investor presentation · investor presentation august 2015 . safe harbor all statements in this...
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Investor Presentation
August 2015
Safe Harbor
All statements in this communication, other than those relating to historical facts, are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended 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 our control, which could cause actual results to differ materially from such statements or projections. Important factors that could cause actual results to differ materially from our expectations include, among others: loss or impairment of business licenses or mining permits or concessions; natural disasters; failure to raise the water level in evaporation Pond 5 in the Dead Sea; accidents or disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; labor disputes, slowdowns and strikes involving our employees; currency rate fluctuations; rising interest rates; general market, political or economic conditions in the countries in which we operate; pension and health insurance liabilities; price increases or shortages with respect to our principal raw materials; volatility of supply and demand and the impact of competition; changes to laws or regulations (including environmental protection and safety and tax laws or regulations), or the application or interpretation of such laws or regulations; government examinations or investigations; the difference between actual reserves and our reserve estimates; failure to integrate or realize expected benefits from acquisitions and joint ventures; volatility or crises in the financial markets; cyclicality of our businesses; changes in demand for our fertilizer products due to a decline in agricultural product prices, lack of available credit, weather conditions, government policies or other factors beyond our control; decreases in demand for bromine-based products and other industrial products; litigation, arbitration and regulatory proceedings; and war or acts of terror. More detailed information about factors that may affect our performance may be found in “Risk Factors” in our Annual Report Form 20-F filed with the U.S. Securities and Exchange Commission on March 20, 2015. Forward-looking statements and projections represent our views and are given only as of the date of this communication and we disclaim any obligation to update or revise them, whether as a result of new information, future events or otherwise, except as required by law.
All information included in this document speaks only as of the date on which they are made, and we do not undertake any obligation to update such information afterwards. Some of the market and industry information is based on independent industry publications or other publicly available information, while other information is based on internal studies. Although we believe that these independent sources and our internal data are reliable as of their respective dates, the information contained in them has not been independently verified and we can not assure you as to the accuracy or completeness of this information.
2
Index
3
INDEX
Main Deck 1-28
Company Vision, Business Model, End Markets, Asset Portfolio 4-11
Q2 Financial Results Summary 12-13
Business Strategy 14-28
Appendices 29-106
ICL at a Glance, Our Story 30-31
Financial Review 32-38
Agriculture 39-71
Engineered Materials 72-91
Food 92-97
Efficiency and Operational Excellence 98-106
What We Do Evolves From Humanity’s Essential Needs
4
Humanity’s evolving needs are being driven by global mega trends:
Natural population growth and diminishing arable land per capita
– demand for more crops
Rise of the middle class and standard of living – demand
for higher quality food
Increased use of natural resources – the need to expand
mining operations
Environmental stewardship and sustainability – demand for new
environmental solutions
Our Vision: Fulfilling Humanity’s Essential Needs
5
Rise of the middle class and standard of living across the globe
Increased demand for and use of natural resources
Environmental stewardship and sustainability
We fulfill essential needs in 3 core end markets – Agriculture, Food and
Engineered Materials by utilizing an integrated value chain based on
specialty minerals
Unique Business Model - Using Resources and Reaching Customers Globally
6
Unique Portfolio of Mineral Assets
Integrated Value Chain
Potash, Phosphates Bromine Magnesium
Potash Potash Phosphate
Mining Chemistry Formulation
Leading Positions in Concentrated Global Markets with Strong Fundamentals
Leading Positions
Israel China
Spain
UK
Ethiopia
Potash Polysulphate
US
Phosphate
Integrated Value Chains Provide Significant Synergies
7 7
Phosphate Fertilizers
Fertilizer Grade
Phosphoric Acid
Food Grade
Phosphoric Acid
Salt (NaCl)
Phosphate Salts
Pure Magnesium
Magnesium Alloys
Compound Fertilizers
Salt (NaCl)
Potash
Specialty Fertilizers
Chlorine based Biocides
Bromine Compounds
Magnesium
Chloride
Solution
Magnesium
Chloride
Raw Materials
Potash
Sylvanite
Crude
Magnesium
Fertilizers Industrial Products Performance Products DSM Product Sold
End Brine
Elemental
Bromine
Phosphate
Rock
Chlorine
Elemental
Phosphorus
Special
Grade Acid
OPFRs & Others
Magnesia
Products (MgO)
Source Major Intermediate & Finished Products
Wildfire Extinguishers
Food Additives
Phosphorus ( Penta)
Sulfide
Polysulphate
Carnallite
PCL3 POCL3
From Needs to Products
8
End Markets
Flame Retardants
Industrial Solutions
Advanced Additives
Engineered Materials
~$470M ~$780M ~$650M
Food Specialties
Food
~$530M
Segments
Business lines
Contribution to sales*
Potash Fertilizers
Phosphates Fertilizers
Specialty Fertilizers
Agriculture
~$1,820M ~$910M ~$770M
* In 2014, including inter-segment sales
From Vision to Value – Our Main Objectives
9
Rise of the middle class and standard of living across the globe
Increased demand for and use of natural resources
Environmental stewardship and sustainability
Be at the forefront of market trends
Capture the demand that arises from the market needs at an above average profitability
Strengthen our value chain through operational excellence & cost efficiency to better serve our markets
Unique Portfolio of Mineral Assets – Existing Assets
10
Logistical advantage - close to port of Barcelona
Vast reserves
Cost reduction initiatives
Significant expansion plans
Logistical advantage - close to Teesside port
Improved capacity utilization
Polysulphate – increase production to 600,000 tonnes
ICL UK ICL Iberia
Dead Sea
Potash, Bromine Magnesium
Potash Potash Polysulphate
Relatively low cost in potash, the world’s lowest in bromine
Near-infinite reserve life – potash and bromine
Logistical advantages – stockpiling ability, geographical position
Ongoing operational efficiency measures, including labor reduction
Integrated value chain highly biased towards value added specialty products
Successful efficiency and operational excellence plan at Rotem
Negev Desert
Phosphate
Unique Portfolio of Mineral Assets – Under Development
11
Phosphate - value creation in China
Shift from commodity to specialty
Chinese JV
Phosphate
Danakhil project in Ethiopia
First potash mine in Africa
Production in less than 5 years
ICL Africa
Potash
Constantly examining new opportunities to expand our mineral assets
Fit to our strategy – close to end markets, ability to expand or develop an integrated value chain, adequate shareholder return
Future Opportunities
Potash Phosphate
Q2 2015 Financial Results Summary
1,535 1,196
19 61 61 253
127 100
13
Q2 2015 Highlights and Financial Results
Q2 2015 Sales Q2 2015 Adjusted operating income
Numbers may not add up due to rounding
$ millions Q2 15 Q2 14
% change Q1 15
% change
Revenues 1,196 1,535 (22.1)% 1,403 (14.8)%
Operating income 107 78 37.2% 315 (66.0)%
Adjusted operating income
251 243 3.3% 275 (8.7)%
Net income 75 68 10.3% 217 (65.4)%
Adjusted net income 177 214 (17.3)% 193 (8.3)%
Cash flow from operations
325 121 169% 66 392%
243 251
6 19 29 36
10
Progress of efficiency initiatives fully on track
Second half performance to be supported by elevated potash sales and improved profit margins
Strategic progress: acquisition of Allana Potash completed, significant advance in Chinese phosphates JV
Business Strategy
Strategy Highlights
15
Unique business model Build global
integrated value chains
Execute on $350M efficiency improvements Improve positioning
on production cost curve
Cross-organization process improvement
Grow core business Organic growth Acquisitions
Mineral assets Capability
Enhancing Acquisitions
Asset allocation focused on total shareholder return Divestiture of non-core
assets Attractive dividend
policy
Efficiency Initiatives Contribution – Segment Breakdown
16
USD millions/year
2016 efficiency gains run-rate of $350M Segment run-rate contribution
2016E2015E2014A
ICL PP
ICL IP
Phosphatesand fertilizers
Potash
$240 million
$120 million
$350 million
Procurement
Energy
Commercial excellence
R&D
Production cost
efficiency
Operational Excellence Goals at Our Production Sites
17
ICL UK ICL Industrial Products, ICL Performance Products
ICL Dead Sea
Potash Engineered Materials, Food
Potash Polysulphate TM
Additional production of 400kt annually beyond the 3 years compensation for the strike losses
Potash cost per tonne reduction of ~ $10 by 2016
EBITDA contribution of ~$50 million by 2016
Increase production of main products vs. 2013 level : MGA - ~15% Fertilizers - ~10%
EBITDA contribution of ~ $80 million by 2016
ICL Rotem
Phosphate
Increased potash production by 40% vs. 2013 level
Potash cost per tonne reduction of ~ $40 by 2016
EBITDA contribution of ~$50 million by 2016
Operational Excellence initiatives implementation started in 2015
Labor costs reduction at ICL Neot Hovav and the elemental bromine plant at the Dead Sea
ICL Iberia
Potash
Reduce our fixed costs per tonne by around €40/t by 2020
EBITDA contribution of ~$20 million by 2016 and ~$50 million by 2020
Operational Efficiency Achievements in Israel
18
Over 250 (over 10%) employees have already left both sites Headcount
Reduction Approx. 50 employees will leave the company by 2018.
ICL Dead Sea, ICL Neot Hovav
ICL Neot Hovav
Managerial Control
& Efficiency Initiatives
Flexible deployment of employees
ICL Dead Sea estimated additional production capability
~400kt per year
Reduction and control over employee benefits costs
Production
Management decision on staffing levels, work practices and structural changes
Freedom to implement Shared Services & pursue Operational Excellence
ICL Dead Sea, ICL Neot Hovav
Investment into Operational Excellence in Israel
19
Strike impact - 2015
NPV of economic benefit: at least $170 million
Total economic impact ($M, NPV) ~(90)
Total benefits ($M, NPV) ~260
Benefit from bromine and compound price increase – estimated annual contribution ($M/year)
~ 20
Higher than expected recovery of potash in the ponds ($M/year) 10 – 20
Ability to implement ongoing productivity improvements in ICL DS and Neot Hovav
Potential upside
Impact on operating income ($M) ~(260)*
Impact on net income ($M) ~(200)*
Benefits – anticipated continuous operational improvements
* Including 2H strike impact of ~$15M on operating income and ~$11M on net income
Challenging Israeli Business Environment Does not Present Further Downside
20
Taxation Environment Natural resources tax Royalties Corporate tax and investment incentives Opportunity to gain back some of the investment incentives
Extension of Mining Rights Future phosphate mining in Israel Dead Sea concession beyond 2030 High barriers to entry for competitors
Golden Share Special State Share protects its vital interests Restricts the transfer of certain assets outside Israel A veto right in case of a take over Opportunity to create a comprehensive dialogue with Authorities
Labor relations in Israel Approx. 5,000 employees in Israel 78% are unionized Opportunity for a transformation
Opportunities in Potash, SOP and PolysulphateTM to Increase Production
21
Potential gradual increase of production capability
5.3 5.1
7.8 0.13
1.0
0.5
10.0%
7.5% 9.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
2
4
6
8
10
2005A 2015E 2025E
Million tonnes Potash Polysulphate SOP Potash market share
Incremental potash production – short term & brownfield potash
Project Production (Mt)
Comments
ICL Iberia 0.3 1st stage brownfield expansion
ICL Dead Sea 0.4
Polysulphate TM
1.0 By 2020
Incremental potash production – long term
Project Production (Mt)
Comments
ICL Iberia 1.0 2nd stage brownfield expansion
ICL Ethiopia - potash
1.0 - 1.5 Subject to detailed engineering planning
ICL Ethiopia - SOP
0.5 Subject to detailed engineering planning
Source: Industry publications, ICL estimates
~
JV in China – Strategic Progress of an Attractive Opportunity
22
Management team fully in place
The R&D agreement was signed on June 2015
11 projects were jointly agreed in Food, Engineered Materials, Agro and process improvement. Additional projects by year-end
The JV in Numbers
$183M in the JV. $270 in the listed company Investment
~550M in year 1 to ~700M in year 5 Revenues
Low teens in year 1 to high teens in year 5 EBITDA Margins
~7.4x EV/EBITDA multiple in year 2 EV/EBITDA
About $340 million spread over 5 years Additional CAPEX
From the first full year of operations Cash EPS Accretion
Aggregate JV Production capability
6.5mt 2.5mt Phosphate Rock
2.7mt 850kt Fertilizers
895kt 115kt Specialty Fertilizers
1.3mt 700kt Phosphoric Acid
350kt 60kt Purified Phosphoric Acid
Transaction approval on track, demonstrating local authorities support
Approvals have partially already been granted
Approval process continues to be very constructive
23
Fulfilling Potash Demand Growth Potential in India
An ICL & IPL JV, Bringing India to the state of the art potash fertilization
- K +K
The program enters its 3rd year, covers 52 districts in 9 states around India
21 experienced agronomists help providing evidence of the profitable use of potash
~400 farmer activities (Oct ’13 – Apr ’15) including field days, jeep campaigns, crop seminars and farmers meetings.
~2,000 Demonstration plots (Oct ’13 – Apr ’15) with more than 20 crops
Results: 15-35% average increase in yields;
Success stories demonstrate benefit-to-cost ratios between 13:1 and 43:1
24
Africa – Driving Demand in an Unexploited Potash Market
Potential potash consumption of more than 400k tonnes between Ethiopia, Tanzania & Kenya. Current consumption – 40-50k tonnes
Africa has 12% of the world’s arable land but only 20% is cultivated
Only 7% is irrigated (40% in Asia)
Share in global population to grow from 15% in 2010 to 23% in 2050
Only 1.7% of global potash consumption
Program led by ICL in collaboration with
Ethiopian partners
Range of activities to increase awareness among farmers of the benefits of potash:
Demonstration plots, outreach to farmers
Soil fertility mapping
Research and validation
Expansion into Tanzania
25
ICL Specialty Fertilizers: The Path for Faster than the Market Growth
0.7 1.4
0.8
1.4 1.4
2.6
2023
5.4
2014
2.9
Market USD bn
1 Other straights includes MAP/MKP, Calcium Nitrate, SOP
ws NPK
NOP
Other Straights1
9%
SOLUBLES
2023
5.4
2014
3.5
5%
FOLIAR LIQUIDS
2023
3.5
2014
0.9
16%
Controlled Release Fert.
ICL Specialty Fertilizers Growth Pillars
Establish production in
attractive markets
Enlarge Product Portfolio-
New Potassium Nitrate
production plant
Reduce cost of production
New production
plants with focus on
emerging markets
Grow with R&D
and new Strategic
Partners
New cost efficient
coating generation
26
Industrial Products’ Growth Projects - a Significant Contribution To Future Sales
FURNITURE & TEXTILE
TRANSPORTATION WATER
TREATMENT CONSTRUCTION
INTERMEDIATES FOR FOOD, PHARMA,
AGRO
OIL & GAS POWER PLANTS ELECTRONICS
Growth areas – short to mid term
Next generation Polymeric and Reactive flame retardants
Brominated biocides
Merquel and Clear Brine Fluids
Purified potassium chloride
Energy Storage
2020 estimated contribution
Potential sales of ~$150M with above average operating income
Growth areas – long term
Energy storage
Gold extraction
Soil fumigation
3-D printing
Significant contribution beyond 2020
Growing core business through in-house R&D
Margin expansion, pricing, focus on customer unmet needs
Advocacy: SAFR™ (Scientific Assessment for Flame Retardants), Merquel® in China/EU
Implementing
growth strategy
Leveraging ICL’s natural resources and technology in a diverse portfolio of applications
Industrial applications: grow through geographic expansion and product differentiation
ICL Performance Products – Full Focus on Core Business
27
Leveraging our proprietary technology in the rapidly developing market space for creative food with unique ingredient systems
New products, functional blends, protein modifiers
Geographic expansion: Asia, LATAM
New ingredients, technologies through M&A
Food Specialties Advanced Additives
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15E '16E '17E '18E '19E
Op
erat
ing
Inco
me
%
Rev
enu
e (
m$
)
Core (Rev $) Non Core (Rev $) Core (OI %) Non Core (OI %)
Thermphos -
P2S5 business
$1,711M
Estimated CAGR 2015-2019: 4-6% Estimated operating margin expansion: about 150-250 basis points
Thank you
Appendices
ICL at a Glance
30
ICL is a leading global specialty minerals company that operates a
unique integrated business model to fulfil essential needs in three
key end markets: Agriculture, Engineered Materials and Processed
Food
Utilizes sophisticated processing and product formulation
technologies to produce downstream / value-added products
Operates low-cost, geographically advantaged assets
~50% of production and ~95% of sales (2014) outside of Israel
FY2014 dividend yield: 8.3% (including special dividend) (2)(3)
Company Snapshot
Key Statistics (3) Our Business Segments
US$Bn
Market Capitalization 8.4
Net Debt 2.6
Enterprise Value 10.8
Main Shareholders Israel Corp 46.2%
PCS 13.9%
Q2 2015 Q2 2014
Revenue 1.2 1.5
Adj. EBITDA 0.34 0.34
% Margin 29% 22%
Fertilizers: One of the world's largest producers of potash, phosphate-based fertilizers and specialty fertilizers
Performance Products: Produces, markets and sells a broad range of downstream phosphate-based food additives and advanced additives
Industrial Products: Extracts bromine and magnesium from the Dead Sea and produces and markets bromine, magnesium and phosphorus compounds
19%
18%
15%
48%
Our Business Mix and End Markets (1)
Potash
Fertilizers & Phosphates
Industrial Products
Performance Products 52%
9%
8%
31%
Processed Food
Engineered Materials
Agriculture (Bulk and Specialty Fertilizers)
Fertilizers Segment
Business Mix (Based on 2014 EBITDA)
End Markets (Based on 2014 Revenue)
Other
1 Excludes adjusted EBITDA attributable to Other and eliminations; may not sum to 100% due to rounding 2 Dividend yield calculated as total dividends paid in 2014 divided by current market capitalization 3 Market data as of August 13, 2015; Net debt calculated as total debt less cash, cash equivalents and short term investments
Our Story: “Needs Evolve, So Do We”
31
Financial Review
Financial Priorities
33
Value Creation Support strategic moves Enable inorganic moves Total shareholders return
Dividend policy – up to 70% of net income
Share price attention
Create Enabling Platform Maintain a healthy equity/debt ratio –
up to 2.5 net debt/EBITDA Available lines of credit - $1.5 to 2.5Bn Operational excellence and efficiency
initiatives - $350M by 2016 Increase free float in the NYSE
Solidify Foundations Cost control – lean mindset Internal financial disciplines
Cash flows from
operating activities
(Incl. Growth)
80%
Divestment 5%
Debt 15%
Investing Activities
35%
Investing Activities
for Growth
25%
Dividends 70% of NI (Incl. from Growth)
40%
Accumulated sources and uses 2015-2019
34
5-Year Capital Allocation Supports Growth and Shareholder Return
Debt metrics meet investment grade rating requirements
Maintaining Investment Grade Rating while Fulfilling Future Growth Initiatives and Dividend Payout Ratio
2.40
2.00
36%
34%
20%
23%
26%
29%
32%
35%
38%
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Net Debt/Adj. EBITDA Funds From Operations/Net Debt
Comfortable Repayments Load
35
0.8 1.2 Utilized
Unutilized
Credit line utilization in $Bn
ICL debt maturities in $M
* Pro forma post new club deal utilization and cancelation of older ones
Total $2Bn
USD 92%
Floating 54%
Bank & others 61%
Euro 6%
Fix 46%
Debentures 39%
Other 2%
-
200
400
600
800
1,000
1,200
Total Debt: $2.7Bn
Avg. Interest 2.9%
Declining Share of Labor Costs in Revenues
36
Labor costs In US$ millions, Share of labor costs in sales
* Excluding new projects, M&A
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
-
200
400
600
800
1,000
1,200
1,400
Labor Costs Labor Costs out of Revenues Linear (Labor Costs out of Revenues)Labor costs of Revenues Trend line
0
500
1,000
1,500
2,000
2,500
Potash Phosphates Specialty Fertilizers Engineered Materials Food Specialties ROIC
Growth and Efficiency Initiatives Support Future EBIT and ROIC
37
Business units’ EBIT and ROIC ROIC: 16-17%
Agriculture
95 180 545 966 549 998 1131 1019 634 845
2.3%
3.1%
5.1% 5.3%
4.2%
5.9%
6.1%
7.1%
4.8%
8.3%
0
200
400
600
800
1000
1200
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
Dividends (CF based) Special Dividend yield Linear (yield)
Dividend Policy Supports Strong Dividend Yield
38
Dividends Paid and Dividend Yield 2005-2014
Dividend Policy of up to 70% of reported net income generated average yield of 5.2% in the last decade
Yield trend line
* 2010 & 2014 special dividend: $500M
ICL Segments, Business Environment, Additional Strategic Milestones
Agriculture
Growth Factors - Fertilizers and Food Products
41
Meat Consumption
Population
Fertilizer consumption
1.0
2.0
3.0
4.0
5.0
6.0 Index, relative to 1962
Yield Growth Required to Meet World’s Food Needs Population, Meat and Fertilizers [Base 1962]
Source: IFA, USDA, USA Census
Diminishing arable land per capita
World Grains Production & Consumption
42
Grains and Pulses: Barley, Corn, Millet, Mixed Grain, Oats, Rice, Rye, Sorghum, Wheat
0.167249298
0.197981098
0.217274389
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
1.4
1.5
1.6
1.7
1.8
1.9
2.0
2.1
2.2
2.3
2.4
2.5
Bill
ion
To
nn
e
Consumption Production Stock to Use
Sources: USDA, (Update August 2015)
$0
$5
$10
$15
$20
$25
CHICAGO BOARD OF TRADE (CBOT) CROP PRICES $/bushel
Corn Wheat
Soybean Rice
World Grain Price Futures (CBOT)
43 Source: USDA, CBOT. Prices as of August 14, 2015
$11.82
$5.07
$3.64
$9.25
44
Fertilizer Prices
Potash Prices
FOB Vancouver standard KCl
US$/t spot US$/t spot
Average DAP fob Tampa
Average GTSP, fob North Africa
Phosphate Prices
* Source: Fertilizer Week, prices as of August 13, 2015
FOB NOLA granular KCl
200
250
300
350
400
450
500
550
600
650
0
100
200
300
400
500
600
700
45
Fertilizers are Affordable Source: CBOT, Fertilizer Week & ICL
*GPI = Grain Price Index formula: [(wheat price*7) + (maize price*8) + (rice price*4.5) + (soybean price*2.5)] /22]
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5Index of Fertilizer Price Ratio to GPI Base 2002 MOP/GPI
DAP/GPI
46
China China China
China China India
India India
India India
Brazil
Brazil Brazil
Brazil
Brazil
USA
USA
USA
USA
USA
SE Asia
SE Asia
SE Asia
SE Asia
SE Asia
RoW
RoW
RoW
RoW
RoW China India
Brazil RoW
1999 2006 2013 2014 China India Brazil RoW 2020 2025
80*
72*
53
62
Potash Demand Growth Estimates Source: CRU
Region 1999-2014
CAGR
2014-2020
Growth (tonnes)
2014-2020
CAGR
China 7% 1.3 1.5%
India 3% 2.2 7%
Brazil 6% 2.7 4%
USA 1% (0.4) 1%-
SE Asia 6% 2.1 4.4%
RoW 0% 2 2%
Total 3% 10 2.5%
After 2020 annual growth rate returns to 2%, and reaches 18M tonnes
growth from 2014 to 2025
Million tonnes KCl
Source: CRU, ICL estimates
*FertEcon estimations for 2020 & 2025: 75M tonnes & 81.5M tonnes, respectively
47
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
Potash Market is Expected to Remain Balanced Source: CRU, DSW
68
79
88
Million tonnes 2014 2020 2025
Demand 62 72 80
Operating Capacity 68 79 88
Gap 6 7 8
Utilization rate 91% 91% 91%
* Greenfields capacity is multiplied by realization factor that takes into account the probability of realization, based on its category – Firm (80%), Probable (60%), Speculative (30%), ICL (100%). Not including BHP
Probable Brownfields
Firm Greenfields
Probable Greenfields
Speculative Greenfields
ICL growth
Firm Brownfields
Supply (Million tonnes KCl)
ICL’s growth: 2.8 million tonnes
48
Agriculture
ICL Dead Sea
ICL Rotem
ICL Turkey
5,855 Employees Worldwide
ICL Haifa
ICL UK
ICL Iberia
ICL Germany
ICL The Netherlands
Fuentes
Nutrisi Everris
A Global Manufacturer of Products that Fulfills Essential Needs in the Agriculture Market
Potash Fertilizers
Phosphate Fertilizers
Specialty Fertilizers
52% 26%
22%
ICLF 2014 Sales by Lines of Business ($3,400M** )
Of ICL’s Rev ($6,100 M)
56%
Americas* - 22%
Asia* - 27%
EMEA* - 51%
*Of 2014 sales **including inter-segment sales
Strategic Geographic Advantage Clear Service Advantage to Developed and Emerging Markets
Destination (Days) Destination ($/tonne)
Country of Departure Mine-to-Port (km)
(1) China India Brazil China India Brazil
Israel ~200 23 11 22 21 15 17
UK ~30 34 22 20 32 27 17
Spain ~85 27 15 17 34 26 17
Germany ~350 34 23 20 30 26 16
Russia / Belarus ~600 39 27 25 24 26 18
Canada West Coast ~1,700 35 47 43 15 26 29
Source: ICL estimates, Netpas
China
India
IL
Europe
Brazil
US
Low plant gate-to-port costs and ocean freight costs with faster time to markets
• ICL has Shorter and Lower Cost Shipping Routes to Emerging Markets
49 1 Israel based on average from Dead Sea to Port of Eilat and Ashdod; Germany based on Werra to Port of Hamburg and Bremerhaven; Canada based on Saskatchewan to Port of
Vancouver; Russia based on Starobin to Port of Klaipeda; Spain based on Cabanasas Mine to Port of Barcelona; UK based on Cleveland Potash, Saltburn-by-the-Sea to Teesport Commerce Park
50
BPC 17.1%
ICL 15.0%
APC 12.5%
K & S 2.1%
Uralkali 31.2%
BPC 26.1%
Uralkali 19.2%
K+S 12.4%
ICL 9.1%
SQM 5.7%
Uralkali 32.5%
BPC 22.5%
ICL 16.3%
APC 7.1%
K+S 2.6%
SQM 1.4%
Other 1.3%
ICL’s Market Share in Potash in the Faster Growing Markets (2014)
Sources: BOABC, SIACESP, Company estimates
India Brazil China
Total import: 4.3 Mt Total import: 9.1 Mt Total import: 8.0 Mt
Canpotex 22.5%
Canpotex 27.5%
Canpotex 27.5%
Demand CAGR 2014-2020: 7% Demand CAGR 2014-2020: 1.5% Demand CAGR 2014-2020: 4%
51
1
3
4
5
2
ICL Dead Sea – Raw Material Extraction
Pumping and
evaporation process
1
2
3
4
5
Phosphate Line of Business
ICL Rotem
ICL Germany
ICL Turkey
ICL The Netherlands
• Employees No. : 1,482 FTE’s
• 2014 production: Phosphate Rock : 3,375 K Tons, Fertilizers: 1,591 K Tons, Acid (P2O5): 475 K Tons
• Successful cost reduction plan implementation at ICL Rotem –labor down by 10%, while P2O5 production up by 15%
• Strategic alliance with Yunnan Yuntianhua signed by the end of 2014 will almost double ICL’s global phosphate business and improve our Phosphate competitive position
• World scale phosphate rock mine with Fully vertically integrated phosphate business and downstream operations
52
53
The Phosphate Market and ICL’s Position
43.0
46.4
- 0.2 0.2 0.4
1.7
1.2
2014consumption
USA China Brazil India RoW 2019consumption
Million tonnes P2O5
Source: CRU
We are active in the TSP, SSP and Phosphoric Acid
• TSP marketing focuses on Brazil, USA and Europe
SSP marketing focuses mainly on Brazil
• We are the largest supplier of PK fertilizers in Europe
• We plan to become a supplier of DAP in future
CAGR 2014-2019: 1.5%
54
What are Specialty Fertilizers?
Concentrated fertilizers with high efficiency used to:
Enhance yields Improve crop quality Save water Protect the environment
Main benefits: Integrate fertilizers with drip irrigation or
foliar Control consumption in open fields,
nurseries and lawns Optimize mix of major and minor
elements and trace elements Optimize plant performance
Usually tailored to specific needs of end-users
Specialties
Light
Specialties
Commodities
• Added value
• Higher prices
• Smaller volumes
• Selective distribution
Specialty Fertilizers vs. Commodities
CRF (Controlled Release Fertilizers)
WSNPK (Water Soluble Fertilizers)
NOP (Potassium Nitrate)
CN (Calcium Nitrate)
Soluble (MAP/MKP)
“Special NPK”
55
Overview ICL Specialty Fertilizers 2014: Sectors
Turf & Amenity Sportsfields, Golf and Landscape.
Specialty Agriculture Specialty Inputs for food crops
Ornamental Horticulture (OH) Container Nursery & Greenhouse
60%
21%
82
Sales by Market
60%
Others – Trading / Chemicals
60%
21%
8.5%
10.5%
56
Our Advantages
Supply chain
Production process-technology adding
value
Market position R&D Innovate the next generation
• Controlled release fertilizers • Fertigation and foliar solubles • Enhanced nutrients and water efficiency
• Back integrated • Access to high quality raw material • Efficient supply chain (high synergies)
• Highly professional Agronomic Sales team • Integrated and tailored service • Full product portfolio • Distributor loyalty • Strong Branding
57
Grow Our Core Business
Spain Phoenix
Africa /Ethiopia Danakhil project
UK Polysulphate
Africa /Ethiopia Potash for Growth
India Potash for life
China YTH
China YTH
Organic Growth
External Growth
SF Worldwide product development, crops and geographic
expansion
SF Worldwide Growth & innovation through M&A activity
Bulk Blend
Potash Business Line
Phosphate& Fertilizers Business Line
Specialty Fertilizers Business Line
58
Leverage Growth Opportunities in Potash
Canada, 36%
Russia 16%
Belarus 15%
China, 10%
ICL, 8%
Germany 6%
Other, 4%
Jordan 3%
Chile 3%
ICL’s Market Share, 2014 (Total Sales: 5.1 M Tons)
ICL will capture 9%-16% of Market growth (0.3% - 1.8% Market share growth).
2014 to 2025 Market growth: 18Mt ICL’s Projected growth (vs. 2014) : 1.6-2.8 M
Tonnes/Year to ~8 M tonnes
62 79 80
0
50
2014 2020 2025
Demand (KT)
Annual Growth rate: 2.9%
Source: CRU
Million Tonnes ICL Growth 2015-2025
1.3 ICL Iberia: Phoenix I-IV
0.1- 0.5 ICL Dead Sea
0- (0.8) ICL UK
1.0 ICL Africa
2.8-1.6 Total
59
60
ICL Iberia – Consolidation and Expansion
ICL Iberia operating capacity development - 2015-2027 (K tonnes)
• Phoenix I+ II (2017): capacity expansion of Suria to 1,080K tonnes, closure of Cabanasas mine, expansion of granular capacity to 1,030K tonnes.
• Phoenix III (2019): new crystallization plant aimed to expand Suria’s Center capacity by extra 200K tonnes of KCl and 500K tonnes of NaCl
• Phoenix IV (gradual, until 2024): a Brownfield project targeted to extend Suria’s Center production capacity by additional 1M tonnes of KCl
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
~1,000
~2,300
• Agreement with Akzonobel to produce and market 1.5M tonnes of vacuum Salt and 50K tonnes of white potash annually
61
Danakhil Potash Project - Ethiopia
Ethiopia
• Our gate to Africa
Acquisition of Allana will enable ICL to accelerate the development of Allana’s concession to mine potash in Ethiopia
Allana estimates that its Danakhil project could yield up to one million tonnes of potash production per year for 25 years
Over the past year ICL has accelerated its market development efforts in Africa by sponsoring the “potash for growth” program
ICL acquired full ownership of Allana potash (remaining 84%) for C$ 0.5 per share , C$ 137 million in total
Ethiopia
Location: Afar region, 800 km north of Addis Ababa, 600 km west of nearest port of Djibouti (export destination port); arid desert
ICL to Establish Bulk Blending Facilities Across Ethiopia to Support Demand Growth
Bulk Blending - fertilizer plant designed to blend several nutrients. The final formula is determined according to the crop needs and availability of nutrient in the soil
Several locations has been investigated
First Bulk Blend was already established in Tulu Bolo by the Ethiopian Government
Djibouti Port
Allana Potash
Oromia
Amhara
SNNP
Tigray Mekele
Nekemte
Tulu Bolo
Worabe
Bahar Dar
• Alternatives examined by ICL • Sites where the Ethiopian Government established or intend to
establish BB facilities without any private business partner
Fertilizers are considered as a strategic commodity in Ethiopia
The plants are design to serve an area of about 200Km radius, use 150 k tonnes of potash annually through various number of formulas
The Ethiopian Gov. is defining the preferred cooperation model between the public and private sectors
62
63
Polysulphate™: The Future of ICL UK
Readily available new natural fertilizer in the market containing four nutrients: Sulphur, Potassium, Magnesium and Calcium - a potential substitute to many fertilizers
0
100
200
300
400
500
600
700
2014 2015 2016 2017 2018 2019
Polysulphate TM production plan K Tonnes
50%
14% K
S
36% Mg+Ca
From Mine to Market, existing infrastructure, low production cost, high profit margins
Production target for 2019 – 1 million tonnes. Promising long term potential for up to 3 million tonnes
Reserves of more than 1 billion tonnes in the ICL UK potash mine
Already in the market, 50 k tonnes were sold in 2014. 2015 target: 150 k tonnes
With an investment of £ 40 million, infrastructure will support production of 600 K tonnes. Additional investment of £ 40 million for granulation facility
Environmentally friendly, used in its natural form. No chemical processing or waste products
Suitable for chloride sensitive crops. Geographical expansion – from Europe to Brazil, US and China
Approved for organic agriculture in the UK, EU and in the midst of an approval in the US
780.00
Specialty FertilizersKT p.a.
64
Strategic Alliance with Yunnan Yuntianhua– a Step Change to ICL’s Global Phosphate Business
Kunming
• 50% in a fully vertically integrated phosphate business including a world scale phosphate rock mine and integrated downstream operations.
• A 15% stake in Yunnan Yuntianhua Co. Ltd., China’s leading producer of phosphate rock and fertilizers.
3.50
0
1
2
3
4
5
6
7
Phosphate Rock, MT p.a.
2.5
3.5
6.0
30 years of Reserves
8 Years of Reserves
0250500750
1,0001,2501,5001,7502,0002,2502,5002,7503,000
Fertilizers KT p.a.
850
1,900
2,700
600.00
0250500750
1,0001,2501,5001,7502,0002,2502,5002,7503,000
Phosphoric AcidKT p.a.
700
600
1,300
780
115
0250500750
1,0001,2501,5001,7502,0002,2502,5002,7503,000
Specialty PhosphoricAcid
KT p.a.
290 60
350 895
ICL Standalone YTH Add. capacity
65
Improving Our Cost Position in Potash
ICL Iberia ICL UK
Co
st
2/3 of ICL’s effective capacity
Potash volume
*Source: CRU, McKinsey & Company, ICL estimates. Excluding Royalties
ICL Dead Sea ICL Africa
Future project
Potash Cash Cost Curve – FOB $ / Tonne * - Abstract Model
Improving Our Cost Position in Phosphate
66
Site
co
sts
Yunnan
Source: CRU, November 2014.
3 Open Pit Mines Restored Mine
Site Capacity
The strategic alliance in China will secure ICL's access to competitive phosphate rock for several decades
Cost reduction in ICL’s existing production base Establishing new low cost
phosphate base
Phosphate rock cost curve (abstract model):
67
ICL Specialty Fertilizers Strategy to Deliver High Growth Rates
4-6 % CAGR
1-2 % Market Growth
Ornamental Horticulture
6-8 % CAGR
0 % Market Growth Professional Turf
>10% CAGR
5-6 % Market Growth Specialty
Agriculture
1-3 % CAGR
1 % Market Growth
Chemicals
68
Growing Our Specialty Agriculture Business
Spec. Agriculture Controlled Release Fertilizer in Emerging Markets
Product Development and more trial data
Product Development & Technology
New production facilities
More feet on the ground
Focus on tropical crops
Investment in innovation
Enhance Innovation & Product Development
Next generation coating technology Unique fertigation and foliar solutions Enhanced nutrient & water efficiency technologies
INNOVATION
PRODUCT DEVELOPMENT & TECHNOLOGY
Proof of Performance with Authorities and Customers Open Innovation / Scouting for new ideas
1
REGULATORY & SUPPORT
2
3
69
Speed up “from project to market”
~ $ 15M investment/yr. in R&D and Product
Development
70
Produt Development Trials US$/acre Current practice CRF
Fertilizer volume (lbs N/acre) 60 40
Fertilizer costs 103 103
Application costs 43 20
Yield value 1,188 1,284
Net value1 1,042 1,160
(2 less)
(1/3 less)
(+11%)
Sugar production in Florida
+ 11 % income
2 fewer applications
33% less N
Adoption time 2-5 years
Has to taste fertilizer to check quality!
Proof of Performance and Market Education
Proof of performance
Market education: new technologies adoption
• Field Biology
• Product Evaluation
• Product development
• Trials
• Grower/Food industry
• Projects
Geographical Expansion
71
Production moves closer to Emerging Markets
High logistic synergies
Improve Yield & Quality
Innovative technology
Market education
Worldwide Agronomist team
Focus on Plants needs
Knowledge and experience in the market
Strategic alliance with YTH
Engineered Materials
Vast Global Footprint
73
2500 Employees worldwide
Of ICL sales in 2014
22% EMEA
Americas
Asia
Plant
Sales
R&D
Sales by region $1.3B sales in 2014
From Assets to Market
74
Bromine
Phosphorus
Mineral Salts
Magnesium
Chlorine
Flame Retardants
Energy and Intermediates
Microbial Solutions
Mineral Applications
Chemistries Key Markets
Back Integration to Customer Solutions
Global Trends Supporting Our Business
75
Population Regulation & Environmental Standard of living
FURNITURE & TEXTILE TRANSPORTATION
WATER TREATMENT
CONSTRUCTION
INTERMEDIATES FOR FOOD,
PHARMA, AGRO OIL & GAS
POWER PLANTS
ELECTRONICS
Global Cost Leader in Bromine
76
0.02 – 0.03 0.03 – 0.05 0.5 – 0.9
3.5 – 4.5 2.5 – 5.5
11.0 – 12.0 g/liter
UndergroundWells
(China)
Sea Water(China, Japan)
Shallow Sea(Ukraine)
Salt Lake(India)
UndergroundWells (U.S.)
Dead SeaOperations
(Israel, Jordan)
• The Dead Sea provides the highest concentration of Bromine
• Cost is related to concentration
• Abundant supply
Source: ICL estimates, MarketsandMarkets
A Global Leader in a Concentrated Market
77
ICL holds the largest capacity Global Bromine Capacity, by producer
280 280
120 120
95 91
92 88
93 83
64 69
2014 2019
Albemarle (Dead Sea)
ICL (Dead Sea)
Other
Albemarle (US)
Chemtura (US)
China
Bromine demand by industry - 2014
Market utilization rates: 70-80%
Flame retardants
41%
Brominated organic
intermediates 21%
Clear brine fluids 18%
Industrial 8%
Biocides 6%
Fumigants 3%
Mercury control
3%
744 731
Source: ICL estimates, MarketsandMarkets
ICL Industrial Products Market Leadership
78
Number 1 Market Positions
• #1 in Bromine capacity
• #1 in Bromine Iso-tank fleet
• #1 in Brominated biocides
• #1 in Phosphorus FRs
• #1 in Clear Brine Fluids
• #1 Self-extinguishing Hydraulic fluids
Leading Market Positions
• Flame Retardants
• Specialty Magnesia
• Magnesium Chloride
Flame Retardants Serve Attractive Markets and are Impacted by Regulatory Changes
79
Construction Market growth rate: 3-4%
Furniture & Textile Market growth rate: 4-5%
Transportation Market growth rate: 4-5%
Electronics Market growth rate: 2-3%
• Circuit boards, wiring, Housings • Demand stable to growing slightly
• Connectors, headliners, seat Components
• Demand growth in China and India
• Upholstery, industrial & military Fabrics, foam
• New generation products drive demand
• Insulation, paints & coatings, panelling • Growth driven by energy efficient
construction, introduction and enhancement of insulation standards
• Clear brine fluids : off-shore • Growth in Africa and the Far East
• Power plant turbines, hydraulic fluids for aviation
• Growing markets in China, India and Russia
• Further expansion in the US • Future growth in China and EU
Multiple Applications for the Energy Markets
80
• Increasing demand for green energy and smart grid
• Patented complexing agents
Oil and Gas Market growth rate: 2-3%
Functional Fluids Market growth rate: 2-3%
Mercury Emission Control Market growth rate: 10-20%
Energy Storage – new market
Strategy and Investment Highlights
81
Grow our core business: Organic growth Margin expansion Pricing Portfolio management
Cost reduction: Operational excellence Reduction of labor costs Divest non-core businesses
Advocacy: SAFR™ (Scientific
Assessment for Flame Retardants)
Flame retardants standards
Merquel® in China/EU
Grow the Bromine pie: In-house R&D Outside technical
collaborations Focus on customer unmet
needs to bring new products and solutions
The Future of Flame Retardants
An ICL-IP tool to measure the sustainability of FR usage according to the specific application
Not recommended
Recommended
Acceptable
Hazard
Exposure
Scientific Assessment for Flame Retardants
SAFR™
82
Grow Our Core Business
83
R&D Leadership
Environmental Leadership
• Next-generation Flame retardants: FR-122P, TexFRon, HF-10, SaFRon 6605, SOL-DP, FR-E0-16
• ZnBr Energy Storage formulations – commercial sales started
• New Biocides: Bronopol, Bromosol, Bactabrom
• ICL France new product: Scoralite DC
• Responsible Care®
• VECAP™ (Voluntary
Emissions Control Action Program)
• Greenhouse gas reduction
• 2015 launch of SAFR™
• Beta sites for Merquel ®mercury control in China and bromine battery technology in USA.
ICL Performance Products: Overview
84
Of ICL Sales in 2014*
25% 40%
32%
28%
Non Core
3,300 Employees Worldwide
Advanced Additives
Food Specialties
Sales by Business unit $1.5B sales in 2014
Americas 40%
Asia/Pacific 15%
EMEA 45%
ICL Performance Products: Advanced Additives Business
85
Engineered Materials
Leveraging ICL’s natural resources in a diverse portfolio of applications
Advanced Additives
Advanced Additives – A Stable Portfolio With Broad Applications
86
Advanced Additives – Main Strategic Goals
87
Geographic expansion
Expand through differentiation
Cost optimization:
lean & reliable
Advanced Additives – Geographic Expansion
88
Strengthen core activities in food, agriculture
and engineered materials markets
Nearly 50% increase in purified phosphoric
acid volumes
Broaden product portfolio, achieve greater
competitiveness and utilize synergies
Fosbrasil is the biggest producer of phosphoric acid in Latin America
Benefits
Advanced Additives – Geographic Expansion
89
A proven business model – convert commodities into specialties
Combining both companies‘ strengths and expertise
Expand end market reach into China, SE Asia, and India
Sales of Commodity versus Specialty ratio from 90%/10% to 50%/50%
Revenue growth from $550M to $700M and EBITDA expansion from low teens to high teens within 5 years.
The strategic alliance with Yunnan Yuntianhua presents tremendous opportunity for ICL to become a market leader in phosphates in China & Southeast Asia.
Benefits
Advanced Additives – Expand Through Differentiation
90
Class A Fire
ICL provides products and services that help prevent, control, and suppress fires
World-wide reputation A strong market position
2014 acquisition of Auxquimia: specialists in the Class B Foam for oil, refinery and chemical industry
Complete and broad portfolio Own testing facilities Fluorine free product innovations
Class B Fire
Fire Safety Products
Advanced Additives – Lean & Reliable: Fitting to Customer Needs
91
ICL is the only global manufacturer
High barriers to entry A solid customer base Platform with potential
for expansion with the JV with Yunnan Yuntianhua
Diphosphorous pentasulfide (P2S5) is an essential ingredient for modern lubricants
Food
ICL Performance Products: Food Specialties Business
Food
Leveraging our proprietary technology in the rapidly developing market space for creative food with unique ingredient systems
Food Specialties
94
Food Specialties – What We Do
Linking Markets with Consumer Trends
Sugar Fat
Sodium
Proteins Fibers
Minerals Antioxidants
Healthy Reduction versus Healthy Enhancements
Food Specialties- Increased Global Demand for Proteins
95
Upside potential for protein consumption
per capita
Brazil China
Ethiopia
Germany
India Indonesia
Nigeria
USA
40
60
80
100
120
0 500 1,000 1,500 2,000
Dai
ly P
rote
in /
Cap
ita
(g)
Population (mil)
3.0
7.7 0.45
0.2
'60 '70 '80 '90 '00 '10 '20P
Ara
ble
Lan
d (
ha/
cap
ita)
Wo
rld
Po
pu
lati
on
(b
ilio
ns)
The world population grows, and the arable
land per capita decreases
Decade
Source: GS&PA Research, FAO
96
Food Specialties – Main Strategic Goals
Bakery & Cereals
Dairy
Meat, Poultry, Seafood
Beverage
Starches & Fibres
Soy & Pea Protein
Phosphates
Dairy Protein
Food Specialties 1. Add synergistic technology platforms
2. Geographic expansion
3. Transforming ICL Food Specialties into
a global formulator of texture &
stability solutions:
Phosphates
Sourced ingredients
Integrated formulation of
solutions
Customers
Sale of solutions
Dairy proteins
Food Specialties – Add Technology Platforms: Whey Proteins in Europe
97
Acquisition of Prolactal/Rovita in Q1/2015 is a big step in implementing the strategy
2014 annual revenue of $110 M; market growth of approximately 10% annually
Proprietary technology can be expanded into other regions
Dair
y
Meat/
Po
ult
ry
/ S
eafo
od
Bakery
Bevera
ge
Phosphate Salts
Whey Proteins
Vegetable Proteins
Spices
Efficiency and Operational Excellence
Efficiency Strategy Projects Overview
99
Procurement
Energy
CAPEX
Pricing
R&D
ACE – Ambition Creates Excellence
Manufacturing excellence
Improved cost position/ cost per ton
Increased production/process optimization/yield increase
Operational Excellence
Procurement
Finance & tax
IT
HR
Legal & compliance
Shared Services
ACE Drives Functional Excellence in 5 Key Processes
Pricing
ACE streams
Energy efficiency
Procurement
CAPEX (investment)
R&D
AC
E
Current Status
Establishment of the commercial excellence
program.
Establishment of a new global function: CIO
Establishment of a new global function: CTO
Establishment of a new global function: CPO
Ongoing efforts
Volume Activity
~ $6000 million of Revenues
Annual spending: ~ $400 million
Annual spending: ~ $4000 million
Annual CAPEX spending: ~ $800 million
~ $6000 million of Revenues
Asset productivity
Revenue increase
Cost reduction
ICL’s core value creation drivers
100
Procurement Savings: Three Potential Levers
What did we do? • One global ICL
approach – regions & management level
• Coordination alignment between global and regional
• Excellent global team work
• Exploration of supply options over the entire value chain
• One global contract or no contract
Result: • Annual saving: $2.1 M
(25%) • Global contract for the
US, Israel & Europe
AC
E
Supplier management
Process management
Demand management
Volume consolidation
Supplier partnerships
Negotiation
Transportation agreements
Make-or-buy opportunities
Simplify specifications to fulfill (not exceed) requirements
Find "replacements" and alternative technologies
Manage service levels/demand
Reduce waste
Success story- Phenol contract
101
As project progresses, budget is committed, ability to change project decisions/add value decreases:
100%
Low
High
Project life cycle
0%
CAPEX Value Engineering
A systematic and structured approach for improving projects, products, and processes
Used to analyze and improve manufacturing products and processes, design and construction projects
Helps achieve an optimum balance between function, performance, quality, safety and cost
The proper balance results in the maximum value for the project
AC
E
Ability to improve value
Commitment of funds
CAPEX value engineering:
Potential cash flow contribution: ~$100M
102
Operational excellence
Key Value Drivers Project
Improve bottom-line performance and ICL’s cost position through promoting manufacturing excellence
Further Tools
■ Efficiency proposals
■ Improvement teams
■ 6 sigma teams
■ Quality cost model
Lean Manufacturing
■ New, lean manufacturing process
■ Accompanied by consultants
Operational Excellence – Scope O
pera
tio
nal E
xcell
en
ce
Improve the competitiveness of our product portfolio in the global markets
Cost structure improvement/cost per tonne reduction
Increased production/process optimization/yield increase
103
Finance & Tax
Procurement
IT
HR
Legal & Compliance
Europe:
• Number of countries: 18
• Number of employees: ~ 4,900 (39%)
• Number of companies: 86
Americas:
• Number of countries: 6
• Number of employees: ~ 1,500 (12%)
• Number of companies: 19
Israel:
• Number of companies: 9
• Number of employees: ~5,000 (40%)
China
• Number of employees: 614 (5%)
• Number of companies: 10
Shared Services Overview
Israel SHS
China SHS
Europe SHS Americas SHS
Israel SHS
SH
S
Shared services center mission: A center enabler of ICL’S Next Step Forward strategy, serving ICL business in a quality, cost effective manner, providing timely, valuable and consistent service.
104 * All data is as of 2014
Shared Services Contribution
Reduce and optimize
labor costs
Increase and optimize
productivity
Meet and exceed
service quality levels
Drive centralization as
part of "One ICL"
Vision
Full time employees
50
91
158 184 188
2015 2016 2017 2018 2019
Accumulated employee reduction
Accumulated annual savings
Accumulated Savings ($M)
8
14
24
28 28
2015 2016 2017 2018 2019
SH
S
105
Thank you