Icl Group Ltd. · TASE:ICL
Icl — Q2 2018 Earnings Presentation
30 slides from Icl's earnings presentation, Aug 1, 2018
Slide 1: Q2 2018 Results
Q2 2018 Results Raviv Zoller | CEO August 1st, 2018
Slide 2: Important Legal Notes
Important Legal Notes Disclaimer and Safe Harbor for Forward-Looking Statements The information contained herein in this presentation or delivered or to be delivered to you during our presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in Israel
Slide 3: Q2 2018 Highlights
Q2 2018 Highlights Strong sales growth and margin expansion across all of ICL’s businesses: Bromine, Potash and Phosphate value chains, and Specialty Fertilizers Operating income increased by 19%. Excluding divested businesses, adjusted operating income increased by 47%(1) and adjusted net income mo
Slide 4: Q2 2018 Results Summary
Q2 2018 Results Summary $ millions Q2 18 Q2 17 % change Q1 18 % change Sales 1,371 1,322 4% 1,404 (2)% Operating income 172 144 19% 985 (83)% Adjusted operating income(1) 188 153 23% 151 25% Adjusted EBITDA(1) 296 251 18% 251 18% Net income 101 57 77% 928 (89)% Adjusted net income(1) 113 64 77% 106
Slide 5: Specialty Solutions: Business Performance and Major Developments
Specialty Solutions: Business Performance and Major Developments $ millions SALES(1) (2) OPERATING INCOME(1) (3) ✓ Segment performance more than +23% compensated for the lost sales of the 700 649 divested businesses 160 600 572(1) +26% 139 ✓ Record quarterly operating income for ICL 140 Industrial P
Slide 6: Essential Minerals: Business Performance and Major Developments
Essential Minerals: Business Performance and Major Developments $ millions SALES (1) OPERATING INCOME(2) 900 +7% ✓ Higher potash prices coupled with 788 120 improved production offset increased +37% 800 736 111 logistics and energy costs, resulting in significant increase in potash 700 100 profitabi
Slide 7: Pricing Trends
Pricing Trends H1 2018 MOP GRANULAR CFR BRAZIL(3) H1 2018 PHOSPHORIC ACID CFR INDIA (3) US$/TONNE US$/TONNE CHINA BROMINE(1) WHITE PHOSPHORIC ACID PRICE INDEX(2) US$/TONNE US$/TONNE Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 (1) Source: Bloomberg (2) Global price index for Food Grade White Phosphoric A
Slide 8: Aligning Organizational Structure with Strategy to Enhance Market Leadership and Promote Growth
Aligning Organizational Structure with Strategy to Enhance Market Leadership and Promote Growth 1H2018 estimated performance, pro-forma for aligned divisions 1 Industrial Products 2 Potash 3 Phosphate Solutions 4 Innovative Ag Solutions - Bromine value chain - Potash value chain - Advanced Additives
Slide 9: Aligning Organizational Structure with Strategy to Enhance Market Leadership and Promote Growth
Aligning Organizational Structure with Strategy to Enhance Market Leadership and Promote Growth 1H2018 estimated performance, pro-forma for aligned divisions $ millions SALES OPERATING INCOME Potash 24% 23% 30% 38% Industrial Products Q2 2018(1)(2) 10% Innovative Ag Solutions 23% 15% 37% Phosphate S
Slide 10: On the Verge of a Tipping Point…
On the Verge of a Tipping Point… POSITIVE BUSINESS IMPROVING MARKET SHARE OVERHANG MOMENTUM CONDITIONS REMOVED Q2 2018 continued strong performance, Higher commodity prices, Nutrien successfully sold its ~14% margin expansion and successful value- demand growth and tight supply stake to a group of I
Slide 11: Financial Results
Financial Results Kobi Altman CFO
Slide 12: Positive Contribution to Sales from All Business Lines
Positive Contribution to Sales from All Business Lines 16 $ millions 40 14 22 3 68 22 32 Essential Minerals Specialty Solutions 1,371 1,322 $57 million $76 million 1,254 See Q2 2018 6-K for a reconciliation of Adjusted operating income to operating income and adjusted net income to net income. Numbe
Slide 13: … As well as to Adjusted Operating Income
… As well as to Adjusted Operating Income $ millions 5 18 7 5 4 6 25 15 Essential Minerals Specialty Solutions 188 $25 million $30 million 153 128 See Q2 2018 6-K for a reconciliation of Adjusted operating income to operating income and adjusted net income to net income. Numbers may not add due to r
Slide 14: Strong Consolidated Performance with Top Line Growth and Margin Expansion
Strong Consolidated Performance with Top Line Growth and Margin Expansion $ millions Q2 2018 SALES Q2 2018 ADJUSTED OPERATING INCOME 39 2 4 68 78 16 78 1,371 1,322 25 1,254 188 153 128 See Q2 2018 press release for a reconciliation of Adjusted operating income to operating income and adjusted net in
Slide 15: Effective Tax Rate
Effective Tax Rate $ millions Q2 18 FY2017 Adjusted income before tax (1) 134 528 Normalized tax rate (including resource tax) 22% 26% Normalized tax expenses 30 136 Carryforward losses not recorded for tax purposes 3 19 Sub-Total 33 155 Sub-Total - % 25% 29% Other items (mainly exchange rate impact
Slide 16: Cash flow Statement
Cash flow Statement $ millions Q2 18 Q2 17 Net income 98 55 Depreciation, amortization 105 95 Other adjustments to net income 24 37 Change in Working capital (63) 12 Net cash provided by operating activities 164 199 Capex (121) (113) Free cash Flow 43 86 See Q2 2018 press release for a reconciliatio
Slide 17: Successful Optimization of Debt Structure
Successful Optimization of Debt Structure $ millions Maturities as of March 2018 1,090 Available credit facilities as of March 31, 2018 amount to $1.4 billion 811 Gross debt as of March 31, 2018 amount to $3.2 million 311 265 212 130 280 46 18 2018 2019 2020 2021 2022 2023 2024 2025 2026 2038 Loans
Slide 18: Successful Optimization of Debt Structure
Successful Optimization of Debt Structure $ millions Maturities as of March 2018 Available credit facilities as of March 31, 2018 amount to $1.4 billion Gross debt as of March 31, 2018 amount to $3.2 million 616 440 115 299 222 61 371 474 117 177 204 17 46 2018 2019 2020 2021 2022 2023 2024 2025 202
Slide 19: Successful Optimization of Debt Structure
Successful Optimization of Debt Structure $ millions Maturities as of June 2018 Available credit facilities as of June 30, 2018 amount to $1.8 billion Gross debt as of June 30, 2018 amount to $2.5 billion. 600 469 366 299 222 204 117 177 17 46 2018 2019 2020 2021 2022 2023 2024 2025 2026 2038 2038 L
Slide 20: Q2 2018 Key Takeaways
Q2 2018 Key Takeaways ALIGNING ICL ON THE STRONG FINANCIAL ORGANIZATIONAL VERGE OF A PERFORMANCE FLEXIBILITY STRUCTURE WITH TIPPING POINT STRATEGY 20
Slide 21: Questions?
On the Verge of a Tipping Point… POSITIVE BUSINESS IMPROVING MARKET SHARE OVERHANG MOMENTUM CONDITIONS REMOVED Q2 2018 continued strong performance, Higher commodity prices, Nutrien successfully sold its ~14% margin expansion and successful value- demand growth and tight supply stake to a group of I
Slide 22: Appendix
Appendix
Slide 23: Specialty Solutions Bridge Analysis
Specialty Solutions Bridge Analysis $ millions SEGMENT SALES SEGMENT OPERATING INCOME 26 16 68 35 4 9 13 5 640 649 25 26 572 135 139 110 Excluding G&A and unallocated expenses Numbers may not add due to rounding and set offs 23
Slide 24: Specialty Solutions' Q2 Business Line Sales Analysis
Specialty Solutions’ Q2 Business Line Sales Analysis $ millions INDUSTRIAL PRODUCTS ADVANCED ADDITIVES 16 4 20 68 5 3 331 208 6 291 140 154 FOOD SPECIALTIES 4 12 6 169 147 Including inter-segment sales Numbers may not add due to rounding and set offs 24
Slide 25: Essential Minerals Bridge Analysis
Essential Minerals Bridge Analysis $ millions SEGMENT SALES SEGMENT OPERATING INCOME 54 24 22 10 16 11 3 4 54 788 736 111 81 Excluding G&A and unallocated expenses Numbers may not add due to rounding and set offs 25
Slide 26: Essential Minerals' Q2 Business Line Sales Analysis
Essential Minerals’ Q2 Business Line Sales Analysis $ millions POTASH & MAGNESIUM PHOSPHATE COMMODITIES 8 11 20 9 26 35 314 346 264 267 SPECIALTY FERTILIZERS 6 4 12 212 190 Including inter-segment sales Numbers may not add due to rounding and set offs 26
Slide 27: Potash Business Q2 Stand-Alone Results Analysis
Potash Business Q2 Stand-Alone Results Analysis $ millions BUSINESS LINE SALES BUSINESS LINE OPERATING INCOME 8 17 37 13 37 4 3 330 302 82 65 Excluding G&A and unallocated expenses Including inter-segment sales 27 Numbers may not add due to rounding and set offs
Slide 28: Alignment of Organizational Structure
Alignment of Organizational Structure Adj. Operating $ millions Sales Income Current Current Aligned Q2 2018 Q2 2017 Q2 2018 Q2 2017 segment business lines division Potash & Potash 346 314 76 61 Magnesium Essential Specialty Innovative Ag 212 190 23 19 Minerals - Fertilizers Solutions Agriculture Ph
Slide 29: Reconciliation Tables
Reconciliation Tables Calculation of Adjusted income before tax ($ millions) Q2 18 FY2017 Adjusted operating income 188 652 Finance expenses (54) (124) Adjusted income before tax 134 528 Calculation of Pro-forma Adjusted operating income ($ millions) Q2 18 Q2 17 Operating income 172 144 Adjustments(
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures We disclose in this Quarterly Report non-IFRS financial measures titled adjusted operating income, adjusted net income attributable to the Company’s shareholders, adjusted EBITDA and free cash flow. Our management uses adjusted operating income, adjusted net income attrib