ICL Group Ltd

Hello everyone. Thank you for joining us, and welcome to the ICL Second Quarter 2026 Earnings Call International. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Peggy Reilly Tharp, Vice President of Global Investor Relations. Peggy, please go ahead.

Hello, everyone. I'm Peggy Reilly Tharp, Vice President of Global Investor Relations for ICL Group. 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 on our presentations with the securities authorities and the stock exchanges in both Israel and the United States. Those reports, as well as the press release on our presentation, are available on our website. Please be sure to review the disclaimer on slide two 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 guaranteed at future performance. The company undertakes Thank you, Peggy, and welcome everyone to a review of our second quarter of 2026 earnings. We delivered another quarter of strong results

with sales of $2.1 billion, which were up 17% year-over-year. Adjusted EBITDA of $448 million also showed meaningful improvements and increased 28% versus the prior year, as you can see on slide 3. Before we go into greater detail about the quarter, I would like to take just a few minutes to review our new segments and to discuss how enterprise-wide cost savings and efficiency measures initiatives elevate. First, I would like you to turn to slide 5 for a quick review of our three new strategic principles which we first shared with you on our third quarter earnings call last November. The first is to drive profitable growth by targeting specialty crop nutrition and specialty food solutions. The second is to maximize and improve the businesses that we have identified as core to ICL, and this includes our phosphate, potash, and bromine resources. The third is dedicated to portfolio optimization and cost efficiency. All three of these principles will benefit from our willingness to embrace new technologies like AI and our deep history of innovation. To drive profitable growth, we identified two distinct businesses which you can see on slide 6. We believe specialty crop nutrition and specialty food solutions have the potential to be significant growth engines for ICL. These are two areas where we already have deep experience and broad exposure and the future looks bright. As you know, ICL's growing solution segment is already a global leader in specialty crop nutrition. On slide 7, You can see that in 2020, our specialty crop nutrition sales were $1 billion, with EBITDA of approximately $60 million. In 2025, we delivered specialty crop nutrition sales of $2 billion, and EBITDA increased in excess of three times to more than $200 million. Our research indicates that there is still meaningful runway for growth in this business, which will allow us to further strengthen our leadership position in this market. Turning now to slide 8 and our second growth engine, specialty food solutions, which is currently part of the phosphate solution segment. We are already leading the $1.5 billion phosphate food specialty market. However, this represents a small piece of the total food ingredient spike. In order to accelerate our growth, we are extending our focus into functional food ingredients. This sizable market provides exposure to approximately $35 billion in value with an expected average five-year growth rate of approximately 6%. We are strongly positioned in this market with a clear ambition to double our sales and reach $1.5 billion in revenues by 2029. As we have begun executing our strategy, it has become increasingly clear that aligning our corporate structure With our end markets is the right approach for the future. As a result, and after careful review, which is shown on slide 9, we have decided to embrace a new organizational structure. This new structure will include dedicated food segments and will consolidate all of our industrial activities into one segment. It will also bring our potash and phosphate fertilizer together. We believe this new market-oriented organizational structure will strengthen management focus on our key growth engines and align the business with our strategic priorities. We expect this update to our reporting structure to provide investors with enhanced visibility into the performance, growth drivers, and value creation potential of our businesses. On slide 10, you can see each of our four segments. Nutrition Solutions will bring together all of our food and beverage, health, nutrition and wellness offerings into one place. This will include our existing food specialties business, along with the food and pharma solutions that previously resided in industrial products. Industrial products will be focused on performance and safety solutions for industrial markets, primarily electronics, energy and construction. Thank you for watching. such as advanced electronics, semiconductors, AI infrastructure, data centers, and next-generation computing, positioning us as the forefront of some of the most dynamic and rapidly expanding industries worldwide. There will be no change to growing solutions which will remain focused on specialty plant nutrition for agriculture, turf, and ornamental markets. Essential minerals will include potash and phosphate fertilizers from our upstream mineral production sites including our potash resources in the Dead Sea and in Spain, and our phosphate resources in the Negev and in China, and will continue to serve the global agriculture markets. This change will take effect in the first quarter of 2027. However, 2025's performance snapshot of each of the new segments is shown on slide 11. We believe this new structure will allow us to amplify our growth engines as we move ahead with our strategic priorities. If you will now turn to slide 12, I would like to take just a few moments to introduce you to Elevate, our new cost transformation program. We have initiated this effort in order to reduce our cost base, support our margin expansion, improve cash generation, and strengthen our earnings power. Elevate is a corporate-wide effort to increase efficiency and productivity by realigning our cost structure to build a lean and agile company poised on growth. In addition, we will be leveraging AI to accelerate innovation, drive efficiency, and improve decision-making. Taken together, these initiatives are expected to deliver more than $150 million in annual EBITDA improvement by the end of 2027, growing to more than $350 million annually by the end of 2028. On slide 13, you can see our targeted savings. We expect approximately 50% to 60% of the projected EBITDA improvement A reduction in external spend expected to deliver 30-40% of our goal. while SG&A optimization efforts are forecasted to contribute the remaining 10-20%. While this is an ambitious effort, I know everyone at ICL is committed to taking the necessary steps to make this cost transformation program a reality over the next two years. Now let's turn to slide 15 for a more detailed review of the second quarter. As discussed, we delivered sales of $2.1 billion which were up 17% year-over-year. These results exceeded expectations and each of our four businesses contributed to this solid sales performance as higher prices for potash, bromine and phosphate contributed to the year-over-year improvement. Adjusted EBITDA of $448 million increased 28% versus the prior year. This growth was achieved even as we absorbed $100 million of higher raw material costs and more than $40 million of exchange rate impact. We also reported a 35% improvement in adjusted net income of $149 million, which translates to adjusted earnings per share of $0.12 and increase of 33%. Operating cash flow of $290 million improved 8% on an annual basis. and Free Cash Flow $94 million was up 34% in second quarter. Despite continued volatility in global markets during the second quarter, we stayed focused on disciplined execution, managing the factors within our control and responding decisively to changing market conditions. We also benefited from our distinctive global presence with regionally diversified operations and from higher prices across the fertilizer, Food and Industrial Markets Reserve. Let's turn to our business segments and begin with industrial products. On slide 16, you can see second quarter sales of $414 million were up 30% year over year, while EBITDA of $130 million was up 88%. This was the segment's best quarterly performance since the end of 2022, and it was mainly driven by higher brooming prices and increased volumes. For flame retardants, overall sales increased. Bromine-based products benefited from higher prices and improved electronics and market demand. Sales of phosphorus-based flame retardants were stable despite muted demand in the construction and markets. For our clear brine fluids, which are used by the oil and gas industry during well completion, business remained solid. While sales decreased slightly due to timing shifts, Demand in Europe and South America increased in the second quarter. Specialty minerals, which includes magnesium, calcium carbonate, and salt products, reported increased sales, with strong magnesium demand across a wide array of end markets. Overall year-over-year improvement was also driven by growth in food and pharma demand, and this trajectory is expected to continue throughout the remainder of 2026. Turning to our potash division on slide 17, For the second quarter, sales of $468 million were up 22% year-over-year. EBITDA of $154 million was up 34%. Our average potash price for the second quarter was $376 CIF per ton. This amount was up 13% year over year and 4% sequentially. Potash production volumes came in at 1,058,000 metric tons in the second quarter and were up 11% or more than 100,000 metric tons versus the prior year. These gains were achieved as a strong focus on process optimization and cost reduction drove significant improvements in operational performance and resource efficiency. Once again, we continued to maximize our potash sales by prioritizing the best global markets and we also benefited from higher potash prices in the quarter. Despite recent price increases, potash remains relatively affordable compared to nitrogen and phosphate fertilizers. Supporting Continuous Demand Now turning to review the Phosphate Solutions Division on slide 18. For the second quarter, sales increased 13% to $722 million. Higher prices for both commodity and specialty phosphates helped drive sales growth. Second quarter EBITDA of $136 million increased slightly as price increases were able to partially offset the impact of high raw material prices. For our specialty food phosphates, sales increased in the second quarter, and this reflects not only price increases, but also volume growth from existing and new customers. Growth was across a variety of use cases, including dairy, meat and seafood, in expansion markets like China and India. Our specialty food solutions are targeting consumer trends such as low sodium, Healthy For You, and Clean Labels. We are also developing a high-protein beverage prototype as we look to expand our participation in the GLP-1 category. This brings us to our growing solutions business division on slide 19. Sales for the second quarter increased 12% to $605 million, with growth in most regions where EBITDA of $50 million was down versus prior year. In order to partially offset the pressure from higher raw material costs, Geopolitical tensions and supply chain volatility, the growing solutions team focused on payroll price and mix, disciplined SG&A management, and commercial actions targeting profitability. On a regional basis, soft market conditions remained an issue in Brazil as overall demand was weak. After a challenging April, performance improved progressively in May and June. For Europe, both sales and profitability improved in the second quarter as we maintained our focus on optimizing product mix. Execution of this strategy has proven successful with a sharp focus on core countries and products, driving growth and profitability. During the quarter, Growing Solutions did a remarkable job of managing the areas under their control, from optimizing its fixed cost base to reducing general and administrative expenses. I would now like to turn the call over to Asaf for a review of quarterly financials and our outlook for the remainder of 2026.