ICL Group Ltd. — Earnings Release 2017

Nov 8, 2017

Q3 2017 Results

Asher Grinbaum | Acting CEO November 8 th , 2017

Important Legal Notes

Disclaimer and Safe Harbor for Forward-Looking Statements

The information contained herein in this presentation or delivered or to be delivered to you during our presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in Israel Chemicals Ltd. ("ICL" or "Company") securities or in any securities of its affiliates or subsidiaries.

This presentation and/or other oral or written statements made by ICL during its presentation or from time to time, may contain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Whenever words such as "believe," "expect," "anticipate," "intend," "plan," "estimate", "predict" or similar expressions are used, the Company is making forward-looking statements. Such forward-looking statements may include, but are not limited to, those that discuss strategies, goals, financial outlooks, corporate initiatives, existing or new products, existing or new markets, operating efficiencies, or other non-historical matters.

Because such statements deal with future events and are based on ICL's current expectations, they could be impacted or be subject to various risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in our Annual Report on Form 20-F for the year ended December 31, 2016, and in subsequent filings with the Tel Aviv Securities Exchange (TASE) and/or the U.S. Securities and Exchange Commission (SEC). Therefore actual results, performance or achievements of the Company could differ materially from those described in or implied by such forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can provide no assurance that expectations will be achieved. Except as otherwise required by law, ICL disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise. Readers, listeners and viewers are cautioned to consider these risks and uncertainties and to not place undue reliance on such information.

Certain market and/or industry data used in this presentation were obtained from internal estimates and studies, where appropriate, as well as from market research and publicly available information. Such information may include data obtained from sources believed to be reliable, however ICL disclaims the accuracy and completeness of such information which is not guaranteed. Internal estimates and studies, which we believe to be reliable, have not been independently verified. We cannot assure that such data is accurate or complete.

Included in this presentation are certain non-GAAP financial measures, such as Adjusted Operating income and Adjusted Net income, designed to complement the financial information presented in accordance with IFRS because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with IFRS. Please refer to our Q3 2017 press release for the quarter ended September 30, 2017 for a reconciliation of the non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with IFRS.

Q3 2017 Results Summary

• A 31% increase in adjusted operating income, attributed mainly to Specialty Solutions, and a 25% decrease in G&A expenses to \$60 million
• Specialty Solutions accounted for over 50% of quarterly sales and nearly 70% of operating income*
• Seventh consecutive quarter of positive free cash flow positions ICL to reduce debt and improve its financial position

\$ millions	Q3 17	Q3 16	% change	Q2 17	% change
Sales	1,440	1,383	4.1%	1,322	8.9%
Operating income (loss)	180	(331)	NA	144	25.0%
Adjusted operating income	215	164	31.1%	153	40.5%
Adjusted EBITDA	314	286	9.8%	251	25.1%
Net income (loss)	84	(340)	NA	57	47.4%
Free Cash flow**	78	96	(18.8)%	86	(9.3)%
External potash sales (thousand tonnes)	1,319	1,293	2.0%	1,051	25.5%
Average potash selling price - FOB	217	199	9.0%	216	0.5%

* Operating income attributed to segments before G&A and other expenses

**See appendix for reconciliation of Free cash flow

See Q3 2017 press release for a reconciliation of Adjusted operating income to operating income and Adjusted net income to net income.

Business Performance & Major Developments

	\$ million	Q3 2017	Q3 2016	% change
	Sales*	746	701	6.4%
	Segment O/I**	190	171	11.1%

• Industrial Products' performance reflects higher prices and solid demand for bromine and bromine compounds.
• Intense wildfire activity and increased demand for phosphate acids and salts supported strong results for ICL Advanced Additives.
• Sequential increase in ICL Food Specialties' dairy protein sales due to continuous efforts to expand customer base.

Specialty Solutions

• Record potash sales volumes to Brazil and increased shipments to China. Average selling price increased by 9% over the period.
• Restructuring of our European sites and maintenance work at the Dead Sea resulted in lower potash production and higher cost compared to Q3 2016.
• Despite lower sales volumes and selling prices of commodity phosphates, operating income for the quarter exceeded last year due to income from insurance and continued improvement in YPH JV.
• Improved Specialty Fertilizers performance supported by higher sales volumes in Europe and despite continued competitive pressure and unfavorable weather in North America as well as shortage of ammonia in Israel.

** Excluding G&A, unallocated expenses and eliminations

Financial Results

Kobi Altman CFO

Main Financial Figures and Analysis

\$ millions	Q3 17	Q3 16	% change	Q2 17	% change
Sales	1,440	1,383	4.1%	1,322	8.9%
Gross profit	470	461	2.0%	415	13.3%
Operating income (loss)	180	(331)	NA	144	25.0%
Adjusted operating income	215	164	31.1%	153	40.5%
Net income (loss)	84	(340)	NA	57	47.4%
Adjusted net income	115	120	(4.2)%	64	79.7%
Capital Expenditures	100	157	(36.3)%	109	(8.3)%
Free cash flow*	78	96	(18.8)%	86	(9.3)%

* See appendix for reconciliation of free cash flow

Numbers may not add due to rounding and set offs

Q3 2017 Sales (\$M) Q3 2017 Adjusted operating income (\$M)

Q3 Sales and Operating Income Breakdown

8

Effective Tax Rate Impacted by Exceptional Items

\$ million	Q3 2017	Q3 2016	FY2016
Profit before tax	182	152	506
Income and Natural resources tax	63	39	121
Normalized effective tax rate	35%	26%	24%
Special items	3	---	26
Post special items	66	39	147
Post special items Tax rate	36%	26%	29%
NIS strengthening and other	3	2	(47)
Post impact of NIS strengthening and other	69	41	100
Effective tax rate	38%	27%	20%

Specialty Solutions Bridge Analysis

Sales (\$M) Segment operating income (\$M)

Excluding G&A and unallocated expenses

Numbers may not add due to rounding and set offs

Essential Minerals Bridge Analysis Sales (\$M) Segment operating income (\$M) 758 9 12 88 4 6

Excluding G&A and unallocated expenses

Numbers may not add due to rounding and set offs

Improving Cash Flow Generation

S&P reaffirmed ICL's global investment grade rating at BBB- with stable outlook. Local rating reaffirmed at ilAA with stable outlook

* See appendix for reconciliation of free cash flow

Thank You

Introduction to

ICL Advanced Additives & Food Specialties

November 8, 2017

Advanced Additives & Food Specialties Profile 2016

\$1.46B REVENUE* \$239M OPERATING INCOME**

\$5.6B ICL REVENUE*

% Sales by business line

Adv Add & Food Spec Sales Distribution

Advanced Additives & Food Specialties: Global Leadership Position

• Backward integrated to phosphate rock: full phosphate chain producer from rock to sophisticated blended products.
• Only global manufacturer of high quality phosphoric acids and downstream phosphates: US, Mexico, Germany, Israel, Brazil, China. Largest global merchant marketer of high quality phosphoric acid.
• Poised to take advantage of growth in China/SE Asia and South America.
  • YPH JV in China
  • Fosbrasil
• Global leadership positions in high value markets: specialty food proteins, Fire Fighting products & services, P2S5 for oil additives & ag specialties

Advanced Additives Profile

\$800M ANNUAL SALES 2016* \$155M OPERATING INCOME 2016*

EMPLOYEES WORLDWIDE

~1,100

BUSINESS LINES SALES DISTRIBUTIONS 2016

Ind. Specialities

• Fire Safety
• P2S5
• P4

Advanced Additives – A Stable Portfolio With Broad Applications

Advanced Additives Strategy: Leverage on Market Trends

Market Trends

• Increasing infrastructure investments
• Less potable Water
• Global weather patterns Increased Vehicle demand.
• Long-term growth in Asia & South America

-

Food Specialties Profile

Food Specialties – A Stable Portfolio With Broad Applications

Food Specialties Accelerated Growth Engines

Follow key industry trends

• Growing middle class in emerging markets
• Increase Processed food consumption
• Longer shelf- life
• "On the go"
• Health and Nutrition (gluten free, reduced salt)

Market Trends Growth Opportunities

• High-growth new applications in Meat, Dairy, Infant Milk Nutrition
• Expand portfolio through tailored solutions
• Local presence in growing emerging markets

Key Points: Advanced Additives & Food Specialties

Only Global player and backward integrated; expanded footprint in Asia & South America

Diverse and blue-chip customer base

Demonstrated ability for Selling Solutions

Growing sales and margins in the face of competitive market environment

Thank You

Appendix

Specialty Solutions Division

Specialty Solutions' Business Line SalesQ3 2017

Numbers may not add due to rounding and set offs

Prices Q3 2017

ICL Essential Minerals Division

Essential Minerals' Business Line Sales Q3 2017

Potash Business Stand-Alone Bridge Analysis Q3 2017

Sales (\$M) Business unit operating income (\$M)

Excluding G&A and unallocated expenses

See Q3 2017 financial reports for a reconciliation of Adjusted operating income to operating income and Adjusted net income to net income.

Numbers may not add due to rounding and set offs

Free Cash Flow Reconciliation

	Q1 2014	Q2 2014	Q3 2014	Q4 2014	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017	Q3 2017
Cash flow from operations	167	120	295	310	66	325	124	58	222	238	249	257	195	199	176
Purchase of property, plant and equipment and intangible assets	(239)	(209)	(207)	(180)	(150)	(155)	(164)	(150)	(187)	(154)	(153)	(138)	(106)	(113)	(98)
Dividend from investees	9	3	2	3	12	-	4	3	3	1	-	8	3	-	-
Proceeds from sale of fixed assets	-	-	-	-	-	-	-	-	-	-	-	-	12	-	-
Free Cash Flow	-63	-86	90	133	-72	170	-36	-89	38	85	96	127	104	86	78 32

Non GAAP Financial Measures

We disclo se in this Quarterly Repo rt non-IFRS financial measures titled adjusted operating income, adjusted net income att ributable t o the Company's shareholder s, adjusted EBITDA and free cash flow. Our management uses adju sted operating income, adju sted net income att ributable t o the Company's shareholder s and adju sted EBITDA t o facilitate operating per fo rmance compariso ns from period to period and present free cash flow t o facilitate a review o f our cash flows in period s. We calculate our adju sted operating income b y adju sting our operating income to add certain items, as set fo rt h in t he reconciliation table "Adju stment s to repo rted operating and net income" abo ve. Certain o f t hese items may recur. We calculate our adju sted net income att ributable to t he Company's shareholder s b y adju sting our net income attributable to t he Company's shareholders to add certain items, as set fo rt h in t he reconciliation table "Adju stment s to reported operating and net income" above, excluding t he total tax impact o f such adju stment s and adju stment s att ributable to t he non-cont rolling interest s. We calculate our adju sted EBITDA by adding back to t he net income att ributable to t he Company's shareholder s t he depreciation and amo rtization, financing expenses, net, taxes o n income and t he items presented in t he reco nciliation table "Adju sted EBITDA fo r t he periods o f activit y" below which were adju sted fo r in calculating t he adju sted operating income and adju sted net income att ributable to t he Company's shareholders. We calculate our free cash flow as our cash flows from operating activities net o f our purchase o f propert y, plant, equipment and intangible asset s, and adding Proceeds from sale o f propert y, plant and equipment and Dividend s from equit y-accounted investees during such period as presented in t he reconciliation table under "Calculation o f free cash flow".

You should not view adju sted operating income, adju sted net income att ributable to t he Company's shareholder s o r adju sted EBITDA as a substit ute fo r operating income o r net income att ributable t o the Company's shareholder s determined in acco rdance wit h IFRS, o r free cash flow as a substit ute fo r cash flows from operating activities and cash flows u sed in investing activities, and you should note t hat our de finitions o f adju sted operating income, adju sted net income att ributable to t he Company's shareholder s, adju sted EBITDA and free cash flow may differ from t ho se used b y ot her companies. However, we believe adju sted operating income, adju sted net income att ributable to t he Company' s shareholder s, adjusted EBITDA and free cash flow provide u se ful in fo rmation t o bot h management and invest o rs by excluding certain expenses t hat management believes are not indicative o f our ongoing operatio ns. In particular fo r free cash flow, we adju st our Capex to include any Proceeds from sale o f propert y, plant and equipment becau se we believe such amount s o ffset the impact o f our purchase o f propert y, plant, equipment and intangible asset s. We furt her adju st free cash flow t o add Dividend s from equit y-accounted investees because receipt o f such dividends a ffect s our residual cash flow. Free cash flow does not reflect adju stment fo r additional items t hat may impact our residual cash flow fo r discretionar y expendit ures, such as adju stment s fo r charges relating t o acquisitions, ser vicing debt obligations, changes in our depo sit account balances t hat relate t o our investing activities and ot her non-discretionar y expendit ures. Our management uses t hese non-IFRS measures t o evaluate t he Company's bu siness st rategies and management 's per fo rmance. We believe t hat t hese non-IFRS measures provide u se ful info rmation t o invest o rs becau se t he y improve t he comparabilit y o f t he financial result s between periods and provide fo r greater t ransparency o f key measures used t o evaluate our per fo rmance.

We present a discu ssio n in t he period-t o-period compariso ns o f t he primar y driver s o f changes in t he company's result s o f operations. This discu ssio n is based in part o n management 's best estimates o f t he impact o f t he main t rends in it s businesses. We have based t he following discussio n o n our financial statement s. You should read t he following discussion t oget her wit h our financial statement s.