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K+S Aktiengesellschaft
Baader Helvea Virtual Roadshow
Alexander Enge
IR Manager
Julia Bock, CFA
Senior IR Manager
16 April 2020
2
K+S at a GlanceGroup financials 2019
Revenues
€ 4.07 billion
EBITDA
€ 640 million
EBITDA-Margin
16%
Earnings after taxes, adj.
€ 78 million
Customer Segments
Revenues
€ 1.15 billion
EBITDA
€ 218 million
Margin 19%
Revenues
€ 0.48 billion
EBITDA
€ 60 million
Margin 12%
Revenues
€ 0.72 billion
EBITDA
€ 94 million
Margin 13%
OU Europe+: Revenues: € 2.54 billion; EBITDA: € 437 million; Margin: 17%
OU Americas: € 1.53 billion; EBITDA: € 230 million; Margin: 15%
Revenues
€ 1.72 billion
EBITDA
€ 295 million
Margin 17%
ConsumersIndustryAgriculture Communities
42%
46%
28%
34%
12%
9%
18%
15%
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606640
-206
140
Slight increase of revenues and EBITDA in 2019
despite adverse conditions
3
REVENUES- in € million -
4,039
4,071
2018 2019
+1%
DIVIDEND- in € -
0.250.15
2018 2019*
Payout ratio
37%56%
*Proposal
▪ EBITDA
improved
again in the
third year in
a row
▪ Synergies
contributed
more than €
100 million
Baader Helvea Virtual Roadshow
640
2018 2019
+6%
606
EBITDA- in € million -
+346
FCF- in € million -
2018 2019
16.04.2020
With our products, we ensure system-
relevant basic services.
• High-purity pharmaceutical salts for medicine and use in dialysis and
infusions
• Potassium salts for the production of a wide range of medical products
• Salts for the manufacture of disinfectant materials, soaps and
hypolyes
• Table salt for food production
• Salts for animal feed and animal nutrition
• Potassium fertilizer for agricultural food production
• Disposal services in the field of underground reutilization and
disposal
Social contribution
44 16.04.2020 Baader Helvea Virtual Roadshow
Our locations are our backbone: production
and supply chains are stable.
• Corona prevention teams established
• Shift times shortened and staggered
• Number of shift dialogues reduced
• Use of respiratory masks during work steps with a short
distance (e.g. to go down the mine shaft in the shaft elevator)
• Use of gloves on machines and vehicles
• Additional disinfection dispenser set up
• Instructions for behavior sent to 3,000 suppliers
• External truck drivers only leave the vehicle for load
securing
Securing production
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Baader Helvea Virtual Roadshow6
Currently sufficient liquidity situation
• Short-term access to financial markets
difficult due to Corona
• Sufficient leeway in our credit line agreed
with banks
• Examination of government support
programs to further secure short-term
liquidity
• The next major financing instruments are
due in May 2021
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▪ Complete sale of OU Americas
▪ Comprehensive realignment and
restructuring of K+S
▪ Noticeable cost reduction
▪ Advanced efficiency and productivity
measures
▪ Future-oriented solutions in the
environmental sector
▪ Sustainable positive free cash flow
contribution from all sites
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➢ The new K+S: lean and performance-
oriented with a solid financial base
New focus
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• Broad portfolio of interested parties
• Initial talks held
• Investment banks mandated
• Signing expected in 2020
• Sale process is proceeding according to plan even
under current conditions with regards to Covid-19
• Uninterrupted interest from potential buyers
• Present framework conditions are no obstacle for
the current phase of the process
Complete Sale OU Americas on schedule
8
1• Leading brands with high
emotional customer loyalty
• Established customer-
oriented network with 28
locations in North America
and cost-effective production
in South America
• Revenues: EUR 1.5 billion
(2019)
• EBITDA: EUR 230 million
(2019)
• Stable cash flows
1
SANTIAGO DE
CHILE
POINTE-CLAIRE
CHICAGO
Unique position in the salt market
Baader Helvea Virtual Roadshow16.04.2020
• Bethune is an integral part of the company's
future asset sale currently not planned
• Restructuring of administrative functions
• Focus on the core business by selling non-core
activities (e.g. Sale of Baltic Train or K+S
Entsorgung Schweiz)
• Future-oriented solutions in the environmental
sector
• Capital expenditure under review
• Sustained positive free cash flows at all German
production sites
Restructuring and crystallizing values
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Restructuring
OU Europe+ measures
K+S: Focus remains on strengthening the balance sheet
10
Dec. 2019: Net financial liabilities: EUR 3.1 billion Net financial liabilities/EBITDA: 4.9x
End of 2021
• Reduction of net financial liabilities by significantly more than € 2 billion
• Stable cross over rating targeted
Sale of OU Americas
Baader Helvea Virtual Roadshow16.04.2020
Current market assessment
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• Agriculture and the food industry as a
system-relevant infrastructure is little affected
worldwide by Covid-19
• Sowing period in the Northern Hemisphere
has just started
• Ideal weather conditions and good farmer
economics in relevant agricultural markets
• Expected new China contract should also
stimulate demand there
Good demand in Customer Segments Agriculture
12 Baader Helvea Virtual Roadshow16.04.2020
13
200
250
300
350
400
450
500
200
225
250
275
300
325
350
375
400
MOP gran. Brazil USD/t, cfr (left scale)
MOP gran. Europe EUR/t, cfr (right scale)
Quelle: FMB Argus Potash
USD/t EUR/t
SOP Europe EUR/t, cfr (right scale)
Potassium
Sulfate
(SOP)
Europe
Potassium
Chloride
(MOP) Brazil Potassium
Chloride
(MOP) Europe
▪ Our unique German deposits enable a broad product portfolio in the customer segment agriculture
▪ Higher value specialty products (SOP) significantly more stable than potassium chloride
▪ Domestic market Europe significantly more stable
▪ MOP prices bottoming out
Customer Segment Agriculture
Stable speciality business and regional diversification pay off
Baader Helvea Virtual Roadshow16.04.2020
Customer Segment Agriculture
Between plan and Reality: Potash projects announced since 2006 (Greenfield)
160 6
Announced projects or in early
development phases
Projects with a high
probability of
implementation by
2025
2
Projects in ramp-up
phase
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thousand tons
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
'05 '10 '15 '20v '25v
Greenfield potash newcomersrevised forecast
technical available capacity from 2015
Source: IFA, K+S; including potassium sulfate and potash varieties with a lower K2O content of about 5 million tonnes eff.
RevenueTechnical available capacity of
existing producers
+/-0% (Scenario 1)
+1.3% (IFA prognosis)
+3% (Scenario 2)
▪ Only 5 years ago, the technically
available capacity in 2025 was
estimated to be 12 million tons higher
than today
▪ Even now, greenfield projects by potash
newcomers will still account for a
significant share of the total until 2025
▪ Non-utilization of capacity by existing
producers not taken into account
▪ Global capacity load should level off at
the long-term average by 2025
15
Customer Segment Agriculture
What is behind the greatly feared oversupply?
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Potassium chloride
57
Fertilizer specialities
47
1 Specialities
2 Commodities
Customer Segment Agriculture at a Glance
Characteristics
1 2
Revenue Split by Products 2019 (%)Revenue Split by Region 2019 (%)
Europe
50
thereof Germany
12
South
America
22
Asia
19
Others
5
▪ Close proximity to our main customers provide logistical
advantages
▪ Shipments to overseas customers at competitive costs
from Hamburg harbor
▪ Strong and long-standing customer relationships
▪ Broad specialty portfolio provides flexibility and stability,
partly following different trends and seasons
North America
4
16 Baader Helvea Virtual Roadshow
in € million FY/18 FY/19
Revenues 1,741.3 1,715.6
Sales volume (mt) 6.85 6.30
EBITDA 274.5 294.9
Key financials
16.04.2020
Growth drivers
Oil and Gas
1
Water Softening
4
Revenue Split by Products 2018 (%)
Complementary
15
Other
24
Animal Nutrition
7
Chemical
23
Food
21
Pharma
5
in € million FY/18 FY/19
Revenues 1,132.8 1,148.0
Sales volume (mt) 10.3 10.1
EBITDA 225.5 218.0
Population growth
Economic growth and industrialization
Increasing standard of living
Urbanization
Current trading
▪ Weaker demand due to Covid-19 in
some industries mitigated by
diversified product portfolio
▪ Strong demand by food industry
Key financials
Customer Segment Industry at a Glance
17 Baader Helvea Virtual Roadshow16.04.2020
Growth drivers
Ice Melt
7
Revenue Split by Products 2018 (%)
Other
1
Water and Pool
53
Culinary
39
in € million FY/18 FY/19
Revenues 453.7 484.7
Sales volume (mt) 1.8 1.8
EBITDA 43.3 59.7
Population growth
Economic growth
and industrialization
Increasing standard
of living
Current trading
▪ Consumers customer segment showed first success in
2019 to pass on higher costs, especially for logistics
▪ Good progress in the rollout of the German premium table
salt brand Saldoro® to retail sellers and gastronomy
▪ Stable demand situation also in times of Covid-19
Key financials
Customer Segment Consumer at a Glance
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Customer Segment Communities at a Glance
Revenue Split by Region 2019 (%)
thereof
Germany
9
Europe
18
North America
821 Commodities
Current trading
▪ Owing to the generally very poor start in the
de-icing salt business for weather-related reasons in
Europe and North America, we
expect sales volumes between 8 and 9 million tonnes
for the 2020 financial year (normal year: between
12.5 and 13.0 million tonnes; 2018:
12.7 million tonnes).
Revenue Split by Products 2019 (%)
De-icing packaged
2
De-icing bulk
98
1
19 Baader Helvea Virtual Roadshow
in € million FY/18 FY/19
Revenues 708.4 719.9
Sales volume (mt) 13.32 12.70
EBITDA 121.8 94.4
Key financials
16.04.2020
Outlook 2020¹
20
Sales volumes:
Agriculture: >7mt
Communities: ~8-9mt€640m
€620m
€560m
€500m
• ASP Agriculture on the level of Q4/2019 (255 €)
• Below average de-icing salt business in EU
• Below average de-icing salt business in NA
• ASP Agriculture slightly below Q4/2019 (255 €)
• Below average de-icing salt business in EU
• Weaker de-icing salt business in NA than upper case
• ASP Agriculture even more below Q4/2019 (255 €)
• Weaker de-icing salt business in EU than midpoint
• Weaker de-icing salt business in NA than midpoint
Upper case
Midpoint
Lower case
EBITDA
2020e
• Stable earnings for Industry and Consumer segment expected
• Positive Shaping effects should slightly overcompensate for cost inflation
• We expect free cash flow to break more or less even at the midpoint of the EBITDA range
EBITDA
2019
Main assumptions
¹Impacts from Corona virus not predictable; no effects from restructuring or sale of OU Americas includedBaader Helvea Virtual Roadshow16.04.2020
IR Contact Details
e-mail: [email protected]
homepage: www.kpluss.com
IR-website: www.kpluss.com/ir
K+S Aktiengesellschaft
Bertha-von-Suttner-Str. 7
34131 Kassel (Germany)
Janina Rochell
Investor Relations Manager
Phone: +49 561 / 9301-1403
Fax: +49 561 / 9301-2425
Christiane Martel
Roadshow Management
Phone: +49 561 / 9301-1100
Fax: +49 561 / 9301-2425
Alexander Enge
Investor Relations Manager
Phone: +49 561 / 9301-1885
Fax: +49 561 / 9301-2425
Julia Bock, CFA
Senior Investor Relations Manager
Phone: +49 561 / 9301-1009
Fax: +49 561 / 9301-2425
Dirk Neumann
Head of Investor Relations
Phone: +49 561 / 9301-1460
Fax: +49 561 / 9301-2425
21 Baader Helvea Virtual Roadshow16.04.2020
Housekeeping Items / Financial Calendar
▪ Tax rate: ~30%
▪ Financial result: ~€-130
▪ CapEx: Significantly up
▪ D&A: ~€450m
▪ Reconciliation (EBITDA): €-60m to €-80m
Additional information on Outlook FY 2020
Financial Calendar
▪ Customer segment Agriculture:
Sales volume: >7.0mt (2019: 6.3mt)
▪ Customer segment Communities:
Sales volume: ~8-9mt (2019: 12.7mt)
Q1 2020 Earnings Release 11 May 2020
Virtual Annual General Meeting tba
Dividend payment tba
Half-yearly Financial Report 2020 13 August 2020
22 Baader Helvea Virtual Roadshow16.04.2020
Appendix
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24
Avoided shutdowns caused by
wastewater
Increased product quality in
Bethune
Most important work done
in 2019
Generated significant positive
free cash flow
Leveraged synergies of
EUR >100 million
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25
Sluggish demand for potassium
chloride overseas
Production cutbacks in the entire
potash industry
Winter below expectations
Deterioration of conditions in
the second half of 2019
16.04.2020 Baader Helvea Virtual Roadshow
▪ Q4/19 EBITDA down to € 160m (2018: € 228m)
▪ FCF plus € 83m from € -147m to € -64m in 2019
▪ NFD/EBITDA with 4.9x improved (31/12/18: 5.3x)
▪ Dividend proposal 0.15ct per share
Q4 and FY/2019 at a glance
26
228
160
-18
-122
+67
2018 Price Volume/Mix
FX/Others 2019
EBITDA in €m
−Production
cuts
Agriculture
−De-icing
volumes
FinancialsHighlights
+Mainly
pricing
Agriculture
+Deconsolidation
K+S Real Estate
+Sale Baltic Train
+IFRS 16
+Synergies
+FX
€ million Q4/18 Q4/19 % FY/18 FY/19 %
Revenues 1,217 1,024 -16 4,039 4,071 +1
t/o Europe+ 783 626 -20 2,585 2,536 -2
t/o Americas 433 491 +13 1,451 1,532 +6
D&A 103 103 -14 379 432 +14
EBITDA 228 160 -30 606 640 +6
t/o Europe+ 166 64 -61 443 437 -1
t/o Americas 75 83 +11 230 230 −
Adj. net profit 72 9 − 85 78 -8
Adj. EPS (€) 0,38 0,05 − 0,45 0.41 -9
Operating cash flow 33 130 − 309 640 −
Adj. FCF -147 -64 − -206 140 −
CapEx 165 183 +11 443 493 +11
NFD/EBITDA (LTM) − − − 5,3x 4,9x −
Baader Helvea Virtual Roadshow16.04.2020
▪ Construction of the new Bethune potash plant from 2011 to 2017
▪ Around EUR 1 billion environmental investment over the last 8 years
▪ 2019: High capex discipline and improved working capital management lead to clearly positive free cash flow
27
(Mio. EUR)
743
1.1531.279
1.171
811
443496
49
-306
-636-777
-390
-206
140
2013 2014 2015 2016 2017 2018 2019
Investments Adjusted FCF
Promise of positive free cash flow from October 2017 fulfilled!
Clearly positive free cash flow generated
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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(after 2023)
K+S Zielitz(Purely MOP)
K+S Bethune*
The Bethune ramp-up to 2.86 million tons in the mid 2020s (production capability) significantly improves K+S's competitive position.
28 Baader Helvea Virtual Roadshow16.04.2020
Disclaimer
29
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 – materialize, 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.
Baader Helvea Virtual Roadshow16.04.2020