Kepler Cheuvreux GCC 2019

Transcription

1 Kepler Cheuvreux GCC 2019 Frankfurt, 21 January 2019 Dr Burkhard Lohr, Chief Executive Officer Lutz Grüten, Head of Investor Relations Julia Bock, Senior Investor Relations Manager

2 Disclaimer No reliance may be placed for any purpose whatsoever on the information or opinions contained in the Presentation or on its completeness, accuracy of fairness. No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its respective directors, officers, employees, agents or advisers as to the accuracy, completeness or fairness of the information or opinions contained in the Presentation and no responsibility or liability is accepted by any of them for any such information or opinions. In particular, no representation or warranty, express or implied, is given as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, ambitions, estimates or forecasts contained in this Presentation and nothing in this Presentation is or should be relied on as a promise or representation as to the future. This Presentation contains facts and forecasts that relate to the future development of the 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 Annual Report materialise, actual developments and events may deviate from current expectations. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forecasts. This Presentation is subject to change. In particular, certain financial results presented herein are unaudited, and may still be undergoing review by the Company s accountants. The Company may not notify you of changes and disclaims any obligation to update or revise any statements, in particular forward-looking statements, to reflect future events or developments, save for the making of such disclosures as are required by the provisions of statue. Thus statements contained in this Presentation should not be unduly relied upon and past events or performance should not be taken as a guarantee or indication of future events or performance. This Presentation has been prepared for information purposes only. It does not constitute an offer, an invitation or a recommendation to purchase or sell securities issued by K+S Aktiengesellschaft or any company of the in any jurisdiction. 1

3 Current Trading

4 Potash Market update Pricing (Source: FMB) 140% MOP Brazil 130% MOP Europe 120% 110% 100% 90% SOP Europe 80% Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Strong demand holds across all regions Many producers are sold out Recovery of MOP prices continued Global demand 2018 again slightly up to ~72m tons KCl But: European MOP and Specialty prices are lagging behind 3

5 Salt Market update Pricing trends in de-icing De-icing Mixed picture in our winter regions Promising pre-stocking in US Mid-West Highly competitive US East Coast Dec below average in terms of snow events Non de-icing Solid demand Logistics costs inflation to continue in

6 May Jun Jul Aug Sep Oct Nov Dec Extreme weather situation in Germany - implications In l/m 2 Rainfall comparison (Werra) 5yr Average Impact on K+S Long-lasting severe drought in 2018 led to temporary shutdowns in Q3 and Q4 EBITDA impact for each site is up to 1.5 million per day -> ~ 110 million in 2018 Basin capacities have been increased by > 10% to 600,000 cubic meters Water levels were low! High logistics costs for remote disposal (old mines) Inland shipping was also impacted 2018: 64 days of weather related plant shut downs! In 2019, significantly higher storage capacity available Q now secured due to heavy rainfalls in Dec -> basin levels significantly lowered Source: Wetterkontor.de 5

7 Shaping 2030 Strategy

8 Our vision for 2030 We will be the most customer-focused, independent minerals company and grow our EBITDA to 3bn in 2030 by... 'One Company'... thinking and acting as 'One Company' and realizing synergies between our businesses Agriculture Communities Industry Consumers Tapping the full potential of our existing assets... and establish the most value-creating portfolio combination Exploring new adjacent growth areas... pursuing growth by venturing into new markets where we can use our existing capabilities Increasing the share of our specialties business... to ensure an overall stabilized performance and reduce our dependency on standard products and weather 7

9 We will implement our strategy in two phases Phase 1: Transformation Phase 2: Growth 2017 Reduce indebtedness Realize synergies 2020 Tapping the full potential of our existing assets Exploring new adjacent growth areas 2030 Advance corporate culture Shaping the organization and focusing towards our clients Increased share of specialties Net debt/ halved EBITDA vs. H1/2017 Synergies > 150m Investment grade rating achieved in 2023 EBITDA-Ambition 3bn ROCE > 15% Revenue growth beyond 2030 > 4% 8

10 Phase I

11 Phase I: Building a basis for our growth options Divisional Silos Matrix COO Group Board of Executive Directors Matrix CEO Group CFO Group Board of Executive Directors Head of Human Resources Head of Corporate Development Head of Corporate Controlling Head of Corporate Communications Agriculture Industry CEO Americas CEO Europe & Agriculture Communities Consumers Customer Segments Head of Marketing, Sales & Supply Chain Excellence Marketing & Sales Committee Agriculture Industries Consumers Communities Operations Head of Operations Excellence Operations Excellence Committee Operating Unit Function Executive Committee 10

12 Synergies: Breakdown by program SHAPING 2030 SG&A Optimization Sponsor CEO Net synergies YE 2020 (vs. 2017) ~ 30m Operations COO > 50m Lift synergies Procurement CFO > 30m Supply Chain and Logistics COO > 20m Commercial Excellence COO > 20m > 150m 11

13 Shaping 2030 EBITDA impact Costs Synergies > 150m 2018e 2019e 2020e Total costs for synergy program: ~ 150m (2020 year end) 12

14 Assumptions Net Present Value (NPV) Bethune (1) We have updated our valuation for Bethune Current purchase conditions for gas reflected Modified ramp-up curve taken into consideration WACC (before taxes) = 8.5% USD/EUR = 1.15 EUR/CAD = 1.55 View on the period MOP gran. Brazil: = USD/t 13

15 Sensitivities Net Present Value (NPV) Bethune (2) NPV for Bethune EUR 4.8 bn This NPV equals an EV per share of 25 EUR Variation NPV change MOP gran. Brazil +/- 10 USD/t +/- 200 million We create value for our stakeholders! 14

16 Site costs (FOB) in comparison (2020) USD/t -30% Best-in-class K+S Bethune (in 2023) K+S Zielitz (Purely MOP) K+S Bethune BU Potash w/o Bethune (incl. Specialties) * Source: CRU Report 2016, K+S * column width = production capability in million tons The Bethune ramp-up to 2.86 million tons in 2023 (production capability) significantly improves K+S's competitive position. 15

17 Phase II

18 Our strategy has incorporated important megatrends 8.5bn Global population in Average global warming (ºC) Arable land shrinking Yield needs to be improved Today: 7.3bn Implications for K+S 40% of population suffer from water shortage by % of water used for agriculture Per decade 5.4bn people belong to the middle-class by : 3.0bn Higher efficiency of fertilization and irrigation needed Plants have to be more stress resistent Infrastructure needs to be improved focus on renewable energy Growing population, especially in Asia, needs more salt for various purposes 17

19 Growth areas and ideas cover the full growth landscape K+S Growth Landscape Geo-expansion Fertilizer Industry Africa Increase of fertilizer specialties Expand Pharma & Food portfolio Asia Ramp of low cost commodities Chemical applications Growth areas and ideas cover core and adjacent businesses 18

20 Financials

21 P&L million FY/16 Q1/17 Q2/17 Q3/17 Q4/17 FY/17 Q1/18 Q2/18 Q3/18 Revenues 3,457 1, ,032 3,627 1, EBITDA Margin 15% 19% 14% 11% 18% 16% 20% 13% 4% EBIT I Financial result Net income, adjusted EPS, adjusted

22 Cash Flow and Balance Sheet million FY/16 Q1/17 H1/17 9M/17 FY/17 Q1/18 H1/18 9M/18 Operating cash flow Investing cash flow (pre sale/ purchase of securities) -1, Adjusted free cash flow CapEx 1, Net debt 3,584 3,614 3,745 3,939 4,141 4,009 4,129 4,299 t/o Net financial debt 2,401 2,440 2,592 2,780 2,974 2,834 2,944 3,100 Net debt/ EBITDA (LTM) Equity ratio 47% 48% 45% 44% 43% 42% 43% 41% 21

23 Guidance 2018: EBITDA between m million Underlying assumptions: Tax rate: ~26-28% Financial result: ~-120 million EUR CapEx: ~ 500 million EUR D&A (incl. Bethune): 380 to 400 million EUR Reconciliation (EBITDA): ~-70 million EUR 577 Main effects: + Potash prices + De-icing salt prices Main effects: + Bethune + Tangibly higher salt volumes - Production issues Germany Main effects: - Planning assumption: 1.20 EUR/USD Main effects: +/- Sigmundshall - Production issues - Logistic costs - Shaping m Actual 2017 Price Volume/Mix Drought Effect Currency Other Effects (net) 2018e Full year guidance is including weather-related outage days in Q4 (roughly 10m)! Cash unit cost per ton (2017: 214 /t) likely to be at ~ 215 /t in

24 Expected Development of our Potash Production 2018 ~ 6.2mt Germany (incl. outage days) ~ 1.4mt Bethune 0.1mt Huludao Total: ~ 7.7mt >500kt Werra: no lack of staff and 50% broken machinery back Werra: no outage days Neuhof: roof stability improved +300 to 500kt Bethune Change in Production +100kt KCF mt Germany mt Bethune 0.1mt Huludao Total: mt Sales Volume: ~7.5mt -600kt Sigmundshall -100kt Lower K 2 O content in Germany Cash Unit Cost: > 200 due to overall cost inflation High-cost production to be replaced by low-cost volumes from Bethune 23

25 CapEx development in m BU Potash (ex Bethune) Bethune BU Salt Complementary Activities e 2019e 2020e 24

26 2017 Operations Shaping CapEx 2018e Operations Shaping CapEx 2020e Moving parts Free Cash Flow Bethune + Price Werra FX Significant improvement + Bethune + Volume = Price = FX Net Working Capital 25

27 K+S sustainability KPIs and targets 2030

28 PEOPLE K+S sustainability KPIs and targets People Goal Health & Safety KPI Lost time incident rate (LTIR) Target until 2030 at the latest 0 Vision 2030 Diversity & Inclusion Human Rights Employees favorable perception of inclusive work environment (percent) Sites covered by a human rights due diligence process (percent) >

29 ENVIRONMENT K+S sustainability KPIs and targets Environment Goal KPI Target until 2030 at the latest Water Waste Deep well injection of saline waste water in Germany (m³ p.a.) Additional reduction of saline process water from potash production in Germany (m³ p.a.) Amount of residue used for other purposes than tailings or increased amount of raw material yield (million tonnes p.a.) 0 Starting January ,000 Excluding reduction by KCF facility and end of production SI 3 Additional area of tailings piles covered (ha) 155 Energy & Climate Carbon footprint for power consumed (kg CO 2 /MWh) (percent) Specific greenhouse gas emissions (CO 2 ) in logistics (percent)

30 BUSINESS ETHICS K+S sustainability KPIs and targets Business ethics Goal Sustainable Supply Chains KPI Critical suppliers aligned with the Supplier Code of Conduct (SCOC) (percent) Spend coverage of the SCoC (percent) Target until 2030 at the latest 100 by end of 2025 > 90 by end of 2025 Compliance & Anti- Corruption All employees reached by communication measures and trained appropriately in compliance matters (percent) 100 by end of

31 IR Contact Details K+S Aktiengesellschaft Bertha-von-Suttner-Str Kassel (Germany) Homepage: IR-website: investor-relations@k-plus-s.com Lutz Grüten Head of Investor Relations Christiane Martel Roadshow Management Phone: / Fax: / lutz.grueten@k-plus-s.com Phone: / Fax: / christiane.martel@k-plus-s.com Julia Bock, CFA Senior Investor Relations Manager Martin Heistermann Senior Investor Relations Manager Alexander Enge Investor Relations Manager Laura Schumbera Junior Investor Relations Manager Phone: / Fax: / julia.bock@k-plus-s.com Phone: / Fax: / martin.heistermann@k-plus-s.com Phone: / Fax: / alexander.enge@k-plus-s.com Phone: / Fax: / laura.schumbera@k-plus-s.com 30