goldman sachs west coast roadshow

Goldman Sachs West Coast Roadshow

San Francisco & Los AngelesJuly 17/18, 2019

Thorsten Boeckers, CFO Janina Rochell, Investor Relations Manager

K+S Group

1

K+S Group

K+S Group

Disclaimer

No reliance may be placed for any purpose whatsoever on the information or opinions contained in the Presentation or on its completeness, accuracy of fairness. No

representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its respective directors, officers, employees, agents or

advisers as to the accuracy, completeness or fairness of the information or opinions contained in the Presentation and no responsibility or liability is accepted by any of

them for any such information or opinions. In particular, no representation or warranty, express or implied, is given as to the achievement or reasonableness of, and no

reliance should be placed on any projections, targets, ambitions, estimates or forecasts contained in this Presentation and nothing in this Presentation is or should be

relied on as a promise or representation as to the future.

This Presentation 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 Annual Report – materialise, actual developments and events may deviate from current expectations. Given these risks,

uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forecasts.

This Presentation is subject to change. In particular, certain financial results presented herein are unaudited, and may still be undergoing review by the Company’s

accountants. The Company may not notify you of changes and disclaims any obligation to update or revise any statements, in particular forward-looking statements, to

reflect future events or developments, save for the making of such disclosures as are required by the provisions of statue. Thus statements contained in this

Presentation should not be unduly relied upon and past events or performance should not be taken as a guarantee or indication of future events or performance.

This Presentation has been prepared for information purposes only. It does not constitute an offer, an invitation or a recommendation to purchase or sell securities

issued by K+S Aktiengesellschaft or any company of the K+S Group in any jurisdiction.

K+S Group 2

K+S Group

K+S at a Glance

IndustryAgriculture Consumers Communities

Group financials 2018

Revenues

€ 4.04 billion

EBITDA

€ 606 million

EBITDA-Margin

15%

Earnings after taxes, adj.

€ 85 million

Customer Segments

Revenues

€ 1.74 billion

EBITDA

€ 275 million

Margin 16%

Revenues

€ 1.13 billion

EBITDA

€ 226 million

Margin 20%

Revenues

€ 0.46 billion

EBITDA

€ 43 million

Margin 10%

Revenues

€ 0.71 billion

EBITDA

€ 122 million

Margin 17%

43%

28%

11%

18%

41%34%

7%18%

OU Europe+: Revenues: € 2.59 billion; EBITDA: € 443 million; Margin: 17%

OU Americas: Revenues: € 1.45 billion; EBITDA: € 222 million; Margin: 15%

Current Trading

K+S Group 4

K+S Group

Our targeted wastewater management makes us less vulnerable to droughts

~50%

July 2018

~25%

600k m³600k m³

July 2019

up to1,000k m³ Capacity

Utilization rate

Temporary wastewater storages underground:In the course of the summer, we expect to get the approval for an additional capacity of up to 400k m3

Basin capacity andutilization¹as of 05 Jul 19

400k m³

¹Basin capacities were at 500k m³ in 2018 , but adjusted for comparative purposes

5

K+S Group

K+S Group

Potash pricing remains strong

Higher Bethune production; first quarter w/o volumes from Sigmundshall potash mine

Good de-icing salt business in North America; higher freight cost headwind YoY persists

EBITDA and FCF improved again

New reporting structure in place

Highlights Financials

€ million Q1/18 Q1/19 YoY

Revenues 1,170 1,264 +8%

t/o Europe+ 662 692 +5%

t/o Americas 507 571 +13%

D&A -90 -100 -10%

EBITDA 237 270 +14%

t/o Europe+ 156 177 +14%

t/o Americas 96 108 +12%

Adj. net profit 84 108 +29%

Adj. EPS (€) 0.44 0.56 +27%

Operating cash flow 233 324 +39%

Adj. FCF 143 233 +63%

CapEx 63 73 +16%

-

Net fin. debt/EBITDA 4.7 4.6 -

Q1 2019: Another quarter with solid results

237270

89

6 -27

-35

Q1/18 Price Volume/Mix

FX,Others

Costinflation

Q1/19

EBITDA in €m

Main effects:- General

costinflation:e.g. freight

Main effects:+ Prices in

agriculture+ North American

de-icing/consumerbusiness

Main effects:- Shaping+ FX- Others

6

K+S Group

K+S Group

2019 FULL-YEAR GUIDANCE confirmed

OPERATING PERFORMANCE improved

WASTEWATER MANAGEMENT improved

CASH CONVERSION RATE improved

SHAPING/CUSTOMER ORIENTATION on track

BETHUNE RAMP-UP on track

7

K+S Group

K+S Group

Pricing (Source: FMB)

80%

90%

100%

110%

120%

130%

140%

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19

SOP Europe

MOP Brazil

Global demand 2018 again slightly up to

~71mt KCl (2017: ~69mt)

Robust demand holds across all regions

Most producers are committed until end

of Q2/19

MOP price momentum remains

supportive into Q2 (YoY)

European MOP and Specialty prices are

picking up but are still lagging behind

K+S Agriculture average selling price:

FY/18: 254 €/t (FY/17: 241 €/t);

Q4/18: 268 €/t; Q1/19: 282 €/t

Trading Update: Customer Segment Agriculture

MOP Europe

8

K+S Group

K+S Group

Trading Update: Customer Segments Industry and Consumers

Solid demand, gradually increasing

sales volumes

Logistic costs after inflation,

especially in North America, in 2018:

“new normal” for 2019

In the Consumers customer segment,

Q1/19 showed first success to pass

on higher costs, especially for

logistics, to our customers

2.47 2.52 2.572.74

2.44

0.48 0.41 0.420.50

0.48

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Industry Consumers

Sigmundshallvolumes missing

Sales volumes (in mt)

9

K+S Group

K+S Group

Trading Update: Customer Segment Communities

Pricing trends in customer segment Communities

Mixed picture in our regions in winter

2018/19

Good business in US Mid-West and

Canada

Highly competitive US East Coast

Europe:

Q4: mild weather

Q1: average demand

In total, Q4 almost on and Q1 above

long-term average

Widely promising start into bidding

season 2019

6.86

0.931.53

4.00

7.11

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Sales volumes in customer segment Communities (in mt)

Shaping 2030 Strategy

K+S Group 11

K+S Group

Tapping the full potential of our existing assets... establishing the most value-creating portfolio combination

Exploring new adjacent growth areas... pursuing growth by venturing into new markets where we can use our existing capabilities

Increasing the share of our specialties business... ensuring an overall stabilized performance and reducing our dependency on standard products and weather

'One Company' ... thinking and acting as 'One Company' and lifting synergies between our businesses

We will be the most customer-focused, independent minerals company and grow our EBITDA to €3bn in 2030 by ...

Our vision for 2030

IndustryAgriculture

ConsumersCommunities

K+S Group 12

K+S Group

Phase 2: Growth

203020202017

Phase 1: Transformation

Realize synergies

Advance corporate culture

Net financial debt/ halvedEBITDA vs. H1/2017

Synergies > €150m

EBITDA-Ambition €3bn

ROCE > 15%

Revenue growthbeyond 2030

> 4%

Increased share of specialties

Tapping the full potential of our existing assets

Exploring new adjacent growth areas

Shaping the organizationand focusing towards our clients

Reduce indebtedness

Investment grade ratingachieved in 2023

We will implement our strategy in two phases

Phase I

14

K+S Group

K+S Group

Phase I: Building a basis for our growth options

Matrix

Operating Unit Function

Agriculture

Industries

Consumers

Communities

Customer Segments

Operations

Board of Executive Directors

COO Group CFO GroupCEO Group

CEO Americas

Head of Human Resources

Head of Corporate Communications

Head of Corporate Development

Head of Corporate Controlling

Matrix

Executive Committee

Head of Marketing,Sales & Supply Chain

Excellence

Marketing & SalesCommittee

Operations Excellence Committee

Head of Operations Excellence

CEO Europe+

Board of Executive Directors

Divisional Silos

IndustryAgriculture

ConsumersCommunities

15

K+S Group

K+S Group

SHAPING 2030

Lift synergies

Operations

Procurement

Supply Chain and Logistics

Commercial Excellence

SG&A Optimization

> €50m

Net synergies YE 2020 (vs. 2017)

> €30m

> €20m

> €20m

~ €30m

COO

Sponsor

CFO

COO

COO

CEO

∑ > €150m

Synergies: Breakdown by program

16

K+S Group

K+S Group

Shaping 2030 EBITDA impact

Costs Synergies > €150m

Total costs for synergy program: ~ €150m (end of 2020)

2018e 2019e 2020e

K+S Group 17

K+S Group

This NPV equals an EV per share of 25 EUR

Variation NPV change

MOP gran. Brazil +/- 10 USD/t +/- €200 million

“We create value for our stakeholders!”

Net Present Value (NPV) Bethune

Sen

siti

viti

es

NPV for Bethune EUR 4.8bn

18

K+S Group

K+S Group

Site costs (FOB) in comparison (2020)

* column width = production capability in million tonnesSource: CRU Report 2016, K+S

-30%

BU Potashw/o Bethune

(incl. Specialties)

Best-in-class

USD/t

K+S Bethune(in 2023)

K+S Zielitz(Purely MOP)

K+S Bethune*

The Bethune ramp-up to 2.86 million tons in 2023 (production capability) significantly improves K+S's competitive position.

Phase II

20

K+S Group

K+S Group

Implications for K+S

Arable land shrinking

Yield needs to be improved

Higher efficiency of fertilizationand irrigation needed

Plants have to be more stressresistent

Infrastructure needs to beimproved focus on renewable energy

Growing population, especiallyin Asia, needs more salt forvarious purposes

Today: 7.3bn

8.5bnGlobal population in 2030

Per decade

0.2Average global warming (ºC)

70% of water used for agriculture

40%of the population will suffer

from water shortage by 2030

2015: 3.0bn

5.4bnpeople will be

middle-class by 2030

Our strategy has incorporated important megatrends

21

K+S Group

K+S Group

Geo-expansion Fertilizer Industry

Africa

Asia

Increase of fertilizer specialties

Ramp of low cost commodities

Expand Pharma & Food portfolio

Chemical applications

Growth areas and ideas cover the full growth landscape

K+S Growth Landscape

Growth areas and ideas cover core and adjacent businesses

Financials

K+S Group 23

K+S Group

P&L

€ million Q1/18 Q2/18 Q3/18 Q4/18 FY/18 Q1/19

Revenues 1,170 812 840 1,217 4,039 1,264

EBITDA 237 105 36 228 606 270

Margin 20% 13% 4% 19% 15% 21%

Depreciation 90 92 94 103 379 99

Financial result -31 -25 -26 -30 -112 -17

EBT, adjusted 116 -12 -84 95 115 154

Tax rate, adjusted 28% 25% 27% 25% 26% 30%

Net income, adjusted 84 -9 -61 71 85 108

EPS, adjusted 0.44 -0.05 -0.32 0.38 0.45 0.56

K+S Group 24

K+S Group

Cash Flow and Balance Sheet

€ million Q1/18 H1/18 9M/18 FY/18 Q1/19

Operating cash flow 233 292 276 309 324

- Investing cash flow(pre sale/ purchase of securities)

-90 -198 -336 -515 -91

Adjusted free cash flow 143 94 -60 -206 233

CapEx 63 154 278 443 73

Net financial debt 2,834 2,944 3,100 3,242 2,935

Net financial debt/ EBITDA (LTM) 4.7 4.9 5.5 5.3 4.6

Equity ratio 42 % 43% 41% 41% 43 %

K+S Group 25

K+S Group

NEW OLD NEW

New Reporting Structure

Europe+:Potash and Magnesium Products (incl. Bethune)

Salt Europe

Americas:Salt excluding Europe

Potash and MagnesiumProducts (incl. Bethune)

Salt

Potassium chlorideFertilizer specialities

Industrial products

Complementary

Non De-icing

Non De-icing

De-icing salt

Agriculture

Industry

Consumers

Communities

Operating Units Business segments Products Customer Segments Subsegments

• Potassium chloride (MOP)• Fertilizer specialities:

SOP, Kieserite, Kornkali

• Chemical• Animal nutrition• Oil and gas• Water softening• Food• Pharma• Complementary

• Culinary• Water and pool• Ice melt

• De-icing bulk • De-icing packaged

Complementary Activities

Segments according to IFRS 8

Reconciliation Reconciliation

26

K+S Group

K+S Group

K+S EBITDA 2019: € 700 to € 850m (2018: € 606m)

Positive free cash flow in 2019

606

700-

850

FY18 Price Volume/Mix

Others Cost inflation FY19

EBITDA in €m

Main effects:

+Bethune

+ Absence of

drought

effect

- Roof stability

Neuhof

- Average de-

icing salt

business

Main effects:

+Sigmunds-

hall

+ Shaping

- FX

+/- OthersMain effects:

+ASP in CS

Agriculture

moderately

up on last

year

+ Supportive

product prices

in other CSs

Main effects:

- Inflation

returning:

Higher

personnel,

energy, freight,

and material

costs

High probability to have no weather-related standstills in 2019!

Guidance 2019 confirmed

27

K+S Group

K+S Group

CapEx development 2015-2020

0

200

400

600

800

1.000

1.200

2015 2016 2017 2018 2019e 2020e

BU Potash (ex Bethune)

Bethune

BU Salt

Complementary Activities

in m€

K+S sustainability KPIs and targets 2030

29

K+S Group

K+S Group

Goal KPI 2018Target by

2030 at the latest

PEO

PLE

Health & Safety

Lost time incident rate (LTIR) 7.90

Vision 2030

Diversity & Inclusion

Employees’ favorable perception of inclusive work environment (percent)

68 (2015) >90

Human Rights

Sites covered by a human rights due diligence process (percent)

0 100

K+S sustainability KPIs and targets 2030 – People

30

K+S Group

K+S Group

Goal KPI 2018 Target by2030 at the

latest

ENV

IRO

NM

ENT

Water

Deep-well injection of saline wastewater in Germany (m³ p.a.)

1.0 0 starting January

2022

Additional reduction of saline process water from potash production in Germany (m³ p.a.)

+400,000-500,000

excluding reduction by KCF facility and

end of production SI

Waste

Amount of residues used for other purposes than tailings piles or increased amount of raw material yield (million tons p.a.)

1.0 3

Additional area of tailings piles covered (ha) 5.9 155

Energy & Climate

Carbon footprint for power consumed (kg CO2/MWh) (percent)

-1.5 -20

Specific greenhouse gas emissions (CO2) in logistics (percent)

-2.0 -10

K+S sustainability KPIs and targets 2030 – Environment

31

K+S Group

K+S Group

Goal KPI 2018Target by

2030 at the latest

BU

SIN

ESS

ETH

ICS

Sustainable Supply Chains

Critical suppliers aligned with the K+S Group Supplier Code of Conduct (SCoC) (percent)

14.7100

by end of 2025

Spend coverage of the K+S Group SCoC (percent) 29.4> 90

by end of 2025

Compliance & Anti-Corruption

All employees reached by communication measures and trained appropriately in compliance matters (percent)

71100

by end of 2019

K+S sustainability KPIs and targets 2030 – Business Ethics

K+S Group 32

K+S Group

Housekeeping Items / Financial Calendar

Tax rate: ~30%

Financial result: ~-120 million EUR

CapEx: ~600 million EUR

D&A (incl. Bethune): 380 to 400 million EUR

Reconciliation (EBITDA): -60 to -70 million EUR

Additional information on Outlook FY 2019

Financial Calendar

Customer Segment Agriculture:Sales volume: 6.9-7.2m t (2018: 6.8m t)ASP: moderately up (2018: 255 €/t)

Customer Segment Communities:Sales volume: 12.5-13.0m t (2018: 13.3m t)

Half-yearly Financial Report H1/19 15 August 2019

Kepler Cheuvreux Roadshow, Frankfurt 16 August 2019

UBS Roadshow, London 16 August 2019

Commerzbank Sector Conference, Frankfurt 27 August 2019

33

K+S Group

K+S Group

IR Contact Details

e-mail: [email protected]: www.k-plus-s.comIR-website: www.k-plus-s.com/ir

K+S AktiengesellschaftBertha-von-Suttner-Str. 734131 Kassel (Germany)

Janina RochellInvestor Relations Manager

Phone: +49 561 / 9301-1403Fax: +49 561 / [email protected]

Lutz GrütenHead of Investor Relations


Christiane MartelRoadshow Management


Alexander EngeInvestor Relations Manager


Julia Bock, CFASenior Investor Relations Manager


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