Icl Group Ltd. · TASE:ICL
Icl — Israel Chemicals — Debt Investor Presentation (December 2019)
74 slides from Icl's debt investor presentation, Dec 18, 2019
Slide 1: Debt Road Show Presentation December 2019
DEBT ROAD SHOW PRESENTATION December 2019
Slide 2: Important Legal Notes
IMPORTANT LEGAL NOTES Ǯ 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
Slide 3: ICL at a Glance
Manufacturing plants in 13 countries worldwide 44 Sales in 2018 , with balanced product portfolio $ 5.6 B Market Cap as of Dec 16 , 2019 Traded on TASE since 1992 Traded on NYSE since 2014 $ 5.8 B Second largest public Israeli company in terms of sales # 2 Leading supplier across most business lines
Slide 4: Sustainability
SUSTAINABILITY We are committed to disciplined, continuous improvement in all sustainability areas ICL ’ s investments and expenditures on environmental projects and operations in 2018 Success in Emission Reduction Reduction rates for ICL Global air emissions between 2008 and 2018 : 86 % in NOx; 65
Slide 5: DNA of Leadership
In western Europe in compound PK fertilizers # 1 Most competitive globally in potash # 1 # 1 Globally in bromine # 1 Globally in phosphorus based flame retardants # 1 Globally in specialty phosphates # 3 DNA OF LEADERSHIP Globally in soluble phosphate based fertilizers DZ
Slide 6: ICL divisions and products
ICL potash helps farmers increase yields and feed the world ICL provides essential € ingredients for various industrial and food applications ICL ’ s bromine solutions are all around us, making consumer goods safer and production more efficient & sustainable LEADERSHIP STRATEGY PRESENT ICL specialty
Slide 7: ICL Business Leadership
ICL BUSINESS LEADERSHIP Potash business cost b y Site and by Com p any 2 Global leadership In Specialty Phosphates ICL 24 % ICL Dead Sea Market Share – Specialty Phosphates – Europe, NA, and LatAm 1 Among the top 3 most competitive potash producers ICL Others 31 % Innophos 19 % Prayon 14 % Chinese P
Slide 8: Organizational Structure Aligned with Strategy
1 Including inter - division sales, segment G&A expenses. 2 Phosphate Solutions division sales after setoffs of intra - division sales and profit, and excluding divested businesses Sales numbers are rounded to the nearest $10M YoY Growth (specialty) ORGANIZATIONAL STRUCTURE ALIGNED WITH STRATEGY Pho
Slide 9: Leadership Strategy
LEADERSHIP STRATEGY ǵ POTASH
Slide 10: The Global Bromine Market Leader
2,600 3,100 3,600 4,100 4,600 5,100 THE GLOBAL BROMINE MARKET LEADER 175 K TONNES of bromine were produced in 2018 NO. 1 World's leading elemental bromine producer, with 40 % of market production capacity SOLID LEADERSHIP 240 K TONNES of bromine compounds and 90 k tonnes of phosphorus compounds sold
Slide 11: Leadership Strategy
LEADERSHIP STRATEGY ǭǭ POTASH
Slide 12: ICL's Unique Position (Potash)
ICL ’ S UNIQUE POSITION MILLION TONNES of potash were produced in 2018 STRONG POSITION POTASH 0 % PRODUCED FROM THE DEAD SEA One of the world ’ s lowest cost sites due to evaporation process and logistic advantages ǭǮ 2000 2015 2022 E China India WELL ESTABLISHED IN GROWING MARKETS China, Indi
Slide 13: ICL's Unique Position (Potash)
ICL ’ S UNIQUE POSITION MILLION TONNES of potash were produced in 2018 STRONG POSITION China, India and Brazil are about 80 % of ICL ’ s target markets POTASH LOWER COST AND FASTER TIME - TO - MARKET Shorter mine - to - port distances and shorter shipping routes to emerging markets Source: CRU C
Slide 14: Potash Pricing Trend
150 200 250 300 350 400 Potash Pricing trend ǭǰ CFR Brazil Sources: ICL US$/TONNE
Slide 15: Leadership Strategy
LEADERSHIP STRATEGY ǭDZ POTASH
Slide 16: Unique Backward Integration Model
UNIQUE BACKWARD INTEGRATION MODEL 5 M TONNES of phosphate rock and 2,300 K tonnes of fertilizers produced in 2018 Over 90 % of phosphate rock u sed internally for fertilizers and specialty products AND VALUABLE INNOVATIVE PRODUCTS ICL is focused on value proposition - high - end solutions, original
Slide 17: Phosphate Commodities Pricing Trends
Phosphate Commodities Pricing Trends ǭdz 1 Source: CRU DAP CFR INDIA 1 US$/TONNE TSP FOB MOROCCO 1 150 200 250 300 350 400 450 500 150 200 250 300 350 400 450 US$/TONNE
Slide 18: Leadership Strategy
LEADERSHIP STRATEGY ǭǴ POTASH
Slide 19: Specialty Fertilizers - The Foundation for the Future
Market Dynamics 2006 - 2016 (Mt) 1 0.4 1.8 FAST GROWING INDUSTRY 1.8 3.2 Controlled Release Fertilizers Soluble Fertilizers SPECIALTY FERTILIZERS - THE FOUNDATION FOR THE FUTURE ~ 850 K TONNES of soluble, liquid and controlled release fertilizer capacity OVER 300 agronomists in sales and customer su
Slide 20: Translating Megatrends and Unmet Needs Into Innovation
Diminishing Arable Land Renewable Energy 5 G Electrification Growing Population Urbanization Dietary Shifts Regulations and Environmental Circular Economy Artificial Intelligence 20 Translating Megatrends and Unmet Needs Into New Innovation Initiatives
Slide 21: Innovation at ICL
40 innovation projects with universities & startups within the last 5 years INNOVATION AT ICL R&D and Innovation Snapshot $ 55 M in 2018 300 FTEs 20 R&D centers globally 850 granted patents Ǯǭ • New Applications for ICL minerals • Products and formulations • Process efficiency • Technology • Machine
Slide 22: Innovation at ICL
INNOVATION AT ICL Translating Megatrends and Unmet Needs Into New Innovation Initiatives ǮǮ Renewable Energy Bromine based flow batteries Magnesium Hydride for Hydrogen Storage Materials for Li - ion batteries Molten salts for solar power Increase Crop Yields FertilizerpluS ™ product lines Increase
Slide 23: Financial Summary
FINANCIAL SUMMARY AXICL
Slide 24: Q3 2019 Highlights
Q 3 2019 Highlights Ǯǰ x Solid results with record cash generation x Sales of $ 1,325 million were 3 % lower than Q 3 2018 , mainly due to delays in the signing of potash supply contracts in Asia x Operating income was slightly higher at $ 201 million x EPS of $ 0.10 , in line with Q 3 2018 x Adjust
Slide 25: Q3 2019 Results Summary
Q 3 2019 Results Summary ǮDZ $ millions Q 3 2019 Q3 2018 % change 1 - 9 / 2019 1 - 9 / 2018 % change Sales 1,325 1,371 (3%) 4,165 4,146 - Sales ) 1 ( excluding divested businesses 1,325 1,371 (3%) 4,165 4,096 2% Operating income 201 196 3% 668 1,353 (51%) Adjusted operating income 201 200 1 % 672 539
Slide 26: Growth Trend in Main Operational Parameters - YTD View
Growth trend in Most Main Operational Parameters – YTD View ǮDz $ millions Adjusted operating income, adjusted EBITDA and operating cash flow for Q 3 2019 include the impact of the new IFRS 16 accounting standard in the amounts of $ 2 million, $ 15 million and $ 10 million respectively. (1) Adjusted
Slide 27: Current Debt Summary
Current Debt Summary Ǯdz Q 3 2019 1 Q 2 2019 1 Q 1 2019 1 FY 2018 FY 2017 USD million 599 654 589 352 872 Long term loans from banks and others 1,502 1,491 1,483 1,463 1,516 Debentures 476 598 638 610 822 Short term credit from banks and others 2,577 2,743 2,710 2,425 3,210 Total financial liabilitie
Slide 28: Decreasing Net Debt/EBITDA Ratio
Decreasing Net Debt/EBITDA Ratio ǮǴ 1 Net debt calculated as short term credit + long term debt & debentures – cash & cash equivalents – short term investments & deposits Net debt/ Adj. EBITDA ( 1 ) 2.5 2.4 3.1 2.9 1.9 2.0 1.9 1.8 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Slide 29: Successful Optimization of Debt Structure
Successful Optimization of Debt Structure Ǯǵ Maturities as of September 30 , 2019 $ millions Available credit facilities as of September 30 , 2019 amounts to $ 1.1 billion Gross debt as of September 30 , 2019 : $ 2.3 bn ( 1 ) Average interest rate: 4.2 % USD 92 % Variable 20 % Banks and others 34 %
Slide 30: Capital Allocation Approach
Capital Allocation Approach ǯǬ Maintaining a balanced relationship between long - term growth, investment grade rating and shareholders ’ return Long - term value creation Maintain investment grade rating Shareholder ’ s return Financial Stability
Slide 31: Key Takeaways
KEY TAKEAWAYS ǯǭ SOLID PERFORMANCE IN AN INCREASINGLY CHALLENGING ENVIRONMENT STRONG CASH GENERATION STRATEGIC MILESTONES STRENGTHEN ICL ’ S LEADERSHIP POSITIONS, CREATING LONG - TERM VALUE
Slide 32: Thank You
ǯǮ THANK YOU com group. - icl www. visit us at
Slide 33: Appendix
Appendix ACL
Slide 34: ICL - Years of History
ICL - 90 YEARS OF HISTORY Focusing on innovation and solidifying leadership 2000 s - Establishing & growing operations in Israel 1920 s - 1970 s Establishment of Dead Sea Bromine and Negev Phosphates Consolidating & expanding globally 1970 s - 2014 Global M&A ǯǰ Establishment of potash & bromine pro
Slide 35: Leading Global Company
Production site Sales & marketing office 35 %* 1 % 22 % 12 % * Percentage of sales by main geographical areas, 2017 LEADING GLOBAL COMPANY 2 % 3 % ǯDZ 25 %
Slide 36: ICL - Strategic Advantages
provide competitive logistic advantage through proximity to ports & customers STRATEGIC LOCATIONS Access to the globally leading high - tech and agri - tech eco - system in Israel ~ driving innovation STARTUP NATION of chemistry, agronomy, synergy utilization and customer requirements accumulated ov
Slide 37: Core Values
CORE VALUES TOP TIER SAFETY PERFORMANCE AND ENVIROMENTAL RESPONSIBILITY EMPLOYER OF CHOICE LEVERAGING TECHNOLOGY AND INDUSTRIAL KNOW HOW TO MEET THE NEEDS OF OUR CUSTOMERS ADOPTING BEST PRACTICES FOR CORPORATE GOVERNANCE ǯdz
Slide 38: Industrial Products
Industrial Products ANCL
Slide 39: Industrial Products end markets
Enabling a variety of industries to enjoy safer products as well as more efficient and sustainable production ǯǵ CONSTRUCTION PHARMA & NUTRACEUTICAL AGRICULTURE ELECTRONICS ENERGY AUTOMOTIVE BIOCIDES Population Regulation & environmental awareness Standard of living INDUSTRIAL PRODUCTS
Slide 40: Industrial Products Geographical Sales Distribution
ǰǬ Percentage of 2018 sales 34 % 27 % 31 % Industrial Products Geographical Sales Distribution
Slide 41: Industrial Products Sales Distribution
ǰǭ Percentage of 2018 sales 66 % 20 % 14 % Bromine Phosphorus Specialty Minerals 40 % 46 % 14 % Flame Retardants Industrial Solutions Specialty Minerals By Minerals By Business Industrial Products Sales Distribution
Slide 42: Industrial Products Supply Chain
ǰǮ ( 1 ) RM sourced from 3 rd parties Specialty Minerals plants : Israel France * Bromine compounds plants: Israel Netherlands China Phosphorus compounds plants: Germany USA MgCl Salts KCl Purchased ( 1 ) Customers Produced Industrial Products Supply Chain ( P 4 )
Slide 43: Leading the Global Bromine Market
ǰǯ Source: ICL estimates, MarketsandMarkets Flame Retardants 41 % Brominated organic intermediates & Industrial 34 % Clear brine fluids 15 % Biocides 7 % Mercury Control 4 % 280 280 120 120 170 165 70 50 80 90 2018 2023 Albemarle (Dead Sea) ICL (Dead Sea) Other USA (ALB & LXS) China 720 705 ICL - IP
Slide 44: Major Trends and ICL Solutions
Major Trends and ICL Solutions ǰǰ Trends ICL ’ s Solutions Clean Air Mercury Emissions Control MERQUEL® Renewable energy Energy storage Electrolytes for Bromine Flow battery Electric car/ Autonomous car New generation polymeric FRs Home automation New generation polymeric FRs Water shortage and trea
Slide 45: Main Goals: A World Leader and Beyond
MAIN GOALS A WORLD LEADER AND BEYOND Advocacy & Regulation Value over volume Increasing Demand via new bromine applications CONCRETING OUR GLOBAL LEADERSHIP OF THE BROMINE MARKET Enhancing complementary business ǰDZ INDUSTRIAL PRODUCTS
Slide 46: Potash
Potash AXSICL
Slide 47: Meeting the Global Need to Feed the World's Growing Population
100 200 World Crop Production in 2005- 2007 Expansion of Arable Land Crop Rotation Increase in Yields World Crop Production in 2050 MEETING THE GLOBAL NEED TO FEED THE WORLD ’ S GROWING POPULATION Without an improvement in crop yields, the demand for food will far outpace production POTASH Grain pro
Slide 48: World Main Crops Long Term Forecast
World Main Crops Long Term Forecast Consumption, Stock and Stock to Use Ratio ǰǴ Source: OECD - FAO Agricultural Outlook 2017 - 2027 (Jul 2018 ) 16% 20% 24% 28% 32% 36% 40% 44% 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Stock to Use Ratio Billion Tonnes Wheat Coarse Grains Rice Oilseeds Ending stocks Stock to
Slide 49: World Grains Production & Consumption: Stock to Use Ratio
World Grains Production & Consumption: Current Stock to Use Ratio ǰǵ Sources: USDA ( November 2019 ) 35.7 % 26.3 % 25.1 % 31.6 % 16.7 % 19.8 % 31.4 % 30.2 % 29.7 % 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 34% 36% 38% 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5
Slide 50: ICL's Potash Market Share in Fast Growing Markets
ICL ’ s Potash Market Share in Fast Growing Markets DZǬ 4.6 Mt 10.0 Mt 7.5 Mt Total Import 2018 4.5 Mt 9.2 Mt 7.5 Mt Total Import 2017 10 % 25 % 25 % 16 % 20 % 4 % APC BPC Canpotex ICL Uralkali K+S 5 % 20 % 23 % 9 % 29 % 14 % SQM BPC Uralkali K+S Canpotex ICL 20 % 23 % 31 % 12 % 9 % 5 % Uralkali BPC
Slide 51: ICL UK: The World's Only Producer of Polysulphate
ICL UK: The World ’ s Only Producer of Polysulphate DZǭ A PREMIUM NICHE FERTILIZER WITH UNIQUE BENEFITS Mineral Attributes ▪ Multi - nutrients ▪ Extended Availability ▪ Natural fertilizer ICL ’ s Advantages ▪ Sole producer ▪ Existing infrastructure ▪ Market position 0 1,000 2,000 3,000 2016 2017 2020
Slide 52: Potash Our Goals
POTASH OUR GOALS To be Among the Top - 3 most competitive players in in our strategic markets Maintain stable production of about 5 million tonnes per year Improve cost competitiveness by 10 % within 5 years Produce 1 million tonnes of polysulphate in the UK by 2020 TOP - 3 5 MT 10 % 1 M DZǮ
Slide 53: Phosphate Solutions
Phosphate Solutions ANCL
Slide 54: Phosphate Solutions: Backward Integrated Value Chain
Phosphate Solutions: Backward Integrated Value Chain DZǰ Phosphate Green Phosphoric Acid SSP, TSP Pure Phosphoric Acid Food additives Controlled & slow release fertilizers Liquid & water soluble fertilizers Industrial phosphate Salts and acids Phosphate Specialty Fertilizers Downstream Specialties
Slide 55: Phosphate Solutions - Food
PHOSPHATE SOLUTIONS - FOOD Essential ingredient for the food industry We enrich sports drinks with ESSENTIAL MINERALS We help Cola drinks BITE We enhance TASTE & MOUTH FEEL of meat and meatless products We help Dairy Products have the right TEXTURE & LAST LONGER We help bakery products RISE DZDZ
Slide 56: Food Specialties: Markets and Competition
Food Specialties: Markets and Competition DZDz Food Phosphates, Blends & Multi - Blends Dairy and Protein Spices
Slide 57: Serving a Wide Range of Industrial Markets
Serving a wide range of industrial markets Oil drilling Mining Oral care Cleaning products Metals Leather Construction Asphalt Paints & coatings - INDUS T RIAL DZdz PHOSPHATE SOLUTIONS Water treatment
Slide 58: Phosphoric Acid Pricing Trends
Phosphoric Acid Pricing Trends DZǴ 1 Source: CRU 2 Global price index for Food Grade White Phosphoric Acid, from ICL internal sources. Prices are indexed to Q 1 2015 average PHOSPHORIC ACID CFR INDIA 1 US$/TONNE WHITE PHOSPHORIC ACID PRICE INDEX 2 % 500 550 600 650 700 750 800 850 80 85 90 95 100 105
Slide 59: Targeting a Shift Towards Specialties
DZǵ 2.5 M TONNES of phosphate rock production capacity 480 K TONNES Of fertilizers were produced during 2018 TARGETING A SHIFT TOWARDS SPECIALTIES ▪ Top line growth targeted through a shift to specialties by, among other things, the construction of a Purified Phosphoric acid facility with a 70 KT P 2
Slide 60: Our Goals
OUR GOALS A leading provider of value added solutions for the industrial, food and agriculture end markets Geographic expansion Innovation new applications & solutions Increase capacity of purified phosphoric acid, the base raw material for our downstream specialty products & solutions Value based p
Slide 61: Innovative Ag Solutions
Innovative Ag Solutions AXICL
Slide 62: ICL's Leadership in the Specialty Fertilizers Market
ICL’s Leadership in the Specialty Fertilizers Market DzǮ 2010 2011 04 2011 05 2012 Xcalibur (USA) 11 2012 09 2014 1993
Slide 63: ICL Specialty Fertilizers: Our Strengths
ICL Specialty Fertilizers: Our Strengths Dzǯ ▪ Leader in Key Markets ▪ Access to P and K resources, unique access to Polysulphate ▪ Wide Portfolio with well established brands & unique products ▪ Profound agronomic knowledge & strong professional sales force ▪ Advanced P and K chemistry ▪ Advanced an
Slide 64: Our Core Markets and Products Today
Our Core Markets and Products Today Dzǰ Specialty Agriculture Fruit, vegetables & arable crops Ornamental Horticulture Nursery stock, perennials, pot & bedding plants Turf & Landscape Golf courses, sports fields & landscape Turf & Landscape Golf courses, sports fields & landscape Liquid Fertilizers G
Slide 65: Specialty Fertilizers and Bio Solutions in Ag Input
Specialty Fertilizers and Bio Solutions Have Became An Important Part of the Ag Input DzDZ Others, 32 % Traditional Fertilizers, 63 % Specialty Fertilizers 3.5 % ~$ 150 bn Nontraditional application of nutrients (i.e. Soluble, Liquids and Coated) Advanced bio solutions for plant nutrient and protectio
Slide 66: The Perfect Storm
THE PERFECT STORM CHANGE FOOD COMPANIES WILL DRAMATICALLY GROW MORE WITH LESS AGRICULTURE MUST FIND A WAY TO GROUNDBREAKING SOLUTIONS STARTUP COMPANIES CREATE 2 B MORE PEOPLE WITHIN 20 YEARS POPULATION GROWTH Positions ICL ’ s Ag businesses on a path for growth DzDz
Slide 67: Innovative Ag Solutions
Creating leadership in advanced crop nutrition and farmer centric solutions INNOVATIVE AG SOLUTIONS UNIQUE R&D CAPABILITIES Rely on decades of chemical and industrial knowledge to establish ICL as an agro - tech solution leader GET CLOSER TO GROWER Through expansion of our offering and our geographi
Slide 68: ICL Aims to Offer Farmers Cutting-Edge Solutions
ICL AIMS TO OFFER FARMERS CUTTING - EDGE SOLUTIONS DzǴ
Slide 69: Present & Future Leadership Strategy
PRESENT&FUTURE LEADERSHIP STRATEGY Dzǵ POTASH
Slide 70: Thank You
dzǬ THANK YOU com group. - icl www. visit us at
Slide 71: Segment Profit Before and After G&A Expenses
Segment Profit Before and After G&A Expenses dzǭ * Divested businesses include the Fire Safety and Oil Additives businesses. In 2018 Divested businesses also include Rovita ( 1 ) Starting from Q 1 2019 , ICL ’ s management will measure, and accordingly present in its reports, the results of its busin
Slide 72: Reconciliation Tables
Reconciliation Tables ( 1 / 3 ) dzǮ ( 1 ) See detailed reconciliation table in the Q 3 2019 6 - K Calculation of adjusted income before tax ($ millions) Q3 19 Q3 18 FY2018 Adjusted operating income 201 200 753 Finance expenses ( 32 ) ( 23 ) ( 158 ) Share in earnings (losses) of equity - accounted inv
Slide 73: Reconciliation Tables
Reconciliation Tables ( 2 / 3 ) dzǯ ( 1 ) See detailed reconciliation table “ Adjustments to reported operating and net income (Non - GAAP) ” in the Q 3 2019 6 - K Calculation of adjusted operating income and adjusted operating income excluding divested businesses Q1 - Q3 2019 Q1 - Q3 2018 Q1 - Q3 20
Slide 74: Reconciliation Tables
Reconciliation Tables ( 3 / 3 ) dzǰ ( 1 ) See detailed reconciliation table “ Adjustments to reported operating and net income (Non - GAAP) ” in the Q 3 2019 6 - K Calculation of adjusted operating income and adjusted operating income excluding divested businesses ($ millions) Q3 19 Q2 19 Q1 19 Q4 18
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