6-K 1 zk2023969.htm 6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2020
Commission File Number: 001-13742
ISRAEL CHEMICALS LTD.
(Exact name of registrant as specified in its charter)
Israel Chemicals Ltd.
Millennium Tower
23 Aranha Street
P.O. Box 20245
Tel Aviv, 61202 Israel
(972-3) 684-4400
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ☐ No ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ☐ No ☒

ISRAEL CHEMICALS LTD.

| 1. | Q4 2019 Investor Presentation

Q4 & FY2019 ResultsRaviv Zoller, President & CEOFeb 13, 2020
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, 2018, 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 sales excluding divested businesses, adjusted operating income, adjusted operating income excluding divested businesses, adjusted EBITDA, adjusted EBITDA excluding divested businesses, adjusted net income, adjusted net income excluding divested businesses, adjusted EPS excluding divested businesses and free cash flow, 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 Q4 2019 press release for the quarter ended December 31, 2019 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. 2 Important Legal Notes
3 Q4 & FY2019 Highlights(1) Successfully completed the Dead Sea production capacity upgrade in Q4 2019, resulting in a significant impact on results Q4 2019 results were also impacted by weak commodity markets as well as the absence of a potash supply contract to China during the quarterValue of ICL’s specialty businesses reflected in resilience of 2019 adjusted operating income amid the current weak commodity price environmentContinued strong cash generation in Q4 2019 resulted in an annual increase of 60% in operating cash flow. Extended dividend policy of up to 50% of adjusted net income. Q4 2019 dividend of ~$0.02 per share. Sales ($M) Reported OI: 5,271 5,556 Operating cash flow ($M) Reported/Adjusted operating income(2) ($M) 1,106 1,410 753 2019 financial information is unaudited. Our audit is ongoing and not complete, particularly our valuation of assets and impairment testing, and accordingly the information presented herein may be subject to change as our audit is completeSee reconciliation table in the Q4 2019 PR and the appendix for this presentation 1,519 756 Reported OI: 166 88
Adjusted operating income, adjusted EBITDA and operating cash flow for Q4 and FY2019 include a positive impact of the new IFRS 16 accounting standard. See slides 31 and 32 in the appendix to this presentation.2019 financial information is unaudited. Our audit is ongoing and not complete, particularly our valuation of assets and impairment testing, and accordingly the information presented herein may be subject to change as our audit is completeAdjusted operating income and adjusted EBITDA are non-GAAP financial measures. See appendix to this presentation for reconciliation tables.EPS and adjusted EPS are calculated as net income and adjusted net income, respectively, divided by weighted-average diluted number of ordinary shares outstanding. Adjusted net income is a non-GAAP measure. See appendix to this presentation for reconciliation tables.Free cash flow is a non-GAAP financial measure, and consists of cash flow from operations excluding additions to property plant and equipment. See appendix to this presentation for reconciliation tables.Dividend per share related to the corresponding periods 4 Key Financial Metrics(1) $ millions Q4 2019 Q4 2018 % change FY 2019 FY 2018 % change Sales 1,106 1,410 (22%) 5,271 5,556 5%)) Operating income 88 166 (47%) 756 1,519 (50%) Adjusted operating income(2) 88 214 (59%) 760 753 1% Adjusted EBITDA(2) 201 322 (38%) 1,198 1,164 3% Net income 48 82 (41%) 475 1,240 (62%) Adjusted net income(3) 48 124 (61%) 479 477 0% EPS(3) (Presented in US $) 0.04 0.06 (41%) 0.37 0.97 (62%) Adjusted EPS(3) (Presented in US$) 0.04 0.10 (61%) 0.37 0.37 0% Operating cash flow 212 224 5%)) 992 620 60% Free cash flow(4) 57 47 21% 446 50 792% Dividend per share(5) (Presented in US$) 0.02 0.05 (63%) 0.18 0.18 0%
5 Achieved record operating income and margin for 2019, while reaching strategic goals and positioning the business for growth going forwardQ4 2019 sales and OI decreased mainly due to lower bromine production and sales volumes as a result of the facility upgrade shutdown at the Dead Sea and the pending magnesium antidumping claim which lowered chlorine availabilityAnother strong quarter led to a record year for clear brine fluids sales (1) Including inter-segment sales Industrial Products Business Performance $ millions QUARTERLY RESULTS SEGMENT PROFIT SALES(1) -8% -14% SEGMENT PROFIT +2% 2018 ANNUAL RESULTS 2019 SALES(1) +13% 1,193 1,296 300 338 1,296 1,318 320 293 70 60 2018 2019 2018 2019 2018 2019
6 (1) Including inter-segment sales Potash Business Performance Combination of production shutdown for upgrade at the Dead Sea and weak business environment led to significant profit margin erosion in Q4 2019Facility upgrade is expected to enable a capacity increase of ~200 thousand tonnes per annumQ4 2019 performance was impacted by no sales to China vs. 430 thousand tonnes sold in Q4 2018 and by an $18 decrease in average realized price for the period2019 Polysulphate production grew by 80%, sales increased by over 50% and positive market acceptance is expected to drive sales momentumMagnesium anti-dumping claim settled favorably QUARTERLY RESULTS SEGMENT PROFIT SALES(1) -41% -84% SEGMENT PROFIT -8% 2018 ANNUAL RESULTS 2019 SALES(1) -8% 1,623 315 289 515 302 138 22 2018 2019 2018 2019 2018 2019 1,494 $ millions
7 (1) Including inter-segment sales Phosphate Solutions Business Performance Strong performance in specialty phosphates overshadowed by accelerated weakness in commodities and by a negative exchange rate impactThe division’s resilience throughout 2019 attributable to ICL’s focus on specialties and the continued improvement of the YPH JVHigher prices and reduced costs led to higher profit in phosphate specialties in Q4 2019, more than offsetting operating loss in phosphate commoditiesNew Food-grade Pure Phosphoric Acid plant in China and a breakthrough solution in plant-based Meat Alternative, position us to execute on our specialty-focused strategy QUARTERLY RESULTS SEGMENT PROFIT SALES(1) SEGMENT PROFIT 2018 ANNUAL RESULTS 2019 SALES(1) 2018 2019 2018 2019 2018 2019 -6% 2,099 1,980 -12% 113 100 -16% 495 417 -93% 14 1 $ millions
8 (1) Including inter-segment sales IAS Business Performance Q4 2019 sales increase and reduced operating loss driven by higher prices and increased sales volume to the Turf and Ornamental Horticulture markets2019 results were negatively impacted by a weather-related decrease in sales volumes and unfavorable exchange ratesThe division continued to reduce lower-margin third party product sales and to focus on high growth markets QUARTERLY RESULTS SEGMENT PROFIT SALES(1) SEGMENT PROFIT 2018 ANNUAL RESULTS 2019 SALES(1) 2018 2019 2018 2019 2018 2019 -3% 741 717 -28% 29 21 +2% 147 150 -4 -2 +50% $ millions
9 Annual Growth Trend in Most Main Operational Parameters Adjusted operating income, adjusted EBITDA and operating cash flow for 2019 include a positive impact of the new IFRS 16 accounting standard. See slides 31 and 32 in the appendix of this presentation.Adjusted operating income excluding divested businesses and adjusted EBITDA excluding divested businesses are non-GAAP financial measures. See Appendix to this presentation for reconciliation tables. $ millions Adjusted operating incomeexcluding divested businesses(1) Adjusted EBITDAexcluding divested businesses(1) Operating cash flow Adjusted operating income Adjusted operating income margin % Adjusted EBITDA Adjusted EBITDA margin % Operating cash flow 9.9% 19.0% 17.8% 21.1% 14.4% 22.7% 10.0% 13.6%
10 ICL’s Commitment to ESG Interactive, innovative and comprehensive CSR web report Ongoing initiatives focused on ten SDGs Production sites ISO CERTIFICATIONS Included in Bloomberg's Gender-Equality Index ‘Platinum+’ on the Ma’ala Sustainability Index Reducing Air Emissions RECOGNITIONS Sustainable Procurement ICL’S INITIATIVES Higher score in the 2019 Bloomberg ESG disclosure ranking IFA’s 2019 Industry Stewardship Champion Gold Medal A- score for the 2019CDP carbon report Corporate governance score upgrade by Entropy
Kobi Altman, CFO
12 Q4 and FY2019 Sales(1) Numbers may not add due to rounding and set offs.2019 financial information is unaudited. Our audit is ongoing and not complete, particularly our valuation of assets and impairment testing, and accordingly the information presented herein may be subject to change as our audit is complete $ millions Potash: -201Phosphate commodities: -55Phosphate specialties: -4Industrial Products: -39Innovative Ag Solutions: +2 Potash: -174Phosphate commodities : -8Phosphate specialties: -72Industrial Products: -28Innovative Ag Solutions: -13 Potash: -11Phosphate Solutions: -13Industrial Products: +13Innovative Ag Solutions: +4 Potash: +63Phosphate Solutions: +33Industrial Products: +65Innovative Ag Solutions: +14
13 Q4 and FY2019 Adjusted Operating Income(1) Numbers may not add due to rounding and set offs. Adjusted operating income is a non-GAAP financial measure. See Q4 2019 PR and the appendix of this presentation for a reconciliation of adjusted operating income to operating income. (1) 2019 financial information is unaudited. Our audit is ongoing and not complete, particularly our valuation of assets and impairment testing, and accordingly the information presented herein may be subject to change as our audit is complete $ millions Potash: -90Phosphate Solutions: -6Industrial Products: -22Innovative Ag Solutions: +1 Potash: -80Phosphate Solutions: -13Industrial Products: -10Innovative Ag Solutions: -3
14 Foreign Exchange Rates Impact Q4 2019 NIS EUR Other Sales (1) 10 1 Expenses 17 (9) (1) Operating income 16 1 - Finance expenses (14) (1) (1) Tax 2 - - Net income 4 - (1) Numbers may not add due to rounding Total Q4 2019 10 7 17 (16) 2 3 FY2019 NIS EUR Other Sales - 95 18 Expenses 2 (68) (14) Operating income 2 27 4 Finance expenses (13) 4 (1) Tax 14 - - Net income 3 31 3 Total FY2019 113 (80) 33 (10) 14 37 Average exchange rates
15 Continued Optimization of Debt Structure Maturities(1) Available credit facilities as of December 31, 2019 amounts to $870 million Gross debt as of December 31, 2019: $2.3bn(2) Average interest rate: 4.2% Proforma for January 2020 bond offeringNot including ~$300 million leasing liability due to implementation of IFRS16 accounting standard $ millions The successful completion of the oversubscribed, 15-year bond offering at the amount of $110 in January 2020, increases our financial flexibility, demonstrating investor confidence 70 20 13 2 2 2 (110)
16 2019 Achievements Positioning ICL for the Next Decade ASSETS & OPERATIONS LEGAL, COMPLIANCE & ESG INNOVATING TO DRIVE RESULTS Dead Sea Potash facility upgrade to add ~5% expected production capacity Launch of the new terminal at the port of Barcelona Polysulphate production doubled, strong sales momentum Strategic LT bromine and bromine compounds supply agreements Fitch revised ICL’s credit rating outlook to ‘Positive’ Completed a public offering of ~$110m debentures on the TASE Breakthrough in Meat Alternative solutions ICL’s digital Ag platform to leverage AWS capabilities Polysulphate compaction/granulation New bromine & phosphorus applications Promoting Industry 4.0 efficiencies Incubating early-stage technologies, novel materials and cost-effective processes Final agreement on past royalties All-time record safety results Abengoa compensation settlement Magnesium antidumping claim revoked Upgrade by Entropy New WPA plant in China Bonus derivative action settlement agreement Circular economy and waste recovery Employer of Choice commitment Creating an ESG vision
MARCH LONDON 18,2020 Please join us at the Investor Day 17 MARCH NEW YORK CITY 19,2020 MARCH TEL AVIV 22,2020 ICL: Leadership, Innovation and Growth
THANK YOU 18
APPENDIX 19
20 Q4 2019 Industrial Products Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT Numbers may not add due to rounding and set offs $ millions $ millions
21 FY2019 Industrial Products Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT Numbers may not add due to rounding and set offs $ millions $ millions
22 Q4 2019 Potash Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions Numbers may not add due to rounding and set offs
23 FY2019 Potash Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions Numbers may not add due to rounding and set offs
24 Q4 2019 Phosphate Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions Numbers may not add due to rounding and set offs
25 FY2019 Phosphate Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions Numbers may not add due to rounding and set offs
26 Q4 2019 Innovative Ag Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions Numbers may not add due to rounding and set offs 4 1 1 2 4
27 FY2019 Innovative Ag Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT $ millions $ millions Numbers may not add due to rounding and set offs
28 Finance Expenses $ millions Q4 2019 Q4 2018 Liabilities(1) (including ~$300 million of LT leases in 2019)(2) 2,520 2,420 Interest rate 4.2% 4.1% Interest expenses(3) 27 25 Interest capitalization (6) (4) Interest expenses, net 21 20 Total hedging transactions, balance sheet revaluation & other (2) 44 Interest & exchange rate impact on long-term liabilities of leasing and employees(3) 6 (5) Net financial expenses 25 59 Adjustments to finance expenses(4) - 7 Reported net financial expenses 25 66 Average liabilities during the given quarterQ4 2019 liabilities includes $300 million impact of IFRS 16, which are not included in the Q4 2018 debt figuresQ4 2019 finance expenses include a $3 million increase in interest expenses and a $1 million exchange rate differences due to the implementation of IFRS 16Q4 2018 adjustments relate to prior periods’ royalties interest Numbers may not add due to rounding
29 Effective Tax Rate $ millions Q4 19 Q4 18 FY 2019 FY 2018 Adjusted income before tax(1) 63 158 632 608 Normalized tax rate 22% 22% 21% 22% Normalized tax expenses 14 33 131 138 Carryforward losses not recorded for tax purposes 4 8 8 15 Exchange rate impact and other items (3) (9) 8 (17) Adjusted tax expenses 15 32 147 136 Adjusted Effective tax rate 24% 20% 23% 22% See calculation in the appendix of this presentation Reported income before tax 63 103 628 1,364 Reported provision for income taxes 15 19 147 129
30 Strong Financial Position Support Strategy Execution Net debt to adjusted EBITDA calculated as short term credit + long term debt & debentures – cash & cash equivalents – short term investments & deposits, divided by last twelve months adjusted EBITDA. Adjusted EBITDA is a non-GAAP measure. See reconciliation table in the Q4 2019 PR and the appendix for this presentation Net Debt/EBITDA ratio(1)
31 IFRS 16(1) Quarterly Impact Item Net impactQ4 2019 VS. Q4 2018 Comments Adjusted operating income(2) $3 million Rent expenses decreased by $16 millionDepreciation increased by $13 million Adjusted EBITDA(2) $16 million Rent expenses decreased by $16 million Property Plant & Equipment ~$339 million A right-of-use asset recognized at the amount of ~$339 million Financial liabilities ~$300 million Net debt increased by ~$300 million due to an increase in long and short term lease liabilities Finance expenses $4 million Interest expenses increased by $3 millionExchange rate differences of $1 million Adjusted net income(2) $1 million Operating income up by $3 millionFinance expenses up by $4 million Operating cash flow $16 million Shift of rent payments (included in operating cash flow) to repayment of debt (included in cash flow from financing activities): $16 million IFRS 16 is a new accounting standard which replaces IAS 17, leases and its related interpretations.Adjusted operating income, adjusted EBITDA and adjusted net income are non-GAAP measure. See reconciliation table in the Q4 2019 PR and the appendix for this presentation
32 IFRS 16(1) Annual Impact Item Net impact2019 VS 2018 Comments Adjusted operating income(2) $10 million Rent expenses decreased by $61 millionDepreciation increased by $51 million Adjusted EBITDA(2) $61 million Rent expenses decreased by $61 million Property Plant & Equipment ~$339 million A right-of-use asset recognized at the amount of ~$339 million Financial liabilities ~$300 million Net debt increased by ~$300 million due to an increase in long and short term lease liabilities Finance expenses $22 million Interest expenses increased by $13 millionExchange rate differences of $9 million Adjusted net income(2) $12 million Operating income up by $10 millionFinance expenses up by $22 million Operating cash flow $53 million Shift of rent payments (included in operating cash flow) to repayment of debt (included in cash flow from financing activities): $61 million IFRS 16 is a new accounting standard which replaces IAS 17, leases and its related interpretations.Adjusted operating income, adjusted EBITDA and adjusted net income are non-GAAP measure. See reconciliation table in the Q4 2019 PR and the appendix for this presentation
33 Additional Data: Segment Profit Before and After G&A Expenses * Divested businesses incl. Fire Safety and P2S5. In 2018 also including Rovita Numbers may not add due to rounding Starting from the first quarter of 2019, ICL’s management has measured, and accordingly has presented in its reports, the results of its business divisions (operating segments) after allocation of general and administrative (G&A) expenses per each division. The purpose of the table below is to assist investors and analysts in comparing ICL's performance in prior periods to ICL's results starting in the first quarter of 2019. It should be noted that the allocation of G&A expenses with respect to comparison periods was made for convenience purposes only, and changes may occur in the allocation methodology in future periods.
34 Reconciliation Tables (1/2) Calculation of adjusted income before tax Q4 19 Q4 18 FY2019 FY2018 Adjusted operating income(1) 88 214 760 753 Finance expenses (25) (66) (129) (158) Share in earnings (losses) of equity-accounted investees and adjustments to financial expenses - 10 1 13 Adjusted income before tax 63 158 632 608 See detailed reconciliation table in the Q4 2019 PRIncludes $27 million proceeds from sale of Property Plant and EquipmentNumbers may not add due to rounding Calculation of adjusted net income to net income Q4 2019 Q4 2018 FY2019 FY2018 Net income attributable to the shareholders of the Company 48 82 475 1,240 Total adjustments to operating income(1) - 48 4 (766) Adjustments to finance expenses(1) - 7 - 10 Total tax impact of the above operating income & finance expenses adjustments(1) - (13) - (7) Total adjusted net income - shareholders of the Company 48 124 479 477 Weighted-average diluted number of ordinary shares outstanding 1,281,811 1,283,152 1,280,638 1,279,781 Adjusted EPS excluding divested businesses (US dollar) 0.04 0.10 0.37 0.37 $ millions Calculation free cash flow Q4 19 Q4 18 FY2019 FY2018 Cash flow from operations 212 224 992 620 Additions to property plant and equipment and dividends from equity-accounted investees (155) (177) (546)(2) (570) Free cash flow 57 47 446 50
35 Reconciliation Tables (2/2) See detailed reconciliation table “Adjustments to reported operating and net income (Non-GAAP)” in the Q4 2019 PRNumbers may not add due to rounding Calculation of adjusted EBITDA and adjusted EBITDA excluding divested businesses to net income FY2019 FY2018 FY2017 FY2016 Net income attributable to the shareholders of the Company 475 1,240 364 (122) Depreciation and Amortization 443 403 390 401 Financing expenses, net 129 158 124 132 Taxes on income 147 129 158 55 Adjustments(1) 4 (766) 23 585 Adjusted EBITDA 1,198 1,164 1,059 1,051 Contribution from divested businesses - (4) (155) (83) Adjusted EBITDA excluding divested businesses 1,198 1,160 904 968 Calculation of adjusted operating income and adjusted operating income excluding divested businesses FY2019 FY2018 FY2017 FY2016 Operating income 756 1,519 629 (3) Capital gain - (841) (54) 1 Impairment loss (reversal) (10) 19 32 489 Provision for early retirement and dismissal of employees - 7 20 39 Provision for legal claims 7 31 25 5 Provision for prior periods waste removal and site closure costs 7 18 - 51 Total adjustments(1) 4 (766) 23 585 Adjusted operating income 760 753 652 582 Divested businesses’ profit - (3) (145) (76) Adjusted operating income excluding divested businesses 760 750 507 506 $ millions
36 Non-GAAP Financial Measures We disclose in this Quarterly Report non-IFRS financial measures titled sales excluding divested businesses, adjusted operating income, adjusted operating income excluding divested businesses, adjusted net income attributable to the Company’s shareholders excluding divested businesses, adjusted EBITDA excluding divested businesses, adjusted EPS excluding divested businesses and free cash flow. Our management uses sales excluding divested businesses, adjusted operating income, adjusted operating income excluding divested businesses, adjusted net income attributable to the Company’s shareholders excluding divested businesses and adjusted EBITDA excluding divested businesses to facilitate operating performance comparisons from period to period and present free cash flow to facilitate a review of our cash flows in periods. We calculate our sales excluding divested businesses by adjusting our sales to exclude results of the divested Fire Safety and Oil Additives business (divested in Q1 2018) and Rovita business (divested in Q3 2018). We calculate our adjusted operating income by adjusting our operating income to add certain items, as set forth above and in the reconciliation table “Adjustments to reported operating and net income”. Certain of these items may recur. We calculate our adjusted net income attributable to the Company’s shareholders by adjusting our adjusted operating income excluding divested businesses, net income attributable to the Company’s shareholders to add certain items, as set forth above and in the reconciliation table “Adjustments to reported operating and net income (Non-GAAP)” in the accompanying press release, excluding the total tax impact of such adjustments and adjustments attributable to the non-controlling interests. We calculate our adjusted operating income excluding divested businesses by excluding the results of the divested Fire Safety and Oil Additives business (divested in Q1 2018) and Rovita business (divested in Q3 2018). We calculate our adjusted EBITDA by adding back to the net income attributable to the Company’s shareholders the depreciation and amortization, financing expenses, net, taxes on income and the items presented in the reconciliation table “Adjustments to reported operating and net income” in the accompanying press release which were adjusted for in calculating the adjusted operating income excluding divested businesses and adjusted net income attributable to the Company’s shareholders. Adjusted EPS excluding divested businesses is calculated as adjusted net income excluding divested businesses divided by weighted-average diluted number of ordinary shares outstanding as provided in the reconciliation table under “Calculation of Adjusted EPS”. We calculate our free cash flow as our cash flows from operating activities net of our purchase of property, plant, equipment and intangible assets, and adding Proceeds from sale of property, plant and equipment and dividends from equity-accounted investees during such period as presented in the reconciliation table under “Calculation of free cash flow”. You should not view sales excluding divested businesses, adjusted operating income, adjusted operating income excluding divested businesses, adjusted net income attributable to the Company’s shareholders excluding divested businesses, adjusted EPS excluding divested businesses or adjusted EBITDA excluding divested businesses as a substitute for operating income or net income attributable to the Company’s shareholders determined in accordance with IFRS, adjusted EPS excluding divested businesses as a substitute for EPS or free cash flow as a substitute for sales, cash flows from operating activities and cash flows used in investing activities, and you should note that our definitions of adjusted operating income, adjusted net income attributable to the Company’s shareholders, adjusted EBITDA excluding divested businesses and free cash flow may differ from those used by other companies. However, we believe sales excluding divested businesses, adjusted operating income, adjusted operating income excluding divested businesses, adjusted net income attributable to the Company’s shareholders excluding divested businesses, adjusted EBITDA excluding divested businesses, adjusted EPS excluding divested businesses and free cash flow provide useful information to both management and investors by excluding certain expenses that management believes are not indicative of our ongoing operations , in particular the divested Fire Safety and Oil Additives business (divested in Q1 2018) and the Rovita business (divested in July 2018), as we no longer own these businesses. In particular for free cash flow, we adjust our Capex to include any Proceeds from sale of property, plant and equipment because we believe such amounts offset the impact of our purchase of property, plant, equipment and intangible assets. We further adjust free cash flow to add Dividends from equity-accounted investees because receipt of such dividends affects our residual cash flow. Free cash flow does not reflect adjustment for additional items that may impact our residual cash flow for discretionary expenditures, such as adjustments for charges relating to acquisitions, servicing debt obligations, changes in our deposit account balances that relate to our investing activities and other non-discretionary expenditures. 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 the financial results between periods and provide for greater transparency of key measures used to evaluate our performance.We present a discussion in the period-to-period comparisons of the primary drivers of changes 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 in its businesses. We have based the following discussion on our financial statements. You should read the following discussion together with our financial statements.
THANK YOU visit us at www.icl-group.com 37

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  | Israel Chemicals Ltd.
|  | By: | /s/ Kobi Altman
|  |  | Name: | Kobi Altman
|  |  | Title: | Chief Financial Officer

|  | Israel Chemicals Ltd.
|  | By: | /s/ Aya Landman
|  |  | Name: | Aya Landman
|  |  | Title: | Global Company Secretary

Date: February 13, 2020