K+S Aktiengesellschaft — Investor Day (September 2018)
25 slides from K+S Aktiengesellschaft's investor day presentation, Sep 5, 2018
Slide 1: Workshop I – The Big Picture
K+S‘ Capital Markets Day 2018 Workshop I – The Big Picture Bethune, 5 September 2018 Dr. Burkhard Lohr, Chief Executive Officer
Slide 2: Dr. Burkhard Lohr
K+S‘ Capital Markets Day 2018 Dr. Burkhard Lohr Dr. Burkhard Lohr was born in Essen in 1963. After completing his Business Administration studies at the University of Cologne, he joined Mannesmann AG in 1991. From 1993 onwards he held various functions at Hochtief AG, Essen, including as member of t
Slide 3: Our vision for 2030
K+S‘ Capital Markets Day 2018 Our vision for 2030 We will be the most customer-focused, 'One Company' independent minerals company and grow ... thinking and acting as 'One Company' and our EBITDA to €3bn in 2030 by ... realizing synergies between our businesses Tapping the full potential of our exis
Slide 4: We will implement our strategy in two phases
K+S‘ Capital Markets Day 2018 We will implement our strategy in two phases Phase 1: Transformation Phase 2: Growth 2017 2020 2030 Reduce indebtedness Tapping the full potential of our existing assets Realize synergies Exploring new adjacent growth areas Advance corporate culture Increased share of s
Slide 5: Phase I
Phase I
Slide 6: Phase I: Building a basis for our growth options
K+S‘ Capital Markets Day 2018 Phase I: Building a basis for our growth options Divisional Matrix Board of Executive Directors Board of Executive Directors Executive Committee K+S Group 5
Slide 7: Change of management culture
K+S‘ Capital Markets Day 2018 Change of management culture Bring management and employees closer together by… Implementing Town Hall Meetings and Board meetings on site Pushing internal communication channels Our principles of cooperation ”Innovation can‘t just be triggered by the Board and al
Slide 8: Synergies: Breakdown by program
K+S‘ Capital Markets Day 2018 Synergies: Breakdown by program SHAPING 2030 Sponsor Net synergies YE 2020 (vs. 2017) SG&A Optimization CEO ~ €30m Operations COO > €50m Lift Procurement CFO > €30m synergies Supply Chain and Logistics COO > €20m Commercial Excellence COO > €20m ∑ > €150m K+S Group 7
Slide 9: SG&A Optimization
K+S‘ Capital Markets Day 2018 SG&A Optimization Overall, about 50 SG&A initiatives were defined leading to a good 10% headcount and cost reduction (~ €30m) Our Strategy Committee and Supervisory Board have approved our SG&A initiatives The implementation will start in October 2018 main foc
Slide 10: Example I: Closing central functions in Hanover
K+S‘ Capital Markets Day 2018 Example I: Closing central functions in Hanover Merging administrative, logistics and production functions in the new customer segments Industry and Consumer in the Europe and Agriculture operating unit Headquarters in Hanover office will be closed Communities: Ac
Slide 11: Example II: Logistics
K+S‘ Capital Markets Day 2018 Example II: Logistics Challenges today Future solutions Management of operational logistics at Kali, Implementation of new organization and bundling of esco and in the Business Center is currently activities ensuring optimized purchase power and reduce acting completely
Slide 12: Net Present Value (NPV) Bethune (1) – Assumptions
K+S‘ Capital Markets Day 2018 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 Assumptions WACC (before taxes) = 8.5% USD/EUR = 1.15 EUR/CAD = 1.55 View on the 2019
Slide 13: Net Present Value (NPV) Bethune (2) – Sensitivities
K+S‘ Capital Markets Day 2018 Net Present Value (NPV) Bethune (2) NPV for Bethune EUR 4.8 bn This NPV equals an EV per share of 25 EUR Sensitivities Variation NPV change MOP gran. Brazil +/- 10 USD/t +/- €200 million “We create value for our stakeholders!” K+S Group 12
Slide 14: Phase II
Phase II
Slide 15: Our strategy has incorporated important megatrends
K+S‘ Capital Markets Day 2018 Our strategy has incorporated important megatrends 8.5bn 0.2 Arable land shrinking Global population in 2030 Average global warming (ºC) Yield needs to be improved Today: 7.3bn Per decade Higher efficiency of fertilization and irrigation needed Implications for K+
Slide 16: Our steps to achieve the financial ambition
K+S‘ Capital Markets Day 2018 Our steps to achieve the financial ambition EBITDA (€ bn) >3 ~ 1.8 Existing business Realizing synergies Growth options Ambition 2030 2030 Assumptions Forecast existing business At least €150 million Realization of organic as based on sales growth, through realization w
Slide 17: Growth areas and ideas cover the full growth landscape
K+S‘ Capital Markets Day 2018 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 co
Slide 18: Sub Saharan Africa is the Brazil of tomorrow
K+S‘ Capital Markets Day 2018 Sub Saharan Africa is the Brazil of tomorrow The Sub-Saharan Africa region has a huge agricultural potential with the need to boost fertilizer usage and crops yields to overcome malnutrition Sub-Saharan Africa (SSA) at a glance Growth option description Build a digita
Slide 19: Sub Saharan Africa has a huge potential
K+S‘ Capital Markets Day 2018 Sub Saharan Africa has a huge potential Huge agricultural potential Very low fertilizer usage Kg fertilizers per hectare of arable land, 2009-2011² Farmers apply 135kg of fertilizers per hectare of arable land globally, in Brazil ~100kg, but in Sub-Saharan Africa only
Slide 20: Implementing a digital platform into the value chain
K+S‘ Capital Markets Day 2018 Implementing a digital platform into the value chain How it works K+S provides farmers with consulting, financing and insurance services via its digital platform Additional parties, such as logistic provider, last-mile agents and end-product trader are platform part
Slide 21: K+S sustainability KPIs and targets 2030 - People
K+S‘ Capital Markets Day 2018 K+S sustainability KPIs and targets 2030 - People Target until 2030 at Goal KPI the latest 0 Health & Safety Lost time incident rate (LTIR) Vision 2030 PEOPLE Diversity & Employees’ favorable perception of inclusive work >90 Inclusion environment (percent) Sites covered
Slide 22: K+S sustainability KPIs and targets 2030 - Environment
K+S‘ Capital Markets Day 2018 K+S sustainability KPIs and targets 2030 - Environment Goal KPI Target until 2030 at the latest Deep well injection of saline waste water in Germany 0 Starting January 2022 (m³ p.a.) Water Additional reduction of saline process water from -500,000 Excluding reduction by
Slide 23: K+S sustainability KPIs and targets 2030 - Business ethics
K+S‘ Capital Markets Day 2018 K+S sustainability KPIs and targets 2030 - Business ethics Target until 2030 at Goal KPI the latest Critical suppliers aligned with the K+S Group Supplier 100 Sustainable Supply Code of Conduct (SCOC) (percent) by end of 2025 BUSINESS ETHICS Chains > 90 Spend coverage o
Slide 24: Disclaimer
K+S‘ Capital Markets Day 2018 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
Slide 25: Workshop I – The Big Picture
K+S‘ Capital Markets Day 2018 Workshop I – The Big Picture Bethune, 5 September 2018 Dr. Burkhard Lohr, Chief Executive Officer
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