K+s Ag · XETR:SDF
K+s — K+S Aktiengesellschaft — Non-Deal Roadshow (July 2008)
65 slides from K+s's roadshow presentation, Jul 3, 2008
Slide 1: Experience growth. Roadshow Lugano/Milan
Experience growth. Roadshow Lugano/Milan 2/3 July 2008 Experience growth.
Slide 2: Growth Lies at the Heart of Our Vision
K+S Group Growth Lies at the Heart of Our Vision K+S is one of the world's leading suppliers of speciality and standard fertilizers, plant care as well as salt products. With our products and brands, we offer our customers a range of needs-based goods and services which provides growth opportunities
Slide 3: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Business Segments D. Strategy E. Financial Data and Outlook F. K+S Share Appendix July 2008 K+S Group 2
Slide 4: Corporate Structure as of January 2008
K+S Group Corporate Structure as of 1 January 2008 K+S Group Revenues EBIT I Potash and Magnesium Products 1,408.0 177.9 Core business fertilizers and COMPO 617.4 32.0 plant care fertiva 648.0 25.3 Core business Salt 545.1 47.8 salt Waste Management and Recycling Complementary KTG Logistics (KTG) bu
Slide 5: Worldwide Presence
K+S Group Worldwide Presence Overseas Europe Kassel Revenues by region (2007) Germany 19.6% Rest of Europe 47.1% Production Overseas 33.3% Sales July 2008 K+S Group 4
Slide 6: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Business Segments D. Strategy E. Financial Data and Outlook F. K+S Share Appendix July 2008 K+S Group 5
Slide 7: Why Fertilize?
K+S Group Why Fertilize ? z There are only few soils on earth which have a sufficient content and availability of nutrients to achieve high yields over a longer period without fertilization z Indispensable supplement to the natural nutrient content of soils z Compensation of the nutrient losses by h
Slide 8: Key Drivers of the Fertilizer Business
K+S Group Key Drivers of the Fertilizer Business z Despite decreasing availability of arable farm land, global production of soft commodities has to increase: • steadily increasing world population • changing diets toward higher meat consumption (e.g. 1 kg beef = 8 kg animal feed) • increasing impor
Slide 9: Yields of Cereals in Selected Regions
K+S Group Yields of Cereals in Selected Regions dt/ha 70 60 50 40 30 20 10 0 North America Latin America Western Europe Eastern Europe South Asia Far East Africa Source: FAO 1980 1985 1990 1995 2000 2004 z Highest yields of cereals per hectare to be found in Western Europe and in North America thank
Slide 10: Meat Consumption per Capita
300 K+S Group Meat Consumption 250 per Capita 200 kg / person 150 North America 100 Europe* South America 50 Asia Africa 0 1961 1970 1980 1990 2002 * Comparable data for Europe is not available before 1992 Source: Food and Agriculture Organization of the United Nations (FAO) z Rising prosperity goes
Slide 11: Bio Diesel Production - Objectives of the EU 25
K+S Group Bio Diesel Production - Objectives of the ‘EU 25’ 22.000 According to the EU guideline from 08.05.2003 for the promotion of the use of 20.000 bio fuels, the member states have to guarantee a minimum share of bio fuels. 18.000 1.000 t/year 16.000 14.000 14,000 13,450 12.000 12,000 11,500 10
Slide 12: Fertilizer Business - Gene Technology
K+S Group Fertilizer Business - Gene Technology z Objectives of gene technology: • improved crop resistance against broad-band herbicides as well as pests and diseases • breeding of plants with elevated use value for the customer z Cultivation of genetically modified crops (GMO) mainly in the USA, A
Slide 13: Agricultural Supply Falls Short of Demand
K+S Group Agricultural Supply Falls Short of Demand Production, consumption, stocks of cereals Production, consumption, stocks of corn 120 40 80 50 30 60 40 80 30 20 40 20 40 10 20 10 m illion t m illion t 0 0 0 0 % % -10 -20 -10 -40 -20 -20 -40 -30 -80 -30 -60 -40 -120 -40 -80 -50 1 6 1 6 1 6 1 6 1
Slide 14: Rising Prices of Agricultural Products
K+S Group Rising Prices of Agricultural Products Index: January 2005 = 100 z Agricultural output cannot 325 Palm oil keep up with demand 300 Corn +201% Soybeans z Low worldwide inventories 275 Wheat of agricultural products 250 +153% 225 +120% z Additional and increasing 200 +114% demand of renewabl
Slide 15: Market Impact on Fertilizer Suppliers
K+S Group Market Impact on Fertilizer Suppliers +++ very strong Relative market impact ++ strong per class of nutrient + low o very low/non existent Nitrogen Phosphate Potash (N) (P) (K) K+S + o +++ Agrium +++ +/o + Mosaic + +++ ++ PCS ++ ++ ++ Uralkali o o +++ Yara +++ + o Explanatory note: The wei
Slide 16: World Potash Production and Demand by Region
Potash and Magnesium Products World Potash Production and Demand by Region Million tonnes 18.9 20.6 24.7 10.8 8.2 7.4 4.7 8.6 10.4 1.5 0.7 World potash production: World potash sales: Incl. sulphate of potash 2007: 57.8 million t 2007: 58.7 million t and low grade potash 2006: 50.9 million t 2006: 5
Slide 17: Supplier Structure on the World Potash Market
Potash and Magnesium Products Supplier Structure on the World Potash Market 33.2% 22.8% 11.8% 9.3% 9.2% 9.0% 3.2% 1.5% zPCS Belarus- z K+S zSilvinit ICL- APC SQM Others zMosaic kali IPC Group participation participation China, of PCS of PCS Intrepid, zAgrium Uralkali z zDSW Vale, Canpotex BPC zIberp
Slide 18: World Potash Capacity, Production and Demand
Potash and Magnesium Products World Potash Capacity, Production and Demand Million tonnes z The shortfall of Eastern European Technically available capacity demand after the collapse of the 80 (incl. announced capacity expansions) Soviet Union was more than 77.9 compensated for by the growth Product
Slide 19: Agricultural Potash Consumption by Region
Potash and Magnesium Products Agricultural Potash Consumption by Region Index 1980/81 = 100 Index 1980/81 = 100 350 350 World Developed markets 300 300 North America, Western Europe, Australia, Japan 250 250 200 200 150 150 100 100 50 50 0 0 80/81 82/ 84/ 86/ 88/ 90/ 92/ 94/ 96/ 98/ 00/ 02/ 04/ 06/0
Slide 20: MOP Prices for Selected Markets
Potash and Magnesium Products MOP Prices for Selected Markets Overseas Northwest-Europe US$/t (standard, cfr) US$/t (standard, fob) 750 Thailand/Taiwan 733 675 700 Brasilien 701 630 623 650 585 600 540 550 495 500 450 450 405 400 360 350 315 300 270 250 225 200 180 150 135 100 90 Q1 Q3 Q1 Q3 Q1 Q3 Q
Slide 21: Recent Price Increases/Announcements
Potash and Magnesium Products Recent Price Increases/Announcements Price quotations per tonne MOP Western Europe granular MOP z End of Apr. ’08: price increase of € 40 to € 450 cfr; End of May ’08: latest price increase of further € 85 to € 535 cfr with immediate effect standard MOP z End of June ’0
Slide 22: Loader (up to 20 tonnes)
Potash and Magnesium Products Loader (up to 20 tonnes) July 2008 K+S Group 21
Slide 23: Potash and Magnesium Products
K+S Group Potash and Magnesium Products 1st Quarter Financial Year Revenues by product group € million 2008 2007 2007 2006 2007 (%) Revenues 522.5 368.5 1,408.0 1,238.9 EBIT I 170.9 52.8 177.9 158.6 Brief description Crude potash and magnesium salts are extracted from six mines in Germany and form t
Slide 24: USD Currency Management
Potash and Magnesium Products USD Currency Management z USD revenues are hedged after the deduction of overseas freight costs and a safety margin z US dollar hedging in 2003 to 2007 (inclusive) via double-barrier options: no classic hedging mechanism, only effective within certain barriers; barriers
Slide 25: COMPO
K+S Group COMPO 1st Quarter Financial Year Revenues by segment € million 2008 2007 2007 2006 2007 (%) Revenues 275.9 217.1 617.4 552.4 EBIT I 35.9 19.2 32.0 29.2 Brief description Consumer business: high-quality branded products such as potting soil, plant care products, lawn and garden fertilizers.
Slide 26: fertiva
K+S Group fertiva 1st Quarter Financial Year Revenues by product group € million 2008 2007 2007 2006 2007 (%) Revenues 212.5 150.5 648.0 556.2 EBIT I 6.7 4.4 25.3 16.7 Brief description fertiva represents the K+S Group’s nitrogen fertiizer activities and markets the agricultural fertilizers produced
Slide 27: Advantages of Joint Production of fertiva/COMPO
K+S Group Advantages of Joint Production of fertiva/COMPO z BASF produces fertilizers on an exclusive basis for fertiva and for COMPO; fertiva and COMPO control production volumes and product mix z Joint use of BASF technologically leading production facilities at competitive cost by fertiva and COM
Slide 28: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix July 2008 K+S Group 27
Slide 29: Salt
K+S Group Salt 1st Quarter Financial Year Revenues by product group € million 2008 2007 2007 2006 * 2007 (%) Revenues 170.3 176.6 545.1 485.8 EBIT I 14.7 25.0 47.8 67.6 * Since 1 July 2006 including SPL Brief description Salt products of highest purity and quality are used as table salt, industrial
Slide 30: Salt: Mining Chamber in Germany
Salt Mining Chamber in Germany July 2008 K+S Group 29
Slide 31: SPL: Salt Extraction in the Atacama Desert
Salt SPL: Salt Extraction in the Atacama Desert July 2008 K+S Group 30
Slide 32: SPL: The Optimal Strategic Complement for K+S
Salt SPL: The Optimal Strategic Complement for K+S z SPL has developed into a strong player in the Americas • one of the most cost effective salt producers in the world • enjoys favourable logistical location to attractive overseas markets • high earnings capacity with growth opportunities z SPL ope
Slide 33: Main Salt Suppliers Worldwide
Salt Main Salt Suppliers Worldwide Capacity in million tonnes (crystallized salt and salt in brine; excl. captive use) 18.7 16.2 6.5 14.0 13.7 13.1 9.0 9.7 7.5 7.0 5.3 4.1 3.8 3.6 China Cargill Compass Morton Dampier Artyom- Expor- Südsalz Salins Mitsui Akzo National Minerals Salt Salt sol tadora Gr
Slide 34: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Business Segments D. Strategy E. Financial Data and Outlook F. K+S Share Appendix July 2008 K+S Group 33
Slide 35: Complementary Business Segments
K+S Group Complementary Business Segments 1st Quarter Financial Year Revenues by segment € million 2008 2007 2007 2006 2007 (%) Revenues 31.7 31.9 125.1 123.9 EBIT I 7.1 10.0 37.7 37.1 Brief description Waste Management and Recycling uses the caverns as well as the existing infrastructure in the act
Slide 36: Raw Material Prices Favour Recycling Business
Waste Management and Recycling Raw Material Prices Favour Recycling Business Index: January 2003 = 100 700 Price of copper z Recycling: high prices for Price of aluminium aluminium granulate being obtained 600 by the recycling of salt slag 500 z Reutilisiation: stricter legal requirements for the tr
Slide 37: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Business Segments D. Strategy E. Financial Data and Outlook F. K+S Share Appendix July 2008 K+S Group 36
Slide 38: K+S is the Leading Player in its Markets
K+S Group K+S is the Leading Player in its Markets Fertilizers and Plant Care: One of the leading suppliers worldwide Potash z Leader in Europe z Fourth-largest producer worldwide Sulphate of potash and magnesium sulphate z Leading position in the World The green market z Leader in Europe with COMPO
Slide 39: Strategy
K+S Group Strategy z Consolidation and selective expansion of our leading market positions, particularly with regard to specialities z Further development of our core business sectors through acquisitions and cooperation arrangements z Ongoing focus on improving efficiency and cutting costs as well
Slide 40: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Business Segments D. Strategy E. Financial Data and Outlook F. K+S Share Appendix July 2008 K+S Group 39
Slide 41: Development of Revenues and Earnings
K+S Group 5.000 500 Development of Revenues 4.500 450 and Earnings € million 4.000 € 400 million CAGR 10.0% CAGR 25.3% CAGR 14.7% 3,500 3.500 3,344 350 3,000 3.000 300 286 2,500 2.500 2,288 250 2,000 2.000 200 175 ** 1,500 1.500 150 116 101 1,000 1.000 100 500 500 50 00 0 ‘03 ‘05 ’07 ‘03 ‘05 ’07 ‘03
Slide 42: Capital Expenditure, Acquisitions, Share Buyback
K+S Group Capital Expenditure, Acquisitions, Share Buyback € million 2003-’08e 500 Share buybacks: 110 Acquisitions: 454 Expansion capex: 280 400 Maintenance capex: 629 Total cash-outflow: 1,473 300 358 200 100 93 1 43 67 2 22 77 33 27 100 21 140 94 105 86 109 95 0 2003 2004 2005 2006 2007 2008e z 2
Slide 43: Key Figures as of March 2008
K+S Group Key Figures as of 31 March 2008 € million Q1/2008 Q1/2007 % Revenues 1,213.0 944.7 + 28.4 Operating earnings (EBIT I) 226.3 103.3 > 100.0 Earnings before income taxes (EBT), adjusted * 224.0 93.5 > 100.0 Group earnings after taxes, adjusted * 162.6 62.6 > 100.0 Effective tax rate (%) 27.4
Slide 44: Changes in Revenues as of March 2008
K+S Group Changes 1.400 in Revenues as of 31 March 2008 € million 1.300 1,300 +332.2 -34.5 +1.4 1,213.0 1.200 1,200 1.100 1,100 +268.3 1,000 1.000 944.7 -30.8 900 800 Revenues Volume/ Prices Exchange Consoli- Revenues Q1 structure rates dation Q1 2007 2008 July 2008 K+S Group 43
Slide 45: Development of Earnings per Share, Adjusted
K+S Group 6,00 Development 5,50 of Earnings per Share, Adjusted* 5,00 4,50 € 3.95 4,00 4.00 3,50 3.50 3,00 3.00 2,50 2.50 2,00 2.00 1.73 1.85 1.52 1,50 1.50 1.15 0.95 1.02 1.00 1,00 0.76 0.56 0,50 0.50 0.83 ** 0,00 0.00 Q1 - Q4 2006 Q1 - Q4 2007 Q1 2008 EPS FY* € 4.27 ** € 4.25 - * Adjusted for the
Slide 46: Strong Business Performance Expected in 2008
K+S Group Strong Business Performance Expected in 2008 (as of 6 May 2008) z In 2008, revenues should rise significantly: - Estimate is supported primarily by higher revenues in the Potash and Magnesium Products business segment due to large price increases on the world's potash markets - Negative cu
Slide 47: 2008 Perspectives by Business Segment
K+S Group 2008 Perspectives by Business Segment z Potash and Magnesium Products: The prices for potash fertilizers currently attained are sig- nificantly higher than last year’s average prices. The resulting price effect should amount to at least 60%. Sales volumes are expected to amount to just und
Slide 48: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Business Segments D. Strategy E. Financial Data and Outlook F. K+S Share Appendix July 2008 K+S Group 47
Slide 49: Key Data of the K+S Share
K+S Aktiengesellschaft Key Data of the K+S Share *** 2008 2007 2006 2005 2004 2003 ** Earnings per share, adjusted (€) * 4.25 4.27 3.81 2.43 2.42 Dividend per share (€) 2.00 2.00 1.80 1.30 1.00 Book value per share, adjusted (€) * 24.12 27.24 25.71 22.58 20.76 13.76 Year-end closing price (XETRA, €)
Slide 50: Dividends and Share Buybacks (10 Years)
K+S Aktiengesellschaft Dividends and Share Buybacks (10 Years) 150 2,50 € million € per share Dividend per share (rhs) (for the prior financial year) 2.00 2.00 120 Share buybacks (lhs) 2,00 2.00 66.70 1.80 Total dividend payment (lhs) (for the prior financial year) 90 69.36 1,50 1.50 1.30 43.38 82.5
Slide 51: K+S Share Price Compared with DAX and MDAX
K+S Aktiengesellschaft K+S Share Price Compared with DAX and MDAX Performance of K+S share Market capitalisation (Index: 31 December 2007 = 100) (€ million) 250 225 K+S +123% 14,977 200 +8,264 175 150 6,713 125 +3,322 100 MDAX -8% 3,391 75 DAX -20% Jan. 2008 June 2006 2007 2008 31 Dec. 31 Dec. 27 Ju
Slide 52: K+S Share Price Compared with Peer Group
K+S Aktiengesellschaft K+S Share Price Compared with Peer Group Index: 31 December 2007 = 100 250 225 K+S +123% 200 Uralkali +93% Yara +75% 175 PotashCorp +59% 150 Mosaic +57% 125 100 75 Jan. 2008 June Source: Bloomberg; as of 27 June 2008 July 2008 K+S Group 51
Slide 53: Shareholder Structure
K+S Aktiengesellschaft Shareholder Structure z BASF holds approx. 10% of our shares; MCC Holding Limited (Linea Ltd.), an investment vehicle of Andrey Melnichenko, which is also invested in the Russian agrochemical enterprise EuroChem, holds 10.43% of our shares z The freefloat of K+S AG amounts to
Slide 54: Financial Calendar
K+S Group Financial Calendar 13 August 2008 ¾ Interim report 30 June 2008 12 November 2008 ¾ Interim report 30 September 2008 12 March 2009 ¾ Report on business in 2008 ¾ Press and analyst conference, Frankfurt am Main 13 May 2009 ¾ Annual General Meeting 2009, Kassel ¾ Interim report 31 March 2009
Slide 55: K+S Aktiengesellschaft Contact
K+S Aktiengesellschaft Bertha-von-Suttner-Straße 7 34131 Kassel (Germany) phone: +49 (0)561 / 9301-0 fax: +49 (0)561 / 9301-1753 www.k-plus-s.com Investor Relations phone: +49 (0)561 / 9301-1460 fax: +49 (0)561 / 9301-2425 email: [email protected] Experience growth.
Slide 56: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Business Segments D. Strategy E. Financial Data and Outlook F. K+S Share Appendix July 2008 K+S Group 55
Slide 57: History
K+S Group History 1889 Formation of „Aktiengesellschaft für Bergbau und Tiefbohrung“, the oldest predecessing company of today`s K+S Aktiengesellschaft 1970 Merger of all three West-German potash producers to Kali und Salz AG; BASF is majority shareholder 1993 Merger of the potash and rock salt acti
Slide 58: Revenues and Earnings as of December 2007
K+S Group Revenues and Earnings as of 31 December 2007 € million 2007 2006 % Revenues 3,344.1 2.957.7 + 13.1 Operating earnings (EBIT I) 285.7 278.0 + 2.8 Earnings after market value changes (EBIT II) - 106.9 361.6 - Financial result - 35.7 - 20.1 - 77.6 Earnings before income taxes (EBT) - 142.6 34
Slide 59: Group Changes in Revenues as of December 2007
K+S 3.700 Group Changes 3.600 in Revenues as of 31 December 2007 € million 3.500 3.400 3,400 3,344.1 3,300 3.300 +126.4 +267.8 -76.0 3.200 3,200 +386.4 3.100 3,100 3,000 3.000 +68.2 2.900 2,900 2,957.7 2.800 2,800 2.700 2,700 2,600 2.600 Revenues Volume/ Prices Exchange Consoli- Revenues 2006 struct
Slide 60: Balance Sheet as of December 2007
K+S Group Balance Sheet as of 31 December 2007 € million 2007 2006 Non-current assets 1,440.2 1,396.6 of which: Intangible assets 172.5 189.0 Property, plant and equipment 1,124.8 1,082.6 Securities 37.1 42.1 Deferred tax assets 70.0 52.0 Current assets 1,524.6 1,434.3 of which: Inventories 368.6 37
Slide 61: Cash Flow Statement as of December 2007
K+S Group Cash Flow Statement as of 31 December 2007 € million 2007 2006 +/- Gross cash flow 372.1 342.7 + 29.4 Cash flow provided by operating activities * 258.7 227.6 + 31.1 Cash flow used in investing activities - 140.7 - 429.8 + 289.1 - of which: acquisitions/divestments 2.6 - 357.7 + 360.3 Free
Slide 62: Operating EBIT Margins as of December 2007
K+S Group Operating EBIT Margins as of 31 December 2007 Operating Operating earnings Revenues EBIT margin € million 2007 2007 2007 2006 Potash and Magnesium Products 177.9 1,408.0 12.6% 12.8% COMPO 32.0 617.4 5.2% 5.3% fertiva 25.3 648.1 3.9% 3.0% Salt 47.8 545.1 8.8% 13.9% Waste Management and Recy
Slide 63: ROCE as of December 2007
K+S Group ROCE as of 31 December 2007 Operating Net Return on earnings assets* capital employed € million 2007 2007 2007 2006 Potash and Magnesium Products 177.9 861.0 20.7% 18.6% COMPO 32.0 300.5 10.7% 10.3% fertiva 25.3 - 94.9 - - Salt 47.8 693.5 6.9% 14.1% Waste Management and Recycling 11.5 28.1
Slide 64: Forward-Looking Statements
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 information available to us at this moment in time. Should the assumptions u
Slide 65: K+S Aktiengesellschaft Contact
K+S Aktiengesellschaft Bertha-von-Suttner-Straße 7 34131 Kassel (Germany) phone: +49 (0)561 / 9301-0 fax: +49 (0)561 / 9301-1753 www.k-plus-s.com Investor Relations phone: +49 (0)561 / 9301-1460 fax: +49 (0)561 / 9301-2425 email: [email protected] Experience growth.
K+S Aktiengesellschaft — Non-Deal Roadshow (July 2008) on 6ix