4. ANÁLISIS E INTERPRETACIÓN DE DATOS:
6.6. Diseño De La Propuesta
As the ebitdA is not affected by depreciation on valu- ations made within the framework of purchase price allocations and as these have increased significantly after the acquisition of morton SAlt, a higher impor- tance is now assigned to the ebitdA in assessing the operating earnings capacity. In the year under review, this increased by almost 85% to reach € 369.7 million. The operating earnings ebit i of the Salt business seg- ment rose by € 97.7 million to € 238.1 million. The earn- ings were favourably affected between € 50 million and € 70 million by an above-average business with de-icing salt in comparison to the long-term aver- age figure. The variance in profitability against a nor- mal year can vary widely, since this depends on the regional mix, the respective utilisation of capacity, the local margin as well as the exchange rates. morton SAlt made a contribution to earnings of € 101.8 mil- lion, which included costs of € 6.9 million for the inte- gration process, which thus far has been proceeding according to plan. Of the depreciation of € 131.6 million (2009: € 59.9 million) included in ebit i, € 52.0 million was accounted for depreciation on the value adjust-
ments to be made within the framework of purchase price allocation (ppA).
The significantly higher revenues were on the costs side also faced with consolidation effects as well as volume- related higher production and freight costs; these, how- ever, could be more than made up for. In the first nine months, the effect of the consolidation of morton SAlt was € 68.6 million. In the year under review, non-recur- rent effects totalling € 13.2 million also had an adverse affect on earnings: Negative effects resulted from the revaluation and consolidation within the valuation of inventories in accordance with ifrS at morton SAlt, the closure of an uneconomic eSco site in France as well as unscheduled depreciation of property, plant and equipment in the Netherlands. These negative effects were offset by a positive one-off effect in the area of pro- visions at morton SAlt.
/ statements regarding the Future development oF revenues and earnings oF the salt business segment can be found on page 154.
coMpleMentary Business seGMents
revenues reach € 133.7 Million (+11%)
At € 133.7 million, revenues of the Complementary Busi- ness Segments were just under 11 % above the level of the previous year. According to ifrS, revenues deriv- ing from services rendered to K+S group companies are not included in these figures. Including these inter-nal revenues, in the period under review, total revenues amounted to € 175.3 million (2009: € 155.8 million).
/ tab: 4.10.9, 4.10.10 / Fig: 4.10.7, 4.10.8
Revenues for the Waste Management and Recycling seg- ment were up just under 10 % to € 73.8 million (2009: € 67.2 million). Decisive factors here were in particular price increases in the recycling business for the second- ary aluminium industry and increases in sales volumes in the areas of waste recycling and disposal. The reve- nues with Logistics (€ 13.6 million) and Animal Hygiene Products (€ 34.2 million) increased predominantly due to volume factors. The trading business achieved revenues of € 12.1 million. The increase of € 4.0 million in compari- son to the figure for the previous year is attributable to the successful marketing of nitric acid.
/ you can Find an overview oF the individual areas oF activity on pages 81 et seq.
variance analysis tab: 4.10.9 2010 in % Change in revenues + 10.8 volume/structure + 9.5 prices/price-related + 1.3 exchange rates — consolidation —
Waste management and recycling + 9.7
logistics + 9.7
animal hygiene products + 4.0
129 Group manaGement report consolidated financial statements Group manaGement report consolidated financial statements 4.11 risk report / 4.10 business seGment development
ebitda and oPerating earnings ebit i
uP signiFicantly
The earnings before interest, taxes, depreciation and amortisation (ebitdA) of the Complementary Business Segments for the year under review amounted to € 27.7 million and were thus up € 6.0 million, or 28%, year on year. Operating earnings ebit i reached € 21.2 million (2009: € 15.2 million). The depreciation included here amounted to € 6.5 million and were at the level of the previous year. Higher quantities for handling, transport- ing and freighting made a positive contribution to earn- ings in the Logistics segment and compensated for the declines in earnings in the Animal Hygiene Products area. The Waste Management and Recycling segment was able to significantly increase its earnings as a result of higher revenues in all areas.
/ statements regarding the Future development oF revenues and earnings oF the complementary business segments can be found on page 154.
4.11 risk report
risK policy
The business policy of the K+S group is geared towards securing the existence of the Company, sustainably gen- erating risk-adequate returns as well as systematically and continuously increasing enterprise value. To achieve this objective, our global activities require a permanent, responsible consideration of opportunities and risks. We define risks as the possible occurrence of internal and
complementary Business segments tab: 4.10.10
Q1/10 Q2/10 Q3/10 Q4/10 2010 2009 %
in € million
revenues 33.2 32.2 31.8 36.5 133.7 120.7 +10.8
earnings before interest, taxes,
depreciation and amortisation (ebitda) 7.9 7.8 5.8 6.2 27.7 21.7 +27.6
operating earnings (ebit i) 6.4 6.2 4.3 4.3 21.2 15.2 +39.5
Capital expenditure 0.4 1.4 1.9 0.5 4.2 4.6 (8.7)
employees as of reporting date (number) 280 277 281 — 280 278 +0.7
revenues By region fig: 4.10.7 2010 2009 in % 1 germany 79.9 81.8 2 rest of europe 20.0 18.1 3 overseas 0.1 0.1 revenues By segment fig: 4.10.8 2010 2009 in % 1 Waste management and recycling 55.2 55.7 2 logistics 10.2 10.3
3 animal hygiene products 25.6 27.3
4 trading 9.0 6.7 4 3 2 1 2 1 3
130 4.11 risk report
external events, which may adversely affect the achieve- ment of both our short-term and our strategic goals. Systematic risk management is an ongoing task for the Board of Executive Directors and for managers in their respective fields of responsibility. Over the long term, we can only be successful if we take opportunities and identify risks at an early stage, analyse them and corre- spondingly manage and monitor them. Taking account of the overall circumstances, we decide the extent to which risks are incurred, so that we can use opportu- nities. However, even an appropriate and functioning risk management system cannot guarantee any abso- lute certainty.
opportunity ManaGeMent
Opportunity and risk management are closely interlinked within the K+S group. Chances are internal and exter- nal developments, which may have a positive impact on the Group. We essentially derive our opportunity man- agement from the goals and strategies of our business segments and ensure a balanced relationship between opportunity and risk. Direct responsibility for the early and regular identification, analysis and use of opportuni- ties rests with the operational management of the busi- ness segments and/or the heads of the central holding units. Opportunity management is an integral part of the groupwide planning and controlling systems. We occupy ourselves intensively with analyses of markets and com- petition, market scenarios, relevant cost drivers and criti- cal success factors, including those in the political envi-
ronment in which the Company operates. This serves as the basis for identifying concrete opportunity poten- tials that are specific to business segments and which are then discussed within the framework of the goal-set- ting talks held between the Board of Executive Directors and the managers responsible for the business segments. Selected opportunity potentials for the K+S group are discussed in the forecast report.
risK ManaGeMent systeM
The business segments of the K+S group have differ- ent opportunities and risks and to identify them in good time as well as to assess and limit these, we use our uni- form planning, management and control systems. The methods used to determine risks extend from analy- ses of markets and competition through close contacts with customers, suppliers and institutions to observing risk indicators in an economic and socio-political envi- ronment. Risks are assessed particularly with regard to the likelihood of materialisation and to potential loss levels. A further building block of risk management is the development of countermeasures taking account of alternative risk scenarios. In this way, we endeavour to systematically counteract risks.
The Board of Executive Directors has defined groupwide principles and rules of behaviour as well as guidelines for systematic and effective risk management. The risk management system consists of the following elements: + a company-specific handbook on risk management,
+ a risk management holding unit,
+ persons responsible for risk management in the busi- ness segments,
+ standardised risk profiles specific to business seg- ments,
+ information about the complete quantified risk situ- ation in goal-setting talks held between the Board of Executive Directors and the managers responsible for the business segments,
+ regular, uniform risk reporting at Group and business segment level as well as
+ immediate reporting in urgent cases.
Competences and responsibilities both in the process of risk identification and with regard to the analysis, management and communication of identified risks are regulated in an unambiguous manner. Thus, directly responsibility for dealing with risks rests with the oper- ational management of the business segments and/ or the heads of the central holding units. The risks of the individual business segments and the holding unit are identified on a quarterly basis, and potential risks are analysed, quantitatively assessed and reported to the Board of Executive Directors. If a risk can be reli- ably held in check by effective and appropriate mea- sures, the focus of consideration will be on the residual risk. We are particularly monitoring risks whose likeli- hood of materialisation is 5% or more and whose dam- age potential at the same time exceeds business-seg- ment-related limits. The risk profiles relate both to the current year and to medium-term planning and thus cover a period of three years. Expected risks with a like-
4.11 risk report 131
Group manaGement report consolidated financial statements Group manaGement report consolidated financial statements
lihood of materialisation of 50 % and more are taken account of in medium-term planning and extrapolation to a year in the form of deductions from earnings. Risks that arise in the short term are, if urgent, immediately communicated directly to the Board of Executive Direc- tors outside normal reporting channels. The Supervisory Board is briefed by the Board of Executive Directors in just as regular and timely a manner, and immediately informed in especially urgent cases. In accordance with groupwide rules, transactions and measures of particu- lar importance and scope require the approval of the Board of Executive Directors and, in special cases, of the Supervisory Board too.
The proper functioning of the risk management system of the K+S group is regularly reviewed by the internal audit department. Furthermore, the functionality and effectiveness of the risk early detection system is also reviewed by our external auditor; thereafter the existing system is suitable for the early detection of such devel- opments that could jeopardise the continued existence of the Company.