Slide 1: Compendium
K+S Group Compendium November 2021
Slide 2: K+S Group
K+S Group
Slide 3: K+S at a Glance
K+S at a Glance K+S Group financials 9M/2021– continuing operations Revenues EBITDA EBITDA-Margin Adjusted Free cash flow €2.144 million €358 million 16.7% €-152 million Customer Segments Agriculture • Potassium chloride (MOP) 69% Revenues • Fertilizer specialties €1.471 million Industry+ Industry C
Slide 4: Global Presence – continuing operations
Global Presence – continuing operations¹ 1 Revenues by regions 2020 62% 4% 5% 17% 13% Employees by region 2020: Total number: 11.135 FTE 91% 4% 4% 1% Germany North America Rest of Europe Rest of the World 4
Slide 5: Adding value along our entire supply chain
Adding value along our entire supply chain Exploration Our potash and salt deposits came into being millions of years ago. They are either our property or we have corresponding rights or approvals that allow the extraction or solution mining of the raw material reserves. Mining We extract raw materi
Slide 6: Board of Executive Directors
Board of Executive Directors Dr. Burkhard Lohr Thorsten Boeckers Holger Riemensperger CEO CFO COO 6
Slide 7: Active portfolio management
Active portfolio management Salt Salt Salt Salt Salt Salt Salt Acquisition Foundation Acquisition Acquisition Acquisition Acquisition Divestment Ashburton Salt 1999 2000 2002 2006 2009 2011 2012 2016 2017 2021 Fertilizer Fertilizer Fertilizer Fertilizer Fertilizer Fertilizer Fertilizer Acquisition A
Slide 8: Signing achieved for complete OU Americas sale
Signing achieved for complete OU Americas sale Key data of the signed agreement: • Buyer: Stone Canyon Industries POINTE-CLAIRE Holdings LLC, Mark Demetree and affiliates CHICAGO • Gross proceeds: USD 3.2 bn 1 • EV/EBITDA: 12.5x 2019 EBITDA of USD 257 million • Closing: April 30, 2021 • Preliminary
Slide 9: Important megatrends
Important megatrends 8.5bn 0.2 Global population in Average global warming (ºC) 2030 ▪ Arable land shrinking ▪ Yield needs to be improved Today: 7.3bn Per decade ▪ Higher efficiency of fertilization and irrigation needed Implications for K+S ▪ Plants have to be more stress resistent ▪ Infrastructure
Slide 10: Growth areas
Growth areas 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 core and adjacent businesses 10
Slide 11: Environment & Ressources
K+S sustainability KPIs and targets 2030 Goal Target by 2030 at Achievements of KPI 2019 2020 (sponsor) the latest targets Deep-well injection of saline wastewater 100% 1.5 1.3 0 (starting January 2022) in Germany (m³ p.a.) starting 2022 Additional reduction of saline process Environment & Ressource
Slide 12: Employees
K+S sustainability KPIs and targets 2030 Goal Target by 2030 at Achievements of KPI 2019 2020 (sponsor) the latest targets Health & Safety 0 Lost time incident rate (LTIR)* 10.3 6.9 20% Vision 2030 Employees Society & (Holger Riemens- perger, COO) Diversity & Inclusion Employees‘ favorable perceptio
Slide 13: Ratings & Rankings
K+S: Sustainability management Organisation Rating Scale 2018 2019 2020 2021 Rating scale 0 to 100 (the lower, the better) 34 35 A A A A Ratings & Rankings Rating scale from AAA to CCC (A: average) Rating scale from A+ to D- C- C- C- Climate Rating scale from A to D- C C C Water Rating scale from A
Slide 14: The contribution of our products to the SDGs
The contribution of our products to the SDGs Agriculture Industry Consumer Communities Direct effect Longer-term, overarching, indirect impact 14
Slide 15: Customer Segments
Customer Segments ▪ Agriculture ▪ Industry+
Slide 16: Long-term dynamics in demand for our customer segments
Long-term dynamcis in demand for our customer segments Agriculture Industry+ Demand driven by … Arable land shrinking Water shortage Increasing standard of living Industry Agriculture Population growth Economic growth and industrialization Urbanization Consumer Winter weather conditions Infrastructu
Slide 17: Customer Segment Agriculture at a glance
Customer Segment Agriculture at a glance Agriculture customer segment Characteristics in € million 9M/2020 9M/2021 ▪ Close proximity to our main customers provides logistical advantages Revenues 1.231,3 1.471,7 ▪ Shipments to overseas customers at competitive costs Sales volume (mt) 5.31 5.67 from H
Slide 18: Why use fertilizers?
Why use fertilizers? Agriculture customer segment ▪ Plants need sunlight, water and minerals to thrive ▪ There are only few soils on earth which have a sufficient content and availability of plant nutrients to achieve high yields over a longer period without fertilization ▪ Potash is an indispensabl
Slide 19: Long-term key drivers for our fertilizer business
Long-term key drivers for our fertilizer business Agriculture customer segment Less arable land – but more protein consumption per capita Jahr 1960 2010 2050 Global population Each year an additional 80 million development people need to be fed – this equals to 6.9 billion 9.7 billion the population
Slide 20: What makes us different?
What makes us different? Agriculture customer segment Fertilizer Specialties ▪ mainly used for special applications (e.g. chloride-sensitive crops) ▪ products containing a broad range of nutrients (e.g. potash, magnesium, sulphur) ▪ premium products used for high-value crops Potassium Chloride ▪ can
Slide 21: Potash price development
Potash price development Agriculture customer segment Pricing (Source: FMB Argus Potash) USD/t EUR/t 850 800 800 750 700 700 Potassium Sulfate 650 (SOP) Potassium 600 600 Europe Chloride (MOP) Brazil 550 500 500 450 400 400 Potassium 350 Chloride (MOP) Europe 300 300 250 200 200 MOP gran. Brazil USD
Slide 22: World potash production and sales by region
World potash production and sales by region Agriculture customer segment 26 in million tonnes 24 35 5 6 6 11 18 17 1 2 Basis: year 2020 World potash production: World potash sales volume: Incl. sulphate of potash and low-grade potash 2020: 75.5 million tonnes 2020: 76.2 million tonnes Sources: IFA,
Slide 23: Supplier structure on the global potash market
Supplier structure on the global potash market Agriculture customer segment 29% Global Potash sales volumes: 2020: 76.2 million tonnes 2019: 68.5 million tonnes 16% 15% 15 % 9% 7% 4% 3% 3% 1% Canpotex BPC Uralkali K+S ICL APC EuroChem SQM China Other Nutrien Belaruskali DSW > 20 Intrepid (prev. Pota
Slide 24: Global potash supply and demand
Global potash supply and demand Agriculture customer segment Production is driven by demand despite continuous excess capacity 100.000 90.000 Capacity by producer 80.000 Others Canpotex 70.000 31% 1,000 t (product) 26% 60.000 50.000 ICL 6% 40.000 K+S 30.000 9% Uralkali Belaruskali 14% 20.000 14% 10.
Slide 25: Potash projects announced since 2006 (Greenfield)
Agriculture customer segment Between plan and reality: Potash projects announced since 2006 (Greenfield) Projects with a high Announced projects or in early probability of Projects in ramp-up development phases implementation by phase 2025 2 160 6 25
Slide 26: What is behind the greatly feared oversupply?
Agriculture customer segment What is behind the greatly feared oversupply? thousand tonnes 140.000 ▪ Only 5 years ago, the technically 120.000 available capacity in 2025 was estimated to be 12 million tonnes higher 100.000 than today +3% (Scenario 2) 80.000 +1.3% (IFA prognosis) ▪ Even now, greenfie
Slide 27: Potash use by crop in selected countries
Potash use by crop in selected countries Agriculture customer segment 100% Wheat 2% Corn 8% Wheat 16% Corn 16% Rice 11% Soybean Rice 2% 2% Corn 13% Rice 1% Oilseeds 11% Soybean 40% Sugar crops 5% Fruits & vegetables 12% Oilpalm 62% Sugar crops 18% Other crops 42% Fruits & vegetables 7% Sugar crops 5
Slide 28: Farmer profitability of US corn
Farmer profitability of US corn Agriculture customer segment in % of revenues 100% ▪ Expenditure on potash products only amounting 17% to approx. 4% of the total costs thereof costs for potash: ~ 4 % 16% ▪ Earnings prospects should give the agricultural industry sufficient incentive to increase yiel
Slide 29: Global potash sales volume by region
Global potash sales volume by region Agriculture customer segment million tonnes 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Western Europe 5.9 5.6 5.8 6.2 6.0 5.9 6.2 6.2 6.0 6.2 Central Europe / FSU 4.4 5.1 4.7 4.4 4.8 4.8 5.2 5.4 5.5 5.4 Africa 0.7 0.7 0.8 1.0 1.0 1.1 1.4 1.6 1.4 1.4 North
Slide 30: Industry+ customer segment at a glance
Industry+ customer segment at a glance Industry+ customer segment: continuing operations Revenue Split by products 9M/2021 (in million €) € million 9M/2020 9M/2021 Water softening 38,6 Revenues 572.1 672.0 Sales volume (mt) 3.89 5.69 Industrial applications 65,7 Communities 138,0 -thereof: de-icing
Slide 31: Broad variety of industry application areas (1)
Broad variety of industry application areas (1) Industry+ customer segment Chemical Food processing Pharma Oil and Gas ▪ Main applications: Main applications: Main applications: Main applications: ▪ Chemical industry ▪ Food processing ▪ Infusion, dialysis ▪ Drilling fluids ▪ Chlor-Alkali industry so
Slide 32: Broad variety of industry application areas (2)
Broad variety of industry application areas (2) Industry+ customer segment Animal nutrition Water softening Complementary Other Main applications: Main applications: Main services: Main services: ▪ Animal feed ▪ Water softening ▪ Waste management ▪ Dyeing works ▪ Lickstones ▪ Water treatment and rec
Slide 33: Main salt suppliers in Europe
Main salt suppliers in Europe Industry+ customer segment Capacity in million tonnes (crystallized salt and salt in brine; excl. captive use) 9 8 7 Artyomsol Nouryon 5 4 Süd- salz Sal- ins Source: Roskill, K+S 33
Slide 34: Development of salt consumption and production
1 Development of salt consumption and production Industry+ customer segment in million tonnes Consumption Production CAGR: 2.0% CAGR CAGR: 2.1% CAGR 295 295 268 1.2% 264 2.5% 220 217 Other 3.3% Other 4.0% Asia Asia 1.0% Europe Europe 1.3% North- North- 1.5% America 0.4% America 2000 2009 2015 2000 2
Slide 35: Production
Production
Slide 36: Potash sites in Germany
Potash sites in Germany Potash production Potash mining in the Werra-Fulda region 6 4 Kassel 1 2 3 5 Potash seam Hesse Share of annual production capacity (in %) 1. Wintershall 2. Unterbreizbach Integrated Werra plant ~ 50 3. Hattorf 4. Zielitz ~ 25 5. Neuhof-Ellers ~ 20 Potash seam 6. Bergmannssege
Slide 37: Underground mining production cycle
Underground mining production cycle Potash production 1 2 3 4 Cleaning Blasting after Muck pile load and dump Roof scaling shift end 9 5 Roof bolting Charging with explosives 8 7 6 Drilling Face cleaning Auger drilling 37
Slide 38: Potash processing above ground
Potash processing above ground Potash production Thermal Electrostatic Flotation separation dissolution (ESTA®) heating flotation finely ground 25 °C 110 °C brine crude salt mother brine finely finely ground ground undissolved crude salt flotation crude salt conditioning residue agent + dissolved KC
Slide 39: Management of residues
Management of residues Potash production ▪ The mined rock salt only contains a limited share of usable material (max. 30%), therefore a residue accumulation is unavoidable. ▪ This challenge is shared among all potash producing companies in the world! ▪ The recovery of residues is performed as effect
Slide 40: Current environmental investments create long-term planning security
Current environmental investments create long-term planning security Tailings pile extensions Hattorf • Completed by end of 2022 / beginning of 2023 • Next permit and significant investments in Wintershall tailings pile extensions will not be necessary again until the end of the 2020s Zielitz Liquid
Slide 41: Development of saline wastewater Werra river
Development of saline wastewater Werra river Potash production 20 Utilization/Avoidance million cbm (CapEx: almost € 500 million) 6.0 4.0 3.0 5.5 1.5 million cbm Tailings pile waters 4.0 Process waters 1.5 Saline Waste-water from 1998: until 2012: K+S until 2015: ESTA 1- until 2018: avg. saline Disp
Slide 42: Bethune – solution mining (example: primary mining)
Bethune – solution mining (example: primary mining) Potash production Mining technique Solution mining Reserves / resources 160 / 982 million t KCl product Depth 1,500 meters Thickness 33 meters Patience Lake K2O / KCl content 18% / 29% Belle Plaine Environmental approved for up to Esterhazy impact
Slide 43: Bethune – primary versus secondary Mining
Bethune – primary versus secondary Mining Potash production Secondary mining [NaCl brine mining / crystallisation pond] Operates at 50% lower production costs than primary mining ▪ Secondary mining uses exclusively saturated NaCl solution to selectively dissolve residual KCl from existing caverns ▪
Slide 44: Bethune – strengthening our global presence
Bethune – strengthening our global presence Potash production ▪ 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 China India North America ▪ Sales and distribution throu
Slide 45: Main production methods
Main production methods Rock salt Sea/solar salt Evaporated salt Brine Conventional Crystallization Recrystallization Controlled mining from sea water of purified brine borehole-brining ▪ Around 70% of worldwide salt production (more than 290 million tonnes including brine) is obtained from rock sal
Slide 46: Financials
Financials
Slide 47: Key financials
Key financials Revenues (€ billion) EBITDA (€ million) 4.0 4.1 640 3.6 3.7 577 606 3.5 519 445 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 EBITDA margin (%) FCF vs Net Financial Debt/EBITDA 7.2 5.3 4.6 5.2 +140 15 16 15 16 -206 4.9 -42 12 -390 -777 2016 2017 2018 2019 2020 2016 2017 2018 2019
Slide 48: Operating and free cash flow (adjusted)
Operating and free cash flow (adjusted) continuing and discontinued operations (€ million) 756 719 669 640 445 429 307 309 140 49 -42 -206 -306 -390 -636 -777 2013 2014 2015 2016 2017 2018 2019 2020 Operating Cash Flow Free Cash Flow (adjusted) 48
Slide 49: Debt profile (promissory notes and bonds)
Debt profile (promissory notes and bonds) Financing instruments €m Amount outstanding Coupon Maturity Promissory note and loans 13 Senior unsecured notes due 2021 441 4.125% Dec-21 Senior unsecured notes due 2022 207 3.000% Jun-22 Senior unsecured notes due 2023 443 2.625% Apr-23 Senior unsecured no
Slide 50: Cash flow and balance sheet
Cash flow and balance sheet continuing and discontinued operations In € million FY/19 3M/20 H1/20 9M/20 FY/20 3M/21 H1/21 9M/21 Operating cash flow 640 255 323 328 429 147 69 83 - thereof continuing operations 124 169 227 82 81 95 Investing cash flow -500 -51 -157 -283 -471 -110 2.480 2.063 (pre-sal
Slide 51: Investor Relations
Investor Relations
Slide 52: Investor Relations Contact
Investor Relations Contact Janina Rochell Nathalie Frost Julia Bock, CFA Senior Investor Relations Manager & Investor Relations Manager Head of Investor Relations Sustainability Expert Phone: + 49 561 / 9301-1009 Phone: + 49 561 / 9301-1403 Phone: + 49 561 / 9301-1403 Fax: + 49 561 / 9301-2425 Fax:
Slide 53: K+S Share
K+S Share Key Data Shareholder Structure as of 31.12.2020 WKN: KSAG88 ISIN: DE000KSAG888 Private Investors 55% Registered shares of no-par Type of shares: value Total number of Freefloat 191,400,000 100% shares: Institutional Investors 45% Trading segment: Prime Standard Bloomberg SDF / Reuters Tick
Slide 54: K+S ADR Program
K+S ADR Program The K+S ADR Program offers North American investors the opportunity to take stock in K+S. Since the ADRs are quoted in US dollars and dividends are also distributed in US dollars, this financial instrument closely resembles an American share. Two ADRs represent one K+S ordinary share
Slide 55: K+S bonds and issuer rating
K+S bonds and issuer rating Bond 12/2021 Bond 06/2022 Bond 04/2023 Bond 07/2024 WKN A1Y CR5 A1P GZ8 A2E 4U9 A2N BE7 ISIN XS0997941355 DE000A1PGZ82 XS1591416679 XS1854830889 Listing Luxembourg SE Luxembourg SE Luxembourg SE Luxembourg SE Issue volume EUR 500 million EUR 500 million EUR 625 million EU
Slide 56: Additional information
Additional information Financial calendar 2021/2022 2021 Annual Report March 10, 2022 Quarterly Report; 31 March 2022 May 11, 2022 Annual Shareholders’ Meeting May 12, 2022 Dividend payment May 17, 2022 Half-yearly Financial Report, 30 June 2022 August 11, 2022 Quarterly Report; 30 September 2022 No
Slide 57: Disclaimer
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 or any of its respective direc