EANS-News: K+S Aktiengesellschaft / K+S presents Q3/09 figures: Weak Fertilizer Demand Weighs on Earnings

K+S presents Q3/09 figures:

Weak Fertilizer Demand Weighs on Earnings

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Financial Figures/Balance Sheet/quarterly report/9-month report

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

Kassel (euro adhoc) - 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
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ots Originaltext: K+S Aktiengesellschaft
Im Internet recherchierbar: http://www.presseportal.de

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
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Stuttgart / regulated dealing
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München / regulated dealing