Icl Group Ltd. · TASE:ICL
Icl — Morgan Stanley Global Chemicals, Agriculture and Packaging Conference 2019
81 slides from Icl's conference presentation, November 2019
Slide 1: Investor Presentation November 2019
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 $5.6B 44 ~11,000 TOP 3 Sales in 2018, Manufacturing plants Employees worldwide, Leading supplier across with balanced in 13 countries 4,500 in Israel most business lines and product portfolio worldwide target markets (1) $5.7B >4.0% BBB- #2 Market Cap as of Oct 31, 2019 Industry lea
Slide 4: Leading Global Company
LEADING GLOBAL COMPANY 2 a - —_ “se fae a ae: om Tt & ye Coie a = a 's -_ a PO Fe ~ -P _ pt =~) ee \ 9 bY “9 Ve. i aX 12% Q gq 2% ov ome > me 5 © E 9 Production site gq Sales « marketing office ¢ ANICL * Percentage of sales by main geographical areas, 2018
Slide 5: ICL - Strategic Advantages
ICL - STRATEGIC ADVANTAGES UNIQUE STRATEGIC STARTUP ASSETS LOCATIONS KNOW-HOW NATION of chemistry, agronomy, Low cost evaporation process at provide competitive logistic Access to the globally advantage through synergy utilization and the Dead Sea with the highest leading high-tech and mineral conce
Slide 6: DNA of Leadership
DNA OF LEADERSHIP #1 #3 #1 Most competitive Globally in specialty Globally in bromine globally in potash phosphates #1 #1 #1 Globally in phosphorus In western Europe in Globally in soluble based flame retardants compound PK fertilizers phosphate based fertilizers
Slide 7: Present
LEADERSHIP STRATEGY PRESENT
Slide 8: Present
LEADERSHIP STRATEGY PRESENT Phosphate Solutions division ICL provides essential ingredients for various industrial and food applications Industrial Products division IAS - Innovative Ag Solutions division ICL's bromine solutions are all around us, ICL specialty fertilizers provide growers making con
Slide 9: ICL Business Leadership
ICL BUSINESS LEADERSHIP Market Share - Specialty Phosphates - Europe, NA, and LatAm1 Global Bromine Production Capacity1 ICL 24% ’ (Dead Sea) Global leadership 39% In Specialty Phosphates Albemarle Global leadership (Dead Sea) In Bromine 17% Potash business cost cost by Site and by Company2 $/tonne
Slide 10: Organizational Structure Aligned with Strategy
ORGANIZATIONAL STRUCTURE ALIGNED WITH STRATEGY Phosphate Solutions division1,2 Industrial Products division1 A leading provider of value added solutions for The global bromine market leader the industrial, food and agriculture end markets (3%) II (9%) 1 6% YTD SALES Y0Y Growth Y0Y Growth OP. Margin
Slide 11: Future
LEADERSHIP STRATEGY FUTURE POTASH Aicl 11
Slide 12: Leadership Strategy
LEADERSHIP STRATEGY AICL 12
Slide 13: Industrial Products
INDUSTRIAL PRODUCTS Enabling a variety of industries to enjoy safer products as well as more efficient and sustainable production Standard of living Population Regulation & environmental awareness BIOCIDES Aicl 13
Slide 14: Industrial Products Solid Leadership
INDUSTRIAL PRODUCTS SOLID LEADERSHIP THE GLOBAL BROMINE BROMINE PRICES MARKET LEADER IN CHINA 35 3d“4s4־p5 175K TONNES Br Bromine 79.904 of bromine were produced in 2018 NO.1 World's leading elemental bromine producer, with 40% of market production capacity 240K TONNES of bromine compounds and F
Slide 15: Industrial Products Main Goals
INDUSTRIAL PRODUCTS MAIN GOALS A WORLD LEADER AND BEYOND CONCRETING OUR GLOBAL LEADERSHIP OF THE BROMINE MARKET Increasing Demand via new bromine Value over volume ם Enhancing complementary applications business
Slide 16: Leadership Strategy
LEADERSHIP STRATEGY AICL 16
Slide 17: Potash
A POTASH ICL PROVIDES ESSENTIAL POTASH-BASED FERTILIZERS'ENABLINO FARWfRS'TQ INCREASE YIELDS AND FEED THE WORLD
Slide 18: Potash: Meeting the Global Need to Feed the World
POTASH 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 World Arable Land Grain production Projections (indexed to too) 11 0.48 10 K. 100 World Crop Expansion of Crop Rotation Increase in Yields Worl
Slide 19: Potash ICL's Unique Position
POTASH ICL’S UNIQUE POSITION WELL ESTABLISHED IN LOWER COST AND FASTER STRONG POSITION GROWING MARKETS TIME-TO-MARKET 4.9 MILLION TONNES of potash were produced in 2018 80% PRODUCED FROM THE DEAD SEA One of the world's lowest cost sites due to evaporation process The Red Sea and logistic advantages
Slide 20: Potash ICL's Unique Position
POTASH ICL’S UNIQUE POSITION WELL ESTABLISHED IN LOWER COST AND FASTER STRONG POSITION GROWING MARKETS TIME-TO-MARKET 4.9 MILLION TONNES 80% PRODUCED FROM THE DEAD SEA One of the world's lowest cost sites due to evaporation process and logistic advantages ׳ZaV NO.6 Shorter mine-to-port distances C
Slide 21: Potash Our Goals
POTASH OUR GOALS -+ TOP-3 5MT To be Among the Top-3 Maintain stable most competitive players in production of about 5 in our strategic markets million tonnes per year ~ 10% 1M Improve cost Produce 1 million tonnes competitiveness by 10% of polysulphate in the UK within 5 years by 2020 21 AICL
Slide 22: Leadership Strategy
LEADERSHIP STRATEGY AXICL 2
Slide 23: Phosphate Solutions - Food
P PHOSPHATE SOLUTIONS - FOOD Essential ingredient for the food industry We enrich sports We help We enhance We help Dairy We help drinks with Cola drinks TASTE & Products have the bakery ESSENTIAL BITE right products MOUTH FEEL MINERALS of meat and meatless products TEXTURE & RISE LAST LONGER Aicl
Slide 24: Phosphate Solutions - Industrial
P PHOSPHATE SOLUTIONS - INDUSTRIAL Serving a wide range of industrial markets Oil drilling Oral care Metals Mining Cleaning products Leather Construction Paints & coatings Asphalt Water treatment
Slide 25: Phosphate Solutions ICL's Recipe for Leadership
P PHOSPHATE SOLUTIONS ICL’S RECIPE FOR LEADERSHIP UNIQUE BACKWARD WITH A LEADING MARKET AND VALUABLE INTEGRATION MODEL POSITION INNOVATIVE PRODUCTS 5M TONNES Market Share - Specialty Phosphates - of phosphate rock and 2,300K Europe, NA, and LatAm1 tonnes of fertilizers produced in 2018 ICL is focuse
Slide 26: Phosphate Solutions Our Goals
P PHOSPHATE SOLUTIONS OUR GOALS A leading provider of value added solutions for the industrial, □ food and agriculture end markets Increase capacity of purified Value based Innovation phosphoric acid, the base raw product new applications material for our downstream positioning & solutions specialty
Slide 27: Leadership Strategy
LEADERSHIP STRATEGY a AICL
Slide 28: Innovative Ag Solutions Creating Leadership
\ INNOVATIVE AG SOLUTIONS CREATING LEADERSHIP SPECIALTY FERTILIZERS - THE FAST GROWING INDUSTRY DIVERSIFIED PORTFOLIO FOUNDATION FOR THE FUTURE Market Dynamics 2006- 2016 (Mt)1 ~850K TONNES of soluble, liquid and controlled release fertilizer capacity OVER 300 ICL-SF agronomists in sales and Compo c
Slide 29: The Perfect Storm
THE PERFECT STORM Positions ICL's Ag businesses on a path for growth POPULATION GROWTH AGRICULTURE MUST FOOD COMPANIES STARTUP COMPANIES FIND A WAY TO WILL DRAMATICALLY CREATE 2B MORE PEOPLE GROW MORE CHANGE GROUNDBREAKING WITHIN 20 YEARS WITH LESS SOLUTIONS
Slide 30: Innovative Ag Solutions
\ INNOVATIVE AG SOLUTIONS Creating leadership in advanced crop nutrition and farmer centric solutions PORTFOLIO GROWTH UNIQUE R&D CAPABILITIES Develop new advanced specialty Grow specialty fertilizers sales from Rely on decades of chemical and fertilizers, including niche products, to $ 700 million
Slide 31: Present & Future
LEADERSHIP STRATEGY PRESENT&FUTURE POTASH Aicl 31
Slide 32: Recent Developments @ ICL - Operations
RECENT DEVELOPMENTS @ ICL ICL has been evolving since mid-2018, reaching numerous achievements in different fronts OPERATIONS ✓ Realignment of corporate structure with strategy ✓ Activation of the new power plant in Sodom ✓ Profitability turnaround at ICL Iberia and YPH JV in China ✓ Potash facility
Slide 33: Recent Developments @ ICL - Regulation & ESG
RECENT DEVELOPMENTS @ ICL REGULATION & ESG ✓ Final agreement with Israeli authorities which put an end to a decade-long dispute over past royalties ✓ Settlement in the Bonus Derivative Action ✓ Settlement with ATAD (Israeli Society for Environmental Protection) in regard to Rotem's gypsum Pond-5 ✓ I
Slide 34: Recent Developments @ ICL - Innovation
RECENT DEVELOPMENTS @ ICL INNOVATION Translating Megatrends and Unmet Needs Into New Innovation Initiatives ✓ Breakthrough in meat alternative solutions ✓ Development of our Digital Ag Platform leveraging Amazon Web Services' capabilities ✓ Management focus on innovation resulting in a wide variety
Slide 35: Q3 2019 Summary
Q3 2019 SUMMARY Aicl
Slide 36: Q3 2019 Highlights
Q3 2019 Highlights ✓ Solid results with record cash generation ✓ supply contracts in Asia ✓ Operating income was slightly higher at $201 million ✓ EPS of $0.10, in line with Q3 2018 ✓ Adjusted EBITDA was up by 4% to $307 million. YTD adjusted EBITDA increased by 18% ✓ 6-year record quarterly operati
Slide 37: Q3 2019 Results Summary
Q3 2019 Results Summary $ millions Q3 2019 Q3 2018 % change 1-9/2019 1-9/2018 % change Sales 1,325 1,371 (3%) 4,165 4,146 — Sales 1,325 1,371 (3%) 4,165 4,096 2% excluding divested businesses^ Operating income 201 196 3% 668 1,353 (51%) Adjusted operating income 201 200 1% 672 539 25% Adjusted EBITD
Slide 38: Growth Trend in Most Main Operational Parameters - YTD View
Growth trend in Most Main Operational Parameters - YTD View $ millions Adjusted operating income Adjusted EBITDA Operating cash flow excluding divested businesses^1 excluding divested businesses^1 Adjusted operating income Adjusted EBITDA | Operating cash flow Adjusted operating income margin Adjust
Slide 39: Q3 2019 Key Takeaways
Q3 2019 KEY TAKEAWAYS SOLID PERFORMANCE IN AN INCREASINGLY CHALLENGING ENVIRONMENT
Slide 40: Thank You
Aicl THANK YOU visit us at www.icl-group.com Aicl
Slide 41: Appendix
Appendix AICL
Slide 42: 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 - Global M&A Establishment of potash & bromine production at Iberpotash - Focus on value added solutions the Dead
Slide 43: 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 GOVERNANCE ENVIROMENTAL OUR CUSTOMERS RESPONSIBILITY 43
Slide 44: Sustainability
SUSTAINABILITY We are committed to disciplined, continuous improvement in all sustainability areas SILVER ranking Environmental $121M Id's investments and for the 2018 EcoVadis sustainability Protection expenditures on environmental assessment as a global supplier, projects and operations in 2018 re
Slide 45: Growth Trend in Most Main Operational Parameters
Growth trend in Most Main Operational Parameters $ millions Adjusted operating income Adjusted EBITDA Operating cash flow excluding divested businesses^1 excluding divested businesses^1 Adjusted operating income | Adjusted EBITDA Operating cash flow % Adjusted operating income margin % Adjusted EBIT
Slide 46: Decreasing Net Debt/EBITDA Ratio
Decreasing Net Debt/EBITDA Ratio Net debt/ Adj. EBITDA™ Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Ql 2019 Q2 2019 Q3 2019 1 Net debt calculated as short term credit + long term debt & debentures - cash & cash equivalents - short term investments & deposits
Slide 47: Successful Optimization of Debt Structure
Successful Optimization of Debt Structure Maturities as of September 30, 2019 Available credit facilities as of June 30, Gross debt as of June 30, 2019: $2.3bnm 2019 amounts to $1.1 billion Average interest rate: 4.2% ■ Loans & debentures ■ Securitization Banks and others 34% Debentures 66% 1 Not in
Slide 48: Effective Tax Rate
Effective Tax Rate $ millions Q3 19 Q3 18 FY2018 Adjusted income before tax(1) 169 179 608 Normalized tax rate 21% 23% 22% Normalized tax expenses 35 41 136 Carryforward losses not recorded for tax purposes (3) 4 17 Exchange rate impact and other items 2 2 (17) Adjusted tax expenses 35 47 136 Adjust
Slide 49: Segment Profit Before and After G&A Expenses
Segment Profit Before and After G&A Expenses Starting from Ql 2019, ICL's management will measure, and accordingly present in its reports, the results of its business divisions (operating segments) after allocation of general and administrative (G&A) expenses per each division. The purpose of the ta
Slide 50: Peer Comparison YTD 2019
Peer Comparison YTD 2019 MOS Key financials 1-9/2019 % CHANGE 1-9/2019 % CHANGE 1-9/2019 % CHANGE 4,165 - 16,482 5% 6,830 (3%) Sales EBITDA 997 18% 3,347 11% 1,145 (24%) Margin 24% 20% 17% Adjusted net income 431 22% 1,179 (12%) 173 (67%) Margin 10% 7% 3% Aicl 50
Slide 51: Industrial Products
Industrial Products Aicl
Slide 52: Industrial Products Geographical Sales Distribution
Industrial Products Geographical Sales Distribution 27% 34% 310/0 Percentage of 2018 sales Aicl 52
Slide 53: Industrial Products Sales Distribution
Industrial Products Sales Distribution By Minerals By Business ■ Bromine ■ Phosphorus ■ Specialty Minerals ■ Flame Retardants ■ Industrial Solutions ■ Specialty Minerals Percentage of 2018 sales
Slide 54: Industrial Products Supply Chain
/ Industrial Products Supply Chain plants: srae Bromine Netherlands Specialty Minerals plants: Customers srae Phosphorus compounds plants: 54
Slide 55: Industrial Products Leading the Global Bromine Market
Industrial Products Leading the Global Bromine Market ICL-IP holds the largest bromine capacity Bromine demand by industry Global bromine capacity by producer (KMT) Average market utilization rate of 70-80% 720 705 Mercury Biocides Control 7% 4% 2018 2023 Aicl Source: ICL estimates, Marketsand Marke
Slide 56: Major Trends and ICL Solutions
Major Trends and ICL Solutions Trends ICL’s Solutions Clean Air MERQUEL® Mercury Emissions Control Renewable energy Electrolytes for Energy storage Bromine Flow battery Electric car/ New generation Autonomous car polymeric FRs Home automation New generation polymeric FRs Water shortage and New Bioci
Slide 57: Potash
Potash AICL
Slide 58: Total Fertilizer Use by Crop at Global Level
Total Fertilizer Use by Crop at Global Level Cereals and Oilseeds Account for 57% of Fertilizer Consumption Aicl Source: IFA- Assessment of Fertilizer Use by Crop at the Global Level 58
Slide 59: World Main Crops Long Term Forecast
World Main Crops Long Term Forecast Consumption, Stock and Stock to Use Ratio S to c k to Use R atio B illio n T o n n e s Aicl Source: OECD-FAO Agricultural Outlook 2017-2027 (Jul 2018) 59
Slide 60: World Grains Production & Consumption: Current Stock to Use Ratio
World Grains Production & Consumption: Current Stock to Use Ratio Aicl Sources: USDA (November 2019]
Slide 61: ICL's Potash Market Share in Fast Growing Markets
ICL’s Potash Market Share in Fast Growing Markets India Brazil China 4.6 Mt 7.5 Mt ■ Canpotex ■Uralkali ■APC ■BPC ■ICL ■K & S ■ Canpotex ■ Uralkali ■ SQM ■ BPC ■ ICL ■ K&S ■ Uralkali ■ BPC ■ Canpotex ■ APC ■ICL ■ K+S ■Other APC ■ BPC ■ Canpotex ■ ICL ■ Uralkali ■ K+S SQM ■ BPC ■ Uralkali ■ K+S ■ Can
Slide 62: Positive Potash Spot Pricing Trend
Positive Potash Spot Pricing trend ICL'S AVG. FOB POTASH PRICE DEVELOPMENT Aicl Sources: ICL 62
Slide 63: ICL UK: The World's Only Producer of Polysulphate
ICL UK: The World’s Only Producer of Polysulphate A PREMIUM NICHE FERTILIZER WITH UNIQUE BENEFITS Mineral Attributes ■ Multi-nutrients ■ Sole producer ■ Extended Availability ■ Existing infrastructure ■ Natural fertilizer ■ Market position 63
Slide 64: Phosphate Solutions
Phosphate Solutions Aicl
Slide 65: Phosphate Solutions: Backward Integrated Value Chain
Phosphate Solutions: Backward Integrated Value Chain Controlled & slow release fertilizers Pure Phosphoric Liquid & Acid water soluble fertilizers Industrial phosphate Salts and acids Food additives Phosphate Specialty Fertilizers Downstream Specialties
Slide 66: Phosphoric Acid Pricing Trends
Phosphoric Acid Pricing Trends PHOSPHORIC ACID CFR INDIA1 WHITE PHOSPHORIC ACID PRICE INDEX2 US$/TONNE •*J? z^P z^ z^ zJ^ >A »A z>^ zJ^ zJ<k z^?3 zv^ z^3 s> A^S t ׳V^ *5״ sf/ er er 0T cP a* $W )^)^^יעס׳^^^סיעס^ס^^סיעס^ס^ס^סיעס^ס 1 Source: CRU 2 Global price index for Food Grade White Phosphori
Slide 67: YPH JV - ICL's Integrated Phosphate Platform in China
YPH JV - ICL’s Integrated Phosphate Platform in China UNIQUE BACKWARD GROWING PRODUCTION TARGETING A SHIFT INTEGRATION MODEL AND FINANCIAL METRICS TOWARDS SPECIALTIES 2.5M TONNES Growth in production, improving market ■ Top line growth targeted of phosphate rock production conditions and efficiency
Slide 68: We Have Built a World-Class Advanced Additives Portfolio
We Have Built a World-Class Advanced Additives Portfolio Phosphate Salts and Acids Paints and Coatings Description • Technical Phosphates & Related • Specialty phosphates and blends, Specialties; food and technical selected organic chemistry grade Phosphoric Acids Key Applications • Metal treatment,
Slide 69: Vast Product Portfolio Serving a Variety of End Food Additives Markets
Vast Product Portfolio Serving a Variety of End Food Additives Markets Meat, Poultry and Seafood Dairy and Dairy Protein Bakery and Other Produces milk and whey proteins for Providing solutions for modifying texture and ICL leavening acids impact the food ingredients Description stability of food pr
Slide 70: Food Specialties: Markets and Competition
Food Specialties: Markets and Competition Food Phosphates, Dairy and Protein Blends & Multi-Blends Budenheim Budenheim ^Innophos ^!nnophos Taste & Technology WIBERG VAN HEES We Know how! Aicl
Slide 71: Innovative Ag Solutions
Innovative Ag Solutions Aicl
Slide 72: ICL's Leadership in the Specialty Fertilizers Market
ICL’s Leadership in the Specialty Fertilizers Market Aicl
Slide 73: ICL Specialty Fertilizers: Our Strengths
ICL Specialty Fertilizers: Our Strengths 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 and flexible manu
Slide 74: Our Core Markets and Products Today
Our Core Markets and Products Today 68% 23%׳ '-Bf ioiWMES“1 OF 2018 SALES1’׳ Specialty Agriculture Ornamental Horticulture Nursery stock, perennials, pot & bedding Fruit, vegetables & arable crops plants Controlled Release Fertilizers (CRF) Water Soluble Fertilizers (WSF) Slow Release Fertilizer
Slide 75: 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 Specialty Fertilizers market / ~$9bn Advanced bio solutions Bio Solutions for plant nutrient and Others 1.5% protection 32% Specialty Fertilizers 3.5% Nontraditional application of nutrients Micro Nutrients (i.e. S
Slide 76: IAS Leveraging Israel's High-Tech and Agri-Tech Eco System
IAS leveraging Israel's high-tech and agri-tech eco system .u Lr^ academic technological business ECO SYSTEM ECO SYSTEM ECO SYSTEM * V TARANIS הטכניוןyr מכון טכנולוגיjVt r: ■ לישראל • SKYX evogene Plant Innovation האוניברסיטה העברית בירושלים A NETAFIM GROW MORE WITH LESS THE HEBREW UNIVERS
Slide 77: ICL Aims to Offer Farmers Cutting-Edge Solutions
ICL AIMS TO OFFER FARMERS CUTTING-EDGE SOLUTIONS
Slide 78: Thank You
Aicl THANK YOU visit us at www.icl-group.com Aicl
Slide 79: Reconciliation Tables (1/3)
Reconciliation Tables (1/3) Calculation of adjusted income before tax ($ millions) Q3 19 Q3 18 FY2018 Adjusted operating income 201 200 753 Finance expenses (32) (23) (158) Share in earnings (losses) of eguity-accounted investees and adjustments to financial expenses - 2 13 Adjusted income before ta
Slide 80: Reconciliation Tables (2/3)
Reconciliation Tables (2/3) Calculation of adjusted operating income and Q1-Q3 2019 Q1-Q3 2018 Q1-Q3 2017 Q1-Q3 2016 adjusted operating income excluding divested businesses Operating income 668 1,353 440 (75) Capital gain (841) (6) 1 Impairment loss (reversal) (10) 19 18 489 Provision for early reti
Slide 81: Reconciliation Tables (3/3)
Reconciliation Tables (3/3) Calculation of adjusted operating income and Q3 19 Q2 19 Ql 19 Q4 18 Q3 18 Q2 18 Ql 18 adjusted operating income excluding divested businesses ($ millions) Operating income Capital gain -- 201 240 - 227 - 166 - 196 - 172 - 985 (841) Impairment loss (reversal) Provision fo
ICL Group — Morgan Stanley Global Chemicals, Agriculture and Packaging Conference 2019 on 6ix