The Consolidated Financial Statements’

SHAPING THE FUTURE Forecast Annual Forecast Forecast Forecast Actual Outlook Report Q/ H/ Q/ K+S Group Revenues billion tangible increase tangible increase . – . – . tangible increase EBITDA¹ million tangible increase tangible increase – – . signi cant increase ¹ Adjusted for the depreciation and amortisation amount not recognised in pro t and loss in the context of own work capitalised. March 2017 May 2017 June 2017 August 2017 October 2017 November 2017 December 2017 Commissioning Ceremonial Bethune mine K+S opens new Ambitious growth Bethune Potash K+S and of two additional opening of the produced rst potash port facility strategy to 2030 Plant – First ship Gerstungen storage basins – new potash tonnes of potash in Vancouver introduced delivered potash municipality agree Production at mine in Canada from Canada on a settlement the Werra plant to customers stabilised further New Board of Executive Directors K+S and BUND team, led by agree on a Dr Burkhard Lohr, settlement intends to promote dialog Sigmundshall Potash mine – Termination of production operations at the end of 2018 About this report: Published on: March mation with internal and external stakeholders. Content with respect Reporting period: January to December to sustainability was prepared in accordance with version G of the Global Reporting Initiative ‘core option’ and considers sector This Annual Report combines the Financial Report with the Sustain- G Sector Disclosures: Mining and Metals. Simultaneously, the Annual ability Report. In this way, we present various dimensions of economic Report serves as the so-called Communication on Progress for the sustainability, which takes appropriate account of ecological and social Global Compact, which the board expressly committed. interests. Statements regarding substantial sustainability issues are included in the combined management report. In accordance with the In the event of any doubt, the German version of the annual report German implementation act to the European Corporate Social Respon- will prevail. sibility Directive , statements on material sustainability issues are contained in the non- nancial statement part of the combined management report, or refer to other non- nancial issues described in the management report. Statements have been reviewed externally Key (please also note the Auditor’s Report). The following icons in this report refer to additional information: We follow the recommendations of the International Integrated = Cross-references within the Annual Report Reporting Council and use the work process to exchange infor- = References to internet sites TO OUR SHAREHOLDERS COMBINED MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS FURTHER INFORMATION Ten-year summary + U . Responsibility Statement from Units at a glance U the Legal Representatives of + . Remuneration Report . Preamble . Highlights . . The Board of Executive Directors . Income Statement . Supervisory Board Report . Statement of Comprehensive Income . + on the Capital Market . Balance Sheet . Statement of Cash Flows . Statement of Changes in Equity . Notes ¹ – Segment Reporting – Statement of Changes in Non-current . Company Pro le Assets – Group Legal Structure – Statement of Changes in Provisions – Value Creation – Other Notes – Employees – Research & Development Auditor’s Report . Non- nancial Statement – Business Model – Sustainability Management – People – Environment De nitions of Key Financial Indicators – Business Ethics -Index and Global Compact Principles . Declaration on Corporate Governance Glossary – Governing Bodies Index – Corporate Governance and Monitoring Financial Calendar, Online Service, Imprint . Corporate Strategy . Report on Economic Position – Overview of the Course of Business – Results of Operations – Financial Position – Net Assets – Presentation of Segments – Assessment of the Current Economic Situation by the Board of Executive Directors . Report on Risks and Opportunities . Report on Expected Developments . + (Explanations Based on the German ¹ The management report of K+S Aktiengesellschaft and the Group management report Commercial Code ()) have been combined for scal year 2017. - + - + ¹ Pro t and Loss Revenues million , . , . , . , . , . , . , . ,. , . , . – thereof Potash and Magnesium Products business unit million , . , . , . , . , . , . , . , . , . , . – thereof Salt business unit million . , . , . , . , . ,. , . ,. , . , . Earnings before interest, taxes, depreciation and amortisation EBITDA ² million , . . , . , . . . , . . . – thereof Potash and Magnesium Products business unit ² million , . . . . . . – thereof Salt business unit million . . . . . . . EBITDA margin % . . . . . . . Depreciation ³ million . . . . . . . . . Operating earnings (EBIT I) million , . . . . . . . . . – thereof Potash and Magnesium Products business unit million , . . . . . . . – thereof Salt business unit million . . . . . . . EBIT I margin % . . . . . – Potash and Magnesium Products business unit % . . . . – Salt business unit % . . . . . Group earnings from continued operations, adjusted million . . . . . . . Earnings per share from continued operations, adjusted . . . . . . Cash ow Operating Cash ow million . . . . . Capital expenditure ³ million . . . . , . , . , . . Adjusted Free Cash ow million . − . . . − . − . − . − . Balance Sheet Balance sheet total million , . ,. , . , . , . , . , . , . , . , . Equity million , . , . , . , . , . , . , . ,. ,. , . Equity ratio % . . . . . . Net debt as of 31 Dec. million . , . . . , . , . , . , . , . Net debt/EBITDA x . . . Working capital million . . . . , . . . . . . Return on Capital Employed ROCE % . . . . Employees Employees as of 31 Dec. number , , , , , , , , , , Average number of employees number , , , , , , , , , , The Share Book value per share . . . . . . Dividend per share . . . Dividend yield % . . . . Closing price as of 31 Dec. XETRA, . . . . . . . . . Market capitalisation billion . . Enterprise value as of 31 Dec. billion . . . . . Average number of shares million . . . . . . . . . . ¹ Unless stated otherwise, information refers to the continued operations of the K+S Group. The FTE: Full-time equivalents; part-time positions are weighted in accordance with their discontinued operations of the COMPO business are also included up to 2009, and also the respective share of working hours. discontinued operations of the nitrogen business up to 2010. The balance sheet and therefore The gure for 2017 corresponds to the dividend proposal; the dividend yield is based on the the key gures working capital, net indebtedness, net indebtedness/EBITDA and book value year-end closing price. per share also include in 2010 the discontinued operations of the COMPO business and in 2011 The price of the K+S share since the capital increase in December 2009 has been traded ex also the discontinued operations of the nitrogen business. subscription right. Historical values were not adjusted. ² Adjusted for the depreciation and amortisation amount not recognised in pro t and loss in Total number of shares less the average number of own shares held by K+S. the context of own work capitalised. ³ Concerns cash investments as well as depreciation of property, plant and equipment and In this Annual Report rounding di erences may arise in percentages and numbers. amortisation of intangible assets, taking claims for reimbursement from claim management into account. The adjusted key gures only include the result from operating forecast hedges of the respective reporting period reported in EBIT I (see also ‘Notes to the income statement and the statement of comprehensive income’ on page 133). In addition, related e ects on deferred and cash taxes are eliminated; tax rate for 2017: 29.9 % (2016: 29.3 %). Q/ Q / H/ Q/ M/ Q/ FY/ € million Revenues . , . , . EBITDA ¹ . . . . EBIT I . . . Capital expenditure . . . . . ¹ Adjusted for the depreciation and amortisation amount not recognised in pro t and loss in the context of own work capitalised. Q/ Q / H/ Q/ M/ Q/ FY/ € million Revenues . . . . ,. . , . EBITDA . . . . . EBIT I . . . . . . . Capital expenditure . . . Q/ Q / H/ Q/ M/ Q/ FY/ € million Revenues . . . . EBITDA . . . EBIT I . . . . . . . Capital expenditure . . . . Q/ Q / H/ Q/ M/ Q/ FY/ € million Revenues . EBITDA ‒ . ‒ . ‒. ‒ . ‒. ‒ . ‒ . EBIT I ‒. ‒. ‒ . ‒. ‒ . ‒ . ‒. Capital expenditure . . . + Q/ Q / H/ Q/ M/ Q/ FY/ € million Revenues , . . , . . , . , . , . EBITDA . . . . . . . EBIT I . . . . . . . Capital expenditure . . . . . . An eventful year lies behind us. It was a transition year for us. We made a start on tack- ling the future and removed obstacles from our path. Particularly, the development of our new Group strategy laid the foun- dations for the way we will steer our Company towards the future, with sustainability playing a key role. At the core of the strategy is a change in the way we view our activities. Whereas in the past we prioritized extraction of potash and magnesium products as well as salt, now we are sharpening our focus on the market and our customers. Agriculture, Industry, Consumers

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