Slide 1: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results Raviv Zoller | President and CEO August 9, 2023
Slide 2: Important legal notes
Important legal notes Disclaimer and safe harbor for forward-looking statements This presentation and/or other oral or written statements made by ICL Group during its presentation, or from time to time, may contain forward-looking statements within the meaning of the United States Private Securities
Slide 3: Second quarter results
Second quarter results Compared to all-time record quarter in 2Q’22 • Sales of $1.83B, down YoY and up vs. 2Q’21 • Adjusted EBITDA(1) of $441M, down YoY and up vs. 2Q’21 • Maintained strong cash generation, with $391M of operating cash flow • Continued returns to shareholders • Diluted EPS of $0.13
Slide 4: Key financial metrics
Key financial metrics Sales Adjusted EBITDA(1) Sales Adjusted EBITDA(1) US$M US$M US$M US$M $5,405 $3,932 $3,127 $2,880 $2,260 $1,834 $1,617 $1,258 $1,051 $441 $662 $360 22% 44% 24% 21% 42% 27% 2Q'21 2Q'22 2Q'23 2Q'21 2Q'22 2Q'23 1H'21 1H'22 1H'23 1H'21 1H'22 1H'23 (1) Adjusted EBITDA and margin are
Slide 5: Consistent cash generation focus
Consistent cash generation focus Specialties sales Adjusted diluted EPS(1) Operating and free cash flow(1) US$M US$ US$M $627 $1,679 $0.58 $242 $391 $1,073 $1,176 $410 $0.11 $0.13 $221 $94 2Q'21 2Q'22 2Q'23 2Q'21 2Q'22 2Q'23 2Q'21 2Q'22 2Q'23 $3,176 $1.06 $2,526 $952 $773 $2,105 $448 $628 $0.35 $441
Slide 6: Industrial Products
Industrial Products Sales Key developments US$M $486 • Global demand weakness continued in flame retardants $410 $300 • Expected end-market improvement not yet materializing • Slower return to growth in China than projected 2Q'21 2Q'22 2Q'23 • Proactively adjusting production and implementing saving
Slide 7: Phosphate Solutions
Phosphate Solutions Sales $915 Key developments US$M $605 • Food demand resilient $582 $493 Specialties $329 $395 • U.S. price stable, but competitive price pressure in other regions Commodities $422 $253 $210 • Overall conditions lower than exceptional 2022, but base 2Q'21 2Q'22 2Q'23 business rema
Slide 8: Potash
Potash Sales $951 Key developments US$M • China contract signed in late June at prevailing $546 rate of $307 per ton $380 • Potash CIF price per ton of $403 vs. $801 in 2Q’22 and $289 in 2Q’21 2Q'21 2Q'22 2Q'23 • Volume increased YoY, with demand led by China and India EBITDA US$M $616 • Benefitted
Slide 9: Growing Solutions
Growing Solutions Sales Key developments US$M • Record free cash flow of $100M, with considerable $700 reduction in working capital $481 $334 • Significant destocking in Brazil 2Q'21 2Q'22 2Q'23 • Executing savings and efficiency plan, with impact expected in 2H’23 EBITDA US$M • Lower than-expected
Slide 10: Remain committed to long-term strategy
remain committed to long-term strategy Enhancing Growing efficiencies and specialties competitiveness product portfolio Driving Targeting M&A and strong cash flow strategic partnerships 10
Slide 11: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results Aviram Lahav CFO
Slide 12: Macro overview
Macro overview • Inflation declining, but higher than historical rates • Interest rates remain elevated • Global growth continues to be subdued • Geopolitical obstacles persist • China economic rebound appears stalled • Crop prices remain elevated • Resilient farmer affordability • Fertilizer prices
Slide 13: Global indicators
Global indicators Inflation Interest rates Rate Percentage 20% 20% USA EU China Brazil Israel USA EU Brazil Israel UK India 15% 15% 10% 10% 5% 5% 0% 0% -5% -5% 4Q'19 2Q'19 3Q'19 1Q'20 1Q'21 1Q'22 1Q'23 1Q'19 2Q'20 3Q'20 2Q'22 3Q'22 2Q'23 4Q'21 4Q'20 2Q'21 3Q'21 4Q'22 2Q'19 3Q'19 1Q'20 1Q'22 1Q'23 4Q
Slide 14: Key market metrics – fertilizers
Key market metrics – fertilizers Commodity crop prices Farmer sentiment US$/ton Index $1,000 Corn Rice Wheat Soybeans 180 $500 130 $0 80 2Q'19 3Q'19 4Q'19 1Q'20 1Q'21 1Q'22 1Q'23 1Q'19 2Q'20 3Q'20 2Q'22 3Q'22 2Q'23 4Q'21 4Q'22 4Q'20 2Q'21 3Q'21 1Q'21 4Q'19 1Q'19 2Q'19 3Q'19 1Q'20 1Q'22 1Q'23 4Q'20 4
Slide 15: Key market metrics – electric vehicles
Key market metrics – electric vehicles EV sales forecasts M of units 100 70 64 90 88 85 87 87 86 85 85 84 83 82 82 60 77 78 80 51 52 Penetration rate (percent) 46 50 Cars sold (millions) 40 60 35 52 40 48 31 43 26 38 30 40 34 21 30 16 26 20 13 22 18 20 14 8 11 10 4 2 2 3 6 0 0 2029 2020 2021 2022 20
Slide 16: Sales bridges
Sales bridges Second quarter 2023 Sales by segment Sales US$M US$M $2,880 $2,880 ($186) ($343) ($310) $74 ($405) ($219) $1,834 $481 GS ($699) ($4) $1,834 PS Spec. 65% $605 Comm. 35% Potash $546 IP $300 2Q'23 2Q'22 Solutions Potash Solutions Industrial Other Growing Products Phosphate Price Rate Quan
Slide 17: Profit bridges
Profit bridges Second quarter 2023 Adjusted EBITDA(1) by segment Adjusted EBITDA(1) US$M US$M $1,258 $1,258 ($132) ($156) ($185) $36 $22 $20 $22 ($403) $17 GS $441 $130 ($3) ($18) $441 ($133) PS Spec. 64%, Comm. 36% ($699) $213 Potash IP $74 2Q'22 2Q'23 Solutions Potash Solutions Industrial Other Gr
Slide 18: Potash costs and prices
Potash costs and prices Leading positions MOP Industry Cost Curve Potash ASP Cash costs US$/t, excluding royalties, FOB load port US$ $500 $800 $400 $600 $300 $400 $200 ICL DSW $100 $200 $0 $0 0 10 20 30 40 50 1Q'20 1Q'21 1Q'22 1Q'23 4Q'21 2Q'20 3Q'20 4Q'20 2Q'21 3Q'21 2Q'22 3Q'22 4Q'22 2Q'23 Produc
Slide 19: Financial overview
Financial overview Continued attention to delivering shareholder returns Highlights • Net debt to adjusted EBITDA(1) of 0.72 • Driving reduction in working capital • Strong cash conversion • Operating cash flow of $391M vs. $627M in 2Q’22 • Free cash flow of $221M vs. $410M in 2Q’22 (1) • Available
Slide 20: Guidance
Guidance Full year 2023 • Expectations for full year adjusted EBITDA of $1.6 billion to $1.8 billion (1) • EBITDA of specialties businesses to represent approximately $0.8 billion to $0.9 billion of total adjusted EBITDA Adjusted EBITDA(1) Specialties EBITDA(1) US$B US$B $4.0 $1.6 to $1.8 ~20% CAGR
Slide 21: Thank you
Thank you Co n ta c t Pe g g y. Re i l l y T h a r p @ i c l - g r o u p . co m f o r m o r e i n f o r m a t i o n o n I C L View our interactive data tool at https://investors.icl-group.com/interactive-data-tool/default.aspx
Slide 22: Appendix
Appendix Second Quarter 2023
Slide 23: Calculation of segment EBITDA
Calculation of segment EBITDA Second quarter 2023 Industrial Products US$M 2Q’23 2Q’22 2Q’21 Phosphate Solutions US$M 2Q’23 2Q’22 2Q’21 Segment sales $300 $486 $410 Segment sales $605 $915 $582 Segment operating income $60 $191 $114 Segment operating income $71 $268 $77 Segment operating margin 20%
Slide 24: Calculation of segment EBITDA
Calculation of segment EBITDA First half 2023 Industrial Products US$M 1H’23 1H’22 1H’21 Phosphate Solutions US$M 1H’23 1H’22 1H’21 Segment sales $661 $980 $808 Segment sales $1,319 $1,713 $1,084 Segment operating income $150 $379 $219 Segment operating income $186 $468 $119 Segment operating margin
Slide 25: Segment results analysis
Segment results analysis Second quarter 2023 Segment Sales Industrial Phosphate Growing Segment EBITDA Industrial Phosphate Growing Potash Potash US$M Products Solutions Solutions US$M Products Solutions Solutions 2Q’22 $206 $616 $315 $155 2Q’22 $486 $951 $915 $700 Quantity ($95) $15 ($66) ($18) Pri
Slide 26: Segment results analysis
Segment results analysis First half 2023 Segment Sales Industrial Phosphate Growing Segment EBITDA Industrial Phosphate Growing Potash Potash US$M Products Solutions Solutions US$M Products Solutions Solutions 1H’22 $409 $1,066 $562 $265 1H’22 $980 $1,746 $1,713 $1,266 Quantity ($184) ($51) ($97) ($
Slide 27: Reconciliation tables
Reconciliation tables Calculation of adjustments for second quarter 2023 Adjusted EBITDA Adjusted NI and diluted EPS 2Q’23 2Q’22 2Q’21 2Q’23 2Q’22 2Q’21 US$M US$M, ex. per share Net income $167 $585 $150 Net income, attributable $163 $563 $140 (1) Financing expenses, net $49 $14 $30 Adjustments - -
Slide 28: Reconciliation tables
Reconciliation tables Calculation of adjustments for first half 2023 Adjusted EBITDA Adjusted NI and diluted EPS 1H’23 1H’22 1H’21 1H’23 1H’22 1H’21 US$M US$M, ex. per share Net income $461 $1,242 $292 Net income, attributable $443 $1,195 $275 (1) Financing expenses, net $93 $48 $50 Adjustments $15
Slide 29: Guidance and non-GAAP financial measures
Guidance and non-GAAP financial measures Guidance: The company only provides guidance on a non-GAAP basis. The company does 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 amou