Icl Group Ltd. · TASE:ICL
Icl — Israel Chemicals — Q3 2014 Earnings Presentation
29 slides from Icl's earnings presentation, Nov 12, 2014
Slide 1: Important Legal Notes
Important Legal Notes The information delivered or to be delivered to you does not constitute an offer or a recommendation to do any transaction in Israel Chemicals Ltd. (ICL) securities. Certain statements in this presentation and other oral and written statements made by ICL from time to time, are
Slide 2: Highlights and Financial Results
Highlights and Financial Results * Improved operating income margins compared to 2013 and sequentially due to improved volumes in most segments and contribution of efficiency plan * Strategy implementation on track with important milestones delivered [] Efficiency improvement will deliver approx. $8
Slide 3: Our Unique Business Model
Our Unique Business Model Resources Dead Sea U.K. / Spain Mines Negev Desert Global Opportunities Our Specialty Minerals Potash Bromine Magnesium Potash Polyhalite Phosphate Potash Phosphate Our Expertise Mining Chemistry Formulation Segment Fertilizers Performance Products Industrial Products End M
Slide 4: Business Environment and Major Developments
Business Environment and Major Developments * Potash market recovery continued across all geographies. Demand expected to remain robust, especially in China and India * Successful efficiency plan in Rotem led to record acid production at lower cost which resulted in improved profitability * Crop com
Slide 5: Fertilizers Imports into Main Markets
Fertilizers Imports into Main Markets Thousand tonnes, January-September (Except the US Jan to Aug) 2014 7,007 6,815 6,482 5,645 5,934 4,810 3,071 2,776 2,152 1,868 2,005 2,046 2013 2014 * Phosphate fertilizers in P205 terms ** DAP imports Sources: China Fertilizer Weekly Market Report, Sindicaro Da
Slide 6: Implications of the Natural Resources Committee Looking Forward
Implications of the Natural Resources Committee Looking Forward [] Final recommendations need to be brought to the government for approval [] Once approved, the parliament will initiate a legislative process [] Changes to the potash tax system will not come into effect prior to January 2017 The Comm
Slide 7: Maximizing Efficiency and Growth in ICL Iberia
Maximizing Efficiency and Growth in ICL Iberia KCl Production 2012 2015 2020 2025 [] Establish a long term capacity increase while significantly reducing the cost per tonne to a near Dead Sea level, with marginal cost per tonne similar to the Dead Sea level [] Significantly reduce environmental foot
Slide 8: Strengthening and Expanding ICL's Specialty Fertilizers' Innovative Technologies
Strengthening and Expanding ICL's Specialty Fertilizers' Innovative Technologies Acquisition of AmegA Sciences: Targeting Growth Opportunities in Specialty Fertilizers [] Based in the UK, established in 1984 [] Developer and manufacturer of specialty products for the specialty agriculture, horticult
Slide 9: Engineered Materials: Drive Bromine Market Growth
Engineered Materials: Drive Bromine Market Growth A Agreement Between ICL and Albemarle: Establishment of a manufacturing joint venture for the production of polymeric flame retardant The Deal [] The JV will operate an existing 2,400 MT per year plant in the Netherlands and a 10,000 MT per year plan
Slide 10: Financial Flexibility to Support ICL's Strategy -- APW divestment
Financial Flexibility to Support ICL's "Next Step Forward" Strategy -- APW divestment After the Quarter: Agreement with Kurita to sell ICL PP's Non-Core APW businesses The Deal [] Kurita to acquire APW business units for []250 million. Net proceeds* after tax approx. $260M [] Closing expected to occ
Slide 11: Fulfilling Potash Demand Growth Potential -- India and Africa
Fulfilling Potash Demand Growth Potential -- India and Africa [] Farmer education is an essential factor in the growth of potash demand [] ICL believes it will be the prime beneficiary of such initiatives given its strong position in these markets and the strategic location of its assets Incremental
Slide 12: Global Leader in Climate Change Mitigation
Global Leader in Climate Change Mitigation ICL has been recognized as a World Leader in managing and reducing Greenhouse Gas Emissions and mitigating Climate Change High Scores by the Carbon Disclosure Project (CDP) [] For the second year in a row, ICL has maintained its high score of 98/100 in the
Slide 13: Financial Results
Financial Results (Mr. Avi Doitchman)Executive VP, CFO and Strategy
Slide 14: Q3 2014 Results
Q3 2014 Results $ millions Q3 14 Q3 13 Revenues 1,559 1,445 Operating Income 262 222 Adjusted OI 262 222 Operating margin 16.8% 15.4% Net income 180 78 Adjusted net income 180 196 % change Q2 14 % change 7.9% 1,536 1.5% 18.0% 78 235.9% 18.0% 243 7.8% 15.8% 130.8% 67 168.7% (8.2)% 214 (15.9)% [] Oper
Slide 15: Potash Bridge Analysis
Potash Bridge Analysis -- Improved Demand more than Offsets Lower Prices Sales ($M) 5 105 57 450 397 Operating Profit ($M) 6 6 53 60 131 112 16
Slide 16: Phosphates and Fertilizers -- Efficiency Plan Bearing Fruit
Phosphates and Fertilizers -- Efficiency Plan Bearing Fruit Sales 1 8 10 421 424 Operating Profit 5 8 11 7 37 22 17
Slide 17: Industrial Products - Volume Improvement amid Lower Prices
Industrial Products - Volume Improvement amid Lower Prices Sales 6 33 328 301 Q3 2013 Volumes Prices Q3 2014 Operating Profit 3 2 4 5 6 13 36 27 18
Slide 18: Performance Products -- Acquisitions Contributed to Increased Sales
Performance Products -- Acquisitions Contributed to Increased Sales Sales 4 11 451 436 Operating Profit 4 3 4 4 73 66 19
Slide 19: Commercial Bond Offering to Support Strategy
Commercial Bond Offering to Support Strategy ICL is preparing a bond offering in the US Investment Grade Rating BBB (Stable Outlook) BBB (Stable Outlook) Opportunities [] Further strengthening ICL's financial position: refinance existing debt, free up revolving credit facilities [] Diversifying the
Slide 20: Commercial Bond Offering to Support Strategy
AIcL | Commercial Bond Offering to Support Strategy ICL is preparing a bond offering in the US Investment Grade Rating SMU RARP BBB (Stable Outlook) F itch BBB (Stable Outlook) Ratings [Opportunities ¢ Further strengthening ICL’s financial position: refinance existing debt, free up revolving credit
Slide 21: Appendices Financial Overview
Appendices Financial Overview
Slide 22: Natural Resources Committee Final vs. Interim Recommendations
Natural Resources Committee Final vs. Interim Recommendations -- Key points INTERIM RECOMMENDATIONS (May 2014) Fixed 42% tax on OP above 11% Return on Depreciated Assets (RODA) Fixed 5% royalty pay-off for all natural resources Phosphate royalties will be paid based on ex- plant value No recognition
Slide 23: Lower, Yet Strong Returns
Lower, Yet Strong Returns 4.2 2000 2001 ROE ROIC 2000-2006 figures are based on Israeli GAAP, 2007-2013 are based on IFRS Data for 2012-2013 reflect the application of 2 new IFRS accounting standards ROE (Return on equity) = net income / shareholders' equity, average ROIC (Return on invested capital
Slide 24: Sequential Improvement in Cash Flow Delivery
Sequential Improvement in Cash Flow Delivery $ millions 1,414 1,384 1,111 1,011 925 881 582 415 285 20 * 2006 figures are based on Israeli GAAP, 2007-2014 are based on IFRS 25
Slide 25: More than a Decade of High Dividend Yields
More than a Decade of High Dividend Yields Year Dividend Yield* ---- --------------- 2001 4.0% ---- --------------- 2002 4.8% ---- --------------- 2003 4.5% ---- --------------- 2004 4.5% ---- --------------- 2005 3.6% ---- --------------- 2006 6.4% ---- --------------- 2007 3.5% ---- --------------
Slide 26: Macroeconomic and Industry Parameters Which Affected Q3 2014 Results
Macroeconomic and Industry Parameters Which Affected Q3 2014 Results (average Q3 2014 compared to average Q3 2013) Change ------------------------------------------- ----------------------------------- Appreciation of the NIS against the Dollar -1.8% ------------------------------------------- -----
Slide 27: Macroeconomic and Industry Parameters Which Affected 9M 2014 Results
Macroeconomic and Industry Parameters Which Affected 9M 2014 Results (average 9M 2014 compared to average 9M 2013) Change ------------------------------------------- ----------------------------------- Appreciation of the NIS against the Dollar -4.0% ------------------------------------------- -----
Slide 28: Macroeconomic and Industry Parameters Which Affected 9M 2014 Results
ACL Macroeconomic and Industry Parameters Which Affected 9M 2014 Results (average 9M 2014 compared to average 9M 2013) Appreciation of the NIS against the Dollar Appreciation of the EURO against the Dollar (average for the period) LIBOR Dollar interest rate (3 months) Increase in Bulk Dry Freight In
Slide 29: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Israel Chemicals Ltd. By: /s/ Avi Doitchman Name: Avi Doitchman Title: Executive Vice President, Chief F