K+S Aktie

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've 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 2 of the posted presentation.

And a note on data privacy, please be aware that the Teams session will be recorded, webcast and available as an audio replay on our homepage afterwards. [Operator Instructions]

Now I'd like to hand over to Christian, our CEO, for the opening remarks.

Thank you, Julia, and welcome from my side as well. Let's 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 we 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 noncash 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's look at the full-year guidance. We raised our 2026 EBITDA forecast to range from EUR 680 million to EUR 760 million compared to EUR 630 million to 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 H2, current market price levels for logistical costs and a gas price of USD 45 per megawatt-hour. We also raised our free cash flow guidance from at least breakeven to mid- to higher double-digit million euro amount, which is also in line with Vara consensus.

After this brief introduction, I'm now looking forward to answering your questions with my colleagues, Jens and Julia. And with this, I hand over to the operator to start the Q&A session.

[Operator Instructions] This brings us to the first question of Christian.

Congrats on the results. I have 2.5 questions. I'll 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?

Yes. Christian. Brazil, we saw in the first half of the year record imports and good application. Currently, as we are in between this year's seasons, we see good inventories, but we expect for the second half of the year at least a normal demand in Brazil. And also, what could have an impact is, yes, 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. So for Brazil, we are optimistic for the second half.

Okay. Great. Now my hard question. And I admit it's far-fetched, but 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 '27 in Europe.

No, that's currently not our expectation. Yes, we have a drought in Europe. But in different regions, it's totally different. We just discussed it this morning. Even if you just go 50 kilometers to the north from Kassel, there 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.

And Christian, don't forget, potash is the nutrient that is responsible for water stress in plants. So it helps the plants to withstand water stress. So 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. So maybe he has also then learned from that.

Well, let's -- I mean, this year is clearly a stress test indeed. Yes. Now my final and third question, can you elucidate a bit, indeed talking about low water levels, how they affect production in your mines, particularly in [indiscernible]? I'm aware that you might have at some point cooling water issues or not. Can you elucidate this a bit?

Yes. As we see low water levels in nearly every river in Germany, we also see this in the Ulster River, very close to our Werra site. And we need cooling water for our production process. As long as we have the wet production process, we switch to a dry process with the Werra 2060. So until 2028, the mid of 2028, we closely monitor every time the levels in the rivers. And yes, that could have an impact, but we are monitoring this pretty close, and that's with the cooling water we need.

With regard to saline water, we don't have any impact. We don't expect any impact because we are well prepared.

Our next question comes from the line of David.

It's David Symonds from BNP Paribas. Could I ask, it looked like deicing 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 deicing into next season?

Yes, we have also on a lower level because we are not in the deicing season in Q2, but we still have a good demand, and the inventories are pretty low. So we expect for the rest of the year with the refill orders and also for the -- if we have a normal winter, just a normal deicing demand because there are no buildup of inventories at the other side.

I was also wondering whether there might be a shortfall of inventories into next season, which would have to continue to rebuild at the end of this year. I don't know if you think that's the case.

I think most of the catch-up was done in Q2.

Q2.

Yes.

Okay. Understood. And then 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?

And 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, and that was fully related to saltwater disposal things, and that is why we improved saltwater management that much.

Understood. Okay. I think I'm 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.

Like I said, there was no -- maybe we said if there would be a repeat of the 2018 situation. But 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's due to one allowance we were waiting for, I'm not sure. But the last shutdown related to it was 2018.

Our next question comes from the line of Michael.

Michael Schaefer from ODDO BHF. First question is on relative pricing MOP versus specialty. So I'm rather looking for your netback plans and production plans into the second half. How do you see -- or how do you do the planning? So what's the kind of -- is it rather MOP centric? Or are you rather focusing on specialties? How should we think about the netback planning for the second half on the output?

Yes. As you know, we are permanently optimizing our netbacks with our production mix. And what's very important that including in our rock salt [indiscernible] site, has included potash, sulfur and magnesium. And so we optimize our netback if we produce SOP on the one hand or if we produce MOP and kieserite. Kieserite is a sulfur magnesium product on the other hand. So we optimize if we get a higher netback in kieserite or an SOP for the sulfur, especially due to the good price development in sulfur. And so that's 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 per megawatt-hour nat gas price for the remaining 30% open exposure. So I wonder -- I mean, currently, we have EUR 60 at spot. However, we are below EUR 40 at 1 year forward. So I wonder how you see kind of gas price risk on your side or gas cost risk, let's say, heading into '27, so how your hedging looks like and how are you 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 per megawatt-hour for our midpoint. The volatility 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 middle 1-digit million euro amount to our calculations. So we are well positioned with our gas hedge strategy.

And '27 hedging so far?

We have hedged 50% for Europe at a slightly lower price than this year. And 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. So just give us a bit of a background. Was there any kind of meaningful earnings contribution from that end? Or was it just a pass-through?

The trading revenues that was the technical MAP that we included in our -- that we now have included in our portfolio with the contract with Elixir, and that was the main effect.

Our next question comes from the line of Angelina.

This is Angelina Glazova from JPMorgan. I have 3 short questions this morning. And my first one is just coming back to the guidance. So you were clear in outlining that the lower end of the guidance assumes some adverse impact from lower water levels. But 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?

Yes. In the midpoint, we included especially our normal maintenance that we have in Q3. And then you have a ramp-up phase after the maintenance period that we have just started on Monday at the Werra site. And for the lower end, yes, there we included that it could last for some weeks if we have low water levels, but we feel very comfortable based on the experience that we have with the lower end.

Okay. Understood. And 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. And I'm wondering how this is being perceived by the buyers and whether you think there could be more room for some further increases.

Yes. In Europe, you should keep in mind that we had over the last months, pretty high levels with good netbacks for us. So the room for additional increases isn't the same compared to the international overseas markets where we had lower price levels and a strong increase of the prices. So that's a little bit different overseas and Europe from the base where you are coming from. But the sulfur prices are on a good way, and that's included in our assumptions.

And my last question is looking more broadly on the second half outlook. We have potentially an El Nino situation, which could be worse than what we saw in previous years. So 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 drought, maybe potentially wars in the Southern Hemisphere. So how do you think about incorporating those impacts into your outlook?

Yes. We include the potential El Nino effects in our outlook, but 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. And so in total, we don't expect that it will have a very meaningful impact overall. So as we look globally in all the regions, with the different impacts.

Our next question comes from the line of Lisa.

This is Lisa from Morgan Stanley. I have one follow-up on El Nino. I mean, I know that you -- for this year, you don't expect an impact. But I mean, 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 Nino expected, I mean, would that -- what would change your view on the 2027 demand outlook? Just sort of any thoughts on that.

So if we have an extreme El Nino with lower harvest, then we will have increasing agriculture commodity prices, and that will compensate the situation from our side.

Okay. And then 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. But I was curious about your thoughts into 2027 on higher supplies potentially from Acron, who's ramping up a brand-new potash mine. Sort of any insights of how much volumes they may bring into the market and how that will affect the supply and demand balance?

Yes. And what's very important, Acron is not new for us, that was announced, that we expected, and that's also when we present our calculations what is coming to the market and what is catch-up with additional increases, so a 2% step-up each year. So that will be -- won't have a big impact from our perspective.

And as you addressed BHP, we will see. They announced they will come with the first volumes by the mid of 2027. What's very important, they are not in the market. It's a strong spring season in 2027. And even in 2028, there will be only a few volumes from their side. And so 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. And then my final question is on Industry+ and deicing. I mean, you had a quite 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 sort of the destocking -- restocking -- sorry, restocking element that sits in there?

Yes. So the Industry+ segment overall, including our salt business that we have in total a good demand and good price development. And with the deicing, we expect for the rest of the year a normal winter, and that's finally included. Yes.

Yes. I think even with regard to the prices, they are on a historic high level. And so we think that this will stay at least for the next months. And so we will profit from it as we have profited in the past.

Our next question comes from the line of Sebastian.

I have 2, please. Sebastian Bray from Berenberg Bank. I should have said the name first. The first one is on 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 the -- under the current system to 2030, K+S has to purchase in terms of carbon credits a year?

Yes. Sure.

Yes. So we have already purchased certificates in the past, and we're also profiting from the free allocation, but you can take as a rule of thumb, EUR 30 million per year is our cost for CO2 certificates. And now, if there would be changes in the regulation, for instance, the reduction of the certificates, it will not be that strict as already planned, and there could be some tailwind from it.

That's helpful. And I believe Angelina picked up on the question of SOP pricing more broadly, which has picked up a little in the most recent quarter. But is it possible for this business to get any better into '27? It seems to be really ticking along quite nicely. How do you think about the 1-year view on this, particularly the MOP prices start to decline?

Yes. What's very important, the sulphur production that was missed over the last weeks or months, you are not able to refill it. So if there will be a normal sulphur production, especially in the Middle East, then these are only the volumes that then are able to produce, but not more. So we have some back wins with the sulphur, and the sulphur, we are trying to optimize the netbacks, as I just mentioned. If we are selling SOP or kieserite also, there's a good demand for this magnesium sulphur products, and we try to optimize our sulphur, yes, netbacks in different products.

[Operator Instructions] We have a follow-up question from Christian.

Just a short one. Can you give us any guidance for the tax rate into the end of this year on a normalized basis?

So we will expect a normal tax rate of roughly 30%. Yes.

[Operator Instructions] It appears there are currently no further questions. Handing it back to Christian for any final remarks.

Yes. Thanks to all of you for participating in this call, and thanks also for your questions. And 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 Evercall. Thank you, and have a great day.

Welcome to the K+S First 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've had a chance to review our posted slides as well as our full year -- as well as our Q1 documents available on the 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 2 of the presentation.

A note on data privacy: Please be aware that the Teams session will be recorded, webcast and available as a audio replay on our homepage afterwards. People who ask a question in the Teams session should be clear that by switching on the camera and microphone they agree to the recording and replay of video and audio sequences.

Now I'd like to hand over to Christian Meyer, our CEO, for the opening remarks.

Thank you, Julia; and welcome from my side as well.

We have published the key figures for the quarter and our 2026 outlook already on the 22nd of April, so I will keep this brief.

Starting with the quarter. Q1 EBITDA was almost 40% above the prior year quarter at nearly EUR 280 million. Firstly, this was due to the successful de-icing salt business because of the strong winter weather. Following the strong start at the beginning of the year, performance continued to exceed expectations in the second half of the quarter. Secondly, in the Agriculture customer segment, sales volumes and the average prices exceeded expectations, particularly in March. Free cash flow reached EUR 87 million; cash CapEx, EUR [ 126 ] million.

Let's look at our full year guidance. We raised our 2026 EBITDA forecast to range from EUR 630 million to EUR 730 million from EUR 600 million to EUR 700 million before. This is due to a strong performance in the first quarter and the positive price trend that has continued in the Agriculture customer segment over the past few weeks. This is also driven by the revised U.S. dollar exchange rate assumption of $1.17 instead of $1.20 for the remainder of the year. However, the rising prices of materials, energy and freight resulting from the conflict in the Middle East since March are having a negative impact compared to the original assumptions.

The midpoint. The midpoint of the EBITDA range assumes current market price levels for gas and logistics, stable potash prices in Brazil, persistent positive spillover effects on other sales markets and product groups of K+S. Additionally, it assumes that the increase in sulfur prices will continue to benefit the prices of K+S Cyprus specialty products. The price level achieved for the product portfolio in the Agriculture customer segment by midyear will then roughly need to be maintained on average in the second half of the year.

If the prices continue to rise overseas with corresponding persistent spillover effects, the upper end of the range could be achieved. This could, for example, happen if potassium is given greater weight in compound fertilizers, thereby increasing demand. The lower end of the earnings range could be realized if the conflict in the Middle East persisted for a longer period. Thereby, it could either limit the availability of nitrogen and phosphate fertilizers or the earnings situation of the farmers and therefore, potash application. This could reduce sales prices and volumes over the course of the second half of the year.

Overall, the effects related to the conflict in the Middle East continue to be of limited predictability. I would like to give you a feeling for the phasing of figures for the rest of the year. Keep in mind that Q1 and Q4 are our strongest quarters due to seasonality in both business segments. As a maintenance quarter, Q3 typically has the weakest EBITDA contribution. Q2 is normally better than Q3, but significantly below Q1 or Q4 levels. Last year, Q2 saw a seasonal drop in EBITDA of EUR 90 million versus Q1. This year, the gap between the first 2 quarters is expected to even bigger because of the extraordinary de-icing business in Q1 and the higher cost for energy and logistics.

After this brief introduction, I'm now looking forward to answering your questions together with my colleagues, Jens and Julia. With this, I now hand over to the operator to start the Q&A session.

[Operator Instructions] This brings us to the first question of [ Christian ].

So 2 questions. I'll ask them one at a time as instructed. First of all, in your specialties in potash and namely in your sulfur-related products, can you give us an idea of price increases we should expect for Q2 given the strained sulfur supply situation of your SOP peers?

Yes, absolutely. Our SOP products, there we see increasing price levels in overseas, that's already the fact. In Europe, it's a little bit different due to the fact that the Mannheim producers have high stocks of sulfur, and we have a price list until the end of May. Then in the summertime, there we have a weaker season for SOP, so there, we will see stable prices, and that's finally a good news based on the fact that this will be a weaker season. So a little bit different Europe versus overseas.

Okay. Great. Second question and final question for me for now is, we had a strong start to the winter season and we saw this being reflected, obviously, in this solid Q1 results from de-icing. Yet the last part of the quarter saw rather moderate winter conditions in Europe. Hence, the question, if you see any elevated inventory levels at the municipalities, for example, that could mean lower sales volumes at least in Q3 when preorder typically starts for the upcoming winter season then?

Yes. No, that's -- we see it a little bit different. Especially in March, we had high demand. And due to the weather conditions, and that's already brought to the street. And we have a good demand for the next month, so we expect that it should be on a normal level. And then finally, at the end of the year, it depends on the weather conditions in November and December. But there are no stocks that are built up.

Our next question comes from the line of Angelina.

I will also have 2, please. And my first one is a little bit of a follow-up regarding sulfur. So you have mentioned that for the midpoint of the guidance, you have assumed the higher sulfur prices will still support the sulfur-based specialties. I'm just wondering what exactly you are assuming with regards to sulfur prices? Do you expect them to increase further from current levels or are you assuming, for the guidance sake, that they stay elevated at these levels? So it would be great to get a bit more color on that.

Yes. That's what's very important. We have different sulfur products. On the one hand, we have the SOP, but we also have the Kieserit, that's a sulfur and magnesium product; and in addition, the so-called Korn-Kali, that has also included sulfur. And our expectations is that there are some spillover effects to these products over the next weeks. That's a little bit behind compared to the MOP developments, but there should be some small increases.

And as Christian elaborated, it is also a positive effect that sulfur prices are not seeing the seasonal dip they have seen in earlier years, yes? So after the price list of prices just remained stable, this is already something positive with regards to our original assumptions.

Great. And my second question will be on demand. Maybe as you go into the second quarter or almost halfway through the second quarter, you could give us a bit more color how you're seeing demand developing by region and maybe as early look into the second half? I'm just trying to understand if you're already seeing any evidence of farmers, maybe in the Southern Hemisphere, starting to change their plans for application and for specific crops in light of the fact that nitrogen fertilizer prices are very high. So are you seeing any impact there?

Yes. No, we see a real good and strong demand also on our side. It's pretty close to our competitors. And we are still able to optimize our netbacks by logging in the different contracts. So we -- what we see finally is a good application globally. You see the high volumes that are finally imported in Brazil and the additional demand in China, where the price levels -- domestic price levels are pretty high -- still pretty high, the acceptance of higher prices from China for cross-border deliveries from Russia, and also, we expect some increases in India. These are smaller volumes, but also some increases. And what's also very important, we still see a strong demand compared to last year in Southeast Asia based on the fact of the good palm oil prices. So we -- currently, we don't see a decrease of demand.

Our next question comes from David.

It's David Symonds from BNP Paribas. Could I ask about the bridging items quarter-on-quarter between the first quarter and the second quarter? You mentioned you expect a significant step down and possibly a more significant step down than you saw last year. I remember last year, there was an overproduction impact in Q1, which then sort of reversed in Q2. And I think you've seen that again this year. But maybe you could help us with the bridge quarter-on-quarter.

Yes. Thank you, David, for that question. Last year, you are right, that was an inventory buildup in Q1 and inventory drawdown in Q2. And when we had the ad hoc release, we also discussed this. One of the positive effects that we saw in this year's Q1 was that we did not have a negative inventory development, because we had a good production in Q1 this year again as well, yes? So that old dropdown that we have seen from Q1 to Q2 seasonally will also -- I mean, maybe not exactly in the same magnitude, but ballpark, happen this time because also production in this year's Q1 was good as last year.

Understood. And then if I do some sort of quick math on where you sit on the guidance, it seems to imply like at the midpoint, the second half will be lower year-on-year than it was in 2025. And I'm struggling to understand why that will be the case given that the midpoint assumption is that prices stabilize from midyear at a higher level than they were last year. I understand there's some freight cost increase, but it seems like the net benefit should be -- second half should be higher year-on-year.

First of all, you have the energy cost increase and you have the logistic cost increase, both low double-digit million amount burdens kind of for the year. And then for sure, it depends on the final ASP that we reach until the end of Q2 and which will then, on average, be stable during H2, yes? But the -- I mean, last year, the ASPs were quite good in the second half of the year. Yes.

So there's no special effect beyond ASP and then raw materials and energy, et cetera. Okay.

[Operator Instructions]. We have a follow-up question from [ Christian ].

Yes. Just a small technical follow-up. What was the reason for the rather high interest expense in your P&L of, what was it, almost EUR 60 million-or-so, and what should we consider for Q1 going forward -- for the remainder of the year going forward, sorry?

The rather high interest expense in the P&L should be related. I will check that and maybe come back to you. Could be related to the -- there are always -- yes, in the financial result, there are always changes with regards to the exchange rate. And as we have seen changing exchange rates that can be the reason. Within the cash flow statement, the cash interest was actually quite stable.

[Operator Instructions]. This concludes the time allotted for Q&A, handing it back to Christian Meyer of K+S for any final remarks.

Yes. Thanks a lot for your participation and your questions. And as we already published our numbers, that's maybe the reason why a lot of questions are already answered. And yes, maybe tomorrow, we have our AGM, and then we see you for the half year results soon. Thanks a lot, and see you.

This concludes today's Evercall. Thank you all for joining today, and have a great day.

Good day, and welcome to the K+S Full Year 2025 Earnings Call. My name is Barbara, and I'll be your Evercall webinar host. I would now like to hand over to Julia from K+S for some technical notes. Julia, you may now begin.

Ladies and gentlemen, also from my side, welcome to our call. We hope you had a chance to review our posted slides as well as our full year 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 2 of the presentation. A note on data privacy. Please be aware that the Teams session will be recorded, webcasted and available as an audio replay on our homepage afterwards. People who ask a question in the Teams session should be clear that by switching on the camera and microphone, they agree to the recording and replay of video and audio sequences.

Now I'd like to hand over to Christian Meyer, our CEO, for the opening remarks.

Thank you, Julia, and to welcome from my side as well.

Starting with the quarter. Q4 EBITDA was 17% above the prior year quarter. Therefore, we reached the upper half of our full year guidance range. Firstly, this was due to better prices in both customer segments. Secondly, EBITDA was affected by a higher drawdown in inventories than last year. This resulted in a negative EBITDA effect, which was overcompensated by a positive FX effect due to our hedging. Full year free cash flow reached EUR 29 million. Full year CapEx, EUR 546 million.

In accordance with our dividend policy, we pay out 43% of our free cash flow and therefore, propose a dividend of EUR 0.07 per share to the AGM. In the Q4 impairment test, we saw a value recovery over EUR 484 million. Just to remind you, as long as we remain below the book value, there will be fluctuations with even minor changes in the parameters due to the long term of the valuation model.

Regarding our full year guidance, we expect global potash demand to rise again this year, following full capacity utilization in 2025. Potash prices are tangibly higher year-on-year, which will benefit Q1. Further developments will depend on the course of the spring season when demand from many regions must be met simultaneously. Demand for non-de-icing products in the Industry+ customer segment is also likely to develop positively overall in the current year. Here, we continue to expect moderate price increases for our salt products.

You have all witnessed the exceptional and prolonged winter weather we experienced in January and February throughout Germany and large parts of Europe. This has resulted in a significant upturn in our de-icing salt business. Therefore, we expect significantly stronger sales volumes than in 2025, assuming average winter weather in Q4 2026.

We expect EBITDA to range between EUR 600 million and EUR 700 million. This translates to a midpoint above the 2025 level due to higher potash prices in Q1 and the strong de-icing salt business. Free cash flow should at least break even again despite elevated CapEx. For the upper end of the range, we would need an agricultural volume of 7.6 million tonnes, excluding trade goods and a moderate price increase for MOP in Brazil during the spring season. This has to spill over into other regions and product groups and hold up during the second half of 2026. The lower end would work with a volume of 7.4 million tonnes and prices at the level of the end of 2025.

Just to give you some thoughts on the first quarter, which should see a better EBITDA than in 2025. We anticipate positive effects from our strong start in the de-icing salt business and higher potash prices. However, negative effects arise from the fact that Q1 is the last quarter with an effect in the year-on-year comparison due to the collective bargaining agreement, as well as from the significant inventory buildup that benefited Q1 last year.

In closing, I would like to briefly outline the outlook for the future beyond 2026. We will position K+S as efficiently as possible in terms of resource allocation, structures and processes to make the company even more robust also regarding costs. We also want to direct attention to our second pillar, the salt business. In addition to the potash business, the European salt market has undergone structural changes due to the permanent loss of Ukrainian capacity. Therefore, I would like to clearly state that salt belongs to our core business. We are focusing on operational improvements as well as further developing our product portfolio and market position.

Now I'm looking forward to answer your questions together with my colleagues, Jens and Julia, and I now hand over to the operator to start the Q&A session.

[Operator Instructions] This brings us to our first question. It comes from Christian.

Christian, Jens and Julia and team, just 2 questions. So I'll ask the first one and then wait as asked for. So looking at weather data we had actually -- can you hear me?

Can you put the camera on, Christian?

I can't put the camera on for some reason. I cannot unfortunately.

You can try, Christian. I believe that your camera has been activated.

Alright. Now you can see me in all my beauty. So yes, first question. So I believe looking at current weather data, we had a relatively early start to the, let's say, at least growing season in Europe in the Northern Hemisphere. How -- what are your salespeople telling you about current demand, how that is happening? And also, can you maybe make some comments about in that context, farmer profitability. Farmers are squeezed. I know that farmers are complaining all the time, but they are complaining. So how is potash demand panning out at this point in time?

Yes. So the potash demand, there we see a good demand as our competitors has announced that they are fully sold out for the first quarter, okay, it's already at the end. And that's also the situation for us. And also for the first weeks in the second quarter, where we also have a good demand and that we see more or less globally. And the affordability of the farmers, that depends on the different regions. In general, we can say that the farmers are still earning money with some ups and downs. And if you, for example, see the current palm oil price levels, that's a good and healthy level. And as you know, that's a potash eater crop, there we see also strong demands.

Okay. Perfect. Now my second question, I believe at the end of -- or at the Q3 reporting level, you mentioned the planned big maintenance for Bethune for '26. How is that coming along? And can you tell us about timing there?

That's in the summertime. That's every 3 years, there are 3 months maintenance. But we are on a good way to keep the production level or to increase it a little bit compared to last year.

And our next question comes from Ben.

Great. Ben Isaacson and my research house is Scotiabank. Good to talk to you all. I just have maybe a high-level question on just everything that's going on in the Middle East. I -- when we look at Q4, when we look at fall, we started to see a little bit of resistance to potash demand in some markets, whether it was in North America, a little bit in Europe. And so now we look at nitrogen that's kind of not doubled in price but moving meaningfully higher and presumably other input costs for the farmers such as diesel and whatnot will also move higher. How can we not -- I mean, do you not see a scenario where we could actually have a potash demand destruction in the back half of the year? And I noticed in your guidance, your guidance said that you've included or your assumptions take into consideration what's going on in the Middle East. So maybe you can start by talking about that. And what the guidance have been? Or how are you thinking about those paths for future demand?

Yes. Maybe make a real general picture. With regard to the situation in the Middle East, there are different stories that you can hear in the market. Based on the fact that the fertilizer prices increase, that the energy cost increase, normally, they say that you have a spillover effect also to the crop price, crop prices increase and then it's affordable for the farmers and makes sense to apply fertilizers. The others say, if the prices are too high, then the farmers won't buy any fertilizers, there you have no clear picture. At the end, I expect that we are still 8 billion people on the Earth that there will be a demand for food and that they will apply potash maybe with some volatility. But from our perspective, we don't think that this will have a real big impact on the volumes because we see a good strong demand in Brazil. We see a good demand also in Asia and in Europe and the U.S., we expect a normal level.

And with regard to the situation in the Middle East, from our position, it's important to know that we have a real low exposure in this market. So that wouldn't be a problem to shift or relocate the volumes to other markets. And also for the logistics, from our perspective, as we have sites on 2 continents, we won't have big impact, maybe some increases for the oil price for the logistics for the ships that directly go into the real prices with the formula, but this is an impact for all competitors. So that's not a disadvantage, not an advantage for us. And from the region, that's correct. If you have a look to the Strait of Hormuz, 45% of the sulfur has to go through the Strait and it's blocked currently and also a huge volume of up to 30% of nitrogen is coming from this region. So that there are different stories in the market, what effect that finally will have. But...

Yes. Can I -- just one follow-up and then I'll pass it on. This may be difficult to answer. But on a regional basis, can you talk about which farmers or growers are in best shape and which ones are most at risk of seeing pushback, not necessarily to potash from K+S, but maybe just in general.

Yes. If you go through the different regions, as I just mentioned, U.S. and Europe, we expect a normal base. But if you have a look to Asia, especially with the palm oils and so on, the farmers have a good situation. U.S. farmers are not in a great shape with the sanctions. But I think they will apply potash, especially based on the high harvest of last year. And in Brazil, we see a growing acres of the farmers and also a good demand. So we think that's in line with their profitability. So in Brazil, I would say it's okay. And -- but especially Asia has a positive outlook.

And our next question comes from Angelina.

I hope you can see and hear me okay. It is Angelina Glazova from JPMorgan. I have one question, but it consists of two parts. So I will split it in two. I wanted to ask about your SOP business in Europe. What is the environment in general right now in terms of demand? I think in the context of the Middle East situation, there is an understanding that quite a lot of sulfur comes from the Middle East and from the affected regions. So there is possibly an upside risk to sulfur prices. And in this context, I was wondering if you think there is room to increase SOP prices in Europe if that happens, just depending on the demand levels because those prices have been at quite high levels already, and it's not quite clear whether there is room to further increase them.

Yes. As you mentioned, it's very important that around about 40% to 45% of the global sulfurs coming from the Middle East needs to go through the Strait of Hormuz. So they are blocked currently. But at present, you don't see much increases for sulfur prices. But from our perspective, it will stabilize the premium that we had in the past on a pretty good level. And then we -- it depends finally how long it takes. But what's the difference between us and our competitors, the SOP producers, the Mannheim producers have the challenges to get sulfur physically and the risk where the prices will go. And on the other hand, the higher energy costs will affect their production costs too. That's our advantage from our side as we have the sulfur already included in the rock salt. So we don't have higher cost for sulfur or the physical deliveries. And with our gas consumption, we already hedged 70% of our gas that we need for Germany.

That is clear. And the second part is a very quick follow-up. Could you please remind us the exposure of SOP business maybe both in terms of volumes and also to the extent possible in terms of earnings sensitivity to price increases?

Yes. So it is 700,000 to 900,000 tonnes. That is the number that we are having. And therefore, the earnings sensitivity is quite clear, yes, with that number because price increases directly go through here. And with that 700,000 to 900,000, you know that we can always decide intentionally which way we choose, yes. So if we decide for the so-called SOP MAX, that just means that we have a lower volume in total, but we would only decide for that if it makes most sense with regards to EBITDA and margin expansion.

And in addition, it's important to know that the sulfur component is also included in our Korn-Kali and in our Kieserit, but on a lower level. The main effect will come from the SOP.

And our next question comes from Michael.

Yes, happy to do so. Hope you can hear me well. Michael Schaefer from ODDO BHF. So I want to come back to your outlook statement on the ag volume. So you are, I think, projecting an increase compared to last year's level, excluding also trading 7.5% is the lower end, which is even higher than what you reported last year. So I wonder where this is coming from, given where you are also with the major maintenance shutdown in Canada? And can you give us a bit of an indication to what extent netback optimization plays a major role in your planning i.e., more of the specialties maybe then on the potassium chloride, which we have seen in 2025?

So Michael, if you compare our outlook that we had given for 2025, you would have seen a 7.5% to 7.7%, yes. So 7.4% to 7.6% is still not kind of back at that part. And that is why the increased production-wise is totally possible, yes, with the 100,000 tonnes coming from Bethune. And now it's just a question of the product mix, yes, and we did not reach that 7.5% to 7.7% because we decided for SOP Max. And now it's -- the final outcome between the 7.4% and 7.6% will totally depend on SOP MIN or SOP MAX, not the increase in Bethune. That will come with 100,000.

Okay. Good. Understood. Second question is going back to what you what you flagged before, i.e., the overlooked salt business, which you have. So let's divide the question into two. Maybe give us a bit of an understanding. You talked about price increases and obviously strong volume evolution in de-icing. So can you give us a bit of an indication what kind of earnings contribution we should expect from those, let's say, non-de-icing and de-icing type of businesses underlying because obviously, you are not reporting that anymore, unfortunately, but just giving us a bit of a color here to -- on the sensitivities looking into '26.

Yes. We are very happy with our salt business. As you know, that we are not reporting the figures of the earnings, but you see it finally from the revenues, the increases. And as the cost levels are pretty close the same some smaller increases, then you can see that our earnings or netbacks are higher. And we have really low capital because the mines are pretty old. The book rates are written down. So we don't -- even have no high impact from depreciation, neither from CapEx volumes. We don't need higher CapEx volumes in this area. So that's a low capital intensity. And yes, the volumes coming from de-icing, these are not the highest prices or highest netbacks. So if we have high de-icing volumes, then the average price will go down. That's a normal effect. But in total, the absolute earnings will increase, especially if we are able to sell around about 500,000 tonnes more compared to last year with the de-icing business, but that has not the effect like pharma salt.

And our next question comes from Joel.

Joel Jackson, BMO. First of all, thanks for doing a North American-friendly call time.

Just for you, Joel.

I was interested in your FX assumptions where you're assuming a 1.2 exchange rate for the year, Euro-USD, but we're at 1.15. It makes a big difference on earnings. Can you explain that assumption?

Yes, sure, we can. So our assumption is 1.20 for the year. And obviously, we are hedged on a free cash flow level, but just only to some extent on an EBITDA level. So 0.05 lower exchange rate would end up in EUR 20 million higher EBITDA. So that's the sensitivity.

Sorry, the hedge, how much -- I may have missed how much are you hedged this year and at what rate?

Yes. So we have 70% on a cash flow level, so and the revenues...

On the FX?

On the FX, yes. So on the EBITDA level, it's around about 50% and the hedging rate is 1.14 for the worst case and the best case is 1.09.

And you're also 70% hedged for gas? That number is...

Yes, of course.

Okay. Just making sure. Okay. Second question I have for you is like obviously, sulfur is really extended here and might get more extended, and we all know why, and it was extended for March. Are there ways you can capture more because you've got a free use -- a free feedstock of sulfur that doesn't come to the Middle East. I mean is there a way you can -- you create a way -- unique way you can maximize the value of sulfur you have? Or is that just should we expect the SOP premium over MOP to rise substantially? Are you seeing that from customers? And you mentioned Korn-Kali as well, should we expect that premium to rise going forward?

Yes. With the sulfur, that's depending on the situation, if it finally will spill over to the prices. We have limited access to the sulfur because that's included in the rock salt and there we are only able to, as we just explained, switch between 700,000 and 900,000 tonnes with SOP. As I just mentioned, based on the current situation, we expect that the premium will be at least stable for the year. If there will be some higher impact that at the end, our competitors won't have access to the sulfur, then it could increase. But that's also depending on the seasonality when you need the SOP and in this situation, then the sulfur finally is not accessible.

And finally, are you worried about European potash demand? It kind of dovetails a bit of what Ben was asking earlier, but...

No.

Specifically, there's -- No? Okay. Will gas price [ rebound ]? I know the season has been late for fertilizer in Europe. Like should we be worried about it?

No. From Europe, that we expect a normal demand.

And we're going to move to our next question. It comes from John.

Yes, it's John Campbell with Bank of America. I've got two, please, if I can. Could you maybe elaborate on perhaps your potash sales mix by individual regions, say, in 2025, so presumably Brazil, China, Europe, maybe if you could lay out those percentages, that would be helpful. And also if you could maybe give any guidance kind of where you expect volumes to be settling in terms of the different regions in 2026 as well.

Yes. Okay. Pretty close, the half of our volumes we are able to sell within Europe. So euro-based, that's also very important for us. There we are independent from the U.S. dollar FX rate. We have around about 1 million tonnes to Brazil and a little bit lower to Asia. So yes, these are the main areas.

Very good. And any steer on 2026? Would you expect a stable?

Yes, we expect -- yes, it could be stable there we have some volumes to China and to Brazil, but there we permanently optimize our regional mix to optimize the netbacks. So there, we are able to ship, for example, to Brazil or to Asia maybe to keep some more volumes in Europe depending on the price levels. And that also depends finally on the logistics situation and the logistic cost because there, we have the big advantage compared to our competitors that we have lower logistic cost compared to the others with our routes.

Okay. Very clear. Second question, do you have any kind of sense or reading on the levels of inventory in some of the major markets. So I think in 2025, Chinese inventories were a big topic. Presumably, there's a lot of other bigger topics going on at the moment. But do you have any kind of updates in China and Brazil and India?

Yes. Starting with India, the inventories are pretty low currently. Everybody is waiting for signing that India signs the contract with others. We are not at the table for the negotiations. With China, they are catching up a little bit with their port stocks to their strategic volumes. But what we still see is a good demand and keeping the price level at a pretty high level for the cross-border deliveries from Russia to China. So that reflects finally that there will be also a good demand. And Brazil is maybe a little bit lower, but coming back to a normal level. But in total, there we see a strong demand, especially in Brazil.

And our next question comes from Oliver.

Yes. Research house is Warburg Research. My name is Oliver Schwarz, and obviously, I'm taking the questions one by one. First of all, I'd like to challenge you on your guidance, the upper end. You stated that in that guidance is baked in slightly higher prices, both at the beginning of the year and also a sustainable level of those higher prices towards the end of the year, given the situation in the Middle East. Obviously, let's say, shipping rates are bound to go up, bunker oil is getting more expensive. Shipping room is getting more scarce. Transport routes are likely to expand to avoid the bottleneck we currently have at the border of Iran.

You, other than your competitors normally don't communicate prices ex factory, but including freight and insurance. Hence, if the freight prices go up, obviously, the prices go up as well because that's just the past-through item for you guys. But on the other hand, the price for your product that you receive for the product isn't increasing despite the overall price increase. So what would you say we will need on top of the current price that you see, for example, in Brazil, the EUR 380 million as a sustainable level for, let's say, the average of the current year to basically reflect the likely higher transport costs.

Yes. Finally, maybe important is that the higher logistical costs, the freight costs based on the mentioned tax from your side, that every -- also our competitors are affected by that could increase the prices maybe furthermore. But what's very important, what we expect for the current year with for the upper end, a moderately higher price compared to the February level. So at the spring season that we see a moderately higher prices and that will be reflected or spill over to other regions and other products. And this moderately higher prices will also last for the second half of the year. That's very important. Then we are able to reach the upper end. And yes, with the higher freight costs, I expect that should be finally reflected because our competitors will be affected, too. So that will be compensated at higher costs and maybe other price [ locations ].

So in the outlook, we have basically based the outlook on the fact that we have normal shipping rates, then the prices need to go up moderately, yes. If you have not normal shipping rates for the upper end, they would probably need to go up a few euros more. It's not much, yes, for the full year and for the ASP to be able to get that.

Excellent. Second question is in regards to your competitors from Israel. Obviously, the route to Europe for them is getting more attractive than the route towards the south. Hence, are we likely to see more competition in the European market from those suppliers?

Yes, you are talking about ICL and the Arabian potash company from Jordan. Israel can use the ports in Haifa, but also go through the Gulf of Aqaba and Suez Canal. But at the end, the ships avoid to go to the East along Yemen also before the Iranian situation. I think that wouldn't change the situation. That's a competition like before.

Okay. Last question is on the, let's say, the impairment in summer and the reversal now in Q4. Obviously, that has very much to do with are those prices that -- or perhaps the prices you take into account for potash on a longer-term basis. Just to get, let's say, a feeling for the sensitivity of your model that you use to calculate the value of your assets. Can you just give us a feeling what you changed in your internal calculations to come up with, let's say, this chunk we saw now in Q4 that's basically written back. I mean we are talking about substantial numbers here. So what did basically trigger that reversal?

Yes. So we have different factors, and we name them all in our annual report through the years. And this time, we had a change in the WACC. So it decreased from 8.7% to 8.2%. And this has an effect of roughly EUR 500 million. That was the write-back we saw in the second half or in the fourth quarter. No changes with regard to the potash assumptions, they stayed the same. No changes there.

[Operator Instructions] And team, it appears as we have no further questions at this point. So I'll hand over the call back to you for any final remarks.

Yes. Thanks to all of you for your questions. And I wish you a real great springtime and a good Easter and see you soon.

Bye.

Bye-bye.

Bye.

Thank you, team. As a reminder, this call was recorded and a recording will be made available shortly after today's conference. Thank you all for your participation, and have a great day.

Welcome to the K&S Second Quarter 2025 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've had the chance to review our posted slides as well as our Q3 documents available on our website. After the opening remarks by Christian, we will jump directly into the Q&A session.

Some technical notes as always. Please refer to our disclaimer on Page 2 of the presentation. And then a note on data privacy. Please be aware that the Teams session will be recorded, webcasted and available as an audio replay on our home page afterwards. People who ask a question in the Teams session should be clear that they are switching on their camera and microphone, they agree to the recording and replay of video and audio sequences.

Now I'd like to hand over to Christian, our CEO, for the opening remarks.

Thank you, Julia, and welcome from my side as well. Starting with the quarter. Third quarter EBITDA was above the prior year quarter. Firstly, this was due to better prices in both customer segments. Last year's EBITDA was affected by a drawdown in inventories, which did not occur this year. This resulted in a positive EBITDA effect.

Thirdly, our hedging brought us to a total positive FX effect, which was better than last year. Q3 free cash flow could also be increased from EUR 24 million to EUR 37 million. Regarding our full year guidance, we confirm the midpoint of our previous guidance range and now expect EBITDA to be between EUR 570 million and EUR 630 million. The expectation of a slightly positive free cash flow is confirmed as well.

For the midpoint of the EBITDA guidance, we assume that the average price level currently achieved in all regions and for all product groups remains stable during the rest of the year. This would result in a full year ASP of EUR 330. Although we are highly committed regarding our potash deliveries until the end of the year, we still have some flexibility regarding the exact product mix.

Furthermore, we assume normal winter weather, normal production as well as a U.S. dollar-euro exchange rate of $1.18 and a gas price at EUR 36 for 30% open position in Q4. We would reach the upper or lower end if these factors in combination develop in our favor or against us.

I'm looking forward to answering your questions together with my colleagues, Jens and Julia. And I will now hand over to the operator to start the Q&A session.

[Operator Instructions] And this brings to our first question from Christian.

Christian Faitz here at Kepler Cheuvreux. Christian, Jens and Julia and team, congrats on the results in a difficult time, low season period. A couple of questions, please. So my first question would be your D&A in Q3 was significantly lower than in previous quarters. I assume this is in context of the impairment you took for Q2, correct? And which D&A level should we model in going forward?

Yes. Christian, you're absolutely right. The lower D&A is based on the impairment that we had in Q2. So the base level now is much lower. So the current level that you could calculate for the other quarters.

Okay. Great. And my second question is, any news regarding the progression in talks about the tailing pile coverings.

So we postponed the roundtable discussions and now went further in the smaller group with the local municipality and the citizens initiative. And the aim now is to focus on reliable measures which we can implement and also put in our procedural applications. And yes, now the discussions are ongoing, and we are still confident that we will find a solution.

This is for Neuhof, I assume.

It is for Neuhof, yes.

Okay. And last question, what is the current run rate of annual production in Bethune? And where do you see Bethune gearing up to by the end of '26 in terms of production?

So in the current level, we expect a little bit more than 2.2 million. And in the next year, we have a big maintenance, and that's why we have a little bit more than this year, but not much more in the next year. But that's based on the long maintenance period. That's every 3 years.

And you know that we always ramp by 100,000 to 150,000 tonnes and next year will probably rather be a 100,000 tonnes year.

Our next question comes from Sebastian.

Sebastian Bray from Berenberg Bank. I have two questions, please. The first is on the volume outlook for the group as a whole for '26. Q3, it looks as if the group quite wisely cut some of the more commoditized volumes and went more for specialty. But I'm thinking about implications for next year. We have, as you had mentioned earlier to Christian, a little bit of maintenance at Bethune. Is 7.4 million tonnes a reasonable baseline? Or are there any one-off effects?

And how do you think of that is for agriculture? And how do you think about volume growth, if any, moving into '26? Because if we have some maintenance at Bethune, additional ramp-up of specialties at the MOP market, let's say, remains a bit more challenging, is there any volume growth at the group level in the year?

Yes, Sebastian, what's very important is the final volume finally depends on the product mix. If we have some more specialties compared to MOP, than the volumes are a little bit lower. But from today's perspective, we expect a little bit more volumes for the next year. So growth of at least around about 100,000 tonnes.

That's helpful. And can I ask about the salt business. The pricing has been very helpful over the last few years I think it is safe to say. Are there any signs that the pricing for de-icing salt or salt-like products more broadly is starting to flatten out or in some places, decline or that's not the case?

From today's perspective, not really. That finally depends on the weather conditions in the winter. If it's a pretty warm winter then it could be that's a little bit lower. But you should keep in mind that we are selling de-icing volumes over the whole year. So more than 1 million tonne is already sold. And so the rest finally depends on the weather conditions. If it's pretty cold, then the prices are better; if it's warm, then a little bit lower. But the general price level should be the same.

Our next question comes from the line of Michael.

This is Mike Schaefer speaking from ODDO BHF. Two questions from my side. The first one is more on the general market conditions in the potash market. Initially, into '25, we discussed a lot about production curtailments in Russia and Belorussia. So obviously helping to bring potash prices up. But if we look into rail shipment statistics year-to-date October, we see that basically volumes are up 10%.

So my question is, how do you see, let's say, the supply side from Russia? And how we should think about let's say, going into '26 from this source and what this is doing to the potash market environment in general in '26 from your perspective? This is my first question.

Yes, with Belarus and Russia, they are back on the pre-war levels and increased their volumes a little bit. But the main or the most important answer is that there's the demand. And that regardless of these additional volumes, we saw increasing prices, for example, also for the cross-border deliveries to China.

But also if you have a look to Brazil over the last 12 months, we have a much higher level in Brazil. And for the next year, we will see in the spring season when the demand comes from every region globally that we will see how tight the market is. So we expect still a good demand for next year. And if the supply -- we will see if the supply is able to fulfill this demand in the spring season.

Okay. Second question is more related to K&S specifically on the major building blocks for your cost items, major cost items in '26. So can you just remind us on how you -- you mentioned the EUR 36 price assumption for natural gas in the fourth quarter. So -- but how in general should we think about those energy costs and personnel, what to expect in '26 compared to '25?

Yes. In total, we expect that the cost level will be more or less stable. With regard to the personnel cost, you should keep in mind that the bargaining agreement was in place since the second quarter of this year.

So the next year, we have, in the first quarter, a higher level compared to this year, but the bargaining agreement will run until the end of the next year. So there will be no additional increases. And with gas, we already hedged around about 70% for our gas consumption, and that's a little bit below EUR 40 of the hedging position.

Our next question comes from the line of Tristan.

Tristan Lamotte, Deutsche Bank. I'm just wondering about Q4 and your ASP assumptions. I think you said EUR 330 for the full year, which implies quite a drop-off in Q4 versus Q3 even if you consider FX. So I was wondering if you could maybe talk through that.

Yes. So what's very important, I mentioned that we expect stable market prices from the perspective of today. We are at a peak, for example, with the Brazilian prices. That's also a little bit weaker currently. And you should keep in mind that the FX effects compared to H1 will also be -- is included in our calculation. And the third thing that we have some seasonality with regard to the product mix. So mathematically, that results finally in this EUR 330 a tonne.

And maybe second, I was wondering if you could maybe comment on where you think inventory levels are at the moment in potash in the different regions.

Yes. In the different regions, we see more or less normal levels if you have a look to Europe, U.S. and Brazil. If we have a look to China, there, we see that the prices for cross-border deliveries increased and that the port stocks are below the strategic levels of 3 million. They are around about 2 million. And so at the end, there are normal levels in total, maybe in total, a little bit lower than the normal levels if you see the global market.

[Operator Instructions] This brings us to the next question of Angelina.

I will have two. The first one is specifically on Brazil and the current market environment. Could you give us a bit more color as to what you're seeing on that market?

Because we know that potash is relatively more affordable compared to other micronutrients right now and demand has generally been good from Brazil, but still the farmers have seen some challenges from the economic side, and their availability to credit has become more difficult.

So have you seen any impact on your operations from that? And how are you expecting the situation to develop in terms of demand in Brazil due to this?

Yes. Yes, you're absolutely right. The general conditions for the farmers are still good. And from our perspective, we optimize our regional mix. So we have some better netbacks in some other regions currently. So we don't bring too much volume to Brazil. But the volumes that we are finally export to Brazil, there, we look pretty close on the payments and that we secure or ensure our receivables.

So from our perspective, we don't see a risk for us. And the general farmer conditions are pretty good. So at the end, that's more, yes, depending on different customers that we have a closer look, but in total, we don't see a risk for us.

Understood. And my second question is a bit of a follow-up to Sebastian's questions regarding volumes. So one of the things that we've seen, I think, over the course of the past few quarters, but particularly in Q3, is you're shifting to more higher margin product mix.

And I just wanted to understand to what extent do you have further potential to ship your product mix that way? Is it mostly down? Or you still think that there is some addition you can make in terms of SOP or maybe more broadly in terms of premium products?

Currently, we are very happy with the product mix, but there's not much room for more specialties currently.

Our next question comes from the line of Lisa.

This is Lisa De Neve from Morgan Stanley. I have one question. Against your expectation for rising potash demand in 2026, as you just stated, and your comment that Chinese potash inventory is maybe slightly below their normal strategic levels and their domestic production in China being quite restricted. I mean what are your qualitative expectations for the timing of the Chinese potash contract negotiations? And to which extent do you see potential for the price to be settled higher year-on-year?

What's very important to keep in mind the point I already addressed and you just also addressed, we are not part of the negotiations. That's very important to understand. For this year, everybody expect that it won't take too long that we see a Chinese contract compared to this year. So I can't imagine that we will see that in the summer or in the late spring, it should be earlier, but the rumor is in the market, but we are not at the table.

And if there are no more questions, we will conclude the call.

Okay. Yes. Thanks for your questions, and hope to see you on the road in the next weeks, and have a good day.

Thank you. Bye-bye.

Bye.

Thank you. Bye-bye.

This concludes today's call. Thank you, and have a great day.

In the third quarter, we increased our revenues and operating earnings. Additionally, I have been in close contact with many of our stakeholders, especially politicians over the past few months.

Overall, the third quarter was a typical maintenance quarter for us. In the agriculture customer segment, we achieved higher average prices compared to the previous quarter in both Europe and overseas markets. Adjusted free cash flow reached nearly EUR 62 million in the first 9 months of the year.

We expect capacity utilization in the global potash market to remain high for the remainder of the year. As the financial year has progressed, we can now narrow our outlook. We expect EBITDA to range between EUR 570 million and EUR 630 million. The midpoint of the range remains unchanged. We have assumed stable price development in the agricultural business compared to current levels. We have slightly lowered our sales volumes forecast for the agriculture customer segment. This is due to reduced production and our deliberate optimization of our product mix, among other factors.

We continue to expect slightly positive adjusted free cash flow in 2025. However, we still have the capital-intensive fourth quarter ahead of us. As a company, we are working hard to optimize our costs, structures and processes to strengthen K+S.

I was on the road quite a bit in the third quarter meeting with our national and international stakeholders. This included customers, investors and politicians in particular. When it comes to politics, it is important to me to emphasize repeatedly that the extraction of raw materials in Germany needs much more support. Securing the supply of domestic raw materials is crucial, not only for agricultural production, but also for most industrial value chains. For instance, the German and European chemical industries depend on a reliable supply of our products. I'm committed to finally making serious progress in reducing excessive bureaucracy.

The requirements that German companies must meet are stifling the economy, preventing investment and hindering efficient working practices. It is unacceptable that our company, a raw materials extraction firm based in Germany, often must wait years for crucial permits. This process must be faster, and it can be faster. Other countries such as Canada, where we also have production facilities are showing us how it's done.

I'm committed to reducing energy costs. Both the German economy and K+S are suffering from high energy prices. The situation is so dramatic that the future of industry in our country is literally at stake. Without relief from gas, electricity and CO2 costs, the German economy will no longer be competitive. Politicians must understand this and remedy the situation immediately.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]