Welcome to the K+S Second Quarter 2026 Earnings Call. I will now hand over to Julia from K+S for some technical notes. 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 two 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 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. 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 will have it fully in the third quarter this year. 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 U.S. dollar. 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. Free cash flow. 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-EUR 760 million, compared to EUR 630 million-EUR 730 million before. This is mainly due to the strong performance in the second quarter. Midpoint is in line with Vara consensus. That shows that the positive deviation in Q2 results is mainly due to 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 H2s, current market price levels for logistical costs, and a gas price of $45/MWh. 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 session. 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 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. Yes. Thank you. Good morning, Christian, Jens, Christian, Julia, and team. Congrats on the results. I have 2.5 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? Yeah. Hi, Christian. In Brazil, we saw in the first half 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 second half of the year, at least a normal demand in Brazil. Also, 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. Okay, great. Now my half question. Yeah. Is there a risk that due to the extreme drought we've seen in Europe, some cultures, such as corn, might not have taken up the full amount of potash toppings given this year, and hence farmers might be incentivized to take a potash holiday in 2027? In Europe? No, that's currently not our expectation. Yes, we have growth in Europe, but in different regions it's totally different. We just discussed it this morning. Even if you just go 50 km to the north from Kassel, the corn is pretty good. In Kassel, it's not as good. But we don't expect that will have an impact on the application of potash in Germany. Christian, don't forget, potash is the nutrient that is responsible for water stress in plants, so it helps the plants to stand water stress. 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. Maybe he has also then learned from that. Well, this year is clearly a stress test indeed. Now my final and third question. Yeah. Can you elucidate a bit, indeed, talking about low water levels, how they affect production in your mines, particularly in Unterbreizbach? I'm aware that you might have at some point cooling water issues or not. Can you elucidate this a bit? Thanks. 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. We need cooling water for our production process as long as we have the wet production process. We switch to a dry process with Werra 2060, so until the mid of 2028, we closely monitor every time the levels in the rivers. That could have an impact, but we are monitoring. That is 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. Okay, great. Thanks very much. Yeah, thanks to you, Christian. 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. Hi. Good morning. Thank you very much. It is David Symonds 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? 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 the other side. 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. I do not know if you think that is the case. I think most of the catch-up was done in Q2. Q2. Yeah. Understood. Thank you. Back on the Werra River situation, 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? There was no shutdown in 2022. The last shutdown we had was in 2018. That was fully related to salt water disposal things, and that is why we improved salt water management that much. 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. 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 was due to one allowance we were waiting for. I am not sure. But the last shutdown related to it was 2018. Understood. Okay. Thank you very much. You are welcome. 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. Hey, good morning, all. Michael Schäfer here from ODDO BHF. First question is on relative pricing MOP versus specialty. I am rather looking for your netback plans and production plans into the second half. 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 the second half and the output? As you know, we are permanently optimizing our netbacks with our production mix and what is very important, that including in our rock salts as a Werra site, it has included potash, sulfur, and magnesium. We optimize our netback if we produce SOP on the one hand, or if we produce MOP and Kieserit. Kieserit is a sulfur magnesium product on the other hand. So we optimize if we get a higher netback in K+S or an SOP for the sulfur, especially due to the good price development in sulfur. That is finally a week-by-week decision. Okay. Second question is on your outlook statement. At the midpoint, you are still baking in something like EUR 45/MWh net gas price for the remaining 30% open exposure. Yeah. I wonder, currently we have EUR 60 at spot. However, we are below EUR 40 at one year forward. I wonder how you see gas price risk on your side of gas cost risk, let's say, heading into 2027. So how your hedging looks like, and how you are progressing here. 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/MWh for our midpoint. The volatility, which also addressed, that we also expect for the second half of the year. 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. 2027 hedging so far? We have hedged 50% for Europe at slightly lower price than this year. For Canada, we were able to manage to hedge 88% at a very nice price level. 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 this just a pass-through? The trading revenues, that was the technical MAP that we now have included in our portfolio with a contract with Elixir, and that was the main effect. Okay. Thank you. Thank you very much, Michael. Yeah. Thanks. Thank you. Our next question comes from the line of Angelina. Angelina, please state your name and research house, and proceed with your question. Good morning. Thank you for taking my questions. This is Angelina Glazova from JPMorgan. I have three short questions this morning, and 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 needs to last for the adverse impact to become sort of a base case rather than bear case? 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 are 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. 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. In Europe, you should keep in mind that we had, over the last months, pretty high levels with good netbacks for us. The room for additional increases isn't the same compared to the international oversea markets, where we had lower price levels and a strong increase of the prices. That's a little bit different overseas and Europe from the base where you're coming from. The sulfur prices are on a good way, and that's included in our assumptions. Thank you very much. My last question is, looking more broadly on the second half 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 droughts may be potentially worse in the Southern Hemisphere? How do you think about incorporating those impacts into your outlook? Yes. We include the potential El Niño effects in our outlook. You should keep in mind that in different regions there 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. We look globally in all the regions with the different impacts. Great. Thank you very much. You are welcome. 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. Hi, this is Lisa from Morgan Stanley. 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 second half of 2026 in specific regions, in light of a very strong El Niño than expected? What would change your view on the 2027 demand outlook? Just any thoughts on that? If we have an extreme El Niño with lower harvests, then we will have increasing agriculture commodity prices, and that will compensate the situation from our side. 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'm not so concerned about BHP because that could take a long time to ramp. I 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 and demand balance? Yeah, and 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. It is a strong spring season in 2027, and 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 demand that we see over the last years and also for the future. Sure. My final question is on Industry+ and de-icing. Quite a strong second quarter with some restocking from the municipalities. Can you share any sort of dynamics on the pricing side? Should we also foresee higher pricing given the restocking element that sits in there? Yeah. The Industry+ segment overall, including our salt business, there we have in total a good demand and good price developments. With the de-icing, we expect for the rest of the year a real normal winter. That's finally included. Thank you. Even with regard 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. Okay. Thank you very much. Thank you. 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. 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? 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 the certificates will not be that strict as already planned, then there could be some tailwind from it. That is helpful. Thank you. I believe Angelina 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 SOP prices start to decline? What is 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 [back prints] with the sulfur, and the sulfur, we are trying to optimize the net mix, as I just mentioned. If we are selling SOP or Kieserit, there is a good demand for these magnesium sulfur products, and we try to optimize our sulfur net mix in different products. That is helpful. Thank you for taking the questions. You are welcome, Sebastian. Thank you very much, Sebastian. 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. 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. 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 an annualized basis? We will expect a normal tax rate of roughly 30%. Okay. Yeah. All right. Thanks very much. Welcome. 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. 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. Thank you. This concludes today's conference call. Thank you and have a great day.