The following forecasts relate exclusively to the expected organic development of revenues and earnings; increases resulting from possible acquisitions and cooperations are not taken into consideration.
world potash capacity, production and sales volumes fig: 4.13.5
in million
tonnes 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010e 2011e 2012e 2013e 2014e 90 80 70 60 50 40 30 20 10 0 production 45.1 46.0 48.5 53.9 56.5 50.9 57.8 56.0 33.7 55.0 sales volumes 43.9 45.5 49.1 54.2 54.4 50.7 58.7 54.5 31.0 57.0 60.057.0 62.060.0 65.061.0 68.064.0 production sales volumes available capacity sales volumes estimated and from 2012 Ø +3% sources: ifa, k+s growth assumed respectively sales volumes estimated and from 2012 Ø +5% growth assumed respectively
brownfield projects greenfield projects
incl. potassium sulphate and potash grades with lower k2o content; Capacity development 2010 – 2014 based on ifa supply capability data.
4.13 forecast report 153
Group manaGement report consolidated financial statements Group manaGement report consolidated financial statements
For a number of years, K+S has principally been pursu- ing a clearly defined forecast policy:
+ In the Financial Report, an outlook for two years is given. In terms of quality, the outlook uses the expres- sions “slight”, “moderate, “tangible”, “significant” and “strong”. The respective expressions normally follow an internal classification depending on the expected percentage change in comparison to the figures for the previous year.
+ In the Quarterly Financial Report for the first quar- ter, the outlook for the current year is taken up and, if necessary, adjusted. The outlook uses the same quali- tative classification as the Financial Report.
+ In the Half-yearly Financial Report the outlook is quantified for the first time and ranges are speci- fied for the expectations regarding revenues, ebitdA, operating earnings ebit i, Group earnings and earn- ings per share.
+ In the Quarterly Financial Report for the third quarter, the ranges are, if necessary, adjusted and narrowed for the current year. Furthermore, the qualitative out- look of the Financial Report for the following year is taken up again and, if necessary, changed.
k+s grouP with attractive ProsPects
In 2011, rEvEnuES Should IncrEaSE tanGIBly In
coMParISon wIth thE PrEvIouS yEar’S fIGurE
Following the estimates in the outlook for the third quarter of 2010 and against the background of the posi- tive demand and price trends emerging at the end of the year and during the course of the first quarter of2011, revenues of the K+S group should rise tangibly in financial year 2011 against the previous year (previ- ously: moderately). While in the Potash and Magnesium Products business segment we are assuming a tangi- ble increase in revenues and, in the Nitrogen Fertilizers business segment, a significant (previously: slight) one, in the Salt business segment we expect a stable (previ- ously: moderately declining) revenue level. The revenue forecast assumes an average uS dollar exchange rate of 1.35 uSd/eur (2010: 1.33 uSd/eur).
coStS wIll ProBaBly rISE tanGIBly, But By a
lowEr ProPortIon
The following forecast of the development of costs is structured by cost type: The total costs of the K+S group should rise tangibly year on year. As far as personnel expenses are concerned, in light of a slightly higher number of employees and the most recent higher pay settlements under collective bargaining agreements, we anticipate a tangible increase. Energy and freight costs too should rise tangibly and significantly, respectively, in relation to the preceding year. Finally, higher input prices will probably also result in a significant increase in material costs. We expect depreciation/amortisation charges to be at a moderately higher level.
oPEratInG EarnInGS lIKEly to rISE
SIGnIfIcantly
For the financial year 2011, we are forecasting signifi- cantly higher operating earnings ebit i in comparison to last year’s figure. This is primarily due to the expected
significantly higher earnings in the Potash and Magne- sium Products business segment as well as a moderate (previously: tangible) improvement in operating earn- ings in the Nitrogen Fertilizers business segment. On the other hand, the operating earnings of the Salt business segment will probably fall moderately (previously: sig- nificantly). On the basis of our uS dollar estimate of 1.35 uSd/eur (average rate for 2010: 1.33 uSd/eur) this does not result in a material currency-related effect.
GrouP EarnInGS aftEr taxES wIll ProBaBly
IMProvE SIGnIfIcantly
In 2011, the adjusted Group earnings after taxes should also be significantly higher in line with the develop- ment of operating earnings. Our projection is based not only on the effects described for revenues and operat- ing earnings, but also on the following circumstances expected from today’s perspective:
+ a significantly better financial result, after this was negatively impacted by special effects in 2010; + a domestic Group tax rate of 28.2 % and an adjusted
Group tax ratio of about 26 to 27 % (2010: 26.2 %).
forEcaSt for 2012 alSo PoSItIvE
In 2012, revenues will probably develop in a largely sta- ble manner in comparison to the previous year. Mod- erately higher revenues in the Potash and Magnesium Products business segment will probably be accompa- nied by stable revenues in the Nitrogen Fertilizers busi- ness segment and moderately lower revenues in the Salt business segment. Owing to the high profitability of the
154 4.13 forecast report
Potash and Magnesium Products business segment, for operating earnings we see realistic opportunities for a moderate increase year on year, which should also have a correspondingly positive impact on the adjusted Group earnings after taxes.