Delivers annual sales of $7,536 million, with adjusted EBITDA of $1,754 million, and continued strong cash generation of $818 million
TEL AVIV, Israel--(BUSINESS WIRE)-- ICL (NYSE: ICL) (TASE: ICL), a leading global specialty minerals company, today reported its financial results for the fourth quarter and full year ended December 31, 2023. Consolidated annual sales were $7,536 million versus a record $10,015 million in 2022. Net income was $647 million versus $2,159 million, while adjusted net income was $715 million versus $2,350 million. Annual adjusted EBITDA was $1,754 million versus $4,007 million in 2022. Diluted earnings per share for 2023 were $0.50, while adjusted diluted EPS was $0.55. Operating cash flow was $1,595 million in 2023, while free cash flow was $818 million. For 2023, the Company paid out more than $350 million in dividends.
For the fourth quarter of 2023, consolidated sales were $1,690 million versus $2,091 million. Net income was $67 million, with adjusted net income of $123 million, versus $331 million and $358 million, respectively, for fourth quarter 2022. Adjusted EBITDA in the fourth quarter was $357 million versus $698 million. Fourth quarter diluted earnings per share were $0.05, with adjusted diluted EPS of $0.10, versus $0.25 and $0.28, respectively. Operating cash flow was $415 million in the fourth quarter, while free cash flow was $160 million.
“ICL delivered adjusted EBITDA of $1.8 billion and operating cash flow of $1.6 billion, on the backdrop of a record 2022. During 2023, we expanded into additional new end-markets, with the groundbreaking of new advanced facilities and the launch of new innovative products, which will have a long-term impact on growth. We executed against our cost reduction plan and launched further efficiency measures in the fourth quarter, as we continued to respond to challenging market conditions and remained resilient in the face of war,” said Raviv Zoller, president and CEO of ICL. “For the year, ICL delivered significant value to shareholders, with $818 million of free cash flow and more than $350 million in dividend payments, as we diligently managed the areas under our control, swiftly reacting to changing external conditions. We currently see improving demand in our key end-markets and, while we expect there will be new and continued challenges in 2024, we are looking forward to achieving our goals for the year, including inorganic growth.”
The Company also announced it is making a change to guidance practices, in order to provide greater transparency for its shareholders. Going forward, the Company will be providing guidance for expected potash sales volumes and EBITDA guidance for all of its business segments other than potash, which will be referred to as specialties-driven business segments.
For 2024, the Company expects the specialties-driven segments adjusted EBITDA to be between $0.7 billion to $0.9 billion. For potash, the Company expects 2024 sales volumes to be between 4.6 million metric tons and 4.9 million metric tons. The Company’s fourth quarter 2023 Potash segment EBITDA should give a good indication of EBITDA at current prices, and ICL expects every $20 change in the average potash CIF price from current levels to result in a $100 million annual impact to EBITDA (1a).
Financial Figures and non-GAAP Financial Measures
| 10-12/2023 | 10-12/2022 | 1-12/2023 | 1-12/2022 | ||||||||||||
| $ millions | % of Sales | $ millions | % of Sales | $ millions | % of Sales | $ millions | % of Sales | ||||||||
Sales | 1,690 | - | 2,091 | - | 7,536 | - | 10,015 | - | ||||||||
Gross profit | 560 | 33 | 933 | 45 | 2,671 | 35 | 5,032 | 50 | ||||||||
Operating income | 149 | 9 | 540 | 26 | 1,141 | 15 | 3,516 | 35 | ||||||||
Adjusted operating income (1) | 211 | 12 | 562 | 27 | 1,218 | 16 | 3,509 | 35 | ||||||||
Net income attributable to the Company's shareholders | 67 | 4 | 331 | 16 | 647 | 9 | 2,159 | 22 | ||||||||
Adjusted net income attributable to the Company’s shareholders (1) | 123 | 7 | 358 | 17 | 715 | 9 | 2,350 | 23 | ||||||||
Diluted earnings per share (in dollars) | 0.05 | - | 0.25 | - | 0.50 | - | 1.67 | - | ||||||||
Diluted adjusted earnings per share (in dollars) (2) | 0.10 | - | 0.28 | - | 0.55 | - | 1.82 | - | ||||||||
Adjusted EBITDA (2) | 357 | 21 | 698 | 33 | 1,754 | 23 | 4,007 | 40 | ||||||||
Cash flows from operating activities | 415 | - | 467 | - | 1,595 | - | 2,025 | - | ||||||||
Purchases of property, plant and equipment and intangible assets (3) | 255 | - | 212 | - | 780 | - | 747 | - |
(1) | See “Adjustments to Reported Operating and Net income (non-GAAP)” below. | |
(2) | See “Consolidated Adjusted EBITDA and Diluted Adjusted Earnings Per Share for the periods of activity" below. | |
(3) | See “Condensed consolidated statements of cash flows (unaudited)” to the accompanying financial statements. |
| Industrial Products |
| Potash |
| Phosphate Solutions |
| Growing Solutions | |||||||||
| Three-months ended 31 December | |||||||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| 2023 |
| 2022 | |
Segment operating income | 39 | 95 | 122 | 340 | 74 | 116 | (5) | 32 | ||||||||
Depreciation and amortization | 17 | 15 | 46 | 45 | 59 | 49 | 20 | 24 | ||||||||
Segment EBITDA | 56 | 110 | 168 | 385 | 133 | 165 | 15 | 56 |
Segment Information
Industrial Products
The Industrial Products segment produces bromine from a highly concentrated solution in the Dead Sea and bromine‑based compounds at its facilities in Israel, the Netherlands and China. In addition, the segment produces several grades of salts, magnesium chloride, magnesia-based products, phosphorus-based products, and functional fluids.
Results of operations
| 10-12/2023 |
| 10-12/2022 |
| 1-12/2023 |
| 1-12/2022 | |
| $ millions |
| $ millions |
| $ millions |
| $ millions | |
Segment Sales | 299 | 349 | 1,227 | 1,766 | ||||
Sales to external customers | 294 | 343 | 1,206 | 1,737 | ||||
Sales to internal customers | 5 | 6 | 21 | 29 | ||||
Segment Operating Income | 39 | 95 | 220 | 628 | ||||
Depreciation and amortization | 17 | 15 | 57 | 61 | ||||
Segment EBITDA | 56 | 110 | 277 | 689 | ||||
Capital expenditures | 29 | 27 | 91 | 90 |
Significant highlights
Results analysis for the period October – December 2023
| Sales | Expenses | Operating income | |||
| $ millions | |||||
Q4 2022 figures | 349 | (254) | 95 | |||
Quantity | 63 | (34) | 29 | |||
Price | (115) | - | (115) | |||
Exchange rates | 2 | 6 | 8 | |||
Raw materials | - | 7 | 7 | |||
Energy | - | 4 | 4 | |||
Transportation | - | 8 | 8 | |||
Operating and other expenses | - | 3 | 3 | |||
Q4 2023 figures | 299 | (260) | 39 |
Potash
The Potash segment produces and sells mainly potash, salts, magnesium, and electricity. Potash is produced in Israel using an evaporation process to extract it from the Dead Sea at Sodom and in Spain using conventional mining from an underground mine. The segment also produces and sells pure magnesium, magnesium alloys and chlorine. In addition, the segment sells salt products produced at its potash site in Spain. The segment operates a power plant in Sodom which supplies electricity and steam to ICL facilities in Israel, with surplus electricity sold to external customers.
Results of operations
| 10-12/2023 | 10-12/2022 | 1-12/2023 | 1-12/2022 |
| $ millions | $ millions | $ millions | $ millions |
Segment Sales | 474 | 713 | 2,182 | 3,313 |
Potash sales to external customers | 336 | 568 | 1,693 | 2,710 |
Potash sales to internal customers | 49 | 36 | 129 | 184 |
Other and eliminations (1) | 89 | 109 | 360 | 419 |
Gross Profit | 231 | 456 | 1,171 | 2,292 |
Segment Operating Income | 122 | 340 | 668 | 1,822 |
Depreciation and amortization | 46 | 45 | 175 | 166 |
Segment EBITDA | 168 | 385 | 843 | 1,988 |
Capital expenditures | 132 | 92 | 384 | 346 |
Potash price - CIF ($ per tonne) | 345 | 594 | 393 | 682 |
(1) | Primarily includes salt produced in Spain, metal magnesium-based products, chlorine, and sales of excess electricity produced by ICL’s power plant at the Dead Sea in Israel. |
Significant highlights
Additional segment information
Global potash market - average prices and imports:
Average prices |
| 10-12/2023 | 10-12/2022 | VS Q4 2022 | 7-9/2023 | VS Q3 2023 | ||||||
Granular potash – Brazil | CFR spot ($ per tonne) | 336 | 570 | (41.1)% | 351 | (4.3)% | ||||||
Granular potash – Northwest Europe | CIF spot/contract (€ per tonne) | 388 | 813 | (52.3)% | 392 | (1.0)% | ||||||
Standard potash – Southeast Asia | CFR spot ($ per tonne) | 318 | 675 | (52.9)% | 309 | 2.9% | ||||||
Potash imports |
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To Brazil | million tonnes | 3.4 | 1.5 | 126.7% | 3.6 | (5.6)% | ||||||
To China | million tonnes | 3.6 | 1.8 | 100.0% | 2.9 | 24.1% | ||||||
To India | million tonnes | 0.8 | 0.5 | 60.0% | 0.6 | 33.3% |
Sources: CRU (Fertilizer Week Historical Price: January 2024), SIACESP (Brazil), World Shipping Agenciamentos (WSA), FAI, Brazil and Chinese customs data.
Potash – Production and Sales
Thousands of tons | 10-12/2023 | 10-12/2022 | 1-12/2023 | 1-12/2022 | ||||
Production | 1,139 | 1,224 | 4,420 | 4,691 | ||||
Total sales (including internal sales) | 1,179 | 1,068 | 4,683 | 4,499 | ||||
Closing inventory | 284 | 547 | 284 | 547 |
Fourth quarter 2023
Full year 2023
Results analysis for the period October – December 2023
| Sales | Expenses | Operating income | |||
| $ millions | |||||
Q4 2022 figures | 713 | (373) | 340 | |||
Quantity | 11 | 2 | 13 | |||
Price | (255) | - | (255) | |||
Exchange rates | 5 | 3 | 8 | |||
Raw materials | - | 4 | 4 | |||
Energy | - | 5 | 5 | |||
Transportation | - | (2) | (2) | |||
Operating and other expenses | - | 9 | 9 | |||
Q4 2023 figures | 474 | (352) | 122 |
Phosphate Solutions
The Phosphate Solutions segment operates ICL's phosphate value chain and uses phosphate rock and fertilizer-grade phosphoric acid to produce phosphate-based specialty products with higher added value, as well as to produce and sell phosphate-based fertilizers.
Phosphate specialties sales of $343 million and operating income of $38 million in the fourth quarter of 2023 were approximately 15% and 42% lower, respectively, compared to the fourth quarter of 2022. The decrease in operating income was driven mainly by lower selling prices and sales volumes, partially offset by lower costs of raw materials.
Sales of phosphate commodities amounted to $201 million, approximately 10% lower than in the fourth quarter of 2022. Operating income of $36 million decreased year-over-year by $14 million, primarily due to lower prices, partially offset by higher volumes sold and lower raw material costs, mainly sulphur.
Results of operations
| 10-12/2023 | 10-12/2022 | 1-12/2023 | 1-12/2022 | ||||
| $ millions | $ millions | $ millions | $ millions | ||||
Segment Sales | 544 | 627 | 2,483 | 3,106 | ||||
Sales to external customers | 503 | 574 | 2,274 | 2,851 | ||||
Sales to internal customers | 41 | 53 | 209 | 255 | ||||
Segment Operating Income | 74 | 116 | 329 | 777 | ||||
Depreciation and amortization* | 59 | 49 | 221 | 189 | ||||
Segment EBITDA | 133 | 165 | 550 | 966 | ||||
Phosphate specialties EBITDA | 55 | 79 | 277 | 436 | ||||
Phosphate commodities EBITDA | 78 | 86 | 273 | 530 | ||||
Capital expenditures | 90 | 78 | 272 | 259 |
* | For Q4 2023, comprised of $17 million in phosphate specialties and $42 million in phosphate commodities. For Q4 2022, comprised of $13 million in phosphate specialties and $36 million in phosphate commodities. |
Significant highlights
Additional segment information
Global phosphate commodities market - average prices:
Average prices | $ per tonne | 10-12/2023 | 10-12/2022 | VS Q4 2022 | 07-09/2023 | VS Q3 2023 | ||||||
DAP | CFR India Bulk Spot | 594 | 734 | (19)% | 518 | 15% | ||||||
TSP | CFR Brazil Bulk Spot | 422 | 543 | (22)% | 394 | 7% | ||||||
SSP | CPT Brazil inland 18-20% P2O5 Bulk Spot | 278 | 270 | 3% | 275 | 1% | ||||||
Sulphur | Bulk FOB Adnoc monthly Bulk contract | 102 | 138 | (26)% | 82 | 24% |
Source: CRU (Fertilizer Week Historical Prices, January 2024).
Results analysis for the period October – December 2023
| Sales | Expenses | Operating income | |||
| $ millions | |||||
Q4 2022 figures | 627 | (511) | 116 | |||
Quantity | (7) | 8 | 1 | |||
Price | (81) | - | (81) | |||
Exchange rates | 5 | 1 | 6 | |||
Raw materials | - | 24 | 24 | |||
Energy | - | (1) | (1) | |||
Transportation | - | (3) | (3) | |||
Operating and other expenses | - | 12 | 12 | |||
Q4 2023 figures | 544 | (470) | 74 |
Growing Solutions
The Growing Solutions segment aims to achieve global leadership in plant nutrition by enhancing its position in its core markets of specialty agriculture, ornamental horticulture, turf and landscaping, fertilizers and FertilizerpluS, and by targeting high-growth markets such as Brazil, India, and China. The segment also looks to leverage its unique R&D capabilities, substantial agronomic experience, global footprint, backward integration to potash, phosphate and polysulphate and its chemistry know-how, as well as its ability to integrate and generate synergies from acquired businesses. ICL continuously works to expand its broad portfolio of specialty plant nutrition, plant stimulation and plant health solutions, which consist of enhanced efficiency and controlled release fertilizers (CRF), water-soluble fertilizers (WSF), liquid fertilizers and straights (MKP/MAP/PeKacid), FertilizerpluS, soil and foliar micronutrients, secondary nutrients, biostimulants, soil conditioners, seed treatment products, and adjuvants.
Results of operations
| 10-12/2023 | 10-12/2022 | 1-12/2023 | 1-12/2022 | ||||
| $ millions | $ millions | $ millions | $ millions | ||||
Segment Sales | 478 | 527 | 2,073 | 2,422 | ||||
Sales to external customers | 475 | 513 | 2,047 | 2,376 | ||||
Sales to internal customers | 3 | 14 | 26 | 46 | ||||
Segment Operating Income | (5) | 32 | 51 | 378 | ||||
Depreciation and amortization | 20 | 24 | 68 | 70 | ||||
Segment EBITDA | 15 | 56 | 119 | 448 | ||||
Capital expenditures | 36 | 38 | 92 | 101 |
Significant highlights
Results analysis for the period October – December 2023
| Sales | Expenses | Operating income | |||
| $ millions | |||||
Q4 2022 figures | 527 | (495) | 32 | |||
Quantity | 98 | (67) | 31 | |||
Price | (165) | - | (165) | |||
Exchange rates | 18 | (16) | 2 | |||
Raw materials | - | 111 | 111 | |||
Energy | - | 1 | 1 | |||
Transportation | - | 2 | 2 | |||
Operating and other expenses | - | (19) | (19) | |||
Q4 2023 figures | 478 | (483) | (5) |
Financing expenses, net
Net financing expenses in the fourth quarter of 2023 amounted to $33 million, compared to $41 million in the corresponding quarter last year, a decrease of $8 million. This decrease is mainly due to a decrease of $10 million in account receivables factoring expenses, partially offset by an increase of $2 million in interest expenses.
Tax expenses
In the fourth quarter of 2023, the Company’s reported tax expenses amounted to $33 million, compared to $158 million in the corresponding quarter of last year, reflecting an effective tax rate of 28% and 32%, respectively. The Company’s relatively low effective tax rate for this quarter was mainly due to the devaluation of the shekel against the US dollar.
Liquidity and Capital Resources
As of December 31, 2023, the Company’s cash, cash equivalents, short-term investments and deposits amounted to $592 million compared to $508 million as of December 31, 2022. In addition, the Company maintained about $1.2 billion of unused credit facilities as of December 31, 2023.
Outstanding net debt
As of December 31, 2023, ICL’s net financial liabilities amounted to $2,095 million, a decrease of $221 million compared to December 31, 2022.
Credit facilities
Sustainability-linked Revolving Credit Facility (RCF)
In April 2023, the Company entered into a Sustainability-Linked Revolving Credit Facility Agreement made between ICL Finance B.V. and a consortium of twelve international banks for a $1,550 million credit facility. The Sustainability-Linked RCF replaced a previous revolving credit facility that was entered into in 2015, as amended and extended in 2018, and which was due to expire in 2025.
As of December 31, 2023, the Company had utilized $376 million of the credit facility.
Securitization
The total amount of the Company's committed securitization facility framework is $300 million with an additional $100 million uncommitted. As of December 31, 2023, ICL had utilized approximately $182 million of the facility’s framework.
Ratings and financial covenants
Fitch Ratings
In June 2023, Fitch Ratings reaffirmed the Company’s long-term issuer default rating and senior unsecured rating at 'BBB-'. The outlook on the long-term issuer default rating is stable.
S&P Ratings
In July 2023, the S&P credit rating agency reaffirmed the Company’s international credit rating and senior unsecured rating of 'BBB-'. In addition, the S&P Maalot credit rating agency reaffirmed the Company’s credit rating of 'ilAA' with a stable rating outlook.
Financial covenants
As of December 31, 2023, the Company was in compliance with all of its financial covenants stipulated in its financing agreements.
Dividend Distribution
In connection with ICL’s fourth quarter 2023 results, the Board of Directors declared a dividend of 4.76 cents per share, or approximately $61 million. The dividend will be paid on March 26, 2024. The record date is March 14, 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 12,500 people worldwide, and its 2023 revenue totaled approximately $7.5 billion. For more information, visit the Company’s website at www.icl-group.com1.
We disclose 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. Our 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. We calculate our adjusted operating income by adjusting our 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. We calculate our adjusted net income attributable to the Company’s shareholders by adjusting our 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. We calculate our diluted adjusted earnings per share by dividing adjusted net income by the weighted-average number of diluted ordinary shares outstanding. Our 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 adjust items 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. 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 our owned operations, since adjusted EBITDA measures the Company’s overall performance, 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 our 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 our non-IFRS financial measures as tools for comparison. However, we believe 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 our ongoing operations. Our management uses these non-IFRS measures to evaluate the Company's business strategies, and management performance. We believe that these non IFRS measures provide useful information to investors because they improve the comparability of our financial results between periods and provide for greater transparency of key measures used to evaluate our performance.
1The reference to our website is intended to be an inactive textual reference and the information on, or accessible through, our website is not intended to be part of this Form 6-K. |
(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. For 2023, Specialties businesses are represented by the Industrial Products, and Growing Solutions segments, and the specialties part of the Phosphate Solutions segment, and 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. Beginning with 2024, we are providing specialties-driven Adjusted EBITDA which will include Industrial Products, Growing Solutions and Phosphate Solutions, as the Phosphate Solutions business is now predominantly specialties-focused and for our Potash business we will be providing sales volumes guidance. The company believes this change provides greater transparency, as these new metrics are less impacted by fertilizer commodity prices, given the extreme volatility in recent years.
We present 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 our businesses. We have based the following discussion on our financial statements. You should read such discussion together with our financial statements.
Adjustments to Reported Operating and Net income (non-GAAP)
| 10-12/2023 | 10-12/2022 | 1-12/2023 | 1-12/2022 | ||||
| $ millions | $ millions | $ millions | $ millions | ||||
Operating income | 149 | 540 | 1,141 | 3,516 | ||||
Provision for early retirement (1) | 16 | - | 16 | - | ||||
Write-off of assets and provision for site closure (2) | 34 | - | 49 | - | ||||
Legal proceedings, dispute and other settlement expenses (3) | (2) | 22 | (2) | 22 | ||||
Charges related to the security situation in Israel (4) | 14 | - | 14 | - | ||||
Divestment related items and transaction costs (5) | - | - | - | (29) | ||||
Total adjustments to operating income | 62 | 22 | 77 | (7) | ||||
Adjusted operating income | 211 | 562 | 1,218 | 3,509 | ||||
Net income attributable to the shareholders of the Company | 67 | 331 | 647 | 2,159 | ||||
Total adjustments to operating income | 62 | 22 | 77 | (7) | ||||
Total tax adjustments (6) | (6) | 5 | (9) | 198 | ||||
Total adjusted net income - shareholders of the Company | 123 | 358 | 715 | 2,350 |
(1) | For 2023, reflects provisions for early retirement, due to restructuring at certain sites, as part of the Company’s global efficiency plan. | |
(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 2023, reflects a reversal of a legal provision. For 2022, reflects mainly the costs of a mediation settlement regarding the claims related to the Ashalim Stream incident. | |
(4) | For 2023, reflects charges relating to the security situation in Israel deriving from the war which commenced on October 7, 2023. | |
(5) | 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. | |
(6) | 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 adjusted EBITDA and diluted adjusted Earnings Per Share for the periods of activity
Calculation of adjusted EBITDA was made as follows:
| 10-12/2023 | 10-12/2022 | 1-12/2023 | 1-12/2022 | ||||
| $ millions | $ millions | $ millions | $ millions | ||||
Net income | 84 | 342 | 687 | 2,219 | ||||
Financing expenses, net | 33 | 41 | 168 | 113 | ||||
Taxes on income | 33 | 158 | 287 | 1,185 | ||||
Less: Share in earnings of equity-accounted investees | (1) | (1) | (1) | (1) | ||||
Operating income | 149 | 540 | 1,141 | 3,516 | ||||
Depreciation and amortization | 146 | 136 | 536 | 498 | ||||
Adjustments (1) | 62 | 22 | 77 | (7) | ||||
Total adjusted EBITDA (2) | 357 | 698 | 1,754 | 4,007 |
(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 disclaimer above. |
Calculation of diluted adjusted earnings per share was made as follows:
| 10-12/2023 | 10-12/2022 | 1-12/2023 | 1-12/2022 | ||||
| $ millions | $ millions | $ millions | $ millions | ||||
Net income attributable to the Company's shareholders | 67 | 331 | 647 | 2,159 | ||||
Adjustments (1) | 62 | 22 | 77 | (7) | ||||
Total tax adjustments | (6) | 5 | (9) | 198 | ||||
Adjusted net income - shareholders of the Company | 123 | 358 | 715 | 2,350 | ||||
Weighted-average number of diluted ordinary shares outstanding (in thousands) | 1,290,575 | 1,291,299 | 1,290,668 | 1,289,947 | ||||
Diluted adjusted earnings per share (in dollars) (2) | 0.10 | 0.28 | 0.55 | 1.82 |
(1) | See "Adjustments to Reported Operating and Net income (non-GAAP)" above. | |
(2) | The diluted adjusted earnings per share is calculated by dividing the adjusted net income‑shareholders of the Company by the weighted-average number of diluted ordinary shares outstanding (in thousands). |
ConsolidatedResults Analysis
Results analysis for the period October – December 2023
| Sales | Expenses | Operating income | |||
| $ millions | |||||
Q4 2022 figures | 2,091 | (1,551) | 540 | |||
Total adjustments Q4 2022* | - | 22 | 22 | |||
Adjusted Q4 2022 figures | 2,091 | (1,529) | 562 | |||
Quantity | 170 | (84) | 86 | |||
Price | (601) | - | (601) | |||
Exchange rates | 30 | (2) | 28 | |||
Raw materials | - | 105 | 105 | |||
Energy | - | 10 | 10 | |||
Transportation | - | 5 | 5 | |||
Operating and other expenses | - | 16 | 16 | |||
Adjusted Q4 2023 figures | 1,690 | (1,479) | 211 | |||
Total adjustments Q4 2023* | - | (62) | (62) | |||
Q4 2023 figures | 1,690 | (1,541) | 149 |
* See "Adjustments to reported Operating and Net income (non-GAAP)" above.
The following table sets forth sales by geographical regions based on the location of the customers:
| 10-12/2023 | 10-12/2022 | ||||||
| $ millions | % of Sales | $ millions | % of Sales | ||||
Europe | 464 | 27 | 608 | 29 | ||||
Asia | 440 | 26 | 592 | 28 | ||||
South America | 364 | 22 | 396 | 19 | ||||
North America | 318 | 19 | 358 | 17 | ||||
Rest of the world | 104 | 6 | 137 | 7 | ||||
Total | 1,690 | 100 | 2,091 | 100 |
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.
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:
Changes in exchange rates or prices compared to those we are currently experiencing; 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; disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; general market, political or economic conditions in the countries in which we operate; price increases or shortages with respect to our principal raw materials; 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; Pandemics may create disruptions, impacting our sales, operations, supply chain and customers; 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; disruption of our, or our service providers', 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; 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; 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; litigation, arbitration and regulatory proceedings; 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; closing of transactions, mergers and acquisitions; 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; The Company is exposed to risks relating to its current and future activity in emerging markets; 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 at the date they are made, and 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 in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.
This report for the fourth quarter of 2023 (the “Quarterly Report”) should be read in conjunction with the Annual Report and the report for the first, second and third quarter of 2023 published by the Company (the “prior quarterly report”), including the description of the events occurring subsequent to the date of the statement of financial position, as filed with the U.S.SEC.
Appendix:
Condensed Consolidated Statements of Financial Position as of (Unaudited) | ||||
| December 31, 2023 | December 31, 2022 | ||
| $ millions | $ millions | ||
Current assets |
|
| ||
Cash and cash equivalents | 420 | 417 | ||
Short-term investments and deposits | 172 | 91 | ||
Trade receivables | 1,376 | 1,583 | ||
Inventories | 1,703 | 2,134 | ||
Prepaid expenses and other receivables | 363 | 323 | ||
Total current assets | 4,034 | 4,548 | ||
|
|
| ||
Non-current assets |
|
| ||
Deferred tax assets | 152 | 150 | ||
Property, plant and equipment | 6,329 | 5,969 | ||
Intangible assets | 873 | 852 | ||
Other non-current assets | 239 | 231 | ||
Total non-current assets | 7,593 | 7,202 | ||
|
|
| ||
Total assets | 11,627 | 11,750 | ||
|
|
| ||
Current liabilities |
|
| ||
Short-term debt | 858 | 512 | ||
Trade payables | 912 | 1,006 | ||
Provisions | 85 | 81 | ||
Other payables | 783 | 1,007 | ||
Total current liabilities | 2,638 | 2,606 | ||
|
|
| ||
Non-current liabilities |
|
| ||
Long-term debt and debentures | 1,829 | 2,312 | ||
Deferred tax liabilities | 489 | 423 | ||
Long-term employee liabilities | 354 | 402 | ||
Long-term provisions and accruals | 224 | 234 | ||
Other | 56 | 60 | ||
Total non-current liabilities | 2,952 | 3,431 | ||
|
|
| ||
Total liabilities | 5,590 | 6,037 | ||
|
|
| ||
Equity |
|
| ||
Total shareholders’ equity | 5,768 | 5,464 | ||
Non-controlling interests | 269 | 249 | ||
Total equity | 6,037 | 5,713 | ||
|
|
| ||
Total liabilities and equity | 11,627 | 11,750 |
Condensed Consolidated Statements of Income (Unaudited) (In millions except per share data) | ||||||||
| For the three-month period ended | For the year ended | ||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||
| $ millions | $ millions | $ millions | $ millions | ||||
Sales | 1,690 | 2,091 | 7,536 | 10,015 | ||||
Cost of sales | 1,130 | 1,158 | 4,865 | 4,983 | ||||
|
|
|
|
| ||||
Gross profit | 560 | 933 | 2,671 | 5,032 | ||||
|
|
|
|
| ||||
Selling, transport and marketing expenses | 286 | 281 | 1,093 | 1,181 | ||||
General and administrative expenses | 71 | 78 | 260 | 291 | ||||
Research and development expenses | 17 | 15 | 71 | 68 | ||||
Other expenses | 44 | 24 | 128 | 30 | ||||
Other income | (7) | (5) | (22) | (54) | ||||
|
|
|
|
| ||||
Operating income | 149 | 540 | 1,141 | 3,516 | ||||
|
|
|
|
| ||||
Finance expenses | 4 | 65 | 259 | 327 | ||||
Finance income | 29 | (24) | (91) | (214) | ||||
|
|
|
|
| ||||
Finance expenses, net | 33 | 41 | 168 | 113 | ||||
|
|
|
|
| ||||
Share in earnings of equity-accounted investees | 1 | 1 | 1 | 1 | ||||
|
|
|
|
| ||||
Income before taxes on income | 117 | 500 | 974 | 3,404 | ||||
|
|
|
|
| ||||
Taxes on income | 33 | 158 | 287 | 1,185 | ||||
|
|
|
|
| ||||
Net income | 84 | 342 | 687 | 2,219 | ||||
|
|
|
|
| ||||
Net income attributable to the non-controlling interests | 17 | 11 | 40 | 60 | ||||
|
|
|
|
| ||||
Net income attributable to the shareholders of the Company | 67 | 331 | 647 | 2,159 | ||||
|
|
|
|
| ||||
Earnings per share attributable to the shareholders of the Company: |
|
|
|
| ||||
|
|
|
|
| ||||
Basic earnings per share (in dollars) | 0.05 | 0.26 | 0.50 | 1.68 | ||||
|
|
|
|
| ||||
Diluted earnings per share (in dollars) | 0.05 | 0.25 | 0.50 | 1.67 | ||||
|
|
|
|
| ||||
Weighted-average number of ordinary shares outstanding: |
|
|
|
| ||||
|
|
|
|
| ||||
Basic (in thousands) | 1,289,449 | 1,289,100 | 1,289,361 | 1,287,304 | ||||
|
|
|
|
| ||||
Diluted (in thousands) | 1,290,575 | 1,291,299 | 1,290,668 | 1,289,947 |
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| For the three-month period ended | For the year ended | ||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||
| $ millions | $ millions | $ millions | $ millions | ||||
Cash flows from operating activities |
|
|
|
| ||||
Net income | 84 | 342 | 687 | 2,219 | ||||
Adjustments for: |
|
|
|
| ||||
Depreciation and amortization | 146 | 136 | 536 | 498 | ||||
Exchange rate, interest and derivative, net | (51) | (4) | 24 | 157 | ||||
Tax expenses | 33 | 158 | 287 | 1,185 | ||||
Change in provisions | 9 | (8) | (32) | (83) | ||||
Other | 22 | 4 | 29 | (15) | ||||
| 159 | 286 | 844 | 1,742 | ||||
|
|
|
|
| ||||
Change in inventories | 50 | (72) | 465 | (527) | ||||
Change in trade receivables | 47 | 149 | 252 | (215) | ||||
Change in trade payables | 66 | (100) | (101) | (42) | ||||
Change in other receivables | 37 | 12 | 26 | (46) | ||||
Change in other payables | 16 | 48 | (210) | 107 | ||||
Net change in operating assets and liabilities | 216 | 37 | 432 | (723) | ||||
|
|
|
|
| ||||
Interest paid, net | (37) | (38) | (115) | (106) | ||||
Income taxes paid, net of refund | (7) | (160) | (253) | (1,107) | ||||
|
|
|
|
| ||||
Net cash provided by operating activities | 415 | 467 | 1,595 | 2,025 | ||||
|
|
|
|
| ||||
Cash flows from investing activities |
|
|
|
| ||||
Proceeds (payments) from deposits, net | (10) | 1 | (88) | (36) | ||||
Purchases of property, plant and equipment and intangible assets | (255) | (212) | (780) | (747) | ||||
Proceeds from divestiture of assets and businesses, net of transaction expenses | - | 4 | 4 | 33 | ||||
Business combinations | - | - | - | (18) | ||||
Other | - | - | 1 | 14 | ||||
Net cash used in investing activities | (265) | (207) | (863) | (754) | ||||
|
|
|
|
| ||||
Cash flows from financing activities |
|
|
|
| ||||
Dividends paid to the Company's shareholders | (68) | (314) | (474) | (1,166) | ||||
Receipt of long-term debt | 149 | 311 | 633 | 1,045 | ||||
Repayments of long-term debt | (183) | (383) | (836) | (1,181) | ||||
Receipts (repayments) of short-term debt | 64 | 30 | (25) | (21) | ||||
Receipts (repayments) from transactions in derivatives | (1) | 1 | 5 | 20 | ||||
Dividend paid to the non-controlling interests | - | - | (15) | - | ||||
Net cash used in financing activities | (39) | (355) | (712) | (1,303) | ||||
|
|
|
|
| ||||
Net change in cash and cash equivalents | 111 | (95) | 20 | (32) | ||||
Cash and cash equivalents as of the beginning of the period | 307 | 498 | 417 | 473 | ||||
Net effect of currency translation on cash and cash equivalents | 2 | 14 | (17) | (24) | ||||
Cash and cash equivalents as of the end of the period | 420 | 417 | 420 | 417 |
Operating segment data
| ||||||||||||||
| Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | |||||||
| $ millions | |||||||||||||
For the three-month period ended December 31, 2023 |
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
| |||||||
Sales to external parties | 294 | 408 | 503 | 475 | 10 | - | 1,690 | |||||||
Inter-segment sales | 5 | 66 | 41 | 3 | (1) | (114) | - | |||||||
Total sales | 299 | 474 | 544 | 478 | 9 | (114) | 1,690 | |||||||
|
|
|
|
|
|
|
| |||||||
Segment operating income (loss) | 39 | 122 | 74 | (5) | (1) | (18) | 211 | |||||||
Other expenses not allocated to the segments |
|
|
|
|
|
| (62) | |||||||
Operating income |
|
|
|
|
|
| 149 | |||||||
|
|
|
|
|
|
|
| |||||||
Financing expenses, net |
|
|
|
|
|
| (33) | |||||||
Share in earnings of equity-accounted investees |
|
|
|
|
|
| 1 | |||||||
Income before income taxes |
|
|
|
|
|
| 117 | |||||||
|
|
|
|
|
|
|
| |||||||
Depreciation and amortization | 17 | 46 | 59 | 20 | 1 | 3 | 146 | |||||||
|
|
|
|
|
|
|
| |||||||
Capital expenditures | 29 | 132 | 90 | 36 | 5 | 12 | 304 |
Operating segment data (cont'd) | ||||||||||||||
|
| Industrial Products |
| Potash |
| Phosphate Solutions |
| Growing Solutions |
| Other Activities |
| Reconciliations |
| Consolidated |
| $ millions | |||||||||||||
For the three-month period ended December 31, 2022 |
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
| ||||||
Sales to external parties | 343 | 656 | 574 |
| 513 | 5 | - | 2,091 | ||||||
Inter-segment sales | 6 | 57 | 53 |
| 14 | 1 | (131) | - | ||||||
Total sales | 349 | 713 | 627 |
| 527 | 6 | (131) | 2,091 | ||||||
|
|
|
|
|
|
|
|
| ||||||
Segment operating income (loss) | 95 | 340 | 116 |
| 32 | (2) | (19) | 562 | ||||||
Other expenses not allocated to the segments |
|
|
|
|
|
|
| (22) | ||||||
Operating income |
|
|
|
|
|
|
| 540 | ||||||
|
|
|
|
|
|
|
|
| ||||||
Financing expenses, net |
|
|
|
|
|
|
| (41) | ||||||
Share in earnings of equity-accounted investees |
|
|
|
|
|
|
| 1 | ||||||
Income before income taxes |
|
|
|
|
|
|
| 500 | ||||||
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization | 15 | 45 | 49 |
| 24 | 1 | 2 | 136 | ||||||
|
|
|
|
|
|
|
|
| ||||||
Capital expenditures | 27 | 92 | 78 |
| 38 | 2 | 7 | 244 |
Information based on geographical location
The following table presents the distribution of the operating segments sales by geographical location of the customer: | ||||||||
| 10-12/2023 | 10-12/2022 | ||||||
| $ millions | % of sales |
| $ millions | % of sales | |||
|
|
|
|
| ||||
Brazil | 347 | 21 | 359 | 17 | ||||
USA | 295 | 17 | 333 | 16 | ||||
China | 284 | 17 | 283 | 14 | ||||
Spain | 77 | 5 | 80 | 4 | ||||
United Kingdom | 74 | 4 | 108 | 5 | ||||
Israel | 72 | 4 | 76 | 4 | ||||
Germany | 68 | 4 | 94 | 4 | ||||
France | 63 | 4 | 66 | 3 | ||||
India | 29 | 2 | 153 | 7 | ||||
Austria | 28 | 2 | 38 | 2 | ||||
All other | 353 | 20 | 501 | 24 | ||||
Total | 1,690 | 100 | 2,091 | 100 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227509674/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 - IsraelAdi Bajayo ICL Spokesperson +972-3-6844459 Adi.Bajayo@icl-group.com
Source: ICL Group LTD