August 14, 2007

Growth trend continued

Strong second quarter for the K+S Group

• Excellent business environment for fertilizers
• Globally strong demand leading to significantly higher prices
• Revenues in second quarter up 11% to € 778.6 million
• Operating earnings increase by 17% to € 69.4 million
• Adjusted earnings after taxes at € 42.2 million (+8%)
• Outlook for 2007: new highs for revenues and operating earnings

The K+S Group has successfully continued its growth trend in the second quarter of 2007. “The main contributors to this were primarily the globally strong demand in our markets, especially for potash and nitrogen fertilizers, as well as the resulting attractive price levels. In particular, international potash prices have risen markedly against the background of a limited global supply. For the second half of the year too, further significant price increases have already been announced,” says Norbert Steiner, Chairman of the Board of Executive Directors of K+S Aktiengesellschaft.

Revenues increases in second quarter by 11%

At € 778.6 million, second quarter revenues exceeded the figure for the same period last year by € 78.5 million or 11%. Along with the first-time consolidation of SPL, this rise is also due to positive price effects and to increases in sales. These factors were able to more than make up for the negative impact of currency effects as a result of a weaker US dollar. The Potash and Magnesium Products, COMPO and fertiva business segments all showed noticeably increased revenues. The first-time consolidation of SPL, moreover, led to a large rise in the revenues of the Salt business segment. In the first six months of the year, revenues rose by € 167.7 million or 11% to € 1,723.3 million due to both consolidation and price factors.

Operating earnings increase significantly to € 69.4 million (+17%)

In the second quarter of 2007, EBIT I rose in comparison with the same period last year by € 10.0 million or 17% to € 694 million. This was above all due to the substantial increase in earnings in the Potash and Magnesium Products business segment. In the first half of the year, at € 172.7 million, operating earnings of the K+S Group were on the level of the previous year (€ 172.5 million). The clearly weaker earnings contribution of the Salt business segment in the first quarter of 2007 could thus already be fully made up for. Adjusted group earnings after taxes rose by 8% to € 42.2 million in the second quarter. In the first half of the year, at € 104.8 million, group earnings were, however, 5% down on last year's figure as a result of the weaker financial result.

Outlook for 2007: new highs for revenues and operating earnings expected

This year, K+S is anticipating a tangible increase in revenues; this is also being driven by the consolidation effect of the first-time consolidation of SPL for the whole year. Revenues for 2007 as a whole should reach € 3.1 billion to 3.3 billion (previous year: € 2.96 billion).

For EBIT I, K+S expects a figure of between € 310 million and € 325 million. Compared with the peak value of last year (€ 278.0 million), this means a further increase of between 12% and 17%.
The outlook is based in particular on the worldwide high demand for fertilizers. On the agricultural markets, generally insufficient food production has been leading to further decreases in stocks of agricultural products. The resulting price increases that can be observed are favouring the use of mineral fertilizers. Additional positive effects on the demand for fertilizers are coming from the trend toward renewable raw materials.

In the Salt business segment, an average business with de-icing salt in Europe and North America is anticipated for the fourth quarter of 2007. Moreover, the outlook takes account of a reserve for possible follow-up hedging in the event of a further weakening of the US dollar. Taking into consideration the above conditions, adjusted earnings after taxes for 2007 should amount to between € 185 million and € 195 million; this would correspond to an adjusted earnings per share of approximately € 4.50 to € 4.75 per share.

Experience growth

The K+S Group is one of the world’s leading suppliers of speciality and standard fertilizers, plant care and salt products. Achieving healthy and sustained growth is its goal as a company and a general challenge at the same time. K+S offers agriculture, industry and private consumers a range of goods that meet needs and serve growth in almost all areas of day-to-day life in the form of tailor-made and branded products. The K+S Group has 12,000 employees and achieved revenues of approximately € 3 billion in 2006. K+S is listed on all German stock exchanges (ISIN: DE0007162000, symbol: SDF) and included in the MDAX share index.

Conference call with analysts

On the occasion of the publication of the figures for the second quarter on 14 August 2007, Norbert Steiner, Chairman of the Board of Executive Directors of K+S Aktiengesellschaft, will answer questions from analysts at a conference call. From 3 p.m. onward you can follow this at www.k-plus-s.com.