Icl Group Ltd. · TASE:ICL
Icl — Q2 2021 Earnings Presentation
35 slides from Icl's earnings presentation, Jul 28, 2021
Slide 1: Second Quarter 2021 Financial Results
Second Quarter 2021 Financial Results Raviv Zoller July 28, 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: 2Q'21 Highlights
3 2Q’21 Highlights Innovative Ag Solutions Phosphate Solutions Potash Industrial Products Record quarter driven by increased demand for specialty products Successful completion of Dead Sea annual maintenance and ramp project in Spain Record breaking quarter, with strength in specialty food and indus
Slide 4: Creating impact and sustainable growth
Industrial Agriculture Food 4 Creating impact and sustainable growth Committed to growing in our target markets Shift to long-term contracts, with investments in innovation and growth Acquisitions in Brazil to provide seasonal balance, opportunities for growth Continued focus on specialties growth,
Slide 5: Key financial metrics
Key financial metrics 5 Substantial 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 34% YoY Up 43% YoY Up $65M YoY
Slide 6: Second quarter 2021 Key financial highlights
Second quarter 2021 6 Key financial highlights (1) Adjusted operating income and margin, adjusted net income, adjusted EBITDA and margin, and adjusted EPS are non-GAAP financial measures; see reconciliation tables in appendix. US$M 2Q’21 2Q’20 YoY Change Sales $1,617 $1,203 34% Gross profit $570 $32
Slide 7: Industrial Products
Industrial Products 7 Record quarter, with continued strong end-market demand Sales US$M EBITDA(1) US$M Key highlights Record sales and EBITDA, benefitting from strong demand Record results for bromine, phosphorous and magnesia-based productsContinued strong demand for flame retardants +45% +44% (1)
Slide 8: Potash
Potash 8 Continued good environment, with additional upside expected Sales US$M EBITDA(1) US$M Key highlights Dead Sea: successful one-week maintenance shutdown in early April, with ~80 projects completedICL Iberia: ramp project finalized, with production ramping up Good environment continued in sec
Slide 9: Phosphate Solutions
Phosphate Solutions 9 Sales US$M EBITDA(1) US$M Key highlights Record results for specialties, commodities and YPH joint ventureSpecialties: food and industrial saw strong demand and higher prices across most regions and industriesPhosphate fertilizers: sales up, especially in U.S. and Brazil, where
Slide 10: Innovative Ag Solutions
Innovative Ag Solutions 10 All products showed year-over-year growth (1) Segment EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix. Sales US$M EBITDA(1) US$M Key highlights All product lines showed sales growth, due to higher prices and volumes Record turf and ornamental
Slide 11: Key takeaways
Key takeaways 11 Specialties provide balanced long-term growth Consistently seeing strength in all businesses, with adjusted EBITDA improvement across all divisionsFocusing on long-term partnerships with customers in Industrial ProductsCompletion of Potash capacity increasesDriving Phosphate Special
Slide 12: Second Quarter 2021 Financial Results
Second Quarter 2021 Financial Results Kobi Altman CFO
Slide 13: Financial strength
Financial strength 13 Continued growth in cash flow (1) Free cash flow is a non-GAAP financial measure; see reconciliation tables in appendix.Note: Liquidity is comprised of available credit facilities, cash and equivalents, and short-term investments and deposits. Operating cash flow of $242M vs. $
Slide 14: Pricing across mineral value chain
Pricing across mineral value chain 14 Commodity price upcycle Sources: GMOP and phosphoric acid - CRU Fertilizer Week, as of 6.30.21; Supramax - Simpson Spence Young (SSY), as of July 2021; Sulfur - CRU, as of 7.15.21. GMOP FOB NOLA US$/ton Phosphoric acid CFR contract India US$/ton Sulfur Bulk FOB
Slide 15: Second quarter 2021 Sales and profit bridges
Second quarter 2021 15 Sales and 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. Sales US$M Adjusted EBITDA(1) US$M Spec 37%Comm 63% Spec 53%Comm 47%
Slide 16: Second quarter 2021 Results by segment
Second quarter 2021 16 Results by segment Sales US$M Adjusted EBITDA(1) US$M (1) Adjusted EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix.Note: Numbers rounded to closest million.
Slide 17: Guidance Full year 2021
Guidance 17 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 $1,315 million to $1,375 million(1) Follows another quarter of strong resultsIncludes South American Pla
Slide 18: Sustainability
Sustainability 18 Significant reduction(1) with continued progress Included for 3rd straight year Highest Platinum+ ranking for 3rd consecutive year A Industry leading member for 4th straight year Certified 1st sustainable European underground mining company Rated A- for 2nd straight year Leadership
Slide 19: Thank you
Thank you Contact Peggy.ReillyTharp@icl-group.com for more information on ICLView our interactive data tool at https://investors.icl-group.com/interactive-data-tool/default.aspx
Slide 20: Appendix
Appendix Second Quarter 2021 Financial Results
Slide 21: Results of operations
Results of operations 21 Second quarter and first half 2021 Industrial ProductsUS$M 2Q’21 2Q’20 1H’21 1H’20 Segment sales $410 $285 $808 $649 Sales to external customers $406 $281 $800 $642 Sales to internal customers $4 $4 $8 $7 Segment profit $114 $70 $219 $173 Depreciation and amortization $14 $1
Slide 22: Industrial Products
Industrial Products 22 Second quarter and first half 2021 US$M 2Q Sales 1H Sales 2020 $285 $649 Quantities $90 $110 Prices $27 $34 Exchange rates $8 $15 2021 $410 $808 US$M 2Q Segment EBITDA 1H Segment EBITDA 2020 $88 $208 Quantities $41 $45 Prices $27 $34 Exchange rates $(1) $(2) Raw materials ($17
Slide 23: Potash
Potash 23 Second quarter and first half 2021 Note: Segment EBITDA is a non-GAAP financial measure; see reconciliation tables.(1) Primarily includes salt produced in the UK and Spain, Polysulphate and Polysulphate-based products, magnesium-based products, and sales of electricity produced in Israel;
Slide 24: External potash metrics
External potash metrics 24 Average market prices and imports Sources: CRU (Fertilizer week Historical Price: July 2021), FAI, Brazil and Chinese customs data. Average prices 2Q’21 2Q’20 YoY Change 1Q’21 QoQ Change Granular potash – BrazilCFR spot US$ per ton 383 222 72.5% 283 35.3% Granular potash –
Slide 25: Phosphate Solutions
Phosphate Solutions 25 Second quarter and first half 2021 Phosphate Solutions US$M 2Q’21 2Q’20 1H’21 1H’20 Segment sales $623 $439 $1,168 $941 Specialty $328 $273 $622 $552 Commodity $295 $166 $546 $389 Segment profit $77 $8 $117 $17 Specialty $37 $30 $72 $58 Commodity $40 ($22) $45 ($41) Segment EB
Slide 26: External phosphate metrics
External phosphate metrics 26 Commodities market Average prices ($/ton) 2Q’21 2Q’20 YoY Change 1Q’21 QoQ Change DAPCFR India spot $565 $316 79% $455 24% TSPCFR Brazil spot $527 $245 115% $408 29% SSPCPT Brazil inland 18% to 20% P2O5 spot $250 $173 45% $206 21% SulfurBulk FOB Adnoc Monthly contract $
Slide 27: Innovative Ag Solutions
Innovative Ag Solutions 27 Second quarter and first half 2021 Note: Segment EBITDA is a non-GAAP financial measure; see reconciliation tables.*Not including capital expenditures as part of business combination. For further information see Note 3 to the Company’s Interim Financial Statements in the 2
Slide 28: Consolidated results analysis Second quarter 2021
Consolidated results analysis 28 Second quarter 2021 US$M Sales Expenses Operating Income EBITDA Notes: 2Q’20 $1,203 ($1,372) ($169) Total adjustments Q2 2020* - $297 $297 Adjusted Q2 2020 figures $1,203 ($1,075) $128 $246 Quantities $177 ($135) $42 $42 Positive – higher sales volumes of bromine- an
Slide 29: Consolidated results analysis First half 2021
Consolidated results analysis 29 First half 2021 US$M Sales Expenses Operating Income EBITDA Notes: 1H’20 $2,522 ($2,559) ($37) Total adjustments YTD 2020* - $297 $297 Adjusted YTD 2020 figures $2,522 ($2,262) $260 $496 Quantities $245 ($192) $53 $53 Positive – higher sales volumes of bromine- and p
Slide 30: Sales by geographic location
Sales by geographic location 30 Second quarter 2021 SalesUS$M Industrial Products Potash Phosphate Solutions Innovative Ag Solutions Other Activities Reconciliations Consolidated 2Q’21 2Q’20 2Q’21 2Q’20 2Q’21 2Q’20 2Q’21 2Q’20 2Q’21 2Q’20 2Q’21 2Q’20 2Q’21 2Q’20 Europe $142 $99 $96 $84 $185 $154 $11
Slide 31: Finance expenses
Finance expenses 31 Second quarter and first half 2021 (1) Average liabilities during given quarter.(2) Other for 2Q’21 includes $6 million, due to shekel revaluation vs. U.S. dollar.Note: Numbers may not add, due to rounding and set-offs. US$M 2Q’21 2Q’20 1H’21 1H’20 Average net debt(1) $2,800 $2,8
Slide 32: Adjusted effective tax rate
Adjusted effective tax rate 32 Second quarter and first half 2021 (1) See reconciliation table.Note: Numbers may not add, due to rounding and set-offs. US$M 2Q’21 2Q’20 1H’21 1H’20 Adjusted income before tax(1) $207 $98 $372 $179 Normalized tax rate 25% 20% 23% 21% Normalized tax expenses $52 $20 $8
Slide 33: Reconciliation tables Slide one of two
Reconciliation tables 33 Slide one of two (1) Also includes proceeds from sale of property, plants and equipment (PP&E).Note: Numbers may not add, due to rounding and set-offs. Calculation of segment EBITDA and marginUS$M Industrial Products Potash Phosphate Solutions Innovative Ag Solutions 2Q’21 2
Slide 34: Reconciliation tables Slide two of two
Reconciliation tables 34 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 EBITDA ratio was calculated by dividing net debt by past four quarters adjusted EBITDA
Slide 35: Guidance and non-GAAP financial measures
Guidance and non-GAAP financial measures 35 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