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K+S presents Q3/09 figures: Weak Fertilizer Demand Weighs on Earnings

Kassel (euro adhoc) -

K+S presents Q3/09 figures:
Weak Fertilizer Demand Weighs on Earnings
  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
Financial Figures/Balance Sheet/quarterly report/9-month report
Subtitle: K+S presents Q3/09 figures:
Weak Fertilizer Demand Weighs on Earnings
Kassel, 12 November 2009
K+S presents Q3/09 figures:
Weak Fertilizer Demand Weighs on Earnings
• At EUR 698 million, Q3 revenues are down 52% year on year
    • Q3 operating earnings reach EUR 9.4 million
    • Extraordinary effects result in Q3 adjusted earnings per share of
      EUR (0.01)
    • Salt business segment´s operating earnings rise by almost 60%
    • 2009 outlook unchanged; higher fertilizer sales volume expected for 2010
The third quarter too was characterised by continued  below-average  demand  for
fertilizers. With prices for agricultural products failing to recover
until  the end of September and with agreements on potash deliveries 
to  China  yet  to  be concluded, agriculture  continued  to  display
restraint  for  fertilizers.  In addition, the trade sector has been 
seeking to keep inventories, which have  now been largely depleted, 
as low as possible and to  delay  the  early  stocking-up which is 
otherwise customary at this time. During the  first  nine  months,  
the K+S response to continued weak demand has been to reduce  output 
and  introduce short-time working in the Potash and Magnesium 
Products business segment.
"From today´s perspective,  as  already  announced  in  August,  the 
fertilizer business can still not be expected to normalise in the  
fourth  quarter  of  the year. From many factors, such as, for 
example, the low use of fertilizers  since the autumn of 2008, low  
inventories  in  the  trade  sector  and  the  possible conclusion of
an agreement with  China,  however,  one  could  expect  that  the 
global demand for potash should see a significant recovery next year 
and  thus, our potash sales will rise again," says Norbert Steiner, 
Chairman of  the  Board of Executive Directors. "In addition, the 
first-time inclusion  of  Morton  Salt for the entire year 2010 will 
impact positively on both our  Group  revenues  as well as on 
earnings per share," Steiner continued.
Revenues also down significantly year on year in Q3 K+S Group 
revenues for the third quarter fell by  about  52%  year  on  year  
to EUR 698.1 million, primarily as a result of price  and  volume  
factors.  This is mainly due  to  significant  revenue  decreases  in
the  Potash  and  Magnesium Products and Nitrogen Fertilizers 
business segments.
Q3 operating earnings reach EUR 9.4 million EBIT I for the third 
quarter amounted  to  EUR  9.4  million,  compared  with the record 
quarterly result of EUR 502.2 million a year ago. Earnings fell 
sharply in the Fertilizer business  sector  above  all  as  a  result
of  lower  revenues. Moreover, in the case of nitrogen fertilizers, 
higher  raw  material  costs  for the production of complex 
fertilizers as well as inventory write-downs  on  such fertilizers 
weighed on earnings in particular. By contrast, satisfactory  early- 
procurement in the European de-icing salt business  coupled  with  
lower  energy and freight costs resulted in an increase in operating 
earnings  for  the  Salt business segment.
At EUR (11.7) million, the third quarter financial result was down  
slightly year on year (Q3/08: EUR (8.1) million)  as  a  result  of  
higher  interest expenses, including one-off expenses in connection 
with the financing of  the  acquisition of Morton Salt.
The extraordinary effects described above also caused adjusted  
earnings  before taxes for the third quarter to  amount  to  EUR  
(2.3)  million  (Q3/08:  EUR 494.1 million) and adjusted earnings 
after taxes to amount to EUR (2.1) million (Q3/08: EUR 358.1 
million). Correspondingly, adjusted earnings per  share  also 
decreased against previous year´s period to EUR (0.01) (Q3/08: EUR 
2.17 per share).
Outlook for financial year 2009 unchanged K+S continues to estimate 
that the total sales volume of  potash  and  magnesium products for 
the year as a whole will amount to about  4  million  tonnes,  with 
about 3 million tonnes having been sold in the first nine months.
As already stated in the Half-yearly  Financial  Report,  revenues  
of  the  K+S Group in financial year 2009 should  decline  
significantly  compared  with  the previous year. In the Fertilizer 
business sector,  significantly  lower  volumes as well as tangibly 
lower  average  prices  will  have  a  negative  impact.  By 
contrast, the Salt business sector should report a  significantly  
higher  level of revenues as a result of the  above-average  de-icing
salt  business  in  the first quarter 2009 as well as the first-time 
inclusion of  Morton  Salt  from  1 October 2009. However, the 
increase  will  not  be  able  to  make  up  for  the negative 
development of revenues in the fertilizer area.
There is also an unchanged assessment,  that  K+S  Group´  costs  in 
2009  will decline appreciably against last year. K+S expects that 
short-term working  will more than offset  the  additional  costs  
arising  from  the  latest  collective agreement pay rise.  The  
costs  of  energy,  materials  and  freight  are  also expected to 
cause relief. However, as a result of  the  customarily  high  fixed 
cost component in the mining industry,  the  total  decline  in  
costs  will  be significantly below the decrease in revenues 
described above.
K+S still assumes that  EBIT  I  for  financial  year  2009  will  
fall  sharply compared with previous year´s record result. This is  
linked  primarily  to  the declining level of earnings in the  
fertilizer  business.  Even  a  stronger  US dollar exchange rate on 
average and higher  earnings  from  salt  compared  with last year 
will only be able to cushion this trend to a limited degree.
The financial result will be significantly weaker  compared  with  
the  previous year due to higher net indebtedness and the 
extraordinary effects  arising  from the hedging of the Morton Salt 
purchase price.
Thus, adjusted Group earnings after taxes  for  2009  as  a  whole  
should  fall sharply.
Outlook 2010: Higher sales volume expected for potash products K+S 
Group revenues in 2010  will  be  positively  influenced  to  a  
significant degree  by  the  first-time  inclusion  of  Morton  Salt 
for  the  whole  year. Fertilizer demand should increase again to 
about 45 million tonnes (2009:  about 30 million tonnes expected) as 
a result of lower  trade  sector  inventories  of straight 
fertilizers in the meantime, lower soil potash  content  following  
two very good harvests and the lower application of fertilizers  
since  autumn  2008 as well as the assumption that an agreement will 
be  concluded  with  China.  In the Fertilizer business  sector,  K+S
therefore  expects  significantly  higher sales volume, especially 
for potash fertilizers. However, it is  very  difficult to forecast 
future potash prices at this moment in time. Should the price  level 
currently attainable on world markets is to continue,   a  
significant  rise  in revenues for the fertilizers  business  and  
thus  for  the  Group  too  can  be expected in the coming year. Such
a scenario would also result  in  an  increase in operating earnings.
By contrast, a decline in the  global  market  price  for potash 
fertilizers would,  however,  have  a  considerable  negative  impact
on revenues and profitability of the K+S Group.
Experience growth The K+S  Group  is  one  of  the  world's  leading 
suppliers  of  standard  and speciality fertilizers.  In  the  salt  
business,  measured  against  production capacity,  K+S, with 
locations in Europe and in North and South America, is  the world´s 
leading  producer.  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 worldwide and
achieved revenues of about EUR  5  billion in 2008. The K+S share - 
the only commodities stock on the German DAX®  index  - is listed on 
all German stock exchanges (ISIN: DE0007162000, symbol: SDF).  More 
information about K+S is available at www.k-plus-s.com.
Note to editors: The press release and the Quarterly  Financial  
Report  can  be downloaded from our website www.k-plus-s.com.
Conference Call with Analysts In connection with the publication of 
the  figures  for  the  third  quarter  of 2009, on 12 November 2009,
Norbert Steiner, CEO, Jan Peter Nonnenkamp,  CFO,  as well as Joachim
Felker, member of  the  Board  of  Executive  Directors  of  K+S 
Aktiengesellschaft, will answer analysts` questions  during  a  
conference  call held in English. From 15:00, you can also follow the
conference  call  live  on the Internet at www.k-plus-s.com or by 
telephone by dialling  +49.40.37707.9033.
Your contact persons:
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
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 
should certain risks - such as  those  referred  to  in  the  Risk 
Report - materialise, actual developments and events may  deviate  
from  current expectations. The  Company  assumes  no  obligation  to
update  the  statements contained in this press release, save for the
making of such disclosures as  are required by the provisions of 
statute.
|K+S Group at a Glance           | |           | |            | |        |
|3rd Quarter 2009                | |           | |            | |        |
| |                               | |Q3         | |Q3          | |        |
|All figures in accordance with  | |July -     | |July -      | |        |
|IFRSs                           | |Sept.      | |Sept.       | |        |
| |                               | |2009       | |2008        | |Change  |
| |                               | |EUR million  | |EUR million   | |in %    |
| |                               | |           | |            | |        |
|Revenues                        | |698.1      | |1,441.4     | |(51.6)  |
| |                               | |           | |            | |        |
| |Potash and Magnesium Products  | |340.8      | |763.4       | |(55.4)  |
| |Nitrogen Fertilizers           | |204.5      | |515.6       | |(60.3)  |
| |Salt                           | |121.7      | |131.0       | |(7.1)   |
| |Complementary Business Segments| |30.9       | |31.2        | |(1.0)   |
| |Reconciliation                 | |0.2        | |0.2         | |-       |
| |                               | |           | |            | |        |
|Operating earnings (EBIT I)     | |9.4        | |502.2       | |(98.1)  |
| |                               | |           | |            | |        |
| |Potash and Magnesium Products  | |54.0       | |465.6       | |(88.4)  |
| |Nitrogen Fertilizers           | |(47.3)     | |40.0        | |-       |
| |Salt                           | |13.5       | |8.5         | |+58.8   |
| |Complementary Business Segments| |4.3        | |5.1         | |(15.7)  |
| |Reconciliation                 | |(15.1)     | |(17.0)      | |-       |
| |                               | |           | |            | |        |
|Results after operating hedges (EBIT  |17.4   | |468.1       | |(96.3)  |
|II)                                   |       | |            | |        |
| |                               | |           | |            | |        |
|Financial result               | |            | |           | |        |
|                               | |(11.7)      | |(8.1)      | |-       |
| |                               | |           | |            | |        |
|Earnings before income taxes     | |5.7        | |460.0       | |(98.8)  |
| |                               | |           | |            | |        |
|Earnings before income taxes,       | |(2.3)  | |494.1       | |-       |
|adjusted1)                          | |       | |            | |        |
| |                               | |           | |            | |        |
|Group earnings after taxes       | |3.7        | |333.5       | |(98.9)  |
| |                               | |           | |            | |        |
|Group earnings after taxes, adjusted1)| |(2.1)| |358.1       | |-       |
| |                               | |           | |            | |        |
|Earnings per share, adjusted (EUR)1)|(0.01)     | |2.17        | |-       |
| |                                 | |         | |            | |        |
|Capital expenditure2)             | |43.5     | |48.4        | |(10.1)  |
|                                  | |         | |            | |        |
|                                                                      |
|                                                                      |
|1) The adjusted figures only contain the result from operative        |
|forecast hedges already realised during the current period. By        |
|contrast, changes in the market value of operative forcast hedges     |
|still outstanding are not taken into account. The effects on deferred |
|and cash taxes are also eliminated; Q3/09 tax rate: 27.9% (Q3/08:     |
|27.8%).                                                               |
|                                                                      |
|2) For or in connection with intangible assets as well as property,   |
|plant and equipment.                                                  |
|                                                                      |
|K+S Group at a Glance         |   |           | |           | |        |
|January - September 2009        | |           | |           | |        |
| |                               | |           | |           | |        |
|All figures in accordance with   | |Jan. -     | |Jan. -     | |        |
|IFRSs                            | |Sept.      | |Sept.      | |        |
| |                               | |2009       | |2008       | |Change  |
| |                               | |EUR million  | |EUR million  | |in %    |
| |                               | |           | |           | |        |
|Revenues                         | |2,512.5    | |3,838.9    | |(34.6)  |
| |                               | |           | |           | |        |
| |Potash and Magnesium Products  | |1,061.1    | |1,898.7    | |(44.1)  |
| |Nitrogen Fertilizers           | |804.0      | |1,437.8    | |(44.1)  |
| |Salt                           | |559.3      | |409.3      | |+36.6   |
| |Complementary Business Segments| |87.6       | |92.5       | |(5.3)   |
| |Reconciliation                 | |0.5        | |0.6        | |-       |
| |                               | |           | |           | |        |
|Operating earnings (EBIT I)      | |201.5      | |1,054.9    | |(80.9)  |
| |                               | |           | |           | |        |
| |Potash and Magnesium Products  | |204.8      | |927.9      | |(77.9)  |
| |Nitrogen Fertilizers           | |(65.8)     | |126.6      | |-       |
| |Salt                           | |93.1       | |19.0       | |+390.0  |
| |Complementary Business Segments| |9.5        | |19.3       | |(50.8)  |
| |Reconciliation                 | |(40.1)     | |(37.9)     | |-       |
| |                               | |           | |           | |        |
|Result after operating hedges (EBIT   |208.0  | |906.3      | |(77.0)  |
|II)                                   |       | |           | |        |
|                             |   | |           | |           | |        |
|Financial result             |   | |(96.7)     | |(22.3)     | |-       |
|                             |   | |           | |           | |        |
|Earnings before income taxes     | |111.3      | |884.0      | |(87.4)  |
| |                               | |           | |           | |        |
|Earnings before income taxes,       | |104.8  | |1,032.6    | |(89.9)  |
|adjusted1)                          | |       | |           | |        |
| |                               | |           | |           | |        |
|Group earnings after taxes       | |80.8       | |644.5      | |(87.5)  |
| |                               | |           | |           | |        |
|Group earnings after taxes, adjusted1)| |76.1 | |751.8      | |(89.9)  |
| |                               | |           | |           | |        |
|Earnings per share, adjusted (EUR)1)|0.46       | |4.56       | |(89.9)  |
| |                                 | |         | |           | |        |
|Capital expenditure2)             | |114.1    | |133.1      | |(14.3)  |
|                                  | |         | |           | |        |
|Employees as of 30 Sept. (number) | |12,378   | |12,323     | |+0.4    |
|  of which trainees (number)      | |648      | |616        | |+5.2    |
|                                                                      |
|1) The adjusted figures only contain the result from operative        |
|forecast hedges already realised during the current period. By        |
|contrast, changes in the market value of operative forcast hedges     |
|still outstanding are not taken into account. The effects on deferred |
|and cash taxes are also eliminated; Q3/09 tax rate: 27.9% (Q3/08:     |
|27.8%).                                                               |
|                                                                      |
|2) For or in connection with intangible assets as well as property,   |
|plant and equipment.                                                  |
end of announcement                               euro adhoc

Further inquiry note:

Your contact persons:
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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