Investor and Analyst Day

Transcription

1 Investor and Analyst Day Ofer Lifshitz, SVP Global Processes May 19, 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 ICL s Efficiencies and Operational Excellence a Major Pillar in Our Strategy Initiative Procurement 2016 EBITDA Impact (Run-Rate) USD Millions/Year Execute on $350 million in identified efficiency improvements Improve positioning on production cost curve Cross-organization process improvement Energy Pricing R&D Production Cost Efficiency Overall $350 million 3

4 Efficiency Strategy Projects Overview ACE Ambition Creates Excellence Operational Excellence Shared Services Procurement Energy CAPEX Pricing R&D Manufacturing excellence Improved cost position/ cost per ton Increased production/process optimization/yield increase Procurement Finance & tax IT HR Legal & compliance 4

5 ACE ACE Drives Functional Excellence in 5 Key Processes ACE streams ICL s core value creation drivers Current Status Volume Activity Pricing 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 5

6 ACE 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 6

7 ACE 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 7

8 Operational Excellence Operational Excellence Scope Operational excellence Key Value Drivers Project Further Tools Lean Manufacturing Improve bottom-line performance and ICL s cost position through promoting manufacturing excellence Efficiency proposals Improvement teams 6 sigma teams Quality cost model New, lean manufacturing process Accompanied by consultants Improve the competitiveness of our product portfolio in the global markets Cost structure improvement/cost per tonne reduction Increased production/process optimization/yield increase 8

9 Operational Excellence Operational Excellence at Our Mineral Assets ICL Dead Sea ICL UK ICL Rotem ICL Industrial Products, ICL Performance Products Potash Potash Polysulphate Phosphate Engineered Materials, Food Potash cost per tonne reduction of ~ $10 by 2016 EBITDA contribution of ~$50 million by 2016 Increase production by 40% vs level Potash cost per tonne reduction of ~ $40 by 2016 EBITDA contribution of ~$50 million by 2016 Increase production potash of main production products to a vs level level of 900KT : by MGA ~15% Fertilizers Increase - ~10% EBITDA Polysulphate contribution of ~ production $80 million to by a 2016 level of 400 KT by 2016 Operational Excellence initiatives implementation to start in 2015 Significant potash cost per tom reduction 9

10 SHS Shared Services Overview Shared services center mission: A center enabler of ICL S Next Step Forward strategy, serving ICL business in a quality, cost effective manner, providing timely, valuable and consistent service. Procurement Americas SHS Europe SHS Israel SHS Finance & Tax IT HR Israel SHS China SHS Legal & Compliance Israel: Number of companies: 9 Number of employees: ~5,000 (40%) Europe: Number of countries: 18 Number of employees: ~ 4,900 (39%) Number of companies: 86 Americas: Number of countries: 6 Number of employees: ~ 1,500 (12%) Number of companies: 19 China Number of employees: 614 (5%) Number of companies: 10 * All data is as of

11 SHS 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

12 On Track to Achieve Efficiency & Operational Excellence Gain of $350M Overall efficiency contribution to the P&L compared to 2013 baseline (Year End run rate) Additional opportunities beyond

13 Thank you