Obligation K+S AG 3.25% ( XS1854830889 ) en EUR

K+S AG

100 % ▲

Allemagne

XS1854830889 ( en EUR )

3.25% par an ( paiement annuel )

18/07/2024 - Obligation échue

Prospectus brochure de l'obligation K+S Aktiengesellschaft XS1854830889 en EUR 3.25%, échue

K+S Aktiengesellschaft est une société minière allemande cotée en bourse, spécialisée dans l'extraction et la commercialisation de potasse et de sels industriels, utilisés principalement dans l'agriculture et l'industrie.

L'Obligation émise par K+S AG ( Allemagne ) , en EUR, avec le code ISIN XS1854830889, paye un coupon de 3.25% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 18/07/2024

K+S Aktiengesellschaft
(Kassel, Federal Republic of Germany)
EUR 600,000,000 3.250 per cent. Notes due 2024
Issue Price: 100.00 per cent.
This prospectus (the "Prospectus") relates to the issue of EUR 600,000,000 3.250 per cent. fixed rate notes due
2024 (the "Notes") by K+S Aktiengesellschaft, Bertha-von-Suttner-Straße 7, 34131 Kassel, Germany (the "Issuer" or
"K+S AG" and together with its consolidated subsidiaries and affiliates, "K+S", "K+S Group" or the "Group") on
18 July 2018 (the "Issue Date") in a denomination of EUR 100,000 each. The Notes will be governed by the laws of
the Federal Republic of Germany ("Germany").
This Prospectus comprises a prospectus for the purposes of (i) Article 5.3 of the Directive 2003/71/EC of the
European Parliament and of the Council of 4 November 2003, as amended (inter alia, by Directive 2010/73/EU of the
European Parliament and of the Council of 24 November 2010) (the "Prospectus Directive"), and (ii) the relevant
implementing measures in the Grand Duchy of Luxembourg ("Luxembourg") and, in each case, for the purpose of
giving information with regard to the issue of the Notes and the Issuer. This Prospectus has been approved by the
Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg (the "CSSF") in its capacity as
competent authority under the Luxembourg Loi relative aux prospectus pour valeurs mobilières of 10 July 2005 (the
"Luxembourg Prospectus Law") which implements the Prospectus Directive into Luxembourg law. Pursuant to
Article 7(7) of the Luxembourg Prospectus Law, by approving this Prospectus, the CSSF gives no undertaking as to
the economic and financial soundness of the transaction and the quality or solvency of the Issuer.
Application has been made to the Luxembourg Stock Exchange for the Notes to be admitted to trading on the
Luxembourg Stock Exchange's regulated market "Bourse de Luxembourg" and to be listed on the official list of the
Luxembourg Stock Exchange (the "Official List").
The Notes will initially be represented by a temporary global note, without interest coupons, which will be exchangea-
ble in whole or in part for a permanent global note without interest coupons, not earlier than 40 days after the Issue
Date, upon certification as to non-U.S. beneficial ownership.
Investing in the Notes involves certain risks. See "RISK FACTORS" beginning on page 8.
The Issuer expects that, upon issuance, the Notes will be assigned a rating of BB by Standard & Poor's Credit Market
Services Europe Limited. A rating is not a recommendation to buy, sell, or hold securities, and may be subject to
revision, suspension or withdrawal at any time by the relevant rating agency.
This Prospectus will be published in electronic form together with all documents incorporated by reference herein on
the website of the Luxembourg Stock Exchange (www.bourse.lu).
The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") and the Notes are in bearer form that are subject to U.S. tax law
requirements. Subject to certain exceptions, the Notes may not be offered, sold or delivered within the
United States of America ("United States") or to, or for the account or benefit of, U.S. persons (as defined in
Regulation S under the U.S. Securities Act ("Regulation S")).
The Notes have been assigned the following securities codes:
ISIN XS1854830889, Common Code 185483088, WKN A2NBE7.
Joint Lead Managers
Deutsche Bank
DZ BANK AG
Goldman Sachs
HSBC
Co-Managers
Commerzbank
Santander Global Corporate Banking
The date of this Prospectus is 13 July 2018.
1

RESPONSIBILITY STATEMENT
The Issuer accepts responsibility for the information contained in this Prospectus and
hereby declares that, having taken all reasonable care to ensure that such is the case, the
information contained in this Prospectus is, to the best of its knowledge, in accordance with
the facts and does not omit anything likely to affect its import.
NOTICE
This Prospectus should be read and understood in conjunction with any supplement here-
to and with any other documents incorporated herein by reference.
No person is authorised to give any information or to make any representations other than
those contained in this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorised by or on behalf of the Issuer or the Man-
agers (as defined in "SUBSCRIPTION AND SALE OF THE NOTES"). The delivery of this
Prospectus at any time does not imply (i) that the information in this Prospectus is correct as
of any time subsequent to the date hereof or, as the case may be, subsequent to the date on
which this Prospectus has been most recently supplemented, or (ii) that there has been no
adverse change in the financial situation of the Issuer which is material in the context of the
issue and sale of the Notes since the date of this Prospectus or, as the case may be, the date
on which this Prospectus has been most recently supplemented, or the balance sheet date of
the most recent financial statements which are deemed to be incorporated into this Prospec-
tus by reference or (iii) that any other information supplied in connection with the issue of the
Notes is correct at any time subsequent to the date on which it is supplied or, if different, the
date indicated in the document containing the same.
This Prospectus contains certain forward-looking statements, including statements using
the words "believes", "anticipates" "intends", "expects" or other similar terms. This applies in
particular to statements under the caption "INFORMATION ON K+S AG AS ISSUER Busi-
ness Overview" and statements elsewhere in this Prospectus relating to, among other things,
the future financial performance, plans and expectations regarding developments in the busi-
ness of the Issuer. These forward-looking statements are subject to a number of risks, uncer-
tainties, assumptions and other factors that may cause the actual results, including the
financial position and profitability of the Issuer, to be materially different from or worse than
those expressed or implied by these forward-looking statements. Neither the Issuer nor the
Managers assume any obligation to update such forward-looking statements and to adapt
them to future events or developments.
Certain numerical figures set out in this Prospectus, including financial data presented in
millions or thousands and percentages, have been subject to rounding adjustments and, as a
result, the totals of the data in this Prospectus may vary slightly from the actual arithmetic to-
tals of such information.
Furthermore, this Prospectus contains industry related data taken or derived from industry
and market research reports published by third parties ("External Data"). Commercial publi-
cations generally state that the information they contain originated from sources assumed to
be reliable, but that the accuracy and completeness of such information is not guaranteed and
that the calculations contained therein are based on a series of assumptions. The External
Data have not been independently verified by the Issuer.
The External Data was reproduced accurately by the Issuer in the Prospectus, and as far
as the Issuer is aware and is able to ascertain from information published by any third party,
2

no facts have been omitted that would render the reproduced External Data inaccurate or
misleading. The Issuer does not have access to the underlying facts and assumptions of nu-
merical and market data and other information contained in publicly available sources. Con-
sequently, such numerical and market data or other information cannot be verified by the
Issuer.
Neither Deutsche Bank AG, London Branch, DZ BANK AG Deutsche Zentral-
Genossenschaftsbank, Frankfurt am Main, Goldman Sachs International, HSBC Bank plc,
Banco Santander, S.A., or Commerzbank Aktiengesellschaft (the "Managers") nor any other
person mentioned in this Prospectus, except for the Issuer, is responsible for the information
contained in this Prospectus or any other document incorporated herein by reference, and
accordingly, and to the extent permitted by the laws of any relevant jurisdiction, none of these
persons accepts any responsibility for the accuracy and completeness of the information con-
tained in any of these documents. The Managers have not independently verified any such
information and accept no responsibility for the accuracy thereof.
This Prospectus does not constitute an offer of Notes or an invitation by or on behalf of the
Issuer or the Managers to purchase any Notes. Neither this Prospectus nor any other infor-
mation supplied in connection with the Notes should be considered as a recommendation by
the Issuer or the Managers to a recipient hereof and thereof that such recipient should pur-
chase any Notes. Each investor contemplating purchasing any Notes should make its own
independent investigation of the financial condition and affairs, and its own appraisal of the
creditworthiness of the Issuer.
The offer, sale and delivery of the Notes and the distribution of this Prospectus in certain
jurisdictions is restricted by law. Persons into whose possession this Prospectus comes are
required by the Issuer and the Managers to inform themselves about and to observe any such
restrictions. In particular, the Notes have not been, and will not be, registered under the Unit-
ed States Securities Act of 1933, as amended (the "Securities Act"), and are subject to spe-
cial U.S. tax law requirements where held by U.S. persons (TEFRA D rules). Subject to
certain limited exceptions, the Notes may not be offered, sold or delivered within the United
States of America ("United States") or to U.S. persons.
For a further description of certain restrictions on offerings and sales of the Notes and dis-
tribution of this Prospectus (or of any part thereof) see "SUBSCRIPTION AND SALE OF THE
NOTES Selling Restrictions."
MIFID II PRODUCT GOVERNANCE / PROFESSIONAL INVESTORS AND ECPS ONLY
TARGET MARKET Solely for the purposes of the product approval process conducted by
each Manager who is a manufacturer for the purposes of EU Delegated Directive 2017/593,
the target market assessment in respect of the Notes has led to the conclusion that, as of the
date of this Prospectus: (i) the target market for the Notes is eligible counterparties and pro-
fessional clients only, each as defined in Directive 2014/65/EU (as amended, "MiFID II"), and
(ii) the appropriate distribution channels are execution only, non-advised services, investment
advised and portfolio management. The targeted investors are expected to have (1) at least
advanced knowledge and/or experience with financial products, (2) the ability to bear losses
resulting from interest rate changes and no capital loss bearing capacity if held to maturity, (3)
a medium to high risk profile, (4) a return profile preservation, growth and/or income as in-
vestment objective and (5) a medium term investment horizon. Any person subsequently of-
fering, selling or recommending the Notes (a "distributor") should take into consideration the
manufacturers' target market assessment; however, a distributor subject to MiFID II is re-
sponsible for undertaking its own target market assessment in respect of the Notes (by either
3

adopting or refining the manufacturers' target market assessment) and determining appropri-
ate distribution channels.
IMPORTANT EEA RETAIL INVESTORS: The Notes are not intended to be offered, sold
or otherwise made available to and should not be offered, sold or otherwise made available to
any retail investor in the European Economic Area ("EEA"). For these purposes, a retail in-
vestor means a person who is one (or more) of: (i) a retail client as defined in MiFID II or (ii) a
customer within the meaning of Directive 2002/92/EC (as amended, the "Insurance Media-
tion Directive"), where that customer would not qualify as a professional client as defined in
point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospec-
tus Directive.
In this Prospectus, unless otherwise specified, all references to "", "EUR" or "Euro" are to
the currency introduced at the start of the third stage of the European economic and monetary
union, and as defined in Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the
introduction of the Euro, as amended, references to "USD" or "U.S. $" are to the legal curren-
cy of the United States of America, references to "CAD" are to the legal currency of Canada
and references to "AUD" are to the legal currency of Australia.
IN CONNECTION WITH THE ISSUE OF THE NOTES, DEUTSCHE BANK AG, LONDON
BRANCH (OR PERSONS ACTING ON ITS BEHALF) MAY OVER-ALLOT NOTES OR
EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE PRICE OF THE NOTES
AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER,
STABILISATION MAY NOT NECESSARILY OCCUR. ANY STABILISATION ACTION MAY
BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE
TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN, MAY CEASE AT ANY
TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE
ISSUE DATE OF THE NOTES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF
THE NOTES. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE
CONDUCTED BY THE RELEVANT STABILISATION MANAGER(S) (OR PERSON(S)
ACTING ON BEHALF OF ANY STABILISATION MANAGER(S)) IN ACCORDANCE WITH
ALL APPLICABLE LAWS DIRECTIVES, REGULATIONS AND RULES OF ANY RELEVANT
JURISDICTION.
This Prospectus may only be used for the purpose for which it has been published.
This Prospectus does not constitute and may not be used for the purposes of an of-
fer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not
authorised or to any person to whom it is unlawful to make such an offer or solicita-
tion.
4

TABLE OF CONTENTS
OVERVIEW ................................................................................................................................. 6
RISK FACTORS ......................................................................................................................... 8
USE OF PROCEEDS ............................................................................................................... 31
INFORMATION ON K+S AG AS ISSUER ............................................................................. 32
TERMS AND CONDITIONS OF THE NOTES ....................................................................... 54
TAXATION ................................................................................................................................ 83
SUBSCRIPTION AND SALE OF THE NOTES ..................................................................... 90
GENERAL INFORMATION ..................................................................................................... 94
INCORPORATION BY REFERENCE .................................................................................... 96
NAMES AND ADDRESSES .................................................................................................... 98
5

OVERVIEW
The following overview contains basic information about the Notes and does not purport to
be complete. It does not contain all the information that is important to making a decision to
invest in the Notes. For a more complete description of the Notes, please refer to the section
"Terms and Conditions of the Notes" of this Prospectus. For more information on the Issuer,
its business and its financial condition and results of operations, please refer to the section
"Information on K+S AG as Issuer" of this Prospectus. Investing in the Notes involves cer-
tain risks. See the section "Risk Factors" beginning on page 8 of this Prospectus.
Terms used in this overview and not otherwise defined have the meanings given to them in
the terms and conditions of the Notes (the "Terms and Conditions").
Issuer:
K+S Aktiengesellschaft
Joint Lead Managers:
Deutsche Bank AG, London Branch
DZ BANK AG Deutsche Zentral-Genossenschaftsbank,
Frankfurt am Main
Goldman Sachs International
HSBC Bank plc
Co-Managers
Banco Santander, S.A.
Commerzbank Aktiengesellschaft
Principal Paying Agent:
Deutsche Bank Aktiengesellschaft
Currency:
Euro
Denominations of Notes:
Euro 100,000
Form of Notes:
The Notes will be issued in bearer form.
Global Notes:
The Notes will initially be represented by a temporary global
note, without interest coupons, which will be exchangeable in
whole or in part for a permanent global note without interest
coupons, not earlier than 40 days after the Issue Date, upon
certification as to non-U.S. beneficial ownership.
Status:
The Notes will constitute unsecured and unsubordinated ob-
ligations of the Issuer ranking pari passu among themselves
and pari passu with all other unsecured and unsubordinated
obligations of the Issuer.
Maturity Date:
18 July 2024
Day Count Fraction / Interest
Act/Act (ICMA) Day Count Fraction. Annually in arrears on 18
Payment Dates / Business Day July each year. Following Business Day Convention (unad-
Convention:
justed).
Early Redemption:
The Notes can be redeemed at the option of the Issuer prior
to their stated maturity for taxation reasons, within the three
month period prior to their stated maturity and for reasons of
minimal outstanding amount. See § 4 of the Terms and Con-
ditions of the Notes.
6

Negative Pledge:
The Terms and Conditions of the Notes contain a negative
pledge provision. See § 2 of the Terms and Conditions of the
Notes.
Change of Control
The Terms and Conditions of the Notes provide for a change
of control provision. See § 7 of the Terms and Conditions of
the Notes.
Events of Default:
The Terms and Conditions of the Notes provide for events of
default entitling holders of the Notes to demand immediate
redemption of the Notes. See § 8 of the Terms and Condi-
tions of the Notes.
Cross Default:
The Terms and Conditions of the Notes provide for cross
default provisions. See § 8 of the Terms and Conditions of
the Notes.
Taxation:
All payments of principal and interest in respect of the Notes
shall be made free and clear of, and without withholding or
deduction for, any taxes or duties of whatever nature im-
posed or levied by way of withholding or deduction at source
by or on behalf of the Federal Republic of Germany, or by or
on behalf of any political subdivision or authority therein hav-
ing power to tax, unless such deduction or withholding is re-
quired by law. In such event, the Issuer will, subject to the
exceptions set out in the Terms and Conditions, pay such
additional amounts as shall result in receipt by the holders of
the Notes of such amounts as would have been received by
them had no such withholding or deduction been required.
Governing Law:
The Notes will be governed by German law.
Jurisdiction:
Non-exclusive place of jurisdiction for any legal proceedings
arising under the Notes is Frankfurt am Main.
Clearance and Settlement:
Payments and transfers of the Notes will be settled through
Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B-1210
Brussels, Belgium ("Euroclear") and Clearstream Banking
S.A., 42 Avenue JF Kennedy L-1855 Luxembourg ("Clear-
stream Luxembourg").
Listing and Admission to Trad- Application has been made to the Luxembourg Stock Ex-
ing:
change for the Notes to be admitted to trading on the Lux-
embourg Stock Exchange's regulated market "Bourse de
Luxembourg" and to be listed on the Official List of the Lux-
embourg Stock Exchange.
Rating:
Standard & Poor's Credit Market Services Europe
Limited (German Branch) ("S&P") has assigned a long-term
credit rating of BB (outlook stable) to K+S AG. The Notes are
expected to be rated BB by S&P.(1)
(1)
A credit rating assesses the creditworthiness of an entity and informs an investor therefore about the probability
of the entity being able to redeem invested capital. It is not a recommendation to buy, sell or hold securities and
7

RISK FACTORS
Before deciding to purchase the Notes, investors should carefully review and consider the
following risk factors and the other information contained in this Prospectus. The occurrence
of one or more of the risks described below, alone or in combination with other circumstanc-
es, may have a material adverse effect on the business, cash flows, results of operations and
financial condition of the Issuer and K+S Group. Moreover, if any of these risks materialize,
the market value of the Notes and the likelihood that the Issuer will be in a position to fulfil its
respective payment obligations under the Notes may decrease, in which case the holders of
the Notes (the "Noteholders") could lose all or part of their investments. Investors should
note that the risks discussed below may not prove to be comprehensive and, therefore, may
not be the only risks to which the Issuer and K+S Group are exposed. Additional risks and
uncertainties, which are not currently known to the Issuer, or which the Issuer currently be-
lieves are immaterial, could likewise impair the business operations of the Issuer or K+S
Group and have a material adverse effect on its business, cash flows, results of operations
and financial condition. The order in which the risks are presented does not reflect the likeli-
hood of their occurrence or the magnitude of their potential impact on the business, cash
flows, results of the operations and financial conditions of K+S Group.
Words and expressions defined in the section "Terms and Conditions" shall have the same
meanings in this section of the Prospectus.
Risk Factors relating to K+S AG as Issuer and K+S Group
K+S Group is subject to effects of macroeconomic trends.
The demand for K+S Group's potash and magnesium products is considerably influenced
by general economic growth as well as economic trends and the associated living standards
in relevant markets, trends in soft commodity prices and, in part, also by political decisions in
some consumer countries. There is a particular risk that growth in the emerging economies
will slow down and/or that the sovereign debt crisis in the euro area will intensify again. This
could lead to agricultural prices falling to a level that triggers uncertainty among farmers about
their future income situation and thereby adversely affect their demand for plant nutrients.
Lower agricultural prices could also negatively affect the incentive for farmers to increase their
yield per hectare through more intensive use of plant nutrients.
A lack of prosperity generally and reductions in disposable income result in changes in
eating habits, which are particularly reflected in a decrease of consumption of meat. As the
production of meat requires significantly more cereals, soy beans and other products used as
animal feed, a decrease in the consumption of meat results in a decreasing need for agricul-
tural raw materials, which in turn lowers the demand for fertilizers.
Although there has been some improvement in the global economy and financial markets
since the last global economic and financial crisis, the overall global economic outlook re-
mains uncertain and current economic conditions could lead to prices for agricultural products
falling to a level that triggers uncertainty among farmers and could adversely affect their fu-
ture income situation and thus among other factors negatively impact their demand in relation
may be revised or withdrawn by the rating agency at any time. A suspension, reduction or withdrawal of the rating
assigned to the Issuer may adversely affect the market price of the Notes. See "General Information Rating".
8

to fertilizers. Any of these situations or developments may have an adverse impact on the
assets, financial and earnings position of the K+S Group.
K+S Group is subject to general fluctuations in demand, supply and price levels.
The demand for K+S Group's products may be adversely affected due to external factors
beyond K+S Group's control. These include, for example, global natural disasters or regional
swings in the economic cycle, decreasing global prices of important agricultural products, the
market entry of new suppliers, a concentration on the demand side as well as deliberate buy-
ing restraint on the part of K+S Group's customers.
Particularly products from the Potash and Magnesium Products business unit could be
threatened by considerable decreases in demand caused by external influences. In terms of
demand, macroeconomic factors such as unfavourable exchange rate developments or liquid-
ity reduction of farm businesses could affect demand in individual sales regions. The same is
true for political market regulation, for example through regional subsidy cuts, the imposition
of customs duties on fertilizers or the introduction of stricter regulations. Environmental factors
such as diseases in certain crops or the occurrence of animal epidemics could likewise lead
to a decline in demand.
Changes on the supply side could arise as a result of capacity expansion. New and exist-
ing producers are in the process of expanding their production capacity based on their fore-
casts of long-term demand on the global potash market, and may have more resources than
K+S Group. Should the market not be ready to absorb additional volumes entirely, this could
increase competitive pressure during a transitional period. Furthermore, producers could at-
tempt to gain additional market share or regain lost market share by increasing supply within
available capacity. A decline in demand could also give rise to increased competitive pres-
sure.
Major increases in capacity and its utilisation, increases in supply from individual produc-
ers within available capacity as well as longer-term decreases in demand could substantially
affect pricing and/or sales prospects. This could change the existing structure of the entire
plant nutrient business, even resulting in the squeezing out of supply-side competition. Con-
sequently, a drop in potash prices and/or saleable volumes cannot be ruled out.
Any of these effects may have a material adverse impact on the assets, financial and earn-
ings position of the K+S Group.
K+S Group is subject to seasonal fluctuations in demand and price levels.
K+S Group is subject to a significant sales volume risk for potash and magnesium prod-
ucts as well as salt that results in particular from the seasonality of demand, especially due to
their dependence on weather conditions. In the Salt business unit, the weather in the de-icing
salt regions of Europe and North America is of particular relevance. Mild winters may lead to
a weather-related decrease in demand and thus considerably reduced sales volumes for de-
icing salt; this in turn could create large season-ending inventories of de-icing salt, putting
pressure on tenders for the upcoming winter season. A sales risk for the Potash and Magne-
sium Products business unit may particularly arise as a result of the dependence on weather
conditions. Prolonged cold and wet weather conditions during the spring season, such as in
2018, which is particularly important for Europe, could, for example, result in shifts in or even
declining sales of plant nutrients. The same holds for weather phenomena such as El Niño or
droughts, which could lead to significant losses of yields for farmers in the affected regions
and reduced use of plant nutrients.
9

The building-up and destocking of inventories by K+S Group's customers, depending on
their expectations regarding future demand and price trends, the weather or their liquidity
management, result in fluctuations in demand. This can lead to an underutilisation of produc-
tion capacity and thus to rising unit costs. As a result of this, during the main fertilizer season,
K+S Group might be faced with such high volume requirements that on the one hand the
stocks in its depots might not be sufficient or, on the other hand, it might not be able to be
fully covered due to logistical bottlenecks. The same applies to salt if towns and cities, com-
munities and road maintenance depots also in view of the public budgets build up insuffi-
cient de-icing salt inventories in the low season.
These seasonal effects may have an adverse impact on the assets, financial and earnings
position of the K+S Group, and may particularly intensify in case of ongoing or repeated spe-
cific weather conditions.
K+S Group is subject to additional weather-related costs.
In the Potash and Magnesium Products business unit, water law framework conditions are
particularly important at some production sites for the unrestricted use of the available tech-
nical production capacity. For example, K+S Group is dependent on the water flow of the
Werra river and the corresponding risk of having to limit production at the Werra plant sites.
Following production outages in 2016 and 2017, which resulted in a disruption in operations
and short-time work, K+S Group continues to face major challenges at the integrated Werra
plant. Due to the still limited availability of personnel and machinery uptime, K+S Group con-
tinues to produce there below the technically feasible capacity limit and is thus not able to
exploit the deductible potential. The commissioning of the kainite crystallization and flotation
facility (the "KCF Facility"), which became operational in 2018 and which is supposed to cre-
ate a means for the disposal of saline waste water and to reduce the volume of saline waste
water at the Werra plant by 1.5 million cubic meters to 5.5 million cubic meters annually, may
prove ineffective or insufficient. In particular in dry years, certain volumes of saline
wastewater would have to be disposed of remotely, generating additional costs for the trans-
portation of this water. Measures undertaken by the K+S Group for wastewater disposal, such
as obtaining permits for temporary storage of brine at the Springen mining field (Merkers
mine) and for discharging process and tailings pile water into the inactive K+S Bergmannsse-
gen-Hugo mine (Hanover region), as well as basin capacity on site which is needed for
wastewater management, may prove ineffective or insufficient, needs time for implementation
and generates costs. Technical issues need to be resolved and permits obtained and subse-
quent adjustments to infrastructure will be required.
These external factors and seasonal effects may have an adverse impact on the assets,
financial and earnings position of the K+S Group.
K+S Group is subject to the risk of new competitors entering the potash business.
An entry of new competitors or the formation of larger competitors in the international pot-
ash business, as the merger of Potash Corp. and Agrium to form Nutrien, could result in a
further tangible shift in the structure of the sector, as already effected by Uralkali's exit of the
BPC sales organisation operated jointly with Belarusian Belaruskali in July 2013. A further
aggressive expansion of new potash capacities by one or more producers could result in a
further increase of competitive pressure and lead to further declining margins. This may have
an adverse impact on the assets, financial and earnings position of K+S Group.
10