K+S Aktiengesellschaft

EANS-News: K+S Aktiengesellschaft
Successful third quarter 2010 K+S Group revenues and earnings increase significantly

@@start.t1@@--------------------------------------------------------------------------------   Corporate news transmitted by euro adhoc. The issuer/originator is solely   responsible for the content of this announcement. --------------------------------------------------------------------------------@@end@@

Company Information/quarterly report

Kassel (euro adhoc) - Kassel, 11 November 2010

Successful third quarter 2010 K+S Group revenues and earnings increase significantly

• Third quarter revenues up 52% to almost EUR 1.1 billion  • Operating earnings reach EUR 108.5 million (Q3/09: EUR 9.4 million)   • Adjusted earnings per share at EUR 0.21 (Q3/09: EUR (0.01))  • Earnings forecast for 2010 raised:

@@start.t2@@-  Expected revenues: EUR 4.8 billion to EUR 5.0 billion (previously: EUR
         4.6 billion to EUR 5.0 billion; previous year: EUR 3.6 billion)
    -  Operating earnings EBIT I should increase to between EUR 630 million and
EUR 670 million (previously: EUR 550 million to EUR 600 million; previous year:
EUR 238 million)
    -  Earnings per share expected to be between EUR 1.95 and EUR 2.10
(previously: EUR 1.75 to 1.95 EUR/share; previous year: EUR 0.56/share)
• Outlook for 2011:
    -  Revenues should increase moderately
    -  Significant increase in operating earnings and adjusted Group earnings
         after taxes expected@@end@@

The recovery in demand for fertilizers observed since  the  start  of the  year continued in the third quarter. The salt markets in Western Europe  as  well  as North and South America also showed themselves to be  in  good  health.  At  the same time, the inclusion of  Morton Salt  also  contributed  to  a  significant increase in K+S Group´s revenues and earnings in the third quarter of 2010.

"The development in our most important business segments  Potash  and Magnesium

@@start.t3@@Products and Salt in the third  quarter  was  better  than  expected.  This  has
prompted us to raise our earnings forecast for the current year,"  says  Norbert
Steiner,      Chairman      of      the      Board      of      Executive      Directors      of
K+S Aktiengesellschaft. "For 2011 too, we are confident that we will be able  to
significantly raise both operating earnings and adjusted  Group  earnings  after
taxes."@@end@@

Third quarter revenues strongly up once again At EUR 1,061.2 million, revenues for the third quarter were up EUR 363.1 million  or 52% on the figure for the same period last year. The increase  was attributable to volume- and consolidation-related growth and able to more than make  up  for price-related decreases in revenues. The   Salt  business  segment significantly increased its revenues, in particular due to the consolidation of Morton  Salt. The Nitrogen Fertilizers and Potash and  Magnesium  Products business  segments also achieved considerable revenue  growth  after  the demand  for   fertilizers increased significantly again. Revenues in the first nine months  of  the  year also rose by 45% due to volume and consolidation effects and reached  EUR  3,653.3 million. In this period, 38% of  revenues were  generated  in  the  Potash  and Magnesium Products  business  segment, followed  by  Salt  (33%)  and Nitrogen Fertilizers (27%). The  acquisition  of  Morton  Salt  has   contributed  to  the regional distribution of revenues now being very balanced  between  Europe  and overseas: Thus, about 53% of total revenues were generated  in  Europe  and  47% overseas.

Operating earnings more than ten times higher than last year In the third quarter of 2010, operating earnings  (EBIT  I)  of  the  K+S   Group reached EUR 108.5 million and thus, seen against the low  basis of  the previous year (Q3/09: EUR 9.4 million),  improved  very   strongly.  While  the Potash  and Magnesium Products and Nitrogen Fertilizers  business  segments improved  their earnings  as  a   result  of  the  persistent  considerably higher  demand    for fertilizers from the start of the  year,  the  pleasant earnings  in the  Salt business  segment  can  be  attributed  to  a  positive   consolidation    effect (EUR 18.3 million) and to an increased early stocking-up  business  for  de-icing salt. In the first nine months of 2010, operating earnings of  EUR  531.7  million were achieved.   This  exceeded  the previous  year´s  figure  (9M/09:  EUR  201.5 million) by about 164 %.

Depreciation  and  amortisation  amounted    to    EUR    55.7    million and were EUR 19.8 million higher in comparison to the  previous   year.  Of  this increase, EUR 20.3 million was accounted for by the consolidation of Morton Salt.  This  in turn includes depreciation of EUR 11.1  million  on  valuations made  within  the framework of purchase price allocation. In the first nine months,  depreciation and amortisation of the K+S Group amounted to EUR 182.6 million   (9M/09:  EUR 106.0 million) and include depreciation on valuations of EUR 39.6  million  made  within the framework  of  purchase  price   allocation of  Morton  Salt.  Against  this backdrop, greater importance will be assigned to the EBITDA in the  future  when assessing earnings capacity, especially in the Salt business segment.

EBITDA also significantly up on previous year During the third quarter of 2010, earnings before interest, taxes,  depreciation and amortisation (EBITDA) increased by EUR  119.0  million  to  EUR   164.3 million. Morton Salt accounted for EUR 38.6 million of this.   In  the  first nine  months, EBITDA was EUR 714.4 million (9M/09: EUR 307.5 million). At  EUR 135.1  million,  one third of the total increase of EUR 406.9 million was contributed by Morton Salt.

Third quarter financial result affected by non-recurrent effect In the third quarter, the financial result was EUR  (52.7)  million   after having been EUR (11.7) million in the same period of the previous year.  In addition  to higher interest expenses resulting from the  financing  of  the acquisition  of Morton Salt, this was   principally  the  result  of  a non-cash,  extraordinary interest expense (EUR 23.1 million) for provisions  for  mining  obligations. The financial result was EUR (104.4) million in the first  nine   months,  having  been EUR (96.7) million in the same period of the previous year.

Adjusted earnings also strongly improved The adjusted earnings before income taxes reached EUR 55.8 million in the quarter under review and were therefore EUR 58.1 million higher than in  the same  period of the previous year. Adjusted earnings before  income  taxes reached   EUR  427.3 million in the first nine months of the year, having  been EUR 104.8  million  in the same period of the previous year.

In the third quarter, it proved possible to  increase  adjusted   Group  earnings after taxes by EUR 42.5 million to EUR 40.4 million (Q3/09:  EUR  (2.1) million).  In the first nine months, adjusted Group earnings after taxes of  EUR  313.7  million (9M/09: EUR 76.1 million) were achieved.

Third quarter adjusted earnings per share at EUR 0.21 For the quarter under review, adjusted earnings per share  amounted  to  EUR 0.21 per share and thus were significantly higher than a year ago  (EUR (0.01)).  This was computed on the basis of 191.40  million  no-par   value shares,  being  the average number of shares  outstanding   (previous  year: 165.00  million  no-par value shares). In the first nine months, adjusted earnings per share  reached  EUR 1.64 compared to  EUR  0.46  in  the  same period  of  the  previous  year.  This corresponds to an increase of EUR 1.18 to which Morton Salt   contributed  a  total of EUR 0.10 after financing costs. Thus, Morton Salt has, since the first  day  of its inclusion in the K+S Group (1 October 2009)  and  despite  all  acquisition-related special and customary seasonal  effects  as  well  as  taking  financing costs into  consideration, so  far  contributed  positively  to  the   operating success in every quarter.

Outlook for 2010: Earnings forecast raised In 2010, demand for fertilizers and in particular for  potash  fertilizers  will again increase significantly due to the low stocks of  straight   fertilizers  in the trade sector at the start of the year and due to the  lower  potash  content of the soil following two very good harvests  and  the  reduced  application  of fertilizers since autumn 2008. Agricultural consumption  has  increased  sharply and, in the first nine months, was again approaching  its  normal  level.  Since the middle of the year, this development was  boosted  by   significantly  higher agricultural prices, which result in strongly improved  earnings  potential  for the global agricultural sector.   Against  this  background,  now  global  potash sales volumes of between 52 and 53 million  tonnes  for  2010  as  a  whole  are expected (previous forecast: about 50 million tonnes; 2009: 31 million tonnes).

In the Salt business sector, the fourth quarter´s de-icing  salt   business  will be influenced decisively by  wintry  weather   conditions  in  Europe  and  North America. The forecast is based on sales  volumes  at  their  multi-year  average level in the case of both the European and North American markets. While  demand for food grade and industrial  salt  in  Europe  and  North  America  should   be stable, the South American industrial salt  and  food  grade  salt market  will probably grow further in line with the regional   population  trend.  As  far  as salt for chemical use is concerned, demand on the part of the chemical  industry primarily in Europe should continue to normalise in the context of a  persistent economic recovery.

Against the backdrop of the given demand and price tendencies, revenues  of  the K+S Group should rise significantly in financial year 2010 against the  previous year. A figure of between EUR 4.8 billion and EUR 5.0 billion seems  realistic from today´s perspective (previously  expected:  EUR  4.6  billion  to EUR 5.0 billion; previous year: EUR 3.6 billion). In particular the Salt business   segment,  which will grow very significantly due to the first-time inclusion of Morton Salt  for the whole year,  but  also  the  Potash and Magnesium  Products  and  Nitrogen Fertilizers business segments should experience significant revenue growth.

For financial year 2010, operating earnings EBIT  I  of  the  K+S   Group  should increase significantly in comparison to the figure for the previous  year.  This is attributable to the earnings increase in the Potash  and  Magnesium  Products business segment,  the   turnaround  in  earnings  in  the  Nitrogen  Fertilizers business segment and the already described  consolidation  effect  in  the   Salt business segment. The forecast for operating earnings EBIT I for the  K+S  Group

@@start.t4@@this  year  has  been  raised  to  between  EUR  630  million  and EUR 670 million (previously: EUR 550 million to EUR 600 million; previous  year: EUR 238.0  million). The forecast is based on the following assumptions:

        • Stable average prices in the Potash and Magnesium Products business
          segment in the fourth quarter
        • Sales volumes in the Potash and Magnesium Products business segment of
          6.7 to 6.9 million tonnes (previous forecast: 6.5 to 7.0 million tonnes)
        • Sales volumes in the Salt business segment of about 22 million tonnes
          (previous forecast: 21 to 22 million tonnes), of which about 13 million
          tonnes (previous forecast: 12 to 13 million tonnes) should be accounted
          for by de-icing salt. For the fourth quarter, this, as customary,
          assumes normal de-icing salt sales volumes at their multi-year average
          level
        • An average US dollar exchange rate of 1.33 USD/EUR for 2010 as a whole
          (previous forecast: 1.31 USD/EUR) and 1.37 USD/EUR for the fourth
          quarter and as of 31 December 2010
        • Stable energy prices in the fourth quarter on the basis of the energy
          agreement clauses relevant for K+S@@end@@

Assuming expected depreciation  of  about  EUR  250  million  for   2010 including depreciation of just under EUR 55 million on valuations at Morton Salt within  the framework of purchase price allocation, EBITDA of  between  EUR  880  million  and EUR 920 million is expected  this  year  (previously:  EUR  800 million  to   EUR  850 million; previous year: EUR 411.8 million).

Adjusted Group earnings after taxes  should  also  be  significantly higher  in 2010, in line with the development of operating earnings. Here a figure  between EUR 375 million and EUR 405 million (previously: EUR 330 million to EUR 370 million; previous year: EUR 93.6 million) is expected. This would correspond  to  adjusted earnings per share of about EUR 1.95 to EUR  2.10/share  (previously: EUR 1.75  to  EUR 1.95/share; previous year: EUR 0.56/share). The projection is based  not  only  on the assumptions described for revenues and operating earnings, but also  on  the following facts expected from today's perspective:

@@start.t5@@• A somewhat weaker financial result in comparison to the previous year
          due to non-recurrent effects
        • A domestic Group tax rate to be applied in accordance with IFRSs of
          28.0% and an overall adjusted Group tax ratio derived from this of 26%
          to 27% (2009: 23.7%)@@end@@

Significantly higher earnings also expected for 2011 As a result of   an  expected  further  increase  in  global  demand  for  potash fertilizers, it is now reasonable to assume global potash sales volumes in  2011 of between 55 and 60  million  tonnes  (previous   forecast:  53  to  57  million

@@start.t6@@tonnes). The  higher  estimate  is  primarily  based  on  a  probably  not  only temporary  positive  price  trend  for  agricultural  raw  materials    and    the resultantly more attractive earnings prospects of the agricultural sector.  This should provide sufficient incentive to increase yields per hectare  through  the increased use of fertilizers. In the case of straight nitrogen  fertilizers  and complex fertilizers too, the positive trend in demand  should  continue  in  the coming year.@@end@@

Assuming average weather conditions, demand for de-icing salt in   Europe  should decline  to  a  normal  level  again  at  the  start   of    2011    and    increase correspondingly again in North America. While the consumption of food grade  and industrial salt in Europe and North America should be stable in  2011  too,  the South American industrial and food grade salt  market  should  grow  further  in line with the regional population trend. Demand on  the  part  of   the  chemical industry for salt for chemical use should again increase moderately in light  of the emerging economic recovery.

In financial year 2011, revenues of the  K+S  Group  should   therefore  increase moderately overall and it  is  likely  that   operating  earnings  will  increase significantly. This and  an   improved  financial  result  should  also  cause  a significant increase in adjusted Group earnings after taxes.  This  estimate  is based on the following assumptions:

@@start.t7@@• Continued attractive agricultural prices
        • Higher average prices and moderate increases in sales volumes (expected
          sales volume: just over 7 million tonnes) in the Potash and Magnesium
          Products business segment
        • Average sales volumes of crystallised salt of about 21 million tonnes,
          somewhat lower in comparison to the previous year
        • A US dollar exchange rate of 1.40 USD/EUR
        • Stable energy prices on the basis of the energy agreement clauses
          relevant for K+S
        • A stable adjusted Group tax ratio of 26% to 27%@@end@@

Experience growth The K+S  Group  is  one  of  the  world's  leading suppliers  of  standard  and speciality fertilizers. In  the  salt   business,  K+S  is  the  world´s  leading producer with sites in Europe as well as North and South America. K+S  offers  a comprehensive range  of  goods  and  services  for  agriculture,   industry,  and private consumers which provides growth opportunities in virtually every  sphere of daily life. The K+S Group employs more than 15,000 people. The  K+S  share  - the only commodities stock on the German DAX index - is  listed  on  all  German stock exchanges (ISIN: DE0007162000, symbol: SDF).  For  additional  information on K+S please visit www.k-plus-s.com.

Note to editors The Quarterly Financial Report Q3/2010, an  interview with  Norbert  Steiner  - chairman of the Board of Executive Directors of K+S Aktiengesellschaft  -  about the course of business and up-to-date press photos relating  to  the  K+S  Group are available under www.k-plus-s.com/2010q3en.

We are offering a conference call for  analysts  in  English  today   at  3  p.m. Norbert Steiner, chairman of the  Board  of  Executive   Directors,  as  well  as Joachim Felker and Jan Peter Nonnenkamp,   members  of  the  Board  of  Executive Directors, will participate in the  conference  call.  Shareholders,  investors, representatives of the press and all other interested  parties  are  invited  to follow the conference via a live webcast (www.k-plus-s.com) or by phone (+49-69- 71044-5598). The conference  will  be  recorded  and  also   be  available  as  a podcast.

Contact:

Press: Michael Wudonig

phone: +49 561 9301-1262 fax: +49 561 9301-1666 michael.wudonig@k-plus-s.com

Investor Relations: Christian Herrmann phone: +49 561 9301-1460 fax: +49 561 9301-2425 christian.herrmann@k-plus-s.com

Forward-looking statements

This press release 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 assumptions underlying these forecasts prove  not  to be correct or risks arise - examples of which are mentioned in the  risk  report -, actual  developments  and  events  may  deviate  from  current   expectations. Outside  statutory  disclosure  provisions,  the   Company  does  not  take    any obligation to update the statements contained in this press release.

@@start.t8@@|K+S Group at a Glance                         |    |                 | |                  | |
|
|Q3/2010                                                  | |                 | |                  | |
|
|            |                                                | |                 | |                  | |
|
|All figures in accordance with IFRSs    | |Q3              | |Q3                | |
|
|            |                                                | |July -        | |July - Sept.| |
|
|            |                                                | |Sept.         | |                  | |
|
|            |                                                | |2010          | |2009            | |Change
|
|            |                                                | |EUR million  | |EUR million    | |in %
    |
|            |                                                | |                 | |                  | |
|
|Revenues                                                 | |1,061.2      | |698.1          | |+52.0
|
|            |                                                | |                 | |                  | |
|
|            |Potash and Magnesium Products | |417.8         | |340.8          | |+22.6
|
|            |Nitrogen Fertilizers                | |306.1         | |204.5          | |+49.7
|
|            |Salt                                         | |305.2         | |121.7          | |+150.8
|
|            |Complementary Business            | |31.8          | |30.9            | |+2.9
|
|            |Segments                                  | |                 | |                  | |
|
|            |Reconciliation                         | |0.3            | |0.2              | |-
|
|            |                                                | |                 | |                  | |
|
|Operating earnings (EBIT I)                  | |108.5         | |9.4              |
|+1,054.3|
|            |                                                | |                 | |                  | |
|
|            |Potash and Magnesium Products | |79.4          | |54.0            | |+47.0
|
|            |Nitrogen Fertilizers                | |2.6            | |(47.3)         | |-
|
|            |Salt                                         | |31.8          | |13.5            | |135.6
|
|            |Complementary Business            | |4.3            | |4.3              | |-
|
|            |Segments                                  | |                 | |                  | |
|
|            |Reconciliation                         | |(9.6)         | |(15.1)         | |-
|
|            |                                                | |                 | |                  | |
|
|Earnings after operating                                 |158.9  | |17.4            | |+813.2
|
|hedges (EBIT II)                                              |          | |                  | |
|
|            |                                                 | |                 | |                  | |
|
|Financial result                                      | |(52.7)        | |(11.7)         | |(350.4)
|
|                                                                | |                 | |                  | |
|
|Earnings before income taxes                  | |106.2         | |5.7              |
|+1,763.2|
|            |                                                 | |                 | |                  | |
|
|Earnings before income taxes, adjusted1)    | |55.8    | |(2.3)          | |-
|
|            |                                                 | |                 | |                  | |
|
|Group earnings after taxes                      | |76.8          | |3.7              |
|+1,975.7|
|            |                                                 | |                 | |                  | |
|
|Group earnings after taxes, adjusted1)          | |40.4 | |(2.1)          | |-
|
|            |                                                 | |                 | |                  | |
|
|Earnings per share, adjusted (EUR)1)            |0.21          | |(0.01)         | |-
  |
|            |                                                    | |              | |                  | |
|
|Capital expenditure2)                                 | |45.5        | |43.5            | |+4.6
|
|                                                                  | |              | |                  | |
|
|            |                                                    | |              | |                  | |
|
|
|
|1)  The adjusted figures only contain the earnings actually realised on
|
|operating forecast hedges for the respective reporting period. The changes in
|
|the market value of operating forecast hedges still outstanding, however, are
|
|not taken into account. Any resulting effects on deferred and cash taxes are
|
|also eliminated; tax rate 2010: 28.0% (2009: 27.9%).
|
|
|
|2)  Cash-effective investments in or depreciation on property, plant and
|
|equipment, intangible assets.
|
|K+S Group at a Glance                         |    |                 | |                  | |
|
|January to September 2010                      | |                 | |                  | |
|
|            |                                                 | |                 | |                  | |
|
|All figures in accordance with IFRSs|    | |Jan. -        | |Jan. - Sept.| |
|
|                                                         |    | |Sept.         | |                  | |
|
|            |                                                 | |2010          | |2009            | |Change
|
|            |                                                 | |EUR million  | |EUR million    | |in
%      |
|            |                                                 | |                 | |                  | |
|
|Revenues                                                  | |3,653.3      | |2,512.5        | |+45.4
|
|            |                                                 | |                 | |                  | |
|
|            |Potash and Magnesium Products  | |1,379.7      | |1,061.1        | |+30.0
|
|            |Nitrogen Fertilizers                 | |979.0         | |804.0          | |+21.8
|
|            |Salt                                          | |1,196.9      | |559.3          | |+114.0
|
|            |Complementary Business Segments| |97.2          | |87.6            | |+11.0
|
|            |Reconciliation                          | |0.5            | |0.5              | |-
|
|            |                                                 | |                 | |                  | |
|
|Operating earnings (EBIT I)                    | |531.7         | |201.5          | |+163.9
|
|            |                                                 | |                 | |                  | |
|
|            |Potash and Magnesium Products  | |349.2         | |204.8          | |+70.5
|
|            |Nitrogen Fertilizers                 | |43.1          | |(65.8)         | |-
|
|            |Salt                                          | |161.5         | |93.1            | |+73.5
|
|            |Complementary Business Segments| |16.9          | |9.5              | |+77.9
|
|            |Reconciliation                          | |(39.0)        | |(40.1)         | |-
|
|            |                                                 | |                 | |                  | |
|
|Earnings after operating hedges (EBIT II)      |547.9  | |208.0          | |+163.4
|
|            |                                                 | |                 | |                  | |
|
|Financial result                                      | |(104.4)      | |(96.7)         | |(8.0)
|
|                                                                | |                 | |                  | |
|
|Earnings before income taxes                  | |443.5         | |111.3          | |+298.5
|
|            |                                                 | |                 | |                  | |
|
|Earnings before income taxes, adjusted1)    | |427.3  | |104.8          | |+307.7
|
|            |                                                 | |                 | |                  | |
|
|Group earnings after taxes                      | |325.4         | |80.8            | |+302.7
|
|            |                                                 | |                 | |                  | |
|
|Group earnings after taxes, adjusted1)          | |313.7| |76.1            | |+312.2
|
|            |                                                 | |                 | |                  | |
|
|Earnings per share, adjusted (EUR)1)            |1.64          | |0.46            |
|+256.5  |
|            |                                                    | |              | |                  | |
|
|Capital expenditure2)                                 | |107.2      | |114.1          | |(6.0)
|
|                                                                  | |              | |                  | |
|
|Employees as of 30 Sept. (number)              | |15,255    | |12,378         | |+23.2
|
|            |of which trainees (number)          | |645         | |648              | |(0.5)
|
|
|
|
|
|1)  The adjusted figures only contain the earnings actually realised on
||operating forecast hedges for the respective reporting period. The changes in
|
|the market value of operating forecast hedges still outstanding, however, are
|
|not taken into account. Any resulting effects on deferred and cash taxes are
|
|also eliminated; tax rate 2010: 28.0% (2009: 27.9%).
|
|
|
|2)  Cash-effective investments in or depreciation on property, plant and
|
|equipment, intangible assets.
|@@end@@

@@start.t9@@end of announcement                                                 euro adhoc
--------------------------------------------------------------------------------@@end@@

Further inquiry note:
Press:        
Michael Wudonig  
phone: +49 561 9301-1262        
fax: +49 561 9301-1666        
michael.wudonig@k-plus-s.com    
    
Investor Relations:
Christian Herrmann
phone: +49 561 9301-1460
fax: +49 561 9301-2425
christian.herrmann@k-plus-s.com

Branche: Chemicals
ISIN:      DE0007162000
WKN:        716200
Index:    DAX, Midcap Market Index, CDAX, Classic All Share, HDAX,
              Prime All Share
Börsen:  Frankfurt / regulated dealing/prime standard
              Berlin / regulated dealing
              Hamburg / regulated dealing
              Stuttgart / regulated dealing
              Düsseldorf / regulated dealing
              Hannover / regulated dealing
              München / regulated dealing



Weitere Meldungen: K+S Aktiengesellschaft

Das könnte Sie auch interessieren: