Delivers sales of $1.9 billion, flat
sequentially, with adjusted EBITDA of $346 million, diluted
earnings per share of $0.11 and continued strong cash
generation
Reaffirms full year adjusted EBITDA
guidance
ICL (NYSE: ICL) (TASE: ICL), a leading global specialty
minerals company, today reported its financial results for the
third quarter ended September 30, 2023. Consolidated sales were
$1.9 billion versus $2.5 billion, while operating income was $227
million versus $935 million in the third quarter of last year.
Operating cash flow was $407 million vs. $606 million, and adjusted
EBITDA was $346 million versus $1,049 million.
“ICL delivered solid results, while continuing to target
long-term growth and consistently strong cash generation, enhanced
by efficiency initiatives. While some competitive pressures remain
in certain end-markets, demand recovery is on the horizon for our
specialty businesses, and we are expecting a return to a more
stabilized growth trajectory during 2024,” said Raviv Zoller,
president and CEO of ICL. “Despite the unprecedented October 7
attack on Israel, ICL operations there continue to function without
significant disruption. While we have faced some headwinds, we
remain committed to our customers, to our focused long-term growth
strategy and, before all else, to our employees, their families and
the communities where we do business.”
The company reaffirmed its guidance for full year adjusted
EBITDA, now expected at the middle of the previously announced
range of between $1.6 billion to $1.8 billion, with the company’s
specialties focused businesses expected at approximately $0.7
billion. (1a)
Key Financials
Third Quarter 2023
US$M
Ex. per share data
3Q'23
3Q'22
YTD'23
YTD'22
Sales
$1,862
$2,519
$5,846
$7,924
Gross profit
$586
$1,315
$2,111
$4,099
Gross margin
31%
52%
36%
52%
Operating income
$227
$935
$992
$2,976
Adjusted operating income (1)
$227
$928
$1,007
$2,947
Operating margin
12%
37%
17%
38%
Adjusted operating margin (1)
12%
37%
17%
37%
Net income attributable to
shareholders
$137
$633
$580
$1,828
Adjusted net income attributable to
shareholders (1)
$137
$628
$592
$1,992
Adjusted EBITDA (1)
$346
$1,049
$1,397
$3,309
Adjusted EBITDA margin (1)
19%
42%
24%
42%
Diluted earnings per share
$0.11
$0.49
$0.45
$1.42
Diluted adjusted earnings per share
(1)
$0.11
$0.49
$0.46
$1.55
Cash flows from operating activities
$407
$606
$1,180
$1,558
(1)
Adjusted operating income and margin,
adjusted net income attributable to shareholders, adjusted EBITDA
and margin, and diluted adjusted earnings per share are non-GAAP
financial measures. Please refer to the adjustments table and
disclaimer.
Industrial Products
Third quarter 2023
- Sales of $267 million vs. $437 million.
- EBITDA of $42 million vs. $170 million.
- While certain end-markets remain subdued, moderate demand
recovery becoming visible.
Key developments
- Flame retardants: Continuation of softness in electronics and
construction end-markets resulted in lower volumes and prices
versus the prior year.
- Industrial solutions: Chinese spot bromine price continued to
decline year-over-year.
- Oil and gas: Sales grew versus the prior year on higher
volumes, as drilling activity increased in the Gulf of Mexico.
- Specialty minerals: Sales in accordance with expectations.
Potash
Third quarter 2023
- Sales of $526 million vs. $854 million.
- EBITDA of $164 million vs. $537 million.
- Grain Price Index decreased 14.2% year-over-year, with rice,
soybeans, wheat and corn down 7.6%, 8.0%, 15.5% and 25.6%,
respectively.
- Potash price (CIF) per ton of $342 was down 51% year-over-year,
as prices have significantly moderated versus highs seen in
2022.
- Company’s potash supply sold out for 2023.
Key developments
- Production: Spain still facing geological constraints in lower
grade mineral zone.
- Sales: Quantities higher year-over-year, with increased volumes
to Europe, Brazil and China.
Phosphate Solutions
Third quarter 2023
- Sales of $620 million vs. $766 million.
- Phosphate specialties: Sales of $364 million vs. $455
million.
- Phosphate commodities: Sales of $256 million vs. $311
million.
- EBITDA of $117 million vs. $239 million.
- Phosphate specialties: EBITDA of $55 million vs. $111
million.
- Phosphate commodities: EBITDA of $62 million vs. $128
million.
- Strong results relative to current market conditions, with
resilience demonstrated across Specialties.
Key developments
- White phosphoric acid: Sales declined year-over-year, as prices
were lower in most regions.
- Industrial specialties: Sales lower on decreased volumes in
most regions, with the exception of Asia Pacific.
- Food specialties: Lower volumes in Europe and the Americas
resulted in a decrease in sales, even with stable pricing.
- Battery materials: LFP cathode active material facility
expansion in U.S. remains on-track.
Growing Solutions
Third quarter 2023
- Sales of $550 million vs. $629 million.
- EBITDA of $37 million vs. $127 million.
- Significant destocking efforts contributed, in part, to
all-time quarterly free cash flow record.
Key developments
- Specialty agriculture: Despite strong volumes, sales declined
versus the prior year, due to lower prices.
- Turf and ornamental: Continuation of trend, with ornamental
horticulture sales decreasing, while turf sales remained
stable.
- Brazil: Record sales volume, with strong market share
gains.
- Polysulphate: Production at Boulby increased 13% year-over-year
to 245,000 metric tons.
Financial Items
Financing Expenses
Net financing expenses for the third quarter of 2023 were $42
million, up versus $24 million in the corresponding quarter of last
year.
Tax Expenses
Tax expenses in the third quarter of 2023 were $43 million,
reflecting an effective tax rate of 23%, compared to $276 million
in the corresponding quarter of last year and reflecting an
effective tax rate of 30%.
Available Liquidity
ICL’s available cash resources, which are comprised of cash and
deposits, unutilized revolving credit facility, and unutilized
securitization, totaled $1,782 million, as of September 30,
2023.
Outstanding Net Debt
As of September 30, 2023, ICL’s net financial liabilities
amounted to $2,107 million, a decrease of $209 million compared to
December 31, 2022.
Dividend Distribution
In connection with ICL’s third quarter 2023 results, the Board
of Directors declared a dividend of 5.31 cents per share, or
approximately $68 million, versus 24.35 cents per share, or
approximately $314 million, in the third quarter of last year. The
dividend will be payable on December 20, 2023, to shareholders of
record as of December 5, 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, Twitter 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, 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, 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
Nine-months ended
Year ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
December 31,
2022
Sales
1,862
2,519
5,846
7,924
10,015
Cost of sales
1,276
1,204
3,735
3,825
4,983
Gross profit
586
1,315
2,111
4,099
5,032
Selling, transport and marketing
expenses
264
300
807
900
1,181
General and administrative expenses
66
70
189
213
291
Research and development expenses
17
18
54
53
68
Other expenses
14
-
84
6
30
Other income
(2)
(8)
(15)
(49)
(54)
Operating income
227
935
992
2,976
3,516
Finance expenses
79
57
255
262
327
Finance income
(37)
(33)
(120)
(190)
(214)
Finance expenses, net
42
24
135
72
113
Share in earnings of equity-accounted
investees
-
-
-
-
1
Income before taxes on income
185
911
857
2,904
3,404
Taxes on income
43
276
254
1,027
1,185
Net income
142
635
603
1,877
2,219
Net income attributable to the
non-controlling interests
5
2
23
49
60
Net income attributable to the
shareholders of the Company
137
633
580
1,828
2,159
Earnings per share attributable to the
shareholders of the Company:
Basic earnings per share (in dollars)
0.11
0.49
0.45
1.42
1.68
Diluted earnings per share (in
dollars)
0.11
0.49
0.45
1.42
1.67
Weighted-average number of ordinary
shares outstanding:
Basic (in thousands)
1,289,318
1,287,881
1,289,332
1,286,698
1,287,304
Diluted (in thousands)
1,290,813
1,290,131
1,290,926
1,288,948
1,289,947
Condensed Consolidated Statements of Financial Position
as of (Unaudited)
$ millions
September 30, 2023
September 30, 2022
December 31,
2022
Current assets
Cash and cash equivalents
307
498
417
Short-term investments and deposits
162
92
91
Trade receivables
1,387
1,672
1,583
Inventories
1,722
1,982
2,134
Prepaid expenses and other receivables
362
361
323
Total current assets
3,940
4,605
4,548
Non-current assets
Deferred tax assets
141
152
150
Property, plant and equipment
6,125
5,764
5,969
Intangible assets
851
825
852
Other non-current assets
217
252
231
Total non-current assets
7,334
6,993
7,202
Total assets
11,274
11,598
11,750
Current liabilities
Short-term debt
592
481
512
Trade payables
814
1,066
1,006
Provisions
71
45
81
Other payables
809
1,040
1,007
Total current liabilities
2,286
2,632
2,606
Non-current liabilities
Long-term debt and debentures
1,984
2,290
2,312
Deferred tax liabilities
464
412
423
Long-term employee liabilities
334
398
402
Long-term provisions and accruals
234
262
234
Other
64
61
60
Total non-current liabilities
3,080
3,423
3,431
Total liabilities
5,366
6,055
6,037
Equity
Total shareholders’ equity
5,664
5,310
5,464
Non-controlling interests
244
233
249
Total equity
5,908
5,543
5,713
Total liabilities and equity
11,274
11,598
11,750
Condensed Consolidated Statements of Cash Flows
(Unaudited)
$ millions
Three-months ended
Nine-months ended
Year ended
September 30,
2023
September 30, 2022
September 30, 2023
September 30, 2022
December 31,
2022
Cash flows from operating
activities
Net income
142
635
603
1,877
2,219
Adjustments for:
Depreciation and amortization
119
121
390
362
498
Exchange rate, interest and derivative,
net
27
45
75
161
157
Tax expenses
43
276
254
1,027
1,185
Change in provisions
(13)
(16)
(41)
(75)
(83)
Other
1
(5)
7
(19)
(15)
177
421
685
1,456
1,742
Change in inventories
251
(160)
415
(455)
(527)
Change in trade receivables
(28)
84
205
(364)
(215)
Change in trade payables
(59)
(41)
(167)
58
(42)
Change in other receivables
(6)
32
(11)
(58)
(46)
Change in other payables
(19)
68
(226)
59
107
Net change in operating assets and
liabilities
139
(17)
216
(760)
(723)
Interest paid, net
(19)
(13)
(78)
(68)
(106)
Income taxes paid, net of refund
(32)
(420)
(246)
(947)
(1,107)
Net cash provided by operating
activities
407
606
1,180
1,558
2,025
Cash flows from investing
activities
Proceeds (payments) from deposits, net
1
1
(78)
(37)
(36)
Business combinations
-
-
-
(18)
(18)
Purchases of property, plant and equipment
and intangible assets
(191)
(184)
(525)
(535)
(747)
Proceeds from divestiture of assets and
businesses, net of transaction expenses
1
7
4
29
33
Other
-
-
1
14
14
Net cash used in investing
activities
(189)
(176)
(598)
(547)
(754)
Cash flows from financing
activities
Dividends paid to the Company's
shareholders
(82)
(376)
(406)
(852)
(1,166)
Receipt of long-term debt
131
201
484
734
1,045
Repayments of long-term debt
(255)
(183)
(653)
(798)
(1,181)
Receipts (repayments) of short-term
debt
(72)
21
(89)
(51)
(21)
Receipts from transactions in
derivatives
-
-
6
19
20
Dividend paid to the non-controlling
interests
-
-
(15)
-
-
Net cash used in financing
activities
(278)
(337)
(673)
(948)
(1,303)
Net change in cash and cash
equivalents
(60)
93
(91)
63
(32)
Cash and cash equivalents as of the
beginning of the period
372
426
417
473
473
Net effect of currency translation on cash
and cash equivalents
(5)
(21)
(19)
(38)
(24)
Cash and cash equivalents as of the end
of the period
307
498
307
498
417
Adjustments to Reported Operating and Net Income
(non-GAAP)
$ millions
Three-months ended
Nine-months ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Operating income
227
935
992
2,976
Write-off of assets and provision for site
closure (1)
-
-
15
-
Divestment related items and transaction
costs from acquisitions (2)
-
(7)
-
(29)
Total adjustments to operating
income
-
(7)
15
(29)
Adjusted operating income
227
928
1,007
2,947
Net income attributable to the
shareholders of the Company
137
633
580
1,828
Total adjustments to operating income
-
(7)
15
(29)
Total tax adjustments (3)
-
2
(3)
193
Total adjusted net income -
shareholders of the Company
137
628
592
1,992
(1)
For 2023, reflects a write-off of assets
and closure costs resulting from 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
Nine-months ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Net income
142
635
603
1,877
Financing expenses, net
42
24
135
72
Taxes on income
43
276
254
1,027
Operating income
227
935
992
2,976
Depreciation and amortization
119
121
390
362
Adjustments (1)
-
(7)
15
(29)
Total adjusted EBITDA (2)
346
1,049
1,397
3,309
(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
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Segment operating income
31
154
125
496
69
193
20
112
Depreciation and amortization
11
16
39
41
48
46
17
15
Segment EBITDA
42
170
164
537
117
239
37
127
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107938737/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
ICL (NYSE:ICL)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
ICL (NYSE:ICL)
Historical Stock Chart
Von Mai 2023 bis Mai 2024