K+s AG · XETR:SDF
K+s — K+S Aktiengesellschaft — Non-Deal Roadshow (December 2007)
66 slides from K+s's roadshow presentation, Dec 17, 2007
Slide 1: Experience growth. Roadshow London
Experience growth. Roadshow London 17 December 2007
Slide 2: Growth Lies at the Heart of Our Vision
K+S Group Growth Lies at the Heart of Our Vision K+S is one of the world‘s leading suppliers of speciality and standard fertilizers, plant care and salt products. Achieving healthy and sustained growth is our goal as a company and a challenge at the same time. We offer agriculture, industry and priv
Slide 3: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix December 2007 K+S Group 2
Slide 4: Corporate Structure
K+S Group Corporate Structure K+S Group Revenues EBIT I Potash and Magnesium Products 1,238.9 158.6 Core business fertilizers and COMPO 552.4 29.2 plant care fertiva 556.2 16.7 Core business Salt 485.8 67.6 salt Waste Management and Recycling 69.4 13.8 Complementary businesses Services and Trading 5
Slide 5: Worldwide Presence
K+S Group Worldwide Presence Overseas Europe Kassel Revenues by region (2006) Germany 23.6% Rest of Europe 48.1% Production Overseas 28.3% Sales December 2007 K+S Group 4
Slide 6: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix December 2007 K+S Group 5
Slide 7: Why Fertilize ?
K+S Group Why Fertilize ? z There are only few soils on earth which have a sufficient content and availability of nutrients to achieve high yields over a longer period without fertilization z Indispensable supplement to the natural nutrient content of soils z Compensation of the nutrient losses by h
Slide 8: Key Drivers of the Fertilizer Business
K+S Group Key Drivers of the Fertilizer Business z Despite decreasing availability of arable farm land, global production of soft commodities has to increase: • steadily increasing world population • changing diets toward higher meat consumption (e.g. 1 kg beef = 8 kg animal feed) • increasing impor
Slide 9: Yields of Cereals in Selected Regions
K+S Group Yields of Cereals in Selected Regions dt/ha 70 60 50 40 30 20 10 0 North America Latin America Western Europe Eastern Europe South Asia Far East Africa Source: FAO 1980 1985 1990 1995 2000 2004 z Highest yields of cereals per hectare to be found in Western Europe and in North America thank
Slide 10: Meat Consumption per Capita
300 K+S Group Meat Consumption 250 per Capita 200 kg / person 150 North America 100 Europe* South America 50 Asia Africa 0 1961 1970 1980 1990 2002 source: Food and Agriculture Organization of the United Nations (FAO) * comparable data for Europe is not available before 1992 z Rising prosperity goes
Slide 11: Bio Diesel Production - Objectives of the 'EU 25'
K+S Group Bio Diesel Production - Objectives of the ‘EU 25’ 22.000 According to the EU guideline from 08.05.2003 for the promotion of the use of 20.000 bio fuels, the member states have to guarantee a minimum share of bio fuels. 18.000 1.000 t/year 16.000 14.000 14,000 13,450 12.000 12,000 11,500 10
Slide 12: Fertilizer Business - Gene Technology
K+S Group Fertilizer Business - Gene Technology z Objectives of gene technology: • improved crop resistance against broad-band herbicides as well as pests and diseases • breeding of plants with elevated use value for the customer z Cultivation of genetically modified crops (GMO) mainly in the USA, A
Slide 13: Agricultural Supply Falls Short of Demand
K+S Group Agricultural Supply Falls Short of Demand Production, consumption, stocks of cereals Production, consumption, stocks of corn 120 40 80 50 30 60 40 80 30 20 40 20 40 10 20 10 m illion t m illion t 0 0 0 0 % % -10 -20 -10 -40 -20 -20 -40 -30 -80 -30 -60 -40 -120 -40 -80 -50 /8 1 /8 6 /9 1 /9
Slide 14: Rising Prices of Agricultural Products
K+S Group Rising Prices of Agricultural Products Index: January 2005 = 100 z Agricultural output cannot 250 Corn keep up with demand +138% Palm oil 225 z Low worldwide inventories Wheat +110% of agricultural products 200 Soybeans +85% z Additional and increasing 175 +78% demand of renewable raw mate
Slide 15: Market Impact on Fertilizer Suppliers
K+S Group Market Impact on Fertilizer Suppliers +++ very strong Relative market impact ++ strong per class of nutrient + low o very low/non existent Nitrogen Phosphate Potash (N) (P) (K) K+S + o +++ Agrium +++ +/o + Mosaic + +++ ++ PCS ++ ++ ++ Yara/Kemira GrowHow +++ + o Explanatory note: The weigh
Slide 16: World Potash Production and Demand by Region
Potash and Magnesium Products World Potash Production and Demand by Region Million tonnes 17.2 16.2 20.8 8.2 9.5 6.9 4.4 7.9 8.4 1.5 0.7 World potash production: World potash sales: incl. sulphate of potash 2006: 51.0 million t 2006: 50.7 million t and low grade potash 2005: 56.6 million t 2005: 54.
Slide 17: Supplier Structure on the World Potash Market
Potash and Magnesium Products Supplier Structure on the World Potash Market 30.2% 23.7% 13.4% 10.6% 8.2% 9.1% 3.2% 1.6% zMosaic Belarus- z K+S zSilvinit ICL- APC SQM Others zPCS kali IPC Group participation participation China, of PCS of PCS Intrepid, zAgrium Uralkali z zDSW CVRD, Canpotex BPC zIber
Slide 18: World Potash Capacity, Production and Demand
Potash and Magnesium Products World Potash Capacity, Production and Demand Million tonnes Technically available Capacity z The shortfall of Eastern European (incl. announced capacity expansions) demand after the collapse of the Production (incl. announced capacity expansions) 71.7 Soviet Union was m
Slide 19: Agricultural Potash Consumption by Region
Potash and Magnesium Products Agricultural Potash Consumption by Region Index 1980/81 = 100 Index 1980/81 = 100 350 350 World Developed markets 300 300 North America, Western Europe, Australia, Japan 250 250 200 200 150 150 100 100 50 50 0 0 80/81 82/ 84/ 86/ 88/ 90/ 92/ 94/ 96/ 98/ 00/ 02/ 04/ 06/0
Slide 20: MOP Prices for Selected Markets
Potash and Magnesium Products MOP Prices for Selected Markets Overseas Northwest-Europe US$/t (standard, cfr) US$/t (standard, fob) 420 290 Thailand/Taiwan 380 376 265 268 Brazil 340 348 240 300 215 260 190 220 165 180 140 140 115 100 90 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 20
Slide 21: Recent Price Increases/Announcements
Potash and Magnesium Products Recent Price Increases/Announcements Western Europe granular MOP z Price increase of € 12 in Apr., € 8-9 in July, 2 steps of € 15 and € 12 in Sept., € 13 in Oct., € 20 in Nov. and further increase of € 30 to € 290 cfr with immediate effect standard MOP z Price increase
Slide 22: Loader (up to 20 tonnes)
Potash and Magnesium Products Loader (up to 20 tonnes) December 2007 K+S Group 21
Slide 23: Potash and Magnesium Products
K+S Group Potash and Magnesium Products 9 Months Financial Year Revenues by product group € million 2007 2006 2006 2005 2006 (%) Revenues 1,021.7 943.3 1,238.9 1,197.2 EBIT I 173.7 123.0 158.6 151.8 Brief description Crude potash and magnesium salts are extracted from six mines in Germany and form t
Slide 24: USD Currency Management
Potash and Magnesium Products USD Currency Management z USD revenues are hedged after the deduction of overseas freight costs and a safety margin z US dollar hedging in 2003 to 2007 (inclusive) via double-barrier options: no classic hedging mechanism, only effective within certain barriers; barriers
Slide 25: COMPO
K+S Group COMPO 9 Months Financial Year Revenues by segment € million 2007 2006 2006 2005 2006 (%) Revenues 489.9 435.5 552.4 541.7 EBIT I 28.2 25.6 29.2 25.0 Brief description Consumer business: high-quality branded products such as potting soil, plant care products, lawn and garden fertilizers. Re
Slide 26: COMPO - Market Entrance Consolidated
COMPO COMPO - Market Entrance Consolidated z New plant protection products thanks to cooperation with Syngenta - “COMPO Axoris Insekten-frei“ introduced at the beginning of 2007 - Four further new developments based on Syngenta substances and 13 new formulae pending approval z Further development of
Slide 27: fertiva
K+S Group fertiva 9 Months Financial Year Revenues by product group € million 2007 2006 2006 2005 2006 (%) Revenues 468.5 413.6 556.2 568.3 EBIT I 15.1 14.6 16.7 14.8 Brief description fertiva represents the K+S Group’s nitrogen fertiizer activities and markets the agricultural fertilizers produced
Slide 28: Advantages of Joint Production of fertiva/COMPO
K+S Group Advantages of Joint Production of fertiva/COMPO z BASF produces fertilizers on an exclusive basis for fertiva and for COMPO; fertiva and COMPO control production volumes and product mix z Joint use of BASF technologically leading production facilities at competitive cost by fertiva and COM
Slide 29: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix December 2007 K+S Group 28
Slide 30: Salt
K+S Group Salt 9 Months Financial Year Revenues by product group € million 2007 2006 * 2006 * 2005 2006 (%) Revenues 376.2 340.9 485.8 398.0 EBIT I 29.9 55.6 67.6 62.7 * since 1 July 2006 including SPL; cumulative previous year figures are not comparable Brief description Salt products of highest pu
Slide 31: Salt: Mining Chamber in Germany
Salt Mining Chamber in Germany December 2007 K+S Group 30
Slide 32: SPL: Salt Extraction in the Atacama Desert
Salt SPL: Salt Extraction in the Atacama Desert December 2007 K+S Group 31
Slide 33: SPL: The Optimal Strategic Complement for K+S
Salt SPL: The Optimal Strategic Complement for K+S z SPL has developed into a strong player in the Americas • one of the most cost effective salt producers in the world • enjoys favourable logistical location to attractive overseas markets • high earnings capacity with growth opportunities z SPL ope
Slide 34: Main Salt Suppliers Worldwide
Salt Main Salt Suppliers Worldwide Capacity in million tonnes (crystallized salt and salt in brine; excl. captive use) 18.7 16.0 6.5 14.0 13.7 13.1 9.0 9.5 7.5 7.0 5.3 4.1 3.8 3.6 China Cargill Compass Morton Dampier Artyom- Expor- Südsalz Salins Mitsui Akzo National Minerals Salt Salt sol tadora Gr
Slide 35: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix December 2007 K+S Group 34
Slide 36: Complementary Business Segments
K+S Group Complementary Business Segments Waste Management and Recycling Services and Trading 9 Months Financial Year 9 Months Financial Year € million 2007 2006 2006 2005 € million 2007 2006 2006 2005 Revenues 52.9 51.3 69.4 56.0 Revenues 41.2 41.1 55.0 54.5 EBIT I 8.7 10.2 13.8 8.1 EBIT I 22.8 20.
Slide 37: Raw Material Prices Favour Recycling Business
Waste Management and Recycling Raw Material Prices Favour Recycling Business Index: January 2003 = 100 600 Price of copper z Recycling: high prices for Price of aluminium aluminium granulate being obtained by the recycling of salt slag 500 z Reutilisiation: stricter legal 400 requirements for the tr
Slide 38: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix December 2007 K+S Group 37
Slide 39: K+S is the Leading Player in its Markets
K+S Group K+S is the Leading Player in its Markets Fertilizers and Plant Care: One of the leading suppliers worldwide Potash z Leader in Europe z Fourth-largest producer worldwide Sulphate of potash and magnesium sulphate z Leading position in the World The green market z Leader in Europe with COMPO
Slide 40: Strategy
K+S Group Strategy z Consolidation and selective expansion of our leading market positions, particularly with regard to specialities z Further development of our core business sectors through acquisitions and cooperation arrangements z Ongoing focus on improving efficiency and cutting costs as well
Slide 41: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix December 2007 K+S Group 40
Slide 42: Development of Revenues, Earnings and Cash Flow
5.000 500 K+S Group 4.500 450 Development of Revenues, Earnings and Cash Flow 4.000 400 € million € million 3.500 3,500 CAGR 7.0% 350 CAGR 20.2% 2,958 3.000 3,000 300 278 2,500 2.500 250 2,259 CAGR 14.1% 2,000 2.000 200 176 *** CAGR 29.0% 1,500 1.500 150 133 130 104 1,000 1.000 100 47 500 50 0 0 0 ‘
Slide 43: Capital Expenditure, Acquisitions, Share Buyback
K+S Group Capital Expenditure, Acquisitions, Share Buyback € million 2003-’08e 500 Share buybacks: 110 Acquisitions: 453 Expansion capex: 280 400 Maintenance capex: 637 Total cash-outflow: 1,480 300 358 200 100 93 43 67 77 33 2 27 22 100 21 140 94 105 86 109 103 0 2003 2004 2005 2006 2007e 2008e z 2
Slide 44: Key Figures as of September 2007
K+S Group Key Figures as of 30 September 2007 € million 9M/2007 9M/2006 % Revenues 2,450.4 2,225.7 + 10.1 Operating earnings (EBIT I) 252.1 224.2 + 12.4 Earnings before income taxes (EBT), adjusted* 227.6 212.9 + 6.9 Group earnings after taxes, adjusted* 152.4 141.7 + 7.6 Effective tax rate (%) 33.0
Slide 45: Changes in Revenues as of September 2007
K+S Group 2.700 Changes in Revenues as of 30 September 2007 2.600 € million 2.500 2,500 2,450.4 +128.4 2.400 2,400 +151.1 -46.8 +224.7 2,300 2.300 2.200 2,200 2,225.7 -8.0 2.100 2,100 2.000 2,000 Revenues Volume/ Prices Exchange Consoli- Revenues 9 Months structure rates dation 9 Months 2006 2007 De
Slide 46: Development of Earnings per Share, Adjusted
K+S Group Development 2,50 of Earnings per Share, Adjusted* 2,25 € 2,00 2.00 1.85 1.73 1.75 1,75 1.52 1.50 1,50 1.43 1,25 1.25 1.15 0.97 1.02 1.00 0.95 1,00 0.86 0.76 0.75 0,75 0.83 ** 0.56 0.50 0,50 0.25 0,25 0.00 0,00 Q1 - Q4 2005 Q1 - Q4 2006 Q1 - Q3 2007 EPS 9M* € 2.96 € 3.44 € 3.70 EPS FY* € 3.
Slide 47: Outlook for the Year 2007
K+S Group Outlook for the Year 2007 z Strong increase in global potash demand and already high utilisation of installed capacities caused further significant price announcements for potash fertilizers all over the world z COMPO will benefit from increased sales of consumer products and higher prices
Slide 48: Perspectives for the Year 2008
K+S Group Perspectives for the Year 2008 z Potash and Magnesium Products: year-end 2007 achieved potash prices being considerably higher than at the beginning of the year will improve 2008 revenues by just under 15% (calculation excludes further price increases in 2008 and currency effects). This an
Slide 49: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix December 2007 K+S Group 48
Slide 50: Key Data of the K+S Share
K+S Group Key Data of the K+S Share *** 2007 2006 2005 2004 2003 2002 ** Earnings per share, adjusted (€)* 4.27 3.81 2.43 2.42 2.43 Dividend per share (€) 2.00 1.80 1.30 1.00 1.00 Book value per share, adjusted (€)* 26.62 25.71 22.58 20.76 13.76 12.42 Year-end closing price (XETRA, €) 82.20 51.05 39
Slide 51: Dividends and Share Buybacks (10 Years)
K+S Group Dividends and Share Buybacks (10 Years) 150 2,50 € million € per share Dividend per share (rhs) (for the prior financial year) 2.00 120 Share buybacks (lhs) 2,00 2.00 66.70 1.80 Total dividend payment (lhs) (for the prior financial year) 90 69.36 1,50 1.50 1.30 43.38 82.50 1.00 1.00 1.00 7
Slide 52: K+S Share Price Compared with DAX and MDAX
K+S Aktiengesellschaft K+S Share Price Compared with DAX and MDAX Performance of K+S share Market capitalisation (Index: 31 December 2006 = 100) (€ million) 200 180 K+S +81% 6,145 160 +2,754 140 3,391 +1,285 120 DAX +22% 2,106 100 MDAX +7% 80 Jan. Dec. 2005 2006 2007 2007 2007 31 Dec. 31 Dec. 12 Dec
Slide 53: K+S Share Price Compared with Peer Group
K+S Aktiengesellschaft K+S Share Price Compared with Peer Group Index: 31 December 2006 = 100 400 Mosaic +287% 350 300 250 PotashCorp +171% 200 K+S +81% 150 Yara +62% 100 50 Jan. Dec. 2007 2007 source: Bloomberg; as of 12 December 2007 December 2007 K+S Group 52
Slide 54: Shareholder Structure
K+S Aktiengesellschaft Shareholder Structure z BASF holds approx. 10% of our shares; Linea Ltd., an investment vehicle of Andrey Melnichenko, which is also invested in the Russian agrochemical enterprise BASF AG EuroChem, holds 6.75% of our shares 10.30% Linea Ltd. 6.75% z The freefloat of K+S AG am
Slide 55: Financial Calendar
K+S Group Financial Calendar 13 March 2008 ¾ Report on business in 2007 ¾ Press and analyst conference, Frankfurt am Main 14 May 2008 ¾ Annual General Meeting 2008, Kassel ¾ Interim report 31 March 2008 15 May 2008 ¾ Dividend payment for the year 2007 13 August 2008 ¾ Interim report 30 June 2008 12
Slide 56: K+S Aktiengesellschaft Contact
K+S Aktiengesellschaft Bertha-von-Suttner-Straße 7 34131 Kassel (Germany) phone: +49 (0)561 / 9301-0 fax: +49 (0)561 / 9301-1753 www.k-plus-s.com Investor Relations phone: +49 (0)561 / 9301-1460 fax: +49 (0)561 / 9301-2425 email: investor-relations@k-plus-s.com Experience growth. December 2007 K+S G
Slide 57: Content
K+S Group Content A. Corporate Structure B. Core Business Segments: - Fertilizers and Plant Care - Salt C. Complementary Businesses D. Strategy E. Financial Data and Outlook F. K+S Share Appendix December 2007 K+S Group 56
Slide 58: History
K+S Group History 1889 Formation of „Aktiengesellschaft für Bergbau und Tiefbohrung“, the oldest predecessing company of today`s K+S Aktiengesellschaft 1970 Merger of all three West-German potash producers to Kali und Salz AG; BASF is majority shareholder 1993 Merger of the potash and rock salt acti
Slide 59: Revenues and Earnings as of December 2006
K+S Group Revenues and Earnings as of 31 December 2006 € million 2006 2005 % Revenues 2,957.7 2,815.7 + 5.0 Operating earnings (EBIT I) 278.0 250.9 + 10.8 Earnings after market value changes (EBIT II) 361.6 271.7 + 33.1 Financial result - 20.1 - 12.1 - 66.1 Earnings before income taxes (EBT) 341.5 2
Slide 60: Changes in Revenues as of December 2006
K+S Group Changes in Revenues as of 31 December 2006 3.050 € million 3,000 3.000 2,957.7 2,950 2.950 +81.9 2,900 2.900 +142.0 +85.4 -0.8 2,850 2.850 2,800 2.800 2,815.7 -24.5 2,750 2.750 2,700 2.700 Revenues Volume/ Prices Exchange Consoli- Revenues 2005 structure rates dation 2006 December 2007 K+S
Slide 61: Balance Sheet as of December 2006
K+S Group Balance Sheet as of 31 December 2006 € million 2006 2005 Non-current assets 1,396.6 1,020.8 of which: Intangible assets 189.0 82.2 Property, plant and equipment 1,082.6 791.9 Securities 42.1 56.0 Deferred tax assets 52.0 58.1 Current assets 1,434.3 1,238.2 of which: Operating current asset
Slide 62: Cash Flow Statement as of December 2006
K+S Group Cash Flow Statement as of 31 December 2006 € million 2006 2005 +/- Gross cash flow 342.7 341.5 + 1.2 Cash flow provided by operating activities 202.4 220.8 - 18.4 Cash flow used in investing activities - 429.8 - 94.3 - 335.5 Free cash flow - 227.4 126.5 - 353.9 Cash flow used in financing
Slide 63: Operating EBIT Margins as of December 2006
K+S Group Operating EBIT Margins as of 31 December 2006 Operating Operating earnings Revenues EBIT margin € million 2006 2006 2006 2005 Potash and Magnesium Products 158.6 1,238.9 12.8 % 12.7 % COMPO 29.2 552.4 5.3 % 4.6 % fertiva 16.7 556.2 3.0 % 2.6 % Salt 67.6 485.8 13.9 % 15.8 % Waste Management
Slide 64: ROCE as of December 2006
K+S Group ROCE as of 31 December 2006 Operating Net Return on earnings assets* capital employed € million 2006 2006 2006 2005 Potash and Magnesium Products 158.6 850.9 18.6 % 19.5 % COMPO 29.2 283.9 10.3 % 9.3 % fertiva 16.7 - 100.3 - - Salt 67.6 480.6 14.1 % 24.7 % Waste Management and Recycling 13
Slide 65: K+S Aktiengesellschaft Contact
K+S Aktiengesellschaft Bertha-von-Suttner-Straße 7 34131 Kassel (Germany) phone: +49 (0)561 / 9301-0 fax: +49 (0)561 / 9301-1753 www.k-plus-s.com Investor Relations phone: +49 (0)561 / 9301-1460 fax: +49 (0)561 / 9301-2425 email: investor-relations@k-plus-s.com Experience growth. December 2007 K+S G
Slide 66: Forward-Looking Statements
K+S Group 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 information available to us at this moment in time. Should the assumptions u
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