K+S Aktiengesellschaft

EANS-News: K+S Aktiengesellschaft
Experience growth K+S Group also on course in 3rd quarter


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Company Information/Financial Figures/Balance Sheet/quarterly report


Kassel (euro adhoc) - Kassel, 13 November 2012

Experience growth
K+S Group also on course in 3rd quarter

 - Robust business with Potash and Magnesium Products
 - Early stocking-up in salt business weak overall, as expected
 - Quarterly revenues up 7% to EUR 916.6 million
 - Operating earnings EBIT I at EUR 156.7 million 14 % below previous year
 - Adjusted earnings per share from continued operations at EUR 0.52 (Q3/11: EUR
   0.62)
 - Adjusted Group earnings after taxes favoured by income from divestment of
   K+S Nitrogen: Increase by 35% to EUR 164.9 million
 - Outlook 2012:

         - Revenue expectation of a good EUR 3.9 billion at the lower end of the
           previously quantified range (previously: EUR 3.9 billion to EUR 4.2
           billion; 2011: EUR 4.0 billion)
         - Operating earnings EBIT I of approximately EUR 820 million expected
           (previously: EUR 820 million to EUR 900 million;
           2011: EUR 906.2 million)

 - Normalisation in salt business opens up opportunities for a slight  increase
   in operating earnings EBIT I in 2013

In the third quarter, the K+S Group was able to increase  revenues  compared  to
last year's period in particular due to currency factors. The expectedly  weaker
early stocking-up business with de-icing salt and a higher cost  burden  in  the
Potash and Magnesium Products business segment meant,  however,  that  operating
earnings of the K+S Group were down compared with the previous year.
"Despite the globally poorer framework conditions, our business with potash  and
magnesium products in the third  quarter  was  robust",  says  Norbert  Steiner,
Chairman of the Board of Executive  Directors  of  K+S  Aktiengesellschaft.  "In
this business segment, this year, we should therefore again be able  to  achieve
the good result of the previous year. For the K+S  Group  as  a  whole,  we  are
counting on operating earnings  of  about  EUR  820  million  in  2012.  With 
the
assumption  of  an  again  normalised  winter  business,  in  2013,  there   are
opportunities for a slight increase in operating earnings", continues Steiner.

Fertilizer demand on a good level in third quarter
In the third quarter, due to the attractive price  level  for  agricultural  raw
materials demand was on a good level  in  the  markets  of  relevance  for  K+S.
However, the continuing absence of contract conclusions by  North  American  and
Russian producers with Chinese and Indian customers led to  the  capacities  not
being fully utilised, particularly in North America  and  Russia.  Against  this
backdrop, the international prices for potassium chloride  came  under  pressure
towards the end of the third quarter, but overall were  moderately  above  those
of the same quarter of the previous year.

Decrease in early stocking-up with de-icing salt, as expected
In Western Europe, the very high level of the previous year's early  stocking-up
business could not be achieved in the reporting period, due to the mild and  dry
weather conditions at the beginning of the year. Nevertheless, the  creation  of
additional storage capacities on the customer  side  ensured  an  average  early
stocking-up sales volume in the third quarter. Prices decreased slightly in  the
early stocking-up season and in the tenders for the 2012/13 winter  season,  due
to the high supply. By contrast, the contract volumes for  the  upcoming  season
stood at a good level.

The de-icing salt regions on the East Coast of the United States and  in  Canada
were also characterised by high stocks  in  the  reporting  period  due  to  the
exceptionally mild winter at the start of the year. Most  producers  reacted  to
this situation with cutting back in production. In the de-icing salt regions  of
the United States, both in the early stocking-up business in the  third  quarter
and in the tenders for the winter season 2012/13 there were declines  in  prices
and volumes, especially in the Midwest.

K+S Nitrogen shown as a discontinued operation
The description below of the earnings, financial and asset position relates,  if
not stated otherwise, to the continued operations of the K+S  Group.  Since  the
reporting on the second quarter of 2011, the COMPO business and, since the half-
yearly financial report 2012, also K+S  Nitrogen  are  stated  as  "discontinued
operations" in accordance with IFRS. Detailed information can be  found  in  the
Notes to the Quarterly Financial Report Q3/12 on page 35. The  income  statement
and the cash flow statement were adjusted correspondingly.  The  balance  sheet,
however, remains unchanged.

Third quarter revenues rise by 7%
At EUR 916.6 million, revenues of the K+S Group in the third  quarter  were  up 
EUR
63.1 million or 7% in comparison to the previous year. This  can  be  attributed
to a currency- and volume-related revenue increase in the Potash  and  Magnesium
Products business segment and a currency-related increase in the  Salt  business
segment. In the first nine months, revenues of the K+S Group  rose  slightly  by
1% to EUR 2,993.7 million despite lower revenues in the Salt business  segment 
in
the first quarter due to weather conditions.

In the first nine months of the year, 60% of  revenues  were  generated  in  the
Potash and Magnesium Products business segment, followed by Salt (36%)  and  the
Complementary Business Segments  (4%).  In  Europe,  K+S  achieved  a  share  in
revenues of approximately 40%, followed by North America  (25%),  South  America
(19%) and Asia (13%).

Third quarter operating earnings below those of previous year
During the third quarter of 2012, earnings before interest, taxes,  depreciation
and amortisation (EBITDA) declined by 10% to EUR 213.8  million  (Q3/11:  EUR 
237.2
million).  In  the  first  nine  months,  EBITDA  was  EUR  793.8  million.  
This
corresponds to a decrease of 8% (9M/11: EUR 864.8 million).

In the third quarter of 2012, operating earnings EBIT  I  amounted  to  EUR 
156.7
million and were thus EUR 25.1 million or  14%  below  the  figure  for  the 
same
quarter of the previous year. At EUR 57.1 million, depreciation  and 
amortisation
charges were slightly above the figure for the  same  quarter  of  the  previous
year (Q3/11: EUR 55.4 million). In the  Potash  and  Magnesium  Products 
business
segment, earnings declined moderately  due  to  price-related  increased  energy
costs, currency-related higher  freight  costs,  costs  related  to  the  Legacy
Project, a negative currency result and the effect resulting from the  reduction
in stocks. In the  Salt  business  segment,  the  weather-related  weaker  early
stocking-up business with de-icing salt led to a decline in operating  earnings.
In the first nine months of 2012, the K+S Group achieved operating  earnings  of
EUR 625.3 million. This was down on the previous year's figure by  11%  (9M/11: 
EUR
698.4 million). At EUR 168.5 million, depreciation  and  amortisation  taken 
into
account in the first nine months were at about the level for  the  same  quarter
of the previous year (9M/11: EUR 166.4 million).

Lower earnings before income taxes
Taking into account a weaker financial result due to a  non-cash,  extraordinary
interest expense for provisions as a result  of  the  further  lowering  of  the
discount factor,  adjusted  earnings  before  income  taxes  were,  at  EUR 
135.0
million, EUR 32.7 million or just under 20% below the previous year's  figure. 
In
the first nine months, adjusted  earnings  before  income  taxes  were  EUR 
564.3
million (9M/11: EUR 653.9 million).

Adjusted Group earnings from continued operations also lower
In the third quarter, adjusted Group earnings from continued operations fell  by
EUR 19.7 million or 17% to EUR 98.9 million. In  the  first  nine  months, 
adjusted
Group earnings from continued operations  were,  at  EUR  409.2  million,  EUR 
66.5
million or 14 % below the figure for the same quarter of the previous year.

Adjusted earnings per share from continued operations in the third quarter at
EUR
0.52 (Q3/11: EUR 0.62)
In the  quarter  under  review,  adjusted  earnings  per  share  from  continued
operations reached EUR 0.52 and were thus about 16% below the figure for the 
same
period last year. This was computed on the basis of 191.40 million no-par  value
shares, being the average number of shares outstanding  (Q3/11:  191.40  million
no-par value shares). In the first nine months of 2012,  adjusted  earnings  per
share from continued operations reached EUR 2.14 after having been EUR 2.49  in 
the
previous year, a decrease of 14%.

Adjusted Group earnings and adjusted earnings per share increased
Adjusted  Group  earnings  (including  discontinued  operations)  in  the  third
quarter reached EUR 164.9 million (Q3/11: EUR 121.8 million). Of this,  income 
from
the  divestment  of  K+S  Nitrogen  (after  taxes)  of  EUR  66.0   million  
were
attributable to the discontinued operations. In the first nine months,  adjusted
Group earnings amounted to EUR 509.1 million (9M/11: EUR  422.9  million), 
while  EUR
99.9 million was attributable to the discontinued operations of K+S Nitrogen.

Adjusted earnings per share (including discontinued operations) in  the  quarter
under review were EUR 0.86 (Q3/11: EUR 0.64). Of this, EUR 0.34  was 
attributable  to
the discontinued operations. Adjusted earnings per share including  discontinued
operations of the first nine months achieved EUR 2.66, after having  been  EUR 
2.21
in the same period of the previous year, while EUR 0.52 was  attributable  to 
the
discontinued operations.

Outlook for 2012 specified
In October, North American and Russian producers  announced  further  production
cuts, due to the continuing absence of contract  conclusions  with  Chinese  and
Indian customers, in order to adjust supply  to  the  reduced  demand  in  these
markets. While demand should continue to be at  a  good  level  on  the  markets
relevant for K+S  due  to  the  attractive  price  level  for  agricultural  raw
materials,  price  negotiations  in  these  regions  will  become   increasingly
difficult as a result of continuing absence of contract conclusions  with  China
and India being of relevance for the global price level. On  the  basis  of  the
described developments, a global potash sales volume of about 54 million  tonnes
for 2012 as a whole is to be  assumed  (previously:  about  56  million  tonnes;
2011: 60.2 million tonnes). This includes  approximately  3  million  tonnes  of
potash specialities and products with lower potash content.

As a result of the exceptionally mild weather conditions at  the  start  of  the
year, the demand for de-icing salt both  in  Europe  and  North  America  should
decline accordingly in 2012 compared to the  above-average  year  2011.  In  the
food grade salt area, the demand in the sales markets  relevant  to  K+S  should
remain largely  stable  and  decline  somewhat  in  the  industrial  salt  area,
particularly in North America. While sales volumes  of  salt  for  chemical  use
should decrease moderately due to the economic slowdown in  Europe,  the  demand
from the chemical industry for salt for chemical use  in  South  America  should
remain stable and increase slightly in North America.

In 2012, revenues should reach a good EUR 3.9 billion
In the Half-yearly Financial Report H1/12, revenues of the K+S Group of  between
EUR 3.9 billion and EUR 4.2 billion were forecast (previous year: EUR  4.00 
billion).
This estimate was based on a US dollar annual  average  exchange  rate  of  1.26
USD/EUR. Due to the most recent weakening of the US dollar,  for  the  remaining
months, an average US dollar exchange rate of 1.29 USD/EUR is now assumed.  This
corresponds to an average annual rate of 1.28 USD/EUR. Consequently and  against
the backdrop of  the  above-mentioned  changed  conditions  in  the  Potash  and
Magnesium Products business segment, revenues should now roughly reach  a  value
at the lower end of the range, i.e. a good EUR 3.9 billion.

Operating earnings EBIT I of approximately EUR 820 million expected (2011: EUR
906.2 million)
Previously, for the EBITDA of the K+S Group in  2012,  a  figure  of  between 
EUR
1,050 million and EUR  1,130  million  (previous  year:  EUR  1,146.1  million) 
and
operating earnings EBIT I of between EUR 820 million and EUR 900  million 
(previous
year: EUR 906.2 million) were expected. The reasons discussed in relation  to 
the
revenue expectation lead to also assume figures at the lower end of  the  range,
i.e. of about EUR 1,050 million for EBITDA and about EUR 820 million  for 
operating
earnings EBIT I. In the Potash and Magnesium Products business  segment,  stable
operating earnings can be expected  (previously:  slight  rise).  Compared  with
last year, which had benefited from  above-average  sales  volumes  of  de-icing
salt, operating earnings of the Salt business  segment  will  probably  decrease
strongly.

Group earnings 2012 additionally burdened
For the adjusted Group earnings after  taxes  of  the  continued  operations,  a
value of between EUR 540 million  and  EUR  600  million  for  2012  was 
previously
assumed (previous year: EUR 625.6 million). Due  to  the  further  burden  in 
the
financial result due to non-cash, extraordinary interest expense for  provisions
for mining obligations, from today's perspective, the lower value of  the  range
cannot quite be achieved, i.e.  a  value  of  about  EUR  530  million  is  to 
be
expected. This would correspond to adjusted earnings per share of the  continued
operations of about EUR 2.75 (previously: EUR 2.85 to EUR 3.15; 2011: EUR 3.27).
 Taking
into  consideration  the  discontinued  operations  including  the  higher  than
initially expected income arising from the divestment of K+S Nitrogen,  adjusted
Group earnings after taxes of approximately EUR 630 million  are  to  be 
assumed,
which should thus lie at the lower end of the previous range of  between  EUR 
630
million and  EUR  690  million  (previous  year:  EUR  581.8  million).  This 
would
correspond to adjusted earnings per share of about EUR 3.30  (previously:  EUR 
3.30
to EUR 3.60; previous year: EUR 3.04). This  estimate  is  based  not  only  on 
the
effects described for revenues and operating earnings, but also on:


    - the expectation of consistently attractive agricultural prices;
    - the customary, technical forecast policy, which  maintains  the  currently
      achieved potash price level unchanged for the remaining months of 2012;
    - a sales volume of 6.9 million tonnes (2011: 6.9  million  tonnes)  in  the
      Potash and Magnesium Products business segment;
    - a crystallised salt sales volume of 18 to 19 million  tonnes  (2011:  22.7
      million tonnes), of which a good 9 million tonnes of de-icing salt  (2011:
      13.3 million tonnes). For the fourth quarter, a somewhat reduced  de-icing
      salt business compared to normal is assumed. The reason for this,  despite
      the assumption of a normal  winter,  is  relatively  high  stocks  at  the
      customers;
    -  a  significantly  (previously:  tangibly)  weaker  financial  result   in
      particular due to non-cash, extraordinary interest expense for  provisions
      for mining obligations resulting from the lowering of the average weighted
      discount factor;
    - a slightly higher adjusted Group tax ratio of 27% to 28% (2011: 25.7%).


Outlook 2013: Farmers' earnings prospects continue to be attractive
For 2013, a tangible increase in global potash sales volumes is to be  expected.
The estimate is based primarily on a price level for agricultural raw  materials
which is continuously attractive for the earnings prospects of the  agricultural
sector, and on the expectation of a significant increase in demand in China  and
India after the buying restraint in 2012.  Against  this  background,  worldwide
capacities should once again be well utilised.

In the Salt business segment, in 2013, both for the North American and  European
markets for de-icing salt, sales volumes are expected to be on their  multi-year
average level. After the below-average demand in 2012 both in Europe  and  North
America as a result of the exceptionally mild weather conditions  at  the  start
of the year, the de-icing salt sales volumes should increase again  accordingly.
However, prices for the tenders for  the  winter  season  2012/13  are,  overall
slightly below the level of the last season with regional differences.


Opportunities for a slight increase in operating earnings in 2013
For 2013, revenues of the K+S Group are expected to increase  slightly  compared
with 2012. The Salt business segment should achieve  tangibly  higher  revenues.
In the Potash and Magnesium Products business segment, against the  backdrop  of
the continuing absence of contract conclusions by  North  American  and  Russian
producers with Chinese  and  Indian  customers  leads  to  an  overall  cautious
assessment. A sales volume at approximately the previous  year's  level  (2012e:
6.9 million tonnes) and a  slightly  lower  average  price  level  is  therefore
assumed. As a consequence,  revenues  for  the  Potash  and  Magnesium  Products
business segment should decrease slightly compared with 2012.

As far as EBITDA and operating earnings EBIT I of the K+S Group  are  concerned,
from today's perspective,  there  are  opportunities  for  the  coming  year  to
increase the figures slightly  in  comparison  with  2012.  In  the  Potash  and
Magnesium Products business segment, slightly weaker operating earnings  EBIT  I
are assumed. In the Salt business segment, on  the  basis  of  an  again  normal
winter business that follows the long-term average  of  de-icing  salt  volumes,
strongly increasing earnings in comparison to the probably below-average  figure
in 2012 should be anticipated. As regards adjusted Group  earnings  after  taxes
of the continued operations of the K+S Group, assuming  a  tangible  improvement
in the financial result,  a  moderate  increase  would  even  be  possible.  Our
outlook for the coming year is based  on  a  number  of  factors  including  the
following:


    - consistently attractive agricultural prices;
    - a sales volume at about the same level as the previous  year  (2012e:  6.9
      million tonnes) and, compared with 2012, slightly lower average prices  in
      the Potash and Magnesium Products business segment.  It  should  be  taken
      into consideration that the assumption of an average exchange rate of 1.30
      USD/EUR in 2013, which underlies the forecast,  in  particular  in  months
      with high overseas volumes, compares with a stronger US dollar in 2012;
    - in comparison to the lower than average sales volume of the previous  year
      (2012e: 18 - 19 million tonnes) significantly higher average sales volumes
      of crystallised salt of about 22 million tonnes (of which de-icing salt: a
      good 12 million tonnes, 2012e: a good 9 million tonnes);
    - a tangibly improved financial result after 2012 was adversely impacted  by
      a non-cash, extraordinary  interest  expense  for  provisions  for  mining
      obligations resulting from the lowering of the average  weighted  discount
      factor;
    - a stable adjusted Group tax rate of 27% to 28%.


Future dividend policy
We pursue an essentially earnings-based dividend policy. According  to  this,  a
dividend payout ratio of between 40% and 50% of adjusted  Group  earnings  after
taxes (including discontinued operations) forms the  basis  for  the  amount  of
future dividend recommendations to be  determined  by  the  Board  of  Executive
Directors and the Supervisory Board. For 2012, on the  basis  of  the  described
earnings expectations, there is still a chance for a higher  dividend  (previous
year: EUR 1.30), since the income from the divestment  of  K+S  Nitrogen  and 
the
cessation of the adverse effects from  the  divestment  of  the  COMPO  business
should have a positive impact on Group earnings.

In 2013, Group earnings will then no longer benefit  from  the  effects  of  the
divestment of K+S Nitrogen.



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. The  K+S  share  -
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 Quarterly Financial Report (Q3/2012), a video message  by  Norbert  Steiner,
Chairman of the Board of Executive Directors of  K+S  Aktiengesellschaft,  about
the third quarter of 2012  and  up-to-date  press  photos  are  available  under
http://www.k-plus-s.com/2012q3en.

We are offering a conference call for analysts in English today at 3 p.m.  (CET)
Norbert Steiner, Chairman of the Board of Executive Directors, and Dr.  Burkhard
Lohr, member 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/2012q3en) or by  phone  under  +49-69-71044-
5598. The conference is being recorded and will then  also  be  available  as  a
podcast.


Your contact persons:


Press:                            Investor Relations:
Michael Wudonig, CFA              Julia Bock, CFA / Kai Kirchhoff
Phone: +49 561 9301 1262          Phone: +49 561 9301 1009 / 1885
Fax: +49 561 9301 1666            Fax: +49 561 9301 2425
michael.wudonig@k-plus-s.comjulia.bock@k-plus-s.com /
                               kai.kirchhoff@k-plus-s.com



Forward-looking statements


This press release contains facts  and  forecasts  that  relate  to  the  future
develoment 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 develoments 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.


Further inquiry note:
Press:	
Michael Wudonig, CFA	
Phone: +49 561 9301-1262	
Fax: +49 561 9301-1666	
michael.wudonig@k-plus-s.com	

Investor Relations:
Julia Bock / Kai Kirchhoff
phone: +49 561 9301-1009 / -1885
fax: +49 561 9301-2425
julia.bock@k-plus-s.com / kai.kirchhoff@k-plus-s.com

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:     investor-relations@k-plus-s.com
WWW:      http://www.k-plus-s.com
sector:      Chemicals
ISIN:        DE000KSAG888
indexes:     DAX, Midcap Market Index, CDAX, Classic All Share, HDAX, Prime All
             Share
stockmarkets: regulated dealing: Hannover, Berlin, München, Hamburg, Düsseldorf,
             Stuttgart, regulated dealing/prime standard: Frankfurt 
language:   English
 

 

 



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