BMO Farm to Market Conference
BMO Farm to Market Conference May 18, 2017
Safe Harbor 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 providing general information to assist the recipient in deciding whether it wishes to proceed with a further investigation for investing in Israel Chemicals Ltd. and/or its affiliates (hereinafter jointly referred to as the “Company” or “ICL”). This Presentation shall not form the basis of, or be relied upon in connection with, any contract or commitment whatsoever, and it does not purport to be comprehensive or to contain all the information that the recipient may need in order to evaluate the Company and/or its assets. No representation, warranty or undertaking, express or implied, is given by ICL and/or any member of the ICL Group or their respective directors, officers, employees, agents, representatives and/or advisers as to or in relation to the accuracy, completeness or sufficiency of the information contained in this Presentation or as to the reasonableness of any assumption contained therein. To the maximum extent permitted by law the Company and its respective directors, officers, employees, agents, representatives and/or advisers expressly disclaim any and all liability which may arise from this Presentation and any errors contained therein and/or omissions therefrom or from any use of this Presentation or its contents or otherwise in connection therewith. No representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any valuations, forecasts, estimates, opinions and projections contained in this Presentation. In all cases, recipients should conduct their own investigation on any analysis of the Company and/or its assets and the information contained in this Presentation. Nothing in this Presentation constitutes an investment advice and any opinions or recommendations that may be contained herein have not been based upon a consideration of financial situation or particular needs of any specific recipient. Any prospective investor interested in buying Company’s securities or evaluating the Company and/or its assets is recommended to seek its own financial and other professional advice. This Presentation and/or other oral or written statements made by ICL during its presentation or from time to time, may contain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Whenever words such as "believe," "expect," "anticipate," "intend," "plan," "estimate", “predict” or similar expressions are used, the Company is making forward-looking statements. Such forward-looking statements may include, but are not limited to, those that discuss strategies, goals, financial outlooks, corporate initiatives, existing or new products, existing or new markets, operating efficiencies, or other non-historical matters. These forward-looking statements and projections are not guarantees of future performance and are subject to a number of assumptions, risks, projections and uncertainties, many of which are beyond the Company’s control, which could cause actual results, performance or achievements to differ materially from those described in or implied by such statements or projections. Because such statements deal with future events and are based on ICL’s current expectations, they could be impacted or be subject to various risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in our Annual Report on Form 20-F for the year ended December 31, 2015, and in subsequent filings with the Tel Aviv Securities Exchange (TASE) and/or the U.S. Securities and Exchange Commission (SEC). Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can provide no assurance that expectations will be achieved. Except as otherwise required by law, ICL disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise. Readers, listeners and viewers are cautioned to consider these risks and uncertainties and to not place undue reliance on such information. Certain market and/or industry data used in this Presentation were obtained from internal estimates and studies, where appropriate, as well as from market research and publicly available information. Such information may include data obtained from sources believed to be reliable, however ICL disclaims the accuracy and completeness of such information which is not guaranteed. Internal estimates and studies, which we believe to be reliable, have not been independently verified. We cannot assure that such data is accurate or complete. Included in this presentation are certain non-GAAP financial measures, such as Adjusted Operating income and Adjusted Net income, designed to complement the financial information presented in accordance with IFRS because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to our Annual Report on Form 20-F for the year ended December 31, 2016 filed with TASE and the SEC for a reconciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP.
2
ICL’s Highly Experienced Management Team Asher Grinbaum, Acting CEO 42 years in ICL
Kobi Altman, CFO 2 years in ICL
Charles Weidhas, COO 10 years in ICL
Ofer Lifshitz, President, ICL Essential Minerals 21 years in ICL
Eli Glazer, Yakir Menashe, President, ICL EVP Global HR Specialty Solutions 11 years in ICL 34 years in ICL
Rani Loebenstein, Lisa Haimovits, General Counsel & Head of Global CR Company Secretary 3 years in ICL 8 years in ICL
Hezi Israel, EVP BD & Strategy 10 years in ICL
Over 140 years of ICL experience
3
Our Vision: Fulfilling Humanity’s Essential Needs
We fulfill essential needs in 3 core end markets – Agriculture, Engineered Materials and Food by utilizing an integrated value Increased demand for and use of Rise of the middle class and standard natural resources of living across the globe on specialty chain based minerals FY 2016* 659 3,162
1,919
Environmental stewardship and sustainability Agriculture
Engineered Materials
*Before elimination of inter-business units sales
Food
4
Adding Value throughout Our Backward Integrated Production Chain Potash & PolysulphateTM
Potash fertilizers
Compound NPKs
PolysulphateTM
Specialty fertilizers
Food additives
Phosphates
Green Phosphoric Acid
Pure Phosphoric Acid
SSP, TSP, DAP, MAP
Controlled & slow release fertilizers Liquid & water soluble fertilizers Industrial phosphate Salts and acids P2S5, fire safety Flame retardants Clear brine fluids
Elemental bromine
Bromine
Bromine industrial solutions Mercury emission
Potash & Magnesium
Phosphate
Agriculture
Specialty Fertilizers
Industrial Products
Advanced Additives
Industrial
Food Specialties
5
ICL’s Integrated Product Portfolio Specialty Fertilizers Liquid & Water Soluble Fertilizers
CRF and SRF
SSP, TSP, DAP, MAP
Compound NPKs
Green Phosphoric Acid
Food Additives
Polysulphate Magnesium
Potash Fertilizers
Downstream Business
Pure Phosphoric Acid
Upstream Business
Fire Safety
Phosphate
Potash
P2S5
Bromine Bromine
Industrial Phosphate Salts and Acids
Bromine Compounds
P4 derivatives
Intermediate Business Clear Brine Fluids Bromine Industrial Solutions
Specialty Minerals Mercury Emission
Flame Retardants
Food Specialties Potash & Magnesium Essential Minerals
Phosphates
Specialty Fertilizers
Industrial Products Specialty Solutions
Advanced Additives
6
ICL’s Integrated Product Portfolio Specialty Fertilizers Liquid & Water Soluble Fertilizers
CRF and SRF
AGRO SSP, TSP, DAP, MAP
Compound NPKs
Green Phosphoric Acid
Food Additives
Polysulphate Magnesium
Potash Fertilizers
Downstream Business
Pure Phosphoric Acid
Upstream Business
Fire Safety
Phosphate
Potash
P2S5
Bromine
Industrial Phosphate Salts and Acids
Bromine Compounds
P4 derivatives
Intermediate Business Clear Brine Fluids Bromine Industrial Solutions
Specialty Minerals Mercury Emission
Flame Retardants
INDUSTRIAL Food Specialties
Potash & Magnesium Essential Minerals
Phosphates
Specialty Fertilizers
Industrial Products Specialty Solutions
Advanced Additives
7
ICL’s Organization Structure: Enabling Strategic Growth
ICL Specialty Solutions Division
Essential Minerals Division
Potash & Magnesium
Phosphate
Industrial Products
Specialty Fertilizers
Advanced Additives
Food Specialties
Q1 2017 Sales* ($ million) Food Specialty Specialties, Fertilizers, 192 138
Industrial
Industrial Products, 266
Agro
Potash & Mg., 283
Advanced Additives, 213
*Before elimination of inter-business lines’ sales
Phosphates, 292
8
Focus on Diversification Into Specialty Solutions and Competitiveness of Assets Essential Minerals Operational Excellence
Specialty Solutions Focus on
Commercial Excellence Competitive advantage from upstream operations
Geographic advantage of core production sites Strong cash generation
Higher organic growth compared to commodity business
Sales ($M)*
Segment Operating Income ($M)**
55%
53%
52%
57%
54%
45%
34% 46%
47% 45%
47%
48%
43%
46%
2016 Q1
2016 Q2
2016 Q3
2016 Q4
2017 Q1
Adjusted to Organizational Structure as of Q1 2017 * Before elimination of inter-business lines’ sales ** Excluding G&A, unallocated expenses and eliminations
53% 2016 Q1
55% 2016 Q2
66% 2016 Q3
Specialty Solutions
36%
54%
64%
2016 Q4
2017 Q1
Essential Minerals
9
Mineral Asset Base: ICL Dead Sea A high quality and practically inexhaustible source of potash, bromine and magnesium Low cost Near-infinite reserve life Logistical advantages: stockpiling ability, geographical position Increased production capability by ~10% through ongoing operational excellence Short mine-to-port distances, proximity to emerging markets
Europe US IL
China
India Brazil
10
Mineral Asset Base: ICL Dead Sea A high quality and practically inexhaustible source of potash, bromine and magnesium Low cost Near-infinite reserve life Logistical advantages: stockpiling ability, geographical position Increased production capability by ~10% through ongoing operational excellence The Dead Sea provides the highest concentration of Bromine
11
Mineral Asset Base: Potash, Phosphate and PolysulphateTM Sites
Potash and PolysulphateTM : ICL Iberia, ICL UK
Phosphates: ICL Rotem, YPH JV
Logistical advantages: focus on domestic markets,
Backward integration to Specialty Solutions
close to ports
Cost per tonne reduction Production optimization
Cost reduction through efficiency and operational excellence
Potential for increased production
Potential for increased production
12
Specialty Business Lines’ Sales and Divisional Operating Income Development Specialty Solutions Sales ($M) 2,330*
2,578*
2,429*
514
613
803
945
659
966
617* 1,013
871
953
138 213 266
FY 2014
FY 2015
FY 2016
Q1 2017
Industrial products
Advanced additives
Food specialties
Segment Operating Income ($M)** 534 422
451
115
Adjusted to organizational structure as of Q1 2017 * Total prior to elimination of inter-business lines’ sales **Excluding G&A, unallocated expenses and eliminations
FY 2014
FY 2015
FY 2016
Q1 2017
13
Financials
Main Financial Figures and Analysis $ millions
Growth in the Specialty Solutions % continues to provide a solid balancing change
Q1 17
Q1 16
% change
Q4 16
1,295
1,265
2%
1,338
(3%)
116
115
1%
140
(17%)
Net income
68
66
3%
32
113%
Adjusted net income
68
85
(20%)
114
(40%)
Cash flow from operations
195
222
(12%)
257
(24%)
Capital Expenditures
112
163
(31%)
138
(20%)
Free cash flow
104
38
174%
127
(18%)
Sales Adjusted operating income
1,265
30
Modest sequential recovery in potash prices and year over year volumes despite commodity downturn cycle Continued reduction of G&A, CapEx and increased free cash flow shows commitment to cash generation Q1 2017 Adjusted operating income ($M)
Q1 2017 Sales ($M)
55
effect on our operations
115
40
55 1,295
115
25 21 10
8
116
14
See Q1 2017 financial reports for a reconciliation of Adjusted operating income to operating income and Adjusted net income to net income. Numbers may not add up due to rounding and set offs
15
Capital Allocation Approach Drive long-term value creation
Solid shareholders’ return
Reduce debt level
FINANCIAL STABILITY 16
Strict CapEx Management while still Investing in Future Growth CapEx* ($M)
887
2017 target: ~$500 - $550 million
794
680 619
401 337
355
350
112
2013A
2014A
2015A Amount spent
2016A
Q1 2017A 2017E
Depreciation and amortization
* CapEx – additions to property plant and equipment and intangible assets not including PPA adjustments (recalculated for prior years)
17
Continued Focus on New Products to Drive Future Growth Annual sales of new products ($M) ICL Industrial Products
New polymeric flame retardants (FR-122P), FR-1410
ICL Specialty Fertilizers
New products including E-Max coated release technology
ICL Food Specialties
Over 70% increase in new blended solution products for energy drinks, baking, meatless meat, gluten free and many others
ICL Potash & Magnesium
Polysulphate®, PotashpluS, New vacuum salt sales
$200-250M
~$150M
~$100M ~18%
32%
~22% 37%
~21% 34%
~82%
~78%
~79%
68%
63%
66%
2015A2015A
2016A 2016A Specialty Solutions
Essential Minerals
2017E2017E
Annual R&D investment: ~$70-80 million 18
Improving Working Capital Management and Cash Flow Generation Cash Flow
$ Million
Free Cash flow* Operating Cash flow
325 170 124
66
-72
Q1 2015
-36 Q2 2015
Q3 2015
58 -89 Q4 2015
257
249
238
222
85
96
Q2 2016
Q3 2016
127
195 104
Q4 2016
Q1 2017
38 Q1 2016
Working Capital**
$ Million
1,309
1,274
1,406 1,347
1,179 1,297 1,203 1,103
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
* Free cash flow - cash flow from operations and dividend from investees net of CapEx ** Working capital = trade and other receivables + inventories – trade and other payables (recalculated for prior years)
1,067
Q1 2017
19
Facing 2017 2017 Main Challenges Potash prices moderately recovering from trough levels, but are still low. Continued price pressure in several parts of the phosphate value chain Focus for 2017
Continue strengthening our specialty businesses
Continue improving our assets’ competitiveness
Continue improving balance sheet position
20
Committed to Responsible Value Creation Thank you
Safe Harbor 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 providing general information to assist the recipient in deciding whether it wishes to proceed with a further investigation for investing in Israel Chemicals Ltd. and/or its affiliates (hereinafter jointly referred to as the “Company” or “ICL”). This Presentation shall not form the basis of, or be relied upon in connection with, any contract or commitment whatsoever, and it does not purport to be comprehensive or to contain all the information that the recipient may need in order to evaluate the Company and/or its assets. No representation, warranty or undertaking, express or implied, is given by ICL and/or any member of the ICL Group or their respective directors, officers, employees, agents, representatives and/or advisers as to or in relation to the accuracy, completeness or sufficiency of the information contained in this Presentation or as to the reasonableness of any assumption contained therein. To the maximum extent permitted by law the Company and its respective directors, officers, employees, agents, representatives and/or advisers expressly disclaim any and all liability which may arise from this Presentation and any errors contained therein and/or omissions therefrom or from any use of this Presentation or its contents or otherwise in connection therewith. No representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any valuations, forecasts, estimates, opinions and projections contained in this Presentation. In all cases, recipients should conduct their own investigation on any analysis of the Company and/or its assets and the information contained in this Presentation. Nothing in this Presentation constitutes an investment advice and any opinions or recommendations that may be contained herein have not been based upon a consideration of financial situation or particular needs of any specific recipient. Any prospective investor interested in buying Company’s securities or evaluating the Company and/or its assets is recommended to seek its own financial and other professional advice. This Presentation and/or other oral or written statements made by ICL during its presentation or from time to time, may contain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Whenever words such as "believe," "expect," "anticipate," "intend," "plan," "estimate", “predict” or similar expressions are used, the Company is making forward-looking statements. Such forward-looking statements may include, but are not limited to, those that discuss strategies, goals, financial outlooks, corporate initiatives, existing or new products, existing or new markets, operating efficiencies, or other non-historical matters. These forward-looking statements and projections are not guarantees of future performance and are subject to a number of assumptions, risks, projections and uncertainties, many of which are beyond the Company’s control, which could cause actual results, performance or achievements to differ materially from those described in or implied by such statements or projections. Because such statements deal with future events and are based on ICL’s current expectations, they could be impacted or be subject to various risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in our Annual Report on Form 20-F for the year ended December 31, 2015, and in subsequent filings with the Tel Aviv Securities Exchange (TASE) and/or the U.S. Securities and Exchange Commission (SEC). Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can provide no assurance that expectations will be achieved. Except as otherwise required by law, ICL disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise. Readers, listeners and viewers are cautioned to consider these risks and uncertainties and to not place undue reliance on such information. Certain market and/or industry data used in this Presentation were obtained from internal estimates and studies, where appropriate, as well as from market research and publicly available information. Such information may include data obtained from sources believed to be reliable, however ICL disclaims the accuracy and completeness of such information which is not guaranteed. Internal estimates and studies, which we believe to be reliable, have not been independently verified. We cannot assure that such data is accurate or complete. Included in this presentation are certain non-GAAP financial measures, such as Adjusted Operating income and Adjusted Net income, designed to complement the financial information presented in accordance with IFRS because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to our Annual Report on Form 20-F for the year ended December 31, 2016 filed with TASE and the SEC for a reconciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP.
2
ICL’s Highly Experienced Management Team Asher Grinbaum, Acting CEO 42 years in ICL
Kobi Altman, CFO 2 years in ICL
Charles Weidhas, COO 10 years in ICL
Ofer Lifshitz, President, ICL Essential Minerals 21 years in ICL
Eli Glazer, Yakir Menashe, President, ICL EVP Global HR Specialty Solutions 11 years in ICL 34 years in ICL
Rani Loebenstein, Lisa Haimovits, General Counsel & Head of Global CR Company Secretary 3 years in ICL 8 years in ICL
Hezi Israel, EVP BD & Strategy 10 years in ICL
Over 140 years of ICL experience
3
Our Vision: Fulfilling Humanity’s Essential Needs
We fulfill essential needs in 3 core end markets – Agriculture, Engineered Materials and Food by utilizing an integrated value Increased demand for and use of Rise of the middle class and standard natural resources of living across the globe on specialty chain based minerals FY 2016* 659 3,162
1,919
Environmental stewardship and sustainability Agriculture
Engineered Materials
*Before elimination of inter-business units sales
Food
4
Adding Value throughout Our Backward Integrated Production Chain Potash & PolysulphateTM
Potash fertilizers
Compound NPKs
PolysulphateTM
Specialty fertilizers
Food additives
Phosphates
Green Phosphoric Acid
Pure Phosphoric Acid
SSP, TSP, DAP, MAP
Controlled & slow release fertilizers Liquid & water soluble fertilizers Industrial phosphate Salts and acids P2S5, fire safety Flame retardants Clear brine fluids
Elemental bromine
Bromine
Bromine industrial solutions Mercury emission
Potash & Magnesium
Phosphate
Agriculture
Specialty Fertilizers
Industrial Products
Advanced Additives
Industrial
Food Specialties
5
ICL’s Integrated Product Portfolio Specialty Fertilizers Liquid & Water Soluble Fertilizers
CRF and SRF
SSP, TSP, DAP, MAP
Compound NPKs
Green Phosphoric Acid
Food Additives
Polysulphate Magnesium
Potash Fertilizers
Downstream Business
Pure Phosphoric Acid
Upstream Business
Fire Safety
Phosphate
Potash
P2S5
Bromine Bromine
Industrial Phosphate Salts and Acids
Bromine Compounds
P4 derivatives
Intermediate Business Clear Brine Fluids Bromine Industrial Solutions
Specialty Minerals Mercury Emission
Flame Retardants
Food Specialties Potash & Magnesium Essential Minerals
Phosphates
Specialty Fertilizers
Industrial Products Specialty Solutions
Advanced Additives
6
ICL’s Integrated Product Portfolio Specialty Fertilizers Liquid & Water Soluble Fertilizers
CRF and SRF
AGRO SSP, TSP, DAP, MAP
Compound NPKs
Green Phosphoric Acid
Food Additives
Polysulphate Magnesium
Potash Fertilizers
Downstream Business
Pure Phosphoric Acid
Upstream Business
Fire Safety
Phosphate
Potash
P2S5
Bromine
Industrial Phosphate Salts and Acids
Bromine Compounds
P4 derivatives
Intermediate Business Clear Brine Fluids Bromine Industrial Solutions
Specialty Minerals Mercury Emission
Flame Retardants
INDUSTRIAL Food Specialties
Potash & Magnesium Essential Minerals
Phosphates
Specialty Fertilizers
Industrial Products Specialty Solutions
Advanced Additives
7
ICL’s Organization Structure: Enabling Strategic Growth
ICL Specialty Solutions Division
Essential Minerals Division
Potash & Magnesium
Phosphate
Industrial Products
Specialty Fertilizers
Advanced Additives
Food Specialties
Q1 2017 Sales* ($ million) Food Specialty Specialties, Fertilizers, 192 138
Industrial
Industrial Products, 266
Agro
Potash & Mg., 283
Advanced Additives, 213
*Before elimination of inter-business lines’ sales
Phosphates, 292
8
Focus on Diversification Into Specialty Solutions and Competitiveness of Assets Essential Minerals Operational Excellence
Specialty Solutions Focus on
Commercial Excellence Competitive advantage from upstream operations
Geographic advantage of core production sites Strong cash generation
Higher organic growth compared to commodity business
Sales ($M)*
Segment Operating Income ($M)**
55%
53%
52%
57%
54%
45%
34% 46%
47% 45%
47%
48%
43%
46%
2016 Q1
2016 Q2
2016 Q3
2016 Q4
2017 Q1
Adjusted to Organizational Structure as of Q1 2017 * Before elimination of inter-business lines’ sales ** Excluding G&A, unallocated expenses and eliminations
53% 2016 Q1
55% 2016 Q2
66% 2016 Q3
Specialty Solutions
36%
54%
64%
2016 Q4
2017 Q1
Essential Minerals
9
Mineral Asset Base: ICL Dead Sea A high quality and practically inexhaustible source of potash, bromine and magnesium Low cost Near-infinite reserve life Logistical advantages: stockpiling ability, geographical position Increased production capability by ~10% through ongoing operational excellence Short mine-to-port distances, proximity to emerging markets
Europe US IL
China
India Brazil
10
Mineral Asset Base: ICL Dead Sea A high quality and practically inexhaustible source of potash, bromine and magnesium Low cost Near-infinite reserve life Logistical advantages: stockpiling ability, geographical position Increased production capability by ~10% through ongoing operational excellence The Dead Sea provides the highest concentration of Bromine
11
Mineral Asset Base: Potash, Phosphate and PolysulphateTM Sites
Potash and PolysulphateTM : ICL Iberia, ICL UK
Phosphates: ICL Rotem, YPH JV
Logistical advantages: focus on domestic markets,
Backward integration to Specialty Solutions
close to ports
Cost per tonne reduction Production optimization
Cost reduction through efficiency and operational excellence
Potential for increased production
Potential for increased production
12
Specialty Business Lines’ Sales and Divisional Operating Income Development Specialty Solutions Sales ($M) 2,330*
2,578*
2,429*
514
613
803
945
659
966
617* 1,013
871
953
138 213 266
FY 2014
FY 2015
FY 2016
Q1 2017
Industrial products
Advanced additives
Food specialties
Segment Operating Income ($M)** 534 422
451
115
Adjusted to organizational structure as of Q1 2017 * Total prior to elimination of inter-business lines’ sales **Excluding G&A, unallocated expenses and eliminations
FY 2014
FY 2015
FY 2016
Q1 2017
13
Financials
Main Financial Figures and Analysis $ millions
Growth in the Specialty Solutions % continues to provide a solid balancing change
Q1 17
Q1 16
% change
Q4 16
1,295
1,265
2%
1,338
(3%)
116
115
1%
140
(17%)
Net income
68
66
3%
32
113%
Adjusted net income
68
85
(20%)
114
(40%)
Cash flow from operations
195
222
(12%)
257
(24%)
Capital Expenditures
112
163
(31%)
138
(20%)
Free cash flow
104
38
174%
127
(18%)
Sales Adjusted operating income
1,265
30
Modest sequential recovery in potash prices and year over year volumes despite commodity downturn cycle Continued reduction of G&A, CapEx and increased free cash flow shows commitment to cash generation Q1 2017 Adjusted operating income ($M)
Q1 2017 Sales ($M)
55
effect on our operations
115
40
55 1,295
115
25 21 10
8
116
14
See Q1 2017 financial reports for a reconciliation of Adjusted operating income to operating income and Adjusted net income to net income. Numbers may not add up due to rounding and set offs
15
Capital Allocation Approach Drive long-term value creation
Solid shareholders’ return
Reduce debt level
FINANCIAL STABILITY 16
Strict CapEx Management while still Investing in Future Growth CapEx* ($M)
887
2017 target: ~$500 - $550 million
794
680 619
401 337
355
350
112
2013A
2014A
2015A Amount spent
2016A
Q1 2017A 2017E
Depreciation and amortization
* CapEx – additions to property plant and equipment and intangible assets not including PPA adjustments (recalculated for prior years)
17
Continued Focus on New Products to Drive Future Growth Annual sales of new products ($M) ICL Industrial Products
New polymeric flame retardants (FR-122P), FR-1410
ICL Specialty Fertilizers
New products including E-Max coated release technology
ICL Food Specialties
Over 70% increase in new blended solution products for energy drinks, baking, meatless meat, gluten free and many others
ICL Potash & Magnesium
Polysulphate®, PotashpluS, New vacuum salt sales
$200-250M
~$150M
~$100M ~18%
32%
~22% 37%
~21% 34%
~82%
~78%
~79%
68%
63%
66%
2015A2015A
2016A 2016A Specialty Solutions
Essential Minerals
2017E2017E
Annual R&D investment: ~$70-80 million 18
Improving Working Capital Management and Cash Flow Generation Cash Flow
$ Million
Free Cash flow* Operating Cash flow
325 170 124
66
-72
Q1 2015
-36 Q2 2015
Q3 2015
58 -89 Q4 2015
257
249
238
222
85
96
Q2 2016
Q3 2016
127
195 104
Q4 2016
Q1 2017
38 Q1 2016
Working Capital**
$ Million
1,309
1,274
1,406 1,347
1,179 1,297 1,203 1,103
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
* Free cash flow - cash flow from operations and dividend from investees net of CapEx ** Working capital = trade and other receivables + inventories – trade and other payables (recalculated for prior years)
1,067
Q1 2017
19
Facing 2017 2017 Main Challenges Potash prices moderately recovering from trough levels, but are still low. Continued price pressure in several parts of the phosphate value chain Focus for 2017
Continue strengthening our specialty businesses
Continue improving our assets’ competitiveness
Continue improving balance sheet position
20
Committed to Responsible Value Creation Thank you
