Deutsche Balaton AG: Resolution on a buyback and redemption of 20% of the issued shares in K+S AG to the upcoming AGM of K+S AG proposed

Heidelberg (pta026/10.03.2023/14:40 UTC+1)

Deutsche Balaton, an investment company based in Heidelberg, Germany, proposes a share buyback program covering 20% of the issued shares to K+S's next AGM, which is scheduled for 10 May 2023. Deutsche Balaton feels that a share buyback is the best way for all shareholders to benefit from the success of the company for the following reasons:

• K+S currently has no net financial liabilities and will continue to generate a large amount of free cash flow in the future. The company is benefitting from the reduced potash supply driven by geopolitical sanctions, long-term megatrends (including population growth, climate change) and strong operational performance.
• The current K+S share price of approximately €21.30 does not reflect these circumstances. It is considerably below the book value per share (approximately €34.07 as at 30 September 2022). The company considers that the fair value per share should be in the range of €42 (IR publication dated November 2022).
• A share buyback would optimise K+S's capital structure and increase the value of the share, as excess liquidity not required for operations can only be invested at lower returns (compared with its use in the core business). Additionally, debt finance to an adequate extent can reduce the cost of capital (WACC) on which standard valuation models are based and thus also creates shareholder value.
• A share buyback is preferable to a dividend payment since it allows K+S shareholders to decide whether they want to keep their shares or tender them into the buyback program and receive liquidity. In addition, institutional investors would generally benefit from the fact that any capital gains are privileged under the German Corporate Tax Act (KStG), while for private shareholders, compared to reinvestments of dividends, such gains are not subject to taxation until the time of realisation (compounded interest effect).

A larger share buyback program is common practice – particularly among successful companies in the Anglo-Saxon world. In Germany, this can be implemented via a resolution of the General Meeting on the reduction of the share capital by redemption of shares to be purchased by the company (section 237 German Stock Corporation Act and section 71 (1) 6 German Stock Corporation Act).

Deutsche Balaton encourages other shareholders of K+S to support this proposal at the next AGM on 10 May 2023.

About Deutsche Balaton AG

Deutsche Balaton is an investment company based in Heidelberg. Its shares are listed in the "Basic Board" of the Frankfurt stock exchange. The investment focus includes listed investments and unlisted corporate investments held directly or via independent subsidiaries in a wide variety of industries.

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Emitter:	Deutsche Balaton AG Ziegelhäuser Landstraße 1 69120 Heidelberg Germany
Contact Person:	Dr. Martin Flick
Phone:	+49 6221 64924-0
E-Mail:	ir@deutsche-balaton.de
Website:	www.deutsche-balaton.de
ISIN(s):	DE000A2LQT08 (Share)
Stock Exchange(s):	Free Market in Berlin, Dusseldorf, Frankfurt (Basic Board), Hamburg, Munich, Stuttgart