Company expanding long-term specialties focus, while benefitting from market upside
TEL AVIV, Israel--(BUSINESS WIRE )--ICL (NYSE: ICL) (TASE: ICL), a leading global specialty minerals company, today reported its financial results for the first quarter ended March 31, 2022. Consolidated sales of $2,525 million were up 67% year-over-year versus $1,510 million. Operating income of $902 million was up 388%, while adjusted operating income of $880 million was up 376%. Net income attributed of $632 million was up 368%, while adjusted net income attributed of $613 million was up 354%. Adjusted EBITDA of $1,002 million was up 232% versus $302 million.
ICL’s quarterly results continued to benefit from its long-term strategic focus on specialty solutions and on expanding customer relationships, which were bolstered by significant commodity upside. The strong performance was supported by increased demand and higher prices in most markets, despite higher overall costs and worldwide supply chain challenges.
“ICL delivered record results, even with global uncertainty, and leveraged its agility and diversity in the face of continuing supply chain challenges. Once again, all our specialty businesses achieved new quarterly results records, as all four of our divisions contributed to our significant growth and new ICL record sales and EBITDA,” said Raviv Zoller, president and CEO of ICL. “We continued to focus on long term cash generation by innovating within our specialty businesses product portfolio and by driving cost efficiencies. The disruptions caused by the pandemic, sanctions and the conflict in Ukraine have radically shifted market dynamics and could continue to significantly impact global agriculture, food and industrial markets in the near term. We will continue to optimize our customer and supplier relationships, to manage through global supply challenges and to work to ensure consistent and reliable product supply for our customers.”
Due to very strong results in the first quarter, and significant changes in market dynamics, ICL is raising its expectations for full year adjusted EBITDA to a range of $3,500 million to $3,750 million, with between $1,300 million to $1,400 million coming from its specialties focused businesses. (1a)
Net income attributable to shareholders
Cash flows from operating activities
* Adjusted EBITDA is a non-GAAP financial measure; see updated definition in non-GAAP statement below. Adjusted EBITDA under the prior definition for the periods ended 3.31.22 and 3.31.21 was $977 million and $295 million, respectively.
Net financing expenses for the first quarter of 2022 were $34 million, up versus $20 million in the corresponding quarter of last year.
Tax expenses in the first quarter of 2022 were $211 million, reflecting an effective tax rate of 24%, versus $23 million and 14% in the corresponding quarter of last year. The company’s relatively low effective tax rate in the corresponding quarter was affected by the devaluation of the shekel against the U.S. dollar, which had a positive effect on shekel denominated tax provisions.
ICL has long-term credit facilities of $1,200 million, of which $322 million were utilized as of March 31, 2022.
As of March 31, 2022, ICL’s net financial liabilities amounted to $2,376 million, a decrease of $73 million compared to December 31, 2021.
In connection with ICL’s first quarter 2022 results, the Board of Directors declared a dividend of 23.83 cents per share, or approximately $306.5 million, up versus 5.25 cents per share, or approximately $67 million, in the first quarter of last year. The dividend will be payable on June 15, 2022, to shareholders of record as of June 1, 2022.
ICL has consolidated its specialty agriculture businesses under Innovative Ag Solutions (IAS), as the company continues to focus on targeting long-term growth through its diversified specialty solutions. As a result, ICL Boulby and other European business components were allocated from the Potash and Phosphate Solutions segments, respectively, to the IAS segment. The 2021 quarterly and annual restated segment data and 2020 annual restated segment data is available below.
(1) Primarily includes salt produced in underground mine in Spain, metal magnesium-based products, and sales of excess electricity produced in Israel.
Innovative Ag Solutions US$M
ICL Group is a leading global specialty minerals company, which also benefits from commodity upside. The company creates impactful solutions for humanity's sustainability challenges in the global food, agriculture and industrial markets. ICL leverages its unique bromine, potash and phosphate resources, its passionate team of talented employees, and its strong focus on R&D and technological innovation, to drive growth across its end markets. ICL shares are dually 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 2021 revenues totaled approximately $7 billion.
For more information, visit ICL's website at www.icl-group.com.
To access ICL's interactive Corporate Social Responsibility report, please click here.
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(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 Innovative Ag 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.
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. For additional information regarding this adjustment for prior periods, please see the reconciliation table under "consolidated adjusted EBITDA and diluted adjusted earnings per share for the periods of activity", in the appendix below.
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.
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, target, and potential, among others.
Forward‑looking statements appear in a number of places in this announcement and include, but are not limited to, our 2022 adjusted EBITDA guidance, 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; global unrest and conflict; failure to harvest salt, which could lead to accumulation at the bottom of evaporation Pond 5 in the Dead Sea; construction of a new pumping station; 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 the completion of major projects by third party contractors and/or termination of engagements with contractors and/or governmental obligations; the inflow of significant amounts of water into the Dead Sea could adversely affect production at our plants; labor disputes, slowdowns and strikes involving our employees; pension and health insurance liabilities; the ongoing COVID-19 pandemic, which has impacted, and may continue to impact our sales, operating results and business operations by disrupting our ability to purchase raw materials, by negatively impacting the demand and pricing for some of our products, by disrupting our ability to sell and/or distribute products, impacting customers' ability to pay us for past or future purchases and/or temporarily closing our facilities or the facilities of our suppliers or customers and their contract manufacturers, or restricting our ability to travel to support our sites or our customers around the world; changes to governmental incentive programs or tax benefits, creation of new fiscal or tax related legislation; changes in our evaluations and estimates, which serve as a basis for the recognition and manner of measurement of assets and liabilities; higher tax 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; volatility or crises in the financial markets; uncertainties surrounding the withdrawal of the United Kingdom from the European Union; hazards inherent to mining and chemical manufacturing; the failure to ensure the safety of our workers and processes; cost of compliance with environmental, regulatory, legislative, and licensing restrictions; laws and regulations related to, and physical impacts of climate change and greenhouse gas emissions; 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; 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, 2021, filed with the U.S. Securities and Exchange Commission (SEC) on February 23, 2022 (the Annual Report).
Forward‑looking statements speak only as of the date they are made, and 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 in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.
This announcement for the first quarter of 2022 (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.
Condensed Consolidated Statements of Income (Unaudited)
Selling, transport and marketing expenses
Share in earnings of equity-accounted investees
Income before taxes on income
Net income attributable to the non-controlling interests
Net income attributable to the shareholders of the Company
Earnings per share attributable to the shareholders of the Company:
Basic earnings per share (in dollars)
Diluted earnings per share (in dollars)
Weighted-average number of ordinary shares outstanding:
Condensed Consolidated Statements of Financial Position as of (Unaudited)
Prepaid expenses and other receivables
Cash flows from operating activities
Reversal of fixed assets impairment
Exchange rate, interest and derivative, net
Net change in operating assets and liabilities
Income taxes paid, net of refund
Net cash provided by operating activities
Cash flows from investing activities
Proceeds (payments) from deposits, net
Purchases of property, plant and equipment and intangible assets
Proceeds from divestiture of assets and businesses, net of transaction expenses
Net cash used in investing activities
Cash flows from financing activities
Dividends paid to the Company's shareholders
Repayments of short-term debt, net
Receipts (payments) from transactions in derivatives
Net cash used in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents as of the beginning of the period
Net effect of currency translation on cash and cash equivalents
Cash and cash equivalents as of the end of the period
Adjustments to Reported Operating and Net Income (non-GAAP)
Divestment related items and transaction costs from acquisitions (1)
Net income attributable to the shareholders of the Company
Total adjustments to operating income
Total adjusted net income - shareholders of the Company
(1) For 2022, reflects a capital gain related to the divestment of Novetide, a 50% owned joint venture.
(2) For 2022, reflects the tax impact of adjustments made to operational income.
Consolidated EBITDA for the Periods of Activity
Less: Share in earnings of equity-accounted investees
(1) See "Adjustments to Reported Operating and Net income (non-GAAP)" above.
(2) “Adjusted EBITDA” under the prior definition for the period ended March 31, 2022, and March 31, 2021, was $977 million and $295 million, respectively.
Investor Relations Contacts Peggy Reilly Tharp VP, Global Investor Relations +1-314-983-7665 Peggy.ReillyTharp@icl-group.com
Dudi Musler Director, Investor Relations +972-3-684-4448 Dudi.Musler@icl-group.com
Press Contact Adi Bajayo Scherf Communications +972-52-4454789 Adi@scherfcom.com
Investor Relations Contacts Peggy Reilly Tharp VP, Global Investor Relations +1-314-983-7665 Peggy.ReillyTharp@icl-group.com
Dudi Musler Director, Investor Relations +972-3-684-4448 Dudi.Musler@icl-group.com
Press Contact Adi Bajayo Scherf Communications +972-52-4454789 Adi@scherfcom.com