Ladies and gentlemen, welcome to the K+S second quarter 2023 earnings call. We hope you had a chance to review our posted slides, as well as our Q2 documents available on the website. After some opening remarks by Burkhard Lohr, we will directly jump into Q&A. Just some technical notes: Please refer to our disclaimer on page 2 of the presentation. A note on data privacy. Please note that the team session will be recorded, webcasted, and be available as 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 Burkhard Lohr for the opening remarks. Thank you, Julia. Good morning, everybody, welcome to our Q2 earnings discussion. After my opening remarks, we will directly start with a Q&A session. I will answer these together with my colleague, Christian Meyer, our CFO. We have good news for you. The potash market finally found the bottom. The worst is behind us. We thought that we would see the turnaround already with the Chinese contract, but MOP selling price in Brazil initially continued to fall, and only, but finally, bottomed out at the end of the quarter. If the positive demand and price trend continue in the further course of the year, EBITDA would reach the upper end of the EUR 600 million-EUR 800 million range. Free cash flow will see a significant working capital inflow, therefore, a range between a strong EUR 300 million-EUR 450 million is what we expect. Now we are ready for your questions. Julia? If you would like to ask a question, please use the hand signal in Teams and write your name and the name of your research house in the chat function. We will then call you individually, and you can address your questions to us live. Please switch on your camera if you start asking a question. 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 other questions. This brings us to the first question of Markus Mayer. Good morning. Can you hear me? Yes, we can hear you, and now we can see you as well. Very good. Very warm welcome from Munich. I have one question to the pre-pre-cashflow guidance range. You've basically nearly reached the lower end of your guidance range. Can you help us to understand how to come to the midpoint? Still EUR 100 million are missing of the EUR 550 million CapEx guidance. You have already spent, I guess, it was around EUR 200 million. Yeah. Still something to come. Also with this indication over the quarters of EBITDA, would be helpful to get a bridge here. Thank you. Okay. If you really answered, nearly answered the question. If you start by the midpoint of the EBITDA of round about EUR 700 million, then you reduce the CapEx, that will be higher in the second half, round about EUR 550, we expect. Then you deduct the taxes, then you see that we need a working capital effect of round about EUR 330 million-EUR 350 million. Then you can calculate the expected midpoint from our side. These are the main effects. Finally, if you have a look at the higher CapEx we will spend in the second half of the year. That's- Yep. My question was more related to the assumptions on, prices and volumes. No ... for the up and the lower end of the guidance range. Okay. Okay, then, you also asked for, for, the development of the quarter three and four, if I remember correctly. Yes, exactly. What I'm saying now is true for the range EBITDA and free cash flow, of course. At the upper end, and that is what I indicated is possible still, we expect that the prices continue to rise as we see them rising currently for the rest of the year, and that we will be able to sell roughly 2 million tons product per quarter. That would be 2 strong quarters in volumes, but volumes that we have even exceeded in the past. Possible. If we look at to the mid-range, we see a lower volumes and prices still rising, but not as strong as in the upper range assumption. The lower end assumption would even mean that the prices would come down again. I personally believe, as we see the indications in the markets, that this is more, more, more, less probable, but it's not a probability of zero. When we come to the quarters, one thing is of course, for sure, we will have, like always, maintenance breaks in Q3, and we start into that quarter three with low pricing. The third quarter will be significantly weaker than the fourth quarter in our assumptions. Does that answer your question? Yes. Thank you very much. That was all your questions, Marcus? I'm asking Thomas Swoboda from Société Générale. Yes. Yeah, good morning, everybody. I, I have two questions. The first question is on, on pricing. How fast does it drop through your P&L? On the way down, the drop through was almost immediate. I think that that was one of the things that, that surprised us. How, how should we think about the delay, going up? Yeah, we are on the way back to normal. What we have seen over the last, I would say 18 months, was really not normal in any way in terms of high pricing, the, the, the speed where, where prices came back, the shyness of the customers, the, the time where the customers fall into a wait-and-see behavior. Now we are back to a normal behavior, and that means we expect what we sell now in Q3, at least until the mid of Q3, will run in the P&L of the Q4. Understood. My second question is on the, on specialties and the, the volume weakness in, in Q3. You also say in your, in your press release that you are optimizing, optimizing your production. Is the weakness in demand something structural? Is... Are those production measures somehow related to the specialties situation, or is this related to, to drought, in, in Europe? Thank you. Now, first of all, we had had demand and sales volumes, which were significantly below our expectations, and that, of course, had an impact on capabilities to produce because warehouse volumes are limited. Then we have seen MOP and Korn-Kali in Germany is now running very well. SOP and Kieserit is still... We see they are picking up, but much slower, and that is a reason for other adjustments as well. Adjustment does not mean stopping production, but focusing in our sites, especially Werra and Neuhof, different, and taking some measures to support that development in the markets. Thank you. Welcome. The next question comes from Christian Faitz, from Kepler. Yes. Thank you. Good morning, Burkhard, Christian, and Julia, and team. Couple of questions, please. First of all, can you give us an update on the harbor strikes in Vancouver and how that affects your volumes out of Bethune, potentially? Mm. In that context, how flexible would you be to ship potash from Europe to Brazil rather than the usual, what is it? 1 million tons or so of Bethune volumes to Brazil. Yeah. Thank you for that. That is my first question. Okay. Then I have a second one. Okay. Thank you, Christian, for that question. It's an important question because we have always said, as we are the only producer in two continents, we are more flexible than others, and this shows now, and we can prove it now. The strike is over. It was for Canadian affairs, quite long, but it's over. We have not seen any impact on Bethune, and we are, we are very flexible to use other harbors. Our logistics, our supply chain did a marvelous job, and I personally believe that we will not have any impacts. There's a remaining risk because there are miles of rail cars waiting for be unloaded in Vancouver. That could have an impact when it takes longer than expected. As we have shown that flexibility already during the strike, I don't believe that there will be a negative impact. Yes, we are, of course, and not only able, we are doing it. We are shipping volumes from Zielitz, meaning Germany, via Hamburg to Brazil. All right. Very helpful. I have a second question, a modeling question. Maybe you can help us. In terms of EBITDA sensitivity, I mean, if you took the current costs now, everything else being equal from here on, and potash prices moving by, let's say, $10 per ton, how much impact would that be on your EBITDA annualized, roughly? Hmm. That would not be enough to, to reach the upper end of the, of the range. We are assuming a much stronger price recovery. But I guess. I was just saying, I mean, if you could get a, like, a ballpark figure for every $10 price move, that is your EBITDA sensitivity annualized, roughly. At $10, so we are expecting 4 million tons, sales volume, and if you take $10 on 4 million tons, you're pretty close to it. This is for the second half, the annualized numbers. Yeah. Mm-hmm. are, a bit higher, and also considering the product portfolio, but yeah. Yeah. Mm-hmm. Yeah. All right. Thank you very much. Thank you. That's it for now. Thank you. The next question comes from Andreas Heine from Stifel. Thanks. Actually, I have 4, but they're very short. I'd like to start, I'd like to start with European season. You, you said it is strong. Is that what you expect, or is that what you already see? The season, I think, in Europe has not started yet, the autumn season, as we are in the summer period. Is that what you were talking about, what you have, what you already see in your order books, or is it your assumption? We, we see it already. We have adjusted our prices a couple of weeks ago already, and we have seen strong reaction on that. Now we have even we are quite shy with public announcements to be sold out, but I think that is the right phrasing for Europe. Supply chain could not do more what we are currently have in our books for Europe. We are quite happy about that, especially Korn-Kali in Germany and MOP in the rest of Europe. We are almost back to normal demand, and you know how weak the demand was, especially in Europe, so that is really a good trend that we are seeing. Mm-hmm. Thanks. That was the first. On specialties, also here, going into the second half, do you think that then the split will be different specialties and MOP? What do you expect in this terms for the SOP premium over MOP? Yeah, we expect and work on that to have a normal premium by the end of the year again. We are quite reluctant with... so in our assumptions, we are cautious with volumes because we see a big, a big customer for us is a European NPK industry, and they are, they are coming back, but slowly. We are cautious for the rest of the year in terms of SOP, but there is also a positive trend, but it's l-lower and not in that speed as the MOP development currently. Okay. That, then, thanks a lot. That brings me then to the third question. You talked about normalization of the market. I don't know what the last really normal year was. 2021 was a very strong one, and 2022 and 2023, volume-wise, less so. What would you say, if 2024 turns out to be normal, what would you say is then a normal market volume next year? We discussed in the team earlier that it's too early. August, we have August, too early to to indicate anything for 2024. I think I should keep to that promise that I gave. That's why I didn't want to ask for a forecast, just what is normal. You're right. You're right, I might have taken this then as a forecast. That's right. Last point, last point is on, on costs. Well, it's again, a 2024 question, of course. What, what you would think, this year on the cost side, but you are hedged, and that's what you have said already on the energy side. Other costs, like material cost, freight rates, and service costs, and so on, I would assume that all of them come down. Is it fair, not talking our numbers, that we can expect a normalization, so to speak, lower unit cost next year than this year? Yeah, I think that is not giving a guidance when I elaborate on costs, especially as the two biggest items are HR and gas. HR costs, of course, will not come back. We already fixed a 2% rise for 2024, which is, I think, appropriate. We have already fixed 80% of our gas consumption for 2024 on a price level below EUR 40 per megawatt. This is definitely a decrease. Other items, I, I see the industry is coming down, it's a fair assumption to expect that all other cost items are rather lower than higher in 2024 than 2023. Thanks. I have no more. Thanks a lot. Thank you very much. The next questions come from Alexander Jones from Bank of America. Great. Thanks very much. Two, I'll take them one by one. The first, just to follow up on costs, on personnel expenses. I think in the quarter it was up 14% year-on-year. Could you give us a bit more color on that? Was that related to maintenance, FX? Because I think that's slightly more than the labor inflation rate you'd been guiding for for the year. 14%? Yeah, you, you are referring to unit costs, Alexander, is that right? To the absolute personnel expenses in the PNL, I think it's up from something like EUR 207 last year to EUR 237 this year. Okay. We had some extraordinary items which were paid in the second quarter. For the full year, it levels out on around 8% increase. It, it, if you only look into the quarter or half year, you will have a higher number, that's correct. The full year HR cost increase is 8%, and next year, 2%. Only 4 of that 8% are one-off, and 4 are remaining. That's also important to understand. Yeah. Mm-hmm. Great. Thank you. The second on, on the market, you talked a little bit about some of the regions, I guess Southeast Asia might be one region where demand's taken a little bit longer to come back. Can you talk any sort of what you're seeing there and when you might expect an uptick in that region as well? Yeah, you're correct. That is currently the only region where we are not seeing a significant uptake of demand. In addition, it's a region where a lot of Belarusian and Russian product is placed. That's why we are shy to expect, here, big movements in the next couple of weeks or month, and that is not part of our of our forecast, a strong Southeast Asian business. Thank you. You're welcome. The next question comes from Rikin Patel, from BNP Exane. Hi, thanks for taking my questions. Just two follow-ups. Firstly, on demand. I appreciate it's tough to give a view on next year. I think one of your Canadian peers said last week that they expect mid-cycle demand of about 70-75 million tons. Is that something you would describe to as well? If so, what sort of gets you to that, that number? Huh? Yeah, I'm sorry. Again, I don't want to elaborate on the potential, market volume, market volume in 2024. We can talk about that in, in our November call, but not now. Sorry. My, my question was more sort of mid-cycle. Do you see demands recovering back to sort of 70 million-75 million tons? Yeah, the big question will be, will the supply be a limiting factor? If there are still 7-10 million tons missing from Eastern Europe, then the demand in this range is impossible. It's very tricky and difficult to put all pieces together because that is currently a little bit underestimated. We have between 10% and 15% of a normal demand missing in supply, and that is. That's why I'm shy to answer that question. Okay, understood. Thanks. Secondly, just following up from earlier around sort of the Q3 dynamic, I think you mentioned the time lag is now widening with sales having been, been sort of just in time in Q2. Can you maybe give an indication on where you see earnings going in Q3 relative to Q2? Should we be assuming sort of a marginal step up sequentially, and then a bigger step up in Q4? Yeah, that will definitely be the case. Again, and that is important, so I'm, I'm grateful for that question. It gives me the chance to, again, point out, we have two effects in Q3. In early July, we had the weakest prices. We said, bottom was met at the end of the quarter, so we started with weakest weak prices. Now we are in August, seeing prices rising, and we expect to continue them. Compared Q3 to Q4, prices will be significantly lower in Q3 than in Q4, and the production volumes, due to the maintenance break. All our sites will have the maintenance break, and that's, that will, of course. That's normal that we have every year, but that will have also an impact on EBITDA. If we look into the midpoint, there's another EUR 220 million EBITDA to come, and a mid-size double-digit number will be expected in Q3. The rest in Q4. Great. Very helpful. Thank you. Thank you. The next question comes from Aron Ceccarelli. Hello. Hi, good morning. I joined late, so apologies if my question has been already asked. I have one on China. With Belarus and Russia rerouting most of their volumes there, would you be able to share some color about inventories in the region and how this could, could impact global prices? The second one would be on Brazil. We got industry data suggesting that for the first half, volumes were down 10%. How do you see them going into, into the second half? Thank you. Yeah, to China, we see also a pickup in demand in China, and that means there is enough room for all suppliers to supply into China. And we also see that the Chinese are not keen in only having Belarusian and Russian product, but the market is so big that we all will ship into the market, even on that price level. We ship from Bethune less than normal because netbacks are higher in other areas, but it's an important market, and message is very positive. Demand is picking up, and the assumption that the next Chinese price is a higher one is a fair one from today's perspective. Brazil was- further off? 10% down in the first half. How will it be in the second half? Yeah, Brazil has a perfect environment. They will have a strong harvest. They have high prices for their product to farmers. We believe to see a very strong second half, so it could, yeah, could match what we have lost in the first half. Thank you. You're welcome. Right now, I'm not seeing any further questions. Does anyone want to raise their hand and ask a question? Yeah, there is another one. Lisa De Neve from Morgan Stanley. Hi. Sorry, I can't put on my camera. I apologize for that. It doesn't allow the MS system to do that. Just have one. I'm aware you're not selling huge volumes into India normally, but what is your view that the Indian contract hasn't really been formally resettled? Any thoughts you have on that would be great. Thank you. Yeah, that's it. Final question is a tricky one. India is an interesting story. We know that they have negotiated very, very long for the old contract, and then they found out that prices have fallen further and start a new negotiation round. Until today, there is still no end. Now, prices are picking up again, obviously, the negotiations are always following the current market trend. I have no idea when they come into the market with a new price, but the longer they wait, the higher, compared to China, will be the Indian price. I, I just elaborated on China, on the imports of the Chinese market. India is another animal, if you wish. We are able to avoid Indian shipments if the prices are not fair, and currently, we are not doing much. Thank you very much. You're welcome. I have one more question from Christian Faitz from Kepler. Yes, thank you. Just a small follow-up question on your customer segment industry. Looks like a very solid performance. I would hope and believe also on the bottom line. Can you differentiate between the various end customer industries a bit, and how you see prices holding up into the second half of this year? Thank you very much. Yeah, thank you for that question, because we... As we did today, we usually only talk about the agriculture business, but the Industry+ is a very nice add-on. As you know, a mix from salt business and, and potash business. We have seen potash prices following the market trends, so coming down a bit. Now we expect always with a little delay to see prices increase in the segment as well. The, the potash products run into very many segments, industrial applications. The salt business is still a little bit driven by desalt, desalting, de-icing salt business, which is currently not a big issue. What we are also seeing is that the chemical industry, which is a key player for us, is weakening. All in all, taking that into account, we are very happy with the performance of the Industry+ business, and the margins are on a very healthy level. Very helpful. Thank you, and good luck for H2. Thank you very much. Yeah. We don't have any further questions. Yeah. I say, say thank you for the participation. We had no big surprises today as we announced our numbers earlier, but you see the team being optimistic, and we are looking very forward to see you on the roadshow or wherever. We wish you all the best. Bye-bye.