Berenberg - Goldman Sachs German Corporate Conference Munich September 2016

Transcription

1 K+S Aktiengesellschaft Berenberg - Goldman Sachs German Corporate Conference Munich September 2016 Norbert Steiner, CEO

2 K+S Group Two-pillar strategy Positioned for growth Sustainable margin growth through specialisation Investment Case Global Presence Earnings-based dividend policy Balanced regional portfolio Attractive mid-term outlook Cost discipline K+S Group 2

3 K+S Group Our Products De-icing ~ 10m tons Food processing Agriculture (Feed) Oil & Gas Pharma Chemicals ~ 11m tons Fertilizer ~ 6m tons K+S Group 3

4 K+S Group Our Structure K+S Group Potash and Magnesium Products Business Unit Salt Business Unit Complementary Activities K+S Group 4

5 Salt Indispensable for Life and for K+S Essential mineral for our life Diverse and stable salt end uses driving continuous growth Mineral without economically viable substitutes Basic material representing only a small portion of the production costs K+S Group 5

6 Salt Unrivalled Global Production Network Project in Australia launched More than 30 assets on 3 continents Ensuring close proximity to customers Best in class supply chain assets and competence Industry best cost production in Chile K+S Group 6

7 Potash and Magnesium Products ¼ of a Soccer Field Remains to Feed One Person 2050 K+S Group 7

8 Potash and Magnesium Products Balanced Fertilization Plants need sunlight, water and minerals Only few soils with sufficient availability of plant nutrients Potash is an indispensable supplement to natural nutrient content of soils Potash not substitutable K+S Group 8

9 Potash and Magnesium Products Utilizing Entire Range of Minerals in Complex Deposits Industrial products 0.7 Health Care & Nutrition Industrial potash KCL (MOP) Specialties 3.0 Kieserite Korn-Kali SOP K+S Group 9

10 Legacy Project Strengthening our Global Presence China India South East Asia North America South America K+S Group 10

11 K+S Group Lower potash prices Fit for the Future High extraordinary impacts Q2/16 Results Dry weather Mild winter weather Full-year guidance Cost discipline Missing deep-well injection K+S Group 11

12 K+S Group Weak Second Quarter in Both Business Units EBIT I in million 179 Potash price and product mix Mild winter in salt Werra production standstills 15 Q2/15 Volume/ Price Missing deepwell injection Fit for the Future Q2/16 K+S Group 12

13 Water flow Werra Potash and Magnesium Products Update on deep-well injection Review of the application is ongoing Originally expected to be completed in summer 2016 Currently, saline wastewater can only be disposed to a limited extent Production largely based on water flow rate of the Werra river May Jun Jul Aug K+S Group 13

14 K+S Group Guidance 2016: EBIT I also Influenced by Extraordinaries million Main effects: - OpEx Legacy - Higher D&A Actual 2015 Volume-/ price Missing deepwell injection permit Other effects (net) Fit for the Future 2016e 2016e EBIT I range K+S Group 14

15 K+S Group Commissioning Legacy Fit for the Future Potash fundamentals to improve Management Agenda Lower CapEx Manage environmental challenges Salt 2020 Enhancing portfolio of higher yielding products Cost discipline K+S Group 15

16 K+S Group From Capex to Cash Today 2020 Leverage (LTM) 3.6x Capex billion FCF Negative EBITDA billion Enhancing portfolio of higher yielding products Commissioning of Legacy Successful implementation of Salt 2020 Strategy Managing environmental challenges particularly in Germany Keeping cost discipline above and beyond Fit for the Future Fundamentals of the potash business expected to improve Leverage x Capex Maintenance FCF Positive EBITDA 1 ~ 1.6 billion 1 Main assumptions: Unaffected potash production in Germany and Canada; Potash price level of summer 2015; USD/EUR 1.10; Normalized winter Guidance 2016 K+S Group 16

17 Commissioning of Legacy Commissioning Continues Despite Incident in July No injuries 1 of 5 crystallizers dropped Impact on ramp-up: Commissioning continues Production of first ton delayed into Q2/17 Production volume 2017 below previously planned (up to 1 million tons) Capacity of 2 million tons p.a. expected to be reached by the end of 2017 K+S Group 17

18 Managing Environmental Challenges in Germany Deep-well injection: Measures for the short-term Million m³ 20 Identification and implementation of measures to bridge 2016/ KCF plant Beyond Werra + Deep-well injection Measures Gap K+S Group 18

19 Enhancing Portfolio of Higher Yielding Products Two Bolt-On Acquisitions in Both Business Units Expected capacity of 3.5 million tons of salt for chemical industry in Asia CapEx of around 225 million Possible production start in 2022 Huludao One of the largest producers of synthetic magnesium sulphate Oil palms, soybeans and sugar cane and industrial applications Improved access to growth markets of South-East Asia and China Scalable low cost production assets K+S Group 19

20 Successful Implementation of Salt 2020 Strategy On Track Priority areas GROWTH Market share growth New segments New regions EFFICIENCY Fit for the Future Business and technical processes Supply chain and distribution network improvements CULTURE Safety first! Remove silo thinking Transparency/trust High performance and engaged workforce Expected EBIT development (Normalized winter) Salt 2020 Launched e K+S Group 20

21 Keeping Cost Discipline Above and Beyond Fit for the Future Cost Discipline Will Remain High million 30 >150 > on track Fit for the Future on track More than 2/3 of total aspirations achieved Measures implemented will continue beyond 2016 with full effects until 2018 Further top-down measures beyond Fit for the Future initiated Effects coming through in 2017 and 2018 K+S Group 21

22 K+S Group From Capex to Cash Today 2020 Leverage (LTM) 3.6x Capex billion FCF Negative EBITDA billion Enhancing portfolio of higher yielding products Commissioning of Legacy Successful implementation of Salt 2020 Strategy Managing environmental challenges particularly in Germany Keeping cost discipline above and beyond Fit for the Future Fundamentals of the potash business expected to improve Leverage x Capex Maintenance FCF Positive EBITDA 1 ~ 1.6 billion 1 Main assumptions: Unaffected potash production in Germany and Canada; Potash price level of summer 2015; USD/EUR 1.10; Normalized winter Guidance 2016 K+S Group 22

23 K+S Group IR Contact Details K+S Aktiengesellschaft Bertha-von-Suttner-Str Kassel (Germany) investor-relations@k-plus-s.com Homepage: IR-website: Thorsten Boeckers Head of Investor Relations Phone: / Fax: / thorsten.boeckers@k-plus-s.com Andrea Rach Investor Relations Assistant Phone: / Fax: / andrea.rach@k-plus-s.com Patrick Kofler Senior Investor Relations Manager Phone.: / Fax: / patrick.kofler@k-plus-s.com Martin Heistermann Senior Investor Relations Manager Phone.: / Fax: / martin.heistermann@k-plus-s.com Laura Schumbera Junior Investor Relations Manager Phone.: / Fax: / laura.schumbera@k-plus-s.com K+S Group 23

24 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 of the Annual Report materialize, 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. K+S Group 24

25 K+S Group

26 K+S Group 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: XS K+S Bond 12/2021 WKN: A1Y CR5 ISIN: XS K+S Aktiengesellschaft Bertha-von-Suttner-Straße Kassel Germany Internet: Investor Relations phone: +49 (0)561 / fax: +49 (0)561 / investor-relations@k-plus-s.com Financial Calendar 2016/17: 10 Nov: Q3/16 16 Mar: FY/16 K+S Group 26