Icl Group Ltd. · TASE:ICL
Icl — Morgan Stanley Global Chemicals and Agriculture Conference 2018
72 slides from Icl's conference presentation, Nov 1, 2018
Slide 1: Investor Presentation
INVESTOR PRESENTATION
Slide 2: Important Legal Notes
IMPORTANT LEGAL NOTES This Presentation (references to which and to any information contained herein shall be deemed to include information which has been or may be supplied in writing or orally in connection herewith or in connection with any further enquiries) is provided for the sole purpose of p
Slide 3: ICL - At a Glance
ICL- AT A GLANCE $5.4B 49 ~11,000 TOP 3 $7.4B <3% BBB- #2
Slide 4: ICL - 90 Years of History
ICL- 90 YEARS OF HISTORY Establishing & growing operations Consolidating & expanding Focusing on innovation and in Israel globally solidifying leadership 1920s - 1970s 1970s - 2014 2000s -
Slide 5: Leading Global Company
LEADING GLOBAL COMPANY 35%* 22% 25% 3% 1% 12% 2% Production site Sales & marketing office * Percentage of sales by main geographical areas, 2017
Slide 6: ICL - Strategic Advantages
ICL – STRATEGIC ADVANTAGES UNIQUE STRATEGIC STARTUP ASSETS LOCATIONS KNOW-HOW NATION proximity to ports & customers accumulated over decades innovation
Slide 7: DNA of Leadership
DNA OF LEADERSHIP #1 #3 #1 #1 #1 #1
Slide 8: Core Values
CORE VALUES LEVERAGING TECHNOLOGY ADOPTING BEST PRACTICES TOP TIER SAFETY EMPLOYER OF AND INDUSTRIAL KNOW FOR CORPORATE PERFORMANCE AND CHOICE HOW TO MEET THE NEEDS OF GOVERMANCE ENVIROMENTAL OUR CUSTOMERS RESPONSIBILITY
Slide 9: Sustainability
SUSTAINABILITY $115M #2 99% SILVER RANKING 89% TfS
Slide 10: Present
LEADERSHIP STRATEGY PRESENT IAS POTASH
Slide 11: Present: Divisions
LEADERSHIP STRATEGY Phosphate Solutions division PRESENT essential ingredients Industrial Products division IAS - Innovative Ag Solutions division IAS Potash division POTASH
Slide 12: ICL Business Leadership
ICL BUSINESS LEADERSHIP Market Share – Specialty Phosphates – Europe, NA, and LatAm1 Global Bromine Production Capacity1 ICL Others 24% 11% Chinese producers ICL 11% (Dead Sea) 40% USA (ALB, LXS) 23% Albemarle (Dead Sea) 16% Potash Business Costs by Site and by Company2 ICL Dead IAS Sea POTASH
Slide 13: Organizational Structure Aligned with Strategy
ORGANIZATIONAL STRUCTURE ALIGNED WITH STRATEGY Phosphate Solutions division1 IAS - Innovative Ag Solutions division1 Potash division1 Industrial Products division1 IAS POTASH
Slide 14: Future
LEADERSHIP STRATEGY FUTURE POTASH
Slide 15: Leadership Strategy
LEADERSHIP STRATEGY POTASH
Slide 16: Industrial Products
AICL INDUSTRIAL PRODUCTS Enabling a variety of industries to enjoy safer products as well as more efficient and sustainable production ENERGY fd PHARMA & NUTRACEUTICAL ELECTRONICS CONSTRUCTION AUTOMOTIVE os) AGRICULTURE BIOCIDES 16
Slide 17: Industrial Products Solid Leadership
INDUSTRIAL PRODUCTS SOLID LEADERSHIP THE GLOBAL BROMINE UNIQUE BROMINE PRICES MARKET LEADER ADVANTAGE IN CHINA 180K TONNES NO.1 230K TONNES NO.1
Slide 18: Industrial Products Main Goals
INDUSTRIAL PRODUCTS MAIN GOALS A WORLD LEADER AND BEYOND
Slide 19: Leadership Strategy
LEADERSHIP STRATEGY POTASH
Slide 20: Potash: Increase Yields and Feed the World
POTASH INCREASE YIELDS AND FEED THE WORLD
Slide 21: Potash
POTASH 11 0.48 10 9 0.40 8 7 0.32 200 6 5 0.24 100 4 3 0.16 1961 1972 1983 1994 2005 2016 2027E 2038E 2049E World Crop Expansion of Crop Rotation Increase in Yields World Crop Production in 2005- Arable Land Production in 2050 2007 World population (Bn) Arable land (Ha/Person)
Slide 22: Potash ICL's Unique Position
POTASH ICL’S UNIQUE POSITION WELL ESTABLISHED IN LOWER COST AND FASTER STRONG POSITION GROWING MARKETS TIME-TO-MARKET 4.8 MILLION TONNES 80% PRODUCED FROM THE DEAD SEA NO.6
Slide 23: Potash ICL's Unique Position
POTASH ICL’S UNIQUE POSITION WELL ESTABLISHED IN LOWER COST AND FASTER STRONG POSITION GROWING MARKETS TIME-TO-MARKET 4.8 MILLION TONNES Europe US IL China 80% PRODUCED FROM THE DEAD SEA Brazil India NO.6
Slide 24: Potash Our Goals
POTASH OUR GOALS TOP-3 5MT 10% 1M
Slide 25: Leadership Strategy
LEADERSHIP STRATEGY ASICL 2%
Slide 26: Phosphate Solutions - Food
PHOSPHATE SOLUTIONS - FOOD TASTE & ESSENTIAL BITE MOUTH FEEL MINERALS TEXTURE & RISE LAST LONGER
Slide 27: Phosphate Solutions - Industrial
PHOSPHATE SOLUTIONS - INDUSTRIAL Oil drilling Oral care Metals Mining Cleaning products Leather Construction Paints & coatings Asphalt Water treatment
Slide 28: Phosphate Solutions ICL's Recipe for Leadership
PHOSPHATE SOLUTIONS ICL’S RECIPE FOR LEADERSHIP UNIQUE BACKWARD WITH A LEADING MARKET AND VALUABLE INTEGRATION MODEL POSITION INNOVATIVE PRODUCTS ~4,900K TONNES Market Share – Specialty Phosphates – Europe, NA, and LatAm1 ~90% of phosphate rock ICL 24% 1,150K TONNES 280K TONNES Source: ICL estimates
Slide 29: Phosphate Solutions Our Goals
PHOSPHATE SOLUTIONS OUR GOALS
Slide 30: Leadership Strategy
LEADERSHIP STRATEGY 30 ANICL
Slide 31: Innovative Ag Solutions Creating Leadership
INNOVATIVE AG SOLUTIONS CREATING LEADERSHIP SPECIALTY FERTILIZERS - THE FAST GROWING INDUSTRY DIVERSIFIED PORTFOLIO FOUNDATION FOR THE FUTURE ~850K TONNES Coated Solubles / Straights Liquids Fertilizers Solubl MAP/ Bulk Foliar SRF CRF SOP/CN NOP e NPK MKP Liquids Liquids OVER 300 1.8 ICL-SF ^ ^ ^ ^
Slide 32: The Farming of the Future
THE FARMING OF THE FUTURE: WITH INCREASING PRESSURE TO EXPAND PRODUCTION AND PROTECT OUR ENVIRONMENT, HIGH TECH FARMING TECHNOLOGIES WILL PLAY A CRUCIAL ROLE
Slide 33: IAS Leveraging Israel's High-Tech and Agri-Tech Eco System
IAS LEVERAGING ISRAEL'S HIGH-TECH AND AGRI-TECH ECO SYSTEM ACADEMIC TECHNOLOGICAL BUSINESS TARANIS
Slide 34: The Perfect Storm
THE PERFECT STORM 2B MORE PEOPLE GROW MORE CHANGE GROUNDBREAKING WITHIN 20 YEARS WITH LESS SOLUTIONS
Slide 35: ICL Aims to Offer Farmers Cutting-Edge Solutions
ICL AIMS TO OFFER FARMERS CUTTING-EDGE SOLUTIONS
Slide 36: Innovative Ag Solutions
INNOVATIVE AG SOLUTIONS PORTFOLIO GROWTH UNIQUE R&D CAPABILITIES GET CLOSER TO GROWER INNOVATION DIGITAL TRANSFORMATION
Slide 37: Present & Future
LEADERSHIP STRATEGY PRESENT&FUTURE POTASH
Slide 38: ICL Is on the Verge of a Tipping Point
ICL IS ON THE VERGE OF A TIPPING POINT POSITIVE BUSINESS IMPROVING MARKET SHARE OVERHANG MOMENTUM CONDITIONS REMOVED GROWTH STRATEGY DEBT OPTIMIZATION ALIGNED ORGANIZATION
Slide 39: Thank You
THANK YOU visit us at www.icl-group.com
Slide 40: Appendix
Appendix ASICL
Slide 41: Financial Overview
Financial Overview ASICL
Slide 42: Additional Data Regarding Aligned Divisions
Additional Data Regarding Aligned Divisions Sales FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 FY 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 Q1 2018 Q2 2018 Q3 2018 Potash 1,515 273 299 351 415 1,338 283 314 372 414 1,383 353 346 409 Phosphate Solutions 2,049 556 584 548 498 2,186 523 507 520 487 2,037
Slide 43: Q3 2018 Highlights
Q3 2018 HIGHLIGHTS Sequential sales were flat Operating income up by 9%. Net income up by 54% Operating income excluding divested businesses(1) increased by 43% EPS was 10 cents compared to 7 cents in Q3 2017 and 8 cents in Q2 2018 Focus on cash flow generation Dividend distribution for Q3 increased
Slide 44: Q3 2018 Results Summary
Q3 2018 Results Summary Pe smillions Teta || gis | t7__| change | Sales 1,371 = 1,371 1,440 (5)% Sales pro-forma® 1,362 BP 1,371 1,280 Th Operating income reported 172 BP 196 180 % Operating income adjusted 188 SB 200 215 (7)% Operating income Adj. © Pro-forma® 190 SB 200 140 43% Net income reported
Slide 45: Effective Tax Rate
Effective Tax Rate AICL erie | tase | nr | Adjusted income before tax® Normalized tax rate (including resource tax) Normalized tax expenses Carryforward losses not recorded for tax purposes Sub-Total Sub-Total - % Other items (mainly exchange rate impact) Adjusted income tax Actual Effective tax rat
Slide 46: Reconciliation Tables
Reconciliation Tables | Calculation of Adjusted income before tax smion) ag |v | Adjusted operating income 200 652 Finance expenses (23) (124) Share in earnings (losses) of equity-accounted investees and adjustments to financial expenses 2 - Adjusted income before tax 179 528 | Calculation of Pro-fo
Slide 47: Successful Optimization of Debt Structure
Successful Optimization of Debt Structure
Slide 48: Decreasing Net Debt/EBITDA Ratio
Decreasing Net Debt/EBITDA Ratio
Slide 49: Industrial Products
Industrial Products ASICL
Slide 50: ICL-IP Product Supply Chains
ICL-IP Product Supply Chains
Slide 51: Global Trends and Major End Markets
Global Trends and Major End Markets INTERMEDIATES ELECTRONICS FOR FOOD, PHARMA, AGRO CONSTRUCTION and Other OIL & GAS WATER FURNITURE & TREATMENT TRANSPORTATION TEXTILE POWER PLANTS
Slide 52: Major Trends and ICL Solutions
Major Trends and ICL Solutions Trends ICL’s Solutions
Slide 53: Potash
Potash ASICL
Slide 54: Total Fertilizer Use by Crop at Global Level
Total Fertilizer Use by Crop at Global Level
Slide 55: World Main Crops Long Term Forecast
World Main Crops Long Term Forecast Consumption, Stock and Stock to Use Ratio
Slide 56: World Grains Production & Consumption: Current Stock to Use Ratio
World Grains Production & Consumption: Current Stock to Use Ratio
Slide 57: ICL's Potash Market Share in Fast Growing Markets
ICL’s Potash Market Share in Fast Growing Markets India Brazil China 18% 13% 12% 29% 7% 26% 22% 22% 6% 17% 17% Canpotex Uralkali APC Canpotex Uralkali SQM Russia Belarus Canada Jordan ICL 4%10% 14% 5% 5% 20% 9% 20% 20% 25% 12% 29% 16% 23% 23% 25% 9% 31% APC BPC Canpotex ICL Uralkali K+S SQM BPC Ural
Slide 58: Positive Potash Spot Pricing Trend
Positive Potash Spot Pricing trend
Slide 59: ICL UK: The World's Only Producer of Polysulphate
ICL UK: The World’s Only Producer of Polysulphate ▪ ▪ ▪ ▪ ▪ ▪
Slide 60: Phosphate Solutions
Phosphate Solutions ASICL
Slide 61: Phosphate Solutions: Backward Integrated Value Chain
Phosphate Solutions: Backward Integrated Value Chain
Slide 62: Phosphoric Acid Pricing Trends
Phosphoric Acid Pricing Trends %
Slide 63: World-Class Advanced Additives Portfolio
We Have Built a World-Class Advanced Additives Portfolio • • • •
Slide 64: Vast Product Portfolio Serving Food Additives Markets
Vast Product Portfolio Serving a Variety of End Food Additives Markets • • • • • • • • • •
Slide 65: Food Specialties: Markets and Competition
Food Specialties: Markets and Competition
Slide 66: Innovative Ag Solutions
Innovative Ag Solutions ASICL
Slide 67: Building Leadership in Advanced Crop Nutrition Solutions
Building Leadership in Advanced Crop Nutrition Solutions Precision Business R&D Infrastructure Ag Development
Slide 68: ICL's Leadership in the Specialty Fertilizers Market
ICL’s Leadership in the Specialty Fertilizers Market
Slide 69: ICL Specialty Fertilizers: Our Strengths
ICL Specialty Fertilizers: Our Strengths ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 70: Our Core Markets and Products Today
Our Core Markets and Products Today
Slide 71: Specialty Fertilizers and Bio Solutions Have Become an Important Part of the Ag Input
Specialty Fertilizers and Bio Solutions Have Became An Important Part of the Ag Input ~$150bn
Slide 72: Leveraging Precision Ag to Grow Sales
Leveraging Precision Ag to Grow Sales a
ICL Group — Morgan Stanley Global Chemicals and Agriculture Conference 2018 on 6ix