Icl Group Ltd. · TASE:ICL
Icl — Q3 2021 Earnings Presentation
36 slides from Icl's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter 2021 Financial Results
Third Quarter 2021 Financial Results Raviv Zoller President and CEO November 4, 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: 3Q'21 summary
3Q’21 summary Results driven by specialties, with commodity upside • Another quarter of specialties results improvement • Another quarter of rising commodity prices • Overcame higher overall costs and global supply chain challenges • All four businesses contributed, reporting double-digit growth in
Slide 4: Third quarter 2021 key financial highlights
Third quarter 2021 Key financial highlights US$M 3Q’21 3Q’20 YoY Change Sales $1,790 $1,204 49% Gross profit $689 $365 89% Gross margin 38.5% 30.3% 820 bps Operating income $321 $100 221% Adjusted operating income(1) $315 $106 197% Adjusted operating margin(1) 17.6% 8.8% 879 bps Net income, attribut
Slide 5: Key financial metrics
Key financial metrics Outstanding year-over-year improvement Sales Adjusted EBITDA(1) Operating Cash Flow US$B US$M US$M Up 49% YoY Up 86% YoY Up $70M YoY $1.8 $1.6 $1.5 $421 $1.3 $351 $1.2 $295 $268 $258 $273 $226 $242 $203 $206 24% 22% 19% 20% 20% 3Q'20 4Q'20 1Q'21 2Q'21 3Q'21 3Q'20 4Q'20 1Q'21 2Q
Slide 6: 3Q'21 Highlights
3Q’21 Highlights Quarterly profit breaks eight-year record Industrial Phosphate Innovative Products Potash Solutions Ag Solutions Strong demand across Record third quarter Record results for specialties, Results up both organically end-markets drove higher production at the Dead Sea commodities and
Slide 7: Industrial Products
Industrial Products Strong end-market demand Key highlights Sales $500 +43% US$M $387 • Continued strong demand $400 $300 $270 • Clear brine fluid sales improving, with higher oil prices • Specialty minerals performance remained strong $200 $100 3Q'20 3Q'21 • Record high bromine spot prices in China
Slide 8: Potash
Potash Market demand strong, with tight supply Key highlights Sales $500 +39% $436 US$M $400 • Spot prices continued to increase, with strong $313 global demand $300 $200 • Record third quarter production at Dead Sea $100 • Water Authority appeal successful 3Q'20 3Q'21 • Optimization of Cabanasses m
Slide 9: Phosphate Solutions
Phosphate Solutions Record results, with strong volume and prices Key highlights Sales $800 +29% $655 US$M $600 $506 • Another quarter of record results for specialties, $346 commodities and YPH joint venture $400 Specialty $292 Commodity $200 $309 $214 • Food specialties continued to benefit from I
Slide 10: Innovative Ag Solutions
Innovative Ag Solutions Sales up organically and with recent acquisitions Key highlights Sales $500 +124% US$M $387 $400 • Positive momentum continued, with higher pricing, $300 $177 tight supply and increased crop prices Acquisitions $200 $173 $210 $100 • Brazilian acquisitions’ strong performance
Slide 11: Recent impactful events
Recent impactful events Crossing boundaries to make an impact Innovation Sustainability Partnership • Expanded into LFP • Committed to carbon • Expanded supply battery technology neutrality by 2050 relationship • Invested in alternative • Sustainability linked loan with Haldor Topsoe protein start-u
Slide 12: Key 3Q'21 takeaways
Key 3Q’21 takeaways Long-term focus on specialties growth • Positive momentum across all businesses • Market dynamics remain strong • Progressing against sustainability targets • Confident in ICL’s strong global supply chain • Continued good progress executing against strategic plan 12
Slide 13: Third Quarter 2021 Financial Results
Third Quarter 2021 Financial Results Kobi Altman CFO
Slide 14: Third quarter 2021 key financial highlights
Third quarter 2021 Key financial highlights US$M 3Q’21 3Q’20 YoY Change Sales $1,790 $1,204 49% Gross profit $689 $365 89% Gross margin 38.5% 30.3% 820 bps Operating income $321 $100 221% Adjusted operating income(1) $315 $106 197% Adjusted operating margin(1) 17.6% 8.8% 879 bps Net income, attribut
Slide 15: Potash
Potash Close to inflection point Sales $1,400 US$M $1,192 $1,233 $1,000 Average realized $967 potash price per $600 $289 $232 $285 ton $200 YTD'19 YTD'20 YTD'21 EBITDA (1) $400 US$M $378 $300 $276 $200 $203 $100 $0 YTD'19 YTD'20 YTD'21 (1) Segment EBITDA is a non-GAAP financial measure; see reconcil
Slide 16: Pricing across mineral value chain
$800 $0 $400 $20,000 $0 $40,000 3Q'11 US$/ton US$/day 3Q'11 1Q'12 1Q'12 3Q'12 3Q'12 1Q'13 1Q'13 3Q'13 GMOP FOB NOLA 3Q'13 1Q'14 1Q'14 3Q'14 3Q'14 1Q'15 1Q'15 3Q'15 3Q'15 1Q'16 Supramax Timecharter Average 1Q'16 Commodity price upcycle 3Q'16 3Q'16 1Q'17 1Q'17 3Q'17 3Q'17 1Q'18 1Q'18 3Q'18 3Q'18 1Q'19
Slide 17: Sales bridges
Third quarter 2021 Sales bridges Sales Sales by segment US$M US$M $286 $21 $214 $1,790 IAS $149 ($17) $1,790 $102 $387 Acquisitions 46% $123 $177 Organic 54% $117 PS $655 Specialty 53% $1,204 $1,204 $1,204 Commodity 47% Potash $436 IP $387 Other ($75) Brazil Expansion Quantities Prices Rate 3Q'20 Ex
Slide 18: Profit bridges
Third quarter 2021 Profit bridges Adjusted EBITDA(1) Adjusted EBITDA(1) by segment US$M US$M $286 ($82) ($4) $509 $505 $42 ($51) $65 ($16) $438 $421 ($17) $421 $55 IAS ($19) Acquisitions 60% $421 $55 $46 Organic 40% $148 $52 $33 PS Specialty 34% Commodity 66% $226 $226 $125 Potash $226 $121 IP Other
Slide 19: Financial strength
Financial strength Continued growth in cash flow Highlights for 3Q’21 • Net debt to adjusted EBITDA improved to 2.0 times • Operating cash flow of $273M vs. $203M in 3Q’20 - Fourth consecutive quarter of YoY growth • Free cash flow(1) of $146 vs. $60M in 3Q’20 • Sustainability linked loan of €250M -
Slide 20: Guidance
Guidance Full year 2021 Raising expectations • Expect adjusted EBITDA range of $1,450 million to $1,500 million(1) • Follows another quarter of strong results • Includes Brazilian expansion (1) See guidance and non-GAAP financial measures in appendix. Note: Adjusted EBITDA is a non-GAAP measure, see
Slide 21: Thank you
Thank you Co n ta c t Pe g g y. Re i l l y T h a r p @ i c l - g r o u p . co m f o r m o r e i n f o r m a t i o n o n I C L View our interactive data tool at https://investors.icl-group.com/interactive-data-tool/default.aspx
Slide 22: Appendix
Appendix Third Quarter 2021 Financial Results
Slide 23: Industrial Products
Industrial Products Third quarter and year-to-date 2021 Industrial Products US$M 3Q’21 3Q’20 YTD’21 YTD’20 US$M 3Q Sales YTD Sales Segment sales $387 $270 $1,195 $919 2020 $270 $919 Sales to external customers $383 $267 $1,183 $909 Quantities $72 $181 Sales to internal customers $4 $3 $12 $10 Prices
Slide 24: Potash
Potash Third quarter and year-to-date 2021 Potash US$M 3Q’21 3Q’20 YTD’21 YTD’20 US$M 3Q Sales YTD Sales Segment sales $436 $313 $1,233 $967 2020 $313 $967 Sales to external customers $310 $224 $860 $703 Quantities $24 $68 Sales to internal customers $27 $20 $76 $67 Prices $98 $179 (1) Other and eli
Slide 25: External potash metrics
External potash metrics Average market prices and imports Average prices 3Q’21 3Q’20 YoY Change 2Q’21 QoQ Change Granular potash – Brazil $674 $239 182% $383 76% CFR spot US$ per ton Granular potash – Northwest Europe $409 $241 70% $256 60% CIF spot/contract € per ton Standard potash – Southeast Asi
Slide 26: Phosphate Solutions
Phosphate Solutions Third quarter and year-to-date 2021 Phosphate Solutions US$M 3Q’21 3Q’20 YTD’21 YTD’20 US$M 3Q Sales YTD Sales Segment sales $655 $506 $1,823 $1,447 2020 $506 $1,447 Sales to external customers $630 $488 $1,754 $1,392 Quantities $10 $65 Sales to internal customers $25 $18 $69 $55
Slide 27: External phosphate metrics
External phosphate metrics Commodities market Average prices ($/ton) 3Q’21 3Q’20 YoY Change 2Q’21 QoQ Change DAP $643 $338 90% $565 14% CFR India spot TSP Granular $629 $246 156% $527 19% CFR Brazil spot SSP $334 $170 96% $250 34% CPT Brazil inland 18% to 20% P2O5 spot Sulfur $176 $59 198% $185 (5%)
Slide 28: Innovative Ag Solutions
Innovative Ag Solutions Third quarter and year-to-date 2021 Innovative Ag Solutions US$M 3Q’21 3Q’20 YTD’21 YTD’20 US$M 3Q Sales YTD Sales Segment sales $387 $173 $865 $568 2020 $173 $568 Sales to external customers $379 $168 $852 $557 New Brazilian Businesses’ $177 $185 contribution Sales to intern
Slide 29: Consolidated results analysis
Consolidated results analysis Third quarter 2021 Operating US$M Sales Expenses EBITDA Income 3Q’20 $1,204 ($1,104) $100 Total adjustments 3Q’20* - $6 $6 Adjusted 3Q’20 figures $1,204 ($1,098) $106 $226 Notes: New Brazilian Businesses’ Positive – includes acquisition of Agro Fertiláqua Participações
Slide 30: Consolidated results analysis
Consolidated results analysis Year-to-date 2021 Operating US$M Sales Expenses EBITDA Income YTD’20 $3,726 ($3,663) $63 Total adjustments YTD’20* - $303 $303 Adjusted YTD’20 figures $3,726 ($3,360) $366 $722 Notes: New Brazilian Businesses' $185 ($157) $28 $28 Positive – includes Agro Fertiláqua Part
Slide 31: Sales by geographic location
Sales by geographic location Third quarter 2021 Innovative Industrial Phosphate Sales Potash Ag Other Activities Reconciliations Consolidated Products Solutions US$M Solutions 3Q’21 3Q’20 3Q’21 3Q’20 3Q’21 3Q’20 3Q’21 3Q’20 3Q’21 3Q’20 3Q’21 3Q’20 3Q’21 3Q’20 Europe $121 $112 $100 $73 $200 $168 $92
Slide 32: Finance expenses
Finance expenses Third quarter and year-to-date 2021 US$M 3Q’21 3Q’20 YTD’21 YTD’20 Average net debt(1) $3,000 $2,825 $2,870 $2,720 Weighted average interest rate 3.7% 3.7% 3.8% 3.9% Interest expenses $28 $26 $81 $80 Interest capitalization ($4) ($6) ($15) ($18) Interest expenses, net $24 $20 $66 $6
Slide 33: Adjusted effective tax rate
Adjusted effective tax rate Third quarter and year-to-date 2021 US$M 3Q’21 3Q’20 YTD’21 YTD’20 Adjusted income before tax(1) $281 $79 $653 $258 Normalized tax rate 21% 20% 22% 21% Normalized tax expenses $58 $16 $144 $53 Carryforward losses for which deferred ($7) ($1) ($3) $6 taxes were not recogni
Slide 34: Reconciliation tables
Reconciliation tables Slide one of two Calculation of segment EBITDA Industrial Phosphate Innovative Potash and margin Products Solutions Ag Solutions US$M 3Q’21 3Q’20 3Q’21 3Q’20 3Q’21 3Q’20 3Q’21 3Q’20 Segment sales $387 $270 $436 $313 $655 $506 $387 $173 Segment profit $105 $50 $83 $28 $93 $28 $4
Slide 35: Reconciliation tables
Reconciliation tables Slide two of two Calculation of adjusted EBITDA 3Q’21 2Q’21 1Q’21 4Q’20 3Q’20 FY’20 FY’19 FY’18 US$M Net income attributable to $225 $140 $135 $65 $54 $11 $475 $1,240 shareholders of the company Financing expenses, net $34 $30 $20 $46 $29 $158 $129 $158 Taxes on income $45 $64
Slide 36: 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