ICL Group Ltd

Good morning, ladies and gentlemen, and welcome to the ICL first quarter 2025 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Monday, May 19, 2025. And I would now like to turn the conference over to Peggy Riley-Tarp, VP ICL Global Investor Relations, please go ahead. Thank you.

Hello, everyone. I'm Peggy Riley-Tharp, Vice President of Global Investor Relations for ICL. I'd like to welcome you and thank you for joining us today for our earnings conference call. This event is being webcast live on our website at icl-group.com, and there will be a replay available a few hours after the live call, and a transcript will be available shortly thereafter. Earlier today, we filed our reports and our presentation with the securities authorities and the stock exchanges in both Israel and the United States. Those reports, as well as the press release and our presentation, are available on our website. Please be sure to review the disclaimer on slide 2 of the presentation. Our comments today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are not guarantees of future performance. Company undertakes no obligation to update any information discussed on this call at any time. We will begin with the presentation by our CEO, Mr. Elad Aronson, followed by Mr. Abraham Lahav, our CFO. After the presentation, we will open the line for the Q&A session. And I would now like to turn the call over to Elad.

Thanks, Peggy, and welcome, everyone. And thank you all for joining us for the first quarter 2025 earnings week. It has been an interesting and busy first few months for me, and I'm pleased to share our results with you today. Now, if you will please turn to slide three for a brief overview of the quarter. Sales were $1,767,000,000, up 2% year-over-year and up 10% on quarterly basis, as the company demonstrated solid strategic execution. Specialties driven sales of $1,412,000,000 were up 3% versus the first quarter of last year and up 15% versus fourth quarter. Consolidated adjusted EBITDA was $359,000,000, while specialties driven EBITDA of $262,000,000 was up 7% year over year and 4% on a quarterly basis. Specialties driven EBITDA margin of 19% improve approximately 70 basis points versus the first quarter of last year. Overall market pricing trends begin to gradually improve in the first quarter. However, I would remind you that for many of our businesses, there is a timing gap between published and realized prices. Nonetheless, fertilizer fundamentals are strengthening and there seems to be a feeling of general optimism. We are, of course, monitoring the global tariff and trade situation and developing different mitigation responses. In addition, we expect to leverage our already well-established regional production to continue to drive global growth with local focus, and Aviram will elaborate on this a little bit later in the call. Our diversified global approach allows our specialty businesses to focus on local production for our customers and to provide customized solutions for the specific needs. Additionally, at present, there are no tariffs on potash, and bear in mind that we are able to reallocate products between markets as needed. Let's start with a review of our divisions and begin with our industrial products business on slide 4. For the first quarter, sales of $344 million were up 3% versus the first quarter of last year, while EBITDA of $76 million was up 6%. EBITDA margin improved to 22% and increased of 60 basis points. This solid performance reflects good quarterly trends, which benefited from higher volumes. Better volumes drove overall flame retardant sales to increase year over year, with brominated product sales up slightly. Phosphorus-based flame retardant improved on both higher volumes, mainly in the U.S. and in Europe, and also higher prices. Some of these improvements is related to a recent anti-dumping measures implemented in the EU in 2024 and now also in the US. And we will continue to protect our markets when necessary. While trends are generally improving, some of our key flame retardant end markets, such as electronics and especially building and construction, are still somewhat subdued. Broming market prices picked up in the first quarter, but there have been different price fluctuations since that time related to ever-changing global tariffs and trade news. Regardless, change creates opportunities, and this is where our focus on R&D and innovation really stands out. It allows us to create solutions to help our existing customers with issues they might be experiencing, and also enables us to develop targeted solutions for new customers. On slide five, you will see our potash division results for the first quarter, with sales of $405 million and EBITDA of $118 million. Our average potash price for the first quarter was $300 CIS per ton, down when compared to the first quarter of last year, but up $15 per ton over the fourth quarter. As a reminder, similar to growing prices, potash price improvement is not immediately reflected in our results, as there is a gap of anywhere from two to three months. In the first quarter, potash sales volumes of 1,103,000 metric tons increased by about 20,000 tons per year over year, with higher volumes mainly to Brazil and China. I would point out that even as we were obligated to fulfill our annual 2024 contract with China and India, which are at lower prices than the current market rates, we still work to maximize the profitability of our potash resources and to prioritize supply to the best global markets when possible. For the second quarter, we expect to deliver approximately another 150,000 tons to China and India under the existing contracted rates. In the first quarter, we addressed some operational issues related in part to the war. And in April, we completed the full and successful maintenance shutdown there. We invested to stabilize operations and expect these efforts to help drive improved output and efficiency as the year progresses. At our portage operations in both Spain and Israel, we remain intent to driving operational and efficiency efforts. In Spain, we are focused on debaselnecking and also using innovation to optimize mining activity, improve reliability, and to meet sustainability targets. Turning to slide six and our phosphate solutions division, where first quarter sales of $573 million were up 3%, while EBITDA of $139 million increased 6%, and EBITDA margin expanded to 24%. The improvement in the quarter was generally driven by strength in commodities due to firm global demand and higher prices. As expected, our phosphate specialty's results were in line with market dynamics, as pricing remained under pressure due to overcapacity of purified phosphoric acid, including TPA and WPA. Industrial phosphate saw increases in both cells and volumes in all major regions, However, an increase in food phosphate volume was not able to offset lower market price. In China, sales for our YPH joint venture increased year over year with higher prices and volumes and favorable product mix. As a reminder, our YPH operation serves both phosphate commodities and specialties and also growing solution business. And the team there does an excellent job of optimizing its resources. We recently had a management change in phosphate solutions, and Nadav Tuner, who successfully served as CEO of YPH for the past five years, has been appointed president of phosphate solutions, replacing Phil Brown. The business will continue to be focused on maintaining market share and volume gains and on targeting geographic expansion for both the food and industrial specialty phosphate solutions. Turning now to slide seven and our growing solutions business division, where first quarter sales of $495 million were up 3% year over year, while EBITDA of $47 million increased 12%. This improvement was driven by a solid strategic execution of our growth plan, including the addition of regional acquisitions in 2024, like custom ag formulators in the US and GreenVest in the UK, and as we expanded locally in China. We saw higher sales in China in the first quarter with strong volume growth and meaningful contribution from our gaiostimulant product offerings. In North America, we saw strong start of the year with both higher sales and profitability due to good demand for specialty fertilizers. In Brazil, sales increased year over year as did volumes, and both B2B and B2C sales also improved. Going forward, we expect Brazil to be a beneficiary of recent uncertainty related to tariffs, and we plan to maximize our business there to benefit from any shifts in global trade. In Europe, so good growth in our turf and ornamental business, and we expect to continue to drive growth from our innovative new offerings and a shift to biosimulant products. As you know, Biologica has been a big focus for ICL, and in early April, we acquired LaviBio, a leading agri-biological technology company. This acquisition further advances our goal of becoming a global powerhouse in agri-biological and helps us to position ICL at the forefront of this vibrant and sustainable new market. This is in addition to other innovative new products we have developed, including the recent launch of BIOS in Italy, Poland, France, Spain, and Germany. BIOS is a new range of biosimilants for Europe, which was engineered to ensure crops reach their full potential by improving establishment, promoting growth, increasing flowering and fruit setting, and enhancing tolerance to and recovery from stress. And with that, I would now like to turn the call over to Aviram for a brief financial overview before I share an update on our guidance and outlook for 2025.