K+S Aktiengesellschaft

EANS-News: K+S Aktiengesellschaft
Successful first half of 2011 K+S continues growth trend in second quarter too

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Financial Figures/Balance Sheet/6-month report


Kassel (euro adhoc) - Kassel, 11 August 2011

Successful first half of 2011
K+S continues growth trend in second quarter too


 • Persistent high demand leads to rising fertilizer prices worldwide
 • COMPO disclosed as discontinued operation due to its sale
 • Quarterly revenues rise by 11 % to EUR 1.05 billion (Q2/2010: EUR 948.1
   million)
 • Second quarter operating earnings increase by 38 % to EUR 191.9 million
   (Q2/2010: EUR 138.9 million)
 • Adjusted earnings per share from continued operations rise to         EUR
0.66
   (Q2/2010: EUR 0.45)
 • Outlook 2011:

     - Significant increase in revenues expected to between EUR 5.00 billion and
       EUR 5.30 billion (2010: EUR 4.63 billion)
     - Operating earnings will probably rise to between EUR 0.95 billion and EUR
       1.05 billion (2010: EUR 714.5 million)
     - Adjusted earnings per share from continued operations expected to be
       between EUR 3.40 and EUR 3.75 (2010: 2.34 EUR/share); taking into
       consideration the discontinued operations, about EUR 2.95 to EUR 3.30
(2010:
       EUR 2.33)
The K+S  Group  continued  its  positive  business  development  in  the  second
quarter. It proved possible to significantly increase revenues and  earnings  in
this period too.

"Thanks to  our  strong  fertilizer  business  we  were  able  to  significantly
increase revenues and earnings of the K+S  Group  also  in  the  second  quarter
compared to the previous year," says Norbert Steiner, Chairman of the  Board  of
Executive Directors of K+S Aktiengesellschaft. "The  positive  development  will
probably continue in the second half of the  year  as  well.  We  are  therefore
expecting  significantly  increasing  revenues  and  a  strong  improvement   in
operating earnings for the year 2011 as a whole," Steiner continues.

Continued positive environment in the Fertilizer business sector
The second quarter of 2011 was characterised by strong demand  for  fertilizers.
The high level of agricultural prices  favoured  the  income  prospects  of  the
agricultural sector, so that there was a significant incentive to  raise  yields
per hectare through the increased use of fertilizers. For potash  and  magnesium
products, this resulted in a very  high  utilisation  of  production  capacities
throughout the world. This environment favoured the development  of  prices  for
potassium chloride. In Europe, during the second quarter,  K+S  implemented  the
price increase to 335 EUR/tonne for granulated  potassium  chloride  announced 
in
mid-March, and announced a further price increase of 10 EUR/tonne to  363 
EUR/tonne
in mid-June. Due to existing  supply  commitments,  price  increases  in  Europe
currently become effective with a delay of six to eight weeks.

The utilisation of nitrogen fertilizer plants was also very high in  the  second
quarter on a global basis. While demand for complex fertilizers  recovered,  the
pronounced drought in Europe at the start of the quarter resulted  in  temporary
decreases in demand for straight nitrogen fertilizers. The prices  for  nitrogen
fertilizers were at a  significantly  higher  level  compared  to  the  previous
year´s quarter.

Strong stocking-up business in the Salt business sector
In the Western European stocking-up business, the above-average  wintry  weather
in the 2010/11 season  led  to  strong  demand  for  de-icing  salt.  It  proved
possible to raise the price level in the already  concluded  contracts  for  the
winter season 2011/12 significantly. The  start  to  the  pre-stocking  business
came relatively early on the East Coast of the United  States.  In  Canada  too,
demand for de-icing salt improved in the second quarter  in  comparison  to  the
same period of the previous year. North American customers´ inventories were  at
a normal level in the second quarter. However, there were slight price  declines
in the existing tenders. The demand for food grade  salt  in  Europe  and  North
America proved to be in good shape in the second quarter too. In South  America,
the market for food grade salt stabilised.

COMPO stated as a "discontinued operation"
If not stated otherwise, the description of the earnings,  financial  and  asset
position relates to the continued operations of the K+S Group without COMPO.  In
accordance with IFRS, due to its  sale,  COMPO  is  stated  as  a  "discontinued
operation" (detailed information about the disposal can be found  in  the  Notes
to the Half-yearly Financial Report on page 34). The income  statement  and  the
cash flow statement of the previous year were restated accordingly.

Second quarter revenues rise by 11 %
At EUR 1,049.8 million, second-quarter revenues were up EUR 101.7 million  or 
11  %
on the figure for the same period last year. This increase  is  attributable  to
price and volume  factors.  The  Potash  and  Magnesium  Products  and  Nitrogen
Fertilizers  business  segments  achieved  tangible  and   significant   revenue
increases  respectively,  after  the  prices  for   fertilizers   increased   in
comparison to the same quarter last year. The Salt business segment  managed  to
increase its revenues slightly due to volume factors. Revenues in the first  six
months of the year rose in particular due to price factors by 14 %  and  reached
EUR 2,676.7 million.

In the first six months of the year, 40 % of  revenues  were  generated  in  the
Potash and Magnesium Products business segment, followed  by  Salt  (36  %)  and
Nitrogen Fertilizers  (21  %).  The  regional  distribution  of  Group  revenues
continues to be  very  balanced.  Thus,  about  49  %  of  total  revenues  were
generated in Europe and 51 % overseas.

Operating earnings have risen strongly
During  the  second  quarter  of  2011,   earnings   before   interest,   taxes,
depreciation and amortisation (EBITDA) rose by 25 % to EUR 247.5 million.  In 
the
first six months, EBITDA achieved EUR 672.4 million, an increase of 29  % 
(H1/10:
EUR 520.8 million).

In  the  second  quarter  of   2011,   operating   earnings   EBIT   I   reached

EUR 191.9 million and were able  to  increase  by  EUR  53.0  million  or  38  %
 in
comparison to the same  quarter  of  the  previous  year.  At  EUR  55.6 
million,
depreciation and amortisation taken into account in EBIT I decreased  by      
EUR

3.7 million compared to the previous year´s figure,  which  had  been  adversely
affected by special depreciation. The Potash  and  Magnesium  Products  business
segment was able to strongly improve its result year on year. The  significantly
higher potash price  level  was  the  decisive  factor  here.  In  the  Nitrogen
Fertilizers business segment, rising prices could more than make up  for  higher
input costs. Against this backdrop, earnings rose by  5  %.  The  Salt  business
segment achieved a lower result than in the previous year, which,  however,  had
been favoured by non-recurrent effects in the  area  of  provisions  of  EUR 
16.2
million. In the first six months of 2011, total operating earnings  of  EUR 
560.3
million were achieved. This exceeded the previous year´s figure (H1/10: EUR 
398.5
million) by 41 %. At EUR 112.1 million, the depreciation  taken  into  account 
in
the first half of the year was EUR 10.2 million below the figure for the 
previous
year, which had been adversely affected by special effects.

Adjusted earnings before income taxes improve strongly
The adjusted earnings before income taxes amounted to EUR  176.6  million  in 
the
second quarter. It proved possible to increase them by EUR 58.1 million  or  49 
%
in comparison to the same period of the previous year. In the first six  months,
adjusted earnings before income taxes amounted to  EUR  529.8  million  (H1/10: 
EUR
348.8 million).



Adjusted Group earnings from continued operations increase strongly
It  proved  possible  to  increase  adjusted  Group  earnings   from   continued
operations by EUR 40.9 million or 48 %  to  EUR  126.8  million  during  the 
second
quarter. In the first half of the year, they  increased  in  comparison  to  the
corresponding period of the previous year by EUR 132.0 million or 51 % to EUR 
388.4
million.

Adjusted earnings per share from continued operations in the second  quarter  at
EUR 0.66 (Q2/10: EUR 0.45) per share
For the quarter  under  review,  adjusted  earnings  per  share  from  continued
operations amounted to EUR 0.66 and were thus about 47 % higher  than  the 
figure
for a year ago of EUR 0.45. They were computed on the basis of 191.32 million 
no-
par value shares, being the average number of shares outstanding (Q2/10:  191.33
million no-par value shares). In the first half of 2011, adjusted  earnings  per
share from continued operations reached EUR 2.03, an increase of 52% after 
having
been EUR 1.34 in the previous year.

Sale of COMPO adversely affects adjusted Group earnings in second quarter
Adjusted Group  earnings  (including  discontinued  operations)  in  the  second
quarter reached EUR  29.2  million  (Q2/10:  EUR  97.5  million).  The 
discontinued
business operations of COMPO, included in this, accounted for EUR  (97.6) 
million
which consist of the impairment loss as at 30 June 2011 of EUR 104.0  million 
and
the net result of COMPO of EUR 6.4  million.  In  the  first  half  of  the 
year,
adjusted Group earnings amounted to EUR 301.1 million (H1/10:  EUR  273.3 
million),
while EUR (87.3) million were attributable to  the  discontinued  operations. 
For
the quarter under review, adjusted earnings per  share  (including  discontinued
operations) amounted to EUR 0.15 and were thus lower than the figure of EUR 
0.51  a
year ago. The discontinued operations of COMPO accounted for EUR (0.51). 
Adjusted
earnings per share (including discontinued operations) of the first half of  the
year achieved EUR 1.57 (H1/10: EUR 1.43), while EUR (0.46) were  attributable 
to  the
discontinued operations of COMPO (detailed information  about  the  disposal  of
COMPO can be found in the Notes to the  Half-yearly  Financial  Report  on  page
34).
Outlook  2011:  Significant  rise  in  revenues  and  strong  rise  in  earnings
anticipated
After the normalisation of demand for fertilizer in 2010, a further increase  in
demand  in  the  current  year  is  expected.  Although  the  prices   of   some
agricultural products decreased in June from having been very high, they  remain
at a level, which should favour the income prospects of the agricultural  sector
and thus offer an incentive to increase the yield per hectare through  a  higher
use of fertilizers. Therefore, unchanged global potash sales  volumes  of  about
58 to 60 million tonnes in 2011 as a whole (2010: 58.3 million  tonnes)  can  be
assumed. Correspondingly, a globally high level  of  utilisation  of  production
capacities is to be expected also during the further course of the year.

For nitrogen fertilizers too, a high demand for the remainder  of  the  year  is
assumed, which should lead to a good  utilisation  of  the  nitrogen  fertilizer
plants worldwide. The average prices of nitrogen  fertilizers  should  be  at  a
significantly higher level year on year. However, higher raw material costs  for
ammonia, phosphate and potash will probably counteract this.

After the close of the first quarter, the  further  de-icing  salt  business  in
2011 will be influenced decisively by wintry weather conditions  in  Europe  and
North America in the fourth quarter. In this respect, it  can  be  assumed  that
sales volumes will be on 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 and food grade salt market will probably grow further  in  line  with
the regional population trend. Demand on the part of the chemical  industry  for
salt for chemical use  should  develop  positively  in  light  of  the  forecast
economic growth.

The following forecasts relate to the  expected  organic  revenue  and  earnings
development of the continued operations. The figures for the previous year  were
restated correspondingly. Only in the case of the adjusted  Group  earnings  and
the  adjusted  earnings  per  share  the  activities  of  COMPO  classified   as
discontinued operations are taken into consideration.

Following the estimates in the outlook of the Financial Report 2010 and  against
the backdrop of the positive demand and price trends emerging during the  course
of the first half of 2011, revenues of the K+S Group should  rise  significantly
in financial year 2011 against the previous year. A figure  of  between  EUR 
5.00
billion and EUR 5.30 billion seems realistic from  today´s  perspective 
(previous
year: EUR 4.63 billion). While in  the  Potash  and  Magnesium  Products 
business
segment a significant increase in  revenues  and  in  the  Nitrogen  Fertilizers
business segment (without COMPO) also a strong one  are  assumed,  in  the  Salt
business segment stable revenues at a  high  level  are  expected.  The  revenue
forecast assumes an average US dollar exchange rate of 1.42 USD/EUR (2010:  1.33
USD/EUR).

Operating earnings likely to rise strongly
In financial year  2011,  earnings  before  interest,  taxes,  depreciation  and
amortisation (EBITDA) and operating earnings EBIT I should increase strongly  in
comparison to the figures for the previous year. The EBITDA  of  the  K+S  Group
will probably reach EUR 1.15 billion to EUR 1.30 billion  (previous  year:  EUR 
953.0
million) and operating earnings EBIT  I  between  EUR  0.95  billion  and  EUR 
1.05
billion (previous year: EUR 714.5 million). This  is  primarily  due  to 
probably
strong growth in earnings in the Potash and Magnesium Products business  segment
as  well  as  a  strong  improvement  in  operating  earnings  in  the  Nitrogen
Fertilizers business segment. However, operating earnings of the  Salt  business
segment will probably decline moderately. On the basis of the average US  dollar
estimate for 2011 of 1.42 USD/EUR (previously: 1.40  USD/EUR)  and  the  hedging
instruments used, this does not result in a material currency-related effect  on
earnings.

The forecasts are based on the following assumptions:

continued attractive agricultural prices;

    • in comparison to the previous year, significantly  higher  average  prices
      and stable sales volumes in the Potash  and  Magnesium  Products  business
      segment (expected sales volume: 7.0 million tonnes);
    • sales volume of about 23 million tonnes  (previously:  22  to  23  million
      tonnes) of crystallised salt in the Salt business segment, of which  about
      14 million tonnes should be accounted for by de-icing salt (previously: 13
      to 14 million tonnes). For the fourth quarter, this, as customary, assumes
      the average of multi-year de-icing salt sales volumes;
    • significantly rising energy costs in 2011 on the basis  of  an  oil  price
      level of about 105 US$ (Brent, previously: 120 US$ per barrel).


Strongly improved Group earnings after taxes expected
The adjusted Group earnings after taxes of the continued operations should  also
increase strongly in 2011 following the development of  operating  earnings  and
reach a figure of between EUR 650 million and EUR  720  million  (previous 
year:  EUR
447.8 million). This would correspond to adjusted earnings  per  share  for  the
continued operations of about EUR 3.40 to EUR 3.75 (previous year: EUR  2.34). 
Taking
into consideration the discontinued operations including the expected book  loss
arising from the disposal of COMPO, adjusted  Group  earnings  after  taxes  are
expected to reach EUR 560 million to   EUR  630  million  (previous  year:  EUR 
445.3
million), which is the relevant  basis  for  the  dividend  payout.  This  would
correspond to adjusted earnings per share of about EUR 2.95 to  EUR  3.30 
(previous
year: EUR 2.33). This projection is based not only on the  effects  described 
for
revenues and  operating  earnings,  but  also  on  the  following  circumstances
expected from today's perspective:


    • a significantly better financial result, after this  had  been  negatively
      impacted by special effects in 2010;
    • a domestic Group tax rate of 28.3% and an  adjusted  Group  tax  ratio  of
      about 26% to 27% (2010: 26.2%).
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  14,000  people.  K+S  -  the
commodities stock on the German DAX index  -  is  listed  on  all  German  stock
exchanges (ISIN: DE000KSAG888, symbol: SDF). More information about K+S  can  be
found at www.k-plus-s.com.



Note to editors
The Half-yearly Financial Report (H1/2011), a video webcast by Norbert  Steiner,
Chairman of the Board of Executive Directors of  K+S  Aktiengesellschaft,  about
the second quarter of 2011 and up-to-date  press  photos  relating  to  the  K+S
Group are available under http://www.k-plus-s.com/2011h1en.

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  at  (http://www.k-plus-s.com/2011h1en)
or by phone under +49-69-71044-5598. The conference will be  recorded  and  also
be available as a podcast.

Press: 
Michael Wudonig, CFA
phone: +49 561 9301-1262
fax: +49 561 9301-1666
michael.wudonig@k-plus-s.com

Investor Relations:
Christian Herrmann, CFA
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  obligations  to
update the statements contained in this press release.

|K+S Group at a Glance                    |  |Q2       |  |Q2       |  |        
|
|Q2/2011                                  |  |Apr - Jun|  |Apr - Jun|  |        
|
|                                         |  |         |20|         |20|        
|
|                                         |  |         |11|         |10|        
|
|                                         |  |         |  |         |  |        
|
|                                         |Po|         |50|         |46|        
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|                                         |ta|         |2.|         |8.|        
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|                                         |sh|         |4 |         |9 |        
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|                                         |ts|         |  |         |  |        
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|                                         |  |         |  |         |  |        
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|                                         |Po|         |18|         |11|        
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|                                         |ta|         |4.|         |9.|        
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|                                         |sh|         |4 |         |2 |        
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|                                         |an|         |  |         |  |        
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|                                         |uc|         |  |         |  |        
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|                                         |ts|         |  |         |  |        
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|                                         |  |         |  |         |  |        
|
|Earnings before income taxes, adjusted1) |  |176.6    |  |118.5    |  |+49.0   
|
|                                         |  |         |  |         |  |        
|
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|                                                                               
|



|K+S Group at a Glance                    |  |H1       |  |H1       |  |        
|
|H1/2011                                  |  |Jan - Jun|  |Jan - Jun|  |        
|
|                                         |  |         |20|         |20|        
|
|                                         |  |         |11|         |10|        
|
|                                         |  |         |  |         |  |        
|
|                                         |Po|         |1,|         |97|        
|
|                                         |ta|         |08|         |3.|        
|
|                                         |sh|         |0.|         |6 |        
|
|                                         |an|         |4 |         |  |        
|
|                                         |d |         |  |         |  |        
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|                                         |Ma|         |  |         |  |        
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|                                         |gn|         |  |         |  |        
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|                                         |ts|         |  |         |  |        
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|                                         |  |         |  |         |  |        
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|                                         |Po|         |38|         |26|        
|
|                                         |ta|         |6.|         |9.|        
|
|                                         |sh|         |8 |         |8 |        
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|                                         |an|         |  |         |  |        
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|                                         |d |         |  |         |  |        
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|                                         |Ma|         |  |         |  |        
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|                                         |uc|         |  |         |  |        
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|                                         |ts|         |  |         |  |        
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|                                         |  |         |  |         |  |        
|
|Earnings before income taxes, adjusted1) |  |529.8    |  |348.8    |  |+51.9   
|
|                                         |  |         |  |         |  |        
|
|                                         |  |         |  |         |  |        
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|                                         |  |         |  |         |  |        
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|                                         |  |         |  |         |  |        
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|                                         |  |         |  |         |  |        
|
|                                         |  |         |  |         |  |        
|
|Employees as of 30 June (number)         |  |14,279   |  |14,021   |  |+1.8    
|
|                                                                               
|


Further inquiry note:
Your contact persons:
Press: 
Michael Wudonig, CFA
phone: +49 561 9301-1262
fax: +49 561 9301-1666
michael.wudonig@k-plus-s.com

Investor Relations:
Christian Herrmann, CFA
phone: +49 561 9301-1460
fax: +49 561 9301-2425
christian.herrmann@k-plus-s.com
 
K+S Aktiengesellschaft
Communications
P.O. Box 10 20 29, 34111 Kassel, Germany
Bertha-von-Suttner-Str. 7, 34131 Kassel
www.k-plus-s.com

__________________________________________________________
 
Chairman of the Supervisory Board: Dr. Ralf Bethke
Board of Executive Directors: Norbert Steiner (Chairman), Joachim Felker, Gerd
Grimmig, Dr. Thomas Nöcker, Jan Peter Nonnenkamp
Registered Office: Kassel
Commercial Register: Kassel HRB 2669

end of announcement                               euro adhoc 
--------------------------------------------------------------------------------


company:     K+S Aktiengesellschaft
             Bertha-von-Suttner-Straße  7
             D-34131 Kassel
phone:       +49 (0)561 9301-1460
FAX:         +49 (0)561 9301-2425
mail:     christian.herrmann@k-plus-s.com
WWW:      http://www.k-plus-s.com
sector:      Chemicals
ISIN:        DE0007162000
indexes:     DAX, Midcap Market Index, CDAX, Classic All Share, HDAX, Prime All
             Share
stockmarkets: regulated dealing/prime standard: Frankfurt, regulated dealing:
             Berlin, Hamburg, Stuttgart, Düsseldorf, Hannover, München 
language:   English
 



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