Kassel, 13 August 2015 Boost in revenues and earnings in the first half of 2015 K+S confirms significant increase in operating earnings for 2015 Outstanding performance in the Salt Business Higher average prices in the Potash and Magnesium Products business unit Operating earnings (EBIT I) up 32 % to 496 million Fit for the Future delivers expected results Legacy Project still on schedule and within budget Outlook for 2015 confirmed: Significant increase in EBIT I to between 780 and 860 million expected (2014: 641 million). Attractive medium-term prospects: EBITDA of around 1.6 billion by 2020 (2014: 896 million) Our overall earnings in the first half of the current financial year were very strong. In addition to our Fit for the Future programme, both large business units made a substantial contribution to this very positive development, said Norbert Steiner, Chairman of the Executive Board of K+S Aktiengesellschaft. The strong performance reinforces our guidance of a significant earnings increase this year, Steiner continued. Revenues of the K+S Group significantly above previous year The K+S Group increased its revenues by 16 % to 2.3 billion in the first half of 2015 (H1/14: 2.0 billion). Both the Potash and Magnesium Products business unit and the Salt business unit profited mainly from higher average prices and a stronger US dollar in relation to the euro compared with the same period in the previous year.
Page 2 of the press release K+S confirms significant increase in operating earnings for 2015, 13 Aug. 2015 Fit for the Future delivers expected results K+S continued its considerable efforts in the first half of 2015 to make the cost and organisational structures of the entire Group more efficient. K+S continues to strive 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 have been avoided. Operating earnings up significantly on previous year Earnings before interest, taxes and depreciation and amortisation (EBITDA) amounted to 630 million after the first six months and consequently were up 25 % on the previous year s figure (H1/14: 503 million). The operating earnings (EBIT I) of the K+S Group totalled 496 million in the first half of 2015 thus exceeding the previous year s figure by 119 million or around 32 % (H1/14: 377 million). This improvement in earnings is due primarily to higher prices for de-icing salt in North America and the recovery of average prices in the Potash and Magnesium Products business unit. Additionally, the stronger US dollar in relation to the euro had a positive effect. The Fit for the Future programme continued to contribute to the Company s success as expected. Adjusted for the special item relating to an insurance payment in the second quarter of the previous year ( 30 million), EBIT I was actually up by more than 40 % in the first six months of 2015. Group earnings also up significantly on the previous year Adjusted Group earnings after taxes were 317 million in the first six months of the year (H1/14: 223 million). Adjusted earnings per share reached 1.66 in the same period compared with 1.16 in the previous year. Both key figures thus increased strongly compared with the same period in the previous year. Increase in capital expenditure as planned The K+S Group invested 555 million in the first half of the year and thus 27 % more than in the same period in the previous year (H1/14: 436 million). Most of the capital expenditure was in the Potash and Magnesium Products business unit and related mainly to the Legacy Project in Canada as well as the package of measures for water protection in the Hesse-Thuringia potash district.
Page 3 of the press release K+S confirms significant increase in operating earnings for 2015, 13 Aug. 2015 Legacy Project: Still on schedule and within budget The focus in the quarter under review was on providing main components for evaporation, crystallisation, drying and compacting, and construction of the steel structure of the factory. The site was also connected to the main gas and electricity supply. Work began on the construction of a new loading and storage facility for potash products in the harbour in Vancouver. K+S is well on the way to commissioning the plant as scheduled in summer 2016 and meeting the investment budget of 4.1 billion Canadian dollars. Around 65 % of the total budget has been spent and over 90 % of the total planned investment amount is locked in with committed orders to our suppliers. A new video about the Legacy Project is available on the K+S website at www.k-plus-s.com/legacy15en. Outlook for 2015 confirms significant increase in operating earnings The revenues of the K+S Group should be between 4.35 billion and 4.55 billion in the 2015 financial year (2014: 3.82 billion). Both business units should profit from a higher year-on-year average price level which is also a result of exchange rate factors. Consequently, K+S is anticipating EBITDA of between 1.06 and 1.14 billion and an EBIT I of between 780 and 860 million (2014: 896 million/ 641 million respectively) therefore confirming the previous forecast of a significant increase. This expectation includes an initial estimate of the significant costs that K+S Aktiengesellschaft could incur as expenses in the current year on account of the unsolicited takeover proposal from PotashCorp. Following a successful start, K+S continued with the 'Fit for the Future' programme. The sustained improvement of cost and organisational structures aims to increase the efficiency of production and administration and sales functions. Compared with the previous year, we are assuming a slightly higher contribution to the result for 2015 (2014: a good 120 million).
Page 4 of the press release K+S confirms significant increase in operating earnings for 2015, 13 Aug. 2015 Adjusted Group earnings after taxes should follow the trend in operating earnings and at a figure of between 490 and 570 million also be significantly higher than in the previous year (2014: 367 million). Attractive prospects in the medium-term Overall, K+S is expecting an increase in Group EBITDA to around 1.6 billion by 2020 if market conditions remain essentially unchanged. Aided by the Legacy Project, the implementation of the Salt 2020 strategy in the Salt business unit and cost control across the Group as a result of the Fit for the Future programme, the K+S Group is expecting annual operating cash flow growth of at least 10 % on average by this date. Note A summary of the rejection of the unsolicited takeover proposal from PotashCorp can be found on page 8 of the K+S Group Half-Yearly Financial Report. 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 www.k-plus-s.com.
Page 5 of the press release K+S confirms significant increase in operating earnings for 2015, 13 Aug. 2015 Information for Editors The Quarterly Financial Report and Facts and Figures (in English) for Q2/15 are available at www.k-plus-s.com/2015q2en. A conference call will be held in English with Dr Burkhard Lohr, CFO of K+S Aktiengesellschaft, on 13 August 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 (www.k-plus-s.com/2015q2en) or by phone on +49-69-71044-5598. The conference is being recorded and will be made available as a podcast. Contact Person: Press: Investor Relations: Michael Wudonig Thorsten Boeckers Phone: +49 561 9301-1262 Phone: +49 561 9301-1460 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.
Page 6 of the press release K+S confirms significant increase in operating earnings for 2015, 13 Aug. 2015 Overview of K+S Group Q2 Q2 Q2 2015 April June April June 2015 2014 Difference All figures in accordance with IFRS million million in % Revenues 914.4 785.7 + 16.4 Potash and Magnesium Products 500.5 461.1 + 8.5 Salt 374.0 287.2 + 30.2 Complementary Activities 39.6 36.9 + 7.3 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 247.3 223.5 + 10.6 Operating earnings (EBIT I) 179.2 157.3 + 13.9 Potash and Magnesium Products 143.9 159.2 9.6 Salt 42.6 1.7 > 100 Complementary Activities 6.7 5.6 + 19.6 Group earnings from continued operations, adjusted 1) 118.7 81.1 + 46.4 Earnings per share from continued operations, adjusted ( ) 1) 0.62 0.42 + 46.4 Capital expenditure (CapEx) 2) 355.5 271.6 + 30.9 Adjusted free cash flow 196.7 49.4 > 100 1) 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 in Q2/15: 28.6% (Q2/14: 28.6%). 2) Capital expenditure in or depreciation and amortisation affecting net income on property, plant and equipment, intangible assets, investment properties and financial assets.
Page 7 of the press release K+S confirms significant increase in operating earnings for 2015, 13 Aug. 2015 Overview of K+S Group H1 H1 January - June 2015 Jan-June Jan-June 2015 2014 Difference All figures in accordance with IFRS million million in % Revenues 2,291.5 1,974.7 + 16.0 Potash and Magnesium Products 1,108.9 968.5 + 14.5 Salt 1,101.0 928.2 + 18.6 Complementary Activities 80.9 77.2 + 4.8 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 630.3 503.3 + 25.2 Operating earnings (EBIT I) 495.9 376.9 + 31.6 Potash and Magnesium Products 327.2 293.6 + 11.4 Salt 184.5 90.8 > 100 Complementary Activities 14.4 13.6 + 5.9 Group earnings from continued operations, adjusted 1) 317.0 222.6 + 42.4 Earnings per share from continued operations, adjusted ( ) 1) 1.66 1.16 + 42.4 Capital expenditure (CapEx) 2) 555.4 436.2 + 27.3 Adjusted free cash flow 99.1 153.8 Employees as of 30 June 3) 14,201 14,248 0.3 1)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 in Q2/15: 28.6% (Q2/14: 28.6%). 2) Capital expenditure in or depreciation and amortisation affecting net income on property, plant and equipment, intangible assets, investment properties and financial assets. 3) FTE: Full-time equivalents; part-time positions are weighted in accordance with their respective share of working hours.