Icl Group Ltd. · TASE:ICL
Icl — Q3 2021 Earnings Presentation
37 slides from Icl's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter 2021 Financial Results
Third Quarter 2021 Financial Results Raviv Zoller November 4, 2021 President and CEO
Slide 2: Important legal notes
Important legal notes 2 Disclaimer and safe harbor for forward-looking statements The information contained herein in this presentation or delivered or to be delivered to you during this presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in ICL
Slide 3: 3Q'21 summary
3Q’21 summary Results driven by specialties, with commodity upside Another quarter of specialties results improvementAnother quarter of rising commodity pricesOvercame higher overall costs and global supply chain challenges All four businesses contributed, reporting double-digit growth in sales and
Slide 4: Third quarter 2021 Key financial highlights
Third quarter 2021 4 Key financial highlights (1) Adjusted operating income and margin, adjusted net income, adjusted EBITDA and margin, and adjusted EPS are non-GAAP financial measures; see reconciliation tables in appendix. US$M 3Q’21 3Q’20 YoY Change Sales $1,790 $1,204 49% Gross profit $689 $365
Slide 5: Key financial metrics
Key financial metrics 5 Outstanding year-over-year improvement (1) Adjusted EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix. Operating Cash Flow Adjusted EBITDA(1) Sales US$M US$M US$B Up 49% YoY Up 86% YoY Up $70M YoY
Slide 6: 3Q'21 Highlights
6 3Q’21 Highlights Innovative Ag Solutions Phosphate Solutions Potash Industrial Products Strong demand across end-markets drove higher sales and profit Record third quarter production at the Dead Sea Record results for specialties, commodities and YPH, with higher volumes and prices Results up both
Slide 7: Industrial Products
Industrial Products 7 Strong end-market demand Sales US$M EBITDA(1) US$M Key highlights Continued strong demand Clear brine fluid sales improving, with higher oil pricesSpecialty minerals performance remained strongRecord high bromine spot prices in China Majority of production at full capacityRaw m
Slide 8: Potash
Potash 8 Market demand strong, with tight supply Key highlights Spot prices continued to increase, with strong global demandRecord third quarter production at Dead SeaWater Authority appeal successfulOptimization of Cabanasses mine continuesPolysulphate sales volume up +90% (1) Segment EBITDA is a n
Slide 9: Phosphate Solutions
Phosphate Solutions 9 Sales US$M EBITDA(1) US$M Key highlights Another quarter of record results for specialties, commodities and YPH joint ventureFood specialties continued to benefit from ICL’s global supply chainSt. Louis alternative protein plant commissioning in DecemberPhosphate fertilizer gro
Slide 10: Innovative Ag Solutions
Innovative Ag Solutions 10 Sales up organically and with recent acquisitions (1) Segment EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix. Sales US$M EBITDA(1) US$M Key highlights Positive momentum continued, with higher pricing, tight supply and increased crop pricesBra
Slide 11: Recent impactful events
Innovation Sustainability Partnership 11 Recent impactful events Crossing boundaries to make an impact Expanded into LFP battery technologyInvested in alternative protein start-up through Planet Hub Committed to carbon neutrality by 2050Sustainability linked loanGained Polysulphate organic certifica
Slide 12: Key 3Q'21 takeaways
Key 3Q’21 takeaways 12 Long-term focus on specialties growth Positive momentum across all businessesMarket dynamics remain strongProgressing against sustainability targetsConfident in ICL’s strong global supply chainContinued good progress executing against strategic plan
Slide 13: Third Quarter 2021 Financial Results
Third Quarter 2021 Financial Results Kobi Altman CFO
Slide 14: Third quarter 2021 Key financial highlights
Third quarter 2021 14 Key financial highlights (1) Adjusted operating income and margin, adjusted net income, adjusted EBITDA and margin, and adjusted EPS are non-GAAP financial measures; see reconciliation tables in appendix. US$M 3Q’21 3Q’20 YoY Change Sales $1,790 $1,204 49% Gross profit $689 $36
Slide 15: Potash: Close to inflection point
Potash 15 Close to inflection point (1) Segment EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix. Sales US$M Average realized potash price per ton EBITDA(1) US$M
Slide 16: Pricing across mineral value chain
Pricing across mineral value chain 16 Commodity price upcycle Sources: GMOP and phosphoric acid - CRU Fertilizer Week, as of 9.30.21; Supramax - Simpson Spence Young (SSY), as of October 2021; Sulfur - CRU, as of 9.30.21. GMOP FOB NOLA US$/ton Phosphoric acid CFR contract India US$/ton Sulfur Bulk F
Slide 17: Third quarter 2021 Sales bridges
Third quarter 2021 17 Sales bridges Note: Numbers rounded to closest million; Other includes intercompany eliminations. Sales US$M Specialty 53%Commodity 47% Sales by segment US$M Acquisitions 46%Organic 54%
Slide 18: Third quarter 2021 Profit bridges
Third quarter 2021 18 Profit bridges (1) Adjusted EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix.Note: Numbers rounded to closest million; Other includes intercompany eliminations. Adjusted EBITDA(1) US$M Adjusted EBITDA(1) by segment US$M Specialty 34%Commodity 66% Ac
Slide 19: Financial strength
Financial strength 19 Continued growth in cash flow (1) Free cash flow is a non-GAAP financial measure; see reconciliation tables in appendix. Net debt to adjusted EBITDA improved to 2.0 timesOperating cash flow of $273M vs. $203M in 3Q’20Fourth consecutive quarter of YoY growthFree cash flow(1) of
Slide 20: Guidance Full year 2021
Guidance 20 Full year 2021 (1) See guidance and non-GAAP financial measures in appendix. Note: Adjusted EBITDA is a non-GAAP measure, see appendix for calculation. Expect adjusted EBITDA range of $1,450 million to $1,500 million(1) Follows another quarter of strong resultsIncludes Brazilian expansio
Slide 21: Thank you
Thank you Contact Peggy.ReillyTharp@icl-group.com for more information on ICLView our interactive data tool at https://investors.icl-group.com/interactive-data-tool/default.aspx
Slide 22: Appendix
Appendix Third Quarter 2021 Financial Results
Slide 23: Results of operations
Results of operations 23 Third quarter and year-to-date 2021 Industrial ProductsUS$M 3Q'21 3Q'20 YTD'21 YTD'20 Segment sales $387 $270 $1,195 $919 Sales to external customers $383 $267 $1,183 $909 Sales to internal customers $4 $3 $12 $10 Segment profit $105 $50 $324 $223 Depreciation and amortizati
Slide 24: Industrial Products
Industrial Products 24 Third quarter and year-to-date 2021 US$M 3Q Sales YTD Sales 2020 $270 $919 Quantities $72 $181 Prices $44 $78 Exchange rates $1 $17 2021 $387 $1,195 US$M 3Q Segment EBITDA YTD Segment EBITDA 2020 $69 $277 Quantities $39 $84 Prices $44 $78 Exchange rates ($4) ($6) Raw materials
Slide 25: Potash
Potash 25 Third quarter and year-to-date 2021 Note: Segment EBITDA is a non-GAAP financial measure; see reconciliation tables.(1) Primarily includes salt produced in the UK and Spain, Polysulphate and Polysulphate-based products, magnesium-based products, and sales of electricity produced in Israel;
Slide 26: External potash metrics
External potash metrics 26 Average market prices and imports Sources: CRU (Fertilizer week Historical Price: October 2021), FAI, Brazil and Chinese customs data. Average prices 3Q’21 3Q’20 YoY Change 2Q’21 QoQ Change Granular potash – BrazilCFR spot US$ per ton $674 $239 182% $383 76% Granular potas
Slide 27: Phosphate Solutions
Phosphate Solutions 27 Third quarter and year-to-date 2021 Phosphate Solutions US$M 3Q’21 3Q’20 YTD’21 YTD’20 Segment sales $655 $506 $1,823 $1,447 Specialty $346 $292 $968 $844 Commodity $309 $214 $855 $603 Segment profit $93 $28 $210 $45 Specialty $37 $35 $109 $93 Commodity $56 ($7) $101 ($48) Seg
Slide 28: External phosphate metrics
External phosphate metrics 28 Commodities market Average prices ($/ton) 3Q’21 3Q’20 YoY Change 2Q’21 QoQ Change DAPCFR India spot $643 $338 90% $565 14% TSP GranularCFR Brazil spot $629 $246 156% $527 19% SSPCPT Brazil inland 18% to 20% P2O5 spot $334 $170 96% $250 34% SulfurBulk FOB Adnoc Monthly c
Slide 29: Innovative Ag Solutions
Innovative Ag Solutions 29 Third quarter and year-to-date 2021 Note: Segment EBITDA is a non-GAAP financial measure; see reconciliation tables.(1) Not including capital expenditures for the Brazilian acquisitions in the first half of 2021. For further information, see Note 3 to the company’s interim
Slide 30: Consolidated results analysis Third quarter 2021
Consolidated results analysis 30 Third quarter 2021 US$M Sales Expenses Operating Income EBITDA Notes: 3Q’20 $1,204 ($1,104) $100 Total adjustments 3Q’20* - $6 $6 Adjusted 3Q’20 figures $1,204 ($1,098) $106 $226 New Brazilian Businesses’ contribution $177 ($144) $33 $33 Positive – includes acquisiti
Slide 31: Consolidated results analysis Year-to-date 2021
Consolidated results analysis 31 Year-to-date 2021 US$M Sales Expenses Operating Income EBITDA Notes: YTD’20 $3,726 ($3,663) $63 Total adjustments YTD’20* - $303 $303 Adjusted YTD’20 figures $3,726 ($3,360) $366 $722 New Brazilian Businesses' contribution $185 ($157) $28 $28 Positive – includes Agro
Slide 32: Sales by geographic location
Sales by geographic location 32 Third quarter 2021 SalesUS$M Industrial Products Potash Phosphate Solutions Innovative Ag Solutions Other Activities Reconciliations Consolidated 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 $9
Slide 33: Finance expenses
Finance expenses 33 Third quarter and year-to-date 2021 (1) Average liabilities during given quarter.Note: Numbers may not add, due to rounding and set-offs. US$M 3Q’21 3Q’20 YTD’21 YTD’20 Average net debt(1) $3,000 $2,825 $2,870 $2,720 Weighted average interest rate 3.7% 3.7% 3.8% 3.9% Interest exp
Slide 34: Adjusted effective tax rate
Adjusted effective tax rate 34 Third quarter and year-to-date 2021 (1) See reconciliation table.Note: Numbers may not add, due to rounding and set-offs. US$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 $16
Slide 35: Reconciliation tables Slide one of two
Reconciliation tables 35 Slide one of two (1) Also includes proceeds from sale of property, plants and equipment (PP&E).Note: Numbers may not add, due to rounding and set-offs. Calculation of segment EBITDA and marginUS$M Industrial Products Potash Phosphate Solutions Innovative Ag Solutions 3Q’21 3
Slide 36: Reconciliation tables Slide two of two
Reconciliation tables 36 Slide two of two (1) See detailed reconciliation table – adjustments to reported operating and net income (non-GAAP) – in corresponding quarters’ earnings release.(2) Quarterly net debt to adjusted EBITDA ratio was calculated by dividing net debt by past four quarters adjust
Slide 37: Guidance and non-GAAP financial measures
Guidance and non-GAAP financial measures 37 GuidanceThe 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 necess