
Cash costs of production
Total costs (Phase 1+2)
At full utilisation of 2.86 million tonnes KCl/a (Phases 1+2)
No increase in prices and costs after the construction phase
January 2016
K+S Group
46
Legacy Project
Geological Overview
Legacy Project
Mining technique
Reserves / Resources
Depth
Thickness
Solution mining
160 / 982 mln. t KCl product
1,500 metres
33 metres
Patience Lake
K2O / KCl content
18% / 29%
Environmental
Impact Statement
approved for up to
4 mln. t KCl/a
Belle Plaine
Esterhazy
January 2016
K+S Group
47
Legacy Project
Primary and Secondary Mining
Primary Mining
(Freshwater mining / Vacuum cooling crystallisation)
● Primary mining uses freshwater. The connection of two boreholes to a
cavern with the corresponding creation of a surface is initially created by NaCl
solution mining below the KCl-rich Esterhazy Seam. The deposit is gradually
solution-mined in up to 3 m thick horizontal layers through the three potash
seams. This process is controlled vertically by an oil barrier (a thin layer on the
surface of the brine).
Patience Lake Seam
Belle Plaine Seam
Esterhazy Seam
● During the primary mining process, the cavern expands to create an
ideal form for commencing secondary mining.
Secondary Mining
(NaCl brine mining / Crystallisation in the crystallisation pond)
● Secondary mining exclusively uses a NaCl-saturated brine in order to
dissolve selectively KCl from the walls and roof of the existing caverns.
● Along with a lower energy intensity, secondary mining – in comparison to
primary mining – is substantially more efficient with the use of water.
January 2016
K+S Group
48
Legacy Project
Milestone supply agreement with Koch Fertilizer
 Legacy Project well positioned to serve main
consumption areas in North America
including corn belt in premium pricing US
market
 Enormous interest by existing and new
customers in potash from Legacy
 Exclusive master supply agreement signed
with Koch Fertilizer on marketing of potash
fertilizer to customers in the U.S.
 Legacy to supply a projected volume of
about 0.5 million tons(1) p.a. of granulated
potash to Koch Fertilizer
 Koch Fertilizer is an indirect, wholly owned
subsidiary of Koch Industries, Inc.
 One of the world‘s largest producers and
marketer of fertilizers (> 13 million tons)
(1) 500.000
January 2016
short tons = ~ 450.000 metric tons
K+S Group
49
K+S Group
Content
A.
Corporate Structure & Strategy
B.
Potash and Magnesium Products
12
C.
Salt
50
D.
Complementary Activities
68
E.
Financial Data
70
F.
K+S Capital Market Data
82
January 2016
2
K+S Group
50
Salt
Why Salt?
●
Essential mineral for our life
●
Diverse and stable salt end uses driving continuous growth
 Essential mineral without economically viable substitutes
●
De-icing salt is used for public safety
 Consumption driven by winter weather
 Most economic and environmentally friendly alternative
●
Industrial salt, chemical salt and food grade salt consumption
benefit from population growth and increasing standards of
living
●
Industrial and chemical salt consumption driven by economic
growth and industrialisation
 Rapidly industrialising regions experience high growth rates
●
Salt products typically represent only a small portion of the
production costs
January 2016
K+S Group
51
Salt
Main Application Areas
Food Grade Salt
● Main Applications:
 Private households
 Food processing


industry
Baking industry
Condiment and
preservative agent
● Key Demand Drivers:
 Population Growth
 Eating Habit
Industrial Salt
● Main Applications:
 Water treatment
 Drilling fluids
 Animal feed
 Infusion and dialysis




solutions
Pharmaceuticals
Preserving of fish
Dyeing works
Leather treatment
● Key Demand Drivers:
 GDP Growth
 Population Growth
 Environmental
Salt for Chemical Use
● Main Applications:
 Chemical industry
 Chlor-Alkali processes


(→ PVC)
Polycarbonates and
MDI (Isocyanat)
(→ plastics, synthetic
resin)
Synthetic Soda Ash
(→ glass)
● Key Demand Drivers:
 GDP Growth
 Urbanization
De-icing Agents
● Main Applications:
 Winter road


maintenance services
Commercial users
Grit for private
households
● Key Demand Drivers:
 Winter Weather

Conditions
Infrastructure
Development
influences
January 2016
K+S Group
52
Salt
Main Production Methods
Rock Salt
Conventional
mining
January 2016
Sea-/Solar Salt
Evaporated Salt
Crystallisation
from sea water
Recrystallisation
of purified brine
Brine
Controlled
borehole-brining
K+S Group
53
Salt
Development of Salt Consumption and Production
Million tonnes
Consumption
Production
CAGR: 1.9%
CAGR: 2.1%
268
275
CAGR
278
CAGR
264
3.7%
220
2.5%
217
Other
4.1%
Other
4.5%
Asia
Asia
Europe
0.5%
Europe
0.8%
North
America
- 0.6%
North
America
- 0.8%
2000
2009
2012
2000
2009
2012
Sources: K+S, Roskill 2011, 2014
January 2016
K+S Group
54
Salt
Salt Consumption by Product Group
CAGR
(2009-2012)
10%
Industrial salt/
Other;
19%
13.1%
Salt for
chemical use;
58%
5.2%
19%
28%
38%
34%
57%
73%
44%
2%
Food grade salt;
10%
De-icing salt;
13%
1.3%
5%
32%
19%
- 4.4%
Global
North America
(Consumption 2012:
275 million tonnes)
(Consumption 2012:
60 million tonnes)
Europe
19%
15%
2%
3%
Asia
Other
(Consumption 2012: (Consumption 2012: (Consumption 2012:
68 million tonnes)
117 million tonnes)
30 million tonnes)
Source: Roskill 2014
January 2016
K+S Group
55
Salt
Main Salt Suppliers Worldwide
Capacity in million tonnes (crystallised salt and salt in brine; excl. captive use)
~4
18
16
14
14
5
5
4
Akzo
Südsalz
Salins
American
Rock Salt
Cargill
Compass
Artyomsol
8
5
China National Salt
9
ESSA
8
9
Dampier
10
4
Mitsui
Source: Roskill 2014, K+S
January 2016
K+S Group
56
Salt
Executing Our Salt Strategy
5 Acquired Morton Salt,
the largest salt producer
in North America
K+S
Morton
Salt
4 Acquired SPL, No.1 salt
producer in South
America
- Market entry into U.S.
and Latin America
- Expansion potential
to Asia
January 2016
SPL
1
Originally, salt
business with high
exposure to de-icing
and industrial salt in
Europe
2
Added salt for chemical
use through the acquisition of Frisia Zout (NL)
3
No.1 salt producer in
Europe through the
acquisition of Solvay
salt business
K+S Group
57
Salt
Our Strengths
● Geographical diversification of production facilities within a region and
Production
network and
Know-how
across continents
● Access to multitude of technical and geological experts within the
K+S Group
● Mixture of own ships, medium-term sea freight contracts and
freight hedging
Logistics
network
● Utilisation of global logistic knowledge of K+S Group
● Close supply chain cooperation for most efficient group-wide
sourcing
Product
portfolio
● Balanced and less cyclical product portfolio
● Product innovations through access to group-wide
R&D network
January 2016
K+S Group
58
Salt
Presence in the Most Attractive De-icing Salt
Regions of the World
Great Lakes
● Continental climate with
distinctly stable winters
● High population density
● Stable de-icing salt
business with high
volumes
January 2016
US East Coast
● Atlantic climate
● Relatively volatile,
partly very harsh
winters
● Very high population
density
● Relatively stable
de-icing salt business
Eastern Canada
●
●
●
●
Central Europe
Atlantic climate
● Atlantic climate
Relatively stable winters ● Milder winters with
Lower population density
occasional upward
Relatively stable
fluctuations
de-icing salt business
● Very high population
● Long-term contracts
density
● Relatively fluctuating
de-icing salt business
Scandinavia
● More stable winters in
comparison with
Western Europe
● Relatively low
population density
● Relatively stable deicing salt business
K+S Group
59
Salt
K+S Production Sites in Europe as well as
Winter Regions relevant for K+S
Production method
Rock salt
Solar salt
Evaporated salt
Production of de-icing salt
K+S winter regions
* Processing
Frisia, NL
Borth, D
BraunschweigLüneburg, D
Bernburg, D
Dombasle, F*
Torrelavega, E*
Povoa, P*
Olhao, P*
January 2016
K+S Group
60
Salt
K+S Production Sites in North and South America
and Winter Regions in North America relevant for K+S
Lindbergh, AB
Regina, SK*
Great Lakes/
Ontario
Quebec/
Maritime
Mines Seleine, QC
Manistee, MI
Pugwash, NS
New
York
Ojibway, ON
Windsor, ON
Silver Springs, NY
River
System
Grantsville, UT
Newark, CA*
Perth Amboy, NJ*
Fairport,OH
Rittman, OH
US-East Coast
Long Beach, CA*
Glendale, AZ
Production method
Rock salt
Solar salt
Evaporated salt
Production of de-icing salt
K+S winter regions
* Processing
January 2016
Natal, Brasilien
Hutchinson, KS
Grand Saline, TX
Port Canaveral, FL*
Weeks Island, LA
Inagua, BH
Salar Grande
de Tarapacá,
Chile
K+S Group
61
Salt
Details of De-icing Salt Bidding Processes
●
Government de-icing contracts are awarded in
Europe, the US and Canada in the form of
public bids
●
Government purchaser issues bid documents
in late spring/early summer
●
Vendors hand in sealed bids, which will be
opened at date and time specified in the bid
documents
●
Most economic bid will be awarded
●
In the US, Canada and most parts of Europe,
all vendor’s bids will become public
●
In the US most bids are valid for one
year/season
●
In Canada and some parts of Europe contracts
might be awarded for a long-term duration
defined by






January 2016
volume
destination
delivery
product and service
specifications
guaranteed minimum
purchase requirement
maximum delivery
requirement
price
vendor

purchaser
Details specified in typical
bid document
K+S Group
62
Salt
De-icing – North America
The public safety and economic benefits of road salt use are clear.
● Winter weather congestion affects 70% of U.S. roadways.
● Roadway de-icing reduces crash frequency by 88.3 percent.
● De-icing decreases the average cost of each crash by 10 percent.
● During the first four hours after salt is applied, the direct road users’ benefits
(i.e. increased mobility, productivity & hourly worker compensation) are $6.50
for every $1.00 spent.
● A one-day major snowstorm can cost a state $300-$700 million in both direct
and indirect costs (i.e. reduction in commerce & associated tax revenue).
Morton/ISCO – Even distribution of
volume between three key regions.
35%
Midwest
Canada
USEC
37%
28%
Sources: Marquette University and Global Insight Studies / Salt Institute
January 2016
K+S Group
63
Salt
Historic Volume Development
Million tonnes
25
Morton Salt (Since
1 October 2009)
23.62
22.53
22.73
9.04
9.42
22.81
20
17.56
9.02
9.24
14.81
15
Salt for chemical use, Industrial Salt
and Food grade salt
(Mio. t)
De-icing Salt (Mio. t)
9.23
5.85
10
8.77
4.73
9.47
5.00
5
13.49
13.31
8.96
4.04
4.47
2007
2008
13.79
14.38
2013
2014
8.33
0
2009
2010
2011
2012
● Total sales volumes increased over the past years mainly due to external growth, while the de-icing salt share
remained rather stable
● Sales volumes declined in 2012 caused by weaker de-icing salt demand due to extraordinarily mild winter
weather
January 2016
K+S Group
64
Salt
Seasonality of the De-icing Salt Business
Million tonnes
10.43
10
9.12
2.28
2.23
7.28
8
6.10
2.21
6
3.65
4
2.24
2
8.15
3.20
5.07
2.22
1.41
0
€
Q3/13
Q4/13
Sales volume of industrial salt,
salt for chemical use and food
grade salt
Q1/14
2.40
3.89
6.89
2.34
3.59
3.74
2.37
2.26
1.22
1.48
Q2/15
Q3/15
0.98
1.55
Q2/14
Q3/14
Q4/14
Q1/15
6.53
70
65
60
De-icing salt sales volume
3.70
5.07
4.02
2.60
55
50
0.60
0.77
1.11
Average price of De-icing Salt
1.41
45
40
Q3/13
Q4/13
Q1/14
Q2/14
Q3/14
Q4/14
Q1/15
Q2/15
Q3/15
● Quarterly volumes and prices are affected by seasonal de-icing salt business which
are in general strongest in the Q1 and Q4
January 2016
K+S Group
65
Salt
Business Unit Performance
Revenues
EBIT (€ million)
(€ billion)
0.73
142
0.52
0.34
Q3/14
Q4/14
Q1/15
0.37
0.38
Q2/15
Q3/15
1.75
57
25
Q3/14
Q4/14
Q1/15
43
43
Q2/15
Q3/15
1.78
226
1.50
118
62
2012
2013
2014
Revenue split by product group (2014)
Food
grade salt
19%
Other
3%
De-icing
Salt
43%
January 2016
2012
2014
Revenue split by region (2014)
South
America
7%
Industrial
salt
30%
Salt for
chemical
use
5%
2013
Europe
19%
North
America
74%
K+S Group
66
Salt
Revenues, earnings and sales volumes
727
Revenues (€ million)
641
531
321
49
Q4/13
142
89
2
9
Q1/14
382
374
335
287
Q3/13
EBIT (€ million)
515
Q2/14
25
Q3/14
57
Q4/14
43
Q1/15
Q2/15
43
Q3/15
10.43
9.12
7.28
3.65
Q3/13
January 2016
3.20
Q4/13
Sales volume
(Million tonnes)
6.10
Q1/14
Q2/14
3.89
Q3/14
Q4/14
Q1/15
3.59
3.74
Q2/15
Q3/15
K+S Group
67
K+S Group
Content
A.
Corporate Structure & Strategy
B.
Potash and Magnesium Products
12
C.
Salt
50
D.
Complementary Activities
68
E.
Financial Data
70
F.
K+S Capital Market Data
82
January 2016
2
K+S Group
68
K+S Group
Complementary Activities
Revenues
EBIT (€ million)
(€ million)
7.9
40.9
41.3
40.2
Q3/14
Q4/14
Q1/15
159.4
39.6
38.0
Q2/15
Q3/15
6.7
5.7
Q1/15
Q2/15
Q3/15
2.7
Q3/14
Q4/14
158.3
153.7
7.7
24.7
24.2
2013
2014
21.0
2012
2013
2014
Revenue split by product group (2014)
CFK
Trading
11%
Animal
hygiene
products
25%
2012
Revenue split by region (2014)
Other
Regions
17%
Waste
Mgmt. and
Recycling
57%
Germany
83%
Logistics
7%
January 2016
K+S Group
69
K+S Group
Content
A.
Corporate Structure & Strategy
B.
Potash and Magnesium Products
12
C.
Salt
50
D.
Complementary Activities
68
E.
Financial Data
70
F.
K+S Capital Market Data
82
January 2016
2
K+S Group
70
K+S Group
Development of Revenues and Earnings
Mio. €
Revenues
Operating earnings
Group earnings, adjusted1),2)
1,500
5,000
4,633
3,822
4,000
1,200
900
3,000
715
641
600
2,000
445
367
300
1,000
0
0
2010 2011 2012 2013 2014
1)
2)
2010 2011 2012 2013 2014
2010
2011
2012
2013
2014
2010 still including K+S Nitrogen.
The adjusted figures only include the realised result from operating forecast hedges of the respective reporting period. The changes in the market value of operating
forecast hedges still outstanding, however, are not taken into account in the adjusted earnings. Related effects on deferred and cash taxes are also eliminated.
January 2016
K+S Group
71
K+S Group
Development of Earnings per Share, Adjusted
€
2,00
1,50
1,00
1.04
0.99
0.74
0.62
0.56
0,50
0.37
0.36
0.42
0.40
0.46
0.35
0,00
Q1-Q4/2013
FY*
€ 2.28
Q1-Q4/2014
Q1-Q4/2015
€ 1.92
* Information refers to the continued operations of K+S Group. The adjusted figures unalteredly only include the realised result from operating forecast hedges of the
respective reporting period. The changes in the market value of operating forecast hedges still outstanding, however, are not taken into account in the adjusted earnings.
Related effects on deferred and cash taxes are also eliminated.
January 2016
K+S Group
72
K+S Group
Operating EBIT Margins
2014
2013
2012
2011
25.9%
27.1%
33.7%
34.7%
25.5%
9.7%
6.7%
4.1%
12.4%
13.8%
Complementary Activities
15.3%
15.5%
13.7%
11.9%
15.8%
K+S Group1)
16.8%
16.6%
20.4%
22.7%
15.4%
Potash and Magnesium Products
Salt
1)
2010
Until 2010 also the discontinued operations of the nitrogen business are included.
January 2016
K+S Group
73
K+S Group
Capital Expenditure and Depreciation1)
€ million
Capex
1.200
1,153
Depreciation
1.000
800
743
600
466
49
400
293
200
178
174
189
239
240
229
251
254
0
2009
2010
2011
2012
2013
2014
● The anticipated capital expenditure for 2015 is around € 1.3 billion (2014: € 1.2 billion). Expenditure connected
with the Legacy Project accounts for most of this figure.
1)
2009 include the discontinued operations of COMPO. 2009-2010 including K+S Nitrogen.
January 2016
K+S Group
74
K+S Group
Net Debt
Provisions for pensions
Provisions for mining obligations
€ million
Non-current liabilities - non-current securities
Current liabilities - cash - current securities
162.8
Total net debt
2500
102.6
2100
925.3
1700
160.1
184.8
743.9
1.676,0
95.3
1300
528.4
900
1,351.3
500
706.6
580.6
610,8
1.037,0
827,3
1,329.7
1,478.7
-1,139.3*
-890.8*
786.6
712.1
765.4
-767.3*
-777.2*
-804.8*
2010
2011
2012
2013
2014
27.6
19.8
24.4
30.5
42.2
100
-300
-700
-1100
-1500
Gearing ratio (%)
*
January 2016
Including reimbursement claim for the Morton Salt bond (2014: € 20.1 million; 2013: €18.0 million; 2012: €18.9 million; 2011: €19.4 million; 2010: €18.9
million)
K+S Group
75
K+S Group
ROCE, EBIT-Margin and Value Added
%
€ million
800
80
700
70
600
60
500
50
400
40
300
30
200
20
100
10
0
0
2004
2005
2006
2007
2008
Value added Mio. € (lhs)
January 2016
2009
2010
ROCE
2011
2012
2013
2014
EBIT-Margin
K+S Group
76
K+S Group
Operating and Free Cash Flow (adjusted)
€ million
900
700
500
300
100
-100
-300
-500
-700
-900
2005
2006
2007
2008
2009
H1 Operating Cashflow
2010
2011
2012
2013
2014
H2 Operating Cashflow
Free cash flow (adjusted)
January 2016
K+S Group
77
K+S Group
Gearing and Equity Ratio
%
%
120
60
100
50
80
40
60
30
40
20
20
10
0
0
2004
2005
2006
2007
2008
Gearing
January 2016
2009
2010
2011
2012
2013
2014
Equity ratio (%) rhs
K+S Group
78
K+S Group
Balance Sheet
Equity and liabilities
Assets
Equity; 50.6%
Non-current assets;
68.4%
Non-current debt;
38.2%
Current assets; 31.6%
Current debt; 11.2%
Balance sheet total (31 December 2014): € 7,855.2 million
January 2016
Target
corridor
2014
2013
Net debt / EBITDA
1.0x – 1.5x
1.9x
1.1x
Net debt / Equity
max. 100%
42.2%
30.5%
Equity ratio
40% - 50%
50.6%
45.3%
K+S Group
79
K+S Group
Financing Strategy
● Proven conservative approach with regard to financial planning
Capital Structure
Financial Debt
➨ Management based on key figures
➨ Net debt/ EBITDA: 1.9x (incl. Provisions)1)
➨ Gearing: 42.2%1)
➨ Equity ratio: 50.6%1)
➨ Bonds
➨ Syndicated bank facilities
➨ Dividend proposal for financial year 2014: € 0.90 per share
Dividend Policy
➨ Long-term earnings-based dividend policy (payout ratio: 40% to
50%)
1) 2014
January 2016
K+S Group
80
K+S Group
Conservative balance sheet structure
Financial instruments
RCF € 1 billion
(undrawn)
Bond III € 500 million
(expn. Dec 2018; coupon: 3.125%)
Bond II € 500 million
(expn. Dec 2021; coupon: 4.125%)
Bond I € 500 million
(expn. June 2022; coupon: 3.000%)
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Peak years in terms of leverage
Group capex
 Capex spent of >€1.0 billion
per year from 2014 to 2016
driven by Legacy Project
2011
January 2016
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
K+S Group
81
K+S Group
Content
A.
Corporate Structure & Strategy
B.
Potash and Magnesium Products
12
C.
Salt
50
D.
Complementary Activities
68
E.
Financial Data
70
F.
K+S Capital Market Data
82
January 2016
2
K+S Group
82
K+S Group
Share, Stock Market Indices and
Analysts’ coverage
The K+S share:

●




The K+S share is quoted in the following stock market indices:
WKN: KSAG88 /
ISIN: DE000KSAG888
Type of shares: Registered shares of no-par
value
Total number of shares: 191,400,000
Trading segment: Prime Standard
Ticker symbols: Bloomberg SDF / Reuters
SDFG





●

DAX
DJ STOXX 600
DJ EURO STOXX
HDAX
CDAX Gesamtindex
Prime Allshare Index
Classic Allshare Index
●
●
●
●
●
●
●
Prime Sector Chemicals
Industry Group Chemicals / Commodity
DJ STOXX TMI
MSCI World Standard
MSCI Europe Standard
MSCI Germany Standard
ECPI Ethical Index Global
Banks presently publishing reports on K+S:






●




Baader Bank AG
Bank of America / Merrill Lynch
B. Metzler seel. Sohn & Co.
Bankhaus Lampe
Berenberg Bank
BMO Bank of Montreal
Citigroup
Commerzbank
Credit Suisse
Deutsche Bank
DZ Bank
●
●
●
●
●
●
●
●
●
●
Equinet
Equita
Exane BNP Paribas
Hauck & Aufhäuser Institutional Research AG
HSBC Trinkaus & Burkhardt
Independent Research
J.P. Morgan Cazenove
Kepler Cheuvreux
LBBW
Liberum
●
●
●
●
●
●
●
●
●
M.M. Warburg
Morgan Stanley
Nord/LB
Redburn
Sanford C. Bernstein
Scotiabank
Société Générale
SRH Alsterresearch
UBS Investment Research
Analysts’ recommendations of the last 12 months and an always current consensus estimate you can find at
http://www.k-plus-s.com/en/ks-aktie/bewertungen/analysten.html. Furthermore you can download all publications and presentations of our company from
the Investor Relations section of our website (http://www.k-plus-s.com/en/investor-relations/index.html), where you also find answers to frequently asked
questions.
January 2016
K+S Group
83
K+S Group
Key Data of the K+S Share
2014
2013
2012
2011
2010
1.92
2.27
3.33
3.04
2.33
Dividend per share (€) 3)
0.904)
0.25
1.40
1.30
1.00
Book value per share, adjusted (€) 2),3)
20.77
17.75
17.73
16.12
13.85
Year-end closing price (XETRA, €) 3)
22.92
22.38
35.00
34.92
56.36
Total stock exchange turnover (€bn)
11.4
17.0
11.8
17.7
16.8
Ø daily trading volume (million units)
1.92
2.75
1.27
1.42
1.50
191.40
191.40
191.40
191.33
191.34
Dividend yield (on closing price, %)
3.9
1.1
4.0
3.7
1.8
Return on equity after taxes (%) 1),2)
9.9
12.8
19.6
20.2
18.7
Earnings per share, adjusted (€)1),2),3)
Ø number of shares (million)
1)
2)
3)
4)
2010 include the discontinued operations of K+S Nitrogen.
The adjusted figures only include the realised result from operating forecast forecast hedges of the respective reporting
period. The changes in the market value of operating forecast hedges still outstanding, however, are not taken into account in the
adjusted earnings. Related effects on deferred and cash taxes are also eliminated.
Historical data not adjusted for the capital increase 2009.
Dividend proposal.
January 2016
K+S Group
84
K+S Group
Dividend Policy and Outlook
Group Earnings and Payout Ratio
Payout ratio
Target range payout ratio
%
90
80
,
1.400
979
70
60
637
50
582
40
445
30
20
10
104
161 176 175
Dividends in €
Mio. €
Group earnings from continued operations,
adjusted (rhs)
100
Dividends
4,0
.
4,0
,
1.200
3,5
.
3,5
,
1.000
3,0
3,0
.
800
2,5
600
435
367
94
200
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
.
2,5
2.40
2,0
.
2,0
1.30
1,5
400
0
0
€
€
1,0
0,5
1.40
.
1,5
1.00
0.90
0.25
0.45 0.50 0.50
1,0
.
0,5
.
0.20
.
0,0
0,0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
● We pursue a dividend policy that is in principle earnings-based. According to this, a dividend payout ratio of
between 40% and 50% of the adjusted Group earnings after taxes forms the basis for future dividend
recommendations.
● Dividend 2014: € 0.90 per share
January 2016
K+S Group
85
K+S Group
Shareholder Structure
Private investors 38 %
● 100% free float
● Investment companies that exceeded the
Freefloat 100 %
3% threshold (according to Article 21,
Section 1 of the WpHG):
- BlackRock Inc.: 4.77%
Institutional investors 62 %
January 2016
K+S Group
86
K+S Group
K+S Bonds and Issuer Rating
Bond 12/2018
●
●
●
●
●
●
●
●
●
WKN: A1Y CR4
ISIN: XS0997941199
Listing: Luxembourg Stock Exchange
Volume: EUR 500 million
Issue price: 99.777%
Coupon payment: 3.125%
Maturity: 06.12.2018
Face value: EUR 1,000
Rating: S&P: BBB
Bond 12/2021
●
●
●
●
●
●
●
●
●
Bond 06/2022
●
●
●
●
●
●
●
●
●
January 2016
WKN: A1P GZ8
ISIN: DE000A1PGZ82
Listing: Luxembourg Stock Exchange
Volume: EUR 500 million
Issue price: 99.422%
Coupon payment: 3.000%
Maturity: 20.06.2022
Face value: EUR 100,000
Rating: S&P: BBB; Moody's: Ba1
WKN: A1Y CR5
ISIN: XS0997941355
Listing: Luxembourg Stock Exchange
Volume: EUR 500 million
Issue price: 99.539%
Coupon payment: 4.125%
Maturity: 06.12.2021
Face value: EUR 1,000
Rating: S&P: BBB
Issuer Rating (S&P)






August 2015: BBB (outlook: negative)
October 2014: BBB (outlook: negative)
April 2014: BBB (outlook: negative)
November 2013: BBB (outlook: negative)
September 2011: BBB+ (outlook: stable)
January 2011: BBB (outlook: positive)
K+S Group
87
K+S Group
K+S ADR Programme
The K+S ADR Programme offers North American investors the opportunity to take stock in K+S. Since the
ADRs are quoted in US dollars and dividends are also distributed in US dollars, this financial instrument
resembles an American share closely. Two ADRs represent one K+S ordinary share. The K+S ADRs are
traded in the United States under a level 1 ADR Programme in the over the counter market (OTC).
Benefits to North American investors
Trade on OTCQX
●
●
●
●
●
●
Symbol:
CUSIP:
Ratio:
Country:
ISIN:
Depositary:
KPLUY
48265W108
2 ADRs = 1 Share
Germany
DE000KSAG888
The Bank of New York
Mellon
● Clear and settle according to normal U.S.
standards
● Stock quotes and dividend payments in U.S.
dollars
● Can be purchased/sold in the same way as
other U.S. stocks via a U.S. broker
● Cost-effective means of international portfolio
diversification
In case of further questions please visit our Q&A section:
http://www.k-plus-s.com/en/ks-aktie/adr/faq.html
January 2016
K+S Group
88
K+S Group
Financial Calendar
10 March 2016
 Report on business in 2015
11 May 2016
 Quarterly Financial Report, Q1/16
11 May 2016
 Annual General Meeting, Kassel
12 May 2016
 Dividend payment
11 August 2016
 Half-yearly Financial Report, H1/16
10 November 2016
 Quarterly Financial Report, Q3/16
January 2016
K+S Group
89
K+S Group
History
1889
1970/71
1993
1997
1998
1999
2000
2002
2003
2004
2005
2006
2008
2009
2011
2012
January 2016
Formation of „Aktiengesellschaft für Bergbau und Tiefbohrung“, the eldest predecessor
company of today’s K+S Aktiengesellschaft
Merger of all three West-German potash producers to Kali und Salz GmbH; BASF is majority
shareholder / change of corporate form into Kali und Salz AG
Merger of the potash and rock salt activities of Kali und Salz AG and the East-German
Mitteldeutsche Kali AG into the Kali und Salz GmbH (Kali und Salz AG share: 51%)
BASF reduces its stake of Kali und Salz AG below 50%
Purchase of the remaining share capital (49%) of Kali und Salz GmbH;
K+S is included in the MDAX
Change of company name to K+S Aktiengesellschaft; acquisition of COMPO and fertiva;
K+S cancels 10% own shares
Foundation of salt joint venture esco - european salt company (K+S stake: 62%)
K+S cancels 5.6% own shares
Acquisition of 38% share in esco
Share buyback and cancellation of 1.25 million shares
Acquisition of the Chilean salt producer Sociedad Punta de Lobos
Inclusion in the DAX
Acquisition of the North American salt producer Morton Salt
Acquisition of the Canadian potash exploration company Potash One, Divestment of COMPO
Divestment of K+S Nitrogen
K+S Group
90
K+S Investor Relations
Your Contact Persons
K+S Aktiengesellschaft
Bertha-von-Suttner-Str. 7
34131 Kassel (Germany)
E-Mail:
[email protected]
Homepage: www.k-plus-s.com
IR-website: www.k-plus-s.com/en/ir
Thorsten Boeckers
Head of Investor Relations
Andrea Rach
Investor Relations Assistant
Phone: +49 561 / 9301-1460
Fax: +49 561 / 9301-2425
[email protected]
Phone: +49 561 / 9301-1100
Fax: +49 561 / 9301-2425
[email protected]
Patrick Kofler
Senior Investor Relations Manager
Matthias Jelden
Investor Relations Manager
Martin Heistermann
Investor Relations Manager
Phone.: +49 561 / 9301-1885
Fax: +49 561 / 9301-2425
[email protected]
Phone.: +49 561 / 9301-2204
Fax:
+49 561 / 9301-2425
[email protected]
Phone.: +49 561 / 9301-1403
Fax:
+49 561 / 9301-2425
[email protected]
January 2016
K+S Group
91
K+S Group
Forward-looking Statements
This presentation contains facts and forecasts that relate to the future development of the K+S
Group and its companies. The forecasts are estimates that we have made on the basis of all the
information available to us at this moment in time. Should the assumptions underlying
these forecasts prove not to be correct or should certain risks – such as those referred to in
the Risk Report – materialise, actual developments and events may deviate from current
expectations. The Company assumes no obligation to update the statements, save for the making
of such disclosures as are required by the provisions of statute.
January 2016
K+S Group
92
K+S Aktiengesellschaft
K+S Aktiengesellschaft · Bertha-von-Suttner-Straße 7 · 34131 Kassel | Germany · Internet: www.k-plus-s.com
Investor Relations · phone: +49 (0)561 / 9301-1100 · fax: +49 (0)561 / 9301-2425 · email: [email protected]
K+S Share
• WKN: KSAG88
• ISIN: DE000KSAG888
• Ticker-Symbols: Bloomberg
SDF / Reuters SDFG
K+S ADR
• CUSIP: 48265W108
• ADR Ticker-Symbol:
Bloomberg: KPLUY /
Reuters: KPLUY.PK
K+S Bond 06/2022
• WKN: A1P GZ8
• ISIN: DE000A1PGZ82
K+S Bond 12/2018
• WKN: A1Y CR4
• ISIN: XS0997941199
K+S Bond 12/2021
• WKN: A1Y CR5
• ISIN: XS0997941355