EANS-News: K+S Aktiengesellschaft / K+S looks confidently ahead to 2010 Fertilizer demand picks up tangibly after falling steeply in 2009

K+S looks confidently ahead to 2010

Fertilizer demand picks up tangibly after falling steeply in 2009

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Annual Reports/quarterly report/Company Information/K+S

Subtitle: K+S looks confidently ahead to 2010
Fertilizer demand picks up tangibly after falling steeply in 2009

Kassel (euro adhoc) - Kassel, March 11, 2010

K+S looks confidently ahead to 2010
Fertilizer demand picks up tangibly after falling steeply in 2009

• Q4/2009:

- At EUR 1.1 billion, revenues rise due to consolidation factors
- Continued muted demand for fertilizers
- Operating earnings down due to extraordinary effects
- Adjusted Group earnings reach EUR 17.5 million or
EUR 0.10/share (Q4/2008: EUR 227.5 million or EUR 1.38/share)

• Financial year 2009:
- At just under EUR 3.6 billion, revenues significantly down on previous
year ((26)%)
- Despite difficult market conditions, operating earnings reach EUR 238
million and adjusted Group earnings reach EUR 94 million
- Adjusted earnings per share at EUR 0.56 (2008: EUR 5.94/share)
- Dividend proposal for 2009: EUR 0.20;
payout ratio of 41% of adjusted Group earnings

• Outlook 2010:
- Fertilizer business rises tangibly;
good start in de-icing salt business
- Significant rise in revenues and earnings expected in 2010

Following a difficult 2009, marked by the effects of the global
financial and economic crisis, the K+S Group looks confidently
ahead to 2010. "There are growing signs that fertilizer demand is
normalising and in the current year, our salt business will once
again profit from an overall good demand for de- icing salt and
from the first-time inclusion of Morton Salt for the entire
year," says Norbert Steiner, Chairman of the Board of Executive
Directors of K+S Aktiengesellschaft.

For the 2009 financial year, uncertainty in global
agricultural markets resulted in a significantly lower demand for
fertilizers. K+S responded to this development with a wide range of
measures:

- Sharp reductions in fertilizer output and the use of short-time working
to scale back the cost base in the wake of the collapse in demand
- Postponement of capital expenditure project until a future time
- Expansion and securing of the underground infrastructure
- Strengthening of the financial structure through the first-time
issuance of a bond and a capital increase

The Salt Business, however, developed positively due to high
demand for de- icing salt as well as the first-time inclusion of
Morton Salt.

At just under EUR 3.6 billion, 2009 revenues down significantly For
financial year 2009, K+S achieved revenues of EUR 3,573.8 million,
which was about 26% below previous year´s figure. The decline
in revenues can be particularly attributed to volume and price
effects in the Fertilizer Sector. Whereas in the Salt Business
Segment high sales volumes of de-icing salt during the first and the
fourth quarter as well as the first-time inclusion of Morton Salt
in the last three months of the year had a positive impact.

With a share of just under 40%, the Potash and Magnesium
Products Business Segment was once again the K+S Group segment
posting the highest revenues, followed by the Nitrogen Fertilizers
and Salt Business Segments, which each held a share of about 28%
Also as a result of the Morton Salt acquisition in the United
States at just under 47%, K+S attained a significantly higher share
of revenues on overseas markets against 2009. Europe accounted
roughly for 53% of total revenues.

Despite adverse environment, operating earnings reach EUR 238 million
At EUR 238 million, operating earnings EBIT I were down about 82% on
last year´s peak figure (2008: EUR 1,342.7 million). The
extreme drop in demand, the resulting lower capacity utilisation
as well as the decline in fertilizer prices during the course of
the year resulted in sharp declines in earnings in the Fertilizer
Sector compared with the record figures for the previous year.
While the Potash and Magnesium Products Business Segment, despite
the collapse in demand, posted positive earnings of EUR 231.7
million, the Nitrogen Fertilizers Business Segment posted an
operating loss of EUR 108.1 million due to not only volume and price
effects but also high raw material costs for the production of
complex fertilizers as well as the adverse impact of
extraordinary effects. At EUR 140.4 million, operating earnings
in the Salt Business Segment, however, were significantly above
previous year´s figure particularly because of the persistent
wintry weather conditions in the first quarter and in the last
weeks of the year.

The effect from the first-time inclusion of Morton Salt was EUR 9.8
million in the fourth quarter. In addition to integration costs,
extraordinary effects from the revaluation and consolidation within
the framework of the inventory valuation according to IFRSs
reduced this earnings contribution. Moreover, write-downs on the
value adjustments to be made within the framework of purchase
price allocation weighed on earnings. The actual operating earnings
of Morton Salt amounted to EUR 52.0 million.

Adjusted earnings down significantly year on year but in the black
Adjusted earnings before taxes for the past financial year amounted
to EUR 122.6 million (2008: EUR 1,349.5 million) and adjusted
Group earnings after taxes reached EUR 93.6 million, compared
with EUR 979.3 million for the previous financial year (details
of the adjustment procedure can be in found in the Financial
Report 2009, pages 98-99).

Q4/2009: Revenues and earnings up on the previous quarter At just
under EUR 1.1 billion, revenues for the fourth quarter of 2009
were up about 52% on the third quarter of 2009 (EUR 698.1 million)
and up about 11% on previous year´s figure (EUR 955.5 million),
which was mainly favoured due to the first-time consolidation of
Morton Salt. Operating earnings EBIT I amounted to EUR 36.5 million
and could be increased compared with the third quarter of 2009 (EUR
9.4 million), but were down significantly on the figure of EUR 287.8
million for the same period a year ago. At EUR 17.5 million,
adjusted Group earnings after taxes were positive again in the
fourth quarter of 2009 (Q3/2009: EUR (2.1) million), but were also
down significantly on the figure for the same period a year ago
(Q4/2008: EUR 227.5 million).

Dividend of EUR 0.20 per share proposed As a result of the marked
decrease in the adjusted earnings of the K+S Group in financial year
2009 and in line with our earnings-based dividend policy, the
Board of Executive Directors and the Supervisory Board proposes the
payment of a dividend of EUR 0.20 per share to the Annual General
Meeting (2008: EUR 2.40 per share). Assuming that no own shares are
held on the date of the Annual General Meeting, this will result
in a dividend payout of EUR 38.3 million; this corresponds to a
payout ratio of 41% within the payout corridor of 40% to 50% of
the adjusted K+S Group earnings that we are in principle seeking to
achieve.

Outlook 2010: Significant rise in revenues and earnings anticipated
Fertilizer demand should rise again significantly in 2010 -
especially for potash fertilizers - because of low straight
fertilizer stocks in the trade sector and due to the lower potash
content of the soil following two very good harvests and lower
fertilisation since autumn of 2008. Thus, the global sales volume
for potash should rise to about 45 million tonnes in 2010 (2009:
about 30 million tonnes) and, at an estimated sales volume of about
55 million tonnes in 2011, almost reach the level from before the
financial and economic crisis. As the world´s fourth-largest
individual producer, the K+S Group should participate in this to
a tangible extent. Thus, the sales volume in the Potash and
Magnesium Products business segment this year should rise to just
under 6 million tonnes of goods (2009: 4.3 million tonnes),
but at expected significantly lower average prices against
previous year.

In financial year 2010, revenues of the K+S Group should rise
considerably year on year. While a moderate increase in revenues is
assumed in the Potash and Magnesium Products business segment
and a tangible one in the Nitrogen Fertilizers business
segment, a significantly higher level of revenues is expected
in the Salt Segment, because of the first-time inclusion of
Morton Salt for a whole year.

In financial year 2010, operating earnings EBIT I should
also rise significantly year on year. This above all relates to the
first-time inclusion of Morton Salt for the entire year as well
as to the indications of a turnaround in earnings in the
Nitrogen Fertilizers Business Segment.

The adjusted Group earnings after taxes should also thus be
significantly higher in 2010 in line with the development of
operating earnings.

Experience growth The K+S Group is one of the world's leading
suppliers of standard and speciality fertilizers. In the salt
business, measured by production capacity, K+S, with sites in
Europe as well as 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. 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 You can download the Financial Report 2009, the
Corporate and Sustainability

Report 2009 as well as the Quarterly Financial Report Q4/2009 from our website
www.k-plus-s.com. In addition, from 10.00 a.m., the speeches given by Norbert
Steiner, Chairman of the Board of Executive Directors of K+S

Aktiengesellschaft, and Jan Peter Nonnenkamp, CFO of K+S
Aktiengesellschaft, at today´s K+S financial report press conference
as well as a video message on the course of business will also be
available on the website.

Conference call for analysts You can also follow today´s conference
call for analysts, which is being held in connection with the
publication of the annual financial statements and will be
conducted in English, live from 1.00 p.m. at www.k-plus-s.com
or by telephone by dialling +49.69.6677.75757; PIN 3524527#.

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

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 | | | | | | |
|Q4/2009 | | | | | | |
| | | |Q4 | |Q4 | | |
|All figures in accordance with | |Oct - Dec | |Oct - Dec| | |
|IFRSs | | | | | | |
| | | |2009 | |2008 | |Change |
| | | |EUR million | |EUR million| |in % |
| | | | | | | | |
|Revenues | |1,061.3 | |955.5 | |+11.1 |
| | | | | | | | |
| |Potash and Magnesium Products | |360.6 | |498.7 | |(27.7) |
| |Nitrogen Fertilizers | |212.2 | |214.6 | |(1.1) |
| |Salt | |455.3 | |209.3 | |+117.5 |
| |Complementary Business Segments| |33.1 | |32.8 | |+0.9 |
| |Reconciliation | |0.1 | |0.1 | |- |
| | | | | | | | |
|Operating earnings (EBIT I) | |36.5 | |287.8 | |(87.3) |
| | | | | | | | |
| |Potash and Magnesium | |26.9 | |275.3 | |(90.2) |
| |Products | | | | | | |
| |Nitrogen Fertilizers | |(42.3) | |(5.2) | |(713.5) |
| |Salt | |47.3 | |26.2 | |+80.5 |
| |Complementary Business Segments| |5.7 | |5.8 | |(1.7) |
| |Reconciliation | |(1.1) | |(14.3) | |- |
| | | | | | | | |
|Earnings after operating hedges (EBIT |33.9 | |286.0 | |(88.1) |
|II) | | | | | |
| | | | | | | | |
|Financial result | |(18.7) | |29.1 | |- |
| | | | | | | |
|Earnings before income taxes | |15.2 | |315.1 | |(95.2) |
| | | | | | | | |
|Earnings before income taxes, | |17.8 | |316.9 | |(94.4) |
|adjusted1) | | | | | | |
| | | | | | | | |
|Group earnings after taxes | |15.6 | |226.4 | |(93.1) |
| | | | | | | | |
|Group earnings after taxes, adjusted1)| |17.5 | |227.5 | |(92.3) |
| | | | | | | | |
|Earnings per share, adjusted (EUR)1)|0.10 | |1.38 | |(92.5) |
| | | | | | | | |
|Capital expenditure2) | |63.5 | |64.4 | |(1.4) |
| | | | | | | |
|1) The adjusted figures only contain the result from operating, |
|anticipatory hedging transactions already realised during the current |
|period. |
|By contrast, changes in the market value of the operating anticipatory |
|hedging transactions still outstanding are not taken into account. The |
|effects on deferred and cash taxes are also eliminated; tax rate 2009 |
|27.9% (2008: 27.9%). |
|2) Cash investments in or depreciation of property, plant and equipment |
|and intangible assets. |
| |
| |
| |
| |
|K+S Group at a Glance | | | | | | |
|January to December 2009 | | | | | | |
| | | | | | | | |
|All figures in accordance with | |Jan - Dec | |Jan - Dec| | |
|IFRSs | | | | | | |
| | | |2009 | |2008 | |Change |
| | | |EUR million | |EUR million| |in % |
| | | | | | | | |
|Revenues | |3,573.8 | |4,794.4 | |(25.5) |
| | | | | | | | |
| |Potash and Magnesium Products | |1,421.7 | |2.397.4 | |(40.7) |
| |Nitrogen Fertilizers | |1,016.2 | |1.652.4 | |(38.5) |
| |Salt | |1,014.6 | |618.6 | |+64.0 |
| |Complementary Business Segments| |120.7 | |125.3 | |(3.7) |
| |Reconciliation | |0.6 | |0.7 | |- |
| | | | | | | | |
|Operating earnings (EBIT I) | |238.0 | |1,342.7 | |(82.3) |
| | | | | | | | |
| |Potash and Magnesium Products| |231.7 | |1.203.2 | |(80.7) |
| |Nitrogen Fertilizers | |(108.1) | |121.4 | |- |
| |Salt | |140.4 | |45.2 | |+210.6 |
| |Complementary Business Segments| |15.2 | |25.1 | |(39.4) |
| |Reconciliation | |(41.2) | |(52.2) | |- |
| | | | | | | | |
|Earnings after operating hedges (EBIT |241.9 | |1,192.3 | |(79.7) |
|II) | | | | | |
| | | | | | | | |
|Financial result | |(115.4) | |6.8 | |- |
| | | | | | | |
|Earnings before income taxes | |126.5 | |1,199.1 | |(89.5) |
| | | | | | | | |
|Earnings before income taxes, | |122.6| |1,349.5 | |(90.9) |
|adjusted1) | | | | | | |
| | | | | | | | |
|Group earnings after taxes | |96.4 | |870.9 | |(88.9) |
| | | | | | | | |
|Group earnings after taxes, adjusted1)| |93.6 | |979.3 | |(90.4) |
| | | | | | | | |
|Earnings per share, adjusted (EUR)1) |0.56 | |5.94 | |(90.5) |
| | | | | | | | |
|Capital expenditure2) | |177.6 | |197.5 | |(10.1) |
| | | | | | | |
|Employees as of 31 December | |15,208 | |12,368 | |+23.0 |
|(number) | | | | | | |
| |of which trainees (number) | |642 | |615 | |+4,4 |
| |
| |
|1) The adjusted figures only contain the result from operating, |
|anticipatory hedging transactions already realised during the current |
|period. |
|By contrast, changes in the market value of the operating anticipatory |
|hedging transactions still outstanding are not taken into account. The |
|effects on deferred and cash taxes are also eliminated; tax rate 2009 |
|27.9% (2008: 27.9%). |
|2) Cash investments in or depreciation of property, plant and equipment |
|and intangible assets. |

end of announcement euro adhoc
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ots Originaltext: K+S Aktiengesellschaft
Im Internet recherchierbar: http://www.presseportal.de

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