Making ICL a World Leader in the Making ICL a World Leader in the - - PowerPoint PPT Presentation
Making ICL a World Leader in the Making ICL a World Leader in the - - PowerPoint PPT Presentation
Making ICL a World Leader in the Making ICL a World Leader in the Fast-Growing Markets for Specialty Fertilizers Horticultural Inputs & Turf Fertilizers, Horticultural Inputs & Turf Proposed Acquisition of Proposed Acquisition of
Important Legal Notes
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
Important Legal Notes
Israel Chemicals Ltd. (ICL) securities. Although our shares may be bought and sold on the Tel Aviv Stock Exchange (TASE) at any time, they do not constitute trade out of Israel - neither in the United States nor elsewhere and this presentation does not constitutive an offer or investment advice to any US or other public at this time. If we ever do so, our offer will only be made by a prospectus or a registration statement conforming with the requirements of U.S. 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) the changes in worldwide economic and political conditions that impact interest and foreign exchange rates, the following: (a) the changes in worldwide economic and political conditions that impact interest and foreign exchange rates, (b) the extent to which ICL is able to successfully integrate acquisitions, (c) the extent to which ICL is able to achieve savings from its various plans, (d) government funding and program approvals affecting products being developed or sold under government programs, and (e) cost and delivery performance under various program and development contracts. We caution you that the above list of important factors is not comprehensive. We refer you to filings that we have made with the TASE. They may discuss new or different factors that may cause actual results to differ materially from this information They may discuss new or different factors that may cause actual results to differ materially from this information. All information included in this document speaks only as of the date on which they are made, and we do not undertake any
- bligation to update such information afterwards.
Some of the market and industry information are based on independent industry publications or other publicly available 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, 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.
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Transaction Summary
Transaction Overview Transaction Overview
- Acquisition: ICL has made an offer to acquire the Global Professional business
- f The Scotts Miracle-Gro Company (NYSE:SMG). Global Pro is a leading global
provider of specialty fertilizers and horticultural and turf specialty products
- Purchase price: $270 million in cash from ICL’s internal resources
p
- Global Pro’s financials (fiscal 2010, ended Sept 2010):
Revenues: $242M; EBITDA: $31.4M (non-GAAP)
- Closing: expected in Q1 2011 subject to completion of customary closing conditions
- Closing: expected in Q1 2011, subject to completion of customary closing conditions
- Acquisition rationale: positioning ICL as a global leader in the
Specialty Fertilizers, Horticultural Inputs & Turf markets with: $500M i l ~$500M in sales A broad range of branded & proprietary products Industry-leading R&D and technologies A large, global, experienced sales and marketing organization Access to downstream customers for our traditional products Favorable access to raw materials a o ab e access to a ate a s
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Business and Assets To Be Acquired Business and Assets To Be Acquired
- Workforce: ~340 employees
Workforce: 340 employees
- Sales & marketing force: ~220 highly-trained sales & support personnel
in 6 regions with existing customer relationships
- Strong R&D capabilities & IP portfolio: Strong R&D teams; patented
Control Release fertilizers, Slow Release fertilizers & coatings technologies
- Strong brands: Global Pro’s Osmocote, Peters, Agroblen and other brands.
ICL is also securing multi-year rights to use the Scotts, Levington and other brand names
- Production plants:
2 fertilizer plants in Heerlen, Netherlands & South Carolina/USA 1 growing media plant and 3 peat mines in the UK 1 growing media plant and 3 peat mines in the UK
- Ongoing co-operation, technical & supply agreements
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S i lt Specialty Fertilizers Market
What Are Specialty Fertilizers? What Are Specialty Fertilizers?
- Concentrated fertilizers with
high efficiency used to Enhance yields Improve crop quality S Save water Protect the environment
- Mainly used to
Mainly used to Integrate fertilizers with drip irrigation
- r foliar
Control consumption in open fields, p p , nurseries and lawns Optimize mix of major and minor elements and trace elements Optimize plant performance
- Usually tailored to specific needs
- f end users
- f end-users
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Growth Drivers for Specialty Fertilizers Growth Drivers for Specialty Fertilizers
Demand for
Population growth
Strong Market Needs Global Trends Demand for Specialty Fertilizers
growth
- Limited land and
water resources drive growers to increase yield per cultivated Specialty fertilizers help farmers, d & i
Increase in standard
- f living in emerging
Reduction of bl l d
yield per cultivated area gardeners & nurseries achieve:
- Improved efficiency
g g g regions arable land Limited availability
- f water resources
- Increased awareness
and regulations force growers to take environmental impact
- Higher yields
- Better quality
- “Greener” agriculture
- f water resources
Environmental concerns
environmental impact into consideration
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concerns
The Specialty Fertilizers Market: Still Small, but Growing Faster than the Commodity Market
Fertilizer Group Fertilizer Type Cost Yield Market Size* Growth Rate* CONVENTIONAL FERTILIZERS
- Nitrogen
- Phosphate
MEDIUM MEDIUM ~$100B per ear 3-4% per ear FERTILIZERS
- Potash
- Water soluble
per year per year SPECIALTY FERTILIZERS HIGH
- Water soluble
straights
- Formulated
fertilizers
HIGH ~$2.0- 2.5B per year 5-8% per year
- Coated fertilizers
per year
* Source: IFA‐Global Fertilizers and Raw Materials Supply and Supply/Demand Balances: 2010‐2014 (May 2010), Company estimates
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pp y pp y/ ( y ), p y
Market Conclusion Market Conclusion Specialty Fertilizers offer Specialty Fertilizers offer
- High growth rates in line with evolution of agricultural
technologies, including increased usage of Water Soluble Fertilizers (WSF) and Controlled Release Fertilizers (CRF)
- Relatively high-priced, downstream products
with strong margins
- High customer loyalty
- Relatively low volatility
y y
- Environmentally friendly fertilizing solutions
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ICL Specialty Specialty Fertilizers Today
ICL Specialty Fertilizers Today ICL Specialty Fertilizers Today
Sales:
ICL FERTILIZERS
2009 sales: $2.1B
- ~$250 million/year
- ~100K tons of WS solid fertilizers
- ~200K tons of liquid fertilizers
ICL Specialty Fertilizers
q
Main customers:
- Solids: producers/blenders & distributors to
sophisticated end users
Fertilizers
2009 Sales: ~$250M
sophisticated end-users
- Liquids: local end-users
Product Lines:
- Water Soluble (WS) MKP, MAP, NPK & HKP
- Variety of leading brands
- World’s #1 producer of soluble PK fertilizers
(crystallized potash & phosphate)
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Innovative Line of Fully-Soluble Fertilizers Innovative Line of Fully Soluble Fertilizers
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Scotts’ Global Pro Global Pro Business
Global Pro is a Top Player in the Global Specialty Fertilizers Market
- Scotts Global Pro is a market leader in
Miracle-Gro
NYSE: SMG
premium specialty fertilizers for Ornamental, Horticulture & Professional Turf markets, with a rising presence in the Specialty Agriculture market
HQ: Marysville, Ohio 2010 sales: $3.1B Employees: 8,000
g p p y g
- Scotts is divesting Global Pro to increase its focus
- n its Global Consumer business
Global Global
Scotts Lawn Corporate
Global Consumer (84%) Global Professional (8%)
2010 l $242M
Scotts Lawn Service (7%) Corporate & Other (1%)
2010 sales: $242M
~340 employees
Branded products for lawn and garden care
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Global Pro: A Great Complement to ICL Specialty Fertilizers
Leadership in three attractive
Markets
Leadership in three attractive, high-growth markets: Ornamental, Turf & Special Agriculture
Sales Force
Best-in-class field force with global reach & loyal customer base B d d t tf li i l di Global Pro’s markets, products, technologies,
Products & Brands
Broad product portfolio including industry-leading brands with significant end-user recognition g , sales force, target end-users & management
R&D
Technical & R&D leadership including patented CRF, SRF & Coatings technologies complement those
- f ICL Specialty
Fertilizers technologies
Management Highly experienced global management
team continuing after acquisition
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g
team continuing after acquisition
Market Leadership in 3 Attractive Segments Market Leadership in 3 Attractive Segments
Ornamental Professional Specialty O a e ta Horticulture Turf p y Agriculture
Brands & t h l Industry Recent Industry technology position
1
Industry leadership
1
introduction
- f Agrocote™
Industry leadership Field force iti
1
End-user focus
1
Strong local nutritional experts working with food End-user focus position focus
1
companies, and large specialized growers focus
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All data provided by Scotts
Large Sales Force Recognized for E t Ad i & T h i l K l d Expert Advice & Technical Knowledge
- 220 sales and technical sales support associates
- Long-lasting premium relationships
& high customer loyalty
Global
220 field force l
~ 1,900 distributor l
T h i l l
Pro
personnel
sales reps
- Technical sales
force reaches 80%
- f end-market
- Over 2,000 people
support product
- ffering globally
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Sales Platform Reaches 80% of End-User Markets Sales Platform Reaches 80% of End User Markets
Sales office
Sales organizations
UK H
Production facility
- UK • Hungary
- Netherlands • US
- Germany • Kenya
- France
- China
- France • China
- Italy • Malaysia
- Spain • Australia
- Poland
- Poland
In addition, distributors throughout the world throughout the world
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Broad Product Portfolio With I d t L di B d Industry-Leading Brands
Ornamental Horticulture
Specialty Agriculture Professional Turf
Special Agriculture Professional Turf Horticulture Agriculture Turf
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Industry-Leading Technology and R&D Capabilities
Leader in coating technology Leader in coating technology
- Pioneering history of superior performance
- Controlled patterned and programmed release
Controlled, patterned and programmed release
- Flexible coating technologies meet various plant
nutrition needs at different price points
Global R&D Center of Excellence
- Recent technologies: Dual Coating and Fusion
- State-of-the-art R&D laboratory
- Experienced team of specialized researchers
p p
- Product formulation know-how
- Delivered 7 patented technologies in the last 10 years
21 21
Leadership in Coated/Encapsulated C t ll d R l P d t Controlled Release Products
The Controlled Release (CRF) Concept
1 NPK granules are 2 After application 3 The nutrients are 4 Controlled nutrient
- 1. NPK granules are
partially coated with an elastic polymer
- 2. After application,
water enters through the pores
- 3. The nutrients are
dissolved in the water, resulting in a concentrated
- 4. Controlled nutrient
release over 3, 6, 9 or 12 mos concentrated nutrient solutions
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Transaction Rationale
Creating a Specialty Fertilizers & Horticultural Inputs/Turf POWERHOUSE Horticultural Inputs/Turf POWERHOUSE
The New Entity: Synergies The New Entity: Synergies
S l
- Leveraging both parties’ distribution networks, sales forces and product
Sales
Leveraging both parties distribution networks, sales forces and product portfolios to explore cross-sale opportunities
Logistics
- Leveraging both parties’ capabilities to optimize logistics service & reduce
costs
g
costs
Raw Materials
Backward-integrate Global Pro’s manufacturing
- Secure its raw material supply
I i t l f ICL t i l
- Increase internal usage of ICL raw materials
R&D
- “Cross-fertilization” between combined forces to develop products &
technologies
Production
- Back-up production capabilities within ICL global manufacturing plants
M t
- Benefit from the highly experienced & capable management teams from both
Management
g y p p g companies
Administration
- Utilize ICL infrastructure to provide service support provided by Scotts HQ
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We Aim to Build an Industry Leader We Aim to Build an Industry Leader
ICL Specialty Fertilizers & Horticultural Inputs/Turf
Global Business Unit ~$500M in Sales B d d t Broad product portfolio for all markets, including Highly trained sales team & well established support Creative R&D and leading Experienced joint management leading brands and unique products established support capabilities technologies management team
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We Will Be Positioned to Benefit from the F t t G i S t f th F tili M k t Fastest Growing Segment of the Fertilizer Market
Other h i l
Specialty Fertilizers
chemicals, seeds, animal feed, etc 11%
79%
Plant P t ti
- etc. 11%
Controlled & slow release Growing Protection 5% slow release, water soluble & liquid fertilizers Growing Media 5%
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We Will Bring State-of-the-Art Products To Customers Throughout the World
Global Pro throughout Europe & UK
Global Pro
throughout Europe & UK
Global Pro Global Pro Global Pro Global Pro Global Pro
Sales Office
Manufacturing Plant
Global Pro
Global Pro Global Pro
ICL Fertilizers
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The Proposed Transaction is an Exciting Step Forward for ICL
The transaction will:
- Make ICL a leading player in the fastest growing segment
- f the fertilizer market
- Double ICL Specialty Fertilizers’ annual revenues to half a billion dollars
and enhance its profitability
- Enrich ICL’s product portfolio with the market’s leading brands
- Enrich ICL s product portfolio with the market s leading brands
- Expand ICL’s technological capabilities with strategic coatings,
CRF and SRF technologies g
- Extend ICL’s fertilizer business downstream to the end-user
- Create a great platform for ICL’s continued geographical expansion
and additional M&As in the fertilizer and horticultural inputs/turf businesses
- Enable ICL to bring additional environmentally-friendly products to
global agricultural markets
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