Icl Group Ltd. · TASE:ICL
Icl — Q1 2021 Earnings Presentation
34 slides from Icl's earnings presentation, May 6, 2021
Slide 1: First Quarter 2021 Financial Results
First Quarter 2021 Financial Results Raviv Zoller President and CEO May 6, 2021
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 Certain market and/or industry data used in this presentation were obtained from internal during this presentation does not con
Slide 3: 1Q'21 Highlights
1Q’21 Highlights Industrial Phosphate Innovative Products Potash Solutions Ag Solutions Record quarter, driven by Record production in first Record food specialties and Record results due to strong strong demand and high quarter at the Dead Sea, YPH results driven by product demand, higher volumes a
Slide 4: Creating impact and sustainable growth
Creating impact and sustainable growth Committed to growing in our target markets Industrial Food Agriculture • Investments in capacity • Strategic additions to • Acquisitions expected to expansions helping to leadership and BoD position ICL as Brazil’s meet long-term demand reinforce commitment to
Slide 5: Key financial metrics
Key financial metrics Strong year-over-year improvement Sales EBITDA(1) Operating Cash Flow US$B US$M US$M Up 14% YoY Up 18% YoY Up $40M YoY $1.5 $1.3 $1.3 $1.2 $1.2 $295 $250 $268 $258 $246 $226 $203 $206 $166 $177 19% 20% 19% 20% 20% 20% 17% 15% 14% 13% 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 1Q'20 2Q'20 3Q
Slide 6: First quarter 2021 key financial highlights
First quarter 2021 Key financial highlights US$M 1Q’21 1Q’20 YoY Change Sales $1,510 $1,319 14% Gross profit $495 $400 24% Gross margin 32.8% 30.3% 250 bps Operating income $185 $132 40% Operating margin 12.3% 10.0% 230 bps Net income, attributable $135 $60 125% EBITDA(1) $295 $250 18% EBITDA margin
Slide 7: Industrial Products
Industrial Products End-market recovery continues Key highlights Sales $500 +9% US$M $400 • Record sales and EBITDA, benefitting from $398 $300 $364 continued strategic shift to long-term contracts $200 • Higher bromine prices in China $100 • Higher input costs, including shipping, as well as raw ma
Slide 8: Potash
Potash Global demand supported higher potash prices Key highlights Sales $500 US$M +23% $400 • Strong growth in sales and EBITDA $300 $385 • Grain price increases, due to strong global demand $314 $200 • Average realized price per ton up only 3% YoY $100 • Signed agreement with IPL (India) in April
Slide 9: Phosphate Solutions
Phosphate Solutions Strong food specialties growth and commodity upcycle Key highlights Sales $700 US$M $600 +9% • Record sales and EBITDA • Phosphate fertilizer prices continued significant recovery across all markets $500 $545 $502 • Major raw material prices increased, mainly sulfur $400 • Strong
Slide 10: Innovative Ag Solutions
Innovative Ag Solutions Strong demand and innovation driving record results Key highlights Sales $400 US$M $300 • Record sales and EBITDA +21% • Strong demand in Europe, the U.S. and Asia $200 $241 $199 • Higher volumes and improved product mix $100 • Benefitted from unified sales and marketing orga
Slide 11: Strategic Acquisitions
Strategic Acquisitions Expected to position ICL as Brazil’s leading specialty plant nutrition company • Acquiring Compass Minerals América do Sul S.A. for ~US$400M • Fertiláqua integrated into ICL results, beginning in January 2021 • Compass overview • Broad range of solutions cover all key crops in
Slide 12: Key takeaways
Key takeaways Building on strategic fundamentals • Sales for 1Q’21 crossed $1.5B for first time since 2014 Each business segment driving toward strategic targets • Bromine capacity expansion meeting demand from shift to more profitable long-term contracts Looking at additional investments and in
Slide 13: First Quarter 2021 Financial Results – CFO
First Quarter 2021 Financial Results Kobi Altman CFO
Slide 14: Financial strength
Financial strength Continued growth in cash flow Highlights for 1Q’21 • Liquidity of $1.1B available • Funded Fertiláqua acquisition in January • Operating cash flow of $206M vs. $166M in 1Q’20 • Free cash flow(1) of $59M vs. $28M in 1Q’20 • Net debt to EBITDA of 2.4 times • No major principal debt
Slide 15: Pricing across mineral value chain
$200 $300 $500 $100 $400 1Q'15 US$/ton 2Q'15 3Q'15 4Q'15 1Q'16 GMOP FOB NOLA 2Q'16 3Q'16 4Q'16 1Q'17 Sources: CRU and Bloomberg, as of 3.31.21. 2Q'17 3Q'17 4Q'17 Commodity price upcycle 1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20 2Q'20 3Q'20 4Q'20 1Q'21 $500 $600 $800 $900 $400 $700 1Q'15
Slide 16: Cost input pricing
Cost input pricing Significant increases in raw materials and freight rates Sulfur Bulk FOB Middle East Spot Supramax Timecharter Average US$/ton US$/day $300 $25,000 $20,000 $200 $15,000 $10,000 $100 $5,000 $0 $0 11/15/20 4/15/20 4/15/21 7/15/20 5/15/20 6/15/20 8/15/20 9/15/20 2/15/21 3/15/21 10/15
Slide 17: Sales and profit bridges
First quarter 2021 Sales and profit bridges Sales EBITDA(1) US$M US$M $62 $68 $61 $1,510 $241 IAS $1,319 $545 PS Spec 54% $15 Comm 46% $61 $1 IAS -$5 $29 -$27 $294 $294 $295 Potash $94 PS $385 $250 Raw materials $12M Spec 51% Transportation $15M Comm 49% $66 Potash $398 IP $122 IP Other ($59) Other
Slide 18: Results by segment
First quarter 2021 Results by segment Sales EBITDA(1) US$M US$M $42 $1 $71 $43 $34 $1,510 $36 $10 $1,319 $2 $13 -$16 $295 $250 1Q'21 1Q'20 IP 1Q'20 IP 1Q'21 Potash Potash Other Other PS PS IAS IAS (1) EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix. Note: Numbers rounde
Slide 19: Guidance
Guidance Full year 2021 Raising expectations • Expect adjusted EBITDA range of $1,090 million to $1,175 million(1) • Improved market conditions combined with prompt execution in 1Q’21 • Probability of achieving high-end of original guidance has risen considerably (1) See guidance and non-GAAP financ
Slide 20: Thank you
Thank you Contact Peggy.ReillyTharp@icl-group.com for more information on ICL View our interactive data tool at https://investors.icl-group.com/interactive-data-tool/default.aspx
Slide 21: Appendix
Appendix First Quarter 2021 Financial Results
Slide 22: Industrial Products
Industrial Products First quarter 2021 Industrial Products US$M 1Q’21 1Q’20 US$M Sales Segment sales $398 $364 1Q’20 $364 Sales to external customers $394 $361 Quantities $20 Sales to internal customers $4 $3 Prices $7 Segment profit $105 $103 Exchange rates $7 Depreciation and amortization $17 $17
Slide 23: Potash
Potash First quarter 2021 Potash US$M 1Q’21 1Q’20 US$M Sales Segment sales $385 $314 1Q’20 $314 Sales to external customers $254 $226 Quantities $37 Sales to internal customers $22 $23 Prices $22 Other and eliminations(1) $109 $65 Exchange rates $12 Gross profit $138 $96 1Q’21 $385 Segment profit $2
Slide 24: External potash metrics
External potash metrics Average market prices and imports Average prices 1Q’21 1Q’20 YoY Change 4Q’20 QoQ Change Granular potash – Brazil $283 $245 15.5% $248 14.1% CFR spot US$ per ton Granular potash – Northwest Europe $235 $255 (7.8%) $234 0.4% CIF spot/contract € per ton Standard potash – Southe
Slide 25: Phosphate Solutions
Phosphate Solutions First quarter 2021 Phosphate Solutions US$M 1Q’21 1Q’20 US$M Sales Segment sales $545 $502 1Q’20 $502 Sales to external customers $525 $483 Quantities ($12) Sales to internal customers $20 $19 Prices $30 Segment profit $40 $9 Depreciation and amortization $54 $49 Exchange rates $
Slide 26: External phosphate metrics
External phosphate metrics Commodities market Average prices 1Q’21 1Q’20 YoY Change 4Q’20 QoQ Change DAP $455 $302 51% $369 23% CFR India spot TSP $408 $252 62% $262 56% CFR Brazil spot SSP $206 $185 11% $179 15% CPT Brazil inland 18% to 20% P2O5 spot Sulfur $138 $44 214% $74 86% Bulk FOB Adnoc Mont
Slide 27: Innovative Ag Solutions
Innovative Ag Solutions First quarter 2021 Innovative Ag Solutions US$M 1Q’21 1Q’20 US$M Sales Segment sales $241 $199 1Q’20 $199 Sales to external customers $238 $196 Quantities $24 Sales to internal customers $3 $3 Prices $1 Segment profit $22 $14 Exchange rates $17 Depreciation and amortization $
Slide 28: Consolidated results analysis
Consolidated results analysis First quarter 2021 Operating US$M Sales Expenses Income Notes 1Q’20 $1,319 ($1,187) $132 Positive – $7 increase in average realized price per ton of potash YoY Prices $61 - $61 Positive – higher selling prices for phosphate commodities, FertilizerspluS products and elem
Slide 29: Sales by geographic location
Sales by geographic location First quarter 2021 Innovative Industrial Phosphate Sales Potash Ag Other Activities Reconciliations Consolidated Products Solutions US$M Solutions 1Q’21 1Q’20 1Q’21 1Q’20 1Q’21 1Q’20 1Q’21 1Q’20 1Q’21 1Q’20 1Q’21 1Q’20 1Q’21 1Q’20 Europe $144 $127 $180 $148 $187 $188 $12
Slide 30: Finance expenses
Finance expenses First quarter 2021 US$M 1Q’21 1Q’20 Average net debt(1) $2,770 $2,684 Weighted average interest rate 3.8% 4.0% Interest expenses $26 $26 Interest capitalization ($6) ($5) Interest expenses, net $20 $21 Total hedging and balance sheet revaluation $12 $38 Interest and exchange rate im
Slide 31: Effective tax rate
Effective tax rate First quarter 2021 US$M 1Q’21 1Q’20 Income before tax(1) $165 $81 Normalized tax rate 20% 21% Normalized tax expenses $34 $17 Carryforward losses not recorded for tax purposes and other $3 $6 Exchange rate impact ($14) ($3) Tax expenses $23 $20 Effective tax rate 14% 25% Tax adjus
Slide 32: Reconciliation tables
Reconciliation tables Slide one of two Calculation of segment EBITDA Industrial Phosphate Innovative Potash and margin Products Solutions Ag Solutions US$M 1Q’21 1Q’20 1Q’21 1Q’20 1Q’21 1Q’20 1Q’21 1Q’20 Segment profit $105 $103 $29 $14 $40 $9 $22 $14 Depreciation and amortization $17 $17 $37 $39 $5
Slide 33: Reconciliation tables
Reconciliation tables Slide two of two Calculation of adjusted EBITDA 1Q’21 4Q’20 3Q’20 2Q’20 1Q’20 FY’20 FY’19 FY’18 US$M Net income attributable to $135 $65 $54 ($168) $60 $11 $475 $1,240 shareholders of the company Financing expenses, net $20 $46 $29 $31 $52 $158 $129 $158 Taxes on income $23 $24
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. We do 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 amounts necessar