Icl Group Ltd. · TASE:ICL
Icl — Q4 2019 Earnings Presentation
37 slides from Icl's earnings presentation, Feb 13, 2020
Slide 1: Q4 & FY2019 Results
Q4 & FY2019 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: Q4 & FY2019 Highlights
Q4 & FY2019 Highlights(1) ✓ Successfully completed the Dead Sea production Sales ($M) Reported/Adjusted operating Operating cash flow ($M) capacity upgrade in Q4 2019, resulting in a income(2) ($M) significant impact on results 5,556 992 5,271 753 ✓ Q4 2019 results were also impacted by weak 760 620
Slide 4: Key Financial Metrics
Key Financial Metrics(1) $ millions Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change Sales 1,106 1,410 (22%) 5,271 5,556 )5%) Operating income 88 166 (47%) 756 1,519 (50%) Adjusted operating income(2) 88 214 (59%) 760 753 1% Adjusted EBITDA(2) 201 322 (38%) 1,198 1,164 3% Net income 48 82 (41%) 475
Slide 5: Industrial Products Business Performance
Industrial Products Business Performance ANNUAL RESULTS QUARTERLY RESULTS ✓ Achieved record operating income and margin for 2019, while reaching strategic goals and positioning the business for growth going +2% forward 1,296 1,318 ✓ Q4 2019 sales and OI decreased mainly due to 1,193 1,296 -8% lower
Slide 6: Potash Business Performance
Potash Business Performance ANNUAL RESULTS QUARTERLY RESULTS ✓ Combination of production shutdown for upgrade at the Dead Sea and weak business environment led to significant profit margin erosion in Q4 2019 -8% ✓ Facility upgrade is expected to enable a capacity -41% increase of ~200 thousand tonne
Slide 7: Phosphate Solutions Business Performance
Phosphate Solutions Business Performance ANNUAL RESULTS QUARTERLY RESULTS ✓ Strong performance in specialty phosphates overshadowed by accelerated weakness in commodities and by a negative exchange rate impact -6% ✓ The division’s resilience throughout 2019 2,099 attributable to ICL’s focus on speci
Slide 8: IAS Business Performance
IAS Business Performance ANNUAL RESULTS QUARTERLY RESULTS ✓ Q4 2019 sales increase and reduced operating loss driven by higher prices and increased sales volume to the Turf and Ornamental -3% Horticulture markets 741 717 +2% ✓ 2019 results were negatively impacted by a weather-related decrease in sa
Slide 9: Annual Growth Trend in Most Main Operational Parameters
Annual Growth Trend in Most Main Operational Parameters $ millions Adjusted operating income Adjusted EBITDA Operating cash flow excluding divested businesses(1) excluding divested businesses(1) 9.9% 10.0% 13.6% 14.4% 19.0% 17.8% 21.1% 22.7% 966 992 847 750 760 1,160 1,198 968 904 620 506 507 2016 2
Slide 10: ICL's Commitment to ESG
ICL’s Commitment to ESG ICL’S INITIATIVES RECOGNITIONS Ongoing initiatives focused on ten SDGs Sustainable Procurement Higher score in the 2019 Bloomberg ESG disclosure ranking ‘Platinum+’ on the Ma’ala Sustainability Index Reducing Air Emissions A- score for the 2019 Interactive, innovative and CDP
Slide 11: Kobi Altman, CFO
Kobi Altman, CFO
Slide 12: Q4 and FY2019 Sales
Q4 and FY2019 Sales(1) $ millions 288 10 6 Potash: -201 1,410 Phosphate commodities: -55 Potash: -11 Phosphate specialties: -4 1,106 Phosphate Solutions: -13 Industrial Products: -39 Industrial Products: +13 Innovative Ag Solutions: +2 Innovative Ag Solutions: +4 Q4 2018 Quantities Exchange rates Pr
Slide 13: Q4 and FY2019 Adjusted Operating Income
Q4 and FY2019 Adjusted Operating Income(1) $ millions Potash: -90 Phosphate Solutions: -6 48 Industrial Products: -22 114 Innovative Ag Solutions: +1 214 166 17 6 10 1 88 Q4 2018 Operating Adjustments to Q4 2018 Adjusted Quantities Exchange rates Product prices Raw material prices Energy, transporta
Slide 14: Foreign Exchange Rates Impact
Foreign Exchange Rates Impact USD\NIS EUR\USD 3.80 1.25 3.70 3.70 1.20 1.18 3.59 3.60 3.56 1.15 1.12 3.50 1.14 3.49 1.10 3.40 1.11 1.05 3.30 3.20 1.00 Jul-18 Jul-19 Apr-18 May-18 Jun-18 Apr-19 Nov-18 May-19 Jun-19 Nov-19 Jan-18 Feb-18 Mar-18 Aug-18 Sep-18 Dec-18 Jan-19 Feb-19 Mar-19 Aug-19 Sep-19 De
Slide 15: Continued Optimization of Debt Structure
Continued Optimization of Debt Structure $ millions Maturities(1) Available credit facilities as of December 31, Gross debt as of December 31, 2019: 2019 amounts to $870 million $2.3bn(2) Average interest rate: 4.2% 2 (110) 736 600 2 2 261 313 13 70 20 123 124 46 2020 2021 2022 2023 2024 2025-30 203
Slide 16: 2019 Achievements Positioning ICL for the Next Decade
2019 Achievements Positioning ICL for the Next Decade ASSETS & INNOVATING TO DRIVE LEGAL, COMPLIANCE OPERATIONS RESULTS & ESG ✓ Dead Sea Potash facility upgrade to add ✓ Breakthrough in Meat Alternative solutions ✓ Final agreement on past royalties ~5% expected production capacity ✓ Launch of the ne
Slide 17: Investor Day
Please join us at the Investor Day ICL: Leadership, Innovation and Growth LONDON NEW YORK CITY TEL AVIV MARCH 18, 2020 MARCH 19, 2020 MARCH 22, 2020
Slide 18: Thank You
ANICL THANK YOU
Slide 19: Appendix
ANICL APPENDIX
Slide 20: Q4 2019 Industrial Products Sales and Segment Profit Analysis
Q4 2019 Industrial Products Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 13 1 39 4 5 13 22 320 293 70 60 Numbers may not add due to rounding and set offs 20
Slide 21: FY2019 Industrial Products Sales and Segment Profit Analysis
FY2019 Industrial Products Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions 15 $ millions 28 65 10 5 6 65 6 1,318 1,296 338 300 Numbers may not add due to rounding and set offs 21
Slide 22: Q4 2019 Potash Sales and Segment Profit Analysis
Q4 2019 Potash Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 201 3 5 11 11 1 13 515 138 90 302 22 Numbers may not add due to rounding and set offs 22
Slide 23: FY2019 Potash Sales and Segment Profit Analysis
FY2019 Potash Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 63 18 174 21 4 63 80 26 1,623 1,494 315 289 Numbers may not add due to rounding and set offs 23
Slide 24: Q4 2019 Phosphate Solutions Sales and Segment Profit Analysis
Q4 2019 Phosphate Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 6 13 59 1 2 5 12 495 6 417 14 13 1 Numbers may not add due to rounding and set offs 24
Slide 25: FY2019 Phosphate Solutions Sales and Segment Profit Analysis
FY2019 Phosphate Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 16 33 56 4 5 80 13 33 15 3 20 2,099 2,083 1,980 113 116 100 Numbers may not add due to rounding and set offs 25
Slide 26: Q4 2019 Innovative Ag Solutions Sales and Segment Profit Analysis
Q4 2019 Innovative Ag Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 2 3 4 147 150 1 1 2 4 -2 -4 4 Numbers may not add due to rounding and set offs 26
Slide 27: FY2019 Innovative Ag Solutions Sales and Segment Profit Analysis
FY2019 Innovative Ag Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions 14 13 25 741 3 3 717 14 5 11 29 21 Numbers may not add due to rounding and set offs 27
Slide 28: Finance Expenses
Finance Expenses $ millions Q4 2019 Q4 2018 Liabilities(1) (including ~$300 million of LT leases in 2019)(2) 2,520 2,420 Interest rate 4.2% 4.1% Interest expenses(3) 27 25 Interest capitalization (6) (4) Interest expenses, net 21 20 Total hedging transactions, balance sheet revaluation & other (2) 4
Slide 29: Effective Tax Rate
Effective Tax Rate $ millions Q4 19 Q4 18 FY 2019 FY 2018 Adjusted income before tax(1) 63 158 632 608 Normalized tax rate 22% 22% 21% 22% Normalized tax expenses 14 33 131 138 Carryforward losses not recorded for tax purposes 4 8 8 15 Exchange rate impact and other items (3) (9) 8 (17) Adjusted tax
Slide 30: Strong Financial Position Support Strategy Execution
Strong Financial Position Support Strategy Execution Net Debt/EBITDA ratio(1) 3.1 2.9 2.5 2.4 2.0 1.9 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4 2019 (1) Net debt to adjusted EBITDA calculated as short term credit + long term debt & debentures – cash & cash equivalents – short term investments & dep
Slide 31: IFRS 16 Quarterly Impact
IFRS 16(1) Quarterly Impact Item Net impact Comments Q4 2019 VS. Q4 2018 Rent expenses decreased by $16 million Adjusted operating income(2) $3 million Depreciation increased by $13 million Adjusted EBITDA(2) $16 million Rent expenses decreased by $16 million Property Plant & Equipment ~$339 million
Slide 32: IFRS 16 Annual Impact
IFRS 16(1) Annual Impact Item Net impact Comments 2019 VS 2018 Rent expenses decreased by $61 million Adjusted operating income(2) $10 million Depreciation increased by $51 million Adjusted EBITDA(2) $61 million Rent expenses decreased by $61 million Property Plant & Equipment ~$339 million A right-
Slide 33: 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 has measured, and accordingly has presented in its reports, the results of its business divisions (operating segments) after allocation of general and administrative (G&A) expenses
Slide 34: Reconciliation Tables (1/2)
Reconciliation Tables (1/2) Calculation of adjusted income before tax Q4 19 Q4 18 FY2019 FY2018 $ millions Adjusted operating income(1) 88 214 760 753 Finance expenses (25) (66) (129) (158) Share in earnings (losses) of equity-accounted investees and adjustments to financial - 10 1 13 expenses Adjus
Slide 35: Reconciliation Tables (2/2)
Reconciliation Tables (2/2) Calculation of adjusted operating income and FY2019 FY2018 FY2017 FY2016 $ millions adjusted operating income excluding divested businesses Operating income 756 1,519 629 (3) Capital gain - (841) (54) 1 Impairment loss (reversal) (10) 19 32 489 Provision for early retirem
Slide 36: 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 37: Thank You
THANK YOU visit us at www.icl-group.com