Icl Group Ltd. · TASE:ICL
Icl — Q3 2019 Earnings Presentation
32 slides from Icl's earnings presentation, Nov 7, 2019
Slide 1: Q3 2019 Results
Q3 2019 Results Raviv Zoller, President & CEO
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: Q3 2019 Highlights
Q3 2019 Highlights ✓ Solid results with record cash generation ✓ Sales of $1,325 million were 3% lower than Q3 2018, mainly due to delays in the signing of potash supply contracts in Asia ✓ Operating income was slightly higher at $201 million ✓ EPS of $0.10, in line with Q3 2018 ✓ Adjusted EBITDA wa
Slide 4: Key Financial Metrics
Key Financial Metrics $ millions Q3 2019 Q3 2018 % change 1-9/2019 1-9/2018 % change Sales 1,325 1,371 (3%) 4,165 4,146 - Sales 1,325 1,371 (3%) 4,165 4,096 2% (Excluding divested businesses) Operating income 201 196 3% 668 1,353 (51%) Adjusted operating income 201 200 1% 672 539 25% Adjusted EBITDA
Slide 5: Industrial Products Business Performance
Industrial Products Business Performance SALES(1) SEGMENT PROFIT $ millions ✓Higher prices of bromine, bromine +3% derivatives and phosphorous flame retardants +6% ✓Higher sales volumes of elemental bromine and clear brine fluids 328 339 ✓Long term strategic agreements with 88 customers in Asia are
Slide 6: Potash Business Performance
Potash Business Performance SALES(1) SEGMENT PROFIT -8% ✓Delayed contract signing in China and India $ millions resulted in a decrease of 10% in potash sales quantities ✓Updated supply contract with India signed at a $10 per tonne price reduction, to be supplied +6% through March 2020 409 376 ✓Polys
Slide 7: Phosphate Solutions Business Performance
Phosphate Solutions Business Performance SALES(1) SEGMENT PROFIT -4% $ millions ✓Results demonstrate the resilience of ICL’s specialty phosphate businesses -20% amid the weak phosphate commodity market 530 508 ✓YPH continued to deliver improved results, driven by operational efficiencies 40 32 ✓ICL
Slide 8: Innovative Ag Solutions Business Performance
Innovative Ag Solutions Business Performance SALES(1) SEGMENT PROFIT $ millions -1% ✓Stable revenues despite reduced sales of low-margin 3rd-party products ✓Year-over-year results negatively impacted by higher raw material costs and unfavorable exchange rates 161 160 ✓Increased focus on cost control
Slide 9: Growth Trend in Most Main Operational Parameters
Growth Trend in Most Main Operational Parameters $ millions Adjusted operating income Adjusted EBITDA Operating cash flow excluding divested businesses(1) excluding divested businesses(1) 300 18% 30% 25% 24% 300 350 17% 16% 23% 23% 250 16% 22% 22% 25% 300 15% 14% 250 15% 15% 14% 18% 200 12% 250 20%
Slide 10: Growth Trend in Most Main Operational Parameters – YTD View
Growth Trend in Most Main Operational Parameters – YTD View $ millions Adjusted operating income Adjusted EBITDA Operating cash flow excluding divested businesses(1) excluding divested businesses(1) 10% 10% 13% 16% 19% 18% 20% 24% 680 580 480 380 672 997 780 837 709 280 536 708 674 570 369 383 180 3
Slide 11: Kobi Altman, CFO
Kobi Altman, CFO
Slide 12: Q3 2019 Sales
Q3 2019 Sales $ millions 18 42 22 Bromine value chain and phosphorus FRs +14 Specialty +1 ILS +1 Specialty phosphates +6 Commodity -38 Euro -18 1,371 Sett-offs & other -5 Other -5 Polysulphate & magnesium +3 1,325 IAS +1 Commodity Phosphates -4 Q3 2018 Prices Quantities Exchange rates Q3 2019 11 33
Slide 13: Q3 2019 Adjusted Operating Income Demonstrating Resilience
Q3 2019 Adjusted Operating Income Demonstrating Resilience $ millions 8 8 6 10 18 9 8 4 196 200 201 Q3 2018 Adjustments to Q3 2018 Prices Raw materials Energy Quantities Transportation Exchange rates Operating & Q3 2019 Operating operating Adjusted other Operating income income operating income inco
Slide 14: Foreign Exchange Rates Impact
Foreign Exchange Rates Impact USD\ILS EUR\USD USD\RMB 3.80 1.25 7.20 3.70 7.00 1.20 6.80 3.60 1.15 6.60 3.50 Up by 2.83% 1.10 6.40 Down by 3.00% 3.40 6.20 3.30 1.05 Down by 4.50% 6.00 1.00 5.80 3.20 Foreign currency impact Y-O-Y Q1 2019 Q2 2019 Q3 2019 YTD 2019 Sales 46 34 22 104 Expenses (48) (26)
Slide 15: Finance Expenses
Finance Expenses $ millions Q3 2019 Q3 2018 Liabilities(1) (including ~$300 million of LT leases in 2019)(2) 2,650 2,514 Interest rate 4.2% 4.0% Interest expenses(2) 28 25 Interest capitalization (4) (5) Interest expenses, net 24 20 Total hedging transactions, balance sheet revaluation & other (6) (
Slide 16: Operating Cash Flow Development
Operating Cash Flow Development ($ millions) 368 780 239 2019 419 173 Q1 2019 Operating cash Q2 2019 Operating cash Q3 2019 Operating cash YTD 2019 Operating YTD 2019 CapEx flow flow flow cash flow 196 2018 396 393 164 36 Q1 2018 Operating cash Q2 2018 Operating cash Q3 2018 Operating cash YTD 2018
Slide 17: Solid Financial Position Supporting Strategy Execution
Solid Financial Position Supporting Strategy Execution Net Debt/EBITDA ratio(1) 3.1 2.9 2.5 2.4 2.0 1.9 1.9 1.8 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q1 2019 Q2 2019 Q3 2019 (1) Net debt to adjusted EBITDA calculated as short term credit + long term debt & debentures – cash & cash equivalents – sh
Slide 18: Q3 Key Takeaways
Q3 Key Takeaways STRATEGIC MILESTONES SOLID PERFORMANCE IN STRENGTHEN ICL’S AN INCREASINGLY STRONG CASH LEADERSHIP POSITIONS, CHALLENGING GENERATION CREATING LONG-TERM ENVIRONMENT VALUE 18
Slide 19: Thank You
ANICL THANK YOU
Slide 20: Appendix
ANICL APPENDIX
Slide 21: Q3 2019 Industrial Products Sales and Segment Profit Analysis
Q3 2019 Industrial Products Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 14 3 0 2 1 14 8 2 328 339 83 88 Numbers may not add due to rounding and set offs 21
Slide 22: Q3 2019 Potash Sales and Segment Profit Analysis
Q3 2019 Potash Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 3 32 4 11 8 1 3 409 376 78 83 Numbers may not add due to rounding and set offs 22
Slide 23: Q3 2019 Phosphate Solutions Sales and Segment Profit Analysis
Q3 2019 Phosphate Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 2 12 12 6 5 2 3 530 8 508 40 32 Numbers may not add due to rounding and set offs 23
Slide 24: Q3 2019 Innovative Ag Solutions Sales and Segment Profit Analysis
Q3 2019 Innovative Ag Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 1 1 3 161 160 1 1 -1 1 1 -2 1 Q3 2018 Prices Operating & Exchange Raw Energy Q3 2019 segment other rates materials segment profit expenses profit Numbers may not add due to rounding a
Slide 25: Effective Tax Rate
Effective Tax Rate $ millions Q3 19 Q3 18 FY 2018 Adjusted income before tax(1) 169 179 608 Normalized tax rate 21% 23% 22% Normalized tax expenses 36 41 136 Carryforward losses not recorded for tax purposes (3) 4 17 Exchange rate impact and other items 2 2 (17) Adjusted tax expenses 35 47 136 Adjus
Slide 26: IFRS 16 Impact
IFRS 16(1) Impact Item Net impact Comments Q3 2019 VS. Q3 2018 Rent expenses decreased by $15 million Adjusted operating income $2 million Depreciation increased by $13 million Adjusted EBITDA $15 million Rent expenses decreased by $15 million Property Plant & Equipment ~$320 million A right-of-use
Slide 27: Additional Data: Segment Profit Before and After G&A Expenses
Additional Data: Segment Profit Before and After G&A Expenses Starting from the first quarter of 2019, ICL’s management will measure, and accordingly present in its reports, the results of its business divisions (operating segments) after allocation of general and administrative (G&A) expenses per e
Slide 28: Reconciliation Tables (1/3)
Reconciliation Tables (1/3) $ millions Calculation of adjusted income before tax Q3 19 Q3 18 FY2018 Adjusted operating income 201 200 753 Finance expenses (32) (23) (158) Share in earnings (losses) of equity-accounted investees and adjustments to financial expenses - 2 13 Adjusted income before tax
Slide 29: Reconciliation Tables (2/3)
Reconciliation Tables (2/3) $ millions Calculation of adjusted operating income and Q1-Q3 2019 Q1-Q3 2018 Q1-Q3 2017 Q1-Q3 2016 adjusted operating income excluding divested businesses Operating income 668 1,353 440 (75) Capital gain (841) (6) 1 Impairment loss (reversal) (10) 19 18 489 Provision for
Slide 30: Reconciliation Tables (3/3)
Reconciliation Tables (3/3) Calculation of adjusted operating income and Q3 19 Q2 19 Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 adjusted operating income excluding divested businesses ($ millions) Operating income 201 240 227 166 196 172 985 Capital gain - - - - - - (841) Impairment loss (reversal) - (10) - - 3
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures We disclose in this Quarterly Report non-IFRS financial measures titled sales excluding divested businesses, adjusted operating income, adjusted operating income excluding divested businesses, adjusted net income attributable to the Company’s shareholders excluding divest
Slide 32: Thank You
THANK YOU visit us at www.icl-group.com