K+S Aktiengesellschaft — Investor Day (December 2010)
23 slides from K+S Aktiengesellschaft's investor day presentation, Dec 8, 2010
Slide 1: Capital Markets Day Financial Perspectives
Capital Markets Day Financial Perspectives Jan Peter Nonnenkamp, CFO Berlin, 8 December 2010 Experience growth. December 2010 K+S Group 0
Slide 2: Content
K+S Group Content A. Financial Position of K+S Group B. Cash & Liquidity Management C. Management of Market Price Risks D. Financial Targets of K+S Group December 2010 K+S Group 1
Slide 3: Development of Net Debt
K+S Group Development of Net Debt € million Provisions for pensions Cash and bank balances z 17 September 2009: K+S 2400 Provisions for mining obligations Total net debt successfully placed € 750 million Bank loans and overdrafts Total net financial liabilities corporate bond 2000 (incl. bonds) 92.6
Slide 4: Effects of Capital Increase
K+S Group Effects of Capital Increase Strengthening of our capital structure at the end of 2009 z Successful capital increase with ordinary rights issue in December 2009 with the issuance of 26.4 million shares and net proceeds of € 661 million z Targets of the capital increase: 1. Improvement of ou
Slide 5: Maturity Profile
K+S Group Maturity Profile € million 1000 Bond due 09/2014; Coupon: 5% 800 Revolving credit facility due 07/2015* 600 400 750 800 200 * The revolving credit facility 0 0 0 is completely undrawn 0 2011 2012 2013 2014 2015 z Maturity profile has been optimised by extending the term of the revolving cr
Slide 6: Financial Result
K+S Group Financial Result € million 9M/10 2009 2008 z To optimize the maturity profile, the previous credit Interest income 4.4 4.7 25.1 facility was replaced by a Interest expenses (110.0) (61.7) (29.7) more favorable credit facility. - Interest from pension provisions (4.7) (7.6) ((2.3) This resu
Slide 7: Content
K+S Group Content A. Financial Position of K+S Group B. Cash & Liquidity Management C. Management of Market Price Risks D. Financial Targets of K+S Group December 2010 K+S Group 6
Slide 8: Continuous Improvement of Cash Management
K+S Group Continuous Improvement of Cash Management … to achieve • Realization of Optimized cash management USD Cash Pool z interest rate advantages Continuous improvement of Cash Management… achieved in Eurozone • Realization of z administrative advantages “payment on behalf” z an optimal allocatio
Slide 9: Development of Working Capital
K+S Group Development of Working Capital 2007 2008 2009 LTM* 2011e Working Capital 570.6 962.3 985.7 897.9 % of revenues 17.1% 20.1% 27.6% 24.6% Working Capital Cycle (days) 73 75 132 100 z Working Capital increased through the crisis mainly due to prolonged payment terms for our customers and the b
Slide 10: Content
K+S Group Content A. Financial Position of K+S Group B. Cash & Liquidity Management C. Management of Market Price Risks D. Financial Targets of K+S Group December 2010 K+S Group 9
Slide 11: Management of Market Price Risks
K+S Group Management of Market Price Risks z Our aim is to minimize risks from changes in market prices which could have a material impact on the profitability of the K+S Group z Market price risks relevant for K+S can result from exchange rates, interest rates, commodity prices z All material risks
Slide 12: Types of Currency Risks
K+S Group Types of Currency Risks Currency risks Transaction risk Translation risk Cashflow & Balance Sheet Income Statement Income Statement Hedging* No hedging Hedging* * in case material impact on K+S Group level could occur December 2010 K+S Group 11
Slide 13: Potash and Magnesium: Management of Transaction Risk
Potash and Magnesium Business Segment Management of Transaction Risk z Substantial overseas revenues and cash inflows achieved in US$ z Costs and cash outflows in US$ (e. g. freight charges) clearly smaller Î Result: Transaction risk z Anticipated US$ revenues less expected overseas freight costs an
Slide 14: Salt Business Segment: Management of Translation Risk
Salt Business Segment Management of Translation Risk z Translation risks exist for the balance sheet and for the income statement z There is no separate hedging in place against balance sheet risks because this would cause new risks on earnings and/or liquidity. Additionally, there is only a limited
Slide 15: Earnings Sensitivities to USD volatility in 2011
K+S Group Earnings Sensitivities to USD volatility in 2011 1.30 USD/EUR 1.40 USD/EUR* 1.50 USD/EUR Ø USD/EUR exchange rate changes from Ø USD/EUR exchange rate changes from 1.40 to 1.30 USD/EUR 1.40 to 1.50 USD/EUR z Based on the expected USD net z Based on the expected USD net exposure of the K+S G
Slide 16: Management of Energy Price Risks
K+S Group Management of Energy Price Risks € z K+S energy costs are mainly determined by the use 600 of natural gas 500 z First, the amount of natural gas necessary for our 400 salt and potash production could be significantly 300 reduced by shifting from natural gas to the usage 200 of steam stemmi
Slide 17: Management of Interest Rate Risks
K+S Group Management of Interest Rate Risks z The € 750 million bond makes up the most important cash-relevant interest position of K+S z Interest expenses for bond (€ 37.5 million p.a.) are fixed until maturity (September 2014) z Interest rate changes have an impact on valuation of long-term provis
Slide 18: Content
K+S Group Content A. Financial Position of K+S Group B. Cash & Liquidity Management C. Management of Market Price Risks D. Financial Targets of K+S Group December 2010 K+S Group 17
Slide 19: Our Aim is to Keep Our Investment Grade Rating
K+S Group Our Aim is to Keep Our Investment Grade Rating Moody’s Date Rating Outlook z We have shown a successful track record in credit and debt November 2010 Baa2 stable capital markets March 2010 Baa2 stable z To ensure this position we want September 2009 Baa2 negative to maintain a solid invest
Slide 20: Key Figures for the Management of the Capital Structure
K+S Group Key Figures for the Management of the Capital Structure z In order to assure and optimise the financial capacity of the K+S Group, we aim to achieve a capital structure, which is in line with the usual criteria for an "investment grade" rating in the long term. The management of the capita
Slide 21: Impact of the Intended Acquisition of Potash One and the Legacy Project
K+S Group Impact of the Intended Acquisition of Potash One and the Legacy Project on our Financial Situation z With the available liquid funds and secured credit facilities, K+S has enough financial scope to finance the purchase price of Potash One. Therefore, the transaction is not subject to any f
Slide 22: 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 23: K+S Aktiengesellschaft
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. December
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