K+s Ag · XETR:SDF
K+s — K+S Aktiengesellschaft — Investor Day (December 2010)
28 slides from K+s's investor day presentation, Dec 8, 2010
Slide 1: Capital Markets Day Fertilizer Perspectives
Capital Markets Day Fertilizer Perspectives Joachim Felker Member of the Board of Executive Directors Berlin, 8 December 2010 Experience growth.
Slide 2: Content
K+S Group Content A. Fertilizer Market Environment B. Nitrogen Market Environment - K+S Nitrogen - Compo C. Potash Market Environment - Growth Perspectives - Potash One - Future Potentials in Germany December 2010 K+S Group 1
Slide 3: Key Drivers of the Fertilizer Business
K+S Group Key Drivers of the Fertilizer Business z Despite decreasing availability of arable farmland, global production of soft commodities has to increase: y steadily increasing world population y changing diets toward higher meat consumption (e.g. 1 kg beef = 8 kg animal feed) y increasing import
Slide 4: Development of Demand – Long-term Trend
Potash and Magnesium Products Development of Demand – Long-term Trend Global Application Rate for Major Nutrients lb/acre 120 112 Current Application Rate Scientifically recommended 100 Application Rate 80 66 60 59 60 40 24 20 17 0 Nitrogen Phosphate Potash Sources: IFA, IPNI Studies, Ohio State
Slide 5: Low Stocks-to-use Ratios of Agricultural Products
K+S Group Low Stocks-to-use Ratios of Agricultural Products Production and consumption development vs. stocks-to-use ratio (Wheat and coarse grains) 1,800 1.800 40.0 40,0 Production Consumption Stocks-to-use 35.0 35,0 1,600 1.600 30.0 30,0 Stocks-to-use ratio 25.0 25,0 in million tonnes 1,400 1.400
Slide 6: Crop Prices: Key Fertilizer Demand Driver
K+S Group Crop Prices: Key Fertilizer Demand Driver Potential global cereals* shortfall in 2011/12 Consecutive years with above-average 1850 z 1827 yield unlikely (weather conditions driven) High 1800 production deficit - Even more unlikely given past 96 general under-application of fertilizer Stock
Slide 7: Prices for Agricultural Products – Spot vs. Future
K+S Group Prices for Agricultural Products – Spot vs. Future Prices for Agricultural Products – spot Prices for Agricultural Products – future 400% 130% 350% 120% 300% 110% 250% 100% 200% 90% 150% 100% 80% 50% 70% Dec. Dec. Dec. Dec. Dec. Dec. Nov. Dec. Dec. Dec. May ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘10
Slide 8: Profitability of Wheat in Europe
Potash and Magnesium Products Profitability of Wheat in Europe 1600 2008 2009 2010e Revenues 1400 Profit potential: Revenues € 231 Profit Costs 1200 potential: Revenues € 325 Year Fertilizer share of total costs 366 Costs Profit Costs 1000 potential: 2008 30% fertilizer costs (4% K) 181 € 71 174 200
Slide 9: Content
K+S Group Content A. Fertilizer Market Environment B. Nitrogen Market Environment - K+S Nitrogen - Compo C. Potash Market Environment - Growth Perspectives - Potash One - Future Potentials in Germany December 2010 K+S Group 8
Slide 10: K+S Nitrogen – Strong Production Partners
Nitrogen Fertilizers K+S Nitrogen – Strong Production Partners BASF Antwerp BASF Ludwigshafen NPK (MOP, SOP) ENTEC-NPK ass / ENTEC 26 KAS AN AS Lanxess Antwerp BASF PEC Rhin Ottmarsheim AS Standard Granammon KAS AN Business Model: z Trading Business z Contractual agreements with BASF for the exclusi
Slide 11: K+S Nitrogen – Sales Volumes by Region
Nitrogen Fertilizers K+S Nitrogen – Sales Volumes by Region Major Product Groups Sales Volumes by Region 2010e 1.800 1.600 Sales volume: 4.7 million tonnes 1.400 Germany 1.200 15% Overseas 1.000 32% Overseas kt 800 Europe (ex Germany) Germany Europe (ex Germany) 600 53% 400 200 0 AS KAS/AN ASS ENTEC
Slide 12: Premium for N in KAS vs. Urea
Nitrogen Fertilizers Premium for N in KAS vs. Urea €/kg 1,4 1.4 300% 1.2 1,2 250% 1.0 1 200% 0.8 0,8 150% 0.6 0,6 100% 0,4 0.4 50% 30% 0.2 0,2 0% 0 -50% Jul-05 Jan-06 Jul-06 Jan-07 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 N Urea €/kg N Premium for KAS €/kg Premium in % December 2010 K
Slide 13: Compo Consumer – Market Environment
Nitrogen Fertilizers Compo Consumer – Market Environment Demand z Heterogeneous European market Competition z Moderate growth to be expected Customers in segment z Concentration process z Poor earnings position of all competitors z Internationalisation z Many suppliers present z Powerplay in purchas
Slide 14: K+S is Considering the Sale of COMPO
Nitrogen Fertilizers K+S is Considering the Sale of COMPO z COMPO is a leading provider in a market that requires consolidation z In compliance with our growth strategy, we will focus our financial and management resources in particular on the Potash and Magnesium Products and Salt business segments
Slide 15: Project Status
Nitrogen Fertilizers Project Status z Concept worked out for a possible corporate and business carve-out of COMPO from the K+S Group All COMPO interfaces within the K+S Group identified Concept worked out to separate the sales platforms in Asia, Europe and North/Central/South America Preparing
Slide 16: Content
K+S Group Content A. Fertilizer Market Environment B. Nitrogen Market Environment - K+S Nitrogen - Compo C. Potash Market Environment - Growth Perspectives - Potash One - Future Potentials in Germany December 2010 K+S Group 15
Slide 17: World Potash Production and Sales by Region
K+S Group World Potash Production and Sales by Region Million tonnes ~18 ~16 ~23.3 ~9.7 ~6 ~5.9 ~4.2 ~9 ~8.6 ~1.5 ~0.7 World potash production: World potash sales: 2010e: ~51 million t 2010e: 52-53 million t Incl. sulphate of potash 2009: 33.7 million t 2009: 31.0 million t and low-grade potash 2008
Slide 18: World Potash Capacity, Production and Sales
K+S Group World Potash Capacity, Production and Sales Available capacity Production Sales Million tonnes 70 Soviet Union China Financial crisis 58.7 60 54.4 52.6 54.2 54.5 52-53 50.7 49.1 50 45.5 43.9 40 36.2 31.0 30 20 10 55.0 35.2 45.1 46.0 48.5 53.9 56.5 50.9 57.8 56.0 33.7 51 0 1988 1993 2001 20
Slide 19: MOP Price Development
Potash and Magnesium Products MOP Price Development US$/t Northwest-Europe (standard, fob) 1000 ● 23 December 2009: Contract with Chinese importers and BPC fixed at 800 US$ 350/t for standard MOP 600 ● Beginning of 2010: Contracts with India and Canpotex/BPC fixed 400 at US$ 370/t 374 ● Mid January
Slide 20: Supplier Structure on the World Potash Market
K+S Group Supplier Structure on the World Potash Market Figures in % 2008 2009 2010 32.9 31.8 23.9 23.0 22.7 21.7 13.9 10.7 11.2 10.1 11.1 9.6 9.0 9.5 8.5 8.6 8.1 6.3 4.7 3.4 3.1 3.5 2.7 3.1 3.4 1.6 1.9 Canpotex BPC K+S IPC ICL APC SQM China Others • Potash • Belarus- • Silvinit • DSW participation
Slide 21: World Potash Capacity, Production and Sales
Potash and Magnesium Products World Potash Capacity, Production and Sales Million tonnes Greenfield projects Brownfield projects z Transitional year 2010: significant 80 Available capacity Financial revival in demand expected, but China crisis no satisfactory utilisation of 70 Production 67 capacity
Slide 22: Agricultural Potash Consumption by Region
Potash and Magnesium Products Agricultural Potash Consumption by Region World Developed markets 40.000 20.000 North America, Western Europe, Australia, Japan 32.000 16.000 1.000 t K2O 1.000 t K2O 24.000 12.000 16.000 8.000 8.000 4.000 0 0 80/81 84/ 88/ 92/ 96/ 00/ 04/ 08/ 12/f 80/81 84/ 88/ 92/ 96/
Slide 23: Friendly Takeover Bid for Potash One
K+S Group Friendly Takeover Bid for Potash One Located in the Heart of Saskatchewan’s Potash-Rich Basin z Potash One is a Vancouver-based resource company engaged in the exploration and development of advanced potash properties. z Potash One holds several potash exploration licences in the Canadian
Slide 24: Overview of the Legacy Project
K+S Group Overview of the Legacy Project Legacy Project Geological Overview Key data * Mining technique Solution Mining Expected maximum 2.7 million t KCl product/a production capacity Depth 1,500 metres Patience Lake Total capex $2.5 billion Belle Plaine Environmental approved Esterhazy impact stat
Slide 25: Solution Mining Expertise Within the K+S Group
K+S Group Solution Mining Expertise Within the K+S Group z With more than 100 years experience in potash mining, K+S has the geological and mining expertise to successfully execute this greenfield project K+S will also engage consultants and certain personnel from Potash One to supplement its team
Slide 26: Future Potentials in Germany
Potash and Magnesium Products Future Potentials in Germany ● K+S evaluates the reactivation of former potash sites such as Rossleben or Siegfried-Giesen, the latter being a K+S reserve capacity since 1987 Sigmundshall Bergm.-Hugo Î Overall target: To replace Siegfried- Giesen Zielitz Sigmundshall, w
Slide 27: 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 28: K+S Aktiengesellschaft contact details
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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