Washington, D.C. 20549
ICL GROUP LTD.
ICL Group Ltd.
P.O. Box 20245
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
This report on Form 6-K shall be deemed to be incorporated by reference into the registration statement on Form S-8 (Registration Number: 333-205518) of ICL
Group Ltd. and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished. In addition, this report on Form 6-K shall be deemed to be incorporated by
reference into the Israeli Shelf Prospectus of ICL Group Ltd. filed with the Israel Securities Authority and dated February 28, 2022 (Filing Number: 2022-02-019821) and to be a part thereof from the date on which this report is filed, to the extent
not superseded by documents or reports subsequently filed or furnished.
ICL GROUP LTD.
ICL Reports First Quarter 2024 Results
Delivers solid sequential quarterly improvement in
sales of $1.7 billion
and adjusted EBITDA of $362 million
Tel Aviv, Israel,
May 9, 2024 – ICL (NYSE: ICL) (TASE: ICL), a leading global specialty minerals company, today reported its financial results for the first quarter ended March 31, 2024. Consolidated sales were $1.7 billion versus $2.1 billion in the first
quarter of last year. Operating income was $203 million versus $465 million, while adjusted operating income was $215 million versus $480 million. Adjusted EBITDA was $362 million versus $610 million in the first quarter of last year. Diluted
earnings per share were $0.08 versus $0.22, and adjusted diluted EPS was $0.09 versus $0.23.
“ICL delivered solid first quarter results, with sequential
improvement in quarterly sales and adjusted EBITDA, as global demand stabilized and the majority of our end-markets began to show signs of recovery. Additionally, we have been able to limit the impact for most of the war-related disruptions,” said
Raviv Zoller, president and CEO of ICL. “During the first quarter, we continued to focus on innovation, expanding our specialties product portfolio and entering into new strategic partnerships, while executing consistently on our efficiency program
and achieving further cost reductions. These efforts help us to provide consistent strong cash generation and industry leading dividend distributions to our shareholders.”
The company reiterated its guidance for full year 2024, which calls
for the specialties-driven segments adjusted EBITDA to be between $0.7 billion to $0.9 billion. For potash, the company continues to expect 2024 sales volumes to be between 4.6 million metric tons and 4.9 million metric tons. (1a)
Financial Results and Business Overview
This Financial Results and Business Overview is based on the Company’s
unaudited interim condensed consolidated financial statements as of and for the three-month period ended March 31, 2024 (hereinafter - Interim Financial Statements), and is prepared in
accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting”, unless otherwise
stated. The Financial Results and Business Overview contains certain non‑IFRS financial measures and forward-looking statements, which are described in the “Financial Figures and non‑GAAP
Financial Measures” section and the “Forward-looking Statements” section, respectively.
About ICL
ICL Group Ltd. is a leading global specialty minerals company which
creates impactful solutions for humanity’s sustainability challenges in the food, agriculture, and industrial markets. ICL leverages its unique bromine, potash, and phosphate resources, its global professional workforce, and its sustainability
focused R&D and technological innovation capabilities, to drive the Company's growth across its end markets. ICL shares are dual listed on the New York Stock Exchange and the Tel Aviv Stock Exchange (NYSE and TASE: ICL). The Company employs
more than 12,000 people worldwide, and its 2023 revenues totaled approximately $7.5 billion. For more information, visit the Company's website at www.icl-group.com[1].
[1] The reference to our website is intended to be an inactive textual reference and the information on, or accessible through, our website is not intended to be part of this Form 6-K.
2 ICL Group Limited Q1 2024 Results
Financial Figures and non-GAAP Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income (1)
|
|
|
|
|
|
|
Net income attributable to the Company's shareholders
|
|
|
|
|
|
|
Adjusted net income attributable to the Company’s shareholders (1)
|
|
|
|
|
|
|
Diluted earnings per share (in dollars)
|
|
|
|
|
|
|
Diluted adjusted earnings per share (in dollars) (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
Purchases of property, plant and equipment and intangible assets (4)
|
|
|
|
|
|
|
|
(1) |
See “Adjustments to Reported Operating and Net income (non-GAAP)” below.
|
|
(2) |
See "Adjusted EBITDA and Diluted Adjusted Earnings Per Share for the periods of activity" below.
|
|
(3) |
In Q1 2024, the Company’s adjusted EBITDA was positively impacted by an immaterial accounting reclassification. For further information, see below in our Potash segment results.
|
|
(4) |
See “Condensed consolidated statements of cash flows (unaudited)” in the accompanying financial statements.
|
We disclose in this quarterly report non-IFRS
financial measures titled adjusted operating income, adjusted net income attributable to the Company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA. Our management uses adjusted operating income, adjusted net income
attributable to the Company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA to facilitate operating performance comparisons from period to period. We calculate our adjusted operating income by adjusting our operating income
to add certain items, as set forth in the reconciliation table under “Adjustments to reported operating, and net income (non-GAAP)” below. Certain of these items may recur. We calculate our adjusted net income attributable to the Company’s
shareholders by adjusting our net income attributable to the Company’s shareholders to add certain items, as set forth in the reconciliation table under “Adjustments to reported operating, and net income (non-GAAP)” below, excluding the total tax
impact of such adjustments. We calculate our diluted adjusted earnings per share by dividing adjusted net income by the weighted-average number of diluted ordinary shares outstanding. Our adjusted EBITDA is calculated as net income before financing
expenses, net, taxes on income, share in earnings of equity-accounted investees, depreciation and amortization, and certain adjustments presented in the reconciliation table under “Consolidated adjusted EBITDA, and diluted adjusted Earnings Per
Share for the periods of activity” below, which were adjusted for in calculating the adjusted operating income.
3 ICL Group Limited Q1 2024 Results
You should not view adjusted operating income,
adjusted net income attributable to the Company’s shareholders, diluted adjusted earnings per share or adjusted EBITDA as a substitute for operating income or net income attributable to the Company’s shareholders determined in accordance with IFRS,
and you should note that our definitions of adjusted operating income, adjusted net income attributable to the Company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA may differ from those used by other companies.
Additionally, other companies may use other measures to evaluate their performance, which may reduce the usefulness of our non-IFRS financial measures as tools for comparison. However, we believe adjusted operating income, adjusted net income
attributable to the Company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA provide useful information to both management, and investors by excluding certain items that management believes are not indicative of our ongoing
operations. Our management uses these non-IFRS measures to evaluate the Company's business strategies and management performance. We believe that these non‑IFRS measures provide useful information to investors because they improve the comparability
of our financial results between periods and provide for greater transparency of key measures used to evaluate our performance.
(1a) The Company only provides
guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting, and quantifying certain amounts that are necessary
for such reconciliation, in particular, because special items such as restructuring, litigation, and other matters, used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a
GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material, and therefore could result in projected GAAP net income
(loss) being materially less than projected adjusted EBITDA (non-GAAP). The guidance speaks only as of the date hereof. We undertake no obligation to update any of these forward-looking statements to reflect events or circumstances after the date
of this news release or to reflect actual outcomes, unless required by law. The Company provides guidance for Specialties-driven Adjusted EBITDA, which includes Industrial Products, Growing Solutions and
Phosphate Solutions, as the Phosphate Solutions business is now predominantly specialties-focused. For our Potash business we provide sales volumes guidance. The Company believes this information provides greater transparency, as these new
metrics are less impacted by fertilizer commodity prices, given the extreme volatility in recent years.
We present a discussion in the period-to-period
comparisons of the primary drivers of change in the Company’s results of operations. This discussion is based in part on management’s best estimates of the impact of the main trends on our businesses. We have based the following discussion on our
financial statements. You should read such discussion together with our financial statements.
Adjustments to Reported Operating and Net income (non-GAAP)
|
|
|
|
|
Charges related to the security situation in Israel (1)
|
|
|
|
Write-off of assets and provision for site closure (2)
|
|
|
|
Provision for early retirement (3)
|
|
|
|
|
|
|
|
|
Total adjustments to operating income
|
|
|
|
Adjusted operating income
|
|
|
|
Net income attributable to the shareholders of the Company
|
|
|
|
Total adjustments to operating income
|
|
|
|
Total tax adjustments (5)
|
|
|
|
Total adjusted net income - shareholders of the Company
|
|
|
|
|
(1) |
For 2024 and 2023, reflects charges relating to the security situation in Israel related to the war, which commenced on October 7, 2023.
|
|
(2) |
For 2023, reflects mainly a write-off of assets related to restructuring at certain sites, including site closures and facility modifications, as
part of the Company’s global efficiency plan.
|
|
(3) |
For 2023, reflects provisions for early retirement, due to restructuring at certain sites, as part of the Company’s global efficiency plan.
|
|
(4) |
For 2023, reflects a reversal of a legal provision.
|
|
(5) |
For 2024 and 2023, reflects the tax impact of adjustments made to operating income.
|
Consolidated adjusted EBITDA and diluted adjusted Earnings Per Share
for the periods of activity
Calculation of adjusted EBITDA was made as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Share in earnings of equity-accounted investees
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA (2)
|
|
|
|
|
(1) |
See "Adjustments to Reported Operating and Net income (non-GAAP)" above.
|
|
(2) |
In Q1 2024, the Company’s adjusted EBITDA was positively impacted by an immaterial accounting reclassification. For further information, see
below in our Potash segment results.
|
Calculation of diluted adjusted earnings per share was made as
follows:
Net income attributable to the Company's shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income - shareholders of the Company
|
|
|
|
Weighted-average number of diluted ordinary shares outstanding (in thousands)
|
|
|
|
Diluted adjusted earnings per share (in dollars) (2)
|
|
|
|
|
(1) |
See "Adjustments to Reported Operating and Net income (non-GAAP)" above.
|
|
(2) |
The diluted adjusted earnings per share are calculated as follows: dividing the adjusted net income attributable to the shareholders of the
Company by the weighted-average number of diluted ordinary shares outstanding (in thousands).
|
Events in the reporting period
The security situation in Israel since October 2023, when the Israeli
government declared a state of war in response to attacks on civilians, has posed several challenges. These include some disruptions in supply chains, a shortage of personnel due to mobilization for reserve duty, and fluctuations in foreign
currency exchange rates relative to the Israeli shekel.
Regional tensions involving Houthis attacks on commercial ships have
intensified, affecting shipping operations in the Red Sea, leading to some delays in shipments as well as increased shipping costs.
The Company has taken measures to ensure the safety of its employees
and business partners, as well as the communities in which it operates, to minimize any potential impact on its business, including avoidance of disruption to production activities at its facilities in Israel.
The security situation in recent months has not had a material impact
on the Company's business results. As of today, the majority of the Company’s employees in Israel who were called up for reserve duty have returned to full-time work.
However, as the developments related to the war, as well as its
duration, are unpredictable, the Company is unable to estimate the extent of the war’s potential impact on its future business and results. The Company continuously monitors developments and will take all necessary actions to minimize any negative
consequences to its operations and assets.
Consolidated Results Analysis
Results analysis for the period January – March 2024
* See "Adjustments to reported Operating and Net income (non-GAAP)"
above.
|
- |
Quantity – The positive impact on operating income was primarily related to an increase in sales volumes of potash, magnesium,
bromine-based flame retardants, elemental bromine, FertilizerpluS products, turf & ornamental products, and MAP used as a raw material for energy storage solutions. This impact
was partially offset by lower sales volumes of white phosphoric acid (WPA) and phosphate-based food additives.
|
|
- |
Price – The negative impact on operating income was primarily related to a decrease of $217 in the price of potash (CIF) per tonne
year-over-year, as well as a decrease in selling prices of magnesium, specialty agriculture and FertilizerpluS products, bromine-based industrial solutions, bromine and phosphorous-based flame retardants, specialty minerals products, WPA,
salts, phosphate-based food additives and MAP used as a raw material for energy storage solutions.
|
|
- |
Exchange rates – The favorable impact on operating income was mainly due to the positive impact on operational costs resulting from the
depreciation of the average exchange rate of the Israeli shekel and the Chinese yuan against the US dollar, as well as a positive impact on sales, which resulted from the appreciation of the average exchange rate of the euro and the
Brazilian real against the US dollar, partially offset by a negative impact resulting from the above-mentioned depreciation.
|
|
- |
Raw materials – The positive impact on operating income was primarily due to lower costs of sulphur, commodity fertilizers, caustic soda
and potassium hydroxide (KOH).
|
|
- |
Energy – The positive impact on operating income was due to decreased electricity and gas prices.
|
|
- |
Operating and other expenses – The positive impact on operating income was primarily due to lower maintenance and operational costs, as
well as lower marketing costs.
|
8 ICL Group Limited Q1
2024 Results
The following table sets forth sales by geographical regions based on
the location of the customers:
|
- |
Europe – The decrease in sales was primarily due to lower selling prices and sales volumes of white phosphoric acid (WPA), bromine-based
industrial solutions, bromine-based flame retardants and specialty minerals products, as well as lower sales prices of potash, magnesium, specialty agriculture and FertilizerpluS products, phosphate fertilizers, salts and phosphate-based
food additives. The decrease was partially offset by higher sales volumes of the above-mentioned products, together with a positive impact on sales resulting from the appreciation of the average exchange rate of the euro against the US
dollar.
|
|
- |
Asia – The decrease in sales was primarily due to lower selling prices and sales volumes of specialty agriculture products, phosphate
fertilizers and specialty minerals products, as well as lower selling prices of bromine-based flame retardants, bromine-based industrial solutions and potash. The decrease was partially offset by higher sales volumes of bromine-based flame
retardants, bromine-based industrial solutions, MAP used as a raw material for energy storage solutions, and potash.
|
|
- |
North America – The decrease in sales was primarily due to lower sales volumes and selling prices of WPA, phosphate-based food additives,
salts, magnesium, phosphorous-based industrial solutions and phosphorous-based flame retardants, as well as lower sales prices of phosphate fertilizers, potash, specialty agriculture and turf & ornamental products, and clear brine fluids. This was partially offset by higher sales volumes of potash, specialty agriculture and turf & ornamental products, clear brine fluids and phosphate
fertilizer.
|
|
- |
South America – The decrease in sales was primarily due to lower selling prices and sales volumes of potash, specialty agriculture products
and WPA, as well as lower sales volumes of phosphate fertilizers and FertilizerpluS products. The decrease was partially offset by a positive impact on sales resulting from the appreciation of the average exchange rate of the Brazilian real
against the US dollar.
|
|
- |
Rest of the world – The increase in sales was primarily due to higher sales volumes of bromine-based industrial solutions, phosphate
fertilizers and potash, partially offset by lower selling prices of the above-mentioned products, as well as lower sales volumes and selling prices of specialty agriculture products.
|
Financing expenses, net
Net financing expenses in the first quarter of 2024 amounted to $35
million compared to $44 million in the corresponding quarter last year, a decrease of $9 million. This decrease is mainly due to a reduction of $16 million in losses from hedging transactions, partially offset by a decrease of $6 million in income
from long-term employee benefits provisions and lease revaluation, resulting from lower depreciation of the Israeli shekel against the US dollar compared to the corresponding period.
Tax expenses
In the first quarter of 2024, the Company’s reported tax expenses
amounted to $42 million, compared to $127 million in the corresponding quarter of last year, reflecting an effective tax rate of 25% and 30%, respectively. The Company’s relatively low effective tax rate for this quarter was mainly due to a lower
surplus profit levy and higher profit deriving from tax jurisdictions with lower effective tax rates.
Segment Information
Industrial Products
The Industrial Products segment produces bromine from a highly
concentrated solution in the Dead Sea and bromine‑based compounds at its facilities in Israel, the Netherlands and China. In addition, the segment produces several grades of salts, magnesium chloride, magnesia-based products, phosphorus-based products and functional fluids.
Results of operations and key indicators
|
|
|
|
|
Sales to external customers
|
|
|
|
Sales to internal customers
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights and business environment
|
• |
Elemental bromine sales decreased year-over-year due to lower bromine prices, partially offset by higher volumes.
|
|
• |
Clear brine fluids sales decreased year-over-year, due to lower volumes.
|
|
• |
Bromine-based flame retardants sales increased year-over-year, with higher volumes partially offset by lower prices, as demand in the electronics
and construction end-markets remained weak.
|
|
• |
Phosphorus-based flame retardants sales decreased year-over-year due to soft demand and strong Chinese competition in the construction end-market.
|
|
• |
Specialty minerals sales decreased year-over-year, driven by lower sales of KCl due to reduced prices and volumes, heightened competition, and
lower volumes of Magnesium Chloride for deicing due to unfavorable weather conditions which was partially offset by higher prices.
|
Results analysis for the period January – March 2024
|
- |
Quantity – The positive impact on operating income was primarily related to an increase in sales volumes of elemental bromine and
bromine-based flame retardants. This was partially offset by lower sales volumes of specialty minerals and phosphorus-based industrial solutions.
|
|
- |
Price – The negative impact on operating income was primarily due to lower selling prices of bromine-based industrial solutions, bromine and phosphorus-based flame retardants, and specialty minerals.
|
|
- |
Exchange rates – The favorable impact on operating income was mainly due to the positive impact on operational costs resulting from the
depreciation of the average exchange rate of the Israeli shekel against the US dollar.
|
|
- |
Raw materials – The positive impact on operating income was due to a decrease in costs of raw materials.
|
|
- |
Operating and other expenses – The positive impact on operating income was primarily related to lower maintenance and operational costs.
|
Potash
The Potash segment produces and sells mainly potash, salts, magnesium
and electricity. Potash is produced in Israel using an evaporation process to extract potash from the Dead Sea at Sodom, and in Spain using conventional mining from an underground mine. The segment also produces and sells pure magnesium, magnesium
alloys and chlorine. In addition, the segment sells salt products produced at its potash site in Spain. The segment operates a power plant in Sodom, which supplies electricity and steam to
ICL facilities in Israel (surplus electricity is sold to external customers).
Results of operations and key indicators
|
|
|
|
|
Potash sales to external customers
|
|
|
|
Potash sales to internal customers
|
|
|
|
Other and eliminations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potash price - CIF ($ per tonne)
|
|
|
|
|
(1) |
Primarily includes salt produced in Spain, metal magnesium-based products, chlorine,
and sales of surplus electricity produced by ICL’s power plant at the Dead Sea in Israel.
|
|
(2) |
In Q1 2024, following an immaterial accounting reclassification of certain assets, the Potash segment's EBITDA increased by $16 million.
|
Highlights and business environment
|
• |
ICL's potash price (CIF) per tonne of $324 in the quarter was 6% lower than the fourth quarter of 2023 and 40% lower year-over-year.
|
|
• |
The Grain Price Index decreased by 2.2% during the quarter. Corn, soy and wheat prices were 9.7%, 8.2% and 6.3% lower, respectfully, while rice
prices continued to strengthen, rising by 6.8%.
|
|
• |
The WASDE (World Agricultural Supply and Demand Estimates) report, published by the USDA in April 2024, showed a continued decrease in the
expected ratio of global inventories of grains to consumption to 27.5.% for the 2023/24 agriculture year, compared to 28.3% for the 2022/23 agriculture year and 28.4% for the 2021/22 agriculture year.
|
Additional segment information
Global potash market - average prices and imports:
|
|
|
|
|
|
|
|
Granular potash – Northwest Europe
|
CIF spot/contract
(€ per tonne)
|
|
|
|
|
|
Standard potash – Southeast Asia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sources: CRU (Fertilizer Week April 2024),
FAI, SIACESP (Brazil), & Chinese customs.
Potash – Production and Sales
|
|
|
|
|
Total sales (including internal sales)
|
|
|
|
|
|
|
|
|
First quarter 2024
|
- |
Production – Production was 61 thousand tonnes higher year-over-year, mainly due to operational improvements.
|
|
- |
Sales – The quantity of potash sold was 121 thousand tonnes higher year-over-year mainly due to increased sales volumes to the US, Europe,
and India, partially offset by lower sales volumes to Brazil and China.
|
Results analysis for the period January – March 2024
|
- |
Quantity – The positive impact on operating income was primarily related to an increase in sales volumes of potash to the US, Europe, and
India, as well as an increase in sales volumes of magnesium, partially offset by lower sales volumes of potash to Brazil and China.
|
|
- |
Price – The negative impact on operating income resulted primarily from a decrease of $217 in the price per tonne of potash (CIF), year
over year.
|
|
- |
Exchange rates – The favorable impact on operating income was due to a positive impact on operational costs resulting from the depreciation
of the average exchange rate of the Israeli shekel against the US dollar, as well as a positive impact on sales resulting from the appreciation of the average exchange rate of the euro against the US dollar.
|
|
- |
Energy – The positive impact on operating income was primarily due to a decrease in gas and electricity prices.
|
|
- |
Operating and other expenses – The positive impact on operating income was primarily related to lower marketing and operational costs.
|
Phosphate Solutions
The Phosphate Solutions segment operates ICL's phosphate value chain
and uses phosphate rock and fertilizer-grade phosphoric acid to produce phosphate-based specialty products with higher added value, as well as to produce and sell phosphate-based fertilizers.
Results of operations and key indicators (1)
|
|
|
|
|
Sales to external customers
|
|
|
|
Sales to internal customers
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
In alignment with the Company’s efficiency plan, which includes a change of reporting responsibilities as of January 2024, the results of a
non-phosphate related business were allocated from the Phosphate Solutions segment to Other Activities. Comparative figures have been restated to reflect the organizational change in the reportable segments.
|
|
(2) |
For Q1 2024, Phosphate Specialties comprised $320 million of segment sales, $44 million of operating income, $12 million of D&A and
represented $56 million of EBITDA, while Phosphate Commodities comprised $239 million of segment sales, $40 million of operating income, $35 million of D&A and represented $75 million of EBITDA.
|
Significant Highlights
|
• |
Phosphate pricing remained firm in the first quarter of 2024 with key benchmarks averaging 3% higher quarter-over-quarter. However, towards the
end of the quarter, negative fundamentals and sentiment began to emerge. India’s decision to decrease subsidies before the "kharif" crop, the closure of the fertilizers import window ahead of northern hemisphere planting, and China’s
re-entry into international markets, all led to lower prices in the second half of March.
|
|
• |
Developments in key markets are described in detail below:
|
|
- |
Chinese DAP exports decreased sharply in January and February following the National Development and Reform Commission's (NDRC) decision to
suspend export applications, aiming to ensure sufficient domestic fertilizer supplies for spring planting, and thus moderate local pricing pressure. As a result, export availability remained limited, keeping FOB prices firm. Towards the end
of March, the suspension policy was revised, and exports became available, leading to a decrease in global prices.
|
|
- |
The Indian government reduced subsidies for DAP. As a result, local distribution margins remained negative, weighing on first quarter imports,
which subsequently decreased sharply. Although DAP prices averaged $593/t for most of the quarter, they dropped by $20 in late March, following China’s change in its export policy.
|
|
- |
For most of the past year, US demand for processed phosphates exceeded expectations, resulting in decreased domestic stocks and increased first
quarter imports and prices. According to provisional trade data, the US imported close to 1Mt in the first quarter of 2024, compared to 0.7Mt. DAP FOB Nola prices peaked at $717/t early in March, before decreasing to $645/t at the end of
the quarter, as the import window for spring planting passed.
|
|
- |
While soy prices in Mato Grosso decreased by a third, MAP CFR Brazil prices reached 570/t at the end of the quarter, reflecting a $7/t increase
compared to the corresponding quarter. This trend is supply-driven, as limited arrivals from Morocco, the US and Saudi Arabia tightened local availability.
|
|
• |
Indian phosphoric acid prices are negotiated on a quarterly basis. The first quarter price was agreed at $968/t P2O5, $17 lower than the fourth
quarter of 2023.
|
|
• |
Sulphur FOB Middle East price reached $83/t at the end of March, up from $77/t at the beginning of the quarter, as higher freight costs eroded
netbacks.
|
|
• |
While food specialties volumes in Europe increased year-over-year, global sales declined due to reduced volumes in the Americas and lower prices
worldwide. Similarly, industrial salts sales decreased year-over-year, driven by lower prices in key markets and reduced volumes in North America, partially offset by higher volumes in Europe.
|
|
• |
Sales of white phosphoric acid (WPA) decreased year-over-year due to decreased selling prices in all regions.
|
|
• |
Sales of battery materials in Asia increased year-over-year, as the Company continues to execute on its long-term strategy to provide commercial
solutions for the energy storage systems (ESS) market. The increase in sales was driven mainly by higher sales volumes.
|
Additional segment information
Global phosphate commodities market - average prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPT Brazil inland 18-20% P2O5 Bulk Spot
|
|
|
|
|
|
|
|
Bulk FOB Adnoc monthly Bulk contract
|
|
|
|
|
|
Source: CRU (Fertilizer Week Historical
Prices, April 2024).
Results analysis for the period January – March 2024
|
- |
Quantity – The negative impact on operating income was due to lower sales volumes of white phosphoric acid (WPA), phosphate-based food
additives and salts. This was partially offset by higher sales volumes of specialty raw materials used for energy storage solutions.
|
|
- |
Price – The negative impact on operating income was primarily related to lower selling prices of WPA, phosphate fertilizers,
phosphate-based food additives, salts and specialty raw materials used for energy storage solutions.
|
|
- |
Exchange rates – The favorable impact on operating income was mainly related to the positive impact on operational costs resulting from the
depreciation of the average exchange rate of the Chinese yuan and the Israeli shekel against the US dollar, which was partially offset by the negative impact on sales resulting from the depreciation of the average exchange rate of the
Chinese yuan against the US dollar.
|
|
- |
Raw materials – The positive impact on operating income was due to lower costs of sulphur, caustic soda and potassium hydroxide (KOH).
|
|
- |
Operating and other expenses – The positive impact on operating income was primarily related to lower maintenance and operational costs.
|
Growing Solutions
The Growing Solutions segment aims to achieve global leadership in
plant nutrition by enhancing its position in its core markets of specialty agriculture, ornamental horticulture, turf and landscaping, fertilizers and FertilizerpluS, and by targeting high-growth markets such as Brazil, India, and China. The
segment also looks to leverage its unique R&D capabilities, substantial agronomic experience, global footprint, backward integration to potash, phosphate and polysulphate and its chemistry know-how, as well as its ability to integrate and
generate synergies from acquired businesses. The segment continuously works to expand its broad portfolio of specialty plant nutrition, plant stimulation and plant health solutions, which consist of enhanced efficiency and controlled release
fertilizers (CRF), water-soluble fertilizers (WSF), liquid fertilizers and straights (MKP/MAP/PeKacid), FertilizerpluS, soil and foliar micronutrients, secondary nutrients, biostimulants, soil conditioners, seed treatment products, and adjuvants.
Results of operations and key indicators
|
|
|
|
|
Sales to external customers
|
|
|
|
Sales to internal customers
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlights and business environment
|
• |
FertilizerpluS: Sales decreased year-over-year due to lower prices, partially offset by higher sales volumes, mainly in Europe. However, sales
volumes in Brazil decreased due to lower demand.
|
|
• |
Specialty Agriculture (SA): Sales decreased year-over-year, due to lower prices, partly offset by higher sales volumes, mainly in CRF and water
soluble NPK, with increased demand in Europe and the US.
|
|
• |
Turf and Ornamental (T&O): Sales increased year-over-year, mainly due to increased sales of ornamental horticulture, impacted by favorable
weather conditions, especially in Northern Europe and the US, which led to increased demand- mainly for CRF and WSF. Conversely, turf and landscape sales slightly decreased due to cautious distributors behavior driven by wet European
conditions, impacting the application rate, and leading to reduced sales to end-users.
|
|
• |
ICL Boulby: The production of Polysulphate decreased by 17% year-over-year, with production reaching 216 thousand tonnes.
|
Results analysis for the period January – March 2024
|
- |
Quantity – The positive impact on operating income was primarily due to higher sales volumes of turf and ornamental, FertilizerpluS and specialty agriculture products.
|
|
- |
Price – The negative impact on operating income was primarily due to lower selling prices across most product lines, mainly specialty
agriculture and FertilizerpluS products.
|
|
- |
Exchange rates – The favorable impact on operating income was primarily due to the positive impact on sales resulting from the appreciation
of the average exchange rate of the Brazilian real and the euro against the US dollar, which slightly exceeded their negative impact on operational costs.
|
|
- |
Raw materials – The positive impact on operating income was primarily related to lower costs of commodity fertilizers, potassium hydroxide
(KOH), caustic soda and ammonia.
|
|
- |
Operating and other expenses – The positive impact on operating income was primarily related to lower maintenance and operational costs.
|
Liquidity and Capital Resources
Net cash provided by operating activities
In the quarter,
cash flow provided by operating activities amounted to $279 million, compared to $382 million in the corresponding quarter last year. This decrease was mainly due to lower operating profit, partially offset by reduced tax payments.
Net cash used in investing activities
In the quarter, net cash used in investing activities amounted to $102
million, compared to $204 million in the corresponding quarter last year. This decrease was mainly due to proceeds received from deposits and from the sale of an investee, which was partially offset by net cash paid for a business combination.
Net cash used in financing activities
In the quarter, net cash used in financing activities amounted to $229
million, compared to $47 million in the corresponding quarter last year. This increase was mainly due to the repayment of long-term debt, which was partially offset by lower dividend
payments.
In January 2024, the Company repaid, as scheduled, $145 million in a private placement bond.
In March 2024, the Company repaid, as scheduled, NIS 392 million
(approximately $108 million) of its Series E Bond.
As of March 31, 2024, ICL’s net financial liabilities amounted to
$2,022 million, a decrease of $73 million compared to December 31, 2023.
Sustainability-linked Revolving Credit Facility (RCF)
In April 2023, the Company entered into a Sustainability-Linked
Revolving Credit Facility Agreement made between ICL Finance B.V. and a consortium of twelve international banks for a $1,550 million credit facility.
As of March 31, 2024, the Company had utilized $454 million out of the
$1,550 million. Subsequent to the date of this report, in April 2024, all lenders exercised the option to extend the agreement by one year, until April 2029.
Securitization
The total amount of the Company's committed securitization facility
framework is $300 million, with an additional $100 million that is uncommitted. As of March 31, 2024, ICL had utilized approximately $175 million of the facility’s framework.
21 ICL Group Limited Q1 2024 Results
Ratings and financial covenants
Fitch Ratings
In June 2023, Fitch Ratings reaffirmed the Company’s long-term issuer
default rating and senior unsecured rating at 'BBB-'. The outlook on the long-term issuer default rating is stable.
S&P Ratings
In July 2023, the S&P credit rating agency reaffirmed the
Company’s international credit rating and senior unsecured rating of 'BBB-'. In addition, the S&P Maalot credit rating agency reaffirmed the Company’s credit rating of 'ilAA' with a stable rating outlook.
Financial covenants
As of March 31, 2024, the Company was in compliance with all of its
financial covenants stipulated in its financing agreements.
Critical Accounting Estimates
In the three month period ended March 31, 2024, there were no material
changes in the critical accounting estimates previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2023.
Board of Directors and Senior Management Updates
Mr. Shalom Shlomo was appointed to the Board of Directors, effective
as of January 1, 2024, to serve until the next annual general meeting of shareholders of the Company.
Subsequent to the date of this report, as of May 8, 2024, Ms. Maya
Grinfeld, ICL’s VP, Marketing and Communication, is considered an office holder of the Company.
In the three month period ended March 31, 2024, there were no material
changes in the risk factors previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2023.
Quantitative and Qualitative Exposures stemming from Market Risks
Reference is made to “Item 11 – Quantitative and Qualitative
Disclosures about Market Risks” in our Annual Report on Form 20-F for the year ended December 31, 2023.
For further information regarding legal proceedings and other
contingencies, see Note 6 to the Company's Interim Financial Statements.
Forward-looking Statements
This announcement contains statements that
constitute “forward‑looking statements”, many of which can be identified by the use of forward‑looking words such as “anticipate”, “believe”, “could”, “expect”, “should”, “plan”, “intend”, “estimate”, “strive”, “forecast”, “targets” and
“potential”, among others. The Company is relying on the safe harbor provided in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in making such forward-looking statements.
Forward‑looking statements appear in a number of
places in this announcement and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward‑looking statements are based on our management’s beliefs and assumptions and on information currently
available to our management. Such statements are subject to risks and uncertainties, and the actual results may differ materially from those expressed or implied in the forward‑looking statements due to various factors, including, but not limited
to:
Loss or impairment of business licenses or mineral
extractions permits or concessions; volatility of supply and demand and the impact of competition; the difference between actual reserves and our reserve estimates; natural disasters and cost of compliance with environmental regulatory legislative
and licensing restrictions including laws and regulation related to, and physical impacts of climate change and greenhouse gas emissions; failure to "harvest" salt which could lead to accumulation of salt at the bottom of the evaporation Pond 5 in
the Dead Sea; litigation, arbitration and regulatory proceedings; disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; changes in exchange rates or prices compared to those
we are currently experiencing; general market, political or economic conditions in the countries in which we operate; price increases or shortages with respect to our principal raw materials; pandemics may create disruptions, impacting our sales,
operations, supply chain and customers; delays in termination of engagements with contractors and/or governmental obligations; the inflow of significant amounts of water into the Dead Sea which could adversely affect production at our plants; labor
disputes, slowdowns and strikes involving our employees; pension and health insurance liabilities; changes to governmental incentive programs or tax benefits, creation of new fiscal or tax related legislation; and/or higher tax liabilities; changes
in our evaluations and estimates, which serve as a basis for the recognition and manner of measurement of assets and liabilities; failure to integrate or realize expected benefits from mergers and acquisitions, organizational restructuring and
joint ventures; currency rate fluctuations; rising interest rates; government examinations or investigations; information technology systems or breaches of our, or our service providers', data security; failure to retain and/or recruit key
personnel; inability to realize expected benefits from our cost reduction program according to the expected timetable; inability to access capital markets on favorable terms; cyclicality of our businesses; The Company is exposed to risks relating
to its current and future activity in emerging markets; 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; disruption of our, or our service providers', sales of our magnesium products being affected by various factors that are not within our control; volatility or crises in the financial markets; hazards inherent to mining and chemical
manufacturing; the failure to ensure the safety of our workers and processes; exposure to third party and product liability claims; product recalls or other liability claims as a result of food safety and food-borne illness concerns; insufficiency
of insurance coverage; war or acts of terror and/or political, economic and military instability in Israel and its region, including the current state of war declared in Israel and any resulting disruptions to our supply and production chains;
filing of class actions and derivative actions against the Company, its executives and Board members; closing of transactions, mergers and acquisitions; and other risk factors discussed under ”Item 3 - Key Information— D. Risk Factors" in the
Company's Annual Report on Form 20-F for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 14, 2024 (the “Annual Report”).
Forward‑looking statements speak only as of the
date they are made, and, except as otherwise required by law, we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements, targets or goals in order
to reflect later events or circumstances or to reflect the occurrence of unanticipated events. Investors are cautioned to consider these risk and uncertainties and to not place undue reliance on such information. Forward-looking statements should
not be read as a guarantee of future performance or results and are subject to risks and uncertainties, and the actual results may differ materially from those expressed or implied in the forward-looking statements.
This report for the first quarter of 2024 (the
“Quarterly Report”) should be read in conjunction with the Annual Report of 2023 published by the Company on Form 20-F, as of and for the year ended December 31, 2023, including the description of events occurring subsequent to the date of the
statement of financial position, as filed with the US SEC.
Consolidated Financial Statements (Unaudited)
As of March 31, 2024
(in millions of US Dollars)
Condensed Consolidated Statements of Financial Position as of (Unaudited)
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
Short-term investments and deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and other receivables
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
| |
|
|
|
|
|
|
|
|
Long-term debt and debentures
|
|
|
|
|
|
|
|
|
Long-term employee liabilities
|
|
|
|
Long-term provisions and accruals
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Total shareholders’ equity
|
|
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
| |
|
|
|
Total liabilities and equity
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
26 ICL Group Limited Quarterly Report
Condensed Consolidated Statements of Income (Unaudited)
(In millions except per share data)
| |
For the three-month period
ended
March 31
|
For the year
ended
December 31
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
Selling, transport and marketing expenses
|
|
|
|
General and administrative expenses
|
|
|
|
Research and development expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Share in earnings of equity-accounted investees
|
|
|
|
| |
|
|
|
Income before taxes on income
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
Net income attributable to the non-controlling interests
|
|
|
|
| |
|
|
|
Net income attributable to the shareholders of the Company
|
|
|
|
| |
|
|
|
Earnings per share attributable to the shareholders of the Company:
|
|
|
|
| |
|
|
|
Basic earnings per share (in dollars)
|
|
|
|
| |
|
|
|
Diluted earnings per share (in dollars)
|
|
|
|
| |
|
|
|
Weighted-average number of ordinary shares outstanding:
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
27 ICL Group Limited Quarterly
Report
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
| |
For the three-month period ended
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
Components of other comprehensive income that will be reclassified subsequently to net income
|
|
|
|
Foreign currency translation differences
|
|
|
|
Change in fair value of cash flow hedges transferred to the statement of income
|
|
|
|
Effective portion of the change in fair value of cash flow hedges
|
|
|
|
Tax relating to items that will be reclassified subsequently to net income
|
|
|
|
| |
|
|
|
| |
|
|
|
Components of other comprehensive income that will not be reclassified to net income
|
|
|
|
Actuarial gains from defined benefit plans
|
|
|
|
Tax relating to items that will not be reclassified to net income
|
|
|
|
| |
|
|
|
| |
|
|
|
Total comprehensive income
|
|
|
|
| |
|
|
|
| |
|
|
|
Comprehensive income attributable to the non-controlling interests
|
|
|
|
| |
|
|
|
Comprehensive income attributable to the shareholders of the Company
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
28 ICL
Group Limited Quarterly Report
Condensed Consolidated Statements of Cash Flows (Unaudited)
| |
For the three-month period ended
|
|
| |
|
|
|
| |
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
Exchange rate, interest and derivative, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| |
|
|
|
|
|
|
|
|
Change in trade receivables
|
|
|
|
|
|
|
|
|
Change in other receivables
|
|
|
|
|
|
|
|
|
Net change in operating assets and liabilities
|
|
|
|
| |
|
|
|
|
|
|
|
|
Income taxes paid, net of refund
|
|
|
|
| |
|
|
|
Net cash provided by operating activities
|
|
|
|
| |
|
|
|
Cash flows from investing activities
|
|
|
|
Proceeds (payments) from deposits, net
|
|
|
|
Purchases of property, plant and equipment and intangible assets
|
|
|
|
Proceeds from divestiture of assets and businesses, net of transaction expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
| |
|
|
|
Cash flows from financing activities
|
|
|
|
Dividends paid to the Company's shareholders
|
|
|
|
Receipt of long-term debt
|
|
|
|
Repayments of long-term debt
|
|
|
|
Receipts (repayments) of short-term debt
|
|
|
|
Receipts from transactions in derivatives
|
|
|
|
Dividend paid to the non-controlling interests
|
|
|
|
Net cash used in financing activities
|
|
|
|
| |
|
|
|
Net change in cash and cash equivalents
|
|
|
|
Cash and cash equivalents as of the beginning of the period
|
|
|
|
Net effect of currency translation on cash and cash equivalents
|
|
|
|
Cash and cash equivalents as of the end of the period
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
29 ICL Group Limited Quarterly Report
Condensed Consolidated Statements of Changes in Equity (Unaudited)
| |
Attributable to the shareholders of the Company
|
Non-
controlling
interests
|
|
| |
|
|
Cumulative translation adjustments
|
|
|
|
Total
shareholders'
equity
|
| |
|
For the three-month period ended March 31, 2024
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2024
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2024
|
|
|
|
|
|
|
|
|
|
| |
Attributable to the shareholders of the Company
|
Non-
controlling
interests
|
|
| |
|
|
Cumulative translation adjustments
|
|
|
|
Total
shareholders'
equity
|
| |
|
For the three-month period ended March 31, 2023
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2023
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 31, 2023
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
30 ICL Group Limited Quarterly Report
Condensed Consolidated Statements of Changes in Equity (Unaudited) (cont'd)
| |
Attributable to the shareholders of the Company
|
Non-
controlling
interests
|
|
| |
|
|
Cumulative translation adjustments
|
|
|
|
Total
shareholders'
equity
|
| |
|
For the year ended December 31, 2023
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2023
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2023
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
ICL Group Ltd. (hereinafter – the Company), is a company
incorporated and domiciled in Israel. The Company's shares are traded on both the Tel-Aviv Stock Exchange (TASE) and the New York Stock Exchange (NYSE) under the ticker: ICL. The address of the Company’s registered headquarters is 23 Aranha St.,
Tel Aviv, Israel. The Company is a subsidiary of Israel Corporation Ltd., a public company traded on the TASE under the ticker: ILCO:TA. The State of Israel holds a Special State Share in ICL and in some of its subsidiaries, entitling the State
the right to safeguard the State of Israel vital interests.
The Company,
together with its subsidiaries, associated companies and joint ventures (hereinafter ‑ the Group or ICL), is a leading specialty minerals group that operates a unique, integrated
business model. The Company competitively extracts certain minerals as raw materials and utilizes processing and product formulation technologies to add value to customers in two main end-markets: agriculture and industrial (including food).
ICL’s products are used mainly in agriculture, electronics, food, fuel and gas exploration, water purification and desalination, construction, detergents, cosmetics, pharmaceuticals and automotive.
|
B. |
Events in the reporting period
|
The security situation in Israel since October 2023, when the Israeli
government declared a state of war in response to attacks on civilians, has posed several challenges. These include some disruptions in supply chains, a shortage of personnel due to mobilization for reserve duty, and fluctuations in foreign
currency exchange rates relative to the Israeli shekel.
Regional tensions involving Houthis attacks on commercial ships have
intensified, affecting shipping operations in the Red Sea, leading to some delays in shipments as well as increased shipping costs.
The Company has taken measures to ensure the safety of its employees
and business partners, as well as the communities in which it operates, to minimize any potential impact on its business, including avoidance of disruption to production activities at its facilities in Israel.
The security situation in recent months has not had a material impact
on the Company's business results. As of today, the majority of the Company’s employees in Israel who were called up for reserve duty have returned to full-time work.
However, as the developments related to the war, as well as its
duration, are unpredictable, the Company is unable to estimate the extent of the war’s potential impact on its future business and results. The Company continuously monitors developments and will take all necessary actions to minimize any negative
consequences to its operations and assets.
32 ICL Group Limited Quarterly Report
Note 2 – Significant Accounting Policies
The Company's financial statements are prepared in accordance with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (IASB) and the Company uses IFRS as its generally accepted accounting principles (“GAAP”).
The condensed consolidated interim financial statements were
prepared in accordance with IAS 34, “Interim Financial Reporting” and do not include all the information required in complete, annual financial statements. These condensed consolidated interim financial statements and notes are unaudited and
should be read together with the Company's audited financial statements included in its Annual Report on Form 20-F for the year ended December 31, 2023 (hereinafter – the Annual Financial Statements), as filed with the Securities and Exchange
Commission ("SEC").
The accounting policies and assumptions used in preparation of these
condensed consolidated interim financial statements are consistent with those used in preparation of the Company's Annual Financial Statements and in the Company's opinion, include all
the adjustments necessary to fairly present such information. Interim results are not necessarily indicative of the Company's expected results for the entire year.
Reclassifications
The Company made a number of insignificant reclassifications in
comparative figures in order to adjust them to the manner of classification in the current financial statements. The said reclassifications have no effect on the total profit (loss).
|
B. |
Amendments to standards and interpretations that have not yet been adopted
|
IFRS 18, presentation and
disclosure in the financial statements
This standard replaces the international accounting standard IAS 1 Presentation of financial statements. As part of the new disclosure requirements, companies will be required to present new defined subtotals in the statements of income: operating profit and profit before
financing and tax. In addition, income statement items will be classified into three defined categories: operating, investment and financing. The standard also includes a requirement to provide a separate disclosure in the financial statements
regarding the use of management-defined performance measures ("non-GAAP" measures), and specific instructions were added for the grouping and splitting of items in the financial statements and in the notes. IFRS 18 is effective for annual reporting
periods beginning on or after 1 January 2027, with an option for early adoption.
33 ICL Group Limited Quarterly Report
Note 3 - Operating Segments
1. Information on operating segments
ICL is a global specialty minerals company operating bromine, potash and phosphate mineral value chains in a unique, integrated business model. Our operations are organized under four segments: Industrial Products, Potash, Phosphate Solutions and
Growing Solutions.
Industrial Products – The
Industrial Products segment produces bromine derived from a solution that is a by‑product of the potash production process in Sodom, Israel, as well as bromine‑based compounds. Industrial Products uses most of the bromine it produces for its
own production of bromine compounds at its production sites in Israel, the Netherlands and China. In addition, the Industrial Products segment produces several grades of salt, magnesium chloride and some other specialty mineral products.
Industrial Products is also engaged in the production and marketing of phosphorous-based flame retardants and additional phosphorus‑based products.
Potash – The Potash
segment produces and sells primarily potash, salt, magnesium, as well as electricity. Potash is produced in Israel and Spain using an evaporation
process to extract potash from the Dead Sea in Israel, and from conventional mining of an underground mine in Spain. The segment also produces and sells pure magnesium and magnesium
alloys, as well as chlorine and sylvinite. In addition, the segment sells salt products produced at its potash site in Spain. The Company operates a power plant in Sodom which supplies electricity to ICL companies in Israel (as well as surplus
electricity to external customers) and steam to all facilities at the Sodom site.
Phosphate Solutions – The
Phosphate Solutions segment is based on a phosphate value chain which uses phosphate commodity products, such as phosphate rock and fertilizer-grade phosphoric acid (“green phosphoric acid”), to produce specialty products with higher added
value. The segment also produces and markets phosphate-based fertilizers. Phosphate rock is mined and processed from open pit mines, three of which are located in the Negev Desert in Israel,
while the fourth is situated in Yunnan province in China. Sulphuric acid, green phosphoric acid and phosphate fertilizers are also produced in the facilities in Israel and China.
The Phosphate Solutions segment manufactures pure phosphoric acid
by purifying green phosphoric acid. Pure phosphoric acid and green phosphoric acid are used to manufacture downstream products with high added value, such as phosphate salts and acids, for a wide range of food and industrial applications.
Phosphate salts and acids are used in various industrial end markets such as oral care, cleaning products, paints and coatings, energy storage solutions, water treatment, asphalt modification, construction, metal treatment and more. The
segment's products for the food industry include functional food ingredients and phosphate additives which provide texture and stability solutions for processed meat, meat alternatives, poultry, seafood, dairy products, beverages and baked goods. In addition, the segment supplies pure phosphoric acid to ICL’s specialty fertilizers business and produces organic milk components and whey proteins for the food ingredients
industry.
34 ICL Group Limited Quarterly Report
Note 3 - Operating Segments (cont’d)
1. Information on operating segments (cont’d)
Growing Solutions – The
Growing Solutions segment aims to achieve global leadership in plant nutrition markets by enhancing its positions in its core markets of specialty agriculture, ornamental horticulture, turf and landscaping, fertilizers and FertilizerpluS,
targeting high-growth markets such as Brazil, India and China. The segment also looks to leverage its unique R&D capabilities, substantial agronomic experience, global footprint, backward integration to potash, phosphate and polysulphate and
its chemistry know-how, as well as its ability to integrate and generate synergies from acquired businesses.
ICL continuously works to expand its broad portfolio of specialty
plant nutrition, plant stimulation and plant health solutions, which consists of enhanced efficiency and controlled release fertilizers (CRF), water-soluble fertilizers (WSF), liquid fertilizers and straights (MKP/MAP/PeKacid), FertilizerpluS,
soil and foliar micronutrients, secondary nutrients, biostimulants, soil conditioners, seed treatment products, and adjuvants.
The Growing Solutions segment develops, manufactures, markets and
sells its products globally, mainly in South America, Europe, Asia, North America and Israel. It produces water soluble specialty fertilizers in Belgium, Israel and Spain, organic, ornamental horticulture, turf and landscaping products in the UK
and the Netherlands, liquid fertilizers in Israel, Spain and China, straights soluble fertilizers in China and Israel, controlled release fertilizers in the Netherlands, Brazil and the US, FertilizerpluS products in the UK, the Netherlands and
Germany, as well as secondary nutrients, biostimulants, soil conditioners, seed treatment products, and adjuvants in Brazil.
Other Activities – Other
business activities include, among other things, ICL’s innovative arm which promotes innovation, developing new products and services, as well as digital platforms and technological
solutions for farmers and agronomists. This category includes Growers and Agmatix, innovative start-ups that are developing agricultural data processing and analysis capabilities for the future of agriculture. In alignment with the Company’s
efficiency plan, which includes a change of reporting responsibilities as of January 2024, the results of a non-phosphate related business were allocated from the Phosphate Solutions segment to Other Activities. Comparative figures have been
restated to reflect the organizational change in the reportable segments. These activities are not presented as reportable segments as they do not meet the required quantitative thresholds.
2. Segment capital investments
Capital investments made by the segments for each of the reporting
periods include mainly property, plant and equipment as well as intangible assets acquired in the ordinary course of business and as part of business combinations.
35 ICL Group Limited Quarterly Report
Note 3 - Operating Segments (cont’d)
3. Inter–segment transfers and unallocated income (expenses)
Segment revenue, expenses and results include inter-segment
transfers, which are based on transactions prices in the ordinary course of business. This is aligned with reports that are regularly reviewed by the Chief Operating Decision Maker.
Inter-segment transfers are eliminated as part of the financial statements' consolidation process.
Segment profit is measured based on operating income, without the
allocation of certain expenses to the operating segments, as presented in the reports regularly reviewed by the Chief Operating Decision Maker. Management believes that it is the most relevant measure for the assessment of such results.
36 ICL Group Limited Quarterly Report
Note 3 - Operating Segments (cont’d)
B. Operating segment data
For the three-month period ended March 31, 2024
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Sales to external parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Segment operating income (loss)
|
|
|
|
|
|
|
|
Other expenses not allocated to the segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures as part of business combination
|
|
|
|
|
|
|
|
37 ICL Group Limited Quarterly Report
Note 3 - Operating Segments (cont'd)
B. Operating segment data (cont'd)
For the three-month period ended March 31, 2023
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Sales to external parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Segment operating income (loss)
|
|
|
|
|
|
|
|
Other expenses not allocated to the segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38 ICL Group Limited Quarterly Report
Note 3 - Operating Segments (cont'd)
B. Operating segment data (cont'd)
For the year ended December 31, 2023
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Sales to external parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Segment operating income (loss)
|
|
|
|
|
|
|
|
Other expenses not allocated to the segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share in earnings of equity-accounted investees
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 ICL Group Limited Quarterly Report
Note 3 - Operating Segments (cont'd)
C. Information based on geographical location
The following table presents the distribution of the operating segments sales by
geographical location of the customer:
40 ICL Group Limited Quarterly Report
Note 3 - Operating Segments (cont'd)
C. Information based on geographical location (cont'd)
The following tables present the distribution of the operating segments sales by
geographical location of the customer:
For the three-month period ended March 31, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three-month period ended March 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41 ICL Group Limited Quarterly Report
Note 3 - Operating Segments (cont'd)
C. Information based on geographical location (cont'd)
The following table presents the distribution of the operating segments sales by
geographical location of the customer:
For the year ended December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42 ICL Group Limited Quarterly Report