- Solid Salt earnings despite mild winter weather
- Decline in earnings in the Potash and Magnesium Products business unit
- Revenues of €1.1 billion (Q1/15: €1.4 billion)
- Operating earnings (EBIT I) of €218 million (Q1/15: €317 million)
- ‘Fit for the Future’ and ‘Salt 2020’ make important contributions
- Legacy Project still on schedule and within budget
- Outlook for 2016 unchanged
- Attractive medium-term goal confirmed
KASSEL, 17-May-2016 — /EuropaWire/ — “As expected, revenues and earnings were significantly below the previous year’s levels due to the prevailing weakness in the potash market. Thanks to our two-pillar strategy and our broad product portfolio, we have still been able to perform well compared with the competition,” said K+S Chairman of the Board of Executive Directors, Norbert Steiner. “The medium and long-term growth trends in our business are continuing and we are consistently gearing all measures towards our management agenda. K+S remains a company with very good prospects.”
Decline in revenues and operating earnings
Due to reduced sales volumes in both business units as well as a lower average price for the Potash and Magnesium Products business unit, K+S Group revenues declined in the first quarter of 2016 by around 20% to €1.1 billion. Operating earnings (EBIT I) followed the trend in revenues and fell by 31% to €218 million.
In the Salt business unit, EBIT I fell only by 14% to €123 million during the reporting period in spite of the mild winter weather. Significantly lower sales volumes of de-icing salt were offset by stable volume growth and slightly rising prices in business involving non de-icing salt.
EBIT I in the Potash and Magnesium Products business unit was down 44% to €102 million in the first quarter due to lower sales volumes and a lower average price, particularly for potassium chloride in the overseas regions.
‘Fit for the Future’ provides important contribution
K+S also continued its considerable efforts in the first quarter to make the cost and organisational structures of the entire Group more efficient. Savings projected for this period were achieved in full.
‘Salt 2020’ strategy on the right track
A new product segmentation with a stronger focus on areas of applications and customers was introduced in the Salt business unit at the beginning of the year. This enables improved analyses of business operations and market developments and also supports efforts to implement strategic goals.
Legacy Project: Commissioning will take place this summer
With the Legacy Project, K+S is still well on the way to commissioning the new potash plant in Canada as scheduled this summer thus meeting the investment budget of C$ 4.1 billion. Just under 90% of the total investment has been spent to date.
Outlook for 2016 unchanged
A significant decline in average price in the Potash and Magnesium Products business unit is still expected as well as slightly lower sales volumes. In the Salt business unit, lower sales volumes of de-icing salt cannot be fully offset by moderately increasing sales volumes of non de-icing salt.
K+S Group revenues in the 2016 financial year should be moderately below the level in the previous year while operating earnings (EBITDA and EBIT I) should fall significantly below the previous year’s level.
Long-term growth prospects remain intact
The Legacy Project in particular, which will be commissioned this year, but also the high expectations of increased profitability in the Salt business in the context of the ‘Salt 2020’ strategy, continue to provide positive encouragement for K+S Management. In spite of the current weakness in the potash market, the medium to long-term growth trends remain intact. Based on these assumptions, the aim of reaching a Group EBITDA of around €1.6 billion in 2020 (2015: €1.1 billion) remains valid.
Information for editorial departments
Further information and data on development in the first quarter of 2016 can be found in the Quarterly Report on our website at
www.k-plus-s.com/2016q1en. A video message on business development from Dr Burkhard Lohr, Chief Financial Officer at K+S, is also available on the website.
A conference call in English for investors and analysts with Dr Burkhard Lohr will take place today at 10 am. Press representatives and interested parties from the general public are invited to follow the conference via a live webcast (www.k-plus-s.com/en/audio-und-video/cc.html). The conference will be recorded and made available as a podcast.
This year’s Annual General Meeting of K+S Aktiengesellschaft will be held on Wednesday, 11 May in Kassel, Germany. More information about this is available at www.k-plus-s.com/en/hv-2016/.
K+S is an international resources company. We have been mining and processing mineral raw materials for more than 125 years. The products we produce from them are used worldwide in agriculture, food and road safety and are important elements in numerous industrial processes. Potash and salt are integral nutrients for the megatrend of a constantly growing and increasingly prosperous global population striving for a higher standard of living. This will result in increasing consumption of mineral resources. We serve the resulting growth in demand from production sites in Europe, North America and South America as well as through a global distribution network. K+S is the world’s largest salt producer and one of the top potash providers worldwide. With more than 14,000 employees, K+S achieved revenues in financial year 2015 of about €4.2 billion and an EBIT of €782 million. Learn more about K+S at www.k-plus-s.com.
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