Outlook

Our assessment for full-year 2019 is mainly based on the following assumptions

+   Changes in the product mix are counteracting a positive market environment in the Agriculture customer segment, which belongs to the operating unit Europe+, and as a result we expect a moderate increase in the average price for potash and magnesium products in our product portfolio in 2019 (2018: €255/tonne).

+   The expected sales volume of all products in the Agriculture customer segment is likely to be between 6.9 and 7.2 million tonnes (2018: 6.8 million tonnes), mainly as a result of higher production volumes at the Bethune site. Assuming a normal hydrological year for 2019, no wastewater-related production cuts due to prolonged low water periods in the Werra are expected. Our efforts to further improve our wastewater management and to expand local storage capacity should significantly reduce the risk of shutdowns, even in the event of prolonged drought. Our challenges at the Werra and Neuhof sites are addressed and the product availability has already improved. Nevertheless, we expect that the German sites in 2019 will still lag behind the technically available capacity.

+   Especially due to the continued use of off-site disposal of saline wastewater, our production costs in the Agriculture customer segment will still be burdened by logistic costs of about €40 million.

+   Owing to the weather-related overall average start to the de-icing salt business, for the 2019 financial year we expect sales volumes of between 12.5 and 13.0 million tonnes (2018: 13.3 million tonnes) in the Communities customer segment, which belongs to both operating units according to the regional split. As usual, this forecast assumes that our sales of de-icing salt in the fourth quarter will remain at the longterm average level.

 

+   An average spot rate of EUR/USD 1.20 (2018: EUR/USD 1.18) is assumed for the euro-dollar exchange rate.

Revenues and earnings forecast

In the 2019 financial year, we expect revenues of the K+S GROUP to increase moderately (2018: €4.04 billion). EBITDA of the K+S GROUP is expected to improve significantly to between €700 million
and €850 million1 (2018: €606.3 million). In the operating unit Europe+ (segment in accordance with IFRS 8), the further increase in production at our new Bethune potash plant in Canada and the expectation that the wastewater-related production stoppages at the Werra plant will not recur are expected to have a positive effect, such that revenues are likely to rise moderately and EBITDA significantly as a result (revenues 2018: €2.60 billion, EBITDA: €443.4 million). Meanwhile, revenues and EBITDA in the operating unit Americas (segment in accordance with IFRS 8) are expected to remain more or less stable (revenues 2018: €1.46 billion, EBITDA: €221.7 million. With an average de-icing salt business, higher product prices should be balanced by cost inflation.

(as of 14 March 2019)

Including a positive effect from IFRS 16.

 

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