Sociedad Quimica y Minera S.A.

Good morning and welcome to the SQM fourth quarter 2020 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Kelly O'Brien, Head of Investor Relations. Please go ahead.

Good morning. Thank you for joining our fourth quarter 2020 earnings conference call. This conference call will be recorded and is being webcast live. Following this call, you will be able to access the webcast at our website, www.fqm.com. Our earnings press release and our presentation with a summary of the results has been uploaded to our website, where you can also find a link to the webcast. Speaking on the call today will be Ricardo Ramos, CEO, our CFO, Gerardo Illanes, and our Commercial Vice President of Lithium and Iodine of Asia Pacific, Felipe Smith. We will also be available to help answer any questions following the prepared remarks. Before we begin, let me remind you that statements in this conference concerning the company's business outlook, future economic performances, anticipated profitability, revenues, expenses, or other financial items, anticipated cost and entries, and product or service line growth, together with other statements that are not historical facts, are forward-looking statements, as that term is defined under federal securities laws. Any forward-looking statements or estimates reflecting the best judgment of SQMs Based on currently available information involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those stated in such statements, including our ability to successfully implement our Sustainable Development Plan. Risks, uncertainties, and factors that could affect the accuracy of such forward-looking statements are identified in our public filings made with the U.S. Securities and Exchange Commission and in our earnings release issued last night. And these forward-looking statements should be considered in light of those factors. We assume no obligation to update such statements, whether as a result of new information, future developments, or otherwise, except as required by law. I now leave you with our Chief Executive Officer, Ricardo Ramos.

Good morning. We thank you for joining the call today. As you know, 2020 began with uncertainty, but we are more than satisfied with the trends that we have seen in the markets in which we participate. The significant advances that we have made related to our sustainable development plan and, of course, the operation of succeeds seen throughout the year, especially related to lithium production. Before discussing the results in more detail, I'm proud to announce that we are the first lithium mining company in the world to join the Initiative for Responsible Mining Assurance, IRMA. For years we have built a sustainable operation in an effort to protect the environment, our neighboring communities, and contribute to sustainable industries. This is part of our commitment to a high level of transparency, seeking public responsibility of the objectives we have established related to environmental matters. Sustainable Operations and Social Responsibility. It is also linked to the role we play in the value chain of a strategic industry for human development, including the electric and sustainable mobility markets, renewable energy, and sustainable farming. I have said this before, and I will reiterate again, our dedication to the goals of our Sustainable Development Plan is paramount, and we look forward to sharing continued advances related to it in the future. Looking back at 2020, there are a lot of positive things to mention, starting with our lithium carbonate collection, which surpassed 70,000 metric tons in the year, exceeding our objectives for the year related to volumes, cost, and quality of the products that we have been producing and selling, allowing us to increase our market share and expand our customer base. As a result of this, our sales volumes in 2020 were over 43% higher than sales volume reported last year, reaching a company record. Additionally, in the fourth quarter, our sales volume reached almost 26,000 metric tons, over 134% higher than sales volume reported in the same period last year. This was part of our plan and continues to be part of our strategy going forward. As I said last night, it's a clear sign that we're prepared to continue to grow Thank you very much. Thank you. of 50,000 metric tons of battery-grade lithium nitroxide with first production coming online during the second half of 2024 before necessary permits are received as anticipated. We believe we are one of the lowest cost producers of lithium and anticipate this project will also be competitive position at the cost curve. While lithium is an exciting market and offers many growth prospects, I would be remiss if I did not mention the other opportunities that we were able to take advantage of during 2020. In industrial chemical business line, which represent about 9% of the gross profit of the company last year, mostly related to sales volumes of more than 160,000 metric tons of solar source, of which over 66,000 metric tons were delivered during the fourth quarter of 2020. In 2021, we expect to deliver close to 200,000 metric tons of solar cells, and we believe that we are prepared to satisfy the market needs with annual volumes of over 200,000 metric tons of solar cells going forward. Many of you have noticed, likely so, that the island market was impacted by the global pandemic in 2020. We believe that the total market demand decreased approximately 9%. However, we are optimistic that we will see multiple coverage during 2021 as the impact of the pandemic fades away, mostly led by the X-ray contrast media, LCD, and pharmaceutical markets. We hope to increase market share during the year, and we are confident that demand growth going forward will require new capabilities, like the one we announced last December. Again, while there are a lot of positive news to share about 2020, what year next? with various challenges, most of which we are able to overcome as a result of the effort and dedication of our team, collaborators, and neighboring communities. The well-being of everyone will remain our priority, and I want to thank each and every person of the accomplishment and the results we were able to achieve in 2020.