Successful Start to the Year by the K+S Group

Transcription

1 Kassel, Germany, 12 May 2015 Q quarterly financial report Successful Start to the Year by the K+S Group Revenues up 16% to 1.4 billion Salt business very strong in first quarter Price recovery continues for Potash and Magnesium Products Operating earnings (EBIT I) at 317 million (Q1/14: 220 million) Fit for the Future programme delivers planned results Outlook 2015 confirmed: Significant increase in EBIT I expected Higher prices for de-icing salt in North America, the continuing recovery of average prices in the potash business and positive currency effects led to significantly higher revenues and profit for the K+S Group in the first quarter of 2015, reported K+S Board of Executive Directors Chairman, Norbert Steiner when presenting the quarterly figures at the Company s Annual General Meeting in Kassel today. Furthermore, cost savings from the Fit for the Future programme again made an extremely significant contribution to the Company s success. The successful start to the year underlines our confidence with regard to the further business development of the K+S Group this year, Steiner continued.

2 Page 2 of the press release Successful Start to the Year by the K+S Group, 12 May 2015 Revenues up 16% on Previous Year The K+S Group generated revenues of 1.38 billion in the first three months of the year, representing an increase of around 16% compared with the same period in the previous year. Higher average prices in particular have had positive effects in both business units, which have also profited from a strong US dollar. In the quarter under review, approx. 53% of revenues were generated by the Salt business unit, followed by Potash and Magnesium Products with just over 44% and Complementary Activities (3%). Fit for the Future Programme Contributes to Results as Planned K+S continued its efforts to improve the efficiency of the cost and organisational structures of the entire Group during the first quarter of 2015 and achieved the cost savings as planned for this period. Operating Earnings Rise Significantly in First Quarter The K+S Group generated operating earnings (EBIT I) of 317 million in the first three months of the year, exceeding the figure in the previous year by 97 million or about 44%. This strong improvement in results is primarily due to price increases in de-icing salt in North America. This more than compensated for the lower sales volumes. The Salt business unit increased EBIT I in this period by almost 60% compared with the previous year. In the Potash and Magnesium Products business unit as well, the recovery in average prices helped to generate higher operating earnings (+36%). The stronger US dollar also had a positive impact on K+S here. Furthermore, cost savings from the Fit for the Future programme contributed to the company s success as expected. Group Earnings After Taxes also Higher than in Previous Year Group earnings after taxes adjusted in accordance with changes in the market value of derivatives were 198 million in the first quarter rising by around 40% compared with the previous year (Q1/14: 142 million). Adjusted earnings per share were 1.04 in the same period compared with 0.74 in the previous year.

3 Page 3 of the press release Successful Start to the Year by the K+S Group, 12 May 2015 Increase in Capital Expenditure as Planned The K+S Group invested 200 million in the first quarter of 2015, roughly equivalent to a 22% increase on the same period in the previous year (Q1/14: 165 million). Most of the capital expenditure applied to the Legacy Project in Canada and the package of measures for water protection in the Hesse-Thuringia potash district. Legacy Project Continues to Make Good Progress The detail engineering plans for the construction of the new potash plant in Canada were completed during the quarter under review. The focus was also on procuring main components in the areas of evaporation, crystallization, drying and compacting and the construction of the steel structure of the factory. K+S is well on the way to commissioning the plant as scheduled from summer 2016 onwards and producing the first tonnes of potash fertilizers towards the end of the year thus meeting the investment budget of 4.1 billion Canadian dollars. Results Outlook for 2015 Confirmed The revenues of the K+S Group in the 2015 financial year should be significantly (to date: moderately) higher than the figure for the previous year (2014: 3.82 billion). Both business units should profit from a higher yearon-year average price level. In particular the Potash and Magnesium Products business unit should also benefit from advantageous currency effects. The Salt business unit should benefit from the higher prices for deicing salt and early fills. The deviation, compared with our previous assumption of a moderate increase in revenues, is the result of higher expected volumes in the Salt business unit. The effects described for the development in revenues also apply to the operating earnings (EBIT I). As a result of the positive development in the first quarter, the K+S Group has confirmed its expectations of a significant increase in EBIT I compared to the previous year (2014: 641 million).

4 Page 4 of the press release Successful Start to the Year by the K+S Group, 12 May 2015 Following a successful start, the Fit for the Future programme will be continued. The sustained improvement of cost and organisational structures aims to increase the efficiency of production and administration and sales functions. K+S is striving for total cost savings of 500 million between 2014 and 2016 compared with previous planning for this period. In addition to actual savings, this figure also includes expenses that were originally planned, but had been avoided. Compared with the previous year, the programme should make a slightly higher contribution to the results in 2015 (2014: a good 120 million). The focus is on optimising production processes, logistics and procurement. Increase in Capital Expenditure as Planned The K+S Group s 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. A large amount of capital expenditure is still intended for the implementation of the package of measures for water protection in the Hesse-Thuringia potash district. About K+S K+S is an international resources company. We have been mining and processing mineral raw materials for 125 years. The products we produce from them are used worldwide in agriculture, food and road safety and are important elements in numerous industrial processes. Potash and salt are integral nutrients for the megatrend of a constantly growing and increasingly prosperous global population striving for a higher standard of living. This will result in increasing consumption of mineral resources. We serve the resulting growth in demand from production sites in Europe, North America and South America as well as through a global distribution network. K+S is the world s largest salt producer and one of the top potash providers worldwide. With more than 14,000 employees, K+S achieved revenues in financial year 2014 of about 3.8 billion and an EBIT of 641 million. K+S is the commodities stock on the German DAX index. Learn more about K+S at

5 Page 5 of the press release Successful Start to the Year by the K+S Group, 12 May 2015 Information for Editorial Departments The Quarterly Financial Report and Facts and Figures (in English) for Q1/15 are available at Today s Annual General Meeting of K+S Aktiengesellschaft will be streamed live online from 10 am until the end of the speech by the Chairman of the Board of Executive Directors at The speech will be available for download from 10 am and from around 2 pm, a video showing excerpts of the speech by the Chairman of the Board of Executive Directors. Up-to-date images of the K+S Group as well as up-to-date photos of the Annual General Meeting will also be available online at from around 12 noon. A conference call will be held in English with Dr Burkhard Lohr, CFO of K+S Aktiengesellschaft, on 13 May 2015 at 10 am. Investors, analysts and press representatives as well as interested parties from the general public are invited to follow the conference via a live webcast ( or by telephone The conference will be recorded and made available as a podcast. Contact Person: Michael Wudonig Thorsten Boeckers Tel.: Tel.: michael.wudonig@k-plus-s.com thorsten.boeckers@k-plus-s.com Forward-looking statements This press release 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 incorrect or should certain risks such as those referred to in the Risk Report materialise, actual developments and results may deviate from current expectations. The company assumes no obligation to update the statements contained in this press release, save for the making of such disclosures as required by law.

6 Page 6 of the press release Successful Start to the Year by the K+S Group, 12 May 2015 Overview of K+S Group Q1 Q1 Q January to March January to March Difference All according to IFRS million million in % Revenues 1, , Potash and Magnesium Products Salt Complementary Activities Reconciliation Earnings before interest, taxes, depreciation and amortisation (EBITDA) Operating earnings (EBIT I) Potash and Magnesium Products Salt Complementary Activities Reconciliation Group earnings from continued operations, adjusted 1) Earnings per share from continued operations, adjusted ( ) 1) Capital expenditure (CapEx) 2) Adjusted free cash flow 3) Employees as of 31 March 14,248 14, ) The adjusted key figures include the result from operating forecast hedges in the respective reporting period, which eliminates effects from fluctuations in the market value of the hedges as well as effects from the exchange rate hedging of future capital expenditure in Canadian dollars (Legacy Project). Related effects on deferred and cash taxes are also eliminated; tax rate for Q1/15: 28.6% (Q1/14: 28.6%). 2) Capital expenditure in or depreciation, amortisation affecting net income on property, plant and equipment, intangible assets, investment properties and financial assets. 3) Adjustment for acquisitions/disposals of securities and other financial investments.