מצגת של...
Transcript of מצגת של...
INVESTOR PRESENTATION
January 2019
IMPORTANT LEGAL NOTES
49$5.4B
$7.2B #2
TOP 3~11,000
ICL- AT A GLANCE
<3% BBB-
ICL- 90 YEARS OF HISTORY
Focusing on innovation and
solidifying leadership
2000s -
Establishing & growing operations
in Israel
1920s - 1970s
Consolidating & expanding
globally
1970s - 2014
Production site Sales & marketing office
35%*
25%
1%
22%
12%
* Percentage of sales by main geographical areas, 2017
LEADING GLOBAL COMPANY
2%
3%
proximity to ports &
customers
STRATEGIC
LOCATIONS
innovation
STARTUP
NATION
accumulated over
decades
KNOW-HOWUNIQUE
ASSETS
ICL – STRATEGIC ADVANTAGES
#1
#1
#1
#1
#1
#3
DNA OF LEADERSHIP
CORE VALUES
TOP TIER SAFETY
PERFORMANCE AND
ENVIROMENTAL
RESPONSIBILITY
EMPLOYER OF
CHOICE
LEVERAGING TECHNOLOGY
AND INDUSTRIAL KNOW
HOW TO MEET THE NEEDS OF
OUR CUSTOMERS
ADOPTING BEST PRACTICES
FOR CORPORATE
GOVERMANCE
SUSTAINABILITY
99%
$115M #2
89%
SILVER RANKING
TfS
PRESENT
LEADERSHIP STRATEGY
POTASH
IAS
essential ingredients
LEADERSHIP STRATEGY
PRESENTPhosphate Solutions division
Potash division
Industrial Products division
IAS - Innovative Ag Solutions division
POTASH
IAS
ICL BUSINESS LEADERSHIP
Potash Business Costs by Site
and by Company2
ICL
24%
ICLDead
Sea
Market Share – Specialty Phosphates –
Europe, NA, and LatAm1
ICL
POTASH
IAS
(Dead Sea)40%
Albemarle (Dead Sea)
16%
USA (ALB, LXS)23%
Chinese producers
11%
Others11%
Global Bromine Production Capacity1
ORGANIZATIONAL STRUCTURE ALIGNED WITH STRATEGY
Phosphate Solutions division1
Potash division1
Industrial Products division1
IAS - Innovative Ag Solutions division1
POTASH
IAS
LEADERSHIP STRATEGY
FUTURE
POTASH
LEADERSHIP STRATEGY
POTASH
INDUSTRIAL PRODUCTS
THE GLOBAL BROMINE
MARKET LEADER
180K TONNES
NO.1
SOLID LEADERSHIP
230K TONNES
NO.1
BROMINE PRICES
IN CHINA
INDUSTRIAL PRODUCTS
UNIQUE
ADVANTAGE
2,600
3,100
3,600
4,100
4,600
5,100
MAIN GOALS
A WORLD LEADER AND BEYOND
INDUSTRIAL PRODUCTS
LEADERSHIP STRATEGY
POTASH
INCREASE YIELDS AND FEED THE WORLD
POTASH
100
200
World CropProduction in 2005-
2007
Expansion ofArable Land
Crop Rotation Increase in Yields World CropProduction in 2050
POTASH
0.16
0.24
0.32
0.40
0.48
3
4
5
6
7
8
9
10
11
1961 1972 1983 1994 2005 2016 2027E 2038E 2049E
World population (Bn) Arable land (Ha/Person)
ICL’S UNIQUE POSITION
4.8 MILLION TONNES
STRONG POSITION
POTASH
80% PRODUCED FROM
THE DEAD SEA
WELL ESTABLISHED IN
GROWING MARKETS
LOWER COST AND FASTER
TIME-TO-MARKET
NO.6
ICL’S UNIQUE POSITION
4.8 MILLION TONNES
STRONG POSITION
POTASH
LOWER COST AND FASTER
TIME-TO-MARKET
China
India
IL
Europe
Brazil
US
WELL ESTABLISHED IN
GROWING MARKETS
80% PRODUCED FROM
THE DEAD SEA
NO.6
POTASH OUR GOALS
TOP-3 5MT
10% 1M
LEADERSHIP STRATEGY
POTASH
PHOSPHATE SOLUTIONS - FOOD
ESSENTIAL
MINERALS
BITE
TASTE &
MOUTH FEELTEXTURE &
LAST LONGER
RISE
Oil drilling MiningOral care Cleaning
products
Metals
Leather Construction AsphaltPaints & coatings
- INDUSTRIALPHOSPHATE SOLUTIONS
Water
treatment
UNIQUE BACKWARD
INTEGRATION MODEL
~4,900K TONNES
~90% of phosphate rock
AND VALUABLE
INNOVATIVE PRODUCTS
ICL’S RECIPE FOR LEADERSHIPPHOSPHATE SOLUTIONS
1,150K TONNES
280K TONNES
ICL
24%
WITH A LEADING MARKET
POSITION
Source: ICL estimates (2017)
Market Share – Specialty Phosphates –
Europe, NA, and LatAm1
OUR GOALSPHOSPHATE SOLUTIONS
LEADERSHIP STRATEGY
POTASH
0.4
1.8
FAST GROWING INDUSTRY
1.8
3.2
SPECIALTY FERTILIZERS - THE
FOUNDATION FOR THE FUTURE
~850K TONNES
OVER 300
INNOVATIVE AG SOLUTIONS CREATING LEADERSHIP
FASTEST GROWING
DIVERSIFIED PORTFOLIO
25 YEARS
Coated Fertilizers
Solubles / Straights Liquids
SRF CRFSoluble NPK
MA P/MKP
SOP/CN NOPBulk
LiquidsFoliarLiquids
ICL-SF ^ ^ ^ ^ ^ ^
Compo ^ ^ ^ ^
Haifa ^ ^ ^ ^
Y ARA ^ ^ ^
SQM ^ ^ ^ ^
Kingenta ^ ^ ^ ^
THE FARMING OF THE FUTURE:
WITH INCREASING PRESSURE TO EXPAND PRODUCTION
AND PROTECT OUR ENVIRONMENT, HIGH TECH FARMING
TECHNOLOGIES WILL PLAY A CRUCIAL ROLE
ACADEMIC TECHNOLOGICAL BUSINESS
IAS LEVERAGING ISRAEL'S HIGH-TECH AND AGRI-TECH ECO SYSTEM
TARANIS
THE PERFECT STORM
CHANGEGROW MORE
WITH LESS
GROUNDBREAKING
SOLUTIONS
2B MORE PEOPLE
WITHIN 20 YEARS
ICL AIMS TO OFFER FARMERS
CUTTING-EDGE SOLUTIONS
INNOVATIVE AG SOLUTIONS
UNIQUE R&D CAPABILITIES
GET CLOSER TO GROWER
PORTFOLIO GROWTH
INNOVATION DIGITAL TRANSFORMATION
PRESENT&FUTURE
LEADERSHIP STRATEGY
POTASH
IS ON THE VERGE OF A TIPPING POINTICL
DEBT OPTIMIZATION
SHARE OVERHANG
REMOVED
IMPROVING MARKET
CONDITIONS
ALIGNED
ORGANIZATION
POSITIVE BUSINESS
MOMENTUM
GROWTH STRATEGY
THANK YOUvisit us at www.icl-group.com
Appendix
Financial Overview
Additional Data Regarding Aligned Divisions
Sales FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 Q1 2018 Q2 2018 Q3 2018
Potash 1,515 273 299 351 415 1,338 283 314 372 414 1,383 353 346 409
Phosphate Solutions 2,049 556 584 548 498 2,186 523 507 520 487 2,037 533 541 530
Industrial Products (Bromine) 1,034 268 294 275 283 1,120 310 291 289 303 1,193 317 331 328
Innovative Ag Solutions 680 188 189 147 137 661 192 190 154 156 692 221 212 161
Setoffs and eliminations (239) (59) (55) (53) (34) (202) (48) (48) (46) (53) (196) (53) (59) (57)
Sub-Total 5,039 1,226 1,311 1,268 1,299 5,103 1,260 1,254 1,289 1,307 5,109 1,371 1,371 1,371
Divested businesses' contribution 366 39 66 115 39 260 35 68 151 54 309 33 - -
Total Sales - ICL 5,405 1,265 1,377 1,383 1,338 5,363 1,295 1,322 1,440 1,361 5,418 1,404 1,371 1,371
Profit FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 Q1 2018 Q2 2018 Q3 2018
Potash 637 50 64 75 93 282 37 61 65 119 282 62 76 97
Phosphate Solutions 340 65 70 48 41 224 37 37 52 23 149 52 55 63
Industrial Products (Bromine) 225 62 71 77 76 286 77 76 77 73 303 78 94 95
Innovative Ag Solutions 63 20 23 7 5 55 20 19 9 8 56 25 23 7
G&A & other (349) (86) (91) (92) (84) (353) (64) (65) (64) (73) (266) (72) (60) (62)
Sub-Total 916 111 137 115 131 494 107 128 139 150 524 145 188 200
Divested businesses' contribution 78 4 26 49 9 88 9 25 76 18 128 6 0 0
Total - adjusted operating income - ICL 994 115 163 164 140 582 116 153 215 168 652 151 188 200
Q3 2018 HIGHLIGHTS
Sequential sales were flat
Operating income up by 9%. Net income up by 54%
Operating income excluding divested businesses(1) increased by 43%
EPS was 10 cents compared to 7 cents in Q3 2017 and 8 cents in Q2 2018
Focus on cash flow generation
Dividend distribution for Q3 increased by 20%
Q3 2018 Results Summary
Sales 1,371 1,371 1,440 (5)%
Sales pro-forma(2) 1,362 1,371 1,280 7%
Operating income reported 172 196 180 9%
Operating income adjusted(1) 188 200 215 (7)%
Operating income Adj. (1) Pro-
forma(2)190 200 140 43%
Net income reported 101 129 84 54%
Net income adjusted(1) 113 134 115 17%
Net income Adj. (1) Pro-forma(2) 115 134 70 91%
Operating cash flow 164 196 176 11%
Net debt 2,267 2,205 3,264 (32)%
Effective Tax Rate
$ millions Q3 18 FY2017
Adjusted income before tax(1) 179 528
Normalized tax rate (including resource tax) 23% 25%
Normalized tax expenses 42 136
Carryforward losses not recorded for tax purposes 4 19
Sub-Total 46 155
Sub-Total - % 26% 29%
Other items (mainly exchange rate impact) 1 1
Adjusted income tax 47 156
Actual Effective tax rate 26% 30%
Reconciliation Tables
Calculation of Adjusted income before tax ($ millions) Q3 18 FY2017
Adjusted operating income 200 652
Finance expenses (23) (124)
Share in earnings (losses) of equity-accounted investees and adjustments to financial
expenses2 -
Adjusted income before tax 179 528Calculation of Pro-forma Adjusted operating income ($ millions) Q3 18 Q3 17
Operating income 196 180
Adjustments(1) 4 35
Adjusted operating income 200 215
Divested businesses’ profit - (75)
Pro-forma Adjusted operating income 200 140
Calculation of Pro-forma Adjusted net income ($ millions) Q3 18 Q3 17
Net income 129 84
Adjustments(1) 5 31
Divested businesses’ operating income - (75)
Allocated tax and finance expenses for divested businesses - 30
Pro-forma Adjusted net income 134 70
2018 2019 2020 2021 2022 2023 2024 2025 2026 2038
91
244
17
207267
118
470
46
600348
Loans & debentures Securitization
Successful Optimization of Debt Structure
Decreasing Net Debt/EBITDA Ratio
1.63
2.492.37
3.11
2.87
2.00
2013 2014 2015 2016 2017 Sep 30, 2018
Industrial Products
ICL-IP Product Supply Chains
Global Trends and Major End Markets
FURNITURE &
TEXTILETRANSPORTATION
WATER
TREATMENT
CONSTRUCTION
INTERMEDIATES
FOR FOOD,
PHARMA, AGRO
and OtherOIL & GAS
POWER PLANTS
ELECTRONICS
Major Trends and ICL Solutions
Trends ICL’s Solutions
Potash
Total Fertilizer Use by Crop at Global Level
Source: IFA- Assessment of Fertilizer Use by Crop at the Global Level
World Main Crops Long Term Forecast
Consumption, Stock and Stock to Use Ratio
Source: OECD-FAO Agricultural Outlook 2017-2026 (Jul 2017)
World Grains Production & Consumption:
Current Stock to Use Ratio
Sources: USDA (updated Nov. 2018)
ICL’s Potash Market Share in Fast Growing Markets
18%
Canpotex Uralkali APC
26%
17%
22%
7%
12%
Russia Belarus Canada Jordan ICL
29%
17%6%
22%
13%
Canpotex Uralkali SQM
10%
25%
25%
16%
20%
4%
APC BPC Canpotex ICL Uralkali K+S
5%
20%
23%9%
29%
14%
SQM BPC Uralkali K+S Canpotex ICL
20%
23%
31%
12%
9%5%
Uralkali BPC Canpotex ICL APC Others
India Brazil China
Sources: ANDA, Chinese Customs, Fertilizer Association of India
Positive Potash Spot Pricing trend
ICL’S AVG. FOB POTASH PRICE
DEVELOPMENT
170
190
210
230
250
270
290
ICL UK: The World’s Only Producer of Polysulphate
Phosphate Solutions
Phosphate Solutions: Backward Integrated Value Chain
Phosphoric Acid Pricing Trends
500
550
600
650
700
750
800
850
80
85
90
95
100
105%
We Have Built a World-Class
Advanced Additives Portfolio
• •
• •
Vast Product Portfolio Serving a
Variety of End Food Additives Markets
••
•
•
• Development of customer solutions to
improve texture and stability, as well as innovations for low-sodium salts and meatless applications
•• Continued development of
applications to optimize the leaving and texture in bakery products
•
•
•
Food Specialties: Markets and Competition
Innovative Ag Solutions
Building Leadership in Advanced
Crop Nutrition Solutions
R&D InfrastructurePrecision
Ag
Business
Development
ICL’s Leadership in the Specialty Fertilizers Market
ICL Specialty Fertilizers: Our Strengths
Our Core Markets and Products Today
Specialty Fertilizers and Bio Solutions Have
Became An Important Part of the Ag Input
~$150bn
1 Calcium, Magnesium and Sulfate
2 iron, cobalt, chromium, copper, iodine, manganese, selenium, zinc and molybdenum
Leveraging Precision Ag to Grow Sales
a