Investor and Analyst Day Eli Amon, SVP Marketing, Sales and Logistics. May 19, 2015

Transcription

1 Investor and Analyst Day Eli Amon, SVP Marketing, Sales and Logistics 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 Strategic Goals for the Next Decade ICL s potash production capacity growth targets ICL Growth ICL Iberia: Phoenix I-IV ICL Dead Sea ICL UK ICL Africa Total Million Tonnes (0.8) Expanding our potash production capability in order to grow with our main markets: Distinctive advantages in the faster growing markets support ICL s higher market share Farmer education initiatives Expand our phosphate fertilizers sales and diversify our product portfolio Expand polysulphate sales through farmer education

4 Diminishing Arable Land Will Require More Intensive Agriculture 4

5 Index, relative to 1962 Fertilizers Demand Correlates with Improved Dietary Consumption Population, Meat and Fertilizers [Base 1962] Fertilizer consumption Meat Consumption Population Source: IFA, USDA, USA Census 5

6 Fertilizers are Affordable Source: CBOT, Fertilizer Week & ICL Index of Fertilizer Price Ratio to GPI Base 2002 MOP/GPI DAP/GPI *GPI = Grain Price Index formula: [(wheat price*7) + (maize price*8) + (rice price*4.5) + (soybean price*2.5)] /22] 6

7 Polysulphate From Mine to Market 4 nutrient content a potential substitute to many fertilizers For direct application as well as blended with other fertilizers Low chloride suitable for chloride sensitive crops Achieved organic certification in Europe Crops footprint expansion: from mainly rapeseed (canola), cereals (mostly wheat), potato, cabbage to soybean, tobacco, tea, vegetables and many other horticulture crops. Geographical footprint expansion from Europe to Brazil, US and China Target for M tonnes 36% Mg+Ca 14% K 50% S 7

8 Potash Demand Growth Estimates Source: CRU Million tonnes KCl RoW RoW SE Asia RoW SE Asia USA RoW SE Asia USA USA Brazil SE Asia USA Brazil Brazil India Brazil India India India China China China China China China India Brazil 72* RoW RoW SE Asia USA Brazil India 80* Region CAGR Growth (tonnes) CAGR China 7% % India 3% 2.2 7% Brazil 6% 2.7 4% USA 1% ) 0.4( - 1% SE Asia 6% % RoW 0% 2 2% Total 3% % After 2020 annual growth rate returns declines to 2%, and reaches 18M tonnes growth from 2014 to China India Brazil RoW *FertEcon estimations for 2020 & 2025: 75M tonnes & 81.5M tonnes, respectively Source: CRU, ICL estimates 8

9 Potash Market is Expected to Remain Balanced Source: CRU, DSW Million tonnes Demand Operating Capacity Gap ICL s growth: 2.8 million tonnes Speculative Greenfields Probable Greenfields Firm Greenfields Utilization rate 91% 91% 91% ICL growth Source: Industry publications, ICL estimates 68 Probable Brownfields Firm Brownfields Supply (Million tonnes KCl) * Greenfields capacity is multiplied by realization factor that takes into account the probability of realization, based on its category Firm (80%), Probable (60%), Speculative (30%), ICL (100%). Not including BHP 9

10 The Phosphate Market and ICL s Position We are active in the Triple Super Phosphates, Single Super Phosphates and Phosphoric Acid TSP marketing focuses on Brazil, USA and Europe SSP marketing focuses mainly on Brazil We are the largest supplier of PK compound fertilizers in Europe Million tonnes P 2 O We plan to become a supplier of DAP in future CAGR : 1.5% 2014 consumption Source: CRU USA China Brazil India RoW 2019 consumption 10

11 ICL s Market Share in Potash in the Faster Growing Markets (2014) India Brazil China K+S 2.6% SQM 1.4% Other 1.3% Uralkali 31.2% BPC 17.1% ICL 15.0% K+S 12.4% ICL 9.1% SQM 5.7% BPC 26.1% Canpotex 27.5% APC 7.1% Uralkali 32.5% K & S 2.1% APC 12.5% Canpotex 22.5% Uralkali 19.2% Canpotex 27.5% ICL 16.3% BPC 22.5% Total import: 4.3 Mt Total import: 9.1 Mt Total import: 8.0 Mt Demand CAGR : 7% Demand CAGR : 4% Demand CAGR : 1.5% Sources: BOABC, SIACESP, Company estimates 11

12 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 12

13 China Domestic Potash Production still Lags Behind Demand Million tonnes 2015E 2020E 2025E Production Imports Total deliveries Million Tonnes Product Total Deliveries Production Imports 13

14 China - Market Share Increase due to Sales Strategy Change Until 2009, we had long term agreements with Sinofert In 2010, sales contracts were signed one level down the value chain with distributors and NPK producers 2015 contracts: 1.1M tonnes with an option for additional 0.1M tonnes. Delayed quantities as a result of the strike, will be delivered during H Million Tonnes Product China Potash Imports and ICL Share First year of new sales strategy Total ICL ICL % Source: FertEcon Potash Outlook (Feb. 2015) ICL Share 25% 20% 15% 10% 5% 0% 14

15 Strategic Alliance with Yunnan Yuntianhua an Important Addition to Our Product Slate We plan to export phosphates from China to Brazil, USA and India This will expand our product portfolio in those markets to further strengthen our foot print and customer relations Sales in China: expand from MOP to other additional phosphate based fertilizers Export phosphates to African markets Kunming 15

16 India s Nutrient Ratio Challenge India needs to feed a growing population N:K Ratio was moving in the right direction, until the Nutrient Based Subsidy (NBS) was introduced Fertilizers subsidies favor urea (N) over P and K, causing distorted NPK ratio. N:K ratio increased to more than 8:1 India has potential to improve crop yields 8.62 Rice yield comparison (tonne/ha) Million tonnes India potash imports Introduction of NBS United States China Vietnam India Source: USDA Source: FertEcon Potash Outlook (Feb. 2015) 16

17 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 2nd year with the Kharif season Providing evidence of the profitable use of potash Activities include field days, jeep campaigns, crop seminars and farmers meetings Demonstration plots increased from 561 in the previous season to 680 this season 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 17

18 ICL in Brazil Solid Position in a Growing Market Brazil Fertilizer demand fundamentals The world s largest reserves of arable land (exc. rain forest) The world s largest volumes of fresh water Agriculture strong development rates expected to continue Agriculture expansion into the Cerrado, soils containing low levels of nutrients, will require intensive fertilization ICL s position Logistical advantage through combined cargo of MOP & Phosphates from Israel (Supermarket vessel) Advantage supports solid customer relations ICL has a well established sales office in Brazil Global soybean export - Million tonnes Other USA Brazil / / / / / /23 Source: OECD 18

19 In 2010 We Established A Presence in the US ICL s granular MOP shipments Other, 17% USA, 7% Europe, 28% Other, 16% Europe, 21% USA, 23% Brazil, 40% Brazil, 48% MT ID WY NV UT CO CA AZ NM ND SD NE KS OX TX MN IA MO AR LA WI IL MS IN TN MI KY AL NOLA OH WV GA PA SC VA NC FL VT NH NY ME CT NJ DE MD MA RI 19

20 Africa - Evolution of Fertilizer Demand Strong demand growth since 2008, driven by Sub-Saharan Africa +43% for Africa (CAGR ~5%) +70% for sub-saharan Africa without South Africa (CAGR ~8%) Regional demand seen reaching 6 Mt by 2015 Million tonnes Source: IFA - Fertilizer Demand in Sub-Saharan Africa, Enlarged Council Meeting Marrakech, Morocco November

21 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 21

22 Thank You