Half Year 2026 K+S AG Earnings Call

August 12, 2026

Speaker #1: Your line is muted.

Jens Christian Keuthen: Ladies and gentlemen, thank you for your patience. The conference will begin in a few moments.

Speaker #2: Ladies and gentlemen, thank you for your patience. The conference will begin in a few moments.

Speaker #1: Your line is muted.

Christian H. Meyer: Your line is muted.

Speaker #3: Welcome to the K+S second quarter 2026 earnings call. I will now hand over to Julia from K+S for some technical notes.

Operator 2: Welcome to the K+S Q2 2026 earnings call. I will now hand over to Julia from K+S for some technical notes.

Operator: Welcome to the K+S Q2 2026 Earnings Call. I will now hand over to Julia from K+S for some technical notes.

Speaker #2: 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 H1 documents available on our website.

Julia Bock: Ladies and gentlemen, also from my side, welcome to our call. We hope you have had a chance to review our posted slides as well as our H1 documents available on our website. After the opening remarks by Christian, we will jump directly into the Q&A session. Some technical notes. Please refer to our disclaimer on page 2 of the posted 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 Q&A should be clear that by switching on their camera and microphone, they agree to recording and replay of video and audio sequences. Now I would like to hand over to Christian, our CEO, for the opening remarks.

Speaker #2: After the opening remarks by Christian, we will jump directly into the Q&A session. Some technical notes: please refer to our disclaimer on page 2 of the posted presentation.

Speaker #2: And a note on data privacy: please be aware that the team's session will be recorded, webcast, and available as an audio replay on our homepage afterwards.

Julia Bock: 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 Q&A should be clear that by switching on their camera and microphone, they agree to recording and replay of video and audio sequences. Now I would like to hand over to Christian, our CEO, for the opening remarks.

Speaker #2: People who ask a question should note that by switching on their camera and microphone, they agree to the recording and replay of video and audio sequences. Now, I'd like to hand over to Christian, our CEO, for the opening remarks.

Speaker #4: Thank you, Julia. And a welcome from my side as well. Let's start with the quarter. Q2—every day was significantly above last year's Q2 at about €176 million.

Christian H. Meyer: Thank you, Julia, and welcome from my side as well. Let us start with the quarter. Q2 EBITDA was significantly above the last year's Q2 at about EUR 176 million. This was mainly due to the higher ASP, higher volumes, and cost discipline offsetting the pressure from price-related cost increases resulting from the geopolitical environment. In addition, please remember that we had part of the regular Bethune maintenance break in Q2 last year, and we will have it fully in Q3 this year. Therefore, this did not weigh on Q2 this year as it did in 2025. Furthermore, Q2 last year was burdened by negative non-cash valuation effects on receivables related to the US dollar. In the Industry+ segment, following the strong start into the year, performance continued to exceed expectations in Q2, even if seasonally on a lower level. Free cash flow.

Speaker #4: This was mainly due to the higher ASP, higher volumes, and cross-discipline offsetting the pressure from price-related cost increases resulting from the geopolitical environment. In addition, please remember that we had part of the regular Bethune maintenance break in Q2 last year, and we'll have it fully in the third quarter this year.

Speaker #4: Therefore, this did not weigh on the second quarter this year as it did in 2025. Furthermore, Q2 last year was burdened by negative non-cash valuation effects on receivables related to the US dollar.

Christian H. Meyer: Therefore, this did not weigh on Q2 this year as it did in 2025. Furthermore, Q2 last year was burdened by negative non-cash valuation effects on receivables related to the US dollar. In the Industry+ segment, following the strong start into the year, performance continued to exceed expectations in Q2, even if seasonally on a lower level. Free cash flow.

Speaker #4: In the Industry+ segment, following the strong start into the year, performance continued to exceed expectations in the second quarter, even if seasonally on a lower level.

Speaker #4: Free cash flow: Free cash flow reached €40 million. It improved versus last year, but not to the same magnitude as EBITDA, due to a higher tie-up in working capital, mainly receivables.

Christian H. Meyer: Free cash flow reached EUR 40 million. It improved versus last year, but not in the same magnitude as EBITDA due to a higher tie-up in working capital, mainly receivables. Let us look at the full year guidance. We raised our 2026 EBITDA forecast to range from EUR 680 million to EUR 760 million, compared to EUR 630 million to EUR 730 million before. This is mainly due to the strong performance in Q2. Midpoint is in line with Vara consensus. That shows that the positive deviation in Q2 results is mainly due to the periodical shift between Q3 and Q2, caused among others by the described Bethune maintenance effect. The midpoint of the EBITDA range assumes stable potash prices on average during H2, current market price levels for logistical costs, and a gas price of $45 US per megawatt hour.

Speaker #4: Let's look at the full-year guidance. We raised our 2026 EBITDA forecast to range from €680 to €760 million, compared to €630 to €730 million before.

Speaker #4: This is mainly due to the strong performance in the second quarter. The midpoint is in line with VARA consensus. That shows that the positive deviation in Q2 results is mainly due to a periodical shift between Q3 and Q2.

Christian H. Meyer: That shows that the positive deviation in Q2 results is mainly due to the periodical shift between Q3 and Q2, caused among others by the described Bethune maintenance effect. The midpoint of the EBITDA range assumes stable potash prices on average during H2, current market price levels for logistical costs, and a gas price of $45 US per megawatt hour.

Speaker #4: Also, among others, by the described Bethune maintenance effect. The midpoint of the EBITDA range assumes stable potash prices on average during H2, current market price levels for logistical costs, and a gas price of $45 per megawatt-hour.

Speaker #4: We also raised our free cash flow guidance from at least break-even to a mid to higher double-digit million euro amount, which is also in line with VARA consensus.

Christian H. Meyer: We also raised our free cash flow guidance from at least break even to mid to higher double-digit million euro amount, which is also in line with Vara consensus. After this brief introduction, I am now looking forward to answering your questions, with my colleagues, Jens and Julia. With this, I hand over to the operator to start the Q&A sessions.

Speaker #4: After this brief introduction, I’m now looking forward to answering your questions together with my colleagues Jens and Julia. With this, I hand over to the operator to start the Q&A session.

Speaker #3: Thank you, Christian. At this time, we will conduct the question-and-answer session. If you would like to ask a question, please press the raise hand icon at the top of your screen, provide your name and research house, and proceed with your question.

Operator 2: Thank you, Christian. At this time, we will conduct a question and answer session. If you would like to ask a question, please press the raise hand icon at the top of your screen and provide your name and research house and proceed with your question. One more request as usual, K+S would like to answer your questions one by one. If you have multiple questions, please ask one question at a time and K+S will answer it first. After that, you will have the opportunity to ask further questions. This brings us to the first question of Christian. Christian, please state your name and your research house, and proceed with your question.

Operator: Thank you, Christian. At this time, we will conduct a question and answer session. If you would like to ask a question, please press the raise hand icon at the top of your screen and provide your name and research house and proceed with your question. One more request as usual, K+S would like to answer your questions one by one. If you have multiple questions, please ask one question at a time and K+S will answer it first. After that, you will have the opportunity to ask further questions. This brings us to the first question of Christian. Christian, please state your name and your research house, and proceed with your question.

Speaker #3: One more request: As usual, K&S would like to answer your questions one by one. So if you have multiple questions, please ask one question at a time, and K&S will answer it first.

Speaker #3: After that, you will have the opportunity to ask further questions. This brings us to the first question from Christian. Christian, please state your name and your research house, and proceed with your question.

Speaker #5: Yes, thank you. Good morning, Christian, Jens, Christian, Julia, and team. Congratulations on the results. I have two and a half questions. I'll ask the first one.

Christian Faitz: Yes. Thank you. Good morning, Christian, Jens, Christian, Julia, and team. Congrats on the results. I have 2 and a half questions. I will ask the first one. First of all, how is the current demand in Brazil heading into the application season in your observation? What are your salespeople saying on the ground?

Speaker #5: First of all, how is the current demand in Brazil heading into the application season, in your observation? What are your salespeople saying on the ground?

Speaker #4: Yeah. Hi, Christian. In Brazil, we saw record imports and good application in the first half of the year. Currently, as we are in between this year's seasons, we see good inventories, but we expect at least normal demand in Brazil for the second half of the year.

Christian H. Meyer: Yeah. Hi, Christian. In Brazil, we saw in the H1 of the year record imports and good application. Currently, as we are in between the seasons, we see good inventories, but we expect for the H2 of the year, at least a normal demand in Brazil. What could have an impact is the challenge with phosphate. That could be that the application of potash as it is the most affordable nutrient compared to the others, it could change the NPK formula a little bit. For Brazil, we are optimistic for the sector.

Speaker #4: And also, what could have an impact is, yeah, the challenge with phosphate. That could be that the application of potash, as it is the most affordable or affordable nutrient compared to the others, could change the NPK formula a little bit.

Speaker #4: So, for Brazil, we are optimistic for the second half.

Speaker #5: Very good. Now, my follow-up question. I admit it's a bit far-fetched, but is there a risk that, due to the extreme drought we've seen in Europe, some crops, such as corn, might not have taken up the full amount of potash applied this year?

Christian Faitz: Okay, great. Now my half question.

Christian H. Meyer: Yeah.

Christian Faitz: I admit it is far-fetched, but is there a risk that due to the extreme drought we have seen in Europe

Christian H. Meyer: Yes

Christian Faitz: some cultures such as corn might not have taken up the full amount of potash toppings given this year, hence farmers might be incentivized to take a potash holiday in 2027 in Europe?

Speaker #5: And hence, farmers might be incentivized to take a potash holiday in ’27, in Europe.

Speaker #4: No, that's currently not our expectation. Yes, we have a drought in Europe, but in different regions, it's totally different. We just discussed it this morning.

Christian H. Meyer: No, that is currently not our expectation. Yes, we have drought in Europe, but in different regions it is totally different. We just discussed it this morning. Even if you just go 50 kilometers to the north from Kassel, the corn is pretty good. In Kassel it is not as good, but we do not expect that will have an impact on the application of potash in Germany.

Speaker #4: Even if you just go 50 kilometers to the north from Kassel, the corn is pretty good. In Kassel, it's not as good, but we don't expect that it will have an impact on the application of potash in Germany.

Speaker #2: And Christian, don't forget: potash is the nutrient that is responsible for water stress in plants, so it helps the plants to withstand water stress.

Julia Bock: Christian, do not forget, potash is the nutrient that is responsible for water stress in plants, so it helps the plants to stand water stress. So the farmer who has not applied potash very well will see that the next field, where the farmer has applied potash very well, is better off. So maybe he has also then learned from that.

Speaker #2: So, the farmer who has not applied potash very well will see that the next field, where the farmer has applied potash very well, is better off.

Speaker #2: So maybe he has also then learned from that.

Christian Faitz: Well, this year is clearly a stress test indeed. Now my final and third question.

Speaker #5: Well, I mean, this year is clearly a stress test indeed. Yeah. Now, my final and third question.

Speaker #4: Yeah.

Christian H. Meyer: Yes.

Speaker #5: Can you elucidate a bit—indeed, talking about low water levels—how they affect production, in your minds, particularly in Unterbreizbach? I'm aware that you might have.

Christian Faitz: Can you elucidate a bit, indeed, talking about low water levels, how they affect production in your mines, particularly in Unterbreizbach? I am aware that you might have-

Speaker #4: Yeah.

Christian H. Meyer: Yes

Speaker #5: At some point, cooling water issues, or not. Can you elucidate this a bit? Thanks.

Christian Faitz: at some point, cooling water issues or not. Can you elucidate this a bit? Thanks.

Speaker #4: Yes. As we see low water levels in nearly every river in Germany, we also see this in the Werra and the Ulster River, close to our Werra site.

Christian H. Meyer: Yes. As we see low water levels in nearly every river in Germany, we also see this in the Werra, in Ulster River, close to our Werra site. And we need cooling water for our production process. As long as we have the wet production process, we switch to a dry process with the Werra 2060. So until 2028, the mid of 2028, we closely monitor every time the levels in the rivers. And that could have an impact, but we are monitoring this pretty close. And that is with the cooling water we need. With regard to saline water, we do not have any impact. We do not expect any impact because we are well-prepared.

Speaker #4: And we need cooling water for our production process as long as we have the wet production process. We switch to a dry process with the Werra 2060.

Speaker #4: So until 2028, the middle of 2028, we closely monitor every time the levels in the rivers. And yeah, that could have an impact, but we are monitoring that pretty closely.

Speaker #4: And that's with the cooling water we need. With regard to saline water, we don't have any impact. We don't expect any impact because we are well prepared.

Christian Faitz: Okay, great. Thanks very much.

Speaker #4: Yeah. Thanks to you, Christian.

Christian H. Meyer: Yeah, thanks to you, Christian.

Speaker #3: Thank you very much, Christian. Our next question comes from the line of David. David, please state your name and research house, and proceed with your question.

Operator 2: Thank you very much, Christian. Our next question comes from the line of David. David, please state your name and research house and proceed with your question.

Operator: Thank you very much, Christian. Our next question comes from the line of David. David, please state your name and research house and proceed with your question.

Speaker #6: Hi. Good morning. Thank you very much. It's David Simmons from BNP Paribas. Could I ask—it looked like de-icing was still above last year into Q2, which presumably is some inventory rebuild?

David Simmons: Hi. Good morning. Yeah, thank you very much. It is David Simmons from BNP Paribas. Could I ask, it looked like de-icing was still above last year into Q2, which presumably is some inventory rebuild. First question, could you tell me where you think inventories are for de-icing into next season?

David Symonds: Hi. Good morning. Yeah, thank you very much. It is David Simmons from BNP Paribas. Could I ask, it looked like de-icing was still above last year into Q2, which presumably is some inventory rebuild. First question, could you tell me where you think inventories are for de-icing into next season?

Speaker #6: First question: Could you tell me where you think inventories are for de-icing going into next season?

Speaker #4: Yes. We have also, on a lower level, because we are not in the de-icing season in Q2, but we still have good demand, and the inventories are pretty low.

Christian H. Meyer: Yes. We have also on a lower level because we are not in the de-icing season in Q2, but we still have a good demand, and the inventories are pretty low. We expect for the rest of the year, with the refill orders, and also if we have a normal winter, just a normal de-icing demand, because there are no buildup of inventories at the other side.

Speaker #4: So we expect, for the rest of the year, with the refill orders and also, if we have a normal winter, just a normal de-icing demand.

Speaker #4: Because they are now built up of inventories on the other side.

Speaker #6: Thanks. I was also wondering whether there might be a shortfall of inventories into next season, which would have to continue to be rebuilt at the end of this year.

David Simmons: Thanks. I was also wondering whether there might be a short pool of inventories into next season.

David Symonds: Thanks. I was also wondering whether there might be a short pool of inventories into next season.

Christian H. Meyer: Yeah

David Simmons: which would have to continuously rebuild at the end of this year. I do not know if you think that is the case.

David Symonds: which would have to continuously rebuild at the end of this year. I do not know if you think that is the case.

Speaker #6: I don't know if you think that's the case.

Speaker #2: I think most of the catch-up was done in Q2.

Julia Bock: I think most of the catch-up was done in Q2.

Christian H. Meyer: Q2.

Speaker #4: Q2.

Speaker #2: Yeah.

Julia Bock: Yeah.

Speaker #6: Okay, understood. Thank you. And then, back on the Werra River situation—could you remind us: obviously, 2022 was a very different market in terms of price levels for potash.

David Simmons: Okay. Understood. Thank you. Back on the Werra river situation,

David Symonds: Okay. Understood. Thank you. Back on the Werra river situation,

Christian H. Meyer: Yeah

David Simmons: could you remind, obviously 2022 was a very different market in terms of price levels for potash. Is there any guidance you can give on if we saw a repeat of the 2022 shutdown? Firstly, could you remind whether that was saline water and cooling or if it was just cooling again? Secondly, is there anything you can say on the size of that impact at today's potash prices?

David Symonds: could you remind, obviously 2022 was a very different market in terms of price levels for potash. Is there any guidance you can give on if we saw a repeat of the 2022 shutdown? Firstly, could you remind whether that was saline water and cooling or if it was just cooling again? Secondly, is there anything you can say on the size of that impact at today's potash prices?

Speaker #6: Is there any guidance you can give on, if we saw a repeat of the 2022 shutdown—firstly, could you remind me whether that was saline water and cooling, or if it was just cooling again?

Speaker #6: And secondly, is there anything you can say on the size of that impact at today's potash prices?

Julia Bock: There was no shutdown in 2022. The last shutdown we had was in 2018.

Speaker #2: There was no shutdown in 2022. The last shutdown we had was in 2018, and that was fully related to salt water disposal things. And that is why we improved salt water management afterwards that much.

David Simmons: Yeah.

David Symonds: Yeah.

Julia Bock: That was fully related to salt water disposal things, that is why we improved salt water management that much.

Speaker #6: Understood. Okay. I think I'm mentioning 2022 because, in your annual report, you say if we see a repeat of the 2022 situation, there could be a shutdown or some impact.

David Simmons: Understood. Okay. I think I am mentioning 2022 because in your annual report, you say if you see a repeat of the 2022 situation, there could be a shutdown or some impact.

David Symonds: Understood. Okay. I think I am mentioning 2022 because in your annual report, you say if you see a repeat of the 2022 situation, there could be a shutdown or some impact.

Speaker #2: Well, like I said, there was no "maybe"—we said if there would be a repeat of the 2018 situation. But to be honest, we have implemented so many measures after 2018 that basically, we always said if there comes another dry season like that, we would not have an impact.

Julia Bock: No. Like I said, maybe we said if there would be a repeat of the 2018 situation. To be honest, we have implemented so many measures after 2018 that basically we always said if there comes another dry season like that, we would not have an impact. Maybe that due to one allowance we were waiting for, I am not sure, but the last shutdown related to it was 2018.

Speaker #2: Maybe that was due to one allowance we were waiting for. I'm not sure, but the last shutdown related to it was in 2018.

Speaker #6: Understood. Okay. Thank you very much.

David Simmons: Understood. Okay. Thank you very much.

David Symonds: Understood. Okay. Thank you very much.

Speaker #4: No worries.

Christian H. Meyer: You are welcome.

Speaker #3: Thank you very much, David. Our next question comes from the line of Michael. Michael, please state your name and your research house, and proceed with your question.

Operator 2: Thank you very much, David. Our next question comes from the line of Michael. Michael, please state your name and your research house and proceed with your question.

Operator: Thank you very much, David. Our next question comes from the line of Michael. Michael, please state your name and your research house and proceed with your question.

Speaker #6: Hey, good morning, all. Michael Schiff here from Auto BHF. First question is on relative pricing—MOP versus specialty. So, I'm really looking for your netback plans and production plans into the second half.

Michael Schaefer: Hey, good morning, all. Michael Schaefer from Oddo BHF. First question is on relative pricing, MOP versus specialty. I am rather looking for your netback plans and production plans into H2. How do you see or how do you do the planning? What is the kind of, is this rather MOP-centric, or are you rather focusing on specialties? How should we think about the netback planning for H2 and the output?

Michael Schäfer: Hey, good morning, all. Michael Schaefer from Oddo BHF. First question is on relative pricing, MOP versus specialty. I am rather looking for your netback plans and production plans into H2. How do you see or how do you do the planning? What is the kind of, is this rather MOP-centric, or are you rather focusing on specialties? How should we think about the netback planning for H2 and the output?

Speaker #6: How do you see or how do you do the planning? So, is this rather MOP-centric, or are you rather focusing on specialties?

Speaker #6: How should we think about the netback planning for the second half and the output?

Speaker #4: Yeah. As you know, we are permanently optimizing our netbacks with our production mix. And what's very important is that, including in our rock salts at the Werra site, there's included potash, sulfur, and magnesium.

Christian H. Meyer: Yes. As you know, we are permanently optimizing our netbacks with our production mix. What is very important, that including in our rock salt at the Werra site, that has included potash, sulfur, and magnesium. So we optimize our netback if we produce SOP on the one hand, or if we produce MOP and Kieserite. Kieserite is a sulfur magnesium product on the other hand. So we optimize if we get a higher netback in Kieserite or in SOP for the sulfur, especially due to the good price development in sulfur. So that is finally a week-by-week decision.

Speaker #4: And so we optimize our netback if we produce SOP on the one hand, or if we produce MOP and kieserite. Kieserite is a sulfur magnesium product.

Speaker #4: On the other hand, we optimize if we get a higher net back in kieserite or in SOP. For the sulfur, especially due to the good price development in sulfur.

Speaker #4: And so that's finally a week-by-week decision.

Speaker #6: Okay. Second question is on your outlook statement. At the midpoint, you are still baking in something like €45 per megawatt-hour net gas price for the remaining 30% open exposure.

Michael Schaefer: Okay. Second question is on your outlook statement. At the midpoint, you are still baking in something like EUR 45 per megawatt hour, net gas price for the remaining 30% open exposure.

Michael Schäfer: Okay. Second question is on your outlook statement. At the midpoint, you are still baking in something like EUR 45 per megawatt hour, net gas price for the remaining 30% open exposure.

Speaker #6: So I wonder—I mean, currently we have 60 at spot. However, we are below 40 at one year forward. So I wonder how you see kind of gas price risk on your side, or gas cost risk, let's say, heading into '27.

Christian H. Meyer: Yeah.

Michael Schaefer: I wonder, currently we have 60 at spot. However, we are below 40 at one year forward. I wonder how you see gas price risk on your side or gas cost risk, let's say, heading into 2027, how your hedging looks like and how you are progressing here.

Michael Schäfer: I wonder, currently we have 60 at spot. However, we are below 40 at one year forward. I wonder how you see gas price risk on your side or gas cost risk, let's say, heading into 2027, how your hedging looks like and how you are progressing here.

Speaker #6: So, are you hedging, it looks like? And how are you progressing here?

Speaker #4: What's very important is what you just mentioned: we only have an open position of 30%, while 70% are hedged. We only have half a year to go until the end of the year.

Christian H. Meyer: Very important is what you just mentioned, that we only have an open position of 30%. 70% are hedged. We only have a half year to go until the end of the year. Yes, we included EUR 45 per megawatt hour for our midpoint, the volatility which also addressed that we also expect for the H2. But even if you calculate the currently EUR 60 for the rest of the year, that would have an impact of a middle one-digit million euro amount to our calculations. We are well positioned with our gas hedge strategy.

Speaker #4: Yes, we included €45 per megawatt-hour for our midpoint. The volatility would also address what we expect for the second half of the year.

Speaker #4: But even if you calculate the 60 currently 60 euros for the rest of the year, that would have an impact of a middle one-digit million euro amount to our calculations.

Speaker #4: So, we are well positioned with our gas-hedged strategy.

Speaker #6: And '27 hedging so far?

Michael Schaefer: 2027 hedging so far?

Michael Schäfer: 2027 hedging so far?

Speaker #4: We have hedged 50% for Europe. It's at a slightly lower price than this year. And for Canada, we were able to hedge 88% at a very nice price level.

Christian H. Meyer: We have hedged 50% for Europe at a slightly lower price than this year. For Canada, we were able to manage to hedge 88% at a very nice price level.

Jens Christian Keuthen: We have hedged 50% for Europe at a slightly lower price than this year. For Canada, we were able to manage to hedge 88% at a very nice price level.

Michael Schaefer: Mm-hmm. Okay, and my final short question. On your trading revenues, EUR 46 million, rather elevated compared to historical levels. Just give us a bit of a background. Was there any kind of meaningful earnings contribution from that end, or was it just a pass-through?

Michael Schäfer: Mm-hmm. Okay, and my final short question. On your trading revenues, EUR 46 million, rather elevated compared to historical levels. Just give us a bit of a background. Was there any kind of meaningful earnings contribution from that end, or was it just a pass-through?

Speaker #6: Okay, and my final short question: on your trading revenues—€46 million, rather elevated compared to historical levels. Could you just give us a bit of background?

Speaker #6: Was there any kind of meaningful earnings contribution from that end, or was this just a pass-through?

Speaker #4: The trading revenues, that was the technical MAP that we included in our— that we now have included in our portfolio. With the contract with Elixir, and that was the main effect.

Christian H. Meyer: The trading revenues, that was the technical MAP that we now have included in our portfolio with a contract with Elixir Group, and that was the main effect.

Speaker #6: Okay. Thank you.

Michael Schaefer: Okay. Thank you.

Michael Schäfer: Okay. Thank you.

Speaker #3: Thank you very much, Michael. Thank you. Our next question comes from the line of Angelina. Angelina, please state your name and research house, and proceed with your question.

Operator 2: Thank you very much, Michael.

Operator: Thank you very much, Michael.

Christian H. Meyer: Yeah. Thanks.

Operator 2: Thank you. Our next question comes from the line of Angelina. Angelina, please state your name and research house and proceed with your question.

Operator: Thank you. Our next question comes from the line of Angelina. Angelina, please state your name and research house and proceed with your question.

Speaker #5: Good morning. Thank you for taking my questions. This is Angelina Gozova from J.P. Morgan. I have three short questions this morning. My first one is just coming back to the guidance.

Angelina Glazova: Good morning. Thank you for taking my questions. This is Angelina Glazova from JP Morgan. I have three short questions this morning. My first one is just coming back to the guidance. You were clear in outlining that the lower end of the guidance assumes some adverse impact from lower water levels. What about the midpoint of the guidance? Is anything included, and for how long would the situation need to last for the adverse impact to become sort of a base case rather than bear case?

Speaker #5: So, you were clear in outlining that the lower end of the guidance assumes some adverse impact from lower water levels. But what about the midpoint of the guidance?

Speaker #5: Is anything included? And for how long would the situation need to last for the adverse impact to become more of a base case, rather than a bear case?

Speaker #4: Yeah. In the midpoint, we included especially our normal maintenance that we have in Q3. And then you have a ramp-up phase after the maintenance period that we just started on Monday at the Werra site.

Christian H. Meyer: Yeah. In the midpoint, we included especially our normal maintenance that we have in Q3. Then you have a ramp-up phase after the maintenance period that we just started on Monday at the Werra site. For the lower end, yes, there we included that it could last for some weeks if we have low water levels. We feel very comfortable based on the experience that we have with the lower end.

Speaker #4: And for the lower end, yes, there we included that it could last for some weeks if we have low water levels. But we feel very comfortable, based on the experience that we have with the lower end.

Speaker #5: Okay, understood. Thank you. My second question is about the demand backdrop in Europe. We have seen some increases in SOP pricing at the start of Q3, which were quite nice.

Angelina Glazova: Okay. Understood. Thank you. My second question is about the demand backdrop in Europe. We have seen some increases in SOP pricing at the start of Q3, which were quite nice. I am wondering how this is being perceived by the buyers and whether you think there could be more room for some further increases.

Speaker #5: I'm wondering how this is being perceived by the buyers, and whether you think there could be more room for further increases.

Speaker #4: Yeah. In Europe, you should keep in mind that we had, over the last months, pretty high levels with good netbacks for us. So the room for additional increases isn't the same compared to the international overseas markets.

Christian H. Meyer: Yeah. In Europe, you should keep in mind that we had over the last month pretty high levels with good net backs for us. The room for additional increases is not the same compared to the international overseas markets, where we had lower price levels and a strong increase of the prices. That is a little bit different overseas and Europe from the base where you are coming from. But the sulfur prices are on a good way, and that is included in our assumptions.

Speaker #4: Where we had lower price levels and a strong increase in prices. So that's a little bit different overseas in Europe from the base where you are coming from.

Speaker #4: But the sulfur prices are on a good path, and that's included in our assumptions.

Speaker #5: Thank you very much. And my last question is looking more broadly at the second half outlook. We have potentially an El Niño situation, which could be worse than what we saw in previous years.

Angelina Glazova: Thank you very much. My last question is looking more broadly on the H2 outlook. We have potentially an El Niño situation, which could be worse than what we saw in previous years. I understand your guidance already implies a broad range of outcomes, and this is to an extent incorporated, but do you think there could be some surprise which is not foreseen by the guidance or drought, maybe potentially worse in the Southern Hemisphere? How do you think about incorporating those impacts into your outlook?

Speaker #5: So, I understand your guidance already implies a broad range of outcomes, and this is to an extent incorporated. But do you think there could be some surprise which is not foreseen by the guidance, or droughts, maybe potentially worse in the southern hemispheres?

Speaker #5: How do you think about incorporating those impacts into your outlook?

Speaker #4: Yes, we include the potential El Niño effects in our outlook. But you should keep in mind that in different regions, there are totally different impacts.

Christian H. Meyer: Yes. We include the potential El Niño effects in our outlook, but you should keep in mind that in different regions you have totally different impacts. There could be some drought in Southeast Asia and Australia. In Brazil, it could be more wet, but in other regions, more dry. In total, we do not expect that it will have a very meaningful impact overall. As we look globally in all the regions, there are different impacts.

Speaker #4: There could be some drought in Southeast Asia and Australia. In Brazil, it could be wetter. But in other regions, more dry. And so, in total, we don't expect that it will have a very meaningful impact.

Speaker #4: Overall, as we look globally, in all the regions with the different impacts.

Speaker #5: Great. Thank you very much.

Angelina Glazova: Great. Thank you very much.

Speaker #4: You're welcome.

Christian H. Meyer: You are welcome.

Speaker #3: Thank you very much. Our next question comes from the line of Lisa. Lisa, your line is now open. Please state your name and research house.

Operator 2: Thank you very much. Our next question comes from the line of Lisa. Lisa, your line is now open. Please state your name and research house. Proceed with your question.

Operator: Thank you very much. Our next question comes from the line of Lisa. Lisa, your line is now open. Please state your name and research house. Proceed with your question.

Speaker #3: Proceed with your question.

[Analyst] (Berenberg): Hi, this is Lisa from Berenberg. I have one follow-up on El Niño. I know that for this year you do not expect an impact, but is there any sort of indication of, if there were to be an impact in the H2 of 2026 in specific regions, in light of a very strong El Niño than expected, would change your view on the 2027 demand outlook? Just sort of any thoughts on that?

Lisa De Neve: Hi, this is Lisa from Berenberg. I have one follow-up on El Niño. I know that for this year you do not expect an impact, but is there any sort of indication of, if there were to be an impact in the H2 of 2026 in specific regions, in light of a very strong El Niño than expected, would change your view on the 2027 demand outlook? Just sort of any thoughts on that?

Speaker #5: Hi, this is Lisa from Ray Stanley. I have one follow-up on El Niño. I mean, I know that for this year, you don't expect an impact.

Speaker #5: But I mean, is there any sort of indication of if there were to be an impact in the second half of 2026, and specific regions, in light of a very strong El Niño that I expected?

Speaker #5: I mean, would that change your view on the 2027 demand outlook? Any thoughts on that?

Speaker #4: So, if we have an extreme El Niño with lower harvests, then we will have increasing agricultural commodity prices. And that will compensate the situation from our side.

Christian H. Meyer: If we have an extreme El Niño with lower harvest, then we will have increasing agriculture commodity prices, and that will compensate the situation from our side.

Speaker #5: Okay. And then, currently, the potash supply-demand outlook looks pretty tight, if not very balanced. But there are some incremental supplies coming into the market.

[Analyst] (Berenberg): Okay. Currently the potash supply and demand outlook looks pretty tight, if not very balanced, but there are some incremental supplies coming into the market. I am not so concerned about BHP because that could take a long time to ramp, but I

Lisa De Neve: Okay. Currently the potash supply and demand outlook looks pretty tight, if not very balanced, but there are some incremental supplies coming into the market. I am not so concerned about BHP because that could take a long time to ramp, but I

Speaker #5: I'm not so concerned about BHP, because that could take a long time to ramp. But I was curious about your thoughts into 2027 on higher supplies, potentially from ACRON, who's ramping up a brand-new potash mine.

Christian H. Meyer: Yeah

[Analyst] (Berenberg): was curious about your thoughts into 2027 on higher supplies, potentially from Acron, who is ramping up a brand new potash mine. Any insights of how much volumes they may bring into the market and how that will affect the supply demand balance?

Lisa De Neve: was curious about your thoughts into 2027 on higher supplies, potentially from Acron, who is ramping up a brand new potash mine. Any insights of how much volumes they may bring into the market and how that will affect the supply demand balance?

Speaker #5: Do you have any insights on how much volume they may bring into the market and how that will affect supply and demand levels?

Speaker #4: Yeah. And what's very important, ACRON is not new for us. That was announced, so we expected it. And that's also when we present our calculations of what is coming to the market and what is catching up with additional increases.

Christian H. Meyer: Yeah. What is very important, Acron is not new for us. That was announced, that we expected, and that is also when we present our calculations of what is coming to the market and what is catch up with additional increases. So a 2% step up each year. That won't have a big impact from our perspective. As you address BHP, we will see, they announced they will come with the first volumes by the mid of 2027. What is very important, they are not in the market at the strong spring season in 2027. Even in 2028, there will be only a few volumes from their side. The postponed start of the production is finally helpful for the balance of the market in the future due to the increasing demands that we see over the last years and also for the future.

Speaker #4: So, a 2% step-up each year. That won't have a big impact from our perspective. And as you address BHP, we see they announced they will come with the first volumes by the middle of 2027.

Speaker #4: What's very important is that they are not in the market. It's a strong spring season in 2027, and even in 2028, there will be only a few volumes from their side.

Christian H. Meyer: What is very important, they are not in the market at the strong spring season in 2027. Even in 2028, there will be only a few volumes from their side. The postponed start of the production is finally helpful for the balance of the market in the future due to the increasing demands that we see over the last years and also for the future.

Speaker #4: And so, the postponed start of the production is finally helpful for the balance of the market in the future, due to the increasing demand that we have seen over the last years and also for the future.

Speaker #5: Sure. And then my final question is on Industry+ and de-icing. I mean, you had quite a strong second quarter with some restocking from the municipalities. Can you share any sort of dynamics on the pricing side?

[Analyst] (Berenberg): Sure. My final question is on Industry+ and de-icing. I mean, you had price from Q2 with some restocking from the municipalities. Can you share any sort of dynamics from the pricing side? Should we also foresee higher pricing given the restocking element that sits in there?

Lisa De Neve: Sure. My final question is on Industry+ and de-icing. I mean, you had price from Q2 with some restocking from the municipalities. Can you share any sort of dynamics from the pricing side? Should we also foresee higher pricing given the restocking element that sits in there?

Speaker #5: Should we also foresee higher pricing given sort of the de-stocking restocking, sorry, restocking element that sits in there?

Speaker #4: Yeah. So the industry plus segment overall, including our salt business, there we have in total a good demand and good price developments. And with the de-icing, we expect for the rest of the year normal winter.

Christian H. Meyer: Well, the Industry+ segment overall, including our salt business, we have in total a good demand and good price development. With the de-icing, we expect for the rest of the year a real normal winter. That is finally included.

Speaker #4: And that's finally included. Yeah. Yeah. Thank you. Even with regard to the prices, they are at a historic high level. And so we think that this will stay.

[Analyst] (Berenberg): Thank you.

Lisa De Neve: Thank you.

Christian H. Meyer: Even with regards to the prices, they are on a historic high level, so we think that this will stay, at least for the next months, so we will profit from it as we have profited in the past.

Speaker #4: At least for the next few months. And so, we will profit from it as we have profited in the past.

Speaker #5: Okay. Thank you very much.

[Analyst] (Berenberg): Okay. Thank you very much.

Lisa De Neve: Okay. Thank you very much.

Speaker #4: Thank you.

Christian H. Meyer: Thank you.

Speaker #3: Thank you very much. Our next question comes from the line of Sebastian. Sebastian, if you could please state your name and research house, and proceed with your question.

Operator 2: Thank you very much. Our next question comes from the line of Sebastian. Sebastian, if you could please state your name and research house and proceed with your question.

Operator: Thank you very much. Our next question comes from the line of Sebastian. Sebastian, if you could please state your name and research house and proceed with your question.

Speaker #6: Hello, good morning, everybody, and thank you for taking my questions. I'd have two pieces. Sebastian Barama, Bank. Actually said the name first. The first one is on the open carbon exposure.

Sebastian Bray: Hello, good morning, everybody, and thank you for taking my questions. I have two, please. Sebastian Bray, Berenberg Bank. I should have said the name first. The first one is on the open carbon exposure. There have been some changes recently to EU ETS, so probably not huge in scope, but can you remind me of what, under the current system to 2030, K+S has to purchase in terms of carbon credits a year?

Speaker #6: There have been some changes recently to the EU ETS, probably not huge in scope. But can you remind me, under the current system to 2030, what K+S has to purchase in terms of carbon credits a year?

Speaker #4: Yeah, sure. So, we have already purchased certificates in the past, and we are also profiting from the free allocation. But you can take as a rule of thumb that €30 million per year is our cost for CO2 certificates.

Christian H. Meyer: Yeah, sure. We have already purchased certificates in the past, and we are also profiting from the free allocation. You can take as a rule of thumb, EUR 30 million per year is our cost for CO2 certificates. If there would be changes in the regulation, for instance, the reduction of certificates will not be that strict as already planned, then there could be some tailwind from it.

Speaker #4: And now, if there would be changes in the regulation—for instance, if the reduction of the certificates will not be as strict as already planned—then there could be some tailwind from it.

Speaker #6: That's helpful, thank you. And I believe Angelina picked up on the question of SOP pricing more broadly, which was addressed a little in the most recent quarter.

Sebastian Bray: That's helpful. Thank you. I believe Angelina Glazova picked up on the question of SOP pricing more broadly, which has picked up a little in the most recent quarter. Is it possible for this business to get any better into 2027? It seems to be really ticking along quite nicely. How do you think about the one-year view on this, particularly if MOP prices start to decline?

Speaker #6: But is it possible for this business to get any better into '27? It seems to be really ticking along quite nicely. How do you think about the one-year view on this, particularly if MOP prices start to decline?

Speaker #4: Yeah. What's very important is the side of production that was missed over the last weeks or months. You're not able to refill it. So, if there will be a normal cycle of production, especially in the Middle East, then these are only the volumes that they are able to produce, but not more.

Christian H. Meyer: Yeah. What's very important, the sulfur production that was missed over the last weeks or months, you are not able to refill it. If there will be a normal sulfur production, especially in the Middle East, then these are only the volumes that they are now able to produce, but not more. We have some backprints with the sulfur, and the sulfur, we are trying to optimize the net base, as I just mentioned. If we are selling SOP or Kieserite, there's a good demand for this magnesium sulfur product, and we try to optimize our sulfur net backs in different products.

Speaker #4: So we have some background with the Cypher. And with Cypher, we are trying to optimize the networks, as I just mentioned. If we are selling SOP, there is also good demand for these magnesium Cypher products.

Speaker #4: And we try to optimize our Cypher networks in different products.

Speaker #6: That's helpful. Thank you for taking the questions.

Sebastian Bray: That's helpful. Thank you for taking the questions.

Speaker #4: Yeah. You're welcome, Sebastian.

Christian H. Meyer: You are welcome, Sebastian.

Speaker #3: Thank you very much, Sebastian. And once again, ladies and gentlemen, to ask a question, please use the 'raise hand' icon at the top of your screen to enter the queue.

Operator 2: Thank you very much, Sebastian. Once again, ladies and gentlemen, to ask a question, that is the raise hand icon at the top of your screen to enter the queue. We will pause here briefly to allow any more questions to generate. We have a follow-up question from Christian. Christian, your line is now open. You may proceed.

Operator: Thank you very much, Sebastian. Once again, ladies and gentlemen, to ask a question, that is the raise hand icon at the top of your screen to enter the queue. We will pause here briefly to allow any more questions to generate. We have a follow-up question from Christian. Christian, your line is now open. You may proceed.

Speaker #3: We will pause here briefly to allow any more questions to generate. We have a follow-up question from Christian. Christian, your line is now open.

Speaker #3: You may proceed.

Speaker #7: Yes, thanks very much. Just a short one: Can you give us any guidance for the tax rate into the end of this year, on a normalized basis?

Christian Faitz: Yes, thanks very much. Just a short one. Can you give us any guidance for the tax rate into the end of this year on a normalized basis?

Speaker #8: So, we will expect a normal tax rate of roughly 30%.

Jens Christian Keuthen: We will expect a normal tax rate of roughly 30%.

Christian Faitz: Okay.

Speaker #7: Okay.

Speaker #8: Yeah.

Jens Christian Keuthen: Yeah.

Speaker #7: All right. Thanks very much.

Christian Faitz: All right. Thanks very much.

Speaker #8: Yeah.

Jens Christian Keuthen: Welcome.

Speaker #3: Thank you very much. And once again, ladies and gentlemen, to ask a question: that is the raise hand icon at the top of your screen to enter the queue.

Operator 2: Thank you very much. Once again, ladies and gentlemen, to ask a question, that is the raise hand icon at the top of your screen to enter the queue. We will again pause here briefly to allow any final questions to generate. It appears there are currently no further questions. Handing it back to Christian for any final remarks.

Operator: Thank you very much. Once again, ladies and gentlemen, to ask a question, that is the raise hand icon at the top of your screen to enter the queue. We will again pause here briefly to allow any final questions to generate. It appears there are currently no further questions. Handing it back to Christian for any final remarks.

Speaker #3: We will again pause here briefly to allow any final questions to generate. It appears there are currently no further questions. Handing it back to Christian for any final remarks.

Speaker #4: Yeah, thanks to all of you for participating in this call, and thanks also for your questions. We all wish you a great August with good weather.

Jens Christian Keuthen: Yeah. Thanks to all of you for participating in this call, and thanks also for your question. We all wish you a great August with good weather and in autumn, some rain. Thanks to you, and have a nice day.

Christian H. Meyer: Yeah. Thanks to all of you for participating in this call, and thanks also for your question. We all wish you a great August with good weather and in autumn, some rain. Thanks to you, and have a nice day.

Speaker #4: And in autumn, some rain. Thanks to you, and have a nice day.

Speaker #7: Thank you.

Christian Faitz: Thank you.

Operator 2: This concludes today's conference call. Thank you and have a great day.

Operator: This concludes today's conference call. Thank you and have a great day.

Speaker #3: This concludes today's Cyber Call. Thank you and have a great day.

Operator 1: The host has ended this call. Goodbye.

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Half Year 2026 K+S AG Earnings Call

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