AI Terminal
Israel Corporation
Investor Presentation • May 11, 2022
6862_rns_2022-05-11_2a97b660-4354-4cd2-b41c-8fd1b9aa2aa4.pdf
Investor Presentation
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First Quarter 2022
Financial Results
Raviv Zoller | President and CEO May 11, 2022
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 this presentation does not constitute an offer, expressed or implied, or a recommendation to do any transaction in ICL Group Ltd. (ICL Group or company) securities or in any securities of its affiliates or subsidiaries.
This presentation and/or other oral or written statements made by ICL Group 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, its 2022 guidance, 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 Group's current expectations, they could be impacted or be subjected to various risks and uncertainties, including those discussed in the "Risk Factors" section and elsewhere in the company's Annual Report on Form 20-F for the year ended December 31, 2021, and in subsequent filings with the Tel Aviv Stock 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 the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can provide no assurance expectations will be achieved. Except as otherwise required by law, ICL Group 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 Group disclaims the accuracy and completeness of such information, which is not guaranteed. Internal estimates and studies, which the company believes to be reliable, have not been independently verified. The company cannot assure such data is accurate or complete.
Included in this presentation are certain non-GAAP financial measures, such as adjusted operating income, adjusted operating income margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted EPS, segment EBITDA, segment EBITDA margin and free cash flow, designed to complement the financial information presented in accordance with IFRS because management believes such measures are useful to investors. Please note other companies may calculate similarly titled non-GAAP financial measures differently than ICL Group and definitions of these measures may differ from those used by other companies or such companies may use other measures to evaluate their performance, which may reduce the usefulness of our non-GAAP financial measures as tools for comparison. 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 the company's first quarter 2022 press release for the period ended March 31, 2022, and the appendix to this presentation 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.
First quarter overview
Expanding long-term specialties focus, while benefitting from market upside
- Record sales up more than \$1 billion
- Adjusted EBITDA(1) crossed \$1 billion all-time record high
- Record quarterly results for all specialties businesses
- Another quarter of profitable growth and strong cash generation, with cost efficiency initiatives on-track
- Strengthened position as consistent and reliable global partner, amidst supply chain challenges
- Dividend of 23.83 cents per share, or \$306.5M, vs. 5.25 cents, or \$67M, in 1Q'21
Key first quarter financial metrics
Substantial year-over-year improvement
(1) Adjusted EBITDA is a non-GAAP financial measure, and an updated calculation can be found in the reconciliation tables in the appendix.
4
First quarter 2022
Key financial highlights
| US\$M ex. per share |
1Q'22 | 1Q'21 | YoY Change |
|---|---|---|---|
| Sales | \$2,525 | \$1,510 | 67% |
| Gross profit | \$1,245 | \$495 | 152% |
| Gross margin | 49.3% | 32.8% | 1,653 bps |
| Operating income | \$902 | \$185 | 388% |
| Adjusted operating income(1) | \$880 | \$185 | 376% |
| Adjusted operating margin(1) | 34.9% | 12.3% | 2,260 bps |
| Net income, attributable(2) | \$632 | \$135 | 368% |
| Adjusted net income, attributable(1) | \$613 | \$135 | 354% |
| Adjusted EBITDA(1) | \$1,002 | \$302 | 232% |
| Adjusted EBITDA margin(1) | 39.7% | 20.0% | 1,968 bps |
| Diluted earnings per share | \$0.49 | \$0.11 | 345% |
| Adjusted diluted EPS(1) | \$0.48 | \$0.11 | 356% |
| Operating cash flow | \$325 | \$206 | 58% |
| Free cash flow | \$218 | \$59 | 269% |
(1) Adjusted operating income and margin, adjusted net income, attributable, adjusted EBITDA and margin, adjusted EPS, and free cash flow are non-GAAP financial measures; see reconciliation tables in appendix. (2) 1Q'22 tax expenses amounted to \$211 million, reflecting an effective tax rate of 24%, compared to \$23 million in 1Q'21, reflecting an effective tax rate of 14%.
Industrial Products
Results driven by higher prices and long-term contracts
Key highlights
- Record quarterly sales and EBITDA
- Market prices for bromine increased year-over-year
- Over 70% of bromine compound sales under long-term contracts
- Record phosphorous-based flame retardants results
- End-market demand mixed
(1) Segment EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix.
Potash Strong pricing, amidst reduced supply
Key highlights
- Average realized price per ton increased to \$601, up \$344 vs. \$257 in 1Q'21 and up \$114 vs. \$487 in 4Q'21
- Successful annual maintenance shutdown at Dead Sea
- Production in Spain increased by 38% to 182,000 tons
- Strong results for metal magnesium
- Realigning ICL Boulby under Innovative Ag Solutions
(1) Segment EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix. Note: ICL has consolidated its specialty agriculture businesses under Innovative Ag Solutions (IAS). 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 in the appendix.
Phosphate Solutions
Record results for specialties and commodities
Key highlights
- Record results, as specialty food and industrial sales and EBITDA continued to increase
- Continued focus on driving long-term specialties profitability
- YPH delivered record results, with strength in both specialties and commodities
- Record phosphate fertilizer results, driven by surging prices
(1) Segment EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix.
Innovative Ag Solutions
Ongoing momentum combined with continued strategy execution
Key highlights
- Record sales and EBITDA
- Brazilian integration on-track, with results ahead of expectations
- Good start to turf and ornamental season, with solid distributor demand
- Record FertilizerpluS (Polysulphate-based) quarterly production and sales volume, combined with ICL Boulby profit contribution
(1) Segment EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix. Note: ICL has consolidated its specialty agriculture businesses under Innovative Ag Solutions (IAS). 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 in the appendix.
Making an impact
Continued investments across focus areas
- Dedicated internal unit and research resources focused on energy storage
- Monetized intellectual property, through sale of Novetide shares
- Innovative milk protein product for superior taste and texture
- Debuted BufferMAX to increase milk fat in cattle
- Expanding alternative-protein customer pipeline
Industrial Food Agriculture
- Consolidating and expanding biostimulant product offerings
- First fertilizer producer to obtain FPR certificate for CRF products
First quarter summary
Keeping our eye on the ball
Expanding long-term specialties focus, while benefitting from market upside
Investing in R&D to innovate and expand specialty product portfolio
Targeting consistent growth in sales and EBITDA
Maintaining focus on long-term customer relationships
Continuing focus on cash generation
Creating and returning value to shareholders
Investing in sustainability
First Quarter 2022
Financial Results
A v i r a m L a h a v
CFO
First quarter 2022
Key financial highlights
| US\$M ex. per share |
1Q'22 | 1Q'21 | YoY Change |
|---|---|---|---|
| Sales | \$2,525 | \$1,510 | 67% |
| Gross profit | \$1,245 | \$495 | 152% |
| Gross margin | 49.3% | 32.8% | 1,653 bps |
| Operating income | \$902 | \$185 | 388% |
| Adjusted operating income(1) | \$880 | \$185 | 376% |
| Adjusted operating margin(1) | 34.9% | 12.3% | 2,260 bps |
| Net income, attributable(2) | \$632 | \$135 | 368% |
| Adjusted net income, attributable(1) | \$613 | \$135 | 354% |
| Adjusted EBITDA(1) | \$1,002 | \$302 | 232% |
| Adjusted EBITDA margin(1) | 39.7% | 20.0% | 1,968 bps |
| Diluted earnings per share | \$0.49 | \$0.11 | 345% |
| Adjusted diluted EPS(1) | \$0.48 | \$0.11 | 356% |
| Operating cash flow | \$325 | \$206 | 58% |
| Free cash flow | \$218 | \$59 | 269% |
(1) Adjusted operating income and margin, adjusted net income, attributable, adjusted EBITDA and margin, adjusted EPS, and free cash flow are non-GAAP financial measures; see reconciliation tables in appendix. (2) 1Q'22 tax expenses amounted to \$211 million, reflecting an effective tax rate of 24%, compared to \$23 million in 1Q'21, reflecting an effective tax rate of 14%.
Macro overview
New and ongoing marketplace disruptions
- Global growth still strong
- Inflation soaring worldwide
- FX dynamics shifting across currencies
- Ripple effect from conflict in Ukraine
- Supply chain disruptions
- Commodity prices surging
Pricing across mineral value chain
Commodity price upcycle
First quarter 2022 Sales bridges
Sales by segment
US\$M
Note: Numbers rounded to closest million; Other includes intercompany eliminations.
16
First quarter 2022 Profit bridges
US\$M
Adjusted EBITDA(1) by segment
US\$M
(1) Adjusted EBITDA is a non-GAAP financial measure; see reconciliation tables in appendix. Note: Numbers rounded to closest million; Other includes intercompany eliminations.
Financial strength
Continued growth in cash flow
Highlights for 1Q'22
- Net debt to adjusted EBITDA(1) improved to 1.0
- Operating cash flow of \$325M vs. \$206M in 1Q'21
- Free cash flow(1) of \$218M vs. \$59M in 1Q'21
- Dividend of 23.83 cents per share vs. 5.25 cents in 1Q'21
- Achieved sustainability linked loan goals
Guidance Full year 2022
- Expect adjusted EBITDA range of \$3,500 million to \$3,750 million(1)
- Of which, EBITDA of specialty businesses to represent between \$1,300 million to \$1,400 million for FY'22
Thank you
C o n t a c t P e g g y . R e i l l y T h a r p @ i c l - g r o u p . c o m f o r m o r e i n f o r m a t i o n o n I C L V i e w o u r i n t e r a c t i v e d a t a t o o l a t h t t p s : / / i n v e s t o r s . i c l - g r o u p . c o m / i n t e r a c t i v e - d a t a - t o o l / d e f a u l t . a s p x
Appendix First Quarter 2022
F i n a n c i a l R e s u l t s
Segment changes
Consolidated specialty agriculture businesses under Innovative Ag Solutions (IAS)
| 2020 | 2021 | |||||
|---|---|---|---|---|---|---|
| FY | 1Q | 2Q | 3Q | 4Q | FY | |
| Segment sales | 1,268 349 | 380 | 400 | 647 1,776 | ||
| Sales to external customers |
979 254 | 296 | 310 | 541 1,401 | ||
| Sales to internal customers |
96 | 22 | 27 | 27 | 18 | 94 |
| Other and eliminations(1) |
193 | 73 | 57 | 63 | 88 | 281 |
| Gross profit | 472 | 135 | 154 | 209 | 372 | 870 |
| Segment operating income |
121 | 29 | 42 | 84 | 244 | 399 |
| Depreciation & amortization |
152 | 33 | 38 | 37 | 40 | 148 |
| Segment EBITDA | 273 | 62 | 80 | 121 | 284 | 547 |
US\$M US\$M US\$M
| 2020 | 2021 | |||||
|---|---|---|---|---|---|---|
| FY | 1Q | 2Q | 3Q | 4Q | FY | |
| Segment sales | 1,816 502 | 582 | 599 | 571 2,254 | ||
| Sales to external customers |
1,663 467 | 539 | 554 | 527 2,087 | ||
| Sales to internal customers |
153 | 35 | 43 | 45 | 44 | 167 |
| Segment operating income |
88 | 42 | 77 | 88 | 87 | 294 |
| Depreciation & amortization |
204 | 52 | 56 | 53 | 46 | 207 |
| Segment EBITDA | 292 | 94 | 133 | 141 | 133 | 501 |
Potash Phosphate Solutions Innovative Ag Solutions 2020 FY 2021 1Q 2Q 3Q 4Q FY Segment sales 1,033 340 334 504 492 1,670 Sales to external customers 1,016 337 331 495 481 1,644 Sales to internal customers 17 3 3 9 11 26 Segment operating income 17 20 21 52 42 135 Depreciation & amortization 45 13 13 15 21 62 Segment EBITDA 62 33 34 67 63 197
(1) Primarily includes salt produced in underground mine in Spain, metal magnesium-based products, and sales of excess electricity produced in Israel.
| Industrial Products US\$M | 1Q'22 | 1Q'21 |
|---|---|---|
| Segment sales | \$494 | \$398 |
| Sales to external customers | \$488 | \$394 |
| Sales to internal customers | \$6 | \$4 |
| Segment operating income | \$188 | \$105 |
| Depreciation and amortization | \$15 | \$17 |
| Segment EBITDA | \$203 | \$122 |
| US\$M | 1Q Sales | ||
|---|---|---|---|
| 2021 | \$398 | ||
| Quantity | (\$45) | ||
| Price | \$149 | ||
| Exchange rates | (\$8) | ||
| 2022 | \$494 | ||
| US\$M | 1Q Segment EBITDA |
||
| 2021 | \$122 | ||
| Quantity | (\$12) | ||
| Price | \$149 | ||
| Exchange rates | (\$6) | ||
| Raw materials | (\$26) | ||
| Energy | (\$3) | ||
| Transportation | (\$8) | ||
| Operating and other expenses | (\$13) | ||
| 2022 | \$203 |
| Potash US\$M | 1Q'22 | 1Q'21 |
|---|---|---|
| Segment sales | \$795 | \$349 |
| Sales to external customers | \$648 | \$254 |
| Sales to internal customers | \$43 | \$22 |
| Other and eliminations(1) | \$104 | \$73 |
| Gross profit | \$523 | \$135 |
| Segment operating income | \$410 | \$29 |
| Depreciation and amortization | \$40 | \$33 |
| Segment EBITDA | \$450 | \$62 |
| Potash production and sales 000s of tons |
1Q'22 | 1Q'21 |
|---|---|---|
| Production | 1,093 | 1,152 |
| Total sales, including internal sales | 1,150 | 1,075 |
| Closing inventory | 298 | 353 |
| US\$M | 1Q Sales \$349 |
|
|---|---|---|
| 2021 | ||
| Quantity | \$17 | |
| Price | \$441 | |
| Exchange rates | (\$12) | |
| 2022 | \$795 | |
| US\$M | 1Q Segment EBITDA |
|
| 2021 | \$62 | |
| Quantity | \$2 | |
| Price | \$441 | |
| Exchange rates | (\$10) | |
| Energy | (\$11) | |
| Transportation | (\$9) | |
| Operating and other expenses | (\$25) | |
| 2022 | \$450 |
Note: Segment EBITDA is a non-GAAP financial measure; see reconciliation tables.
(1) Primarily includes salt produced in Spain, metal magnesium-based products and sales of excess electricity produced in Israel; (2) Potash average realized price (USD per ton) is calculated by dividing total potash revenue by total sales quantities. The difference between FOB price and average realized price is primarily marine transportation costs.
| Phosphate Solutions US\$M | 1Q'22 | 1Q'21 |
|---|---|---|
| Segment sales | \$798 | \$502 |
| Sales to external customers | \$748 | \$467 |
| Sales to internal customers | \$50 | \$35 |
| Segment operating income | \$200 | \$42 |
| Depreciation and amortization(1) | \$47 | \$52 |
| Segment EBITDA | \$247 | \$94 |
| Phosphate Solutions US\$M | 1Q'22 | 1Q'21 |
|---|---|---|
| Segment sales | \$798 | \$502 |
| Specialty | \$437 | \$294 |
| Commodity | \$361 | \$208 |
| Segment operating income | \$200 | \$42 |
| Specialty | \$102 | \$35 |
| Commodity | \$98 | \$7 |
| Segment EBITDA | \$247 | \$94 |
| Specialty | \$115 | \$48 |
| Commodity | \$132 | \$46 |
| US\$M | 1Q Sales | |
|---|---|---|
| 2021 | \$502 | |
| Quantity | \$78 | |
| Price | \$229 | |
| Exchange rates | (\$11) | |
| 2022 | \$798 | |
| US\$M | 1Q Segment EBITDA |
|
| 2021 | \$94 | |
| Quantity | \$31 | |
| Price | \$229 | |
| Exchange rates | (\$4) | |
| Raw materials | (\$87) | |
| Energy | (\$2) | |
| Transportation | (\$4) | |
| Operating and other expenses | (\$10) | |
| 2022 | \$247 |
Note: Segment EBITDA is a non-GAAP financial measure; see reconciliation tables.
(1) For 1Q'22, represents \$13 million in specialties and \$34 million in commodities. For 1Q'21, represents \$13 million in specialties and \$39 million in commodities.
Innovative Ag Solutions First quarter 2022
| Innovative Ag Solutions US\$M | 1Q'22 | 1Q'21 |
|---|---|---|
| Segment sales | \$566 | \$340 |
| Sales to external customers | \$556 | \$337 |
| Sales to internal customers | \$10 | \$3 |
| Segment operating income | \$93 | \$20 |
| Depreciation and amortization | \$17 | \$13 |
| Segment EBITDA | \$110 | \$33 |
| US\$M | 1Q Sales |
|---|---|
| 2021 | \$340 |
| New Brazilian Businesses' contribution |
\$125 |
| Quantity | (\$32) |
| Price | \$146 |
| Exchange rates | (\$13) |
| 2022 | \$566 |
| US\$M | 1Q Segment EBITDA |
| 2021 | \$33 |
| New Brazilian Businesses' contribution | \$19 |
| Quantity | (\$9) |
| Price | \$146 |
| Exchange rates | (\$1) |
| Raw materials | (\$59) |
| Energy | (\$8) |
| Transportation | (\$5) |
| Operating and other expenses | (\$6) |
| 2022 | \$110 |
Consolidated results analysis
First quarter 2022
| US\$M | Sales | Expenses | Operating Income |
EBITDA | |
|---|---|---|---|---|---|
| 1Q'21 | \$1,510 | (\$1,325) | \$185 | ||
| Total adjustments 1Q'21(1) | - | - | - | ||
| Adjusted 1Q'21 figures | \$1,510 | (\$1,325) | \$185 | \$302 | Notes: |
| New Brazilian Businesses' contribution |
\$125 | (\$109) | \$16 | \$19 | Positive – includes acquisition of Compass Minerals América do Sul S.A. (ADS) in July 2021. |
| Quantities | (\$12) | \$17 | \$5 | \$5 | Positive – primarily strong sales volumes of acids in most regions and phosphate fertilizers, also an increase in sales volume of potash from the higher-margin ICL Dead Sea site. Negative – lower sales volume of bromine-based industrial solutions, mainly clear brine fluids, bromine- and phosphorus-based flame retardants, as well as lower sales volumes of specialty agriculture and FertilizerpluS products, mainly in Europe. |
| Prices | \$945 | - | \$945 | \$945 | Positive – primarily an increase of \$344 in avg. realized price/ton of potash YoY, increases in selling prices of phosphate fertilizers, acids, bromine- and phosphorous-based flame retardants, bromine based industrial solution specialty minerals and specialty agriculture and FertilizerpluS products. |
| Exchange rates | (\$43) | \$21 | (\$22) | (\$22) | Negative – primarily depreciation of the Euro against the U.S. dollar, as well as the appreciation of the Israeli shekel against the U.S. dollar. |
| Raw materials | - | (\$153) | (\$153) | (\$153) | Negative – primarily higher prices of sulfur consumed during the quarter, commodity fertilizers, and raw materials used to produce bromine- and phosphorus-based flame retardants. |
| Energy | - | (\$23) | (\$23) | (\$23) | Negative – primarily increase in electricity prices, mainly in Europe. |
| Transportation | - | (\$25) | (\$25) | (\$25) | Negative – higher transportation costs. |
| Operating and other expenses | - | (\$48) | (\$48) | (\$46) | Negative – higher operational costs, mainly payments of royalties as a result of higher revenue. |
| Adjusted 1Q'22 figures | \$2,525 | (\$1,645) | \$880 | \$1,002 | |
| Total adjustments 1Q'22(1) | - | \$22 | \$22 | ||
| 1Q'22 | \$2,525 | (\$1,623) | \$902 |
(1) See adjustments to reported operating and net income (non-GAAP) in the current quarter's 6-K report.
Finance expenses, calculation of adjusted income before tax and adjusted effective tax rate
| US\$M | 1Q'22 | 1Q'21 |
|---|---|---|
| Average debt(1) | \$3,050 | \$2,825 |
| Annual interest rate | 3.8% | 3.9% |
| Interest expenses | \$29 | \$28 |
| Interest income | (\$2) | (\$1) |
| Interest capitalization | (\$2) | (\$6) |
| Interest expenses, net | \$25 | \$21 |
| Total hedging and balance sheet revaluation |
\$4 | (\$5) |
| Employee benefits interest and other |
\$5 | \$4 |
| Net financial expenses | \$34 | \$20 |
US\$M 1Q'22 1Q'21 Adjusted operating income \$880 \$185 Finance expenses, net (\$34) (\$20) Share in earnings of equity-accounted investees and adjustments to financial expenses - - Adjusted income before tax \$846 \$165 Tax rate 26% 22% Tax expenses \$216 \$36 Carryforward losses for which deferred taxes were not recognized and other (\$3) (\$1) Exchange rate impact (\$5) (\$12) Adjusted tax expenses \$208 \$23 Adjusted tax rate 25% 14% Tax adjustments \$3 - Reported taxes on income \$211 \$23 Reported income before taxes \$868 \$165 Reported effective tax rate 24% 14%
28
Note: Numbers may not add, due to rounding and set-offs. (1) Average liabilities during given quarter.
Calculation of segment EBITDA and breakout of segment sales by region
| Calculation of segment EBITDA and margin US\$M |
Industrial Products |
Potash | Phosphate Solutions |
Innovative Ag Solutions |
||||
|---|---|---|---|---|---|---|---|---|
| 1Q'22 | 1Q'21 | 1Q'22 | 1Q'21 | 1Q'22 | 1Q'21 | 1Q'22 | 1Q'21 | |
| Segment sales | \$494 | \$398 | \$795 | \$349 | \$798 | \$502 | \$566 | \$340 |
| Segment operating income | \$188 | \$105 | \$410 | \$29 | \$200 | \$42 | \$93 | \$20 |
| Depreciation and amortization | \$15 | \$17 | \$40 | \$33 | \$47 | \$52 | \$17 | \$13 |
| Segment EBITDA | \$203 | \$122 | \$450 | \$62 | \$247 | \$94 | \$110 | \$33 |
| Segment EBITDA margin | 41% | 31% | 57% | 18% | 31% | 19% | 19% | 10% |
| Sales US\$M | 1Q'22 | 1Q'21 | 1Q'22 | 1Q'21 | 1Q'22 | 1Q'21 | 1Q'22 | 1Q'21 |
|---|---|---|---|---|---|---|---|---|
| Asia | \$211 | \$130 | \$232 | \$70 | \$239 | \$140 | \$66 | \$48 |
| Europe | \$156 | \$144 | \$149 | \$155 | \$212 | \$146 | \$251 | \$215 |
| South America | \$11 | \$13 | \$244 | \$24 | \$117 | \$58 | \$146 | \$14 |
| North America | \$97 | \$95 | \$100 | \$56 | \$170 | \$114 | \$49 | \$32 |
| Rest of World | \$19 | \$16 | \$70 | \$44 | \$60 | \$44 | \$54 | \$31 |
| Total | \$494 | \$398 | \$795 | \$349 | \$798 | \$502 | \$566 | \$340 |
Calculation of adjusted EBITDA, net debt to adjusted EBITDA and free cash flow
| Calculation of adjusted EBITDA US\$M |
1Q'22 | 1Q'21 |
|---|---|---|
| Net income | \$657 | \$142 |
| Financing expenses, net | \$34 | \$20 |
| Share in earnings of equity-accounted investees |
- | - |
| Taxes on income | \$211 | \$23 |
| Operating income | \$902 | \$185 |
| Adjustments(1) | (\$22) | - |
| Depreciation and amortization | \$122 | \$117 |
| Adjusted EBITDA(2) | \$1,002 | \$302 |
| Net debt to adjusted EBITDA(3) US\$M |
1Q'22 |
|---|---|
| Net debt | \$2,376 |
| Adjusted EBITDA | \$2,320 |
| Net debt to adjusted EBITDA | 1.0 |
| Calculation of free cash flow US\$M |
1Q'22 | 1Q'21 |
|---|---|---|
| Cash flow from operations | \$325 | \$206 |
| Additions to PP&E, intangible assets, and dividends from equity accounted investees(4) |
(\$107) | (\$147) |
| Free cash flow | \$218 | \$59 |
Note: Numbers may not add, due to rounding and set-offs. (1) See detailed reconciliation table – adjustments to reported operating and net income (non-GAAP) – in corresponding quarters' earnings release. (2) Adjusted EBITDA under the prior definition for the period ended 3.31.22 and 3.31.21 was \$977M and \$295M, respectively. (3) Quarterly net debt to adjusted EBITDA ratio is calculated by dividing net debt by past four quarters adjusted EBITDA. (4) Also includes proceeds from sale of property, plants and equipment (PP&E).
Calculation of adjusted net income, attributable and adjusted EPS
| Calculation of adjusted net income, attributable US\$M |
1Q'22 | 1Q'21 |
|---|---|---|
| Net income, attributable | \$632 | \$135 |
| Adjustments(1) | (\$22) | - |
| Total tax adjustments | \$3 | - |
| Adjusted net income, attributable | \$613 | \$135 |
| Calculation of adjusted diluted earnings per share US\$M, ex. per share data |
1Q'22 | 1Q'21 |
|---|---|---|
| Adjusted net income, attributable | \$613 | \$135 |
| Weighted-average number of diluted ordinary shares outstanding (in thousands) |
1,290,965 | 1,282,912 |
| Adjusted diluted earnings per share(2) | \$0.48 | \$0.11 |
Note: Numbers may not add, due to rounding and set-offs.
(1) See detailed reconciliation table – adjustments to reported operating and net income (non-GAAP) – in corresponding quarters' earnings release. (2) Adjusted diluted earnings per share is calculated by dividing adjusted net income attributable by weighted-average number of diluted ordinary shares outstanding.
Guidance and non-GAAP financial measures
Guidance
The company only provides guidance on a non-GAAP basis. We do 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 necessary for such a 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 EBITDA (non-GAAP). Our 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 presentation 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
Non-GAAP financial measures
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 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" 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 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's 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.