K+S Aktiengesellschaft (SDF) Earnings Call Transcript & Summary

In the third quarter, we increased our revenues and operating earnings. Additionally, I have been in close contact with many of our stakeholders, especially politicians over the past few months. Overall, the third quarter was a typical maintenance quarter for us. In the agriculture customer segment, we achieved higher average prices compared to the previous quarter in both Europe and overseas markets. Adjusted free cash flow reached nearly EUR 62 million in the first 9 months of the year. We expect capacity utilization in the global potash market to remain high for the remainder of the year. As the financial year has progressed, we can now narrow our outlook. We expect EBITDA to range between EUR 570 million and EUR 630 million. The midpoint of the range remains unchanged. We have assumed stable price development in the agricultural business compared to current levels. We have slightly lowered our sales volumes forecast for the agriculture customer segment. This is due to reduced production and our deliberate optimization of our product mix, among other factors. We continue to expect slightly positive adjusted free cash flow in 2025. However, we still have the capital-intensive fourth quarter ahead of us. As a company, we are working hard to optimize our costs, structures and processes to strengthen K+S. I was on the road quite a bit in the third quarter meeting with our national and international stakeholders. This included customers, investors and politicians in particular. When it comes to politics, it is important to me to emphasize repeatedly that the extraction of raw materials in Germany needs much more support. Securing the supply of domestic raw materials is crucial, not only for agricultural production, but also for most industrial value chains. For instance, the German and European chemical industries depend on a reliable supply of our products. I'm committed to finally making serious progress in reducing excessive bureaucracy. The requirements that German companies must meet are stifling the economy, preventing investment and hindering efficient working practices. It is unacceptable that our company, a raw materials extraction firm based in Germany, often must wait years for crucial permits. This process must be faster, and it can be faster. Other countries such as Canada, where we also have production facilities are showing us how it's done. I'm committed to reducing energy costs. Both the German economy and K+S are suffering from high energy prices. The situation is so dramatic that the future of industry in our country is literally at stake. Without relief from gas, electricity and CO2 costs, the German economy will no longer be competitive. Politicians must understand this and remedy the situation immediately. [Statements in English on this transcript were spoken by an interpreter present on the live call.]