Essential Minerals for Life Nomura Global Chemical Industry Leaders Conference Rome, March 22, 2012
Disclaimer The information delivered or to be delivered to you does not constitute an offer or a recommendation to do any The information delivered or to be delivered to you does not constitute an offer or a recommendation to do any transaction in Israel Chemicals Ltd. (ICL) securities. Although our shares may be bought and sold on the Tel Aviv Stock Exchange (TASE) at any trading time, they do not trade out of Israel - neither in the United States, nor EU ,nor elsewhere and this presentation does not constitute an offer or investment advice to any US or other person at this time. If we ever do so, our offer will only be made by a prospectus or a registration statement conforming with all requirements of U.S., EU or any other applicable law. Certain statements in this presentation and other oral and written statements made by ICL from time to time, are forward-looking statements, including, but not limited to, those that discuss strategies, goals, outlook or other non- historical matters; or project revenues, income, returns or other financial measures. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements, including, among others, the following: (a) Crisis in financial markets;(b) War or terror operations;(c) I Impacts on sales of fertilizers (product prices, government policies and weather); (d) Subjection to legislative and t l f f tili ( d t i t li i d th ) (d) S bj ti t l i l ti d licensing restrictions;(e) Exposure relating to environmental protection and safety;(f) Third party liability and product liability; (g) Volatility in the markets that affects the demand for some of the products; (h) Concessions and permits; (i) Natural disasters; (j) Water level in Pond 150 in Dead Sea;(k) Dependence on seaports, transportation and loading in Israel. We caution you that the above list of important factors is not comprehensive. We refer you to filings that we have made and shall make with the TASE. They may discuss new or different factors that may cause actual results to diff differ materially from this information. t i ll f thi i f ti All information included in this document speaks only as of the date on which they are made, and we do not undertake any obligation to update such information afterwards. Some of the market and industry information is based on independent industry publications or other publicly available y p y p p y information, while other information is based on internal studies. Although we believe that these independent sources and our internal data are reliable as of their respective dates, the information contained in them has not been independently verified and we can not assure you as to the accuracy or completeness of this information. Readers and viewers are cautioned to consider these risks and uncertainties and to not place undue reliance on such information. o at o P. 2
Company Basics From Basic Minerals to Downstream Products and Performance Solutions P. 3
ICL - A Global Player ICL A Global Player � A global manufacturer of fertilizers & specialty chemicals Headquartered in Israel worldwide operations Headquartered in Israel, worldwide operations � 2010 revenues: US$ 5.7 billion; Net Income: US$ 1.025 billion 9M 2011 revenues: US$ 5.4 billion; Net Income: US$ 1.142 billion � Close to 50% of revenues derived from production activities outside of Israel; ~94% of sales occur outside of Israel � 11,965 employees* as of September, 2011 (~5,000 in Israel) Potash � Trading: Tel-Aviv Stock Exchange (TASE: ICL) Corp (POT) 14% Market cap**:~$14 billion Public Israel Corp 34% (ILCO) (ILCO) Dividend yield: 2011: 5 5%; Decade average: 4 8% Dividend yield: 2011: 5.5%; Decade average: 4.8% 52% * Including new acquisitions ICL Shareholders ** As of March 12, 2012 P. 4
Integrated Portfolio Across Segments – From Basic Materials to Downstream Products Potash, Phosphate Rock, Phosphoric Acid, Phosphate Fertilizers, Compound Fertilizers, Specialty Fertilizers, Feed Additives, Salts ICL ICL Potash Potash Industrial 34% Products Potash Elemental Bromine, Bromine & Organophosphorus 22% 34% Other Flame Retardants, Various Bromine Compounds, 4% 4% Chlorine based Biocides Magnesia Prod cts Chlorine-based Biocides, Magnesia Products Fertilizers & ICL Phosphates Performance Specialty Phosphates: Technical, Food Grade & 17% Fertilizers & Products Electronic Grade Phosphoric Acid, Phosphate Salts, Electronic Grade Phosphoric Acid, Phosphate Salts, Phosphates p 23% 23% 17% Food Additives, Hygiene Products, Wildfire Safety Products, Water Treatment Chemicals and Services Pure Magnesium, Magnesium Alloys; Water Desalination Solutions (via IDE, 50% JV) Note: % based on 2010 sales P. 5
Access to Vast, Low Cost Natural Resources , Potash Potash The Polyhalite Dead Bromine Bromine Sea Sea (Israel) Magnesium Iberpotash (Spain) & CPL (England) S Salts Phosphates 3 Peat Mining 3 Peat Mining The Negev Sites (England) Desert (Israel) P. 6
Dead Sea Potash - Unique Low-cost Technology and Open Air Storage and Open Air Storage Open Air Evaporation Dredging 2 Production Storage Process Operation Lines Capacity Capacity • Environmentally friendly pond evaporation system, saves the burning of about 10 million tons of coal or diesel oil each year y • Use of natural gas in Israel, as of mid 2010, reduces CO emissions to the atmosphere 2 P. 7
Agreement with the Israeli Government Ensures Future Potash Development & Sustainability at the Dead Sea Potash De elopment & S stainabilit at the Dead Sea � ICL will finance over 80% of the salt dredging costs. � Dead Sea Works’ royalty rate will increase from 5% to 10% on ex-works (average) price Dead Sea Works royalty rate will increase from 5% to 10% on ex works (average) price of potash for annual volumes sold over 1.5 million tons . 6 5 4 3 2 1 At the At th The dry salt The salt is The suspension The barges Floating North is loaded onto drained. The flows through return the salt dredgers harvest terminal, a conveyor to solution is a floating pipe to the the salt the salt is transport transport filtered and filtered and to a drainage to a drainage northern basin northern basin loaded onto it to the returned to the area near the of the Dead barges. terminal. pond. dike. Sea. Pond No.5 Ein Gedi Terminal Salt transport Terminal Zohar Zohar Ein Bokek P. 8
Bromine: Lowest Cost, Virtually Unlimited Reserves y Sea Water g/l 0.05 ( China, India, Japan ) Underground Wells g/l 0.2 ( China ) Brine Wells g/l 2-6 ( ( USA* and Russia USA and Russia ) ) Most Concentrated Source of Bromine g/l g/l 10 12 10-12 Dead Sea Brine Dead Sea Brine in the World * Arkansas – brine wells of Chemtura & Albemarle P. 9
Vertical Integration With High Utilization of By-Products & Waste Products Major Intermediate & Finished Products Raw Materials Source Phosphorus ( Penta) Elemental Sulfide Sulfide Phosphorus Phosphate Salts Food Additives Food Grade Wildfire Extinguishers Fertilizer Phosphoric Acid Phosphate Phosphate Grade Grade The Th Phosphoric Rock Food Hygiene Acid Negev Special Grade Acid Alumina & Magnesia Desert Based Phosphate Fertilizers Carnallite Potash Compound The Fertilizers Salt (NaCl) Dead Dead End Brine End Brine Specialty Specialty Crude Fertilizers Magnesium Sea Magnesium Chloride Pure Solution Chlorine Magnesium Magnesia Magnesia Magnesium Magnesium Elemental Elemental Potash Products (MgO) Alloys Polynalite Bromine Magnesium Mines in Bromine Chloride Salt (NaCl) Compounds the UK Sylvanite y Potash Chlorine Chlorine & S & Spain i based Biocides OPFRs & Others Fertilizers Performance Products DSM Product Sold Industrial Products P. 10
Strong Global Presence & Logistical Advantages g & g g Sales by Geography (1-9/11 ) North America 20% Europe 36% Israel 5% Asia 27% ROW 2% Mexico South America 10% Manufacturing plant Logistic center Sales offices Headquarter Headquarter P. 11
Leading Player in Global Industries Leading Player in Global Industries #1 in elemental bromine ~40% of global production capacity #1 in organophosphorus flame retardants #1 producer of pure phosphoric acid #1 in specialty phosphates #1 in specialty phosphates #1 in wildfire safety products #1 producer of PK fertilizers (compound potash & phosphate fertilizers) #1 d f PK f tili ( d t h & h h t f tili ) #2 Europe and #6 Worldwide in potash supply #2 Western world magnesium production, and... Major player in specialty fertilizers & specialty chemical niche markets P. 12
Continuous Historical Growth Trend Continuous Historical Growth Trend $ million s 6,904 5 692 5,692 5,356 4,554 4,271 4,103 2 715 2 986 3,258 1,981 2,271 2,715 2,986 2,336 2,004 1 460 1,460 1 346 1,346 1,007 938 743 1,142 536 1,025 , 561 561 770 770 354 354 779 199 203 553 422 374 251 103 92 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 9M10 9M10 9M11 9M11 Net Income Operating Income Sales *2002-2006 figures are based on Israeli GAAP, 2007-2011 are based on IFRS P. 13
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