Slide 1: Q1 2018 Results
Q1 2018 Results Asher Grinbaum | Acting CEO May 10th, 2018
Slide 2: Important Legal Notes
Important Legal Notes Disclaimer and Safe Harbor for Forward-Looking Statements The information contained herein in this presentation or delivered or to be delivered to you during our presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in Israel
Slide 3: Q1 2018 Results Summary
Q1 2018 Results Summary ▪ Excellent start for 2018, with a positive contribution to sales and operating income from all three mineral chains ▪ Higher potash production, sales volumes and prices, and growth in specialty fertilizers drove a 36% increase in Essential Minerals segment profit ▪ Specialty
Slide 4: Business Performance & Major Developments
Business Performance & Major Developments Specialty Solutions Essential Minerals $ million Q1 2018 Q1 2017 % change $ million Q1 2018 Q1 2017 % change Sales* 659 613 7.5% Sales* 814 734 10.9% Segment O/I** 131 115 13.9% Segment O/I** 90 66 36.4% ▪ Continued solid performance of Industrial Products,
Slide 5: 2018 Targets on Track
2018 Targets on Track 2018 TARGETS Q1 2018 Reduce debt ratios while still investing in growth Net Debt/EBITDA = 2.3 (2.9 in Dec. 2017)* Continuous improvement in the competitiveness Positive operating margins at ICL Iberia and of our mineral assets in Europe, China and Israel YPH JV, significant red
Slide 6: Setting the Base for a Promising Future
Setting the Base for a Promising Future Exit Cash Draining Projects Transformation of Low- Performing Assets & Cost Reduction Significant Improvement From Core Advanced Strict Capital Management of Financial Minerals to Crop Results & Specialties Nutrition Divestment of Low Position Synergy Assets R
Slide 7: Strategy Targets
Strategy Targets Optimization of Specialty Solutions: Mineral Assets Maintain Strength. Provide Stability. Growth in Growth through leadership in Semi-Specialty Advanced Crop Nutrition 7
Slide 8: Financial Results
Financial Results Kobi Altman CFO
Slide 9: Main Financial Figures and Analysis
Main Financial Figures and Analysis $ millions Q1 18 Q1 17 % change Q4 17 % change Sales 1,404 1,295 8.4% 1,361 3.2% Adjusted operating income 151 116 30.2% 168 (10.1)% Adjusted net income 106 68 55.9% 142 (25.4)% Operating income 985 116 749.1% 189 421.2% Net income 928 68 1264.7% 155 498.7% Free c
Slide 10: Business Line Contribution to Operating Income
Business Line Contribution to Operating Income 6 5 1 2 4 5 9 25 151 116 See Q1 2018 press release for a reconciliation of Adjusted operating income to operating income Numbers may not add due to rounding and set offs 10
Slide 11: Working Capital Financing Growth
Working Capital Financing Growth US$ Million Q1 2018 Adjusted net income 106 ▪ Increase in sales led to Depreciation and amortization 97 higher trade receivables Other adjustment to net income (12) ▪ Demand required higher Total changes to working (155) inventory capital* Net cash provided by operat
Slide 12: Effective Tax Rate
Effective Tax Rate $ million Q1 18 2017 Adjusted income before tax 137 528 Normalized tax rate (including resource tax) 23% 26% Normalized tax expenses 32 136 Carryforward losses not recorded for tax purposes 3 19 35 151 26% 29% Other items (mainly exchange rate impact) (2) 1 Adjusted income tax 33
Slide 13: Specialty Solutions Bridge Analysis
Specialty Solutions Bridge Analysis Sales ($M) Segment operating income ($M) 659 613 31 10 33* 36* 25 2 131 4 9 5 1 115 25 7* 577 626 9* 124 106 Excluding G&A and unallocated expenses * Divested businesses Numbers may not add due to rounding and set offs 13
Slide 14: Essential Minerals Bridge Analysis
Essential Minerals Bridge Analysis Sales ($M) Segment operating income ($M) 56 33 57 19 15 13 10 56 8 5 734 814 90 66 Excluding G&A and unallocated expenses Numbers may not add due to rounding and set offs 14
Slide 15: Investing in Our Future and Creating Financial Flexibility
Investing in Our Future and Creating Financial Flexibility Net Debt/ 3.1 From Core Advanced EBITDA 2.9 Minerals to Crop Specialties Nutrition $3,268 $3,037 2.3* $2,269 Net debt ($ million) Financial flexibility for future growth Support M&A and growth Infrastructure development From on-going operati
Slide 16: Strategic CAPEX Financed Through Operating Cash Flow
Strategic CAPEX Financed Through Operating Cash Flow Investing in our future and creating financial flexibility to support growth US$ million 150-200 405 ~70 0-50 See appendix to this presentation for reconciliation of free cash flow 16
Slide 17: Q1 2018 Key Takeaways
Q1 2018 Key Takeaways STRONG FINANCIAL STRATEGY PERFORMANCE FLEXIBILITY EXECUTION 17
Slide 18: Thank You
Thank You
Slide 19: Appendix
Appendix
Slide 20: Specialty Solutions Segment
Specialty Solutions Segment
Slide 21: Specialty Solutions' Business Line Sales Q1 2018
Specialty Solutions’ Business Line Sales Q1 2018 Industrial Products Advanced Additives 15 9 17 7 9 8 36* 33* 310 317 144 133 Food Specialties 13 3 13 167 138 * Divested businesses Numbers may not add due to rounding and set offs 21
Slide 22: Essential Minerals Segment
Essential Minerals Segment
Slide 23: Essential Minerals' Business Line Sales Q1 2018
Essential Minerals’ Business Line Sales Q1 2018 Potash & Magnesium Phosphate Commodities 20 19 20 31 23 70 283 353 292 265 Specialty Fertilizers 10 2 17 221 192 Numbers may not add due to rounding and set offs 23
Slide 24: Potash Business Stand-Alone Bridge Analysis Q1 2018
Potash Business Stand-Alone Bridge Analysis Q1 2018 Sales ($M) Business unit operating income ($M) 18 21 21 13 33 6 3 2 339 33 267 71 41 Excluding G&A and unallocated expenses Numbers may not add due to rounding and set offs 24
Slide 25: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Q4 Q1 Q2 Q3 Q4 2017 Q1 2018 2016 2017 2017 2017 Cash flow from operations 257 195 199 176 277 36 Purchase of property, plant (138) (106) (113) (98) (140) (127) and equipment and intangible assets Dividend from investees 8 3 - - - - Proceeds from sale of fixed - 12 - - -
Slide 26: Non GAAP Financial Measures
Non GAAP Financial Measures We disclo se in this Quarterly Report non-IFRS financial measures titled adjusted operating inco me, adjusted net inco me attributable t o the Company’s shareho lder s, adjusted EBITDA and free cash flow. Our management uses adjust ed operat ing inco me, adjust ed net inc