K+S Group Compendium May 2020 11.05.2020 K+S Group K+S at a Glance Group financials 2019 Revenues EBITDA EBITDA-Margin Earnings after taxes, adj. € 4.07 billion € 640 million 16% € 78 million OU Europe+: Revenues: € 2.54 billion; EBITDA: € 437 million; Margin: 17% OU Americas: € 1.53 billion; EBITDA: € 230 million; Margin: 15% Customer Segments Agriculture Industry Consumers Communities 18% 42% Revenues Revenues 12% Revenues Revenues € 1.72 billion 28% € 1.15 billion € 0.48 billion € 0.72 billion EBITDA EBITDA EBITDA 15% EBITDA 46% 9% € 295 million € 218 million € 60 million € 94 million Margin 17% 34% Margin 19% Margin 12% Margin 13% 3 11.05.2020 K+S Compendium May 2020 Global Presence¹ 1 Revenues by regions 2019 40 % 36 % 3% 9 % 13 % Employees by region 2019 69% 22 % 5 % 3 % 1% Germany North South Rest of Asia America America Europe 4 11.05.2020 K+S Compendium May 2020 Customer Focus in New Organization Production Customer focus focus 2019 EBITDA Revenue share margin • Potassium chloride (MOP) • Fertilizer specialities ~42% 17% Agriculture • Chemical • Oil and Gas • Pharma • Water Softening Potash Salt ~28% 19% • Food • other Industrial Industry • Animal Nutrition products + • Culinary • Water and Pool ~12% 12% • Ice Melt Consumers • De-icing bulk • De-icing packaged ~18% 13% Communities 5 11.05.2020 K+S Compendium May 2020 Adding value along our entire supply chain Exploration Our potash and salt deposits came into being millions of years ago. They are either our property or we have corresponding rights or approvals that allow the extraction or solution mining of the raw material reserves. Mining We extract raw materials in conventional mining above and below ground as well as through solution mining. We also use the power of the sun and extract salt by evaporating sea water or saline water. Production The refining of raw materials is one of our core competencies. Above ground, the crude salt is processed in complex, multi-phase, mechanical or physical processes, with the natural properties of the mineral remaining unchanged. Logistics The long-term securing of freight capacity is of strategic importance to us. A large part of our international transport volume is forwarded by service providers with which we maintain long-standing partnerships. Sales/Marketing The K+S Group wants to be its customers’ preferred partner in the market. High product quality and reliability are decisive preconditions for this. K+S offers a comprehensive range of goods and services for agriculture, industry and private consumers. Application Our customers apply our products, use our raw materials in their processes or process them in their products. We make extensive product information available and advise our customers on the application of our products. 6 11.05.2020 K+S Compendium May 2020 Refocusing of the BoED to implement value enhancing measures Dr. Burkhard Lohr, CEO, will Mark Roberts will focus on the additionally assume responsibility Operating Unit Americas and the for managing the Operating Unit transactions required for the Europe+ on the Board of Executive implementation of the value enhancing Directors. This underlines the measures already adopted. importance of the measures to leverage synergies, strengthen technical and operational excellence and achieve future-oriented solutions in the environmental area. Thorsten Boeckers, CFO, will Fabiola Fernandez Grund has been continue to be responsible for appointed by the Supervisory Board the finance organization, i.e. of K+S AG as a new member of the Treasury, Controlling, Tax, Internal BoED. Upon assuming her new role, Audit, Procurement. she will become Labor Relations Officer and take on responsibility for the areas of IT as well as Operations and Technical Excellence Center. 7 11.05.2020 K+S Compendium May 2020 Active Portfolio Management Salt Salt Salt Salt Salt Salt Acquisition Foundation Acquisition Acquisition Acquisition Acquisition Ashburton Salt 1999 2000 2002 2006 2009 2011 2012 2016 2017 Fertilizer Fertilizer Fertilizer Fertilizer Fertilizer Fertilizer Fertilizer Acquisition Acquisition Acquisition Divestment Divestment Acquisition Acquisition 8 11.05.2020 K+S Compendium May 2020 Key Financials Revenues (€ billion) EBITDA (€ million) 1.058 4,2 4,0 4,1 3,5 3,6 606 640 519 577 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 EBITDA-Margin (%) FCF vs Net Financial Debt/EBITDA 5.2 4.9 4.6 5.3 25 +140 -206 -390 15 16 15 16 -636 -777 1.3 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 9 11.05.2020 K+S Compendium May 2020 Shaping 2030 Strategy We will be the most customer-focused, independent minerals company 'One K+S' ... thinking and acting as 'One K+S' and realizing synergies between our businesses Tapping the full potential of our existing assets ... and establish the most value-creating portfolio combination Exploring new adjacent growth areas ... pursuing growth by venturing into new markets where Agriculture Industry we can use our existing capabilities Communities Consumers Increasing the share of our specialties business ... to ensure an overall stabilized performance and reduce our dependency on standard products and weather 10 11.05.2020 K+S Compendium May 2020 We will implement our strategy in two phases Phase 1: Transformation Phase 2: Growth 2017 2020 2030 Reduce indebtedness Tapping the full potential of our existing assets Realize synergies Exploring new adjacent growth areas Advance corporate culture Increased share of specialties Shaping the organization and focusing towards our clients 11 11.05.2020 K+S Compendium May 2020 Phase I: Building a basis for our growth options Divisional Silos Matrix Board of ExecutiveMatrix Directors COO Group CEO Group CFO Group Board of Executive Directors Head of Human Head of Head of Head of Corporate Corporate Corporate Resources Development Controlling Communication Salt Potash s CEO Americas CEO Europe+ Agriculture Industry Communities Consumers KALI KSPC Head of Marketing, Agriculture NA LA EU GmbH Sales & Supply Chain Excellence Industries Costumer Marketing & Sales Segments Committee Consumers Communities Head of Operations Operations Excellence Operations Excellence Committee Operating Unit Function Executive Committee 12 11.05.2020 K+S Compendium May 2020 Synergies SHAPING 2030 Sponsor Synergies YE 2020 (vs. 2017) SG&A Optimization CEO ~ €30m Operations COO > €50m Leverage Procurement CFO > €30m synergies Supply Chain and Logistics COO > €20m Commercial Excellence COO > €20m ∑ > €150m 13 11.05.2020 K+S Compendium May 2020 Shaping 2030 EBITDA impact Costs Synergies > €150m 2018e 2019e 2020e Total costs for synergy program: ~ €150m (end of 2020) 14 11.05.2020 K+S Compendium May 2020 Phase II: Important megatrends 8.5bn 0,2 Global population in Average global warming (ºC) 2030 ▪ Arable land shrinking ▪ Yield needs to be improved Today: 7.3bn Per decade ▪ Higher efficiency of fertilization and irrigation needed Implications for K+S ▪ Plants have to be more stress resistent ▪ Infrastructure needs to be 40 % 5.4bn improved → focus on renewable of population suffer from people belonging to energy water shortage by 2030 the middle class by 2030 ▪ Growing population, especially in Asia, needs more salt for various purposes 70% of water used 2015: 3.0bn for agriculture 15 11.05.2020 K+S Compendium May 2020 Growth Areas K+S Growth Landscape Geo-expansion Fertilizer Industry Africa Increase of fertilizer specialties Expand Pharma & Food portfolio Asia Ramp of low-cost commodities Chemical applications Growth areas and ideas cover core and adjacent businesses 16 11.05.2020 K+S Compendium May 2020 K+S sustainability KPIs and targets 2030 – People Target by Goal KPI 2018 2019 2030 at the latest Health & 0 Lost time incident rate (LTIR) 8.5 10.3 Safety Vision 2030 Diversity & Employees’ favorable perception of inclusive 68 (2015) 54 >90 Inclusion work environment (percent) People Sites covered by a human rights due diligence Human Rights 0 8 100 process (percent) 17 11.05.2020 K+S Compendium May 2020 K+S sustainability KPIs and targets 2030 – Environment Target by Goal KPI 2018 2019 2030 at the latest Deep-well injection of saline waste water in 1.2 1.5 0 starting January Germany (m³ p.a.) 2022 Water -500,000 Additional reduction of saline process water +400,000 +800,000 excluding reduction from potash production in Germany (m³ p.a.) by KCF facility and end of production SI Amount of residues used for other purposes than tailings or increased amount of raw 1.0 1.5 3 Waste material yield (million tons p.a.) Environment Additional area of tailings piles covered (ha) 5.9 8.7 155 Carbon footprint for power consumed (kg -1.5 -1.7 -20 Energy & CO2/MWh) (percent) Climate Specific greenhouse gas emissions (CO ) in 2 -2.0 -11.1 -10 logistics (percent) 18 11.05.2020 K+S Compendium May 2020 K+S sustainability KPIs and targets 2030 – Business Ethics Target by Goal KPI 2018 2019 2030 at the latest Critical suppliers aligned with the K+S Group 100 14.7 23.3 Supplier Code of Conduct (SCoC) (percent) by end of 2025 Sustainable Supply Chains Spend coverage of the K+S Group SCoC > 90 29.4 44.9 (percent) by end of 2025 Business Compliance & All employees reached by communication 100 Anti- measures and trained appropriately in 70.9 100 Corruption compliance matters (percent) by end of 2019 19 11.05.2020 K+S Compendium May 2020 Customer Segments ▪ Agriculture ▪ Industry ▪ Consumers ▪ Communities Long-term dynamics in demand for our Customer Segments Customer Segments Demand driven by … Arable land shrinking Water shortage Increasing standard of