Roadshow Hamburg 8 June 2016

Transcription

1 K+S Aktiengesellschaft Roadshow Hamburg 8 June 2016 Thorsten Boeckers, Head of Investor Relations

2 Content A 1 2 B C K+S Unique Strategic Position Potash and Magnesium Products Salt Current Trading Outlook K+S Group 2

3 Investment Case K+S Group Potash and Magnesium Products Business Unit Salt Business Unit Complementary Activities Broad product portfolio Geographic reach Positioned for growth K+S Group 3

4 Our Products Potash and Magnesium Products Salt Industrial products 10% 6% 8% Food processing 14% Consumer Specialties 44% 16% Salt for chemical use Industrial KCl (MOP) 46% 56% De-icing in % of sales volumes, FY 2015 K+S Group 4

5 From Capex to Cash Capex Phase Mid-term fundamentals of the potash business remain intact Cash Phase 2020 Net debt 2.4 billion Leverage (LTM) 2.5x CapEx (2015) 1.3 billion FCF Negative EBITDA (2015) 1.1 billion Enhancing portfolio of higher yielding products Management Agenda Opening Legacy this summer production of 1 st ton end of 2016 Successful implementation of Salt 2020 Strategy Managing environmental challenges particularly in Germany Keeping cost discipline above and beyond Fit for the Future Net debt < 2.0 billion Leverage x CapEx Maintenance FCF Positive EBITDA ~ 1.6 billion K+S Group 5

6 Content A 1 2 B C K+S Unique Strategic Position Potash and Magnesium Products Salt Current Trading Outlook K+S Group 6

7 Potash and Magnesium Products Long-Term Dynamics Positive for Fertilizer Less arable land but more protein consumption per capita Jahr Global population development Each year additional 80m people need to be fed this equals to the population of Germany 3.0 billion 6.9 billion 9.7 billion Arable Land per capita Available arable land per capita will decrease at the same time m m m 2 Protein per capita 60 g/ day 80 g/ day 130 g/ day 1) By 2050 an expanded world population will be consuming two thirds more animal protein than it does today In 2050, only roughly a quarter of a soccer field will be available to feed one person year round - 80 percent of future growth in crop production will come from yield advancements driven by balanced use of fertilizers Sources: UN, World Population Prospects, 2012 Revision, UNDP, 2013; FAOStat ) FAO forecasts based on the expected increase in animal protein K+S Group 7

8 Raw Salt Potash and Magnesium Products Utilizing Entire Range of Minerals in Complex Deposits Mineral extraction K+S product offering SOP Fertilizer Health Care & Nutrition Industrial Applications Residue 63.5% Kieserite Industrial products 0.7 Health Care & Nutrition Industrial potash Kieserite 20.4% Korn-Kali Magnesia-Kainit KCL (MOP) Specialties 3.0 Kieserite Korn-Kali KCl 16.1% MOP SOP e.g. Neuhof 2014 Basis: 2015 Sales volumes in million tons Reducing specific costs of our MOP products $$$ Extending our product offering K+S Group 8

9 Potash and Magnesium Products Leading Position in Europe Europe Asia South America Other regions K+S Group 9

10 Basis: Q Basis: Q Potash and Magnesium Products Our Unique Portfolio Makes Us More Robust MOP gran. Europe vs. Brazil (Source: FMB) US$/t Europe (, Granular, cfr) Brazil (US$/t, Granular, cfr) /t K+S average selling price versus selected peers K+S K+S Q Q Q Q Q Q Q Q Q Q Q Q Q Q K+S Group 10

11 Legacy Project Strengthening our Global Presence China India South East Asia North America Expanding our current production portfolio in Germany with a North American production site Second source supplier Securing a good asset base with competitive production costs Sales and distribution through existing distribution structures of the K+S group Exclusive outline agreement with Koch Fertilizer about supply and sales of Potash fertilizers in the US Regional growth projects in China and SEA Flexible multi-product strategy Located in the Heart of Saskatchewan s Potash-Rich Basin South America Regina Two additional potash permit areas in the Esterhazy potash region K+S Group 11

12 Port Vancouver Legacy plant Legacy Project On Time and Budget ~ 90% of total CapEx spent Total CapEx of CAD 4.1 billion K+S Group 12

13 ~90 WACC Legacy Project Valuation Implied Value Per Share ( ) Terminal growth rate 0% 2% 7% ~ 21 8% ~ 11 Volume ramp-up (m metric tons)/ /costs per ton (CAD) Conservative price assumptions for Legacy based on MOP gran. Brazil Sustaining capex approximately CAD 100 million p.a. from ~1 ~2 ~2.1 ~2.3 ~2.4 ~2.6 ~2.9 Sales volumes (m metric tons) Production costs Logistics costs Mining taxes/ royalties K+S Group 13

14 Content A 1 2 B C K+S Unique Strategic Position Potash and Magnesium Products Salt Current Trading Outlook K+S Group 14

15 Salt Long-Term Dynamics in Salt Demand Demand driven by Product category Winter weather conditions De-Icing Infrastructure development Consumer Increasing standard of living Population growth Food processing Economic growth and industrialisation Industrial Urbanization Chemical Low single-digit demand growth p.a. to Source: Roskill K+S Group 15

16 Salt Inevitable for life De-Icing Consumer Food processing Industrial Chemical Main Applications: Winter road maintenance services Commercial users Private households Main Applications: Table salt Dishwasher care Water softening Pool chlorination Body care Main Applications: Food processing industry Baking industry Condiment and preservative agent Main Applications: Water treatment Drilling fluids Animal feed Infusion, dialysis solutions Pharmaceuticals Preserving of fish Dyeing works Leather treatment Main Applications: Chemical industry Chlor-Alkali processes ( PVC) Polycarbonates, MDI (Isocyanat) ( plastics, synthetic resin) Synthetic Soda Ash ( glass) K+S Group 16

17 Salt Unrivalled Global Production Network Evaluating several opportunities that will enable K+S to grow in Asia Competitive edge: Unrivalled global production network More than 30 assets on 3 continents allow close proximity to customers in a business that is highly freight-cost sensitive Ensuring close proximity to customers Broad range of products due to variety of production methods Best in class supply chain assets and competence Industry best cost production in Chile K+S Group 17

18 Salt Diverse Regional and Product Portfolio Salt for chemical use Normalized Revenue Distribution Food processing Industrial Consumer K+S Group 18

19 Presence in Attractive De-Icing Markets Eastern Canada Scandinavia Great Lakes US East Coast Central Europe Indicative regional strength of winter Europe North America K+S Group 19

20 Salt 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 Expected EBIT development CULTURE Safety first! Remove silo thinking Transparency/trust High performance and engaged workforce Salt 2020 Launched Normalized Equals more than 400 million EBITDA e Actual results K+S Group 20

21 Salt Expansion into Asia-Pacific: Project Launch in Australia Component of Salt 2020 strategy Initial focus on obtaining necessary permits CapEx estimate of around 225 million Estimated production capacity of 3.5 million tons p.a. Main customers in the chemical industry in Asia Possible production start in 2022 We want this project to give a boost to our planned expansion into the Asian markets. We see big potential there, and want to sustainably participate in the expected growth there in the future. The purchase of the licenses is the foundation to achieve this. Mark Roberts, CEO Salt K+S Group 21

22 Content A 1 2 B C K+S Unique Strategic Position Potash and Magnesium Products Salt Current Trading Outlook K+S Group 22

23 P&L million FY/14 Q1/15 Q2/15 Q3/15 Q4/15 FY/15 Q1/16 Revenues 3,822 1, ,175 1,096 EBIT I t/o insurance gain EBIT I w/o insur. gain Margin 16% 23% 20% 15% 16% 19% 20% Financial result EBT, adjusted Tax rate, adjusted 29% 28% 28% 29% 25% 28% 28% Net income, adjusted EPS, adjusted The adjusted key figures only include operating forecast hedges of the respective reporting period in EBIT I. In addition, related effects on deferred and cash taxes are also excluded. K+S Group 23

24 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 24

25 Cash Flow and Balance Sheet million FY/14 Q1/15 H1/15 9M/15 FY/15 Q1/16 Operating cash flow Investing cash flow (pre sale/ purchase of securities) -1, , Adjusted free cash flow CapEx 1, , Net debt (-) -1,626-1,602-2,019-2,224-2,400-2,367 t/o Net financial debt (-) ,005-1,364-1,315 Net debt/ EBITDA Equity ratio 51% 52% 52% 51% 52% 52% K+S Group 25

26 Potash and Magnesium Products million FY/14 Q1/15 Q2/15 Q3/15 Q4/15 FY/15 Q1/16 Revenues 1, , EBIT I t/o insurance gain EBIT I w/o insurance gain Margin 24% 30% 29% 20% 25% 26% 22% t/o Legacy OpEx Avg. selling price ( /t) Sales volumes (million tons) FY/14 Q1/15 Q2/15 Q3/15 Q4/15 FY/15 Q1/16 Costs per ton (1,2,3) (1) (Revenues EBIT) / Sales volumes (2) Excl. anticipated insurance payment (3) Excluding OpEx Legacy K+S Group 26

27 Salt million FY/14 Q1/15 Q2/15 Q3/15 Q4/15 FY/15 Q1/16 Revenues 1, , EBIT I Margin 10% 20% 11% 11% 9% 14% 21% Sales volumes (million tons) De-icing Non de-icing Average selling prices ( ) De-icing Non de-icing K+S Group 27

28 Content A 1 2 B C K+S Unique Strategic Position Potash and Magnesium Products Salt Current Trading Outlook K+S Group 28

29 Guidance FY 2016: EBIT I Bridge million Assumptions (highlights) 782 Prices for MOP in overseas markets continue to stabilize. However, significantly lower average selling price expected in potash for FY 2016 Main effects: Potash volumes and prices Salt de-icing volumes Main effects: OpEx Legacy Higher D&A Incremental savings Impact of limited deep-well injection may be felt more in upcoming dry spring and summer season Mild winter may lead to lower de-icing sales volumes Actual 2015 Volume-/ price Other effects Fit for the Future FX 2016e We stick to our forecast of significantly lower operating results K+S Group 29

30 Dividend Increase of 28% for % 45% 40% 35% 30% 25% 20% Target payout ratio of 40-50% 10% 8% 6% 4% Earnings-based dividend policy Payout ratio of 40 50% of adjusted net profit Dividend 2015: 1.15 per share (2014: 0.90 per share) 15% 10% 2% 5% 0% Payout ratio (lhs) Dividend yield (rhs) 2) 1) 0% 1) Based on year-end share prices K+S Group 30

31 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 Matthias Jelden Investor Relations Manager Phone.: / Fax: / matthias.jelden@k-plus-s.com Martin Heistermann Investor Relations Manager Phone.: / Fax: / martin.heistermann@k-plus-s.com K+S Group 31

32 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 32

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34 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: 11 Aug: Q2/16 10 Nov: Q3/16 K+S Group 34