K+S Aktiengesellschaft

Welcome to the KMS first quarter 2025 learning score. My name is James and I'll be your ethical webinar host. Please note that all attendees are in a listen-only mode until the Q&A portion of the call, at which point you'll have an opportunity to ask questions live. I will now hand over to Julia from KMS for some technical notes.

Ladies and gentlemen, also from my side, welcome to our call. We hope you've had a chance to review our posted slides as well as our Q1 documents available on our website. After the opening remarks by Christian Meyer, we will jump directly into the Q&A session. Some technical notes. Please refer to our disclaimer on page two of the presentation. A note on data privacy. Please be aware that the team session will be recorded, webcast, and available as an audio replay on our homepage afterwards. People who ask a question in the team session should be clear that by switching on their camera and microphone, they agreed to the recording and replay of video and audio sequences. Before we start into the opening remarks of our quarter, I would like to tell you that our IR team member, Natalie Frost, is moving on within K plus S. She will be heading our forecast and planning department as part of the controlling department from June onwards. Also, I will miss her a lot. I'm very proud that she will do this step. I enjoyed working with Natalie very much. Thank her a lot for all her efforts and wish her all the best in the new role. Now, I would like to hand over to Christian Meyer, our CEO as of June, for the opening remarks.

Thank you, Giga. And welcome from my side as well. As we announced at the end of April, first quarter EBITDA and pre-cash flow are significantly above our annual expectations. This was driven by the higher ASP in agriculture, our strong production performance leading to a positive inventory effect and lower than expected costs. We are very happy with the spring season, facing strong global demand for potash and limited supply. Therefore, we have also raised our previous expectations for the full year. We now expect EBITDA to range between 560 and 640 million euros. This corresponds to a 40 million euro increase of the midpoint to 600 million euros. For this, we assume that the price level achieved in Brazil at the end of April will continue to have a positive spillover effect on other markets and product groups. In addition, this level needs to be maintained on average in the second half of the year. For the upper end, prices would need to increase further. Now we expect free cash flow to be slightly positive in 2025, despite the planned elevated capex. Just to give you a sense of the phasing of figures for the rest of the year. Keep in mind that Q1 and Q4 are our strongest quarters due to seasonality in both business segments. As a maintenance quarter, Q3 typically has the weakest EBITDA contribution. Q2 is normally better than Q3, but significantly below Q1 or Q4 levels. For this year's phasing, please also note that Q1 benefited from the positive inventory effect, and Q2 will see an inventory reduction. This alone should result in a double-digit million-euro swing between the quarters. In addition, Q2 will see higher personal costs, as the collective bargaining agreement was concluded as of April 1st. On the other hand, we will see positive price effects. I'm looking forward to answering your questions together with my colleague, Jens Christian Coyten, our CSO as of June, and together with Julia from Investor Relations. Now, I will hand over to the operator to start the Q&A session.