After a raft of bad news over the last year, K+S – formerly known as Kali und Salz, from the German “Potash and Salt” – wanted to wow investors with a new strategy. The company is emerging from a tough period, caused by new twists in cyclical and long-term trends that have battered its sector brethren. Yet some investors clearly think the latest steps don’t go far enough.
In an interview with Handelsblatt, Chief Executive Burkhard Lohr, 54, complained that the stock market was too fixated on his company’s volatile potash business even though it makes up just one-quarter of revenues – and that there was “tremendous potential for savings” in the planned merger of its salt and potash operations, one of the restructuring measures announced on Monday.
Though not exactly a household name, K+S became the world’s biggest salt producer following its 2009 takeover of Morton Salt of the US. The German company is also the fifth-largest seller of potash, a compound from which potassium chloride is extracted for use in fertilizers.
Mr. Lohr, the company’s former finance head who became CEO in May, said the group’s industrial business alone accounted for a third of the group’s business in 2016, delivering €1.1 billion ($1.29 billion) in revenue and a 21 percent margin on earnings before interest, tax, depreciation and amortization, or EBITDA for short.