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 Scott’s Global Professional Business December 2010 December 2010

Important Legal Notes 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 Israel Chemicals Ltd. (ICL) securities. Although our shares may be bought and sold on the Tel Aviv Stock Exchange (TASE) at 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 obligation 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. 2

Transaction Summary

Transaction Overview Transaction Overview  Acquisition: ICL has made an offer to acquire the Global Professional business of 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 in sales $500M i l  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 4

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 5

Fertilizers Specialty i lt Market S

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 or 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 of end users of end-users 7

Growth Drivers for Specialty Fertilizers Growth Drivers for Specialty Fertilizers Demand for Demand for Strong Market Needs Global Trends Specialty Fertilizers Population growth growth  Limited land and water resources drive Specialty fertilizers Increase in standard growers to increase help farmers, of living in emerging g g g yield per cultivated yield per cultivated gardeners & nurseries d & i regions area achieve: • Improved efficiency Reduction of arable land bl l d • Higher yields  Increased awareness and regulations force • Better quality Limited availability growers to take • “Greener” agriculture of water resources of water resources environmental impact environmental impact into consideration Environmental concerns concerns 8

The Specialty Fertilizers Market: Still Small, but Growing Faster than the Commodity Market Fertilizer Fertilizer Market Growth Group Cost Yield Type Size* Rate* • Nitrogen ~$100B 3-4% CONVENTIONAL • Phosphate MEDIUM MEDIUM per per year ear per per year ear FERTILIZERS FERTILIZERS • Potash • Water soluble • Water soluble straights ~$2.0- 5-8% SPECIALTY • Formulated HIGH HIGH 2.5B per year FERTILIZERS fertilizers per year per year • Coated fertilizers * Source: IFA ‐ Global Fertilizers and Raw Materials Supply and Supply/Demand Balances: 2010 ‐ 2014 (May 2010), Company estimates pp y pp y/ ( y ), p y 9

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 10

Fertilizers Today Specialty Specialty ICL

ICL Specialty Fertilizers Today ICL Specialty Fertilizers Today Sales: ICL FERTILIZERS • ~$250 million/year 2009 sales: $2.1B • ~100K tons of WS solid fertilizers • ~200K tons of liquid fertilizers q Main customers: ICL Specialty • Solids: producers/blenders & distributors to Fertilizers Fertilizers sophisticated end users sophisticated end-users • Liquids: local end-users 2009 Sales: ~$250M Product Lines: • Water Soluble (WS) MKP, MAP, NPK & HKP • Variety of leading brands • World’s #1 producer of soluble PK fertilizers (crystallized potash & phosphate) 12

Innovative Line of Fully-Soluble Fertilizers Innovative Line of Fully Soluble Fertilizers 13

Global Pro Global Pro Business Scotts’

Global Pro is a Top Player in the Global Specialty Fertilizers Market • Scotts Global Pro is a market leader in premium specialty fertilizers for Ornamental, Miracle-Gro Horticulture & Professional Turf markets, with a rising presence in the Specialty Agriculture market g p p y g NYSE: SMG HQ: Marysville, Ohio 2010 sales: $3.1B • Scotts is divesting Global Pro to increase its focus Employees: 8,000 on its Global Consumer business Global Global Corporate Corporate Scotts Lawn Scotts Lawn Global Global & Other Service Professional Consumer (1%) (7%) (8%) (84%) 2010 2010 sales: $242M l $242M Branded products ~ 340 employees for lawn and garden care 15