Icl Group Ltd. · TASE:ICL
Icl — Israel Chemicals — Q2 2018 Earnings Presentation
30 slides from Icl's earnings presentation, Aug 1, 2018
Slide 1: Q2 2018 Results
Raviv Zoller | CEO August 1 st , 2018 Q2 2018 Results
Slide 2: Disclaimer and Safe Harbor for Forward-Looking Statements
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 Chemicals Ltd . (“I
Slide 3: Q2 2018 Highlights
3 Q2 2018 Highlights Strong sales growth and margin expansion across all of ICL ’ s businesses: Bromine, Potash and Phosphate value chains, and Specialty Fertilizers Operating income increased by 19 %. Excluding divested businesses, adjusted operating income increased by 47 % ( 1 ) and adjusted net
Slide 4: Q2 2018 Results Summary
4 Q2 2018 Results Summary $ millions Q2 18 Q2 17 % change Q1 18 % change Sales 1,371 1,322 4% 1,404 (2)% Operating income 172 144 19% 985 ( 83 )% Adjusted operating income (1) 188 153 23% 151 25% Adjusted EBITDA (1) 296 251 18% 251 18% Net income 101 57 77% 928 ( 89 )% Adjusted net income (1) 113 64
Slide 5: Specialty Solutions: Business Performance and Major Developments
5 Specialty Solutions: Business Performance and Major Developments x Segment performance more than compensated for the lost sales of the divested businesses x Record quarterly operating income for ICL Industrial Products driven by higher prices, continued environmental pressure on Chinese producers
Slide 6: Essential Minerals: Business Performance and Major Developments
6 x Higher potash prices coupled with improved production offset increased logistics and energy costs, resulting in significant increase in potash profitability x Higher prices and an increase in commodity phosphate fertilizer sales volumes more than compensated for higher Sulphur and logistics cost
Slide 7: Pricing Trends
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 7 Pricing Trends CHINA BROMINE (1) WHITE PHOSPHORIC ACID PRICE INDEX (2) US$/TONNE US$/TONNE (1) Source: Bloomberg (2) Global price index for Food Grade White Phosphoric Acid, from ICL internal sources (3) Source: CRU 1/4/2018 2/4/2018 3/4/2018 4/4/2018 5/4/20
Slide 8: Aligning Organizational Structure with Strategy to Enhance Market Leadership and Promote Growth
3 Phosphate Solutions - Advanced Additives - Food Specialties - Phosphate fertilizers A LEADING PROVIDER OF VALUE ADDED SOLUTIONS FOR THE INDUSTRIAL, FOOD AND AGRICULTURE END MARKETS H1 2018 SALES (1) (2) $1,070m H1 2018 OPERATING INCOME (1) (2) $110m 8 2 1 4 Potash Industrial Products Innovative Ag
Slide 9: Aligning Organizational Structure with Strategy: Sales and Operating Income Split
9 24% 23 % 15% 38% 30 % 37 % 10 % 23% Potash Industrial Products Innovative Ag Solutions Phosphate Solutions Q2 2018 (1)(2) SALES OPERATING INCOME Aligning Organizational Structure with Strategy to Enhance Market Leadership and Promote Growth (1) Unaudited pro - forma numbers for Phosphate Solutions
Slide 10: On the Verge of a Tipping Point
10 On the Verge of a Tipping Point… DEBT OPTIMIZATION Providing financial flexibility to execute strategy SHARE OVERHANG REMOVED Nutrien successfully sold its ~ 14 % stake to a group of Israeli and foreign institutional investors IMPROVING MARKET CONDITIONS Higher commodity prices, demand growth and
Slide 11: Financial Results
Financial Results Kobi Altman CFO
Slide 12: Positive Contribution to Sales from All Business Lines
1,322 1,254 1,371 68 32 22 3 22 14 40 16 Essential Minerals $ 57 million Specialty Solutions $ 76 million 12 Positive Contribution to Sales from All Business Lines See Q 2 2018 6 - K for a reconciliation of Adjusted operating income to operating income and adjusted net income to net income. Numbers
Slide 13: As Well as to Adjusted Operating Income
13 … As well as to Adjusted Operating Income 153 128 188 25 15 4 6 5 7 18 5 Essential Minerals $25 million Specialty Solutions $30 million See Q2 2018 6 - K for a reconciliation of Adjusted operating income to operating income and adjusted net income to net income. Numbers may not add due to roundin
Slide 14: Strong Consolidated Performance with Top Line Growth and Margin Expansion
1,322 1,254 1,371 68 78 39 153 128 188 25 78 2 4 16 14 Q2 2018 SALES Q2 2018 ADJUSTED OPERATING INCOME Strong Consolidated Performance with Top Line Growth and Margin Expansion See Q2 2018 press release for a reconciliation of Adjusted operating income to operating income and adjusted net income to
Slide 15: Effective Tax Rate
15 Effective Tax Rate $ millions Q 2 18 FY 2017 Adjusted income before tax ( 1 ) 134 528 Normalized tax rate (including resource tax) 22% 26% Normalized tax expenses 30 136 Carryforward losses not recorded for tax purposes 3 19 Sub - Total 33 155 Sub - Total - % 25% 29% Other items (mainly exchange
Slide 16: Cash Flow Statement
16 Cash flow Statement See Q2 2018 press release for a reconciliation of Adjusted operating income to operating income $ millions Q2 18 Q2 17 Net income 98 55 Depreciation, amortization Other adjustments to net income 105 24 95 37 Change in Working capital (63) 12 Net cash provided by operating acti
Slide 17: Successful Optimization of Debt Structure
2018 2019 2020 2021 2022 2023 2024 2025 2026 2038 280 265 18 212 811 130 1,090 46 311 Loans Securitization 17 Successful Optimization of Debt Structure Maturities as of March 2018 Available credit facilities as of March 31, 2018 amount to $1.4 billion Gross debt as of March 31, 2018 amount to $3.2 m
Slide 18: Successful Optimization of Debt Structure
2018 2019 2020 2021 2022 2023 2024 2025 2026 2038 177 204 17 222 371 117 474 46 299 115 61 440 616 Loans Securitization Maturities 18 2038 Available credit facilities as of March 31, 2018 amount to $1.4 billion Gross debt as of March 31, 2018 amount to $3.2 million Maturities as of March 2018 Succes
Slide 19: Successful Optimization of Debt Structure
2018 2019 2020 2021 2022 2023 2024 2025 2026 2038 177 204 17 222 366 117 469 46 299 600 Loans Securitization Maturities 19 2038 Available credit facilities as of June 30, 2018 amount to $1.8 billion Gross debt as of June 30, 2018 amount to $2.5 billion. Maturities as of June 2018 Successful Optimiza
Slide 20: Q2 2018 Key Takeaways
20 Q2 2018 Key Takeaways STRONG PERFORMANCE FINANCIAL FLEXIBILITY ALIGNING ORGANIZATIONAL STRUCTURE WITH STRATEGY ICL ON THE VERGE OF A TIPPING POINT
Slide 21: On the Verge of a Tipping Point
21 On the Verge of a Tipping Point… DEBT OPTIMIZATION Providing financial flexibility to execute strategy SHARE OVERHANG REMOVED Nutrien successfully sold its ~ 14% stake to a group of Israeli and foreign institutional investors IMPROVING MARKET CONDITIONS Higher commodity prices, demand growth and
Slide 22: Appendix
Appendix
Slide 23: Specialty Solutions Bridge Analysis
23 Specialty Solutions Bridge Analysis Excluding G&A and unallocated expenses Numbers may not add due to rounding and set offs 640 572 649 68 35 26 16 SEGMENT SALES SEGMENT OPERATING INCOME 135 110 139 25 26 13 4 9 5 $ millions
Slide 24: Specialty Solutions' Q2 Business Line Sales Analysis
24 Specialty Solutions’ Q2 Business Line Sales Analysis 147 169 6 12 4 208 140 154 68 6 5 3 291 331 20 16 4 INDUSTRIAL PRODUCTS ADVANCED ADDITIVES FOOD SPECIALTIES Including inter - segment sales Numbers may not add due to rounding and set offs $ millions
Slide 25: Essential Minerals Bridge Analysis
25 Essential Minerals Bridge Analysis SEGMENT SALES SEGMENT OPERATING INCOME 736 788 22 54 24 81 111 54 10 16 11 3 4 Excluding G&A and unallocated expenses Numbers may not add due to rounding and set offs $ millions
Slide 26: Essential Minerals' Q2 Business Line Sales Analysis
26 Essential Minerals’ Q2 Business Line Sales Analysis Including inter - segment sales Numbers may not add due to rounding and set offs 314 346 35 8 11 264 267 20 9 26 190 212 12 6 4 INDUSTRIAL PRODUCTS ADVANCED ADDITIVES FOOD SPECIALTIES $ millions
Slide 27: Potash Business Q2 Stand-Alone Results Analysis
27 Potash Business Q2 Stand - Alone Results Analysis 302 330 37 8 17 65 82 37 13 4 3 BUSINESS LINE SALES BUSINESS LINE OPERATING INCOME Excluding G&A and unallocated expenses Including inter - segment sales Numbers may not add due to rounding and set offs $ millions
Slide 28: Alignment of Organizational Structure
28 Alignment of Organizational Structure Essential Minerals - Agriculture Specialty Solutions - Industrial Phosphate Solutions Industrial Products Potash Innovative Ag Solutions Other, G&A and Set - offs Total Current segment Potash & Magnesium Specialty Fertilizers Phosphate Commodities Food Specia
Slide 29: Reconciliation Tables
29 Reconciliation Tables Calculation of Adjusted income before tax ($ millions) Q2 18 FY2017 Adjusted operating income 188 652 Finance expenses (54) (124) Adjusted income before tax 134 528 Calculation of Pro - forma Adjusted operating income ($ millions) Q2 18 Q2 17 Operating income 172 144 Adjustm
Slide 30: Non-GAAP Financial Measures
30 Non - GAAP Financial Measures We disclose in this Quarterly Report non - IFRS financial measures titled adjusted operating income, adjusted net income attributable to the Company’s shareholders , adjusted EBITDA and free cash flow . Our management uses adjusted operating income, adjusted net inco