Financing strategy

The overriding goals of the financial management of the K+S Group include:

  • securing liquidity and controlling it efficiently across the Group,
  • maintaining and optimising the financial capacity of the Group as well as
  • reducing financial risks also by means of financial instruments.

In cash management we focus on the management of our liquidity as well as the optimisation of payment streams within the Group. In order to maintain and optimise the financial capacity of the Group, we aim to achieve a situation where the K+S Group has a capital structure in the long term, which is oriented to the usual criteria and indicators for an "investment grade" rating. Within the possibilities provided by the aimed-for level of creditworthiness, we intend to optimise the cost of capital for borrowed capital and for equity. The management of the capital structure is undertaken on the basis of the following key figures.

Key figures for the management of the capital structure

  Target corridor 2010 2009 2008
Net indebtedness / EBITDA 1.0 to 1.5 0.8 2.4 0.4
Net indebtedness / Equity (%) 50 to 100 27.6 64.5 33.2
ity ratio (%) 35 to 45 47.6 40.1 49.5

Against the backdrop of the significant increase in earnings and the reduction in net indebtedness, it proved possible to again achieve the targets set for the key figures for the management of the capital structure and even exceed them as of 31 December 2010. In view of the upcoming investments in the Werra package of measures as well as the expansion of our potash capacities in Canada (acquisition of Potash One), this solid capital structure provides a very good starting point for the further development of the K+S Group.

Group currency and interest rate management is performed centrally for all Group companies. Derivative financial instruments are only entered into with top-rated banks and are spread across several banks so as to reduce the risk of default.