K+S Aktiengesellschaft (SDF.DE) | Investment Case

1. Company Snapshot

1.a. Company Description

K+S Aktiengesellschaft, together with its subsidiaries, operates as a supplier of mineral products for the agricultural, industrial, consumer, and community segments worldwide.It operates through Agriculture, and Industry+ segments.The Agriculture segment offers potassium chloride for important crops, such as cereals, corn, rice, and soybeans; and fertilizer specialties that are used for crops for magnesium and sulfur, including rapeseed or potatoes, as well as for chloride-sensitive crops consisting of citrus fruits, grapes, or vegetables.

The segment markets under the product brands, including KALISOP, KORN-KALI, PATENTKALI, ESTA KIESERIT, MAGNESIA-KAINIT, SOLUMOP, SOLUSOP, SOLUNOP, SOLUMAP, SOLUMKP, EPSO TOP, EPSO MICROTOP, EPSO COMBITOP, EPSO PROFITOP, and EPSO BORTOP.The Industry+ segment provides potash, magnesium, and salt products for industrial applications that are available in different degrees of purity and in specific grain sizes under the brands comprising APISAL, AXAL, BÄCKERSTOLZ, KASA, k-DRILL, NUTRIKS, and SOLSEL.The company was founded in 1889 and is based in Kassel, Germany.

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1.b. Last Insights on SDF

K+S Aktiengesellschaft faced challenges in its recent quarter, as evident from its second-quarter 2025 earnings miss. The company's financials were impacted by unfavorable business conditions, likely stemming from market dynamics and pricing pressures. With no recent announcements on new product launches, acquisitions, or share buybacks, the focus remains on operational performance. According to recent reports, the company's earnings shortfall may be attributed to increased costs and subdued sales growth. A comprehensive review of its strategic plans and market position is warranted.

1.c. Company Highlights

Last Price	11.79
Change Percentage	-1.01%
Open	11.95
Previous Close	11.91
Market Cap ( Millions)	2112
Volume	289842
Year High	17.07
Year Low	10.3
M A 50	11.49
M A 200	13.35

FCF Yield	0.40%
Dividend Yield	1.27%
ROE	-30.16%
Debt / Equity	11.50%
Net Debt / EBIDTA	33.72%
Price To Book	0.49
Price Earnings Ratio	-1.22
Price To FCF	251.38
Price To sales	0.58
EV / EBITDA	3.84

2. K&S Q3 2025 Earnings: EBITDA Beats on Pricing and FX Gains

K&S reported a strong Q3 2025, with EBITDA exceeding the prior year's quarter due to better prices, no inventory drawdown, and a positive FX effect from hedging. The company's free cash flow also saw a significant increase, rising from EUR 24 million to EUR 37 million. The actual EPS came out at 0.1, beating estimates of -0.11706. The full-year guidance for EBITDA remains unchanged, between EUR 570 million and EUR 630 million, with a slightly positive free cash flow expectation. Christian Faitz, CEO, noted that an average price level of EUR 330 is assumed for the full year, which could impact the EBITDA guidance depending on factors such as weather, production, and the U.S. dollar-euro exchange rate.

Publication Date: Nov -25

                                    📋 Highlights
                                    EBITDA Growth::
                                                Q3 EBITDA increased YoY due to higher prices, no inventory drawdown, and favorable FX hedging effects.
Free Cash Flow::
                                                Q3 free cash flow rose to EUR 37 million from EUR 24 million, reflecting improved operational efficiency.
Full-Year Guidance::
                                                EBITDA target remains EUR 570–630 million, assuming an average potash price of EUR 330/tonne.
Bethune Production::
                                                Current run rate at 2.2 million tonnes, with annual growth of 100,000–150,000 tonnes expected despite 2026 maintenance.
Market Outlook::
                                                Anticipated strong potash demand in 2026 despite increased supply from Russia and Belarus, with regional mix optimization to mitigate risks.

                                

Production and Pricing Assumptions

The company is ramping up production at its Bethune facility, with the current run rate at 2.2 million tonnes and an expected annual increase of 100,000 to 150,000 tonnes. Christian Meyer, CFO, stated that the maintenance period at Bethune will impact production in 2026, but the company expects to maintain a growth rate of at least 100,000 tonnes. The company assumes an average price level of EUR 330 for the full year, which is critical in determining the EBITDA guidance.

Market Environment and Outlook

K&S expects demand for potash to be good in 2026, despite increased supply from Russia and Belarus. The company is mitigating risks related to the economic situation in Brazil by optimizing its regional mix and securing receivables. Christian Meyer emphasized that the company is happy with its current product mix, but there is limited potential for further shifting to higher-margin products. Analysts estimate next year's revenue growth at 1.7%.

Valuation and Metrics

With a P/E Ratio of -1.15 and an EV/EBITDA of 3.63, the market seems to be pricing in a challenging environment for K&S. The company's ROE and ROIC are negative, at -30.16% and -27.71%, respectively, indicating potential underlying issues. However, the Net Debt / EBITDA ratio is relatively healthy at 0.34, suggesting that the company's debt burden is manageable.

3. NewsRoom

individual investors who own 57% along with institutions invested in K+S Aktiengesellschaft (ETR:SDF) saw increase in their holdings value last week

Sep -24

Source:

K+S Second Quarter 2025 Earnings: Misses Expectations

Aug -14

Source:

K+S First Quarter 2025 Earnings: EPS: €0.48 (vs €0.10 in 1Q 2024)

May -15

Source:

K+S AG (KPLUF) Q1 2025 Earnings Call Highlights: Strong Start with Raised EBITDA Expectations ...

May -14

Source:

Don't Race Out To Buy K+S Aktiengesellschaft (ETR:SDF) Just Because It's Going Ex-Dividend

May -10

Source:

K+S (ETR:SDF) Is Reducing Its Dividend To €0.15

Apr -05

Source:

K+S Aktiengesellschaft Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

Mar -16

Source:

K+S AG (KPLUF) Q4 2024 Earnings Call Highlights: Strong Cash Flow and Strategic Positioning ...

Mar -14

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.59%)

6. Segments

Potassium Chloride

Expected Growth: 1.8%

The 1.8% growth of Potassium Chloride from K+S Aktiengesellschaft is driven by increasing demand for fertilizers in agriculture, growth in the oil and gas industry for drilling and extraction, and rising adoption in the pharmaceutical industry for manufacturing. Additionally, expanding production capacities and strategic partnerships contribute to the segment's growth.

Fertilizer Specialties

Expected Growth: 1.5%

K+S Aktiengesellschaft's Fertilizer Specialties segment growth of 1.5% is driven by increasing demand for high-quality fertilizers, expansion in emerging markets, and strategic partnerships. Additionally, the company's focus on sustainable and eco-friendly products, as well as its investment in research and development, contribute to its growth momentum.

Chemicals

Expected Growth: 1.2%

K+S Aktiengesellschaft's 1.2% growth in Chemicals is driven by increasing demand for potassium-based fertilizers, particularly in Asia and Latin America. Additionally, the company's focus on specialty fertilizers and crop nutrition products, as well as its cost-saving initiatives, contribute to its growth momentum.

Complementary Activities

Expected Growth: 1.0%

K+S Aktiengesellschaft's Complementary Activities segment growth is driven by increasing demand for specialty fertilizers, expanding agricultural production in emerging markets, and strategic partnerships to enhance product offerings. Additionally, the company's focus on sustainability and eco-friendly solutions contributes to its growth, as farmers increasingly adopt environmentally responsible practices.

Communities

Expected Growth: 1.3%

K+S Aktiengesellschaft's 1.3% growth is driven by increasing demand for potash and salt products, particularly in the agriculture and road salt segments. Expansion into emerging markets, strategic acquisitions, and operational efficiency improvements also contribute to growth. Furthermore, the company's focus on sustainability and environmental responsibility enhances its reputation and attracts environmentally conscious customers.

Food Processing Industry

Expected Growth: 1.6%

The 1.6% growth in K+S Aktiengesellschaft's Food Processing Industry is driven by increasing demand for specialty fertilizers, rising adoption of precision agriculture, and growing consumer preference for organic and sustainable food products. Additionally, expansion into emerging markets and strategic partnerships with food manufacturers are contributing to the segment's growth.

Industrial Applications

Expected Growth: 1.4%

The 1.4% growth in Industrial Applications from K+S Aktiengesellschaft is driven by increasing demand for potassium chloride in oil and gas drilling, rising adoption of potassium-based fertilizers in agriculture, and growing use of potassium salts in pharmaceuticals and food processing.

Animal Nutrition

Expected Growth: 1.7%

The 1.7% growth in Animal Nutrition from K+S Aktiengesellschaft is driven by increasing demand for sustainable and specialty animal feed, expansion in emerging markets, and strategic partnerships. Additionally, the company's focus on innovative products, such as organic and non-GMO offerings, contributes to its growth momentum.

Consumers

Expected Growth: 1.1%

K+S Aktiengesellschaft's 1.1% growth is driven by increasing demand for potash and salt from the agriculture and chemical industries, respectively. Additionally, the company's cost-saving initiatives and strategic investments in its production facilities have improved operational efficiency, contributing to the growth.

Water Softening

Expected Growth: 1.9%

K+S Aktiengesellschaft's Water Softening segment growth of 1.9% is driven by increasing demand for water treatment solutions, particularly in industrial and municipal applications. Growing concerns over water scarcity and quality, coupled with stringent regulations, are fueling adoption of water softening technologies. Additionally, the company's strong brand presence and expanding distribution network are contributing to its growth momentum.

Pharma

Expected Growth: 1.8%

The 1.8% growth in Pharma segment of K+S Aktiengesellschaft is driven by increasing demand for pharmaceutical-grade salt, expansion in emerging markets, and strategic partnerships with key pharmaceutical companies. Additionally, the company's focus on product innovation and quality enhancements has contributed to the growth.

Other

Expected Growth: 1.4%

K+S Aktiengesellschaft's 1.4% growth in the 'Other' segment is driven by increasing demand for specialty fertilizers, expansion into emerging markets, and strategic partnerships. Additionally, the company's focus on sustainability and eco-friendly products has led to higher sales volumes. Furthermore, cost savings initiatives and operational efficiencies have also contributed to the segment's growth.

7. Detailed Products

Potash

A key nutrient for plant growth, used as a fertilizer in agriculture to increase crop yields and improve food security.

Salt

Used as a de-icing agent on roads, a seasoning in food, and as a raw material in the chemical industry.

MgO (Magnesium Oxide)

Used in the production of cement, insulation, and refractory products, as well as in the manufacture of magnesium-based products.

Sulfate of Potash (SOP)

A specialty fertilizer used in agriculture to provide potassium and sulfur to crops.

Kieserite

A naturally occurring mineral used as a fertilizer and in the production of magnesium-based products.

8. K+S Aktiengesellschaft's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for K+S Aktiengesellschaft is medium, as there are some alternatives to potash and salt, but they are not widely available or cost-effective.

Bargaining Power Of Customers

The bargaining power of customers for K+S Aktiengesellschaft is low, as the company has a diverse customer base and no single customer has significant bargaining power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for K+S Aktiengesellschaft is medium, as the company relies on a few key suppliers for raw materials, but has some flexibility to switch suppliers if needed.

Threat Of New Entrants

The threat of new entrants for K+S Aktiengesellschaft is low, as the company has significant barriers to entry, including high capital costs and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for K+S Aktiengesellschaft is high, as the company operates in a highly competitive industry with several major players.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	7.54%
Debt Cost	6.62%
Equity Weight	92.46%
Equity Cost	8.39%
WACC	8.26%
Leverage	8.16%

11. Quality Control: K+S Aktiengesellschaft passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Grupa Kety

A-Score: 6.5/10

Value: 4.1

Growth: 6.0

Quality: 6.2

Yield: 9.4

Momentum: 6.5

Volatility: 7.0

1-Year Total Return ->

Navigator

A-Score: 6.5/10

Value: 6.4

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 2.5

Volatility: 9.7

1-Year Total Return ->

Buzzi Unicem

A-Score: 6.1/10

Value: 6.1

Growth: 7.3

Quality: 7.2

Yield: 3.8

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

ICL

A-Score: 5.8/10

Value: 5.2

Growth: 3.7

Quality: 4.2

Yield: 8.8

Momentum: 8.5

Volatility: 4.7

1-Year Total Return ->

Yara

A-Score: 5.8/10

Value: 7.3

Growth: 1.9

Quality: 4.4

Yield: 6.2

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

K+S

A-Score: 4.7/10

Value: 7.6

Growth: 2.7

Quality: 2.5

Yield: 4.4

Momentum: 6.0

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

17.05%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.26%

K+S Aktiengesellschaft - DE000KSAG888

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SDF

1.c. Company Highlights

Cheaper

Average Yield

Average Quality

Earnings Beats

Revenues Beats

Weak Momentum

Earnings Miss

Higher Growth

Revenues Miss

Stable Momentum

Fairly Valued

Lower Quality

Average Growth

Strong Momentum

2. K&S Q3 2025 Earnings: EBITDA Beats on Pricing and FX Gains

Production and Pricing Assumptions

Market Environment and Outlook

Valuation and Metrics

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.59%)

6. Segments

Potassium Chloride

Expected Growth: 1.8%

Fertilizer Specialties

Expected Growth: 1.5%

Chemicals

Expected Growth: 1.2%

Complementary Activities

Expected Growth: 1.0%

Communities

Expected Growth: 1.3%

Food Processing Industry

Expected Growth: 1.6%

Industrial Applications

Expected Growth: 1.4%

Animal Nutrition

Expected Growth: 1.7%

Consumers

Expected Growth: 1.1%

Water Softening

Expected Growth: 1.9%

Pharma

Expected Growth: 1.8%

Other

Expected Growth: 1.4%

7. Detailed Products

Potash

Salt

MgO (Magnesium Oxide)

Sulfate of Potash (SOP)

Kieserite

8. K+S Aktiengesellschaft's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: K+S Aktiengesellschaft passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

12.e Scoring ^Insights

12.f DCF ^BETA