K+S Aktiengesellschaft

Ladies and gentlemen, welcome to the KplusS Q3 2023 earnings call. We hope you had a chance to review our posted slides as well as our Q3 documents available on the website. After some opening remarks by Dr. Lohr, we will directly jump into Q&A. Some technical notes. Please refer to our disclaimer on page 2 of the presentation. Then a note on data privacy. Please note that the Teams session will be recorded, webcasted and be available as a replay on our homepage afterwards. People asking a question in the Teams session have to be aware that by turning on their camera and microphone, they give consent to saving and replaying video and audio sequences. Now, I would like to turn over to Dr. Lohr for the opening remarks.

Thank you, Julia. Good morning and welcome to our Q3 earnings discussion. After my opening remarks, we will directly start with the Q&A and I will answer your questions together with my colleague Christian Meyer, our CFO. Overall, Q3 was a solid quarter that performed somewhat better than initially expected. We saw a significant increase in demand This enabled a significant volume increase in our agriculture customer segment and finally resulted in the expected price recovery in the important overseas market of Brazil. In Europe, prices have even stabilized on a more attractive level. For 2023 as a whole, we confirm our forecasts for EBITDA and free cash flow. That means we continue to expect the EBITDA to be between 600 and 800 million euros and the free cash flow to range between 300 and 450 million euros. I want to provide you with some details around our new distribution strategy. Shareholder participation will be linked to the free cash flow and we want to return 30-50% of that figure to our owners. This will be done via dividend, which can be combined with a share buyback, if appropriate. The possible combination of both instruments should also reduce dividend volatility. During the last weeks, there was some fuss about the supply-demand situation of the world potash market in the upcoming years. Therefore, I would like to share our view on this. You should see a slide now to illustrate these thoughts. It shows that if you apply an annual demand growth of 2.5%, which is the current IFA forecasts, the market will need substantial volume additions to the upcoming years to supply this growth. Even if Phase 1 and 2 of BHP Jensen will come on stream in time, and assuming half of the 11 million tons of capacity extension that Russia and Belarus has announced before the war will be seen, there will be an attractive capacity utilization on the world potash market. And this assumes no capacity will have disappeared from the market until then. You see, we are talking about a balanced situation. Thank you.

Thank you very much, Dr. Lohr. Now we would like to start the Q&A session. If you would like to ask a question, please use the hand signal and write your name and the name of your research house in the MS Teams chat function. We will then call you individually and you can address your questions to us live. Please switch on your camera. One more request as usual. We would like to answer your questions one by one. So if you have multiple questions, please ask one question at a time and we will answer it first. After that, you will have the opportunity to ask further questions. The first question comes from Alexander Jones from Bank of America.