K+S Aktiengesellschaft — Investor Day (September 2018)
21 slides from K+S Aktiengesellschaft's investor day presentation, Sep 5, 2018
Slide 1: Workshop II – Shaping 2030 from a Financial Perspective
K+S‘ Capital Markets Day 2018 Workshop II – Shaping 2030 from a Financial Perspective Bethune, 5 September 2018 Thorsten Boeckers, Chief Financial Officer
Slide 2: Thorsten Boeckers
K+S‘ Capital Markets Day 2018 Thorsten Boeckers Thorsten Boeckers was born in 1975 in Würselen (North Rhine-Westphalia). After training as a banker, Boeckers began his professional career in 1996 at Deutsche Bank in Aachen. He joined Deutsche Bank’s Equity Research department in Frankfurt in 1999. I
Slide 3: Safety moment
K+S‘ Capital Markets Day 2018 Safety moment Did you know … With a speed of 50 km/h: 14 meters in 1 second How long does it take to write a text message? 18 seconds means you are driving 252 meters blindly! K+S Group 3
Slide 4: Financial discipline in focus
K+S‘ Capital Markets Day 2018 Financial discipline in focus 1 Shaping 2030 Phase I: Transformation phase has started 2 K+S history is showing several examples of elevated financial leverage as a result of external growth but always followed by a quick de-leveraging 3 Financial de-risking has started
Slide 5: History of indebtedness
K+S‘ Capital Markets Day 2018 History of indebtedness 8.0 7.0 6.0 5.0 4.0 3.0 2.0 Bethune 1.0 0.0 2018e 2019e 2020e 2001 2002 2003 2004 2005 H1/06 2006 2007 2008 2009 2010 Q1/11 2011 Q1/12 2012 2013 2014 2015 2016 2017 -1.0 -2.0 * Net Debt/EBITDA Net Financial Liabilities/EBITDA * including capital
Slide 6: Clear financial targets
K+S‘ Capital Markets Day 2018 Clear financial targets CapEx below €600m in 2018 and remaining on the level of ~ €600m At least €150m synergies by year end of 2020 FCF positive from 2019 onwards Cut Net Debt/EBITDA from 8.1x to 4x in 2020 Achieving prerequisites for Investment Grade rating by the end
Slide 7: CapEx development 2015-2020
K+S‘ Capital Markets Day 2018 CapEx development 2015-2020 in m€ 1,200 BU Potash (ex Bethune) Bethune BU Salt 1,000 Complementary Activities 800 600 400 200 0 2015 2016 2017 2018e 2019e 2020e K+S Group 7
Slide 8: Synergies: Breakdown by program
K+S‘ Capital Markets Day 2018 Synergies: Breakdown by program SHAPING 2030 Net synergies YE 2020 (vs. 2017) SG&A Optimization ~ €30m Operations > €50m Lift Procurement > €30m synergies Supply Chain and Logistics > €20m Commercial Excellence > €20m ∑ > €150m K+S Group 8
Slide 9: High Board attention
K+S‘ Capital Markets Day 2018 High Board attention Steering Committee – Executive Committee Transformation Management Office Program steering Tracking and Reporting Project Portfolio Management Comm. & Change Management HR, IT and Process Management Governance Commercial Operations Supply
Slide 10: Breakout: Procurement
K+S‘ Capital Markets Day 2018 Breakout: Procurement Organizational Transformation Level Old New Total spend: € 2.2bn BoED global Addressable regional local K+S Group 10
Slide 11: Breakout: Procurement
K+S‘ Capital Markets Day 2018 Breakout: Procurement Examples Mobile Mining Equipment Valves Bearings Multi-year bundling approach Qualify alternative suppliers Optimized manufacturer portfolio Representing potential savings of Standardize product portfolio Savings potential up to €2-4m
Slide 12: Breakout: Procurement
K+S‘ Capital Markets Day 2018 Breakout: Procurement Key examples: > € 30m SHAPING 2030 Construction Related Services New suppliers, intensification of claim management, etc. Packaging Tendering, Bundling, packaging optimization, etc. Lift Mining Specific Services/Drilling synergies Best cost country
Slide 13: Shaping 2030 EBITDA impact
K+S‘ Capital Markets Day 2018 Shaping 2030 EBITDA impact Costs Synergies > €150m 2018e 2019e 2020e Total costs for synergy program: ~ €150m (2020 year end) K+S Group 13
Slide 14: Free Cash Flow 2017-2020
K+S‘ Capital Markets Day 2018 Moving parts Free Cash Flow 2017-2020 + Bethune + Price – Werra – FX Significant + Bethune improvement + Volume -390 = Price = FX – Net Working Capital 2017 CapEx CapEx Operations Operations 2018e 2020e Shaping Shaping K+S Group 14
Slide 15: Deleveraging – Development 2015-2020
K+S‘ Capital Markets Day 2018 Deleveraging – Development 2015-2020 8.1 7.2 6.9 5.2 Halved vs. 4.6 H1/17 2.3 Prerequisites for IG-Rating 1.3 2015 2016 2017 2018e 2019e 2020e 2021e 2022e 2023e Net Debt/EBITDA Net Financial Debt/EBITDA K+S Group 15
Slide 16: KPI dashboard developed
K+S‘ Capital Markets Day 2018 KPI dashboard developed K+S Group BU BU Potash Potash and and Magnesium Magnesium BU Salt BUSalt Salt KPI KPI Unit Plan 2018 FC 07/2018 Δ to Plan Trend FC/FC Plan Plan 2018 2018 FC FC 07/2018 07/2018 ΔΔ to to Plan Plan Trend Trend FC/FC FC/FC Plan Plan2018 2018 FC 07/20
Slide 17: Historical ROCE development
K+S‘ Capital Markets Day 2018 Historical ROCE development 25 20 15 10 5 0 2006 2008 2010 2012 2014 2016 2018e 2020e 2022e 2024e 2026e 2028e 2030e ROCE WACC K+S Group 17
Slide 18: Voluntary: Customer Segments
K+S‘ Capital Markets Day 2018 The way we look at our business in the future Reconciliation/ Americas EU & Agriculture IFRS Agriculture Industry Others Communities Consumers Revenues, EBITDA, Assets, Revenues, EBITDA, Assets, Liabilities, ROCE, CapEx, D&A Liabilities, ROCE, CapEx, D&A Revenue split C
Slide 19: Wrap up
K+S‘ Capital Markets Day 2018 Wrap up We have set clear financial targets We consider our targets ambitious but realistic We will ensure that our targets can be measured externally Our adjusted external reporting will increase transparency and uncover hidden champions Unlocking synergies will suppor
Slide 20: Disclaimer
K+S‘ Capital Markets Day 2018 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
Slide 21: Workshop II – Shaping 2030 from a Financial Perspective
K+S‘ Capital Markets Day 2018 Workshop II – Shaping 2030 from a Financial Perspective Bethune, 5 September 2018 Thorsten Boeckers, Chief Financial Officer
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