K+S Aktiengesellschaft — Investor Day (December 2010)
32 slides from K+S Aktiengesellschaft's investor day presentation, Dec 8, 2010
Slide 1: Capital Markets Day: Potash Perspectives
Capital Markets Day Potash Perspectives Dr. Ernst Andres Managing Director of K+S Kali GmbH Berlin, 8 December 2010 Experience growth.
Slide 2: Content
Potash and Magnesium Products Content A. K+S Potash and Magnesium Business B. K+S’ competitive position C. Growth perspectives & Strategy December 2010 K+S Group 1
Slide 3: Production Sites in Germany
Potash and Magnesium Products Production Sites in Germany Potash mining in the Werra Fulda Region 6 7 4 Kassel 1 2 3 5 Potash Seam Hesse Share of production capacity (in %) 1. Wintershall 2. Unterbreizbach Integrated Werra Plant 44 3. Hattorf 4. Zielitz 24 Potash Seam 5. Neuhof-Ellers 16 Thuringia 6
Slide 4: Well Positioned in all Product Segments
Potash and Magnesium Products Well Positioned in all Product Segments • Market leader in Europe • Higher production costs counterbalanced by logistical advantages to regions MOP such as Europe or Latin America • Strategic presence in the most important overseas markets SOP • World market leader for
Slide 5: Broad Portfolio of Fertilizer Specialities
Potash and Magnesium Products Broad Portfolio of Fertilizer Specialities Crude Salt K+S and competitors K+S competitive advantage Highly Kieserite fine. purified salts MOP std. Korn-Kali Kieserite gran. MOP Kieserite SOP MOP gran. Epsom salt Industrial Patentkali MgSO4 anhy. Products K+S revenue 201
Slide 6: K+S Fertilizer Portfolio – More than just potash
Potash and Magnesium Products K+S fertilizer Portfolio – More than just potash Product Nutrients (%) K 2O MgO S Na B Mn; Zn 60 50 18 30 10 17 40 6 4 3 0-0,25 11 5 4 20 25-27 20-22 16 13 13-15 12-13 0-0,9 1-4; 0-1 December 2010 K+S Group 5
Slide 7: Leading Position in Fertilizer Specialities
Potash and Magnesium Products Leading Position in Fertilizer Specialities SOP Potash Specialities Magnesium Sulphate capacities worldwide capacities worldwide capacities worldwide (~5.8 million tonnes) (~3.9 million tonnes without SOP) (~2.5 million tonnes) 21% 36% 45% 79% 64% 55% K+S Competitors So
Slide 8: Major Markets
Potash and Magnesium Products Major Markets > 1% Sales volumes > 5% Revenues by region 9M/10 2009 2008 Germany: 16% 12% 14% Rest of Europe: 40% 32% 49% Overseas: 44% 56% 37% December 2010 K+S Group 7
Slide 9: Agronomical Presence in Europe and Overseas
Potash and Magnesium Products Agronomical Presence in Europe and Overseas z 31 specialists worldwide z On the basis of research activities and field trials (approx. 250 worldwide), K+S consultants work on optimising potassium, magnesium and sulphur fertilizers and provide effective guidance on the u
Slide 10: IAPN Research Institute
Potash and Magnesium Products IAPN Research Institute z Institute of Applied Plant Nutrition (IAPN) will focus on practice-oriented research approaches concerning plant nutrition z An ever-increasing world population, changing dietary habits and climate change currently impose great demands on agric
Slide 11: Non-fertilizer Products
Potash and Magnesium Products Non-fertilizer Products High-quality raw materials for industrial purposes Magnesium Sulphate Potassium Chloride Potassium Sulphate Epsom Salt Pulp and Paper Chlor-Alkali Electrolysis Construction Materials ABS/EPS Plastic Production Detergents Oil Drilling Muds Plaster
Slide 12: Non-fertilizer Products: Zielitz Food-Grade Facility
Potash and Magnesium Products Non-fertilizer Products Example: Zielitz facility for the production of food-grade potassium chloride z Opening in September 2009 z Extension of production capacity for health care and food products z Capacity of around 35 kt KCl food grade z Growing market segment z In
Slide 13: Content
Potash and Magnesium Products Content A. K+S Potash and Magnesium Business B. K+S’ competitive position C. Growth perspectives & Strategy December 2010 K+S Group 12
Slide 14: Development of Selected Cost Items
Potash and Magnesium Products Development of Selected Cost Items Selected Cost Items (€) 2007 2008 2009 2010 2011e Energy 141 186 144 165 - 175 Depreciation 80 85 88 90 - 95 Personnel 435 465 440 500 - 510 Material 210 265 183 220 - 240 Freight 250 227 155 255 - 270 Sales Volumes (mn t) 8.22 6.99 4.
Slide 15: Delivered Costs to Brazil - Cost Comparison
Potash and Magnesium Products Delivered Costs to Brazil - Cost Comparison z No doubt, the average of the production costs of all USD pmt KCl Production costs Plant-to-port transportation Ocean freight 300 K+S sites in Germany is relatively high. BUT… 250 z … there are differences 200 among the indiv
Slide 16: Price Development of Different Product Groups
Potash and Magnesium Products Price Development of Different Product Groups K+S Ø-Portfolio-Price vs. MOP gran. Europe SOP Ø-Price vs. MOP gran. Europe €/t €/t 700 900 K+S Ø-Portfolio Price SOP Ø-Price Europe MOP gran. Europe 800 MOP gran. Europe 600 700 500 600 400 Δ 500 ~10-15% Δ ~50€ 400 300 300
Slide 17: Environmental Standards - A Competitive Factor
Potash and Magnesium Products Environmental Standards - A Competitive Factor z Global trend towards harmonisation of environmental standards z New projects must satisfy global World Bank standards to be refinanced on capital markets z Latest developments: - Environmental approval of PRC project in A
Slide 18: Long-term Solutions to Significantly Reduce Saline Water
Potash and Magnesium Products Long-term Solutions to Signicantly Reduce Saline Water z K+S’ package of measures of up to € 360 million secures jobs and improves environmental protection Halving of the volume of saline wastewater by 2015 30% reduction of salt concentration by 2015 Î We are also c
Slide 19: Higher Capex Going Forward
Potash and Magnesium Products Higher Capex Going Forward € million % 250 120 200 100 150 80 100 60 50 Capex* Capex/Depreciation (rhs) 0 40 05 06 07 08 09 e e e e 10 11 12 13 20 20 20 20 20 20 20 20 20 z Compared to the past years, capital expenditure are expected to more or less double over the next
Slide 20: Content
Potash and Magnesium Products Content A. K+S Potash and Magnesium Business B. K+S’ competitive position C. Growth perspectives & Strategy December 2010 K+S Group 19
Slide 21: K+S Mid-term Production Capacity
Potash and Magnesium Products K+S Mid-term Production Capacity 8.0 8,0 7.8 z Product mix – ceasing production 7.5 7.5 7,5 of lower margin products Slightly above z Usual and gradual decline in z Additional qualified personnel 7 million ore grades over time required 7.0 7,0 z Additional shutdown week
Slide 22: Strategy of the Potash and Magnesium Products Business Segment
Potash and Magnesium Products Strategy of the Potash and Magnesium Products Business Segment Excellence throughout the entire value chain offers a profitable basis for external growth Strategic Focus Global development of low-cost MOP-production facilities Growth Expansion of existing high-margin pr
Slide 23: Potash Market Western Europe (EU 27)
Potash and Magnesium Products Potash Market Western Europe (EU 27) Market Structure Potash Use by Crop * Structure Private trade with country- Other crops 32% Wheat 27% specific regulations Products MOP standard, gran. and specialities through spot Sugar crops Fruits & and contracts 5% Vegetables 14
Slide 24: Potash Market Brazil
Potash and Magnesium Products Potash Market Brazil Market Structure Potash Use by Crop * Other crops Structure Private trade 14% Rice Products MOP gran. through spot 4% Soybeans Cotton and contracts 4% 34% Fruits & Vegetables 5% Corn Sugar crops 19% 20% Agricultural Potash Consumption ** Cultivated
Slide 25: Potash Market Southeast Asia
Potash and Magnesium Products Potash Market Southeast Asia Market Structure Potash Use by Crop * Other crops Structure Private trade Sugar crops 7% Fruits & 4% Vegetables Products MOP standard and 5% specialities through spot Corn 5% and contracts Rice 9% Oil seed 70% Agricultural Potash Consumption
Slide 26: Potash Market India
Potash and Magnesium Products Potash Market India Market Structure Potash Use by Crop * - Other crops Structure Predominantly centralised, 13% subsidised Oil seed 5% Rice 35% Products MOP standard through Cotton 5% contracts Sugar crops 10% Fruits & Wheat Vegetables 10% 22% Agricultural Potash Consu
Slide 27: Potash Market China
Potash and Magnesium Products Potash Market China Market Structure Potash Use by Crop * Other crops Structure Predominantly centralised 10% Oil seed 2% Products MOP standard through Sugar crops 5% long-term contracts Wheat 5% Fruits & vegetables 50% Rice 28% Agricultural Potash Consumption ** Cultiv
Slide 28: Potash Market North America
Potash and Magnesium Products Potash Market North America Market Structure Potash Use by Crop * Other crops Structure Private Trade 21% Products MOP gran. and Sugar crops 3% specialities through Cotton Corn 45% 3% spot and contracts Wheat 6% Fruits & Vegetables Soybeans 7% 15% Agricultural Potash Co
Slide 29: Sales Volumes by Product and Regions 2007
Potash and Magnesium Products Sales Volumes by Product and Regions 2007 Europe Asia Americas Africa Oceania Other 100% MG-Products 90% 80% Potash Specialities 70% 60% Sulphate of Potash 50% Industrial Potash 40% 30% KCL 60 20% 10% 0% Sales volumes in % z Above 60% of sales volumes distributed to Eur
Slide 30: Sales Volumes by Product and Regions 2011e
Potash and Magnesium Products Sales Volumes by Product and Regions 2011e Europe Asia Americas Africa Oceania Other 100% MG-Products 90% MG-Fertlizers 80% 70% Potash Specialities 60% Sulphate of Potash 50% 40% Industrial Potash 30% KCL 60 20% 10% 0% Sales volumes in % z Future product mix with slight
Slide 31: 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 the information available to us at this moment in time. Should the assumptio
Slide 32: K+S Aktiengesellschaft Investor Relations
K+S Aktiengesellschaft Bertha-von-Suttner-Straße 7 34131 Kassel | Germany phone: +49 (0)561 / 9301-0 fax: +49 (0)561 / 9301-1753 Investor Relations phone: +49 (0)561 / 9301-1100 fax: +49 (0)561 / 9301-2425 email: investor-relations@k-plus-s.com Internet: www.k-plus-s.com Experience growth.
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