1 Press conference K+S Aktiengesellschaft March 17, 2000 Frankfurt am Main
What we want to inform you about today 2 Result account year 1999 Presentation of our new business segments Objectives and prospects of the K+S Group
in the year 2000 3 Sales: abt. DM4 billion Investments: (tangible fixed assets) DM340 million Employees: 9,200 K+S makes significant contributions to people: Nutrition Health Ecology Safety Leisure activities
Segments in the year 2000 4 K+S Group Potash Salt Waste COMPO fertiva Services and Management and Magnesium and Trade Products Recycling
Highlights of the development of the company 1999 New name: K+S Aktiengesellschaft Share split in the ratio of 1 to 10 Bought back around 10 percent of own shares Acquisition of specialty supplier COMPO Take-over of marketing and sales of BASF agricultural fertilizers Founding of data process GmbH Laid the foundation stone for a new production plant for the special fertilizer Kieserite 5
K+S Aktiengesellschaft Dividend 1998 and 1999 per share 6 1999 1998 Change Dividend excluding tax credit 0.57 0.36 + 58.3 % Dividend including tax credit * 0.81 0.51 + 58.8 % * for domestic shareholders
K+S Aktiengesellschaft Shareholder structure as of February 2000 7 Total: abt. 24,000 shareholders Domestic and foreign companies 21% Institutional investors/ foreign banks 41% 26% Free float abt. 10% K+S 2% Others
K+S Aktiengesellschaft Shareholder structure by regions as of February 2000 8 Germany (excl. own shares) abt. 58% abt. 32% Foreign Countries abt. 10% K+S
K+S Aktiengesellschaft K+S share outperforms the MDAX Index: January 2, 1998 = 100 9 220 200 180 160 140 120 100 K+S DAX MDAX 1998 1999 2000 80 Jan. Apr. July Oct. Jan. Apr. July Oct. Jan. Apr. July Oct. source: Deutsche Börse AG, Frankfurt/Main
Yield figures 1998 and 1999 * 10 Return on sales 7.3% 8.3% 1998 1999 Return on total investment ** 7.3% 8.0% Return on equity 14.9% 18.4% *) **) acc. to German Commercial Code incl. interest pension provisions
Sales and result 1998 and 1999 * DM million 11 1999 1998 Change Sales 2,331 2,228 + 5 % Earnings before interest and taxes (EBIT) + 173 + 141 + 22 % Net income + 193 + 164 + 18 % * acc. to German Commercial Code
Sales by segments 1999 DM million Sales K+S Group year 1999: DM 2,331 million (= + 5%) 12 Potash and Related Products 1,845 +2% Salt 289 +14% Waste Management 102 +39% Services and Other Activities 95 +8%
Sales by regions 1999 13 Breakdown in DM million Change in DM million Europe 1,766 (76%) + 86 565 (24%) + 17 Overseas
EBIT by segments 1999 DM million EBIT K+S Group year 1999: 173.1 Mio. DM (= + 22%) 14 Potash and Related Products 85.5-6% Salt 36.9 +84% Waste Management 40.7 +72% Services and Other Activities 10.0 +58%
Potash and Related Products Segment 1999 15 Sales (DM million) +2% 1,812.2 1,845.0 Build-up of a significant industrial potash position in France Result at a good level 1998 1999
Salt Segment 1999 16 Sales (DM million) 254.6 +14% 289.1 Extraordinarily good de-icing salt sales volumes due to weather conditions Very good result 1998 1999
Waste Management Segment 1999 17 73.6 Sales (DM million) +39% 102.4 Volume increase due to sizable new business activities Very good result 1998 1999
Services and Other Activities Segment 1999 18 87.9 Sales (DM million) +8% 94.6 Good business course Founding of company data process GmbH 1998 1999
COMPO Segment 19
COMPO: Sales structure 2000 (plan) 20 other home & garden (industrial business, soil conditioners etc.) lawn fertilizers indoor products outdoor fertilizers plant protection products Home & garden Professional & industrial business special compound fertilizers potting soils slow release fertilizers other professional (plant protection, soil conditioners etc.) ammonium-stabilized fertilizers soluble salts, liquid fertilizers, micronutrients
New innovative COMPO products promote the growth sales DM million 140 120 100 80 60 40 20 0 +110% 2000 2002 ENTEC-range (partly) coated fertilizers new home & garden products 21
Sales development COMPO DM million 22 489 535 593 631 Medium-term growth: COMPO: 5% - 7% p.a. Market: 2% - 3% p.a. 1996 1997 1998 1999
Preliminary products of COMPO fertilizers 23 Kali und Salz GmbH. Sulfate of Potash. Muriate of Potash R. ESTA - Kieserite. Patentkali. Epsom Salt BASF-Ludwigshafen. Special compound fertilizers. ASN. Isodur. Slow release fertilizers. Ammonium stabilizer DMPP COMPO-Krefeld. Special compound fertilizers. Liquid fertilizers. Coated fertilizers. Other specialties BASF-Antwerp. Special compound fertilizers
fertiva Segment 24
fertiva Segment 25 Responsible for marketing and sales of agricultural nitrogen fertilizer business fertiva GmbH: exclusive distribution of all BASF produced straight nitrogen fertilizers and compound fertilizers (international brand Nitrophoska ) for agriculture world leading supplier of ammonium sulfate sales volume of approx. 5.3 million tonnes product worldwide with sales of almost DM 1 billion Utilization of various synergies in the K+S Group Contractual arrangements with BASF limit opportunities/risks for K+S
Nitrogen market Nitrogen fertilizers: Market shares in Western Europe 1998/99 26 Consumption 10.0 mill. t N p.a. 34% Others 56% 10% fertiva GmbH Norsk Hydro, Kemira, Grande Paroisse, Fertiberia, DSM, Terra source: EFMA
Fertilizer market Sales of important European fertilizer suppliers on the basis of 1999 DM billion 27 Norsk Hydro K+S (after acquisition) Kemira Grande Paroisse Fertiberia? DSM 0 1 2 3 4 5 6 7 estimate
Fertilizer market Population growth and arable farm land 28 Population in billion 10 Arable farm land/ha per capita 0.4 8 World 0.3 6 4 Asia 0.2 0.1 2 0 sources: FAO, IFDC, IPI 1975 1990 2000 2025 1975 1990 2000 2025 Year
Business in the first quarter of 2000 29 Potash and Magnesium Products COMPO Currently still slack demand Very good start fertiva Salt Waste Management and Recycling Services and Trade High demand, rising prices De-icing salt below very good previous year Significantly exceeding the previous year At good level as expected
Capital expenditures to tangible fixed assets DM million 30 340 277 195 157 197 1996 1997 1998 1999 2000 plan
Development of sales and net income 31 6 5 Sales - in DM billion - Net income after minority interests - in DM billion - 300 250 4 3.8 164 193 200 3 2 2.0 2.2 2.2 2.3 64 104 150 100 1 50 0 '96 '97 '98 '99 '00 '96 '97 '98 '99 '00 (est.) (est.) 0
Structural measures for improving the earning power 32 Acquisition of COMPO / take-over of marketing and sales of BASF agricultural fertilizers 2000 Acquisitions Acqusition of 49% share in Kali und Salz GmbH 1996 1997 1998 1999 Extensive modernization program completed 1995 1993 1994 Merger of potash and rock salt activities of K+S AG/MdK AG in Kali und Salz GmbH
Market positions K+S is... 33...with potash...in the green market market leader in Europe number three in the world market leader in Europe with COMPO...with nitrogen very well positioned with fertiva...with salt...in the underground waste management a leading supplier in Europe market leader in Germany
Our central strategic aim 34 Consistent evolution into a company also offering specialties, niche and brand products Aim: leading, highly profitable supplier in Europe, moving into new, attractive and high-yield growth fields
The K+S growth strategy 35 Focusing Specialization Opening up new business segments