ICL Reports First Quarter 2024 Results

Delivers solid sequential quarterly improvement in sales of $1.7 billion and adjusted EBITDA of $362 million

ICL (NYSE: ICL) (TASE: ICL), a leading global specialty minerals company, today reported its financial results for the first quarter ended March 31, 2024. Consolidated sales were $1.7 billion versus $2.1 billion in the first quarter of last year. Operating income was $203 million versus $465 million, while adjusted operating income was $215 million versus $480 million. Adjusted EBITDA was $362 million versus $610 million in the first quarter of last year. Diluted earnings per share were $0.08 versus $0.22, and adjusted diluted EPS was $0.09 versus $0.23.

“ICL delivered solid first quarter results, with sequential improvement in quarterly sales and adjusted EBITDA, as global demand stabilized and the majority of our end-markets began to show signs of recovery. Additionally, we have been able to limit the impact for most of the war-related disruptions,” said Raviv Zoller, president and CEO of ICL. “During the first quarter, we continued to focus on innovation, expanding our specialties product portfolio and entering into new strategic partnerships, while executing consistently on our efficiency program and achieving further cost reductions. These efforts help us to provide consistent strong cash generation and industry leading dividend distributions to our shareholders.”

The company reiterated its guidance for full year 2024, which calls for the specialties-driven segments adjusted EBITDA to be between $0.7 billion to $0.9 billion. For potash, the company continues to expect 2024 sales volumes to be between 4.6 million metric tons and 4.9 million metric tons. (1a)

Key Financials

First Quarter 2024

US$M

Ex. per share data

1Q'24

4Q'23

1Q'23

Sales

$1,735

$1,690

$2,116

Gross profit

$557

$560

$846

Gross margin

32%

33%

40%

Operating income

$203

$149

$465

Adjusted operating income (1)

$215

$211

$480

Operating margin

12%

22%

Adjusted operating margin (1)

12%

23%

Net income attributable to shareholders

$109

$67

$280

Adjusted net income attributable to shareholders (1)

$118

$123

$292

Adjusted EBITDA (1,2)

$362

$357

$610

Adjusted EBITDA margin (1,2)

21%

29%

Diluted earnings per share

$0.08

$0.05

$0.22

Diluted adjusted earnings per share (1)

$0.09

$0.10

$0.23

Cash flows from operating activities

$279

$415

$382

(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.

(2)

In 1Q’24, the company’s adjusted EBITDA was positively impacted by an immaterial accounting reclassification. Please refer to the 6-K filing for additional details.

Industrial Products

First quarter 2024

Sales of $335 million vs. $361 million.
EBITDA of $72 million vs. $105 million.
Sequential quarterly improvement, with sales up more than 10% and EBITDA up approximately 30%. Provisional anti-dumping measures were imposed by EU Commission on imports of certain alkyl phosphate esters from China, beginning mid-April.

Key developments

Flame retardants: Sales increased year-over-year, as higher volumes for brominated solutions were partially offset by lower sales of phosphorous-related solutions and lower prices overall. While the electronics and construction end-markets remained challenging, key customer demand was maintained.
Industrial solutions: Elemental bromine sales decreased year-over-year, as lower prices offset higher volumes.
Oil and gas: Despite continued stable global demand for clear brine fluids, sales were lower year-over-year, due to a peak in the market at the beginning of 2023.
Specialty minerals: Sales declined versus the prior year, but were up sequentially, with stable demand for pharmaceutical uses.

Potash

First quarter 2024

Sales of $423 million vs. $600 million.
EBITDA of $124 million vs. $298 million.
Grain Price Index decreased 19.0% year-over-year, with rice up 1.4%, while corn, soybeans and wheat were down 35.3%, 21.4% and 29.5%, respectively. On a sequential basis, the Grain Price Index declined 2.2%, with rice up 6.8%, while corn, soybeans and wheat were down 9.7%, 8.2% and 6.3%, respectively.

Key developments

Potash price: $324 per ton (CIF).
- Down 6% sequentially and approximately 40% year-over-year.
Potash sales volumes: 1,084 thousand metric tons.
- Increased more than 120 thousand metric tons year-over-year and were down approximately 95 thousand metric tons on a sequential basis.
ICL Dead Sea
- Completed successful annual maintenance in March.
ICL Iberia
- Strong production execution, with significant year-over-year improvement.
Metal Magnesium
- Increase in production versus the first quarter of 2023.

Phosphate Solutions

First quarter 2024

Sales of $559 million vs. $675 million.
EBITDA of $131 million vs. $171 million.
Sequential quarterly improvement in sales, even as phosphate prices were at a crossroad. While pricing remained stable in the first quarter, supply dynamics are expected to influence future quarters.

Key developments

White phosphoric acid: Sales declined year-over-year, as prices were lower globally and volumes were mixed by region.
Industrial phosphates: Sales decreased, as prices and volumes both declined year-over-year. Productivity was good overall, with consistent demand from the cleaning supply and water treatment end-markets. European demand was positive, while North America was weaker.
Food phosphates: Sales decreased with lower prices and volumes. Demand in Europe was up slightly, on an annual basis, while South America was softer and North American customers faced competitive challenges.
Battery materials: Construction of customer innovation and qualification center (CIQC) in St. Louis remained on-track.
Commodity phosphates: Sequential sales improvement, on higher fertilizer sales, volumes and prices.
Regions: Increased competition for most markets, as expected, including North and South America, China and Europe.

Growing Solutions

First quarter 2024

Sales of $479 million vs. $564 million.
EBITDA of $42 million vs. $45 million.
Sequential quarterly improvement in EBITDA, up approximately 180%, with improved inventory position and continued efficiency efforts.

Key developments

Brazil: Sales decreased versus the prior year, but product optimization helped deliver higher gross margin.
Europe: Sales ahead of expectations and higher year-over-year, while profit was negatively impacted by lower prices and higher logistics costs.
North America: Sales improved year-over-year on higher volumes, while profits were softer, due to lower prices and some logistics challenges.
Asia: Due to challenging market conditions, sales declined year-over-year, with weaker volumes and lower prices contributing to lower profitability.
Product trends: Specialty agriculture sales decreased versus the prior year, as stronger volumes were offset by lower prices. Turf and ornamental saw a recovery in ornamental horticulture, with good demand throughout the quarter, while turf saw some impact from a wet spring in Europe. The polysulphate market remained challenging, as lower prices impacted profitability in Europe and North America, due to lower overall volumes and higher logistics costs.

Financial Items

Financing Expenses

Net financing expenses for the first quarter of 2024 were $35 million, down versus $44 million in the corresponding quarter of last year.

Tax Expenses

Reported tax expenses in the first quarter of 2024 were $42 million, reflecting an effective tax rate of 25%, compared to $127 million in the corresponding quarter of last year, reflecting an effective tax rate of 30%. The lower tax rate reflected a lower surplus profit levy and increased profits in regions with lower effective tax rates.

Available Liquidity

ICL’s available cash resources, which are comprised of cash and deposits, unutilized revolving credit facility, and unutilized securitization, totaled $1,704 million, as of March 31, 2024.

Outstanding Net Debt

As of March 31, 2024, ICL’s net financial liabilities amounted to $2,022 million, a decrease of $73 million compared to December 31, 2023. In January of 2024, the company repaid $145 million in a private placement bond, and in March, it repaid approximately $108 million of its Series E Bond – both as scheduled.

Dividend Distribution

In connection with ICL’s first quarter 2024 results, the Board of Directors declared a dividend of 4.57 cents per share, or approximately $59 million, versus 11.32 cents per share, or approximately $146 million, in the first quarter of last year. The dividend will be payable on June 20, 2024, to shareholders of record as of June 6, 2024.

About ICL

ICL Group Ltd. is a leading global specialty minerals company, which creates impactful solutions for humanity's sustainability challenges in the food, agriculture and industrial markets. ICL leverages its unique bromine, potash and phosphate resources, its global professional workforce, and its sustainability focused R&D and technological innovation capabilities, to drive the company's growth across its end markets. ICL shares are dual listed on the New York Stock Exchange and the Tel Aviv Stock Exchange (NYSE and TASE: ICL). The company employs more than 12,000 people worldwide, and its 2023 revenue totaled approximately $7.5 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, X 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. The company undertakes no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect actual outcomes, unless required by law. The company provides guidance for specialties-driven adjusted EBITDA, which includes Industrial Products, Growing Solutions and Phosphate Solutions, as the Phosphate Solutions business is now predominantly specialties focused. For the Potash business, the company is providing sales volume guidance. The company believes this information provides greater transparency, as these new metrics are less impacted by fertilizer commodity prices, given the extreme volatility in recent years.

Non-GAAP Statement

The company discloses in this quarterly report non-IFRS financial measures titled adjusted operating income, adjusted net income attributable to the company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA. 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)” 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)” 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. Adjusted EBITDA is calculated as net income before financing expenses, net, taxes on income, share in earnings of equity-accounted investees, depreciation and amortization, and certain adjustments presented in the reconciliation table under “Consolidated adjusted EBITDA, and diluted adjusted earnings per share for the periods of activity” below, which were adjusted for in calculating the adjusted operating income.

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 company’s 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 the company’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 that management believes are not indicative of ongoing operations. Management uses these non-IFRS measures to evaluate the company's business strategies and management 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 change in the company’s results of operations. This discussion is based in part on management’s best estimates of the impact of the main trends on the company’s businesses. The company has based the following discussion on its financial statements. You should read such discussion together with the company’s 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 intent, belief or current expectations. Forward‑looking statements are based on management’s beliefs and assumptions and on information currently available to management. Such statements are subject to risks and uncertainties and 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 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 seaport shipping facilities or regulatory restrictions affecting the ability to export products overseas; changes in exchange rates or prices compared to those the company is currently experiencing; general market, political or economic conditions in the countries in which the company operates; price increases or shortages with respect to principal raw materials; pandemics may create disruptions, impacting 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 the plants; labor disputes, slowdowns and strikes involving 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 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 the company, or its service providers', data security; failure to retain and/or recruit key personnel; inability to realize expected benefits from the company’s cost reduction program according to the expected timetable; inability to access capital markets on favorable terms; cyclicality of the businesses; the company is exposed to risks relating to its current and future activity in emerging markets; changes in demand for its fertilizer products due to a decline in agricultural product prices, lack of available credit, weather conditions, government policies or other factors beyond the company’s control; disruption of the company, or its service providers', sales of magnesium products being affected by various factors that are not within the company’s control; volatility or crises in the financial markets; hazards inherent to mining and chemical manufacturing; the failure to ensure the safety of the company’s 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 supply and production chains; filing of class actions and derivative actions against the company, its executives and Board members; closing of transactions, mergers and acquisitions; and other risk factors discussed under ”Item 3 - Key Information— D. Risk Factors" in the company's Annual Report on Form 20-F for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (SEC) on March 14, 2024 (the Annual Report).

Forward‑looking statements speak only as of the date they are made, and, except as otherwise required by law, the company does not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements, targets or goals in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events. Investors are cautioned to consider these risk and uncertainties and to not place undue reliance on such information. Forward-looking statements should not be read as a guarantee of future performance or results and are subject to risks and uncertainties, and the actual results may differ materially from those expressed or implied in the forward-looking statements.

This report for the first quarter of 2024 should be read in conjunction with the Annual Report of 2023 published by the company on Form 20-F, as of and for the year ended December 31, 2023, including the description of events occurring subsequent to the date of the statement of financial position, as filed with the U.S. SEC.

Appendix

Condensed Consolidated Statements of Income (Unaudited)

$ millions

Three-months ended

Year ended

March 31, 2024

March 31, 2023

December 31, 2023

Sales

1,735

2,116

7,536

Cost of sales

1,178

1,270

4,865

Gross profit

557

846

2,671

Selling, transport and marketing expenses

273

264

1,093

General and administrative expenses

260

Research and development expenses

Other expenses

128

Other income

(3)

(3)

(22)

Operating income

203

465

1,141

Finance expenses

259

Finance income

(25)

(43)

(91)

Finance expenses, net

168

Share in earnings of equity-accounted investees

Income before taxes on income

168

421

974

Taxes on income

127

287

Net income

126

294

687

Net income attributable to the non-controlling interests

Net income attributable to the shareholders of the Company

109

280

647

Earnings per share attributable to the shareholders of the Company:

Basic earnings per share (in dollars)

0.08

0.22

0.50

Diluted earnings per share (in dollars)

0.08

0.22

0.50

Weighted-average number of ordinary shares outstanding:

Basic (in thousands)

1,289,530

1,289,238

1,289,361

Diluted (in thousands)

1,290,362

1,290,938

1,290,668

Condensed Consolidated Statements of Financial Position as of (Unaudited)

$ millions

March 31, 2024

March 31, 2023

December 31, 2023

Current assets

Cash and cash equivalents

363

552

420

Short-term investments and deposits

121

129

172

Trade receivables

1,492

1,631

1,376

Inventories

1,630

2,116

1,703

Prepaid expenses and other receivables

301

316

363

Total current assets

3,907

4,744

4,034

Non-current assets

Deferred tax assets

155

155

152

Property, plant and equipment

6,285

6,066

6,329

Intangible assets

897

867

873

Other non-current assets

242

213

239

Total non-current assets

7,579

7,301

7,593

Total assets

11,486

12,045

11,627

Current liabilities

Short-term debt

623

704

858

Trade payables

914

967

912

Provisions

Other payables

849

985

783

Total current liabilities

2,440

2,735

2,638

Non-current liabilities

Long-term debt and debentures

1,883

2,278

1,829

Deferred tax liabilities

492

442

489

Long-term employee liabilities

352

385

354

Long-term provisions and accruals

218

239

224

Other

Total non-current liabilities

3,002

3,412

2,952

Total liabilities

5,442

6,147

5,590

Equity

Total shareholders’ equity

5,762

5,631

5,768

Non-controlling interests

282

267

269

Total equity

6,044

5,898

6,037

Total liabilities and equity

11,486

12,045

11,627

Condensed Consolidated Statements of Cash Flows (Unaudited)

$ millions

Three-months ended

Year ended

March 31, 2024

March 31, 2023

December 31, 2023

Cash flows from operating activities

Net income

126

294

687

Adjustments for:

Depreciation and amortization

147

130

536

Exchange rate, interest and derivative, net

Tax expenses

127

287

Change in provisions

(42)

(15)

(32)

Other

208

264

844

Change in inventories

465

Change in trade receivables

(141)

(35)

252

Change in trade payables

(37)

(101)

Change in other receivables

(6)

Change in other payables

(23)

(210)

Net change in operating assets and liabilities

(36)

(50)

432

Interest paid, net

(13)

(17)

(115)

Income taxes paid, net of refund

(6)

(109)

(253)

Net cash provided by operating activities

279

382

1,595

Cash flows from investing activities

Proceeds (payments) from deposits, net

(44)

(88)

Purchases of property, plant and equipment and intangible assets

(145)

(164)

(780)

Proceeds from divestiture of assets and businesses, net of transaction expenses

Business combinations

(22)

Other

Net cash used in investing activities

(102)

(204)

(863)

Cash flows from financing activities

Dividends paid to the Company's shareholders

(61)

(178)

(474)

Receipt of long-term debt

198

258

633

Repayments of long-term debt

(386)

(170)

(836)

Receipts (repayments) of short-term debt

(25)

Receipts from transactions in derivatives

Dividend paid to the non-controlling interests

(15)

Net cash used in financing activities

(229)

(47)

(712)

Net change in cash and cash equivalents

(52)

131

Cash and cash equivalents as of the beginning of the period

420

417

Net effect of currency translation on cash and cash equivalents

(5)

(17)

Cash and cash equivalents as of the end of the period

363

552

420

Adjustments to Reported Operating and Net Income (non-GAAP)

$ millions

Three-months ended

March 31, 2024

March 31, 2023

Operating income

203

465

Charges related to the security situation in Israel (1)

Write-off of assets and provision for site closure (2)

Total adjustments to operating income

Adjusted operating income

215

480

Net income attributable to the shareholders of the Company

109

280

Total adjustments to operating income

Total tax adjustments (3)

(3)

(3)

Total adjusted net income - shareholders of the Company

118

292

(1)

For 2024 and 2023, reflects charges relating to the security situation in Israel related to the war, which commenced on October 7, 2023.

(2)

For 2023, reflects mainly a write-off of assets related to restructuring at certain sites, including site closures and facility modifications, as part of the Company’s global efficiency plan.

(3)

For 2024 and 2023, reflects the tax impact of adjustments made to operating income.

Consolidated EBITDA for the Periods of Activity

$ millions

Three-months ended

March 31, 2024

March 31, 2023

Net income

126

294

Financing expenses, net

Taxes on income

127

Operating income

203

465

Depreciation and amortization

147

130

Adjustments (1)

Total adjusted EBITDA (2)

362

610

(1)

See "Adjustments to Reported Operating and Net income (non-GAAP)" above.

(2)

In Q1 2024, the Company's adjusted EBITDA was positively impacted by an immaterial accounting reclassification. Please refer to the 6-K filing for additional details.

Calculation of Segment EBITDA

Industrial Products

Potash

Phosphate Solutions (1)

Growing Solutions

Three-months ended

March 31, 2024

March 31, 2023

March 31, 2024

March 31, 2023

March 31, 2024 (2)

March 31, 2023

March 31, 2024

March 31, 2023

Segment operating income

254

119

Depreciation and amortization

Segment EBITDA

105

124

298

131

171

(1)

In alignment with the Company’s efficiency plan, which includes a change of reporting responsibilities as of January 2024, the results of a non-phosphate related business were allocated from the Phosphate Solutions segment to Other Activities. Comparative figures have been restated to reflect the organizational change in the reportable segments.

(2)

For Q1 2024, Phosphate Specialties comprised $320 million of segment sales, $44 million of operating income, $12 million of D&A and represented $56 million of EBITDA, while Phosphate Commodities comprised $239 million of segment sales, $40 million of operating income, $35 million of D&A and represented $75 million of EBITDA.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240507552077/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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