6-K 1 zk2024707.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 July 2020
Commission File Number: 001-13742
ICL GROUP LTD.
(Exact name of registrant as specified in its charter)
ICL Group 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 ☒

ICL GROUP LTD.

| 1. | Q2 2020 Investor Presentation

Important Legal Notes Disclaimer and Safe Harbor for Forward-Looking StatementsThe 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 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, 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 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, 2019, 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 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 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, adjusted EBITDA, 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. 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 Q2 2020 press release for the quarter ended June 30, 2020 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

Q2 2020: Resilience In The Face Of Market Headwinds Positive operating income in all segments and positive free cash flow despite the impact of COVID-19 and low commodity pricesImprovement in adjusted net income and operating cash flow vs. the prior quarter, which was not materially impacted by COVID-19Record first half potash production at the Dead SeaContinued strategic execution to reduce unprofitable exposure to commodities and implement efficiency plans, will result in ~$50 million in enhanced profitability and cash savings annuallyDiscontinuation of Israeli-based production and sales of phosphate rockAccelerated closure of potash production activity in the Vilafruns mine in Spain, previously planned for 2021Headcount reductions, primarily through early retirementsOne-time impact of $297 million in the quarter, most of which is non-cashConsolidation of crop nutrition business sales and marketing organization is expected to drive synergies, optimize distribution channels and increase efficiency of global operationsDividend of $36 million reflects commitment to shareholders return and balanced capital allocation 3

Q2 2020 Sales 1,203 Q2 20191,425 % change(16%) Q1 2020 1,319 % change(9%) Operating income (169) 240 NA 132 NA Adjusted operating income(1) 128 230 (44%) 132 (3%) Adjusted EBITDA(1) 246 340 (28%) 250 (2%) Net income (168) 158 NA 60 NA Adjusted net income(1) 72 151 (52%) 60 20% Operating cash flow 177 239 (26%) 166 7% Free cash flow(2) 20 99 (80%) 28 (29%) Key Financial Metrics 1.Adjusted operating income, adjusted EBITDA and adjusted net income are non-GAAP financial measures. See appendix to this presentation for reconciliation tables.2.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. All figures shown in US $ millions 4

Industrial Products Segment SEGMENT EBITDA (1) 25 109 5 1 2 Quantities Q2 2019 Prices Exchange rates Operating& other expenses Q2 2020 88 Global economic slowdown related to COVID-19 impacted demand for clear brine fluids and flame retardants Continued strong performance in specialty minerals due to high demand for supplements and pharma applications $ millions (1) Segment EBITDA and segment EBITDA margin are non- GAAP financial measures. Segment EBITDA is segment profit net of depreciation and amortization and segment EBITDA margin is segment EBITDA divided by revenue. See appendix to this presentation for reconciliation tables. Achieved a healthy EBITDA margin of 31% despite 19% decrease in EBITDA Segment’s performance is expected to follow the recovery in global industrial activity 5

Potash Segment 82 140 14 9 1 Quantities Q2 2019 Prices Exchange rates Operating& other expenses Q2 2020 Record first half potash production at the Dead Sea Average realized price dropped by $63 per tonne, 22% lower compared to Q2 2019 COVID-19 impact of about $23 million (ICL Iberia: $13mn and ICL UK: 9mn) Efficiency and cost reduction plans implemented, including shutdown of the Vilafruns mine in Spain $ millions SEGMENT EBITDA (1) 80 Polysulphate production increased by 38% over Q2 2019 to 184 thousand tonnes 6 (1) Segment EBITDA is a non- GAAP financial measure and is segment profit net of depreciation and amortization . See appendix to this presentation for reconciliation tables.

17 78 1 1 30 Prices Q2 2019 Energy, transportation & other expenses Exchange rates Raw materials Q2 2020 60 $ millions SEGMENT EBITDA (1) Phosphate SolutionsSegment 3 Quantities A 20% increase in operating income for phosphate specialties, coupled with lower cost of raw materials, partially compensated for a large decline in phosphate commodity prices Solid performance for YPH JV in China with positive operating income Continued strong demand for food additives Cost reduction measures taken, including discontinuation of unprofitable phosphate rock production in Israel 7 (1) Segment EBITDA is a non- GAAP financial measure and is segment profit net of depreciation and amortization . See appendix to this presentation for reconciliation tables.

17 1 3 2 Raw materials Q2 2019 Prices Transportation Q2 2020 22 EBITDA and EBITDA margin increased by 29% and 33%, respectively, due to lower cost of raw materials and internal cost efficiency initiatives Sales decreased by 3% due to exchange rates and lower sales to the turf and ornamental markets as a result of COVID-19 Continued sales growth in emerging markets $ millions SEGMENT EBITDA (1) IAS Segment Operating& other expenses 1 Integration of Growers’ digital platform on track 8 (1) Segment EBITDA and segment EBITDA margin are non- GAAP financial measures. Segment EBITDA is segment profit net of depreciation and amortization and segment EBITDA margin is segment EBITDA divided by revenue. See appendix to this presentation for reconciliation tables.

New Focused Crop Nutrition Sales & Marketing Customers Customers Integrated perspective of the Agriculture market to address current gaps and missed opportunitiesFrom a siloed organization structure to a single unified commercial front facing the Ag sectorPotash Division Crop NutritionPotash Polysulphate Phosphate Solutions DivisionPhosphate CommoditiesCustomers IAS Division Specialty Fertilizers Customers Multiple locations ~$2.5B sales Multiple back office systems Thousands of end-customers Hundreds ofproducts The new operating model achieves:Optimization of sales and marketing channelsDrive internal synergies by extending offering globally Increase the ICL brand awarenessLeverage ICL’s region-specific market knowledge, logistic assets and strong agronomic capabilitiesNo impact on segment reporting 9

Summary & Outlook Second quarter results resemble prior period, despite the impact of COVID-19 on the former. All four operating segments were profitableProduction in all sites is back online according to plan, and operating under health and safety regulations related to COVID-19COVID-19 primarily impacted demand for clear brine fluids and flame retardants. Performance is expected to follow the recovery of the marketCommodity prices were still at trough levels in Q2, but are firming Diversity of ICL’s businesses providing stability and continued cash generation amid weaker commodity environmentContinued strategic execution on efficiency and cost saving plans across all operating segmentsStrength of balance sheet provides flexibility to continue to execute strategic initiatives and capture opportunities 10

Key Financial Parameters Adjusted EBITDA(1) Adjusted Net Income(1) Operating Cash Flow 24% 11% 23% 10% 18% 4% 4% 19% 5% 13% 19% 20% 6% 15% 340 151 Q2 2019 Q2 2019 Q3 2019 Q3 2019 Q4 2019 Q4 2019 Q1 2020 Q1 2020 Q2 2020 Q2 2020 307 130 201 48 250 60 246 72 239 368 212 166 177 % of sales 1.Adjusted EBITDA and adjusted net income are non-GAAP financial measures. See appendix to this presentation for reconciliation tables.All figures shown in US $ millions 28% 17% 12 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Numbers may not add due to rounding and set offs Sales Impacted by COVID-19 and Cyclical Low Commodity Prices 12 100 110 Q2 2019 Commodity prices Quantities Exchange rates Q1 2020 1,203 1,425 SALES All figures shown in US $ millions Industrial Products: 51 Potash: 82 13

340 246 14 12 110 4 1. Adjusted EBITDA is a non-GAAP financial measures. See appendix to this presentation for reconciliation tables. Profitability Impacted by Commodity Prices Adjusted EBITDA(1) Segment Contribution Q2 2019 Prices Quantities Exchange rates Energy, transportation & other expenses Q2 2020 All figures shown in US $ millions Number may not add to rounding and set offs 18 Raw materials 14

TOTAL IMPAIRMENTSEarly retirement Rotem sites Bromine compounds Magnesium TOTAL EARLY RETIREMENT Discontinuation of operationsRotem (Israel) Vilafruns (Spain) TOTAL DISCONTINUATION OF OPERATIONS TOTAL Tax impact TOTAL NET Q2 2020Impairment and write-downs of assetsRotem site (Israel) 175Vilafruns mine (Spain) 12 187 52 11 2210 32297 (57)240 NON-GAAP Adjustments Number may not add to rounding and set offsAll figures shown in US $ millions 15 78 15

Net Debt to EBITDA ratio Fitch and S&P credit rating reaffirmed Operating cash flow Q2 2020 dividend with stable outlook Total cash balance and available credit facilities$1.15 Bn 2.4X BBB- $177 Mn Series G bond almost doubled by issuing additional~$110 Mn $36 Mn Strong Balance Sheet and Liquidity 16

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Key Takeaways DIVERSE, RESILIENT BUSINESSDifferentiated business model and growth of specialty businesses provides strong support in challenging market conditions FINANCIAL STRENGTHStrong liquidity profile and no significant near-term principal repayments ensures flexibility to manage and opportunistically grow the business STRATEGIC EXECUTIONContinued focus on optimizing operations, achieving cost efficiencies and growing sales of specialty businesses POSITIVE OUTLOOKExpectations for improving commodity price environment and continued growth of specialty businesses despite short-term headwinds 19

Key Takeaways DIVERSE, RESILIENT BUSINESSDifferentiated business model and growth of specialty businesses provides strong support in challenging market conditions FINANCIAL STRENGTHStrong liquidity profile and no significant near-term principal repayments ensures flexibility to manage and opportunistically grow the business STRATEGIC EXECUTIONContinued focus on optimizing operations, achieving cost efficiencies and growing sales of specialty businesses POSITIVE OUTLOOKExpectations for improving commodity price environment and continued growth of specialty businesses despite short-term headwinds Visit our new Interactive Data Tool atWWW.ICL-GROUP.COM

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ICL

12 100 110 Q2 2019 Prices Exchange rates Quantities Q2 2020 1,203 1,425 51 6 6 79 92 1,203 1,425 Q2 2020 sales Numbers may not add due to rounding and set offs. All figures shown in US $ millions Q2 2019 Potash Industrial Products Phosphate Solutions Q2 2020 IAS Setoffs & eliminations 22

6 12 Q2 2019 Quantities Raw materials Adjustments to operatingincome (Q2 '19) Exchange rates Energy, transportation & other expenses Prices Q2 2020 128 240 18 110 230 10 Q2 2020 Operating Income 4 Numbers may not add due to rounding and set offs. All figures shown in US $ millions (169) Q2 2019 Adjusted Q2 2020 Adjusted Adjustments to operating Income (Q2 ‘20) 297 23

24 3 Q2 2019 IAS Potash Adjustments to operatingincome (Q2 '19) Industrial Solutions Setoffs & other Phosphate Solutions Q2 2020 128 240 67 9 230 10 Q2 2020 Operating IncomeSegment Contribution 23 Numbers may not add due to rounding and set offs. All figures shown in US $ millions (169) Q2 2019 Adjusted Q2 2020 Adjusted Adjustments to operating income (Q2 ‘20) 297 24

3 1 1 1 51 Q2 2019 Q2 2019 Quantities Quantities Exchange rates Exchange rates Prices Prices Q2 2020 Q2 2020 70 285 2 336 25 93 Operating & other expenses SEGMENT SALES SEGMENT PROFIT Numbers may not add due to rounding and set offs. All figures shown in US $ millions Q2 2020 Industrial ProductsSales and Segment Profit Analysis 25

14 2 2 8 1 82 Q2 2019 Q2 2019 Quantities Quantities Exchange rates Exchange rates Prices Prices Q2 2020 Q2 2020 38 340 82 432 105 Energy,transportation & other expenses SEGMENT SALES SEGMENT PROFIT Numbers may not add due to rounding and set offs. All figures shown in US $ millions Q2 2020 PotashSales and Segment Profit Analysis 26

30 439 518 1 30 7 42 Q2 2019 Q2 2019 Quantities Quantities Exchange rates Exchange rates Prices Prices Q2 2020 Q2 2020 8 32 7 3 17 Q2 2020 Phosphate Solutions Sales and Segment Profit Analysis SEGMENT SALES SEGMENT PROFIT Rawmaterials Energy,Transportation& other expenses Numbers may not add due to rounding and set offs. All figures shown in US $ millions 27

196 202 1 1 4 Q2 2019 Quantities Exchange rates Prices Q2 2020 SEGMENT SALES SEGMENT PROFIT 1 1 Q2 2019 Transportation Prices Q2 2020 15 3 12 Raw materials Numbers may not add due to rounding and set offs. All figures shown in US $ millions Q2 2020 Innovative Ag Solutions Sales and Segment Profit Analysis 28

Net financial expenses 31 37 Interest & exchange rate impact on long-term liabilities of leasing and employees Q2 2020 17 10 Q2 2019 Liabilities(1) 2,800 2,711 Interest rate 3.9% 4.3% Interest expenses 27 29 Interest capitalization (6) (4) Interest expenses, net 21 25 Total hedging transactions, balance sheet revaluation & other (7) 2 Finance Expenses Numbers may not add due to rounding and set offs. All figures shown in US $ millions Average liabilities during the given quarter 29

$ millions Q2 2020 Q2 2019 Adjusted income before tax(1) 98 194 Normalized tax rate 20% 21% Normalized tax expenses 20 40 Carryforward losses not recorded for tax purposes 6 3 Exchange rate impact and other items (2) - Adjusted tax expenses 24 43 Adjusted Effective tax rate 25% 22% Tax adjustments (57) (3) Reported provision for income taxes (33) 46 Effective Tax Rate 1. See calculation in the appendix of this presentation 30 Numbers may not add due to rounding and set offs. All figures shown in US $ millions

Calculation of adjusted income before tax Adjusted operating income(1) Finance expenses Share in earnings (losses) of equity-accounted investees and adjustments to financial expenses Adjusted income before tax Q2 2020 128 (31) 1 98 Q2 2019 230 (37) 1 194 Reconciliation Tables (1/3) Numbers may not add due to rounding and set offs. All figures shown in US $ millions1. See detailed reconciliation table in the Q2 2020 PR 31 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Q2 2019 Segment profit 70 93 38 105 8 32 15 12 Depreciation & Amortization 18 16 42 35 52 46 7 5 Segment EBITDA 88 109 80 140 60 78 22 17 Segment EBITDA margin 31% 32% 24% 32% 14% 15% 11% 8% Calculation of segment EBITDA and margin Industrial Products Potash Phosphate Solutions IAS

Net debt to adjusted EBITDA(2) Net debtAdjusted EBITDA 2,4321,004 Net debt to adjusted EBITDA 2.4 Q2 2020 Calculation of adjusted EBITDA Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 Net income attributable to theshareholders of the Company (168) 60 48 130 158 Depreciation and Amortization 119 118 113 110 109 Financing expenses, net 31 52 25 32 37 Taxes on income (33) 20 15 35 46 Adjustments(1) 297 - - - (10) Adjusted EBITDA 246 250 201 307 340 Numbers may not add due to rounding. All figures shown in US $ millions See detailed reconciliation table “Adjustments to reported operating and net income (Non-GAAP)” in the corresponding quarters’ PR and 6-KLast 4 quarters EBITDA Reconciliation Tables (2/3) 32

Reconciliation Tables (3/3) - - - Calculation free cash flow Q2 2020 Q2 2019 Q1 2020 Cash flow from operations 177 239 166 Additions to property plant and equipment and dividends from equity-accounted investees (157) (140) (138) Free cash flow 20 99 28 Calculation of adjusted net income to net income Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 Net income attributable to the shareholders of the Company (168) 60 48 130 158 Total adjustments to operating income(1) 297 (140) (138) (140) (10) Adjustments to finance expenses(1) - - - - Total tax impact of the above operating income & finance expenses adjustments(1) (57) - - - 3 Total adjusted net income - shareholders of the Company 72 60 48 130 151 Calculation of adjusted operating income Q2 2020 Q2 2019 Q1 2020 Operating incomeImpairment loss (reversal) (169)187 240(10) 132 Provision for early retirement and dismissal of employeesProvision for prior periods waste removal and site restoration costs 7832 - - Total adjustments(1) Adjusted operating income 297 (106) -128 230 123 33

We disclose in this Quarterly Report non-IFRS financial measures titled, adjusted operating income, adjusted net income attributable to the Company’s shareholders, adjusted EBITDA, adjusted EPS, segment EBITDA, segment EBITDA margin and free cash flow. Our management uses such non-GAAP measures 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 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 andnet 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, 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 EBITDA by adding back to the adjusted operating income the depreciation and amortization. Adjusted EPS is calculated as adjusted net income divided by weighted-average diluted number of ordinary shares outstanding as provided in the reconciliation table under “Calculation of Adjusted EPS”. We calculate our segment EBITDA by adding back to our segment profit the depreciation and amortization for each segment. We calculate our segment EBITDA margin by dividing segment EBITDA by revenue. 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 suchperiod as presented in the reconciliation table under “Calculation of free cash flow”. You should not view adjusted operating income, adjusted net income attributable to the Company’s shareholders, adjusted EPS or adjusted EBITDA as a substitute for operating income or net income attributable to the Company’s shareholders determined in accordance with IFRS, adjusted EPS as a substitute for EPS or free cash flow as a substitute for, 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 and free cash flow may differ from those used by other companies. However, we believe that such non-GAAP measures provide useful information to both management and investors by excluding certain expenses that management believes are not indicative of our ongoing operations. 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 residualcash 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. Non-GAAP Financial Measures

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.

|  | ICL Group Ltd.
|  | By: | /s/ Kobi Altman
|  |  | Name: | Kobi Altman
|  |  | Title: | Chief Financial Officer

|  | ICL Group Ltd.
|  | By: | /s/ Aya Landman
|  |  | Name: | Aya Landman
|  |  | Title: | Global Company Secretary

Date: July 29, 2020