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

Kassel (euro adhoc) -

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
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Company Information/quarterly report
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:
-  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
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
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."
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
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
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:
• 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%)
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
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.
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:
• 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%
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.
|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 of announcement                               euro adhoc

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

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