K+S Ag: Take Q1 de-icing with a pinch of salt

Research evidence excerpt

K+S Ag: Take Q1 de-icing with a pinch of salt

iQprofile SM K+S Ag

Key Income Statement Data (Dec) 2024A 2025A 2026E 2027E 2028E Company Sector

(EUR Millions) Chemicals-Specialty

Sales 3,653 3,648 3,853 3,793 3,558

EBITDA Adjusted 558 613 725 700 653

Depreciation & Amortization (568) (2,032) (704) (408) (409) Company Description EBIT Adjusted (9.70) (1,420) 20.6 293 244

Net Interest & Other Income (5.30) 5.70 (18.7) (4.76) (2.36) K+S is a global manufacturer and supplier of standard and

Tax Expense / Benefit 41.9 261 (0.57) (87.1) (72.9) specialty fertilisers (mainly potash-based) and salt products.

Net Income (Adjusted) 4.07 126 275 201 168

Average Fully Diluted Shares Outstanding 179 179 179 179 179

Key Cash Flow Statement Data Investment Rationale

Net Income (Reported) (66.5) (1,076) 1.31 201 168 We see signs that the global potash market could face a

Depreciation & Amortization 568 2,032 704 408 409 moderate supply surplus with significant new capacity

Change in Working Capital 147 (36.3) (132) 81.3 47.1 planned. In turn this could cause industry utilisation rates

Deferred Taxation Charge 0 0 0 0 0

to drift lower and potash prices in turn. Given K+S'

Other CFO (57.4) (348) 46.5 (0.09) 22.4

Cash Flow from Operations 591 573 620 690 647 significant capex burden and relatively high cost position at

Capital Expenditure (505) (555) (600) (575) (460) its German mines, we see modest FCF generation until

(Acquisition) / Disposal of Investments NA NA NA NA NA 2028. While valuation appears 'cheap' on earnings

Other CFI 115 192 0 0 0 multiples, we do not think that this will support shares

Cash Flow from Investing (390) (363) (600) (575) (460)

given the lack of cash flow.

Share Issue / (Repurchase) 0 0 0 0 0

Cost of Dividends Paid (126) (27.7) (12.5) (10.7) (28.7)