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Operating Segments | 12 Months Ended
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Dec. 31, 2021
Disclosure of operating segments [abstract] |
Note 5 - Operating Segments | Note 5 - Operating Segments A. General 1. Information on operating segments: ICL is a global specialty minerals company operating bromine, potash and phosphate mineral value chains in a unique, integrated business model. Our operations are organized under four segments: Industrial Products, Potash, Phosphate Solutions and Innovative Agriculture Solutions. As part of management’s strategy to strengthen the focus on its specialties products a decision was made regarding the Company’s managerial structure, according to which, as of January 2022, the activities of ICL Boulby and ICL Amfert will be allocated from the potash and phosphate solutions segments, respectively, to the Innovative Ag Solutions segment. This transition is not reflected in the presentation set forth below. Industrial Products – The Industrial Products segment produces bromine out of a solution that is a by‑product of the potash production process in Sodom, Israel, as well as bromine‑based compounds. Industrial Products uses most of the bromine it produces for self‑production of bromine compounds at its production sites in Israel, the Netherlands and China. Industrial Products is also engaged in the production and marketing of phosphorous-based products. In addition, the Industrial Products segment produces several grades of potash, salt, magnesium chloride and magnesia products. Potash – The Potash segment produces and sells mainly potash, salt, Polysulphate®, magnesium and electricity. Potash is produced in Israel and Spain, using an evaporation process to extract potash from the Dead Sea in Israel and conventional mining from an underground mine in Spain. In its ICL Boulby mine in the UK, the Company produces Polysulphate®, which is composed of sulphur, potash, calcium and magnesium. The Company’s FertilizerpluS product line is based mainly on Polysulphate®. The segment also includes a magnesium product line which produces pure magnesium and magnesium alloys, as well as chlorine and sylvinite. In addition, the segment sells salt that is produced in its potash and Polysulphate® underground mines in Spain and the UK. The Company has a power plant in Sodom, which supplies electricity to ICL companies in Israel (electricity surplus is sold to external customers) and steam to all facilities in the Sodom site. Phosphate Solutions – The Phosphate Solutions segment is based on a phosphate value chain which uses phosphate commodity products, such as phosphate rock and fertilizer-grade phosphoric acid (“green phosphoric acid”), to produce specialty products with higher added value. The segment also produces and markets phosphate-based fertilizers. Phosphate rock is mined and processed from open pit mines, two of which are located in the Negev Desert in Israel, while the third is situated in Yunnan province in China. Sulphuric acid, green phosphoric acid and phosphate fertilizers are produced in facilities in Israel, China and Europe. The Phosphate Solutions segment manufactures purified phosphoric acid by purifying green phosphoric acid. Pure phosphoric acid and green phosphoric acid are used to manufacture downstream products with high added value, such as phosphate salts and acids, for a wide range of food and industrial applications. Phosphate salts and acids are used in various industrial end markets, such as oral care, cleaning products, paints and coatings, LFP batteries, water treatment, asphalt modification, construction, metal treatment, and more. The segment’s products for the food industry include functional food ingredients and phosphate additives, which provide texture and stability solutions for processed meat, meat alternatives, poultry, seafood, dairy, beverages and baked goods. In addition, the segment supplies purified phosphoric acid to ICL’s specialty fertilizers business and produces alternative protein meat substitutes, as well as milk and whey proteins for the food ingredients industry. Innovative Ag Solutions – The Innovative Ag Solutions segment aims to achieve global leadership in specialty fertilization markets by enhancing its global positions in its core markets of specialty agriculture, ornamental horticulture, turf and landscaping, targeting high-growth markets such as Brazil, India and China, by leveraging its unique R&D capabilities, vast agronomic experience, global footprint, backward integration to potash and phosphate and chemistry know-how, while integrating and generating synergies from acquired businesses. In January 2021, the Company completed the acquisition of Fertiláqua, one of Brazil’s leading specialty plant nutrition companies, and in July 2021, the acquisition of the South American Plant Nutrition business of Compass Minerals América do Sul S.A. (hereinafter - ADS). ICL is continuously working to expand its broad portfolio of specialty plant nutrition, plant stimulation and plant health solutions, which consists of enhanced efficiency and controlled release fertilizers (CRF), water soluble fertilizers (WSF), liquid fertilizers and straights (MKP/MAP/PeKacid), soil and foliar micronutrients, secondary nutrients, biostimulants, soil conditioners, seed treatment products, and adjuvants. The Innovative Ag Solutions segment develops, manufactures, markets and sells its products globally, mainly in Brazil, Europe, Asia, North America and Israel. It produces water soluble specialty fertilizers in Belgium, Israel and Spain, liquid fertilizers in Israel, Spain, China and Brazil, straights soluble fertilizers in China and Israel, controlled‑release fertilizers in the Netherlands, Brazil and the United States, as well as secondary nutrients, biostimulants, soil conditioners, seed treatment product, and adjuvants in Brazil. Other Activities – Business activities which include, among other, ICL’s innovative arm, promoting innovation, developing new products and services, as well as digital platforms and technological solutions for farmers and agronomists. This category includes Growers and Agmatix, innovative start-ups that are developing agricultural data processing and analysis capabilities for the future of agriculture. These activities are not presented as reportable segments, since they do not meet the required quantitative thresholds. 2. Segment capital investments The capital investments made by the segments, for each of the reporting periods, include mainly property, plant and equipment, as well as intangible assets acquired in the ordinary course of business and as part of business combinations. 3. Inter–segment transfers and unallocated income (expenses) Segment’s revenue, expenses and results include inter-segment transfers that are based on transaction prices in the ordinary course of business. This is aligned with the reports that are regularly reviewed by the Chief Operating Decision Maker. The inter-segment transfers are eliminated as part of financial statements’ consolidation process. The Segment profit is measured based on the operating income, without the allocation of certain expenses to the operating segments, as presented in the reports regularly reviewed by the Chief Operating Decision Maker. This is the basis for analyzing segment results, since management believes that it is the most relevant measure for the assessment of such results. B. Operating segment data
| Industrial Products | Potash | Phosphate Solutions | Innovative Ag Solutions | Other Activities | Reconciliations | Consolidated
| $ millions
For the year ended December 31, 2021 |  |  |  |  |  |  |
Sales to external parties | 1,601 | 1,768 | 2,334 | 1,226 | 26 | - | 6,955
Inter-segment sales | 16 | 163 | 98 | 19 | 2 | (298) | -
Total sales | 1,617 | 1,931 | 2,432 | 1,245 | 28 | (298) | 6,955
Segment operating income (loss) | 435 | 399 | 307 | 121 | (8) | (60) | 1,194
Other income not allocated to the segments |  |  |  |  |  |  | 16
Operating income |  |  |  |  |  |  | 1,210
Financing expenses, net |  |  |  |  |  |  | (122)
Share in earnings of equity-accounted investees |  |  |  |  |  |  | 4
Income before income taxes |  |  |  |  |  |  | 1,092
Depreciation amortization and impairment | 65 | 165 | 215 | 38 | 2 | (1) | 484
Capital expenditures | 74 | 298 | 238 | 36 | 6 | 17 | 669
Capital expenditures as part of business combination | - | - | - | 377 | - | - | 377
| Industrial Products | Potash | Phosphate Solutions | Innovative Ag Solutions | Other Activities | Reconciliations | Consolidated
| $ millions
For the year ended December 31, 2020 |  |  |  |  |  |  |
Sales to external parties | 1,242 | 1,183 | 1,871 | 715 | 32 | - | 5,043
Inter-segment sales | 13 | 163 | 77 | 16 | 3 | (272) | -
Total sales | 1,255 | 1,346 | 1,948 | 731 | 35 | (272) | 5,043
Segment operating income (loss) | 303 | 120 | 66 | 40 | (5) | (15) | 509
Other expenses not allocated to the segments |  |  |  |  |  |  | (307)
Operating income |  |  |  |  |  |  | 202
Financing expenses, net |  |  |  |  |  |  | (158)
Share in earnings of equity-accounted investees |  |  |  |  |  |  | 5
Income before income taxes |  |  |  |  |  |  | 49
Depreciation amortization and impairment | 77 | 166 | 210 | 25 | 3 | 98 | 579
Capital expenditures | 84 | 296 | 275 | 20 | 6 | 15 | 696
Capital expenditures as part of business combination | - | - | - | - | 26 | - | 26
| Industrial Products | Potash | Phosphate Solutions | Innovative Ag Solutions | Other Activities | Reconciliations | Consolidated
| $ millions
For the year ended December 31, 2019 |  |  |  |  |  |  |
Sales to external parties | 1,307 | 1,330 | 1,901 | 699 | 34 | - | 5,271
Inter-segment sales | 11 | 164 | 79 | 18 | 3 | (275) | -
Total sales | 1,318 | 1,494 | 1,980 | 717 | 37 | (275) | 5,271
Segment operating income | 338 | 289 | 100 | 21 | 19 | (7) | 760
Other expenses not allocated to the segments |  |  |  |  |  |  | (4)
Operating income |  |  |  |  |  |  | 756
Financing expenses, net |  |  |  |  |  |  | (129)
Share in earnings of equity-accounted investees |  |  |  |  |  |  | 1
Income before income taxes |  |  |  |  |  |  | 628
Depreciation amortization and impairment | 67 | 149 | 177 | 21 | 22 | (3) | 433
Implementation of IFRS 16 | 8 | 95 | 113 | 9 | 105 | 9 | 339
Capital expenditures | 66 | 383 | 213 | 21 | 4 | 6 | 693
C. Information based on geographical location The following table presents the distribution of ICL’s sales by geographical location of the customer:
| 2021 | 2020 | 2019
| $ millions | % of sales | $ millions | % of sales | $ millions | % of sales
Brazil | 1,178 | 17 | 447 | 9 | 581 | 11
USA | 1,091 | 16 | 793 | 16 | 840 | 16
China | 1,060 | 15 | 806 | 16 | 802 | 15
United Kingdom | 386 | 6 | 336 | 7 | 347 | 7
Germany | 345 | 5 | 327 | 6 | 334 | 6
Israel | 291 | 4 | 260 | 5 | 241 | 5
Spain | 280 | 4 | 243 | 5 | 249 | 5
France | 270 | 4 | 238 | 5 | 257 | 5
India | 213 | 3 | 194 | 4 | 178 | 3
Italy | 145 | 2 | 114 | 2 | 116 | 2
All other | 1,696 | 24 | 1,285 | 25 | 1,326 | 25
Total | 6,955 | 100 | 5,043 | 100 | 5,271 | 100
The following table presents the distribution of the operating segments sales by geographical location of the customer:
| Industrial Products | Potash | Phosphate Solutions | Innovative Ag Solutions | Other Activities | Reconciliations | Consolidated
| $ millions
For the year ended December 31, 2021 |  |  |  |  |  |  |
Europe | 530 | 497 | 765 | 424 | 23 | (80) | 2,159
Asia | 597 | 513 | 621 | 156 | 1 | (12) | 1,876
South America | 64 | 507 | 359 | 378 | - | (3) | 1,305
North America | 363 | 216 | 492 | 120 | 1 | (6) | 1,186
Rest of the world | 63 | 198 | 195 | 167 | 3 | (197) | 429
Total | 1,617 | 1,931 | 2,432 | 1,245 | 28 | (298) | 6,955
| Industrial Products | Potash | Phosphate Solutions | Innovative Ag Solutions | Other Activities | Reconciliations | Consolidated
| $ millions
For the year ended December 31, 2020 |  |  |  |  |  |  |
Europe | 458 | 411 | 665 | 334 | 30 | (76) | 1,822
Asia | 405 | 433 | 480 | 127 | 1 | (14) | 1,432
South America | 40 | 230 | 227 | 21 | - | (1) | 517
North America | 299 | 86 | 372 | 105 | 2 | (5) | 859
Rest of the world | 53 | 186 | 204 | 144 | 2 | (176) | 413
Total | 1,255 | 1,346 | 1,948 | 731 | 35 | (272) | 5,043
The following table presents the distribution of the operating segments sales by geographical location of the customer: (cont'd)
| Industrial Products | Potash | Phosphate Solutions | Innovative Ag Solutions | Other Activities | Reconciliations | Consolidated
| $ millions
For the year ended December 31, 2019 |  |  |  |  |  |  |
Europe | 469 | 422 | 712 | 336 | 31 | (85) | 1,885
Asia | 399 | 470 | 447 | 118 | 1 | (12) | 1,423
South America | 56 | 327 | 263 | 23 | - | (1) | 668
North America | 353 | 95 | 370 | 95 | - | (3) | 910
Rest of the world | 41 | 180 | 188 | 145 | 5 | (174) | 385
Total | 1,318 | 1,494 | 1,980 | 717 | 37 | (275) | 5,271
The following table presents the distribution of the Company’s sales by geographical location of the main facilities from which they were produced.
| For the year ended December 31
| 2021 | 2020 | 2019
| $ millions | $ millions | $ millions
Israel | 3,526 | 2,636 | 2,815
Europe | 2,437 | 2,014 | 2,079
South America | 1,095 | 424 | 441
North America | 897 | 757 | 816
Asia | 861 | 643 | 615
Others | 56 | 48 | 47
| 8,872 | 6,522 | 6,813
Intercompany sales | (1,917) | (1,479) | (1,542)
Total | 6,955 | 5,043 | 5,271
The following table presents operating income by geographical location of the assets from which it was produced:
| For the year ended December 31
| 2021 | 2020 | 2019
| $ millions | $ millions | $ millions
Israel* | 863 | 105 | 578
Asia | 179 | 64 | 59
South America** | 95 | 35 | 19
North America | 71 | 47 | 61
Europe | 7 | (50) | 32
Others | 4 | 4 | 3
Intercompany eliminations | (9) | (3) | 4
Total | 1,210 | 202 | 756
| * | Israel operating income for 2020 includes a loss of $274 million resulting from impairments and the initiation of efficiency initiatives and measures.
** South America operating income for 2021 includes $51 million resulting from the operations of Fertilaqua and ADS, which were acquired during the year. For additional information see Note 8B. The following table present the non-current assets by geographical location of the assets (*)
| As of December 31
| 2021 | 2020
| $ millions | $ millions
Israel | 4,079 | 3,952
Europe | 1,505 | 1,575
Asia | 483 | 490
South America | 391 | 58
North America | 333 | 319
Other | 5 | 5
Total | 6,796 | 6,399
| (*) | Mainly consist of property, plant and equipment, intangible assets and non-current inventories.

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