PR Newswire | Jul 29, 2020 03:31AM EDT

07/29 02:30 CDT

ICL Reports Resilient Second Quarter 2020 Results TEL AVIV, Israel, July 29, 2020

TEL AVIV, Israel, July 29, 2020 /PRNewswire/ -- ICL(NYSE: ICL) (TASE: ICL), a leading global specialty minerals and specialty chemicals company, today reported its financial results for the second quarter ended June 30, 2020.

Highlights for the Second Quarter of 2020

* Sales of $1.20 billion compared to $1.43 billion in the second quarter of 2019, a 16% decrease primarily caused by cyclically-low commodity prices as well as lower demand for clear brine fluids and some of our flame retardants due to the impact of COVID-19. * Implementation of strategic efficiency plans, including the discontinuation of unprofitable phosphate rock production and sales from Israel, the accelerated closure of potash operations in the Vilafruns mine in Spain, and a global workforce reduction of about 250 employees, mostly through early retirement plans. Expected annual savings of about $50 million, starting in 2021, due to strategic efficiency plans. * Operating loss of $169 million, including mostly non-cash charges of $297 million related to strategic efficiency plans; adjusted operating income of $128 million, a decrease of 44% compared to the second quarter of 2019. * Adjusted EBITDA of $246 million and operating cash flow of $177 million decreased by 28% and 26%, respectively, compared to the second quarter of 2019, but were unchanged compared to the first quarter of 2020, when results were not negatively impacted by COVID-19. * Achieved record first half potash production at the Dead Sea. * Continuous innovation and focus on growing specialty business reflected in $30 million operating income from phosphate specialties, a 20% increase compared to the second quarter of 2019 * Consolidation of crop nutrition sales and marketing infrastructure, creating a unified commercial operating model facing agriculture end-markets. * Declared a quarterly dividend of $36 million, in line with ICL's balanced approach to capital allocation.

The results for the second quarter of 2020 were impacted by the COVID-19 pandemic and the resulting decline in demand for oil. Notwithstanding the market environment, ICL was profitable in each of its reporting segments, due to a diverse business mix and an ongoing focus on increasing its specialties business. In the Phosphate Solutions segment, operating income from phosphate specialties increased by 20% compared to the prior year, partly offsetting a decline of over 20% in phosphate commodity prices. Also, the Potash segment's operating margin increased sequentially despite a continued weakness in commodity prices, and a $23 million impact related to COVID-19. In the Industrial Products segment, ICL's strategic shift to long-term contracts, a diverse product portfolio and an increase in sales of specialty minerals to the pharma and supplementals markets, helped to partially offset a sharp decline in demand for clear brine fluids. IAS segment's operating margin increased by 25% due to cost efficiency initiatives and lower cost of raw materials. In addition, we continue to enhance our digital capabilities by integrating the Growers' platform into ICL.

During the quarter, as part of the company's strategic focus on efficiency and cost reduction plans, ICL recorded mostly non-cash charges totaling $297 million, related to the discontinuation of non-profitable Israeli-based production and sale of phosphate rock, an activity which does not contribute to the Phosphate Solutions segment's downstream value chain, a reduction of over 250 employees, primarily through an early retirement plan and a provision related to the accelerated consolidation of potash production activities in Spain.

ICL's President & CEO, Raviv Zoller, stated, "Amid low commodity prices and challenges caused by the COVID-19 pandemic, the resilience of ICL's business is reflected in our operating performance and cash flow generation for the second quarter. We remain focused on our strategic priorities, and the non-cash charges incurred during the second quarter are directly related to them. ICL's profitability will be further enhanced by annual savings of about $50 million from 2021, due to our strategic efficiency plans, which were accelerated by COVID-19 and implemented across all of our business segments, to further drive margin expansion and cash flow generation. Although COVID-19 will, most likely, continue to impact our results in the near term, we are well-positioned in our end markets. We are continuing to enhance our diverse portfolio of specialty products by leveraging our strong innovation capabilities, deep knowledge and dominant position in key end markets and global distribution platforms. Finally, the consolidation of our crop nutrition sales and marketing infrastructure has created a unified commercial platform facing the agriculture end-markets that will allow us to drive internal synergies, optimize distribution channels, and better leverage know-how, agronomic and R&D capabilities, logistical assets, and customer relationships. I believe that determined execution of our efficiency and cost reduction measures and our growth strategy, together with our strong financial position and balanced capital priorities will help us navigate well through these current global market challenges, as well as position ICL to execute on timely opportunities."

Financial Figures and Non-GAAP Financial Measures



4-6/2020 4-6/2019 1-6/2020 1-6/2019 1-12/2019

$ % of $ % of $ % of $ % of $ % of millionssalesmillionssalesmillionssalesmillionssalesmillionssales

Sales 1,203 - 1,425 - 2,522 - 2,840 - 5,271 -

Gross profit320 27 508 36 720 29 1,009 36 1,817 34

Operating income (169) - 240 17 (37) - 467 16 756 14 (loss)

Adjusted operating 128 11 230 16 260 10 471 17 760 14 income (1)

Net income (loss) - shareholders(168) - 158 11 (108) - 297 10 475 9 of the Company

Adjusted net income - shareholders72 6 151 11 132 5 301 11 479 9 of the Company (1)

Diluted earnings (loss) per (0.13) - 0.12 - (0.08) - 0.23 - 0.37 - share (in dollars)

Diluted adjusted earnings per0.06 - 0.12 - 0.10 - 0.23 - 0.37 - share (in dollars) (2)

Adjusted 246 20 340 24 496 20 690 24 1,198 23 EBITDA (2)

Cash flows from 177 - 239 - 343 - 412 - 992 - operating activities

Purchases of property, plant and equipment 161 - 141 - 300 - 272 - 576 - and intangible assets (3)



(1) See "Adjustments to reported operating and net income (Non-GAAP)" below.

(2) See "Adjusted EBITDA and Diluted Adjusted Earnings Per Share for the periods of activity" below.

(3) See "Condensed consolidated statements of cash flows (unaudited)" to the accompanying financial statements.

Consolidated Results Analysis

Results analysis for the period April - June 2020



SalesExpensesOperating income (loss)

$ millions

Q2 2019 figures 1,425(1,185) 240

Total adjustments Q2 2019* - (10) (10)

Adjusted Q2 2019 figures 1,425(1,195) 230

Quantity (100)88 (12)

Price (110)- (110)

Exchange rates (12) 8 (4)

Raw materials - 18 18

Energy - 1 1

Transportation - 4 4

Operating and other expenses - 1 1

Adjusted Q2 2020 figures 1,203(1,075) 128

Total adjustments Q2 2020* - (297) (297)

Q2 2020 figures 1,203(1,372) (169)



* See "Adjustments to reported operating and net income (Non-GAAP)".

- Quantity - The negative impact on operating income was primarily related to a decrease in the quantities sold of bromine-based industrial solutions (mainly clear brine fluids), bromine and phosphorus-based flame retardants, mainly due to a decrease in global demand as a result of the COVID-19 pandemic, as well as a decrease in the sales volumes of phosphate fertilizers. This was partly offset by higher sales volumes of phosphate-based food additives and a favorable potash site mix, as the increase in sales volumes from ICL Dead Sea was supplemented by lower sales volumes from ICL Iberia.

- Price - The negative impact on operating income was primarily related to a $63 decrease in the average realized price per tonne of potash compared to the same quarter last year and a decrease in the selling prices of phosphate commodity products.

- Exchange rates - The negative impact on operating income was primarily related to the appreciation of the average exchange rate of the Israeli shekel against the dollar, which increased operational costs. Additionally, the devaluation of the average exchange rate of the euro against the dollar decreased revenues more than it contributed to operational cost-savings. The above trend was partly offset by the devaluation of the average exchange rate of the Brazilian real, which contributed to operational cost-savings.

- Raw materials - The positive impact of raw material prices on operating income was primarily related to lower prices of sulphur consumed during the quarter.

- Operating and other expenses - The positive impact on operating income was primarily related to increased production at ICL Dead Sea and a reduction in certain costs, as a result of implementation of efficiency initiatives and measures, mostly offset by higher operating costs, mainly in Spain, due to the COVID-19 pandemic operational challenges.

Financing expenses, net

Net financing expenses in the second quarter of 2020 amounted to $31 million, compared to $37 million in the same quarter last year - a decrease of $6 million.

The decrease relates mainly to gains from hedging transactions in the amount of $7 million, mainly affected by the current quarter appreciation of the Israeli shekel against the dollar and an increase in energy and dry bulk shipping prices, partly offset by a decrease in the USD interest rate curve. In addition, interest expenses decreased by $4 million, mainly due to a decrease in the average interest rate.

On the other hand, expenses related to long-term employee benefits provisions and long-term lease revaluation (IFRS16) increased by $6 million, mainly due to the Israeli shekel appreciation against the dollar during the quarter.

Tax expenses

Tax income in the second quarter of 2020 amounted to $33 million, compared to tax expenses of $46 million in the corresponding quarter last year, reflecting an effective tax rate of about 17% and 23%, respectively. The Company's relatively low effective tax rate in the current quarter is mainly due to the deferred taxes effect of the significant impairments and provisions, related to the ICL Rotem efficiency plan, which are subject to a beneficiary tax rate.

IMPACT OF COVID-19

Since the emergence of the COVID-19 pandemic, ICL has taken measures to ensure the health and safety of our employees, suppliers, business partners and the communities in which we operate, to maintain the level of operations throughout our various facilities around the world, and to minimize the potential impact on our business.

During the first half of 2020, most of our manufacturing facilities around the world continued to operate undisturbed and were deemed to be essential businesses by the relevant local government authorities. In Israel, our facilities continued to operate at full production levels, with ICL Dead Sea reaching record first half of the year production, following the upgrade of facilities in the fourth quarter of 2019 and despite the challenges imposed by the COVID-19 pandemic. Polysulphate(r) mining activities in the UK were partially reduced, but production gradually ramped up and is now at normal capacity. In Spain, production in the Suria mine (Cabanasses) gradually ramped up to normal capacity, while the Sallent site (Vilafruns) was closed, at the end of June, with the intention to expedite the ICL Iberia site consolidation plan. In addition, some of our external contractors declared force majeure, delaying a few of our projects, including the construction of the access tunnel (ramp) in Spain, the Salt Harvesting Project and the P-9 pumping station in the Dead Sea. The financial impact due to the delay of these projects is not expected to be material.

The COVID-19 pandemic had a negative impact on our business performance during the first half of the year, as revenues decreased mainly from lower demand for some of our Industrial Products segment products, including clear brine fluids, as a result of a significant decline in oil prices and demand, and certain flame retardants, due to lower activity in the automotive, electronics and construction industries. In addition, our operations were negatively impacted by about $35 million, mainly as a result of lower production in Europe and other operational costs related to COVID -19 pandemic. These negative impacts were partially mitigated by efficiency initiatives and measures implemented by the company.

As a result of uncertainties caused by the COVID-19 pandemic, and in order to enhance its financial flexibility, the Company expanded during the quarter its series G bonds, issuing about $109 million. As of the end of the second quarter of 2020, ICL had $409 million in cash and deposits and $740 million in unused credit facilities.

As the ultimate impact on the global economy of the pandemic remains unclear, we anticipate that it will have a continuing impact on our results for the second half of 2020, including but not limited to, affecting our revenues and operating income, as result of the decline in global demand in the end markets for some of our products and health and safety restriction measures affecting our operations. At this stage, we continue to respond to the evolving business environment, continue to adjust our business to the pandemic economy, and are taking appropriate measures to further enhance our operational efficiency to mitigate the impact of the pandemic on our business, including cross-segment cost saving initiatives.

Segment Information

Industrial Products

The Industrial Products segment produces bromine out of a highly concentrated solution in the Dead Sea, as well as bromine-based compounds at its facilities in Israel, the Netherlands and China. In addition, the segment produces salts, magnesium chloride, magnesia-based products, phosphorus-based flame retardants and functional fluids.

Segment sales and operating income in the second quarter of 2020 decreased by 15% and 25% year-over-year, respectively, due to lower demand for flame retardants and clear brine fluids, resulting from the negative impact of the COVID-19 pandemic on global industrial activity and demand for oil and gas. Despite the drop in sales volumes, the segment generated a healthy operating margin of 25% due to a recent strategic shift to long-term contracts, a diverse product portfolio and an increase in sales of specialty minerals to the pharma and supplements markets.

Highlights and business environment

* Market prices of elemental bromine in China decreased during the second quarter of 2020 due to lower demand for brominated derivatives as a result of the COVID-19 pandemic, although, prices stabilized towards the end of the quarter. * Sales of elemental bromine decreased slightly compared to the second quarter of 2019, as prices decreased based on lower demand for bromine derivatives. * Global demand for bromine-based flame retardants softened during the second quarter of 2020. ICL's sales of bromine-based flame retardants decreased compared to the corresponding quarter last year, mainly due to lower demand for printed circuit boards, enclosures & appliances and due to a slowdown in the automotive industry. * The sharp decline in the demand for oil & gas for transportation and industry caused by the COVID-19 pandemic, led to a decline in drilling activities, which in turn resulted in a significant decrease in demand and sales of clear brine fluids. * Phosphorus-based flame retardants sales were lower compared to the corresponding quarter last year, mainly due to lower demand from the automotive and building and construction industries in Europe. * Sales of specialty minerals increased compared to the corresponding quarter last year, as higher demand in the pharmaceuticals and supplements markets led to higher sales volumes and prices. * The impact of the COVID-19 pandemic on the segment is expected to continue through the third quarter of 2020 and result in lower demand for clear brine fluids and brominated flame retardants. At the same time, a slight recovery in certain flame retardants for the electronics markets and the European building and construction industry, could partially offset the overall negative impact on the segment. * The segment is implementing efficiency initiatives including early retirement of employees. See Note 4 to the Company's financial statements as at June 30, 2020.

Results of Operations



4-6/2020 4-6/2019

$ millions$ millions

Segment Sales 285 336

Sales to external customers281 333

Sales to internal customers4 3

Segment profit 70 93

Depreciation and Amortization 18 16

Capital expenditures* 24 11

* For information regarding the effect of IFRS 16 implementation on 2019 capital expenditures, see "Note 3 - Operating segments" of the financial statements.

Results analysis for the period April - June 2020

SalesExpensesOperating income

$ millions

Q2 2019 figures 336 (243) 93

Quantity (51) 26 (25)

Price 1 - 1

Exchange rates (1) (1) (2)

Raw materials - - -

Energy - - -

Transportation - - -

Operating and other expenses- 3 3

Q2 2020 figures 285 (215) 70

Potash

The Potash segment produces and sells mainly potash, using an evaporation process to extract potash from the Dead Sea in Israel and conventional mining from an underground mine in Spain. The segment also produces Polysulphate(r) in its Boulby mine in the UK and magnesium in the Dead Sea in Israel. In addition, the segment sells salt produced in its facilities, and has a power plant in Sodom, which supplies electricity to ICL's companies in Israel (electricity surplus is sold to external customers) and steam to all facilities in the Sodom site.

The Potash segment's sales and operating income decreased in the second quarter of 2020 by 21% and 64%, respectively, compared to the same quarter in the prior year. Business performance was primarily impacted by a $63 decrease in the average potash realized price per tonne and higher operational costs resulting from the COVID-19 pandemic, which were partly offset by a reduction in certain costs as a result of the implementation of efficiency initiatives and measures by the segment, together with increased production in Israel. The production in Israel was a first half of the year record. However, it was more than offset by lower production at ICL Iberia, caused by operational challenges due to the COVID-19 pandemic. Potash sales quantities were 2% lower than in the same quarter last year, primarily due to a decrease in potash sales to Brazil and India, partly offset by increased sales to China and Southeast Asia. The impact of COVID-19 on the segment's operating income, compared to planned production, amounted to approximately $23 million in the second quarter. As of the date of the report, production sites are operating as planned and we do not see a very significant impact from the COVID-19 pandemic on the segment's results in the third quarter of 2020, although the full effect of the pandemic on our operations is uncertain and difficult to assess or predict.

Highlights and business environment

* During May 2020, ICL signed potash supply contracts with Chinese customers and Indian Potash Limited (IPL). According to these contracts, by the end of 2020, ICL will supply to its Chinese customers 910 thousand tonnes of potash (with additional 490 thousand tonnes optional quantities) at a price of $70/tonne below the previous contracts, and 410 thousand tonnes of potash (with additional 30 thousand tonnes optional quantities) to IPL at a price of $50/tonne below the previous contract. The prices are in line with the recent contract prices in China and India. * Potash spot prices continued to decrease during most of the second quarter of 2020 across global markets, mostly due to high availability. For additional information on potash prices and imports to key markets, see 'Global potash market - average prices and imports' in the appendix. * Following the upgrade of ICL's Dead Sea facilities in the fourth quarter of 2019 and despite the operational challenges presented by the COVID-19 pandemic, ICL Dead Sea reached record production for the first half of the year. * Our 2019 Annual Report on Form 20-F provides details regarding the consolidation process of activities of ICL Iberia into one site. The Company is expediting the process, which was originally scheduled for 2021. As a result, the Sallent mine (Vilafruns) was closed towards the end of the second quarter. This closure is part of ICL's strategic decision to concentrate its production in the Suria mine (Cabanasses). The decision will allow the Company to speed up development in Suria, and to improve its cost per tonne in future periods. In Suria, after a three-week full production shutdown, due to the COVID-19 pandemic, followed by a period of partial operations, production operations returned to normal rates towards the end of the second quarter. * Production of Polysulphate(r) increased by 38% to 184 thousand tonnes, and sales volumes increased by 27% to 131 thousand tonnes compared to the second quarter of 2019. This increase was achieved despite some operational challenges presented by the COVID-19 pandemic, which led to a period of partial operations. Production operations returned to normal rates towards the end of the second quarter. * Global end market demand for magnesium, primarily in the automotive and aviation industries, continues to be negatively significantly impacted by the COVID-19 pandemic. * The segment is implementing efficiency initiatives, including early retirement of employees. See Note 4 to the Company's condensed consolidated interim financial statements as at June 30, 2020.

Results of Operations

4-6/2020 4-6/2019

$ millions $ millions

Segment sales 340 432

Potash sales to external customers 253 334

Potash sales to internal customers 24 28

Other and eliminations* 63 70

Gross profit 123 202

Segment profit 38 105

Depreciation and Amortization 42 35

Capital expenditures** 55 89

Average realized price (in $)*** 226 289



* Primarily includes salt produced in underground mines in the UK and Spain, Polysulphate(r) and Polysulphate(r)-based products, magnesium-based products and sales of excess electricity produced by our power plants in Israel.

** For information regarding the effect of IFRS 16 implementation on 2019capital expenditures, see "Note 3 - Operating segments" of the accompanying Financial Statements.

*** Potash average realized price (dollar per tonne) is calculated by dividing total potash revenue by total sales quantities. The difference between FOB price and average realized price is primarily marine transportation costs.

Potash - Production and Sales



Thousands of Tonnes 4-6/20204-6/2019

Production 1,110 1,117

Total sales (including internal sales)1,226 1,252

Closing inventory 448 384

Results analysis for the period April - June 2020

SalesExpensesOperating income

$ millions

Q2 2019 figures 432 (327) 105

Quantity (8) 22 14

Price (82) - (82)

Exchange rates (2) 1 (1)

Energy - 2 2

Transportation - 5 5

Operating and other expenses- (5) (5)

Q2 2020 figures 340 (302) 38

Phosphate Solutions

The Phosphate Solutions segment operates ICL's phosphate value chain, using phosphate rock and fertilizer-grade phosphoric acid to produce phosphate-based specialty products with higher added value, as well as to produce and sell phosphate-based fertilizers.

The segment's sales and operating income decreased by 15% and 75%, respectively, year-over-year, mainly due to a sharp decrease in phosphate commodities market prices, partially offset by lower raw materials prices. The continued positive operating income of the segment, despite the weak commodity price environment, market headwinds and challenges related to the COVID-19 pandemic, reflects strong phosphate specialties performance and ongoing positive operating profit from the YPH JV in China.

Phosphate specialties sales of $273 million and operating income of $30 million in the second quarter of 2020 were approximately 1% lower and 20% higher, respectively, than the second quarter of 2019. The increase in the operating income was driven mainly by lower raw materials costs, strong sales volumes of food phosphates and a positive exchange rates impact.

Sales of phosphate commodities amounted to $166 million, approximately 31% lower than the second quarter of 2019, mostly due to a significant decline in market prices and lower sales volumes of phosphate fertilizers. This resulted in an operating loss of $22 million in the second quarter of 2020, compared to operating income of $7 million in the second quarter of 2019.

Highlights and business environment

* Global phosphate specialties and commodities markets were not significantly disrupted during the second quarter and the first half of 2020, despite the logistical and operational restrictions that were imposed in certain countries due to the ongoing spread of the COVID-19 pandemic. ICL's robust and diversified customer portfolio and wide geographic reach of its phosphate specialties businesses coupled with strong demand for food products, prevented a material impact of the pandemic on the segment's business performance. As of the date of the report, we do not see a very significant impact from the COVID-19 pandemic on the segment's results in the third quarter of 2020, although the full effect of the pandemic on the global economy and on our phosphate business is uncertain and difficult to assess or predict. * Revenues of phosphate salts were stable year-over-year, as higher sales volumes of food grade phosphates were partly offset by a decrease in sales volumes of industrial salts. A sales shift from the food service sector to the retail sector, including supermarkets, caused by the COVID-19 pandemic, contributed to strong sales volumes of food grade phosphates in South America and Europe. A decrease in sales of industrial salts, mainly in Europe and North America, resulting from the slowdown in various key industries, was partly offset by increased sales volumes in the dental hygiene industry in China. * White phosphoric acid revenues decreased year-over-year. Although revenues in Europe remained stable, revenues in South America decreased due to lower sales volumes to key industrial markets. In North America, the decreased demand for food grade WPA, was partially offset by higher sales volumes of specialty acid products. Market prices for food grade WPA also decreased in Europe, North, and South America due to a competitive business environment. During the second quarter of 2020, the Chinese acid market improved from the prior quarter, as higher prices offset lower volumes. * Dairy protein revenues were higher compared to the second quarter of last year due to increased demand for goat milk products. ICL continues to focus on expanding its global leadership position in the organic cow and goat ingredients market for high end applications. * As part of the Company's strategy to divest low synergy businesses and non-core business activities, during the second quarter of 2020, the Company divested Hagesd Interspice Gewrzwerke GmbH, a producer of premium spice blends, including related real-estate assets. For more information, see Note 7 to the Company's condensed consolidated interim financial statements as at June 30, 2020. * Phosphate fertilizer prices were significantly lower than the prices during the same period last year. However, prices, mainly in the Americas, slightly recovered towards the end of the quarter. This was due to high demand in Brazil and India, tightened supply by major manufacturers in China and by OCP (Morocco) and following Mosaic's (USA) petition to the US International Trade Commission (ITC) to impose countervailing duties on Phosphates imports from Morocco and Russia. For additional information on phosphate prices, see 'Global phosphate commodities market - average prices' in the appendix. * OCP (Morocco) has concluded its phosphoric acid supply contracts to India for the third quarter of 2020 at $625/tonne (CFR 100% P2O5), a $18/tonne and a $35/tonne increase compared to the second quarter and the first quarter, respectively. A similar price increase was reported in OCP's phosphoric acid supply contracts in Brazil and in Europe. * The segment is implementing efficiency initiatives including efficiency plan at ICL Rotem. See Note 4 to the Company's condensed consolidated interim financial statements as at June 30, 2020. * For information regarding ICL Rotem phosphate mining and production operations in Israel, see Note 7 to the Company's condensed consolidated interim financial statements as at June 30, 2020.

Results of Operations

4-6/2020 4-6/2019

$ millions $ millions

Segment Sales 439 518

Sales to external customers 421 496

Sales to internal customers 18 22

Segment profit 8 32

Depreciation and Amortization 52 46

Capital expenditures* 63 61



* For information regarding the effect of IFRS 16 implementation on 2019 capital expenditures, see "Note 3 - Operating segments" of the financial statements.

Results analysis for the period April - June 2020

SalesExpensesOperating income

$ millions

Q2 2019 figures 518 (486) 32

Quantity (42) 39 (3)

Price (30) - (30)

Exchange rates (7) 6 (1)

Raw materials - 17 17

Energy - (1) (1)

Transportation - (2) (2)

Operating and other expenses- (4) (4)

Q2 2020 figures 439 (431) 8

Innovative Ag Solutions

The Innovative Ag Solutions (IAS) segment develops, manufactures, markets and sells specialty fertilizers based primarily on nitrogen, potash and phosphate. The segment produces water soluble specialty fertilizers, liquid fertilizers, soluble fertilizers and controlled-release fertilizers in its plants in Israel, Europe, China and the United States. The segment markets its products worldwide, mainly in Europe, Asia, North America, Brazil and Israel.

The IAS segment's sales decreased by 3% year-over-year, driven mainly by an unfavorable dollar-euro exchange rate. Operating income increased by 25% to $15 million year-over-year, primarily due to lower cost of raw materials and internal cost saving initiatives.

During the second quarter of 2020, ICL consolidated its crop nutrition sales and marketing infrastructure, creating a unified commercial platform facing the agriculture end-markets, in order to drive internal synergies and optimize distribution channels of commodity, specialty and semi-specialty fertilizers. The Company expects that this new operating model, which will be managed on a regional basis, will serve to achieve commercial excellence, increase the efficiency of its global operations and better leverage its region-specific knowledge, agronomic and R&D capabilities, logistical assets, and customer relationships. The described structural change has no impact on the Company's operating segments.

Highlights and business environment

* The increase in operating income and operating margin, both sequentially and compared to the corresponding quarter last year, is attributable to lower costs of raw materials and a successful implementation of efficiency and cost reduction initiatives. * Sales to the specialty agriculture market slightly decreased year-over-year, as the negative impact of unfavorable exchange rates was partly offset by strong sales of straight fertilizers and higher sales to China. Sales to the local markets in Israel and Spain were stable compared to the corresponding quarter last year. * Sales to the Turf & Ornamental (T&O) market were lower compared to the corresponding quarter last year mainly due to the impacts of the COVID-19 pandemic, as a decrease in sales to the turf business were only partially compensated by higher sales to the ornamental horticulture market. The re-opening of sports fields and golf courses in Europe resulted in a slight recovery in sales towards the end of the quarter.

Results of Operations

4-6/2020 4-6/2019

$ millions$ millions

Segment Sales 196 202

Sales to external customers193 199

Sales to internal customers3 3

Segment profit 15 12

Depreciation and Amortization 7 5

Capital expenditures* 4 6

* For information regarding the effect of IFRS 16 implementation on 2019 capital expenditures, see "Note 3 - Operating segments" of the financial statements.

Results analysis for the period April - June 2020

SalesExpensesOperating income

$ millions

Q2 2019 figures 202 (190) 12

Quantity (1) 1 -

Price (1) - (1)

Exchange rates (4) 4 -

Raw materials - 3 3

Energy - - -

Transportation - 1 1

Operating and other expenses- - -

Q2 2020 figures 196 (181) 15

Dividend Distribution

In connection with ICL's second quarter 2020 results, the Board of Directors declared a dividend of 2.8 cents per share, or about $36 million in the aggregate. The dividend will be paid on September 16, 2020. The record date is September 2, 2020.

About ICL

ICL Group LTD. is a leading global specialty minerals and chemicals company operating bromine, potash and phosphate mineral value chains in a unique, integrated business model. ICL extracts raw materials from its unique mineral assets and utilizes technology and industrial know-how to add value for customers in key agricultural and industrial markets worldwide. ICL shares are dually listed on the New York Stock Exchange and the Tel Aviv Stock Exchange (NYSE and TASE: ICL). The Company employs more than 11,000 people worldwide, and its sales in 2019 totaled approximately $5.3 billion.

For more information, visit the Company's website at www.icl-group.com [1].

ICL makes its financial results easily accessible to investors through an interactive data tool available in the 'Investors' section of the Company's website. The Interactive Analyst Center will provide the company's historical financial, operational and ESG data in the context of an easy-to-access online web platform. Data drills/views are customizable based on time periods and various parameters. The information is available for download at any time. To access the Interactive Data Tool, click here.

To access ICL's interactive Corporate Social Responsibility Report, please click here.

You can also learn more about ICL on Facebook, LinkedIn and Instagram.

Appendix

Condensed Consolidated Statements of Income (Unaudited)(In millions except per share data)

For the three-month For the six-month For the year period ended period ended ended

June 30, June 30, June 30, June 30, December 2020 2019 2020 2019 31, 2019

$ $ $ $ $ millions millions millions millions millions

Sales 1,203 1,425 2,522 2,840 5,271

Cost of sales 883 917 1,802 1,831 3,454

Gross profit 320 508 720 1,009 1,817

Selling, transport and 183 196 371 391 767marketing expenses

General and administrative 56 65 120 128 254expenses

Research and development 10 12 24 25 50expenses

Other expenses 244 5 246 21 30

Other income (4) (10) (4) (23) (40)

Operating income (loss) (169) 240 (37) 467 756

Finance expenses 54 49 88 128 220

Finance income (23) (12) (5) (56) (91)

Finance expenses, net 31 37 83 72 129

Share in earnings of 1 1 2 1 1equity-accounted investees

Income (loss) before income (199) 204 (118) 396 628taxes

Provision for income taxes (33) 46 (13) 97 147

Net income (loss) (166) 158 (105) 299 481

Net income attributable to 2 - 3 2 6the non-controlling interests

Net income (loss)attributable to the (168) 158 (108) 297 475shareholders of the Company

Earnings (loss) per shareattributable to theshareholders of the Company:

Basic earnings (loss) per (0.13) 0.12 (0.08) 0.23 0.37share (in dollars)

Diluted earnings (loss) per (0.13) 0.12 (0.08) 0.23 0.37share (in dollars)

Weighted-average number ofordinary shares outstanding:

Basic (in thousands) 1,280,524 1,279,617 1,279,977 1,278,905 1,278,950

Diluted (in thousands) 1,280,721 1,283,008 1,280,175 1,283,276 1,282,056

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Financial Position as at (Unaudited)

June 30, June 30, December 31, 2020 2019 2019

$ millions $ millions $ millions

Current assets

Cash and cash equivalents 323 137 95

Short-term investments and deposits 86 82 96

Trade receivables 831 1,071 778

Inventories 1,202 1,245 1,312

Other receivables 422 303 403

Total current assets 2,864 2,838 2,684

Non-current assets

Investments at fair value through other 76 173 111comprehensive income

Deferred tax assets 116 94 109

Property, plant and equipment 5,228 5,045 5,331

Intangible assets 634 662 652

Other non-current assets 308 430 286

Total non-current assets 6,362 6,404 6,489

Total assets 9,226 9,242 9,173

Current liabilities

Short-term credit 544 598 420

Trade payables 720 670 712

Provisions 51 37 42

Other current liabilities 576 571 587

Total current liabilities 1,891 1,876 1,761

Non-current liabilities

Long-term debt and debentures 2,297 2,145 2,181

Deferred tax liabilities 305 345 341

Long-term employee liabilities 579 544 575

Provisions 227 227 202

Other non-current liabilities 69 29 52

Total non-current liabilities 3,477 3,290 3,351

Total liabilities 5,368 5,166 5,112

Equity

Total shareholders' equity 3,722 3,939 3,925

Non-controlling interests 136 137 136

Total equity 3,858 4,076 4,061

Total liabilities and equity 9,226 9,242 9,173

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the For the six-month For the three-month period ended year period ended ended

June 30, June 30, June 30, June 30, December 2020 2019 2020 2019 31, 2019

$ $ $ $ $ millions millions millions millions millions

Cash flows from operatingactivities

Net income (loss) (166) 158 (105) 299 481

Adjustments for:

Depreciation and amortization 119 109 237 220 443

(Reversal of) Impairment of fixed 131 (10) 131 (10) (10)assets

Exchange rate and interest 32 24 63 78 153expenses, net

Share in earnings of (1) (1) (2) (1) (1)equity-accounted investees

Loss from divestiture of 2 - 4 - -businesses

Capital loss (gain) 1 - 1 (12) (12)

Share-based compensation 2 4 5 6 12

Deferred tax expenses (income) (48) 35 (42) 76 67

238 161 397 357 652

Change in inventories 34 13 62 26 (72)

Change in trade receivables 111 1 (75) (81) 199

Change in trade payables (4) 44 67 (36) (58)

Change in other receivables (8) (14) (14) 11 5

Change in other payables (140) (124) (76) (165) (194)

Change in provisions and employee 112 - 87 1 (21)benefits

Net change in operating assets 105 (80) 51 (244) (141)and liabilities

Net cash provided by operating 177 239 343 412 992activities

Cash flows from investingactivities

Proceeds (investments) in 17 (3) 29 11 (2)deposits, net

Business combinations, net of - - (27) - -cash acquired

Purchases of property, plant and (161) (141) (300) (272) (576)equipment and intangible assets

Proceeds from divestiture ofbusinesses net of transaction 17 - 17 - -expenses

Dividends from equity-accounted 2 1 3 1 3investees

Proceeds from sale of property, 2 - 2 35 50plant and equipment

Net cash used in investing (123) (143) (276) (225) (525)activities

Cash flows from financingactivities

Dividends paid to the Company's (30) (75) (53) (136) (273)shareholders

Receipts (payments) fromtransactions in derivatives used 14 - (2) - -for hedging

Receipt of long-term debt 355 167 877 407 657

Payments of long-term debt (408) (142) (551) (412) (689)

Short-term credit from banks and (99) (12) (108) (30) (183)others, net

Other - - - - (2)

Net cash provided by (used in) (168) (62) 163 (171) (490)financing activities

Net change in cash and cash (114) 34 230 16 (23)equivalents

Cash and cash equivalents as at 434 103 95 121 121the beginning of the period

Net effect of currencytranslation on cash and cash 3 - (2) - (3)equivalents

Cash and cash equivalents as at 323 137 323 137 95the end of the period

The accompanying notes are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows (Unaudited) (cont'd)

Additional Information

For the three-month For the six-month For the year period ended period ended ended

June 30, June 30, June 30, June 30, December 31, 2020 2019 2020 2019 2019

$ millions $ millions $ millions $ millions $ millions

Income taxes paid, net 14 35 24 58 120of refunds

Interest paid 36 39 56 60 115

The accompanying notes are an integral part of these condensed consolidated financial statements.

We disclose in this Press Release non-IFRS financial measures titled adjusted operating income, adjusted net income attributable to the Company's shareholders, diluted adjusted earnings per share and adjusted EBITDA. Our management uses adjusted operating income, adjusted net income attributable to the Company's shareholders, diluted adjusted earnings per share and adjusted EBITDA to facilitate operating performance comparisons from period to period. We calculate our adjusted operating income by adjusting our operating income to add certain items, as set forth in the reconciliation table under "Adjustments to reported operating and net income (Non-GAAP)" below. Certain of these items may recur. We calculate our adjusted net income attributable to the Company's shareholders by adjusting our net income attributable to the Company's shareholders to add certain items, as set forth in the reconciliation table under "Adjustments to reported operating and net income (Non-GAAP)" below, excluding the total tax impact of such adjustments and adjustments attributable to the non-controlling interests. We calculate our diluted adjusted earnings per share by dividing adjusted net income by the weighted-average number of diluted ordinary shares outstanding. We calculate our adjusted EBITDA by adding back to the net income attributable to the Company's shareholders the depreciation and amortization, financing expenses, net, taxes on income and the items presented in the reconciliation table under "Consolidated adjusted EBITDA and diluted adjusted Earnings Per Share for the periods of activity (non-GAAP)" below which were adjusted for in calculating the adjusted operating income and adjusted net income attributable to the Company's shareholders.

You should not view adjusted operating income, adjusted net income attributable to the Company's shareholders, diluted adjusted earnings per share or adjusted EBITDA as a substitute for operating income or net income attributable to the Company's shareholders determined in accordance with IFRS, and you should note that our definitions of adjusted operating income, adjusted net income attributable to the Company's shareholders, diluted adjusted earnings per share and adjusted EBITDA may differ from those used by other companies. However, we believe adjusted operating income, adjusted net income attributable to the Company's shareholders, diluted adjusted earnings per share and adjusted EBITDA provide useful information to both management and investors by excluding certain items that management believes are not indicative of our ongoing operations. 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 our 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 change 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 on its businesses. We have based the following discussion on our financial statements. You should read such discussion together with our financial statements.

Adjustments to reported operating and net income (Non-GAAP)

4-6/20204-6/20191-6/20201-6/20191-12/ 2019

$ $ $ $ $ millionsmillionsmillionsmillionsmillions

Operating income (loss) (169) 240 (37) 467 756

Impairment (reversal of impairment) and write-off of 187 (10) 187 (10) (10) assets (1)

Provision for legal proceedings - - - 14 7 (2)

Provision for early retirement 78 - 78 - - and dismissal of employees (3)

Provision for site restoration costs and prior periods waste 32 - 32 - 7 removal (4)

Total adjustments to operating 297 (10) 297 4 4 income

Adjusted operating income 128 230 260 471 760

Net income (loss) attributable to(168) 158 (108) 297 475 the shareholders of the Company

Total adjustments to operating 297 (10) 297 4 4 income

Total tax impact of the above (57) 3 (57) - - operating income

Total adjusted net income - 72 151 132 301 479 shareholders of the Company



(1) In 2020, an impairment and write-off of Rotem Amfert Israel's certain assets following the continuous trend of low phosphate prices and the plan to discontinue unprofitable phosphate rock production and sale and an impairment of assets in Spain (ICL Iberia) due to the closure of the Sallent mine (Vilafruns). In 2019, due to an agreement for the sale of assets, a partial reversal of impairment loss related to assets in Germany which was incurred in2015.

(2) In 2019, an increase in the provision in connection with the finalizationof the royalties' arbitration in Israel relating to prior periods, which was partly offset by a decrease in the provision relating to legal claims in Spain.

(3) In 2020, according to the Company's efficiency initiatives and measures, an increase in the provision relating to a headcount reduction plan, primarilythrough an early retirement plan for the Israeli production facilities (Rotem Amfert Israel, Bromine Compounds and Dead Sea Magnesium).

(4) In 2020, an increase in the provision for assets retirement obligation (ARO) following the plan to discontinue unprofitable phosphate rock productionand sale in Rotem Amfert Israel and a closure of the Sallent mine (Vilafruns) in Spain, which is part of the sites consolidation plan in ICL Iberia. In 2019, an increase in the provision for the Sallent mine closure costs as part of the restoration solution, together with an increase in the provision for the removal of prior periods waste in bromine production facilities in Israel.

For more information, see Note 4 to the Company's condensed consolidated interim financial statements as at June 30, 2020.

Consolidated adjusted EBITDA and diluted adjusted Earnings Per Share for the periods of activity

Calculation of adjusted EBITDA was made as follows:

4-6/20204-6/20191-6/20201-6/20191-12/ 2019

$ $ $ $ $ millionsmillionsmillionsmillionsmillions

Net income (loss) attributable to the shareholders of the (168) 158 (108) 297 475 Company

Depreciation and Amortization 119 109 237 220 443

Financing expenses, net 31 37 83 72 129

Taxes on income (33) 46 (13) 97 147

Adjustments* 297 (10) 297 4 4

Total adjusted EBITDA 246 340 496 690 1,198



* See "Adjustments to reported operating and net income (Non-GAAP)" above.

Calculation of diluted adjusted earnings per share was made as follows:

4-6/2020 4-6/2019 1-6/2020 1-6/2019 1-12/2019

$ $ $ $ $ millions millions millions millions millions

Net income (loss) - (168) 158 (108) 297 475 shareholders of the Company

Adjustments* 297 (10) 297 4 4

Total tax impact of the above operating income & (57) 3 (57) - - finance expenses adjustments

Adjusted net income - 72 151 132 301 479 shareholders of the Company

Weighted-average number of diluted ordinary shares 1,280,7211,283,0081,280,1751,283,2761,282,056outstanding (in thousands)

Diluted adjusted earnings 0.06 0.12 0.10 0.23 0.37 per share (in dollars)**



* See "Adjustments to reported operating and net income (Non-GAAP)" above.

** The diluted adjusted earnings per share is calculated as follows: dividingthe adjusted net income-shareholders of the Company by the weighted-average number of diluted ordinary shares outstanding (in thousands).

Global potash market - Average prices and imports:

VS VSAverage prices Q2 Q2 Q1 Q1 2020 2019 Q2 2020 2020 2019

CFR spotGranular potash - Brazil 222 346 (36%) 245 (9%) ($ per tonne)

CIF spot/Granular potash - Northwest contractEurope 245 291 (16%) 255 (4%) ((eu) per tonne)

Standard potash -Southeast CFR spotAsia 243 301 (19%) 258 (6%) ($ per tonne)

Potash imports

To Brazil million tonnes 3.1 2.6 19% 1.6 94%

To China million tonnes 1.7 2.5 (32%) 2.1 (19%)

To India million tonnes 0.9 1.4 (36%) 0.7 29%

Sources: CRU (Fertilizer Week Historical Price: July 2020), FAI, Brazil andChinese customs data.

Global phosphate commodities market - Average prices:

VS VS $ per tonne Q2 Q2 Q1 2020 2019 Q2 2020 Q1 2019 2020

DAP CFR India Spot 316 376 (16%) 302 5%

TSP CFR Brazil Spot 245 318 (23%) 252 (3%)

SSP CPT Brazil inland 18-20% P 173 229 (25%) 185 (6%) [2]O[5] Spot

Phosphate Rock FOB Morocco contract 88 100 (12%) 85 4%(68-72% BPL)

Sulphur Bulk FOB Adnoc monthly 60 104 (42%) 44 36% contract

Source: CRU (Fertilizer Week Historical Prices, July 2020)

Operating Segments

Industrial Phosphate Innovative Other Products Potash Solutions Ag Reconciliation Consolidated Solutions Activities

$ millions

For thethree-monthperiod endedJune 30, 2020

Sales to 281 301 421 193 7 - 1,203external parties

Inter-segment 4 39 18 3 2 (66) -sales

Total sales 285 340 439 196 9 (66) 1,203

Segment profit 70 38 8 15 (2) (1) 128(loss)

Other expensesnot allocated to (297)the segments

Operating loss (169)

Financing (31)expenses, net

Share inearnings of 1equity-accountedinvestees

Loss before -199income taxes

Capitalexpenditures as - - - - (2) - (2)part of businesscombination

Capital 24 55 63 4 - - 146expenditures

Depreciation,amortization and 18 42 52 7 - 131 250impairment

Operating Segments (cont'd)

Industrial Phosphate Innovative Other Products Potash Solutions Ag Reconciliation Consolidated Solutions Activities

$ millions

For thethree-monthperiod endedJune 30, 2019

Sales to 333 389 496 199 8 - 1,425external parties

Inter-segment 3 43 22 3 1 (72) -sales

Total sales 336 432 518 202 9 (72) 1,425

Segment profit 93 105 32 12 (1) (11) 230(loss)

Other income notallocated to the 10segments

Operating income 240

Financing (37)expenses, net

Share inearnings of 1equity-accountedinvestees

Income before 204income taxes

Implementation - - 6 1 3 - 10of IFRS 16

Capital 11 89 55 5 - - 160expenditures

Depreciation,amortization and 16 35 46 5 6 (9) 99impairment

FORWARD-LOOKING STATEMENTS

This announcement contains statements that constitute "forward?looking statements", many of which can be identified by the use of forward?looking words such as "anticipate", "believe", "could", "expect", "should", "plan", "intend", "estimate" and "potential", among others.

Forward?looking statements appear in a number of places in this announcement and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward?looking statements are based on our management's beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and the actual results may differ materially from those expressed or implied in the forward?looking statements due to various factors, including, but not limited to

Loss or impairment of business licenses or mineral extractions permits or concessions; volatility of supply and demand and the impact of competition; the difference between actual reserves and our reserve estimates; natural disasters; failure to raise the water level in evaporation Pond 5 in the Dead Sea; construction of a new pumping station; disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; general market, political or economic conditions in the countries in which we operate; price increases or shortages with respect to our principal raw materials; delays in the completion of major projects by third party contractors and/or termination of engagements with contractors and/or governmental obligations; the inflow of significant amounts of water into the Dead Sea could adversely affect production at our plants; labor disputes, slowdowns and strikes involving our employees; pension and health insurance liabilities; the ongoing COVID-19 pandemic, which has impacted, and may continue to impact our sales, operating results and business operations by disrupting our ability to purchase raw materials, by negatively impacting the demand and pricing for some of our products, by disrupting our ability to sell and/or distribute products, impacting customers' ability to pay us for past or future purchases and/or temporarily closing our facilities or the facilities of our suppliers or customers and their contract manufacturers, or restricting our ability to travel to support our sites or our customers around the world; changes to governmental incentive programs or tax benefits, creation of new fiscal or tax related legislation; changes in our evaluations and estimates, which serve as a basis for the recognition and manner of measurement of assets and liabilities; higher tax liabilities; failure to integrate or realize expected benefits from mergers and acquisitions, organizational restructuring and joint ventures; currency rate fluctuations; rising interest rates; government examinations or investigations; disruption of our, or our service providers', information technology systems or breaches of our, or our service providers', data security; failure to retain and/or recruit key personnel; inability to realize expected benefits from our cost reduction program according to the expected timetable; inability to access capital markets on favorable terms; 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; sales of our magnesium products being affected by various factors that are not within our control; our ability to secure approvals and permits from the authorities in Israel to continue our phosphate mining operations in Rotem; volatility or crises in the financial markets; uncertainties surrounding the proposed withdrawal of the United Kingdom from the European Union; hazards inherent to mining and chemical manufacturing; the failure to ensure the safety of our workers and processes; cost of compliance with environmental legislative and licensing restrictions; laws, regulations and physical impacts of climate change and greenhouse gas emissions; litigation, arbitration and regulatory proceedings; exposure to third party and product liability claims; product recalls or other liability claims as a result of food safety and food-borne illness concerns; insufficiency of insurance coverage; closing of transactions, mergers and acquisitions; war or acts of terror and/or political, economic and military instability in Israel and its region; filing of class actions and derivative actions against the Company, its executives and Board members; and other risk factors discussed under "Item 3 - Key Information- D. Risk Factors" in the Company's Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (SEC) on March 5, 2020.

Forward-looking statements speak only as at the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

This Press Release for the second quarter of 2020 (hereinafter - "the Press Release") should be read in conjunction with the report for the second quarter of 2020, with the Annual Report published by the Company on Form 20-F as at and for the year ended December 31, 2019 (hereinafter - the "Annual Report") and the report for the first quarter of 2020 published by the Company (the "prior quarterly report"), including the description of the events occurring subsequent to the date of the statement of financial position, as filed with the U.S. Securities and Exchange Commission. As part of the Press Release and Quarterly Report, the Company updated the disclosures provided in the Annual Report, to the extent there were material developments since the publication date of the Annual Report, on March 5, 2020 and the prior quarterly report, on May 12, 2020, and up to the publication date of the Press Release and Quarterly Report.

[1] The reference to our website is intended to be an inactive textual reference and the information on, or accessible through, our website is not intended to be part of this Form 6-K.

INVESTOR RELATIONS CONTACT Dudi MuslerInvestor Relations Manager +972-3-684-4448Dudi.Musler@icl-group.com

PRESS CONTACT Or-li Kasuto Madmon Scherf Communications +972-52-4447750Orli@Scherfcom.com

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SOURCE ICL