Slide 1: Q4 & FY 2017 Results
Q4 & FY 2017 Results Asher Grinbaum | Acting CEO February 14th, 2017
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: Q4 and Full Year 2017 Results Summary
Q4 and Full Year 2017 Results Summary ▪ Strong Q4 and full year performance: ✓ Growth of 20% in adjusted operating income (~160% in Q4 2017 reported operating income) supported by the recovery in the potash market and G&A reduction ✓ FY 2017: stable sales, operating margins expansion and higher free
Slide 4: Business Performance & Major Developments
Business Performance & Major Developments Specialty Solutions Essential Minerals $ million Q4 2017 Q4 2016 FY2017 FY2016 $ million Q4 2017 Q4 2016 FY2017 FY2016 Sales* 651 601 2,650 2,553 Sales* 780 800 3,008 3,036 Segment O/I** 114 121 554 534 Segment O/I** 124 103 359 398 2017 profit growth driven
Slide 5: Significant Achievements in 2017 Setting the Base for a Promising Future
Significant Achievements in 2017 Setting the Base for a Promising Future 2017 ACHIEVEMENTS LOOKING INTO 2018 ▪ ~$1.2b Divestments of IDE (water desalination), ▪ Reduce debt ratios while still investing in growth Fire Safety and Oil Additives businesses ▪ Executing long-term infrastructure CapEx proj
Slide 6: Our Strategic Direction
Our Strategic Direction Improve Competitiveness of Grow Mineral Specialty Assets Businesses Enhanced Focus on Specialty Crop Nutrition 6
Slide 7: Financial Results
Financial Results Kobi Altman CFO
Slide 8: Main Financial Figures and Analysis
Main Financial Figures and Analysis $ millions Q4 17 Q4 16 % change 2017FY 2016FY % change Sales 1,361 1,338 1.7% 5,418 5,363 1.0% Operating income (loss) 189 72 162.5% 629 (3) NA Adjusted operating income 168 140 20.0% 652 582 12.0% Net income (loss) 155 32 384.4% 364 (122) 398.4% Adjusted net inco
Slide 9: Segment Contribution to Operating Income
Segment Contribution to Operating Income FY2017 VS. FY2016 Q4 2017 VS. Q4 2016 61% 39% 57% 43% 48% 52% 54% 46% Specialty Essential Specialty Essential Essential Specialty Essential Specialty Solutions Minerals Solutions Minerals Solutions Minerals Solutions Minerals Specialty businesses continue the
Slide 10: Effective Tax Rate
Effective Tax Rate $ million 2017 2016 Adjusted income before tax 528 506 Income tax rate (including resource tax) 26% 24% 136 121 Carryforward losses not recorded for tax purposes 25 26 161 146 30% 29% Other items: Exchange rate impact (mainly ILS vs USD) 18 1 Reduction in tax rates (mainly US 2017
Slide 11: Specialty Solutions Bridge Analysis
Specialty Solutions Bridge Analysis Sales ($M) Segment operating income ($M) 19 18 13 7 1 2 13 24 601 651 121 114 Excluding G&A and unallocated expenses Numbers may not add due to rounding and set offs 11
Slide 12: Essential Minerals Bridge Analysis
Essential Minerals Bridge Analysis Sales ($M) Segment operating income ($M) 16 42 78 3 1 1 11 42 13 800 780 124 103 Excluding G&A and unallocated expenses Numbers may not add due to rounding and set offs 12
Slide 13: Prudent Capital Management Leading to Strong Cash Flow Generation
Prudent Capital Management Leading to Strong Cash Flow Generation We Exercise Strict CapEx* Management While Still Investing in Future Growth… $ million 887 794 680 CapEx 619 507 Depreciation and Ammortization 401 418 337 350 355 2013A 2014A 2015A 2016A 2017A 2018E … leading to a continuous positive
Slide 14: Q4 and FY2017 Key Takeaways
Q4 and FY2017 Key Takeaways STRONG DEBT STRATEGIC PERFORMANCE REDUCTION DIRECTION 14
Slide 15: Thank You
Thank You
Slide 16: Appendix
Appendix
Slide 17: Specialty Solutions Segment
Specialty Solutions Segment
Slide 18: Specialty Solutions' Sales and Operating Income FY2017
Specialty Solutions’ Sales and Operating Income FY2017 Sales ($M) Adjusted operating income ($M) 82 11 4 19 4 3 15 52 37 2,553 2,650 534 554 Excluding G&A and unallocated expenses See Q4 2017 financial reports for a reconciliation of Adjusted operating income to operating income and Adjusted net inc
Slide 19: Specialty Solutions' Business Line Sales Q4 2017
Specialty Solutions’ Business Line Sales Q4 2017 Industrial Products Advanced Additives 9 6 5 5 4 17 283 303 199 173 Q4 2016 Prices Quantities Exchange Q4 2017 Q4 2016 Quantities Exchange Prices Q4 2017 rates Rates Food Specialties 6 1 7 151 151 Q4 2016 Exchange Prices Quantities Q4 2017 rates Numbe
Slide 20: Essential Minerals Segment
Essential Minerals Segment
Slide 21: Essential Minerals' Sales and Operating Income FY2017
Essential Minerals’ Sales and Operating Income FY2017 Sales ($M) Adjusted operating income ($M) 18 9 1 18 7 6 9 30 31 3,036 3,008 398 359 Excluding G&A and unallocated expenses See Q4 2017 press release for a reconciliation of Adjusted operating income to operating income and Adjusted net income to
Slide 22: Essential Minerals' Business Line Sales Q4 2017
Essential Minerals’ Business Line Sales Q4 2017 Potash & Magnesium Phosphates 32 8 41 6 11 38 415 414 263 242 Specialty Fertilizers 2 1 16 156 137 Numbers may not add due to rounding and set offs 22
Slide 23: Potash Business Stand-Alone Bridge Analysis Q4 2017
Potash Business Stand-Alone Bridge Analysis Q4 2017 Sales ($M) Business unit operating income ($M) 8 34 44 8 6 5 1 34 403 401 124 94 Excluding G&A and unallocated expenses See Q4 2017 press release for a reconciliation of Adjusted operating income to operating income and Adjusted net income to net i
Slide 24: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 Cash flow from 167 120 295 310 66 325 124 58 222 238 249 257 195 199 176 277 operations Purchase of (239) (209) (207) (180) (150) (155) (164)
Slide 25: 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