Investor Presentation. December 2015

Transcription

1 Investor Presentation December 2015

2 Safe Harbor All statements in this communication, other than those relating to historical facts, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended These forward-looking statements and projections are not guarantees of future performance and are subject to a number of assumptions, risks, projections and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such statements or projections. Important factors that could cause actual results to differ materially from our expectations include, among others: loss or impairment of business licenses or mining permits or concessions; natural disasters; failure to raise the water level in evaporation Pond 5 in the Dead Sea; accidents or disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; labor disputes, slowdowns and strikes involving our employees; currency rate fluctuations; rising interest rates; general market, political or economic conditions in the countries in which we operate; pension and health insurance liabilities; price increases or shortages with respect to our principal raw materials; volatility of supply and demand and the impact of competition; changes to laws or regulations (including environmental protection and safety and tax laws or regulations), or the application or interpretation of such laws or regulations; government examinations or investigations; the difference between actual reserves and our reserve estimates; failure to integrate or realize expected benefits from acquisitions and joint ventures; volatility or crises in the financial markets; cyclicality of our businesses; changes in demand for our fertilizer products due to a decline in agricultural product prices, lack of available credit, weather conditions, government policies or other factors beyond our control; decreases in demand for bromine-based products and other industrial products; litigation, arbitration and regulatory proceedings; and war or acts of terror. More detailed information about factors that may affect our performance may be found in Risk Factors in our Annual Report Form 20-F filed with the U.S. Securities and Exchange Commission on March 20, Forward-looking statements and projections represent our views and are given only as of the date of this communication and we disclaim any obligation to update or revise them, whether as a result of new information, future events or otherwise, except as required by law. All information included in this document speaks only as of the date on which they are made, and we do not undertake any obligation to update such information afterwards. Some of the market and industry information is based on independent industry publications or other publicly available information, while other information is based on internal studies. Although we believe that these independent sources and our internal data are reliable as of their respective dates, the information contained in them has not been independently verified and we can not assure you as to the accuracy or completeness of this information. 2

3 Our Vision: Fulfilling Humanity s Essential Needs We fulfill essential needs in 3 core end Rise of the middle class and standard of living across the globe Increased demand for and use of natural resources markets Agriculture, Food and Engineered Materials by utilizing an integrated value chain based on specialty minerals Environmental stewardship and sustainability 4

4 Strategy Highlights Build Integrated Company Focused On Specialty End Markets Grow core business Organic growth, M&A Unique business model Global integrated value chain into specialty markets Balanced capital allocation and strong dividend yield Operational excellence - Execute on $350M efficiency improvements 5 5

5 From Commodity Raw Materials to Specialty Products End Markets Segments Business lines Potash Fertilizers Phosphates Fertilizers Specialty Fertilizers Flame Retardants Industrial Solutions Advanced Additives Food Specialties Contribution to sales* ~$1,820M ~$910M ~$770M ~$470M ~$780M ~$650M ~$530M * In 2014, including inter-segment sales 6

6 Integrated Value Chains Provide Significant Synergies Source Raw Materials Major Intermediate & Finished Products Elemental Phosphorus Phosphate Salts Phosphorus ( Penta) Sulfide Phosphate Rock PCL3 POCL3 Fertilizer Grade Phosphoric Acid Food Grade Phosphoric Acid Special Grade Acid Food Additives Wildfire Extinguishers Phosphate Fertilizers Carnallite Potash Compound Fertilizers Salt (NaCl) End Brine Magnesium Chloride Solution Crude Magnesium Chlorine Specialty Fertilizers Pure Magnesium Polysulphate TM Magnesia Products (MgO) Magnesium Chloride Elemental Bromine Salt (NaCl) Magnesium Alloys Bromine Compounds Sylvanite Potash Chlorine based Biocides OPFRs & Others Fertilizers Industrial Products Performance Products DSM Product Sold 7

7 Unique Portfolio of Mineral Assets Providing Competitive Raw Materials Dead Sea ICL Iberia ICL UK Negev Desert Potash, Bromine Magnesium Potash Potash Polysulphate TM Phosphate Low cost in potash, the world s lowest in bromine Near-infinite reserve life potash and bromine Logistical advantages stockpiling ability, geographical position Ongoing operational efficiency measures, including labor reduction Logistical advantage - close to port of Barcelona Vast reserves Cost reduction initiatives Significant expansion opportunities Logistical advantage - close to Teesside port Polysulphate TM increase production to 1 million tonnes by 2020 Low CAPEX using existing infrastructure Lower Polysulphate TM production costs to double operating income with margins over 30% by 2020 Integrated value chain highly biased towards value added specialty products Successful efficiency and operational excellence plan executed at ICL Rotem 8

8 Unique Portfolio of Mineral Assets Providing Competitive Raw Materials Dead Sea ICL Iberia ICL UK Negev Desert Potash, Bromine Magnesium Potash Potash Polysulphate TM Phosphate Low cost in potash, the world s lowest in bromine Near-infinite reserve life potash and bromine Logistical advantages stockpiling ability, geographical position Ongoing operational efficiency measures, including labor reduction Logistical advantage - close to port of Barcelona Vast reserves Cost reduction initiatives Significant expansion opportunities Logistical advantage - close to Teesside port Polysulphate TM increase production to 1 million tonnes by 2020 Low CAPEX using existing infrastructure Lower Polysulphate TM production costs to double operating income with margins over 30% by 2020 Integrated value chain highly biased towards value added specialty products Successful efficiency and operational excellence plan executed at ICL Rotem 9

9 Attractive Growing Specialty Business Specialty Fertilizers Specialty Fertilizers Enlarge Product Portfolio: R&D, Strategic Partners Establish production in attractive markets Reduce cost of production Estimated CAGR (organic) : 4-8% Estimated CAPEX : $20-40 million p.a. Performance Products Industrial Products Core growth through R&D: potential 2020 sales contribution ~$150M, significant LT contribution Margin expansion, pricing, advocacy, focus on customer unmet needs Estimated CAGR (organic) : 2-4% Estimated CAPEX : $60-75 million p.a. Performance Products Advanced Additives: geographic expansion, product differentiation, Lean and reliable Food Specialties: New products, geographical expansion, new ingredients and technologies through R&D Estimated CAGR (organic) : 4-6% Estimated CAPEX : $20-40 million p.a. 10

10 Executing on Our Business Strategy

11 Efficiency Initiatives Contribution Segment Breakdown 2016 efficiency gains run-rate of $350M Segment run-rate contribution* USD millions/year $350 million ICL PP Production cost efficiency Procurement $240 million ICL IP Phosphates and fertilizers Potash $120 million HR Anticipated labor costs savings in 2015 Anticipated labor costs savings in 2016 ~$25 million* ~$70 million* *Vs A 2015E 2016E Gross average yearly labor costs savings as of 2017 ~$80 million* *Labor cost reduction at ICL Dead Sea and ICL Neot Hovav 12

12 Operational Excellence Expected to Generate Accumulated Savings of Over $350M Potash Phosphates Specialties 400kt Dead Sea additional production Labor reduction ~10% of workforce Labor reduction at ICL UK Cost per tonne reduction Labor reduction of ~10% YTD P2O5 production up by ~15% Fertilizers & rock production up by ~10% Operational Excellence initiatives implementation started in 2015 Labor at ICL s bromine operations down by over 10% by 2018 Procurement and energy savings 2016 EBITDA contribution*: 2016 EBITDA contribution*: 2016 EBITDA contribution*: ~ $120 million ~ $80 million ~ $60 million Procurement and energy savings ~ $150 million *Year end run-rate Vs

13 Reduced Cost for Phosphate Rock, Phosphoric Acid, and Phosphate Fertilizers Cost reduction initiatives are bearing fruits Potash realized full cost per tonne sold* (indexed) Phosphate Rock Cost indexed ($/tonne FOB) 100% 86% 100% 101% 99% 92% 83% 76% White phosphoric Acid Cost indexed ($/tonne FOB) GTSP Cost indexed ($/tonne FOB) 100% 110% 97% 89% 79% 100% 98% 90% 86% 79% * Calculation based on adjusted full costs, including COGS, royalties, depreciation, freight and transportation, G&A, S&M. 14

14 Balanced Business Model Supports Profitability Despite Potash Headwinds ICL s operating income adjusted to potash price developments US$ Million 1, ~ ~ 940 ~ ~ 1,100 ~890 ~830 ~ A 2014 A 2015 E 2016 E ICL Adjusted operating operating income income ICL Adjusted operating operating income income - potash only price potash effect price effect Specialty business, lower costs and cost reduction initiatives offset the negative impact of lower potash prices 15

15 Polysulphate : Solid Market Potential Readily available new natural fertilizer containing four nutrients ~36% Mg+Ca ~14% K ~50% S Over 200 million tonnes resources in the ICL UK potash mine Low production cost allows attractive economics for farmers Environmentally friendly, no chemical processing or waste products, suitable for chloride sensitive crops and for organic agriculture Proven market acceptance: 50k tonnes sold in target: 120k tonnes Polysulphate TM addresses new market niches and replaces more costly existing products 2020 production and sales target 1 million tonnes. Long term potential up to 3 million tonnes Polysulphate TM production plan K Tonnes Transition to Polysulphate TM - Improving cash contribution Operating income expected to double by 2020 vs Operating margins expected to increase to over 30% by 2020 Immediate restructuring expected to contribute $30 million annually, starting from 2H

16 ICL's Potash Sub-Segment Production Moderately Increasing while Adding Specialty Products Potential gradual increase of production capability excluding ICL UK Million Tonnes ~ SOP Polysulphate Potash TM 2005A 2014A 2020E ~2025E Sales growth will be supported by market development activities in India and East Africa Source: Industry publications, ICL estimates 17

17 ICL to Become a Leading Player in China s Phosphate Sector Formation of phosphate JV with Yunnan Yuntianhua completed: JV includes upstream mining, bulk fertilizers and downstream specialty businesses R&D platform: 11 projects in Food, Engineered Materials, Agro and process improvement. Additional projects by year-end A key milestone in our strategy: I. increasing phosphate platform by more than 50%, securing long-term reserves II. III. IV. expanding phosphate end-to-end business model with a focus on Asia transforming into the world s leading specialty phosphate player improving cost competitiveness of our phosphate network The JV in Numbers Production capability JV Total ICL* Change Phosphate Rock 2.5mt 6.5mt 63% Investment ~$180M in the JV Commodity Fertilizers 850kt 2.7mt 45% Revenues ~RMB2,900 (~$450M) in year 1 to ~RMB3,900 (~$600M) in year 5 Specialty Fertilizers 115kt 895kt 15% Operating Income Margins Break even to low single digits in year 1 to low teens in year 5 Phosphoric Acid Purified Phosphoric Acid 700kt 60kt 1.3mt 290kt 117% 26% Additional CAPEX About $340 million spread over 5 years - Incl. Expansion Plans 160kt 410kt 64% * Including 100% of the JV s production capability 18

18 ICL attractive investment case Our value chain driven by essential needs provides ROIC of 15-17% Efficiency improvement to deliver $350M EBITDA contribution Organic growth in the specialty business: 2-8% p.a. Government relationships: Supportive globally Some positive progress in Israel Mineral asset growth, controlled capex and significant cost reduction = grow and defend market share 19

19 Committed to Responsible Value Creation Thank you

20 Appendices

21 ICL at a Glance Company Snapshot ICL is a leading global specialty minerals company that operates a unique integrated business model to fulfil essential needs in three key end markets: Agriculture, Engineered Materials and Processed Food Utilizes sophisticated processing and product formulation technologies to produce downstream / value-added products Operates low-cost, geographically advantaged assets ~50% of production and ~95% of sales (2014) outside of Israel FY2014 dividend yield: 8.3% (including special dividend) (2)(3) Key Statistics (3) US$Bn Market Capitalization 6.2 Net Debt 2.7 Enterprise Value 8.9 Main Shareholders Israel Corp 46.2% PCS 13.9% Q Q Revenue Adj. EBITDA % Margin 25% 23% Our Business Mix and End Markets (1) End Markets (Based on 1-9/2015 Revenue) Engineered Materials Processed Food 11% 33% Other 4% Our Business Segments 52% Agriculture (Bulk and Specialty Fertilizers) Business Mix (Based on 1-9/2015 Adj. EBITDA) Fertilizers Segment Potash Fertilizers: One of the world's largest producers of potash, phosphate-based fertilizers and specialty fertilizers Performance Products: Produces, markets and sells a broad range of downstream phosphate-based food additives and advanced additives Industrial Products: Extracts bromine and magnesium from the Dead Sea and produces and markets bromine, magnesium and phosphorus compounds 46% 14% Industrial Products 22% 18% Fertilizers & Phosphates Performance Products 1 Excludes adjusted EBITDA attributable to Other and eliminations; may not sum to 100% due to rounding 2 Dividend yield calculated as total dividends paid in 2014 divided by current market capitalization 3 Market data as of November 30, 2015; Net debt calculated as total debt less cash, cash equivalents and short term investments 22

22 Agriculture

23 Growth Factors - Fertilizers and Food Products Diminishing arable land per capita Population, Meat and Fertilizers [Base 1962] Yield Growth Required to Meet World s Food Needs 6.0 Index, relative to Fertilizer consumption Meat Consumption 2.0 Population 1.0 Source: IFA, USDA, USA Census 24

24 Billion Tonne World Grains Production & Consumption Consumption Production Stock to Use Sources: USDA, (Updated October 2015) 38% 36% 34% 32% 30% 28% 26% 24% % 22% 21.77% 20% 18% % 16% Grains and Pulses: Barley, Corn, Millet, Mixed Grain, Oats, Rice, Rye, Sorghum, Wheat 25

25 World Grain Price Futures (CBOT) CHICAGO BOARD OF TRADE (CBOT) CROP PRICES $/bushel $17 $15 $13 $11 Soybean Rice $12.14 $9 $8.65 $7 Wheat $5 $3 $1 Corn $4.95 $3.72 Source: USDA, CBOT. Prices as of November 24 th

26 Fertilizer Prices Potash Prices Phosphate Prices 700 US$/t spot 650 US$/t spot FOB NOLA granular KCl FOB Vancouver standard KCl * Source: Fertilizer Week, prices as of November 19, 2015 Average DAP fob Tampa Average GTSP, fob North Africa 27

27 Index of Fertilizer Price Ratio to GPI Base 2002 Fertilizers are Affordable MOP/GPI DAP/GPI *GPI = Grain Price Index formula: [(wheat price*7) + (maize price*8) + (rice price*4.5) + (soybean price*2.5)] /22] Source: CBOT, Fertilizer Week & ICL 28

28 Potash Demand Growth Estimates Million tonnes KCl 72 RoW RoW China India Brazil RoW CAGR Growth (Mt) CAGR 3% % RoW RoW SE Asia SE Asia USA After 2020 annual growth rate returns to 2%, and reaches 18 Mt growth from 2014 to 2025 RoW SE Asia SE Asia USA USA Brazil SE Asia USA USA Brazil Brazil Brazil India India Brazil India China India China India China China China Data: CRU, Updated: March 2015

29 Supply Development Capability Factor Mt Demand Supply Gap Utilization rate 85% 79% 76% Million tonnes KCl Greenfields new entrants Greenfields existing players Brownfields 2014 Base Capability Brownfields Greenfields Data: CRU, DSW

30 ICL Fertilizers: A Global Manufacturer of Products that Fulfills Essential Needs in the Agriculture Market Potash Fertilizers Phosphate Fertilizers 24% 32% 44% Agriculture Specialty Fertilizers 5,855 Employees Worldwide ICLF 1-9/2015 Sales by Lines of Business 55% ICL UK ICL The Netherlands ICL Germany Of ICL s Rev ($3,978M) ICL Turkey Americas* - 22% ICL Iberia Everris EMEA* - 51% Nutrisi Fuentes Asia* - 27% ICL Dead Sea ICL Rotem ICL Haifa *Of 2014 sales **including inter-segment sales 31

31 Strategic Geographic Advantage Clear Service Advantage to Developed and Emerging Markets Low plant gate-to-port costs and ocean freight costs with faster time to markets Europe US IL China ICL has Shorter and Lower Cost Shipping Routes to Emerging Markets Brazil India Country of Departure Mine-to-Port (km) (1) Destination (Days) Source: ICL estimates, Netpas Destination ($/tonne) China India Brazil China India Brazil Israel ~ UK ~ Spain ~ Germany ~ Russia / Belarus ~ Canada West Coast ~1, Israel based on average from Dead Sea to Port of Eilat and Ashdod; Germany based on Werra to Port of Hamburg and Bremerhaven; Canada based on Saskatchewan to Port of Vancouver; Russia based on Starobin to Port of Klaipeda; Spain based on Cabanasas Mine to Port of Barcelona; UK based on Cleveland Potash, Saltburn-by-the-Sea to Teesport Commerce Park 32

32 ICL Dead Sea Raw Material Extraction Pumping and evaporation process

33 The Phosphate Market and ICL s Position We are active in the TSP, SSP and Phosphoric Acid TSP marketing focuses on Brazil, USA and Europe SSP marketing focuses mainly on Brazil We are the largest supplier of PK fertilizers in Europe Million tonnes P 2 O 5 We plan to become a supplier of DAP through our YPH JV in China CAGR : 1.5% 2014 consumption Source: CRU USA China Brazil India RoW 2019 consumption 34

34 Specialty Fertilizers vs. Commodities CRF (Controlled Release Fertilizers) WSNPK (Water Soluble Fertilizers) NOP (Potassium Nitrate) CN (Calcium Nitrate) Soluble (MAP/MKP) Special NPK Specialties Light Specialties Added value Higher prices Smaller volumes Selective distribution Commodities 35

35 Our Advantages Supply chain Production process-technology adding value Back integrated Access to high quality raw material Efficient supply chain (high synergies) Market position Highly professional Agronomic Sales team Integrated and tailored service Full product portfolio Distributor loyalty Strong Branding R&D Innovate the next generation Controlled release fertilizers Fertigation and foliar solubles Enhanced nutrients and water efficiency 36

36 ICL Iberia Consolidation and Expansion Phoenix I+ II (2020): capacity expansion of Suria to 1,080K tonnes, closure of Cabanasas mine, expansion of granular capacity to 1,030K tonnes. Phoenix III (2020): new crystallization plant aimed to expand Suria s Center capacity by extra 200K tonnes of KCl and 500K tonnes of NaCl Phoenix IV (long term potential): a Brownfield project targeted to extend Suria s Center production capacity by additional 1M tonnes of KCl Agreement with Akzonobel to produce and market 1.5M tonnes of vacuum Salt and 50K tonnes of white potash annually 37

37 ICL's long term Commitment to Catalonia Government of Catalonia considers ICL s Phoenix Project strategic for the country Master Plan signed between the Government of Catalonia and ICL defines the development for the next decades Development of mining and operations Adaptation of logistics via rail and port and roads Commitment to the environment: restauration and waste management Basis for steady growth which will develop ICL's potash and salt activities for the benefit of European and global agriculture Stable return on investments of several hundreds of mio USD Long term planning framework for the region and for ICL 38

38 ICL to Establish Bulk Blending Facilities Across Ethiopia to Support Demand Growth Bulk Blending - fertilizer plant designed to blend several nutrients. The final formula is determined according to the crop needs and availability of nutrient in the soil Fertilizers are considered as a strategic commodity in Ethiopia Tigray Mekele Allana Potash The Ethiopian Gov. is defining the preferred cooperation model between the public and private sectors Bahar Dar Amhara Djibouti Port Several locations has been investigated Nekemte Tulu Bolo Worabe SNNP Oromia The plants are design to serve an area of about 200Km radius, use 150 k tonnes of potash annually through various number of formulas First Bulk Blend was already established in Tulu Bolo by the Ethiopian Government Alternatives examined by ICL Sites where the Ethiopian Government established or intend to establish BB facilities without any private business partner 39

39 Fulfilling Potash Demand Growth Potential in India An ICL & IPL JV, Bringing India to the state of the art potash fertilization The program enters its 3rd year, covers 52 districts in 9 states around India 21 experienced agronomists help providing evidence of the profitable use of potash ~400 farmer activities (Oct 13 Apr 15) including field days, jeep campaigns, crop seminars and farmers meetings. ~2,000 Demonstration plots (Oct 13 Apr 15) with more than 20 crops Results: 15-35% average increase in yields; Success stories demonstrate benefit-to-cost ratios between 13:1 and 43:1 +K - K 40

40 Africa Driving Demand in an Unexploited Potash Market Potential potash consumption of more than 400k tonnes between Ethiopia, Tanzania & Kenya. Current consumption 40-50k tonnes Africa has 12% of the world s arable land but only 20% is cultivated Only 7% is irrigated (40% in Asia) Share in global population to grow from 15% in 2010 to 23% in 2050 Only 1.7% of global potash consumption Program led by ICL in collaboration with Ethiopian partners Range of activities to increase awareness among farmers of the benefits of potash: Demonstration plots, outreach to farmers Soil fertility mapping Research and validation Expansion into Tanzania 41

41 ICL Specialty Fertilizers Strategy to Deliver High Growth Rates Specialty Agriculture (60% of sales) 5-6 % Market Growth >10% CAGR Ornamental Horticulture (21% of sales) 1-2 % Market Growth 4-6 % CAGR Professional Turf (8.5% of sales) 0 % Market Growth 6-8 % CAGR Chemicals (10.5% of sales) 1 % Market Growth 1-3 % CAGR 42

42 Market USD bn Other Straights 1 NOP ws NPK ICL Specialty Fertilizers: The Path for Faster than the Market Growth SOLUBLES % Controlled Release Fert % ICL Specialty Fertilizers Growth Pillars FOLIAR LIQUIDS % Reduce cost of production Enlarge Product Portfolio- New Potassium Nitrate production plant Establish production in attractive markets New cost efficient coating generation New production plants with focus on emerging markets Grow with R&D and new Strategic Partners 1 Other straights includes MAP/MKP, Calcium Nitrate, SOP 43

43 Proof of Performance and Market Education Proof of performance Field Biology Product Evaluation Product development Produt Development Trials + 11 % income 2 fewer applications Sugar production in Florida Trials US$/acre Current practice CRF Grower/Food industry Projects 33% less N Fertilizer volume (lbs N/acre) Fertilizer costs Application costs Adoption time 2-5 years Yield value 1,188 1,284 (1/3 less) Net value 1 1,042 1,160 (2 less) (+11%) Market education: new technologies adoption Has to taste fertilizer to check quality! 44

44 Geographical Expansion Strategic alliance with YTH Production moves closer to Emerging Markets High logistic synergies Improve Yield & Quality Innovative technology Market education Worldwide Agronomist team Focus on Plants needs Knowledge and experience in the market 45

45 Engineered Materials

46 ICL Industrial Products: Vast Global Footprint 20% Asia Americas EMEA 2500 Employees worldwide Of ICL sales in 2014 Sales by region $0.8B sales 1-9/2015 Plant Sales R&D 47

47 ICL Industrial Products - from Assets to Markets Chemistries Key Markets Chlorine Magnesium Mineral Salts Phosphorus Bromine Mineral Applications Microbial Solutions Flame Retardants Energy and Intermediates Back Integration to Customer Solutions 48

48 Global Trends Supporting Our Business Standard of living Population Regulation & Environmental ELECTRONICS INTERMEDIATES FOR FOOD, PHARMA, AGRO CONSTRUCTION OIL & GAS WATER TREATMENT TRANSPORTATION FURNITURE & TEXTILE POWER PLANTS 49

49 Global Cost Leader in Bromine The Dead Sea provides the highest concentration of Bromine Cost is related to concentration g/liter Abundant supply Underground Wells (China) Sea Water (China, Japan) Shallow Sea (Ukraine) Salt Lake (India) Underground Wells (U.S.) Dead Sea Operations (Israel, Jordan) Source: ICL estimates, MarketsandMarkets 50

50 A Global Leader in a Concentrated Market ICL holds the largest capacity Global Bromine Capacity, by producer Bromine demand by industry Market utilization rates: 70-80% Other China Chemtura (US) Biocides 6% Fumigants 3% Mercury control 3% Albemarle (US) Albemarle (Dead Sea) ICL (Dead Sea) Industrial 8% Clear brine fluids 18% Brominated organic intermediates 21% Flame retardants 41% Source: ICL estimates, MarketsandMarkets 51

51 ICL-IP s 4 Pillars strategy - Highlights Grow our core business Organic Growth Pricing Margin expansion Cost reduction Operational excellence Reduction of labor costs Divest non core businesses Advocacy SAFR (Systematic Assessment for FR) Flame retardants standards Merquel in China/EU Grow the Bromine pie In-house R&D Outside technical collaborations Focus on customer unmet needs to bring new products and solutions (CVM) 52

52 Industrial Products Growth Projects - a Significant Contribution To Future Sales ELECTRONICS INTERMEDIATES FOR FOOD, PHARMA, AGRO CONSTRUCTION OIL & GAS WATER TREATMENT TRANSPORTATION FURNITURE & TEXTILE POWER PLANTS Growth areas short to mid term Next generation Polymeric and Reactive flame retardants Brominated biocides Merquel and Clear Brine Fluids Purified potassium chloride Energy Storage 2020 estimated contribution Potential sales of ~$150M with above average operating income Growth areas long term Energy storage Gold extraction Soil fumigation 3-D printing Significant contribution beyond 2020 Implementing growth strategy Growing core business through in-house R&D Margin expansion, pricing, focus on customer unmet needs Advocacy: SAFR (Scientific Assessment for Flame Retardants), Merquel in China/EU 53

53 Improving Bromine and Bromine Compounds Margins While Maintaining Historical Market Share Elemental bromine market prices in China have increased Bromine compound prices increased by about 15% especially in Asia Price increase will expand to other markets as well, subject to contract timing Cost reduction initiatives taken this year are expected to generate about $23 million in annual savings in 2016 R&D pipeline encapsulates potential for growth of bromine demand Bromine price in China (RMB/MT) 54

54 ICL Performance Products: Overview Non Core 5% 28% 41% 54% 3,300 Employees Worldwide Of ICL Sales in 1-9/2015 Sales by Business unit $1.1B sales in 1-9/2015 Americas 40% EMEA 45% Advanced Additives Food Specialties Asia/Pacific 15% 55

55 Revenue (m$) Operating Income % ICL Performance Products: Focus on Core Core (Rev $) Non Core (Rev $) Core (OI %) Non Core (OI %) Estimated CAGR : 3-5% Estimated operating margin expansion: about basis points 1,533 $1,711M Thermphos P2S5 business '06 '07 '08 '09 '10 '11 '12 '13 '14 '15E '16E '17E '18E '19E 56

56 Advanced Additives A Stable Portfolio With Broad Applications 57

57 Advanced Additives Expand Through Differentiation Fire Safety Products Class A Fire ICL provides products and services that help prevent, control, and suppress fires World-wide reputation A strong market position Class B Fire 2014 acquisition of Auxquimia: specialists in the Class B Foam for oil, refinery and chemical industry Complete and broad portfolio Own testing facilities Fluorine free product innovations 58

58 Food

59 Food Specialties What We Do Linking Markets with Consumer Trends Healthy Reduction versus Healthy Enhancements Sugar Fat Sodium Proteins Fibers Minerals Antioxidants 60

60 Daily Protein /Capita (g) World Population (bilions) Arable Land (ha/capita) Food Specialties- Increased Global Demand for Proteins The world population grows, and the arable land per capita decreases Decade '60 '70 '80 '90 '00 '10 '20P Upside potential for protein consumption per capita USA Germany Brazil China Nigeria Indonesia India Ethiopia ,000 1,500 2,000 Population (mil) Source: GS&PA Research, FAO 61

61 Dairy Meat/Poultry / Seafood Bakery Beverage Food Specialties Add Technology Platforms: Whey Proteins in Europe Acquisition of Prolactal/Rovita in Q1/2015 is a big step in implementing the strategy 2014 annual revenue of $110 M; market growth of approximately 10% annually Proprietary technology can be expanded into other regions Phosphate Salts Whey Proteins Vegetable Proteins Spices 62

62 Efficiency and Operational Excellence

63 ACE Drives Functional Excellence in 5 Key Processes ACE streams ICL s core value creation drivers Current Status Volume Activity Commercial excellence Establishment of the commercial excellence program. ~ $6000 million of Revenues CAPEX (investment) Revenue increase Establishment of a new global function: CIO Annual CAPEX spending: ~ $800 million R&D Asset productivity Establishment of a new global function: CTO ~ $6000 million of Revenues Procurement Cost reduction Establishment of a new global function: CPO Annual spending: ~ $4000 million Energy efficiency Ongoing efforts Annual spending: ~ $400 million 64

64 Procurement Savings: Three Potential Levers Supplier management Process management Demand management Volume consolidation Supplier partnerships Negotiation Transportation agreements Make-or-buy opportunities Simplify specifications to fulfill (not exceed) requirements Find "replacements" and alternative technologies Manage service levels/demand Reduce waste Success story- Phenol contract What did we do? One global ICL approach regions & management level Coordination alignment between global and regional Excellent global team work Exploration of supply options over the entire value chain One global contract or no contract Result: Annual saving: $2.1 M (25%) Global contract for the US, Israel & Europe 65

65 CAPEX Value Engineering As project progresses, budget is committed, ability to change project decisions/add value decreases: High Ability to improve value Commitment of funds 100% Low 0% Project life cycle CAPEX value engineering: A systematic and structured approach for improving projects, products, and processes Used to analyze and improve manufacturing products and processes, design and construction projects Helps achieve an optimum balance between function, performance, quality, safety and cost The proper balance results in the maximum value for the project Potential cash flow contribution: ~$100M 66

66 Shared Services Contribution Accumulated employee reduction Full time employees Accumulated annual savings Accumulated Savings ($M) Reduce and optimize labor costs Increase and optimize productivity Meet and exceed service quality levels Drive centralization as part of "One ICL" Vision

67 Thank you