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Safe Harbor
All statements in this communication, other than those relating to historical facts, are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended These forward-looking statements and projections are not guarantees of future performance and are subject to a number of assumptions, risks, projections and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from such statements or projections. Important factors that could cause actual results to differ materially from our expectations include, among others: loss or impairment of business licenses or mining permits or concessions; natural disasters; failure to raise the water level in evaporation Pond 5 in the Dead Sea; accidents or disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; labor disputes, slowdowns and strikes involving our employees; currency rate fluctuations; rising interest rates; general market, political or economic conditions in the countries in which we operate; pension and health insurance liabilities; price increases or shortages with respect to our principal raw materials; volatility of supply and demand and the impact of competition; changes to laws or regulations (including environmental protection and safety and tax laws or regulations), or the application or interpretation of such laws or regulations; government examinations or investigations; the difference between actual reserves and our reserve estimates; failure to integrate or realize expected benefits from acquisitions and joint ventures; volatility or crises in the financial markets; cyclicality of our businesses; changes in demand for our fertilizer products due to a decline in agricultural product prices, lack of available credit, weather conditions, government policies or other factors beyond our control; decreases in demand for bromine-based products and other industrial products; litigation, arbitration and regulatory proceedings; and war or acts of terror. More detailed information about factors that may affect our performance may be found in “Risk Factors” in our Annual Report Form 20-F filed with the U.S. Securities and Exchange Commission on March 20, 2015. Forward-looking statements and projections represent our views and are given only as of the date of this communication and we disclaim any obligation to update or revise them, whether as a result of new information, future events or otherwise, except as required by law.
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 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.
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ICL’s Efficiencies and Operational Excellence – a Major Pillar in Our Strategy
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Execute on $350 million in identified efficiency improvements Improve positioning on
production cost curve Cross-organization
process improvement
USD Millions/Year
Procurement
Energy
R&D
Pricing
Overall
Production Cost Efficiency
$350 million
Initiative 2016 EBITDA Impact (Run-Rate)
Efficiency Strategy Projects Overview
4
Procurement
Energy
CAPEX
Pricing
R&D
ACE – Ambition Creates Excellence
Manufacturing excellence
Improved cost position/ cost per ton
Increased production/process optimization/yield increase
Operational Excellence
Procurement
Finance & tax
IT
HR
Legal & compliance
Shared Services
ACE Drives Functional Excellence in 5 Key Processes
Pricing
ACE streams
Energy efficiency
Procurement
CAPEX (investment)
R&D
AC
E
Current Status
Establishment of the commercial excellence
program.
Establishment of a new global function: CIO
Establishment of a new global function: CTO
Establishment of a new global function: CPO
Ongoing efforts
Volume Activity
~ $6000 million of Revenues
Annual spending: ~ $400 million
Annual spending: ~ $4000 million
Annual CAPEX spending: ~ $800 million
~ $6000 million of Revenues
Asset productivity
Revenue increase
Cost reduction
ICL’s core value creation drivers
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Procurement Savings: Three Potential Levers
What did we do? • One global ICL
approach – regions & management level
• Coordination alignment between global and regional
• Excellent global team work
• Exploration of supply options over the entire value chain
• One global contract or no contract
Result: • Annual saving: $2.1 M
(25%) • Global contract for the
US, Israel & Europe
AC
E
Supplier management
Process management
Demand management
Volume consolidation
Supplier partnerships
Negotiation
Transportation agreements
Make-or-buy opportunities
Simplify specifications to fulfill (not exceed) requirements
Find "replacements" and alternative technologies
Manage service levels/demand
Reduce waste
Success story- Phenol contract
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As project progresses, budget is committed, ability to change project decisions/add value decreases:
100%
Low
High
Project life cycle
0%
CAPEX Value Engineering
A systematic and structured approach for improving projects, products, and processes
Used to analyze and improve manufacturing products and processes, design and construction projects
Helps achieve an optimum balance between function, performance, quality, safety and cost
The proper balance results in the maximum value for the project
AC
E
Ability to improve value
Commitment of funds
CAPEX value engineering:
Potential cash flow contribution: ~$100M
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Operational excellence
Key Value Drivers Project
Improve bottom-line performance and ICL’s cost position through promoting manufacturing excellence
Further Tools
■ Efficiency proposals
■ Improvement teams
■ 6 sigma teams
■ Quality cost model
Lean Manufacturing
■ New, lean manufacturing process
■ Accompanied by consultants
Operational Excellence – Scope O
pera
tio
nal E
xcell
en
ce
Improve the competitiveness of our product portfolio in the global markets
Cost structure improvement/cost per tonne reduction
Increased production/process optimization/yield increase
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Operational Excellence at Our Mineral Assets
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Increase potash production to a level of 900KT by 2016
Increase Polysulphate production to a level of 400 KT by 2016
Significant potash cost per tom reduction
ICL UK ICL Industrial Products, ICL Performance Products
ICL Dead Sea
Potash Engineered Materials, Food
Potash Polysulphate
Potash cost per tonne reduction of ~ $10 by 2016
EBITDA contribution of ~$50 million by 2016
Increase production of main products vs. 2013 level : MGA - ~15% Fertilizers - ~10%
EBITDA contribution of ~ $80 million by 2016
ICL Rotem
Phosphate
Op
era
tio
nal E
xcell
en
ce
Increase production by 40% vs. 2013 level
Potash cost per tonne reduction of ~ $40 by 2016
EBITDA contribution of ~$50 million by 2016
Operational Excellence initiatives implementation to start in 2015
Finance & Tax
Procurement
IT
HR
Legal & Compliance
Europe:
• Number of countries: 18
• Number of employees: ~ 4,900 (39%)
• Number of companies: 86
Americas:
• Number of countries: 6
• Number of employees: ~ 1,500 (12%)
• Number of companies: 19
Israel:
• Number of companies: 9
• Number of employees: ~5,000 (40%)
China
• Number of employees: 614 (5%)
• Number of companies: 10
Shared Services Overview
Israel SHS
China SHS
Europe SHS Americas SHS
Israel SHS
SH
S
Shared services center mission: A center enabler of ICL’S Next Step Forward strategy, serving ICL business in a quality, cost effective manner, providing timely, valuable and consistent service.
10 * All data is as of 2014
Shared Services Contribution
Reduce and optimize
labor costs
Increase and optimize
productivity
Meet and exceed
service quality levels
Drive centralization as
part of "One ICL"
Vision
Full time employees
50
91
158 184 188
2015 2016 2017 2018 2019
Accumulated employee reduction
Accumulated annual savings
Accumulated Savings ($M)
8
14
24
28 28
2015 2016 2017 2018 2019
SH
S
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On Track to Achieve Efficiency & Operational Excellence Gain of $350M
Overall efficiency contribution to the P&L compared to 2013 baseline (Year End run rate)
120
240
350
Additional opportunities beyond 2016
12