Slide 1: Q2 2019 Results
Q2 2019 Results Raviv Zoller, President & CEO
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 2019 Highlights
Q2 2019 Highlights ✓ Another strong quarter highlighted by margin expansion and cash generation ✓ Sales increased by 4%, operating income increased by 40% and adjusted operating income(1) increased by 22% ✓ Net income of $158 million compared to $101 million in Q2 2018. Adjusted net income of $151 m
Slide 4: Key Financial Metrics
Key Financial Metrics $ millions Q2 2019 Q2 2018 % change H1 2019 H1 2018 % change Sales 1,425 1,371 4% 2,840 2,775 2% Sales excluding divested 1,425 1,362 5% 2,840 2,725 4% businesses(1) Operating income 240 172 40% 467 1,157 (60%) Adjusted operating income 230 190 21% 471 336 40% excluding diveste
Slide 5: Industrial Products Business Performance
Industrial Products Business Performance SALES(1) SEGMENT PROFIT (after G&A allocation(2)) $ millions +2% ✓Significant increase in operating margin from 24% in Q2 2018 to 28% in Q2 2019, matching Q1 2019 record margin of 28% +15% ✓Growth driven by higher prices, higher sales volume of brominated fla
Slide 6: Potash Business Performance
Potash Business Performance SALES(1) SEGMENT PROFIT (after G&A allocation(2)) +25% $ millions ✓Higher sales volume and prices drove a significant year over year increase in +88% operating margins from 16% in Q2 2018 to 23% in Q2 2019 432 346 ✓Sales volumes of 1.25 million tonnes, an increase of 14%
Slide 7: Phosphate Solutions Business Performance
Phosphate Solutions Business Performance SALES(1) SEGMENT PROFIT (after G&A allocation(2)) -4% $ millions ✓Margin increase achieved despite challenging market conditions in commodity phosphates +3% 541 518 ✓Optimizing sales mix and synergies moderated the impact of market downturn 31 32 ✓Continued i
Slide 8: Innovative Ag Solutions Business Performance
Innovative Ag Solutions Business Performance SALES(1) SEGMENT PROFIT (after G&A allocation(2)) -5% $ millions ✓Challenging conditions continued in Q2, highlighted by unfavorable weather mainly in Israel and in the US 212 ✓Negative impact from exchange rates, 202 mainly due to the devaluation of the
Slide 9: 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) 17% 16% 18% 25% 24% 30% 260 250 15% 350 23% 16% 15% 22% 22% 239 14% 300 25% 210 224 200 14% 18% 11% 12% 250 20%
Slide 10: Kobi Altman, CFO
Kobi Altman, CFO
Slide 11: Q2 2019 Sales Growth
Q2 2019 Sales Growth 30 34 Sales 67 ($ millions) 9 1,425 1,371 1,362 Q2 2018 Divested Businesses Excluding divested Prices Quantities Exchange rates Q2 2019 businesses (1) 14 10 4 86 9 5 1,371 1,425 1,362 Q2 2018 Divested Excluding Industrial Potash Phosphate Innovative Ag Set-offs & Q2 2019 Busines
Slide 12: Q2 2019 Adjusted Operating Income Expansion
Q2 2019 Adjusted Operating Income Expansion 12 10 8 9 Operating income 32 ($ millions) 67 2 230 188 190 Q2 2018 Adjusted Divested Excluding Prices Quantities Energy & Exchange rates Raw materials Operating & Q2 2019 Adjusted operating income Businesses divested transportation other operating income
Slide 13: Effective Tax Rate
Effective Tax Rate $ millions Q2 19 Q2 18 FY 2018 Adjusted income before tax(1) 194 134 608 Normalized tax rate 21% 22% 22% Normalized tax expenses 40 30 136 Carryforward losses not recorded for tax purposes 4 3 17 Exchange rate impact and other items (1) (9) (17) Adjusted tax expenses 43 24 136 Adj
Slide 14: IFRS 16 Impact
IFRS 16(1) Impact Item Net impact Comments Q2 2019 VS. Q2 2018 Rent expenses decreased by $15 million Adjusted operating income $3 million Depreciation increased by $12 million Adjusted EBITDA $15 million Rent expenses decreased by $15 million Property Plant & Equipment ~$300 million A right-of-use
Slide 15: Strengthening Financial Flexibility
Strengthening Financial Flexibility Net Debt/EBITDA ratio(1) 3.1 2.9 2.5 2.4 2.0 1.9 1.9 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q1 2019 Q2 2019 (1) Net debt to adjusted EBITDA calculated as short term credit + long term debt & debentures – cash & cash equivalents – short term investments & deposits
Slide 16: Q2 Key Takeaways
Q2 Key Takeaways CONTINUOUS PROGRESS TOWARDS ACHIEVING & STRONG FINANCIAL …ON THE BACK OF STRENGTHENING PERFORMANCE DESPITE SUCCESSFUL STRATEGY LEADERSHIP AND LONG- MARKET CONDITIONS… EXECUTION TERM VALUE CREATION 16
Slide 17: Thank You
ANICL THANK YOU
Slide 18: Appendix
ANICL APPENDIX
Slide 19: Q2 2019 Industrial Products Sales and Segment Profit Analysis
Q2 2019 Industrial Products Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT (after G&A allocation(1)) $ millions $ millions 2 1 1 2 14 5 4 14 336 93 331 81 Numbers may not add due to rounding and set offs 1) Commencing Q1 2019, segment profit is measured based on the operating income
Slide 20: Q2 2019 Potash Sales and Segment Profit Analysis
Q2 2019 Potash Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions (after G&A allocation(1)) 35 5 56 9 22 27 432 35 346 105 56 Numbers may not add due to rounding and set offs 1) Commencing Q1 2019, segment profit is measured based on the operating income after alloc
Slide 21: Q2 2019 Phosphate Solutions Sales and Segment Profit Analysis
Q2 2019 Phosphate Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT (after G&A allocation(1)) $ millions $ millions 9 19 17 16 2 6 19 7 541 532 9 518 2 31 33 32 Numbers may not add due to rounding and set offs 1) Commencing Q1 2019, segment profit is measured based on the oper
Slide 22: Q2 2019 Innovative Ag Solutions Sales and Segment Profit Analysis
Q2 2019 Innovative Ag Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT (after G&A allocation(1)) $ millions $ millions 1 7 4 1 1 1 1 2 212 202 2 16 12 Numbers may not add due to rounding and set offs 1) Commencing Q1 2019, segment profit is measured based on the operating inc
Slide 23: Finance Expenses
Finance Expenses $ millions Q2 2019 Q2 2018 Liabilities(1) 2,736 2,650 Interest rate 4.2% 3.8% Interest expenses, net of interest income(2) 29 25 Interest capitalization (4) (7) Interest expenses, net 25 18 Total hedging transactions & balance sheet revaluation & other 2 31 Early redemption of a deb
Slide 24: Additional Data: Segment Profit Before and After G&A Expenses
Additional Data: Segment Profit Before and After G&A Expenses Starting from the first quarter of 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 e
Slide 25: Reconciliation Tables (1/2)
Reconciliation Tables (1/2) Calculation of adjusted income before tax ($ millions) Q1 19 Q1 18 FY2018 Adjusted operating income 230 188 753 Finance expenses (37) (54) (158) Share in earnings (losses) of equity-accounted investees and adjustments to financial expenses 1 - 13 Adjusted income before ta
Slide 26: Reconciliation Tables (2/2)
Reconciliation Tables (2/2) Calculation of adjusted net income excluding divestments to net income ($ millions) Q2 19 Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 Net income attributable to the shareholders of the Company 158 139 82 129 101 928 Total adjustments to operating income(1) (10) 14 48 4 16 (834) Adjustm
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures We disclose in this Quarterly Report non-IFRS financial measures titled sales excluding divested businesses, adjusted operating income, adjusted operating income excluding divested businesses, adjusted net income attributable to the Company’s shareholders excluding divest
Slide 28: Thank You
THANK YOU visit us at www.icl-group.com