Shaping 2030 – our strategy

In October 2017, we presented our new Group strategy Shaping 2030. The strategy puts K+S on an ambitious, robust and sustainable course of growth. With Shaping 2030 we build on our strengths in mining and processing minerals and make use of the chances of global megatrends. This incorporates promising growth options for the existing assets as well as new areas, in which we can use our capabilities.

At its core, this strategy aims to reposition K+S from a manufacturing-driven company to a market-focused and customer-centric company. The alignment on the four Product Market Segments Agriculture, Industry, Consumers and Communities demands the systematic integration of our Potash and Salt business units and enables us to realize synergies. We describe our goal as the new “One K+S”. This realignment of our company is the result of a thorough analysis process. All growth options were examined with a no-holds-barred mindset. Shaping 2030 has been chosen as the portfolio option with the highest value creation potential and the greatest robustness. This includes the company's commitment to the raw materials potash and salt as well as to the manufacturing sites in Germany and abroad.

 
 


Implementation of strategy in two phases


1. Transformation through 2020

Through 2020 we will align along four Product Market Segments – Agriculture, Industry, Consumers and Communities. This will help K+S to better address and connect with customers. At the same time we can broaden the product portfolio with a focus on high-margin products.

The business units Potash and Salt will be integrated to “One Company”. This is a key prerequisite for reinforcing customer orientation and tapping synergies. For this purpose, seven areas were identified. K+S expects an annual positive earnings effect of at least €150 million by the end of 2020.

The company will return to become Free Cash Flow positive by 2019. The leverage (Net Debt/EBITDA) is to be halved by 2020 compared to the beginning of 2017. The company wants to regain an investment grade rating in 2023.

The persistent focus on our customers and our enterprise's development towards “One Company” marks an important change for K+S. This also constitutes a change in culture, for the way we see our business and the way we work together will be transformed.

 

2. Growth phase 2020 to 2030

The company has drafted a strategic roadmap setting out development goals and strong growth options for the growth phase up to 2030. It aims to increase the operating earnings and reduce the business's dependence on external factors such as weather and the global market price for potassium chloride (MOP). To realize these growth ambitions, the company will expand the specialty business and related areas such as fertigation. We also intend to step up our business in high-growth regions such as Asia and Africa. This clearly defined path towards growth will open up new development and job opportunities for employees.

Ambition: €3 billion EBITDA in 2030

Looking to the future, K+S has a very demanding ambition for 2030: €3 billion EBITDA with at least 15 % Return on Capital Employed (ROCE). We will achieve about two thirds of the growth towards this goal by driving the development of our existing business and optimizing our organization and processes.

With our EBITDA ambition, we underline that K+S has long-term value prospects if we continue to persistently develop the organization and our business.

 

Sustainability as an integral component of the strategy

At K+S, we give a strong commitment to sustainability and have set ourselves ambitious goals for occupational safety and reducing saline waste water. For example, we will discontinue deep-well injection of saline wastewater from potash production in Germany by the end of 2021. Our sustainability goals are defined and will be underpinned with specific and measurable criteria in the course of 2018 to provide a transparent view of progress and results. Sustainability means future viability: Learn more about sustainability at K+S.