Kassel, 13 May 2009 Start of new financial year 2009: Balanced Portfolio Underpins the Strength of K+S Very good salt result due to winter of above-average severity As expected, fertilizer demand down significantly year on year At 1,075.7 million, revenues down 11% year on year Operating earnings reach 174 million ((23)%) Adjusted earnings per share at 0.74 (Q1/2008: 0.99) Outlook for financial year 2009 unchanged Our salt activities were able to step into the breach for the fertilizer business this is unique compared to our competitors! Even if our first quarter revenues and earnings were unable to reach the record levels of a year ago, thanks to our balanced portfolio of fertilizers and salt, we have achieved a very satisfactory start to the current financial year, said Norbert Steiner, chairman of the Board of Executive Directors of K+S Aktiengesellschaft. In the first quarter the de-icing salt business was very good both in Western Europe as well as on the North American east cost in view of the aboveaverage severity and prolonged duration of the winter. On some markets, there were even delivery bottlenecks, which the K+S Group was able to exploit with its customary, large-scale production flexibility. By contrast, the fertilizer business was characterised by very low demand for fertilizers on almost all markets in the first quarter: Although prices of agricultural products stabilised again, demand on the part of agriculture remained muted, against the background of a prolonged period of cold weather in the northern hemisphere too. In addition, there were sufficient
Page 2 of press release Balanced Portfolio Underpins the Strength of K+S dated 13 May 2009 stocks at the trade sector level and the financial crisis restricted room for manoeuvre with regard to financing for the entire distribution chain. First quarter revenues down about 11% year on year First quarter revenues were down 137.3 million on the same period last year and totalled 1,075.7 million. The revenue decline attributable to volume and structural factors could not be offset by positive price and currency effects. Salt business segment revenues almost doubled, which cushioned the effects of significant revenue declines in the fertilizer business. About 60% of Group revenues were generated in Europe; with 34%, the Potash and Magnesium Products business segment accounted for the largest share of revenues, followed by Nitrogen Fertilizers as well as Salt. Operating earnings reach 174.0 million ((23)%) EBIT I for the first quarter of 2009 reached 174.0 million, after 226.3 million a year ago. The five-fold increase in the earnings of the Salt business segment could markedly reduce the effects of the earnings decreases in the Potash and Magnesium Products and Nitrogen Fertilizers business segments. Adjusted earnings before and after taxes down year on year Adjusted earnings before taxes for the first quarter reached 165.6 million representing a decline of 58.4 million or about 26% on the same period last year. Adjusted Group earnings after taxes for the first quarter were 122.5 million, down just under 25% on the level of a year ago (Q1/2008: 162.6 million). For the quarter under review, adjusted earnings per share amounted to 0.74 and were thus down 0.25 on the figure for the same period last year ( 0.99).
Page 3 of press release Balanced Portfolio Underpins the Strength of K+S dated 13 May 2009 Outlook for financial year 2009 unchanged Prices of agricultural products, which fell sharply from the middle of 2008 in the wake of the financial crisis, have stabilised again in the first quarter of 2009 on a level that meanwhile is markedly above the price levels for a good number of years, but still does not reflect the fundamental conditions on agricultural markets. Against this background, the muted demand for fertilizers can be expected to have a clear impact on the volume sold by international fertilizer producers until the middle of the year. In the second quarter, however, the stocks of fertilizers still available in the trade sector should be reduced to such an extent that a normalisation of demand for fertilizers should be able to be assumed for the second half of the year. In the salt business, the upcoming early purchase business should benefit from the severe 2008/2009 winter. In the fourth quarter the salt business will be influenced, to a significant degree, by winter weather conditions, too. In this respect, K+S assumes that sales will be on their average level for many years in the case of both the European and North American markets. On the basis of the price level for potash and magnesium products evident in the first quarter, K+S assumes a tangibly higher average price level for 2009 as a whole compared with the previous year. However, K+S expects significantly lower sales, which will almost offset the aforementioned price effect. While the revenues of the Nitrogen Fertilizers business segment should be down significantly, mainly in view of substantial price decreases, K+S expects significantly higher revenues for the Salt business sector because of the good start for the de-icing salt business in the new year. Overall, revenues of the K+S Group in 2009 should be down markedly on the previous year. The revenue forecast assumes an average US dollar exchange rate for 2009 of about 1.30 USD/EUR (2008: 1.47 USD/EUR). In 2009, the costs of the K+S Group should decrease only slightly in comparison to the previous year: As far as personnel expenses are concerned, the Company expects that the additional costs arising from the most recent
Page 4 of press release Balanced Portfolio Underpins the Strength of K+S dated 13 May 2009 collective agreement pay rise and a slight increase in the number of personnel will moderately exceed the savings resulting from short-time working. Energy costs should, by contrast, be on a lower level than a year ago as a result of price and volume factors. K+S also sees an easing of material and freight costs while depreciation/amortisation charges should increase by a rate in the midsingle-digit percentage range. For the financial year 2009, K+S therefore estimates significantly lower EBIT I operating earnings in comparison to the peak experienced last year. This is primarily due to the already described decreasing sales volume in the Potash and Magnesium Products business segment. Even a stronger US dollar exchange rate and higher earnings from salt against last year are not inclining us to change this forecast. Also adjusted Group earnings after taxes should be significantly lower in 2009 in line with the development of operating earnings. Experience growth The K+S Group is one of the world's leading suppliers of speciality and standard fertilizers, plant care as well as salt products. With its products and brands, K+S offers its customers a range of needs-based goods and services which provides growth opportunities in virtually every sphere of daily life. The K+S Group employs more than 12,000 people and achieved revenues of just under 5.0 billion in 2008. K+S is quoted on all German stock exchanges (ISIN: DE0007162000, symbol: SDF) and listed on the DAX share index.
Page 5 of press release Balanced Portfolio Underpins the Strength of K+S dated 13 May 2009 Note to editors: You can download this press release as well as the Q1/09 quarterly report from our website www.k-plus-s.com. In addition, you can follow the speech given by Norbert Steiner, chairman of the Board of Executive Directors of K+S Aktiengesellschaft, at today s Annual General Meeting in Kassel live on the website from 10 a.m.; the presentation documents will also be available on the website. Conference Call with analysts On the occasion of the publication of the figures for the first quarter of 2009, on 14 May 2009, Norbert Steiner, chairman of the Board of Executive Directors, as well as Joachim Felker, member of the Board of Executive Directors of K+S Aktiengesellschaft, will answer questions from analysts during a conference call. From 3 p.m., you can follow this conference call live on the Internet at www.k-plus-s.com or by telephone by dialling +49.40. 37707.9033. Your contact persons: Press: Investor Relations: Oliver Morgenthal Christian Herrmann Phone: +49 561 9301-1047 Phone: +49 561 9301-1460 Fax: +49 561 9301-2160 Fax: +49 561 9301-2425 oliver.morgenthal@k-plus-s.com christian.herrmann@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 not to be correct, actual events may deviate from those expected at the present time.
Page 6 of press release Balanced Portfolio Underpins the Strength of K+S dated 13 May 2009 K+S Group at a Glance 1st Quarter 2009 Q1 Q1 All figures in accordance with IFRSs Jan - Mar Jan - Mar 2009 2008 Change million million in % Revenues 1,075.7 1,213.0 (11.3) Potash and Magnesium Products 366.0 522.5 (30.0) Nitrogen Fertilizers 342.1 488.4 (30.0) Salt 338.3 170.3 +98.6 Complementary Business Segments 29.1 31.7 (8.2) Reconciliation 0.2 0.1 +100.0 Operating earnings (EBIT I) 174.0 226.3 (23.1) Potash and Magnesium Products 97.0 170.9 (43.2) Nitrogen Fertilizers 8.1 42.6 (81.0) Salt 80.2 14.7 +445.6 Complementary Business Segments 2.0 7.1 (71.8) Reconciliation (13.3) (9.0) (47.8) Earnings after hedging transactions and derivatives no longer in operation (EBIT II) 152.9 118.6 +28.9 Earnings before income taxes 144.5 116.3 +24.2 Earnings before income taxes, adjusted 1) 165.6 224.0 (26.1) Group earnings after taxes 107.3 84.8 +26.5 Group earnings after taxes, adjusted 1) 122.5 162.6 (24.7) Earnings per share, adjusted ( ) 1), 2) 0.74 0.99 (25.3) Capital expenditure 3) 29.1 24.2 +20.2 Employees as of 31. March (number) 12,334 12,141 +1.6 of which trainees (number) 516 509 +1.4 1) the adjusted figures only contain the result from hedging already realised during the current period. By contrast, changes in the market value of derivatives still outstanding are not taken into account. The effects on deferred and cash taxes are also eliminated. Q1/2009 tax rate: 27.9% (Q1/2008: 27.7%). 2) adjusted to the share split in the ratio 1:4 (entered in Commercial Register: 24 June 2008; technical execution: 21 July 2008) 3) for or in connection with intangible assets as well as property, plant and equipment