Delivers sales of $2.1 billion, net income of
$280 million, adjusted EBITDA of $610 million and adjusted diluted
EPS of $0.23
ICL (NYSE: ICL) (TASE: ICL), a leading global specialty
minerals company, today reported its financial results for the
first quarter ended March 31, 2023. Consolidated sales were $2.1
billion versus $2.5 billion. Operating income was $465 million
versus $902 million, while adjusted operating income was $480
million versus $880 million in the first quarter of last year.
Adjusted EBITDA was $610 million versus $1,002 million. Earnings
per share were $0.22 versus $0.49, and adjusted diluted EPS was
$0.23 versus $0.48.
“ICL delivered another solid first quarter, even as prices
pulled back significantly from last year’s peak levels. We are
working to leverage opportunities created by geopolitical
developments, global sustainability challenges and the current
capital markets backdrop, to strengthen long-term value creation
through innovative food security and battery materials solutions,
while maintaining our focus on consistent cash generation and on
driving cost efficiencies,” said Raviv Zoller, president and CEO of
ICL. “For the first quarter, we continued to return value to
shareholders, as we delivered record operating cash flow of $382
million and announced a dividend of $0.11 per share.”
The company also reiterated its guidance for full year adjusted
EBITDA of between $2.2 billion to $2.4 billion, with approximately
$1.1 billion of this amount estimated to come from the company’s
specialties focused businesses. (1a)
Key Financials
First Quarter 2023
US$M
Ex. per share data
1Q'23
1Q'22
Sales
$2,098
$2,525
Gross profit
$828
$1,245
Gross margin
39%
49%
Operating income
$465
$902
Adjusted operating income (1)
$480
$880
Operating margin
22%
36%
Adjusted operating margin (1)
23%
35%
Net income attributable to
shareholders
$280
$632
Adjusted net income attributable to
shareholders (1)
$292
$613
Adjusted EBITDA (1)
$610
$1,002
Adjusted EBITDA margin (1)
29%
40%
Diluted earnings per share
$0.22
$0.49
Cash flows from operating activities
$382
$325
(1)
Adjusted operating income and margin,
adjusted net income attributable to shareholders, and adjusted
EBITDA and margin are non-GAAP financial measures. Please refer to
the adjustments table and disclaimer.
Industrial Products
First quarter 2023
- Sales of $361 million vs. $494 million.
- EBITDA of $105 million vs. $203 million.
- Recent growth in the Chinese economy and EV markets is not
expected to create significant new demand for flame retardants
before the second half of 2023.
Key developments
- Flame retardants: Product sales declined year-over-year, as
electronics and construction end-market demand remained weak.
- Industrial solutions: Elemental bromine sales were impacted by
lower volumes and declining bromine prices. Strong global demand
for clear brine fluids drove sales higher year-over-year, as the
oil and gas markets remained robust.
- Specialty minerals: Sales were higher versus the prior year,
with increased deliveries to the deicing, food, pharmaceutical and
industrial end-markets.
Potash
First quarter 2023
- Sales of $583 million vs. $795 million.
- EBITDA of $298 million vs. $450 million.
- Grain Price Index increased 3.6% year-over-year, with rice up
14.8%, while corn, soybeans and wheat were down 1.4%, 2.9% and
0.3%, respectively.
- Potash price (CIF) per ton of $541 was down 16% year-over-year,
as prices moderated versus 2022.
- Global stocks-to-use ratio remains low and farmer affordability
remains above average.
Key developments
- Production in-line with last year, as
annual maintenance shutdown took place in March of both years.
- 100,000 metric tons of potash shipments to
India delayed to the second quarter.
- Successfully completed sealing project for
the Dead Sea feeder canal.
- A fatal accident at the Cabanasses mine, in
the beginning of March, was followed by gradual ramp-up, due to
extraordinary safety measures. The resulting production loss is
estimated to be approximately 30,000 metric tons.
- Lower quantities were offset by higher
selling prices.
Phosphate Solutions
First quarter 2023
- Sales of $714 million vs. $798 million.
- Phosphate specialties: Sales of $425
million vs. $437 million.
- Phosphate commodities: Sales of $289
million vs. $361 million.
- EBITDA of $170 million vs. $247 million.
- Phosphate specialties: EBITDA of $84
million vs. $115 million.
- Phosphate commodities: EBITDA of $86
million vs. $132 million.
- Phosphate prices leveled off, as the quarter progressed, while
raw material remained elevated year-over-year.
Key developments
- White phosphoric acid: Sales declined year-over-year, as higher
prices in both North and South America, as well as Europe, were
offset by lower volumes, mainly in Europe and China.
- Industrial phosphates: Higher prices in the U.S. and Europe
were offset by lower volumes in all regions.
- Food phosphates: Sales increased on higher prices, mainly in
North America, while volumes remained stable in the quarter.
- Battery materials: LFP cathode active material expansion in St.
Louis remains on-track, with groundbreaking expected later this
year.
Growing Solutions
First quarter 2023
- Sales of $564 million vs. $566 million.
- EBITDA of $45 million vs. $110 million.
- Margin decreased, due to destocking during a declining price
environment.
Key developments
- Specialty agriculture: Sales declined versus the prior year, as
lower volumes offset higher prices achieved through new product
launches.
- Turf and ornamental: Results softened year-over-year, as higher
prices from new product launches were unable to offset weaker
ornamental and horticulture sales volumes.
- Brazil: Sales increased versus the prior year, while profit was
impacted by higher-cost inventory.
- Polysulphate: Sales and profit increased year-over-year, with
record production at Boulby of 259,000 metric tons.
Financial Items
Financing Expenses
Net financing expenses for the first quarter of 2023 were $44
million, up versus $34 million in the corresponding quarter of last
year.
Tax Expenses
Tax expenses in the first quarter of 2023 were $127 million,
reflecting an effective tax rate of 30%, compared to $211 million
in the corresponding quarter of last year, reflecting an effective
tax rate of 24%.
Liquidity and Capital Resources
ICL had long-term credit facilities of $1,000 million, of which
$587 million were utilized as of March 31, 2023.
On April 24, the company announced it had entered into a $1.55
billion sustainability linked revolving credit facility agreement,
with an initial term of five years and a two-year extension option.
The agreement, with a consortium of 12 international banks,
replaced the previous $1.2 billion revolving credit facility, which
was entered into in 2018.
Outstanding Net Debt
As of March 31, 2023, ICL’s net financial liabilities amounted
to $2,301 million, a decrease of $15 million compared to December
31, 2022.
Dividend Distribution
In connection with ICL’s first quarter 2023 results, the Board
of Directors declared a dividend of 11.32 cents per share, or
approximately $146 million, versus 23.83 cents per share, or
approximately $306.5 million, in the first quarter of last year.
The dividend will be payable on June 14, 2023, to shareholders of
record as of May 31, 2023.
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 12,500 people
worldwide, and its 2022 revenue totaled approximately $10
billion.
For more information, visit ICL's website at icl-group.com.
To access ICL's interactive CSR report, visit
icl-group-sustainability.com.
You can also learn more about ICL on Facebook, LinkedIn, YouTube
and Instagram.
Guidance
(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. Specialties
focused businesses are represented by the Industrial Products, and
Growing Solutions segments, and the specialties part of the
Phosphate Solutions segment. We present EBITDA from the phosphate
specialties part of the Phosphate Solutions segment as we believe
this information is useful to investors in reflecting the specialty
portion of our business.
Non-GAAP Statement
The company discloses in this quarterly announcement 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. The 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. The company calculates adjusted operating
income by adjusting operating income to add certain items, as set
forth in the reconciliation table under "adjustments to reported
operating and net income (non-GAAP)", in the appendix below.
Certain of these items may recur. The company calculates adjusted
net income attributable to the company’s shareholders by adjusting
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)", in
the appendix below, excluding the total tax impact of such
adjustments. The company calculates diluted adjusted earnings per
share by dividing adjusted net income by the weighted-average
number of diluted ordinary shares outstanding. The company
calculates adjusted EBITDA as net income before financing expenses,
net, taxes on income, share in earnings of equity-accounted
investees, depreciation and amortization and adjust items presented
in the reconciliation table under "consolidated adjusted EBITDA and
diluted adjusted earnings per share for the periods of activity" in
the appendix below, which were adjusted for in calculating the
adjusted operating income. Commencing with the year 2022, the
company’s adjusted EBITDA calculation is no longer adding back
minority and equity income, net. While minority and equity income,
net reflects the share of an equity investor in one of the
company’s owned operations, since adjusted EBITDA measures the
company’s performance as a whole, its operations and its ability to
satisfy cash needs before profit is allocated to the equity
investor, management believes that adjusted EBITDA before deduction
of such item is more reflective.
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 the
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 ICL’s non-IFRS financial measures as tools for
comparison. However, the company believes 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 management believes are not indicative
of ongoing operations. Management uses these non-IFRS measures to
evaluate the company's business strategies and management's
performance. The company believes these non‑IFRS measures provide
useful information to investors because they improve the
comparability of financial results between periods and provide for
greater transparency of key measures used to evaluate
performance.
The company presents a discussion in the period-to-period
comparisons of the primary drivers of changes in the results of
operations. This discussion is based in part on management’s best
estimates of the impact of the main trends on its businesses. The
company has based the following discussion on its financial
statements. You should read such discussion together with the
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; our ability to secure approvals
and permits from the authorities in Israel to continue our
phosphate mining operations in Rotem Amfert Israel; 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; 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, 2022, filed
with the U.S. Securities and Exchange Commission (the “SEC”) on
February 28, 2023 (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 announcement for the first quarter of 2023 (herein after
the quarterly announcement) should be read in conjunction with the
Annual Report, including the description of the events occurring
subsequent to the date of the statement of financial position, as
filed with the SEC.
Appendix
Condensed Consolidated Statements of Income
(Unaudited)
$ millions
Three-months ended
Year ended
March 31, 2023
March 31, 2022
December 31, 2022
Sales
2,098
2,525
10,015
Cost of sales
1,270
1,280
4,983
Gross profit
828
1,245
5,032
Selling, transport and marketing
expenses
264
279
1,181
General and administrative expenses
68
69
291
Research and development expenses
18
18
68
Other expenses
16
-
30
Other income
(3)
(23)
(54)
Operating income
465
902
3,516
Finance expenses
87
67
327
Finance income
(43)
(33)
(214)
Finance expenses, net
44
34
113
Share in earnings of equity-accounted
investees
-
-
1
Income before taxes on income
421
868
3,404
Taxes on income
127
211
1,185
Net income
294
657
2,219
Net income attributable to the
non-controlling interests
14
25
60
Net income attributable to the
shareholders of the company
280
632
2,159
Earnings per share attributable to the
shareholders of the company:
Basic earnings per share (in dollars)
0.22
0.49
1.68
Diluted earnings per share (in
dollars)
0.22
0.49
1.67
Weighted-average number of ordinary
shares outstanding:
Basic (in thousands)
1,289,238
1,285,811
1,287,304
Diluted (in thousands)
1,290,938
1,290,965
1,289,947
Condensed Consolidated Statements of Financial Position as of
(Unaudited)
$ millions
March 31, 2023
March 31, 2022
December 31, 2022
Current assets
Cash and cash equivalents
552
439
417
Short-term investments and deposits
129
93
91
Trade receivables
1,631
1,898
1,583
Inventories
2,116
1,673
2,134
Prepaid expenses and other receivables
316
355
323
Total current assets
4,744
4,458
4,548
Non-current assets
Deferred tax assets
155
142
150
Property, plant and equipment
6,066
5,797
5,969
Intangible assets
867
889
852
Other non-current assets
213
378
231
Total non-current assets
7,301
7,206
7,202
Total assets
12,045
11,664
11,750
Current liabilities
Short-term debt
704
506
512
Trade payables
967
1,078
1,006
Provisions
79
56
81
Other payables
985
1,049
1,007
Total current liabilities
2,735
2,689
2,606
Non-current liabilities
Long-term debt and debentures
2,278
2,402
2,312
Deferred tax liabilities
442
406
423
Long-term employee liabilities
385
511
402
Long-term provisions and accruals
239
275
234
Other
68
64
60
Total non-current liabilities
3,412
3,658
3,431
Total liabilities
6,147
6,347
6,037
Equity
Total shareholders’ equity
5,631
5,083
5,464
Non-controlling interests
267
234
249
Total equity
5,898
5,317
5,713
Total liabilities and equity
12,045
11,664
11,750
Condensed Consolidated Statements of Cash Flows
(Unaudited)
$ millions
Three-months ended
Year ended
March 31, 2023
March 31, 2022
December 31, 2022
Cash flows from operating
activities
Net income
294
657
2,219
Adjustments for:
Depreciation and amortization
130
122
498
Exchange rate, interest and derivative,
net
18
41
157
Tax expenses
127
211
1,185
Change in provisions
(15)
(18)
(83)
Other
4
(20)
(15)
264
336
1,742
Change in inventories
51
(87)
(527)
Change in trade receivables
(35)
(469)
(215)
Change in trade payables
(37)
(6)
(42)
Change in other receivables
(6)
(1)
(46)
Change in other payables
(23)
43
107
Net change in operating assets and
liabilities
(50)
(520)
(723)
Interest paid, net
(17)
(16)
(106)
Income taxes paid, net of refund
(109)
(132)
(1,107)
Net cash provided by operating
activities
382
325
2,025
Cash flows from investing
activities
Payments for deposits, net
(44)
(8)
(36)
Business combinations
-
-
(18)
Purchases of property, plant and equipment
and intangible assets
(164)
(131)
(747)
Proceeds from divestiture of assets and
businesses, net of transaction expenses
3
20
33
Other
1
12
14
Net cash used in investing
activities
(204)
(107)
(754)
Cash flows from financing
activities
Dividends paid to the company's
shareholders
(178)
(169)
(1,166)
Receipt of long-term debt
258
343
1,045
Repayments of long-term debt
(170)
(356)
(1,181)
Receipts (repayments) of short-term
debt
37
(97)
(21)
Receipts from transactions in
derivatives
6
19
20
Net cash used in financing
activities
(47)
(260)
(1,303)
Net change in cash and cash
equivalents
131
(42)
(32)
Cash and cash equivalents as of the
beginning of the period
417
473
473
Net effect of currency translation on cash
and cash equivalents
4
8
(24)
Cash and cash equivalents as of the end
of the period
552
439
417
Adjustments to Reported Operating and Net Income
(non-GAAP)
$ millions
Three-months ended
March 31, 2023
March 31, 2022
Operating income
465
902
Write-off of assets and provision for site
closure (1)
15
-
Divestment related items and transaction
costs from acquisitions (2)
-
(22)
Total adjustments to operating
income
15
(22)
Adjusted operating income
480
880
Net income attributable to the
shareholders of the company
280
632
Total adjustments to operating income
15
(22)
Total tax adjustments (3)
(3)
3
Total adjusted net income -
shareholders of the company
292
613
(1)
For 2023, reflects a write-off of assets
and closure costs due to the closure of the company’s Summerville
site in the US.
(2)
For 2022, reflects a capital gain related
to the sale of an asset in Israel and the company’s divestment of a
50%-owned joint venture, Novetide.
(3)
For 2023, reflects the tax impact of
adjustments made to operating income. For 2022, reflects tax
expenses in respect of prior years following a settlement with
Israel’s Tax Authority regarding Israel's surplus profit levy,
which outlines understandings for the calculation of the levy,
including the measurement of fixed assets, as well as the tax
impact of adjustments made to operating income.
Consolidated EBITDA for the Periods of Activity
$ millions
Three-months ended
March 31, 2023
March 31, 2022
Net income
294
657
Financing expenses, net
44
34
Taxes on income
127
211
Operating income
465
902
Depreciation and amortization
130
122
Adjustments (1)
15
(22)
Total adjusted EBITDA (2)
610
1,002
(1)
See "Adjustments to Reported Operating and
Net income (non-GAAP)" above.
(2)
Commencing 2022, the company’s adjusted
EBITDA definition was updated. See the statement above.
Calculation of Segment EBITDA
Industrial Products
Potash
Phosphate Solutions
Growing Solutions
Three-months ended
March 31, 2023
March 31, 2022
March 31, 2023
March 31, 2022
March 31, 2023
March 31, 2022
March 31, 2023
March 31, 2022
Segment operating income
90
188
254
410
115
200
32
93
Depreciation and amortization
15
15
44
40
55
47
13
17
Segment EBITDA
105
203
298
450
170
247
45
110
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509006171/en/
Investor and Press Contact – Global Peggy Reilly Tharp
VP, Global Investor Relations +1-314-983-7665
Peggy.ReillyTharp@icl-group.com
Investor and Press Contact - Israel Adi Bajayo ICL
Spokesperson +972-3-6844459 Adi.Bajayo@icl-group.com
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