Ladies and gentlemen, welcome to the K+S Q3 2022 Earnings Call. We hope you had a chance to review our posted slides as well as our Q3 documents available on our website. After some opening remarks by Dr. Lohr, we will directly jump into Q&A. Please note that today the Q&A session on the quarter and the outlook should not take longer than 20 minutes to leave enough time for the presentation and questions on our Werra 2060 project afterwards. Some technical notes. Please refer to our disclaimer on page 2 of the presentation. Then a note on data privacy. Please note that the Teams session will be recorded, webcast, and be available as a replay on our homepage afterwards. People asking a question in the team session have to be aware that by turning on their camera and microphone, they give consent to saving and replaying video and audio sequences. Now I'd like to turn over to Dr. Lohr for the opening remarks. Thank you, Julia. Good morning, everybody. A warm welcome from my side as well to our Q3 video call. Before we step into the Q&A, I would like to start with some opening remarks. First, again, a good quarter, strong results, and a record quarterly free cash flow of EUR 580 million. Our sales volumes was negatively impacted by logistical challenges. To give you one example, we had one vessel supposed to leave the harbor by the end of September. It slipped into the beginning of October, and we've lost in the quarter, but of course not for the full year, 50,000 tons and roughly EUR 30 million EBITDA. Second, now as we are close to the end of the year, we are more precise with our forecasts. We are expecting an EBITDA of about EUR 2.4 billion and a free cash flow of a good EUR 1.2 billion. This is the upper end of the former range. Even our unadjusted free cash flow will reach EUR 1 billion, so you see a very good cash generation. The final remark is we are seeing normalizing pricing, which is good because we will end up in a very healthy level of pricing with a stronger demand. Before that is achieved, we see the wait and see attitude of our customers. With a new price level, which is again on a very healthy level, we should see a strong demand in the first half of 2023 because profitability in the ag markets is intact, and at the same time, we expect a shortage in supply. That was the brief opening remarks session, and now we are happy to answer your questions. If you would like to ask a question via Microsoft Teams, please use the hand signal and write your name and the name of your research house in the chat function of MS Teams. We will then call you individually, and you can ask the question live. Please switch on your camera. One more request as usual. We would like to answer your questions one by one. If you have multiple questions, please ask one question at a time, and we will answer it first. After that, you will have the opportunity to ask further questions. This brings us to our first question from Christian Faitz from Kepler Cheuvreux. Good morning. Sorry. Can you hear me now? Yes. Good morning, Mr. Faitz. All right. Good morning, Julia. Good morning, Dr. Lohr. Couple of questions. I'll start with the first one. Thanks for the slide on the use of liquidity on page 11. That kind of does also suggest that you could consider a share buyback programs come March. Is that a correct interpretation? We've always said that we are looking for the development of the debt capital markets, and if there's an opportunity, we might start the program again. We have never ruled that out. Okay. Good to know. Thank you. Yes. Second question, if I may, and I have a third one then. You seem to have a rather high level of hedging losses in Q3. Can you explain those? Are you talking about the currency hedging or the gas hedging? The currency hedging. Yes. Christian, if you look at hedging, you first of all have to see you do that to safeguard yourself, yeah? We do that on the currency side, and we do that on the gas side. The gas side, as you can see, is much more important, and the value of that contract has not to be reported in our IFRS. Otherwise, you would see quite positive figures against that, yeah? On the currency side, yes, it's a different development, and it affected basically Q3 with EUR 30 million. But I guess, in the current development, you should put your eyes on the gas side rather to evaluate the things. Okay. Thank you. Third and final question. Dr. Lohr, can you spend a few words on this myth of potash holiday? I mean, I am aware you're suggesting that in your release that there has been a certain buyer hesitancy to wait for lower prices. Have you actually or have your sales people actually observed that people skip potash with an NPK, or would you expect such a thing for 2023? Yeah, good question. The answer is yes, we have seen that in 2022. As you know, this is not really possible in all areas of the world, mainly in North America and in Europe. Here we have seen such development. A mix of several reasons for that. Of course, the high pricing, but also the nitrogen availability in Europe, or nitrogen pricing in Europe and that was another trigger for doing a potash holiday. As we know, we cannot do that multiple seasons in a row. That's why we believe we will see less of that in 2023. I guess there's no way to quantify that in. Right? Oh, that is, almost impossible. Okay, fair enough. Thank you very much. Thank you. The next question is coming from Alexander Jones of Bank of America. Great. Thanks very much for taking my questions. First one on potash demand. You mentioned sort of prices normalizing and customers in a wait and see attitude. Are you seeing any customers stepping in, given now the price have fallen or at what level, if not, do you think customers are likely to step in and start taking more volume? Yeah. We believe we are not far away from the new price level. For example, we've seen in Brazil the inventories going down two months in a row. Of course, customers are waiting for the new base and then they step in at least immediately before the planting season. That is, of course, different from area to area. But we expect December, January to see a stronger demand in Brazil, for example. Again, it's a mix of lower prices, the signal there is a new floor and availability because the Eastern European situation has not really changed. Great, thanks. Just one more on your volumes. How are those logistics situation evolving? Do you expect that to ease at all in Q4 or into 2023 based on what you're hearing? Yeah. I think that some have underestimated the situation that we have seen here in Europe in summer, with very low water in the rivers, with multiple problems at the Deutsche Bahn. That, of course, all had an effect. That's why we had sales volumes of only 1.6 million tons. By the way, the production was higher, although we had our maintenance breaks in Q3. We have seen an easing of the situation in Q4. Of course, we are not expecting any comparable situation in the first half of 2023. It remains to be seen what the summer looks like in 2023, but that's still quite a while, quite a far away. Great. Thank you. Welcome. Are there any further questions on Q3 or the outlook? Yes, we have one more from Kyle from Citi. Hi there. Thank you for the opportunity to ask questions. I guess at this stage in the quarter, you have a pretty good idea of your order book. I wonder if you'd be able to guide us on the ASP for fourth quarter? That's my first question. Yeah. The fourth quarter average selling price will be below the third quarter. Third quarter was the peak, if you wish. It was higher than in the second quarter. With the prices coming down as they came down in the second half, the timeframe between order and delivery is shorter. The Q4 price will be below the third quarter prices. Great, thank you. Secondly, just is there any update on the Bethune ramp-up? I know you guys wanted to accelerate that. Has that changed in any way? Have you maybe managed to accelerate any more or less? We are working hard on that, and you will later hear about our Werra 2060 project deep dive. In the course of 2023, we should also do a Bethune ramp-up deep dive. Okay. Thank you very much. You're welcome. The next question comes from Andreas Heine from Stifel. Yes. Only one. You were talking about prices are normalizing. Can you share what you see as a normalized price level going forward and how you get to that conclusion, what normal in the future means? Thank you, Mr. Heine. That's a good question. With normalizing, I'm not talking about historical price levels. I'm talking about price levels where affordability is back for the farmers. Currently, we are trading slightly above $600 in Brazil. We, as I said earlier, we believe that we are not far away from this situation I just described. I hope that gives you an indication. You basically see the current level as kind of floor going forward. It is also the level of the Chinese and Indian contract, but I read that some expect that the Chinese and Indian contract might go down from $590 to $450. Yeah, that is a wild expectation. Before first part of your question, we might even see rising prices in the first or second quarter next year because when demand comes back, the situation is changing. That, it's also speculation like the speculation on China's and India pricing. There's a big range, and what you mentioned is the lower end of the range. Fair enough. Thanks. That was my question. You're welcome. Thank you. I have one more written question from Nayla from BlackRock. She's on the debt side. I wanted to ask a question of what the company's intention is with the outstanding bonds now that your financial position has turned positive. Is the company intent on having any debt outstanding at all? If so, what is the target for the gross debt? Are you still intent on achieving an investment-grade rating on your bonds? Yeah. I think the investment-grade rating, to start with the second part of it, investment-grade rating is only a matter of time. With these numbers that we are showing, we have a net cash position already by the end of Q3, and we are also positive for the future. It's only a matter of time. What we do with the bonds is financial engineering. It's a matter of interest rates on debt and then on cash. I also elaborated already maybe on a potential buyback of parts of the outstanding bonds. Maybe that was the question by Christian. He was also, I think, referring to share buybacks at the beginning, when he was asking- Share buybacks? Yeah. Yeah. Okay. That was also the question. I got it differently. Mm-hmm. Debt buyback. Share buyback is something we are looking at. Of course, after such a good year, 2022, we have to let the shareholders participate, and the options are higher dividend or a share buyback or maybe a combination. That is, of course, nothing which we can precisely answer today. As you know, we make a proposal to the supervisory board, and then we offer it to the AGM that is going to happen in May, and we disclose the proposal in March. Okay. As far as I see, no further questions on the quarter and the outlook. Last chance. No. We directly jump into Werra 2060, and I now hand over to Dr. Lohr again. Yeah. Ladies and gentlemen, we are very excited about our project, Werra 2060, and we are going to have a deep dive for that reason now because we have all the decisions made, and the supervisory board has agreed as well to spend the money for that project. This project is a real game changer for K+S. It's a situation that I really love. It's a win-win situation because it's positive for our economics, and it is positive for our ESG footprint. That's why my colleague, Holger Riemensperger, our COO, is going to provide you with the technical details now, and I give you some input at the end about the valuation impact. Okay, Holger, the floor is yours. Thank you, Burkhard. About one year ago, we presented our new strategy. A key element of our new strategy is optimizing the existing business. This was or is to make K+S storm-proof. Werra 2060, besides the ramp up of Bethune, is one of our key projects. Today, we present with pride details on this project. The Werra region is home to our three combined sites in Wintershall, Hattorf, and Unterbreizbach. At Werra, we employ about 50% of our people, generating half of our German production output. The Werra can cover for approximately 40% of the Western European potash demand, and therefore, is key for the European potash supply chain resilience. The deposit of Werra has a reach, including the new field, Marbach, of another 40 years of potash mining. The goal of the project is to become more cost competitive, improve margins, and reduce environmental footprint at the same time. Therefore, we choose a holistic approach from mine to field using latest mining technologies, increasing the average ore content, enabling us for underground backfilling and avoiding investments in tailings piles going forward. The patented ESTA technology will allow us to change from wet to dry processes, halving our wastewater disposal, and the dry process technology also reduces the need for fossil energy, making us more resilient. Along the same lines, we can reduce and will reduce our CO2 emissions. The advanced proprietary technologies increase also the share of our specialties, sorry, at the Werra site, making us less dependent from volatile commodity markets. All this, for the time being, only applies for the sites in Wintershall and Unterbreizbach, as Hattorf will continue as is. This chart nicely shows you the value we create by lifetime expansion. In total, we will extract approximately 10 million more potash specialties compared to current situation. The secondary mining technology, combined with the dry backfill, will allow us to use high ore content areas, and therefore we need to extract less rock salt for the same output. As you can see in the graph, that nicely shows what we're talking about here, is that the Unterbreizbach site, for instance, can run another eight extra years. Wrapping up on the technology part, to walk you and talk you through the holistic approach that we have used, first, we start with our proprietary ESTA dry process, which allows us to abstain from wet processes, reducing wastewater. Reducing wastewater or not using water in the process also means that you can avoid drying downstream processes, reducing the need for fossil energy, and again, as I said earlier, reducing CO2 emissions. The technology also provides dry, solid residue instead of wet residue that you usually generate, which is suitable for underground backfilling, and so we can do the secondary mining, as I mentioned before, increasing the relative output through to higher yields from a higher ore content in the rock salt. Combining all this together substantially improves our cost position and allows for a higher proportion of potash magnesium specialities. The special potash magnesium fertilizer I'm referring to is our branded Korn-Kali, where we have a high market share in all the regions where we serve. Today, we can say that we are production limited and not able to meet the growing global demand. With this project, we will increase capacity of granular production as well, which improves field applicability and also provides the option of adding secondary nutrients, which would further add value to farmers. Due to the significantly reduced CO2 emissions and the overall reduction of the environmental footprint, one can call this green potash. On my last slide, I wanna show you the investment we need for this transformation. Some key points here. The total investment is about EUR 600 million, while the incremental difference between the investment and the investment need going forward in an as-is situation is only EUR 300 million. In other words, the extra 10 million potash specialties come at only EUR 300 million investment. At the same time, we reduce our OPEX 20%. This provides us a return on investment of less than 10 years, and the construction starts now. Back to you, Burkhard. Thank you, Holger. Ladies and gentlemen, now you understand why we are so excited about the project. When you look at the numbers, you get even more excited. This is the impact on valuation of that project on the Werra site and the impact on the free cash flow. We are expecting an NPV increase due to Werra 2060 of more than EUR 500 million, and average free cash flow, annual free cash flow of more than EUR 100 million starting in 2026. I know that some thought that the Werra site has no value at all, and that is totally incorrect because of its high profitability, and we even increase that number. With this increase of the NPV of more than EUR 500 million, the total value is higher than EUR 1.5 billion. If you look at the value per share, you end up with almost EUR 8. For sure, this is not reflected in our current share price. Finally, let's have a look on the valuation of K+S of the entire K+S Group. This is our sum-of-the-parts valuation that was already disclosed with our half-year report. If you put all pieces together, you end up with a value of the company of more than EUR 8 billion, and that is more than EUR 42 per share. I'm sure that you might discuss that, and you have now the opportunity in the next Q&A session. The first question on this project is coming from Christian Faitz from Kepler. Yeah, thank you. Trying to find the buttons again. Just quickly, can you elucidate these 10 million additional specialties? Is this a net figure or a gross figure from also additional potash volumes, MOP volumes? Second, the Marbach field, how much of that is new or how much of that is already in your existing mining area? First of all, to the volume, the 10 million. The 10 million, we are changing the portfolio, the production portfolio at the site, moving towards more Korn-Kali, which we consider specialty because this is not in the same fierce competition environment as MOP, as you mentioned. The 10 million are extra on top volume side, what we do already today over the period from now to 2060. That's one part. The second part with regards to the Marbach. Marbach is an existing field that is part of what we have already in our consideration. It is well explored, and we pretty well know what we expect in the area. There is not a risk from that site, or low risk, if you wish. Okay. At this point, you're not having any active mining in Marbach. That's correct? Not within that field, but we are opening the field, basically, yeah. Okay, thank you. Maybe one additional information to your question, Mr. Faitz. The numbers I showed you was already incorporating the shaft Marbach. Okay. Thank you. The next question is coming from Konstantin Wiechert from Baader. Yeah, hi. Thanks for taking my questions. I was just wondering, with your new ESTA production method, and you plan to use, I guess more electricity in the future, do you think this will come from a renewable energy? Are you planning to acquire any purchase agreements on that, or is that from your existing infrastructure? Yep. First to the ESTA. That is a unique process, but we are using the process as such since about 30 years. This is not completely new technology for us. The way we use it, and the way we process it going forward, that's a new combination. To the second question, we will use more electricity indeed. Yes, we hope there will be enough renewable energy in Germany, so that we can basically use that for the production. Part of that we will produce ourselves because we are investing as well, of course, but no, it's never enough for production like this. What kind of renewable share have you included in your assumed reduction in CO2 emissions? Actually, for the full spend going forward, all the electricity will move towards renewable within our- Okay. Climate strategy as well. Okay, great. Thanks. The next question comes from Oliver Schwarz, from Warburg. Oliver, are you there? Yes. I am. Sorry, I had a technical problem here to fix. Firstly, thank you for the presentation. Very interesting. Question is obviously why now? Why not earlier? Has there been technical breakthroughs that allowed you to come up with that project? Obviously, prolonging the lifetime of your German mines is not only crucial to K+S, but also obviously to the region. Basically, what has changed? Is it just that the funds are now available and that weren't available before? Or is that technical expertise has increased at K+S? Or is it, let's say, the assumptions for the prices of the products you can reap from those mines that allow you to alter your calculations and regarding to lifetime? That would be my first question. Yeah. Thank you for the answer to your question. Because it's a mix of everything you just mentioned. Without joking, sometimes good ideas need the right timing, and the time for Werra 2060 is now. This has a long history. We have been working on this and previous projects for years. It looks easy and obvious, but we have looked into 20 different setups of the site, potential setups of the site. We have optimized. We have, as you said, the Korn-Kali, the additional Korn-Kali volumes. We have to wait for the right time for the market to be ready to take these new volumes. Of course, funding was an issue, I think, two years ago. You might remember the difficult situation. CapEx, additional CapEx program like that would have been impossible. All came together and now it's a perfect timing. My second question would be on the projects you keep on evaluating, at least when looking at your annual reports, Siegfried-Giesen. When is the time right to make a decision on that project? There are still some legal claims ongoing. Before they are not finally decided, we cannot go for an investment decision. That might be still a couple of years away, the decision. Okay. Got it. Yeah. Thank you very much. You're welcome. The next question comes from Andreas Heine from Stifel. Yeah. Thanks for the opportunity to ask a question again. It is on the cash flow. I didn't fully get your calculation on the cash flow from this project. You said EUR 100 million, but this EUR 100 million from this project, you would get certainly to a higher net present value than EUR half a billion. Could you please repeat how you come to this calculation? Yeah. Andreas, thank you for that question. For sure, this is a very long-term DCF until 2060, with definitely varying advantages and disadvantages compared to the unchanged operation mode. Yeah? It is really only taking the full DCF line and building an average out of that. Yeah? For sure, if that would be nicely distributed over the years, this would get you to a higher number. Some effects are definitely helping us towards the end of the project. When you discount it at the WACC, this doesn't give you that high number. Yeah. These EUR 100 million, that's something we have in 2040-50, but not before 2050. No, not necessarily. Starting in 2026. Yeah. 2026, additional EUR 100 million per year. In average. On average. Yeah. That's the important- Okay. Important thing. Mm-hmm. Exactly. You also see that the cashflow contributions, for example, on the higher volume, they are helping later, and that's why they're not contributing that much. For example, the personnel part is helping earlier in the DCF, and that's why it's bringing a greater NPV contribution. Applying the average here is not the exact way to look at the DCF advantages. Okay. Fair enough. Thanks. The next question is coming from Alexander Jones of Bank of America. Thanks. Just two. The first on following up on that prior question on benefits. Can you split the sort of financial free cash flow benefits percentage-wise into volume, versus sort of, wastewater saving versus energy savings? Or any way to give us at least an idea on the relative magnitudes? Yeah, that was the slide number 7 that Mr. Lohr showed you. We will give you the slides right after the call. Yeah? They will be available online right afterwards. There you have the exact distribution over the different areas. You have an NPV driver in the volume part of EUR 100 million. You have basically 425, and that is quite evenly split over the three topics, wastewater, CO2 emissions, and saline process waters. You have here EUR 425 million coming out of that. You have the midterm adjusted personnel requirements, which add another EUR 275 million as a value contribution. We also give you the free cash flow advantages on average in the years. As I said, volume advantages later, personnel, for example, earlier. With the ESG improvements, it's a mixed picture. For example, if you can save on tailings piles expansions, that's also quite in the near future, yeah, and not only in 2060. You will have that in the slides very detailed. Great. Thank you. The second question, just on how we should think about your group CapEx profile. You provided gross and net figures in the slides. Should we add the gross figures to the EUR 350-ish you were talking about per year at the CMD? Or should we instead take the net? Thank you. Yeah, of course. Of course, the Werra project and also the ramp-up of Bethune, and also the investment into the energy security will inflate the CapEx numbers for the next couple of years. This is in addition to the EUR 350 that we have given you as a normalized CapEx number. Great. Thank you. Far, these were all our questions. Oliver and Andreas, your hand is just still raised, so if you want to say something, unmute yourself. Otherwise, I'm thinking that you are not. Exactly, they are gone. Okay. Yeah. No further questions. Yeah. Okay. Thank you very much for your attention. I'm sure you will look into the Werra 2060 slides, and there will be some follow-up questions coming up, and we are always available for you to answer that. Again, this is a real game changer for K+S, and we are very proud to disclose that to you now. We wish you all a good day. We might see you soon on roadshows or wherever. Thank you, and bye-bye.