Icl Group Ltd. · TASE:ICL
Icl — Q4 2023 Earnings Presentation
34 slides from Icl's earnings presentation, Feb 28, 2024
Slide 1: Fourth Quarter 2023 Financial Results
Fourth Quarter 2023 Financial Results Raviv Zoller | President and CEO February 28, 2024
Slide 2: Important legal notes
Important legal notes Disclaimer and safe harbor for forward-looking statements This presentation and/or other oral or written statements made by ICL Group during its presentation, or from time to time, may contain forward-looking statements within the meaning of the United States Private Securities
Slide 3: Overview of 2023
Overview of 2023 Delivered according to plan amidst challenging environment • Sales of $7.5B and adjusted EBITDA(1) of $1.8B • Continued strong cash generation, with $1.6B of operating cash flow and $0.8B of free cash flow(1) • Adjusted diluted EPS(1) of $0.55, with annual dividend of $0.27 per shar
Slide 4: Key financial highlights | 2023
Key financial highlights | 2023 Sales Adjusted EBITDA(1) Operating cash flow $10,015 US$M US$M US$M $6,955 $7,536 $4,007 $1,754 $2,025 $1,595 $1,687 $1,065 24% 40% 23% FY'21 FY'22 FY'23 FY'21 FY'22 FY'23 FY'21 FY'22 FY'23 Specialties sales Adjusted diluted EPS(1) Free cash flow(1) US$M US$ US$M $5,9
Slide 5: Industrial Products
Industrial Products Annual FY'21 FY'22 FY'23 Key 2023 developments US$M • Electronics and construction end-markets still soft Sales $1,617 $1,766 • Clear brine fluids record sales and profits EBITDA $1,227 $500 $689 $277 • Specialty minerals record profit 31% 39% 23% • Executed long-term partnership
Slide 6: Phosphate Solutions
Phosphate Solutions Annual FY'21 FY'22 FY'23 Key 2023 developments US$M $3,106 • Strong performance vs. record 2022 $2,483 Sales $2,254 • FY sales and EBITDA at normalized levels – ahead of 2021 EBITDA $966 $501 $550 • Food specialties remained resilient – delivering against 22% 31% 22% strategy Qua
Slide 7: Potash
Potash Annual FY'21 FY'22 FY'23 Key developments US$M $3,313 • Sales volume of 4,683kmt – higher than production and vs. FY’22 Sales $1,988 $2,182 $1,776 EBITDA $843 • Production somewhat impacted by war-related issues in $547 Israel and geological constraints in Spain 31% 60% 39% • Second straight
Slide 8: Growing Solutions
Growing Solutions Annual FY'21 FY'22 FY'23 Key developments US$M • Higher volumes and improved raw material costs $2,422 offset by lower prices Sales $2,073 $1,670 EBITDA • Planned maintenance shifted to 4Q’23 from 1Q’24, $448 due to delay in fertilizer application in Europe $197 $119 18% 12% 6% • R
Slide 9: Sustainability highlights | 2023
Sustainability highlights | 2023 Carbon Carbon Food Scope 3 EU GHG GHG Data MSCI Disclosure Disclosure security Emissions calculation CBAM Emissions Water and waste Rating upgraded completed monitoring to BBB Project Project Positively impacting and audited First reporting Achieved 120k ton assuranc
Slide 10: M&A and business development
M&A and business development New and continuing investments Agriculture • Accelerating biologicals portfolio growth in Brazil with strategic acquisition • Partnering to expand into AI crop nutrition solutions and advance sustainable agriculture practices • Expanding new product distribution through
Slide 11: Positioned for long-term growth, by targeting key inflection points
Positioned for long-term growth, by targeting key inflection points Food security Energy storage ability to feed ~400M daily, expected surge in due to fertilizers, food demand to benefit PS specialty products and food and IP businesses across safety solutions multiple end-markets 11
Slide 12: Fourth Quarter 2023 Financial Results
Fourth Quarter 2023 Financial Results Aviram Lahav CFO
Slide 13: Macro overview
Macro overview • Inflation rates generally stable • Interest rates remain elevated but steady • Return to global growth expected • Construction market forecasted to rebound • Grain prices relatively stable • Farmer sentiment improved • Commodity fertilizer prices mixed • Freight rates increasing 13
Slide 14: Global indicators
Global indicators Inflation Interest rates Rate Percentage 20% 20% USA EU China Brazil Israel USA EU Brazil Israel UK India 15% 15% 10% 10% 5% 5% 0% 0% -5% -5% 2Q'19 3Q'19 4Q'19 1Q'21 1Q'19 1Q'20 1Q'22 1Q'23 4Q'20 4Q'21 4Q'22 4Q'23 2Q'20 3Q'20 2Q'21 3Q'21 2Q'22 3Q'22 2Q'23 3Q'23 1Q'19 4Q'19 1Q'21 2Q
Slide 15: Key market metrics | fertilizers
Key market metrics | fertilizers Grain Price Index Farmer sentiment US¢/bushel Index $2,500 Corn Rice Wheat Soybeans Grain Price Index $2,000 180 $1,500 $1,000 130 $500 $0 80 4Q'19 2Q'19 3Q'19 1Q'21 1Q'20 1Q'22 1Q'23 1Q'19 4Q'20 4Q'21 4Q'22 4Q'23 2Q'20 3Q'20 2Q'21 3Q'21 2Q'22 3Q'22 2Q'23 3Q'23 4Q'19
Slide 16: Key market metrics | energy storage and EVs
Key market metrics | energy storage and EVs EV sales forecasts WPA demand M of units EV Sales All Vehicle Sales EV Penetration Rate ‘000s mt P2O5 100 83.9 88.3 87.0 87.9 86.9 86.1 86.5 85.9 84.7 83.5 83.4 100 78.5 Penetration rate (%) 73.2 64 75 59 75 Cars sold (M) 52 53.4 46 44.0 49.2 36 40 39.5 50
Slide 17: Full year 2023 sales bridge
Full year 2023 Sales bridge Sales by segment Sales US$M US$M $10,015 $10,015 ($539) ($277) ($623) $163 ($1,131) ($349) $7,536 $2,073 ($2,202) $7,536 GS $2,483 PS Potash $2,182 $1,227 IP FY'22 FY'23 Solutions Industrial Potash Other Phosphate Other FY'22 FY'23 Quantity Products Growing Solutions Pric
Slide 18: Full year 2023 profit bridge
Full year 2023 Profit bridge Adjusted EBITDA(1) by segment Adjusted EBITDA(1) US$M US$M $4,007 $4,007 ($190) ($412) ($416) $49 $59 $136 $63 $119 GS ($1,145) ($329) $1,754 $550 PS ($2,202) ($3) ($116) $1,754 $843 Potash $277 IP Other FY'22 FY'23 Solutions Industrial Potash Other Phosphate FY'22 FY'23
Slide 19: Fourth quarter 2023 sales bridge
Fourth quarter 2023 Sales bridge Sales by segment Sales US$M US$M $2,091 ($50) $20 $2,091 $170 ($83) ($239) ($49) $1,690 $478 GS ($601) $30 $1,690 $544 PS $474 Potash $299 IP Other 4Q'22 Solutions 4Q'23 Industrial Potash Other Phosphate 4Q'22 Quantity 4Q'23 Exchange Products Growing Solutions Price
Slide 20: Fourth quarter 2023 profit bridge
Fourth quarter 2023 Profit bridge Adjusted EBITDA(1) by segment Adjusted EBITDA(1) US$M US$M $86 $698 $698 ($54) $3 GS $10 $5 $26 ($32) $15 $105 $133 PS $28 ($217) ($41) $357 $357 $168 Potash ($601) $56 IP 4Q'22 Solutions 4Q'23 Industrial Potash Other Phosphate Other Materials 4Q'22 Quantity 4Q'23 T
Slide 21: Potash costs and prices
Potash costs and prices Leading positions MOP industry cost curve Potash ASP Cash costs US$/t, excluding royalties, FOB load port US$ $500 $800 $400 $600 $300 $400 $200 ICL DSW $100 $200 $0 $0 0 10 20 30 40 50 1Q'20 1Q'22 1Q'23 1Q'21 2Q'21 3Q'21 2Q'20 4Q'20 4Q'21 4Q'22 4Q'23 3Q'20 2Q'22 3Q'22 2Q'23
Slide 22: Bromine quality and costs
Bromine quality and costs Leading positions Bromine industry cost curve Bromine concentration Relative production cost g/L 10.0 to 12.0 Djibouti China & Japan India 3.5 to 5.5 Arkansas, U.S. 2.5 to 4.5 ICL Jordan 0.06 to 0.11 0.1 to 0.2 kT 100 200 300 400 500 600 700 Sea Water Underground Salt Lake
Slide 23: Driving company-wide efficiencies
Driving company-wide efficiencies Benefits to continue into 2024 • Phase I – achieved significant savings in 2023 via operational execution • Phase II – restructuring efforts taken in 4Q’23 set stage for additional savings in 2024 ‒ Consolidated North American production sites ‒ Restructured dairy a
Slide 24: Financial overview
Financial overview Driving efficiencies and delivering shareholder returns Highlights Reduced SG&A by ~8% YoY Strong cash conversion Available resources of $1.9B Net debt to adjusted EBITDA(1) of 1.1 Expanded financial flexibility with $1.55B sustainability linked credit facility Total 2023 dividend
Slide 25: Guidance
Guidance Full year 2024 • Specialties-driven EBITDA(1) of $0.7B to $0.9B • Potash sales volumes of 4.6M to 4.9M metric tons • 4Q’23 Potash EBITDA should give good indication of EBITDA at current prices • Every $20 change in average potash CIF price from current levels expected to result in $100M ann
Slide 26: Thank you
Thank you Co n ta c t Pe g g y. Re i l l y T h a r p @ i c l - g r o u p . co m f o r m o r e i n f o r m a t i o n o n I C L View our interactive data tool at https://investors.icl-group.com/interactive-data-tool/default.aspx
Slide 27: Appendix
Appendix Fourth Quarter 2023
Slide 28: Calculation of segment EBITDA (Q4 2023)
Calculation of segment EBITDA Fourth quarter of 2023 Industrial Products US$M 4Q’23 4Q’22 4Q’21 Phosphate Solutions US$M 4Q’23 4Q’22 4Q’21 Segment sales $299 $349 $422 Segment sales $544 $627 $571 Segment operating income $39 $95 $111 Segment operating income $74 $116 $87 Segment operating margin 13
Slide 29: Calculation of segment EBITDA (Full year 2023)
Calculation of segment EBITDA Full year 2023 Industrial Products US$M FY’23 FY’22 FY’21 Phosphate Solutions US$M FY’23 FY’22 FY’21 Segment sales $1,227 $1,766 $1,617 Segment sales $2,483 $3,106 $2,254 Segment operating income $220 $628 $435 Segment operating income $329 $777 $294 Segment operating m
Slide 30: Segment results analysis (Q4 2023)
Segment results analysis Fourth quarter of 2023 Segment Sales Industrial Phosphate Growing Segment EBITDA Industrial Phosphate Growing Potash Potash US$M Products Solutions Solutions US$M Products Solutions Solutions 4Q’22 $110 $385 $165 $56 4Q’22 $349 $713 $627 $527 Quantity $29 $13 $1 $31 Price ($
Slide 31: Segment results analysis (Full year 2023)
Segment results analysis Full year 2023 Segment Sales Industrial Phosphate Growing Segment EBITDA Industrial Phosphate Growing Potash Potash US$M Products Solutions Solutions US$M Products Solutions Solutions FY’22 $1,766 $3,313 $3,106 $2,422 FY’22 $689 $1,988 $966 $448 Quantity ($193) $16 ($89) $50
Slide 32: Reconciliation tables (Q4 2023)
Reconciliation tables Calculation of adjustments for fourth quarter of 2023 Adjusted EBITDA Adjusted NI and diluted EPS 4Q’23 4Q’22 4Q’21 4Q’23 4Q’22 4Q’21 US$M US$M, ex. per share Net income $84 $342 $298 Net income, attributable $67 $331 $283 (1) Financing expenses, net $33 $41 $38 Adjustments $62
Slide 33: Reconciliation tables (Full year 2023)
Reconciliation tables Calculation of adjustments of full year 2023 Adjusted EBITDA Adjusted NI and diluted EPS FY’23 FY’22 FY’21 FY’23 FY’22 FY’21 US$M US$M, ex. per share Net income $687 $2,219 $832 Net income, attributable $647 $2,159 $783 (1) Financing expenses, net $168 $113 $122 Adjustments $77
Slide 34: Guidance and non-GAAP financial measures
Guidance and non-GAAP financial measures Guidance: The company only provides guidance on a non-GAAP basis. The company does not provide a reconciliation of forward-looking adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amou