Good day everyone. And welcome to the ICL Third Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. Please note this call is being recorded. It is now my pleasure to turn the conference over to Peggy Reilly Tharp. Please go ahead.

Okay. Thank you. 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 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 shortly thereafter. Earlier today, we filed our report and presentation with the securities authorities and the stock exchange in Israel, and tomorrow once the SEC EDGAR website reopens, we will do so in the U.S. Those reports, as well as the press release and our presentation, are available on our website as of this morning. Please be sure to review the disclaimer on Slide 2. 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. The company undertakes no obligation to update any information discussed on this call at any time. We will begin with a presentation by our CEO, Mr. Raviv Zoller, followed by Mr. Aviram 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 Raviv.

Thanks, Peggy, and welcome everyone. I would like to begin by providing a brief update on the situation in Israel, which is now in its 14th month. We have continued to address the challenges caused by the war, including fluctuations in the number of reservists called to service and ongoing logistics-related issues. We remain committed to delivering against our 2024 plan while continuing to manage all areas under our control and preparing for potential external risks and scenarios. Now if you will please turn to Slide 3 for a brief overview of third quarter results, which continued the positive trend we saw in the first half of the year. Sales of $1.753 billion were up for the third consecutive quarter, while adjusted EBITDA of $383 million was up for the fourth consecutive quarter. EBITDA was also up 11% on a year-over-year basis, as EBITDA margin expanded from 19% to 22%. Throughout the first nine months of 2024, as always, we maintained our focus on cash generation. As a result, our free cash flow strengthened throughout the year, with a year-to-date free cash flow of $572 million. Adjusted earnings per share has also improved every quarter this year, and for the third quarter we delivered adjusted EPS of $0.11, up 10% on a sequential basis. In the third quarter, our specialty-driven business divisions, Industrial Products, Phosphate Solutions, and Growing Solutions reported a 37% year-over-year increase in EBITDA. For the third quarter, our potash business division represented approximately 30% of total EBITDA, versus nearly 50% in the same quarter last year. We continue to return value to our shareholders via our industry-leading dividend, and next month we will distribute another dividend payment of approximately $0.05 per share. We also maintained our focus on expanding ICL's innovative product pipeline across all of our specialty-driven businesses during the quarter. In addition to our focus on strong cash generation, we continue to target cost savings and efficiency efforts, as well. I would ask you to turn now to Slide 4, and a look at both year-over-year and quarter-over-quarter trends for some key financial metrics. As you can see, we once again delivered quarter-over-quarter improvement across the board. Consolidated adjusted EBITDA was up on both a quarterly and an annual basis, and our specialty-driven business divisions achieved improvement in both sales and EBITDA versus both prior periods. Let's start with a review of our divisions, and begin with our Industrial Products business on Slide 5. For the third quarter of 2024, sales of $309 million were up 16% year-over-year. Over the same timeframe, EBITDA increased 55% to $65 million. EBITDA margin of 21% improved versus 16% in the prior year, when the bromine market reached its bottom, driven by scale and efficiencies. In the third quarter, we continued to reap benefits from our efforts to gain market share in flame retardants, with higher volumes for both brominated and phosphorus-based solutions. Sales of clear brine fluids for use in the oil and gas industry decreased year-over-year due to a normal shift in the oil and gas drilling cycles in Europe and the Eastern Hemisphere. Specialty mineral sales increased year-over-year driven by higher volumes for industrial applications and steady demand from the food and pharma end markets. The new product pipeline, which spans from apparel to construction and into battery materials, is expected to benefit from an expansion into the North American energy storage supply chain through a phosphorus compound for use in the production of LiPF6, a critical raw material for lithium-ion batteries. On Slide 6, you will see our potash division results for the third quarter of 2024, with sales of $389 million and EBITDA of $120 million. Our average potash price was down $45 CIF per ton year-over-year, while total sales volume was down approximately 220,000 metric tons for the same timeframe. As I mentioned earlier, at our Dead Sea operations we continue to face intermittent challenges related to the war. We have continued to adapt to fluctuations in staffing and remain flexible in the face of shipping constraints, which presents a challenge for ICL and other global companies. In Spain, we are benefiting from ongoing operational and efficiency efforts, which have driven record third quarter production. For 2024, we intend to limit our total annual potash sales volumes to the 4.6 million metric tons, which have already been committed. This is similar to 2023 volumes and in anticipation of improving conditions in 2025. Turning to Slide 7, in our Phosphate Solutions division where third quarter sales were $577 million. EBITDA of $140 million increased on a year-over-year basis, while EBITDA margin expanded to 24% from 20%. In the quarter, growth in specialty market share more than offset lower prices related to a decrease in cost inputs. On a portfolio basis, we continue to expand into new and adjacent products in food, industrial, and pharma end markets. On a regional basis, we saw continued growth at YPH, our joint venture in China, with increased demand for battery-grade phosphate. We are two months away from completing our customer innovation and qualification center in St. Louis, which will allow us to begin qualifying battery materials product for customers. This big step forward puts us in an optimal position for growth in the Western Hemisphere, as it will allow us to prove our products at scale and strengthen our customer relationships. For our commercial LSP plant in North America, we continue to align our construction timeline and capital spend to match anticipated customer demand. Looking more globally, we are now selling specialty phosphate solutions to a battery customer in Argentina, and we're also looking at battery material partnership opportunities in Europe. In terms of commodity phosphates, prices firmed in the third quarter with tight stock positions in key markets. Turning to Slide 8, in our Growing Solutions business division, where third quarter 2024 sales of $538 million were somewhat down year-over-year, while EBITDA of $64 million increased more than 70% for the same timeframe. EBITDA margin of 12% expanded significantly versus the prior year, driven by efficiency efforts and improved product mix. Our strategy of offering innovative products targeted to meet regional needs continued to prove itself as we delivered our third sequential quarter of sales and EBITDA growth. In China, we recently signed a five-year agreement with one of the top agricultural distribution companies. The agreement, valued at approximately $170 million, is for specialty water-soluble fertilizers, which have seen a substantial increase in demand in China. In North America, we have made good progress on the integration of Custom Ag Formulators, a provider of liquid adjuvants and enhanced nutrients, as well as various other specialty products. I would now like to wrap up with a few highlights on Slide 9. While I'm pleased that we delivered sequential EBITDA improvement for the fourth consecutive quarter, our future growth relies on our passion to strive forward and to disrupt our own markets when necessary. This attitude has enabled us to continuously enhance our already robust product pipeline with innovative new solutions. Simultaneously, we have worked to manage costs and drive efficiency efforts. There are no sacred cows at ICL, and two additional small sites were closed this quarter for efficiency considerations. We have also worked together to leverage opportunities across business segments, and we will continue to do so, as we look to target new and adjacent end markets through innovative product solutions. One example of this is our battery materials business. We have the potential to leverage our expertise in a variety of ways, and to expand our presence as a global leader in this space through new products and offerings. In North America, our Customer Innovation and Qualification Center is nearing completion, and we currently expect commercial production to begin in 2027. Another example of our dedication to innovation is Agmatix, our AdTech digital startup, which was recently recognized by Fortune as one of the 10 companies that are changing the world and was featured in an important scientific publication in Nature on regenerative agriculture. The new region IQ platform helps agronomists and suppliers implement environmentally friendly crop strategies and enables them to tailor regenerative practices to specific crops and conditions. These are just two examples that demonstrate how ICL is working to improve lives and protect the planet, and neither would be possible without the hard work, dedication, and support of each and every ICL employee. To all of our team, I say thank you. And with that, I would now like to turn the call over to Aviram.

Thank you, Raviv, and to all of you for joining us today. Let us get started on Slide 11 and take a look at some key market metrics. Since we are a truly global company serving a variety of end markets, we look beyond fertilizer prices to a wider array of macro indicators. Starting with inflation, where the U.S. and EU saw decreases in the third quarter, while China, Brazil, and Israel also saw increases which ranged from 20 to 60 basis points. Interest rates decreased versus the prior quarter in the U.S., the EU and UK remained steady in Israel and India, and increased in Brazil. Global industrial production was stable in the quarter with improving trends expected into the next few quarters. On a sequential basis, housing starts picked up slightly in the U.S. in both the second and third quarters this year. Turning to Slide 12 for key fertilizer market metrics across the board, grain prices ended the third quarter lower while farmer sentiment significantly softened. However, data for October showed a surprising pre-election bounce in sentiment as farmers expressed some optimism that economic conditions will improve and that there will not be an extended downturn in the farm economy. Potash and phosphate prices continue to diverge, with potash prices maintaining their descent while phosphate prices increased slightly versus the second quarter and significantly year-over-year. While ocean freight rates decreased in the quarter, reaching the lowest level since the third quarter of 2023, at ICL we continue to see higher overall logistical costs. On Slide 13, you can see some key market metrics for energy storage and electric vehicles. While both are growing at roughly the same pace over the next few years, the most significant increase in demand is still expected later in the decade. As Raviv mentioned, in addition to our current North American battery materials project, which is aligned with our customers' current expected production timelines, we are also looking at battery materials expansion opportunities in other regions. If you will now turn to Slide 14 for a look at our third quarter sales bridges on the left side, you can see the year-over-year change for each of our business divisions, with potash having a significant impact on the year-over-year decrease in sales which came in at $1.8 billion. Turning to the right side of the slide you can see the impact of lower prices, especially for potash and the effects exchange rates had on sales. In addition, due to one-time logistics adjustments, which will allow for greater flexibility of allocation between ports and Israel going forward, we deferred approximately 120,000 metric tons of potash sales volumes to China. On Slide 15, you can see the impact lower potash prices had on our third quarter 2024 EBITDA of $383 million. We were able to offset lower prices in general through higher quantities and lower raw material costs in our specialty-driven businesses. Turning to Slide 16, you can see that even as potash prices continue to decrease in the third quarter, ICL remained a leader in terms of average realized price. Once again, we maximized the profitability of our cost-efficient resources. Demand for potash is currently constructive due to soil replenishment needs, and we are seeing some firming in the global market. On slide 17, I would like to remind you of ICL's leadership position in the global bromine market. While bromine prices have been under pressure for more than a year, the Dead Sea remains the most cost-competitive source of bromine and accounts for approximately two-thirds of global supply capacity. If you turn to Slide 18, you can see how our business breaks out on both a regional basis and business division. As a truly global company, we maintain solid foundations in Europe and North America while participating in high-growth markets like Brazil, China, and India. As a truly diverse company, our four business segments serve a wide array of end markets from automotive to food and beverage to pharma and beyond. Before we wrap up, I would like to share a few highlights on Slide 19. We continue to prioritize cash generation and ended the quarter with available resources of approximately $1.7 billion. Our cost savings and efficiency efforts are ahead of our expectations. Our net debt to adjusted EBITDA rate at quarter end was 1.2 times, and S&P recently reaffirmed our BBB- rating with a stable outlook. And of course, we are once again distributing 50% of adjusted net income to our shareholders. In December, we will pay out $68 million as a dividend to our shareholders, keeping our trailing twelve-month dividend yield at 4.6%. Finally, if you will turn to Slide 20, I would like to update you on our 2024 guidance. For our specialty-driven business division, which includes industrial products, growing solutions, and phosphate solutions, we now expect EBITDA to be between $0.95 billion to $1.05 billion in 2024. This is up from previous guidance of $0.8 billion to $1 billion. As Raviv mentioned earlier, for 2024 we intend to limit our total annual potash sales volumes to 4.6 million metric tons, which is in line with 2023 volumes and in anticipation of improving conditions in 2025. We'll continue to expect our effective tax rate for 2024 to be approximately 28%, which was our rate in the third quarter. And with that, we can begin the Q&A.

Thank you. We'll take our first question from Rahi Parikh with Barclays. Please go ahead. Your line is open.

Hi everyone and congrats on the results. I'm obviously coming in for Ben. And the first question that we have is, do you have any preliminary specialty outlook for 2025 given that 2024 is coming together much better than initially anticipated? And I have a follow-up for after that.

Okay. So as you can imagine, first of all, hi, how are you? I hope we get to connect. We have some initial thoughts about 2025. It’s not finalized yet, but we definitely see signs of stabilization or improvement in potash, hopefully building on your good track record with phosphate and its industrial product derivatives. As you know, a lot depends on market conditions and demand that we expect to strengthen. We believe demand will increase during the year. We are not waiting for demand; we are operating at full capacity, which should lead to higher prices. Lastly, regarding our growing solutions, we are optimistic about continuing our positive progress, and we anticipate that 2025 will be an even better year. We are working on this, and while we don’t have a detailed forecast to share just yet, the trends look promising.

So that's '25. And of course, once we have a better picture, as always, we'll find a way to share it. It will culminate in the guidance that we will give when we come out with Q4 and '24. We will also, of course, give the guidance for '25, as we did in the previous two years.

Okay. Thanks, Aviram. And then also just on geopolitics, is the impact still just on increased shipping costs or are there issues getting tons out in the area? And then what's your take on the Belarus notion to cut 10% of production? Thanks so much.

Thanks for the question. Geopolitics is unpredictable, but our main concern is logistics and shipping. In the third quarter, we adjusted our operations to ensure we could ship all our products from one port instead of two, which did incur extra costs. Compared to the same quarter last year, transportation costs increased by $13 million, largely due to this change. We hope for a positive resolution in the coming months. Our current strategy has made us more flexible, allowing us to ship everything from a single port. We've also seen better returns from the western hemisphere. Looking at the pricing for early next year, we can achieve a better return on our January product sales compared to the spot price, which leads us to prefer deferring product. Regarding Belarus, we lack clarity. It's noted that the shipping costs from Belarus to China by train are quite low, indicating a lack of profitability. The potash market trends show affirming prices, and there's strong demand for potash in other regions due to the need for soil replenishment, so overall, the outlook appears positive.

Awesome. Thank you so much.

Thank you.

Thank you. Our next question comes from Alex Jones with the Bank of America. Please go ahead. Your line is open.

Great. Thanks very much for taking my questions. Two if I can. The first on the guidance for the year on specialties EBITDA, could you talk about what the sensitivity is within that range? The $100 million sort of top to bottom and what would drive that to the bottom end or the top end, please? And then the second question specifically on industrial products. If I look at the pricing this quarter, it was sequentially improved, still down 6% year-on-year, but much better than the double-digit declines you've reported in recent quarters. Is that indicative of a trend? Should we expect pricing to return to positive into next year from what you're currently seeing in the market or any comments you have there?

Which part of the business, Alex, if I may?

Industrial products.

Okay, on industrial products, the price is relatively stable, and there's a little bit of seasonality. Like for now, there's a little bit of price going up because of winter stoppage in China. The prices have pretty much stabilized in the past few months, and there's no meaningful change in price in recent months. In terms of output, we're almost at full output. So I guess as long as we're at full output, there's no reason for too much price appreciation. Price appreciation will probably appear once demand strengthens in the electronic side. Real estate will take a little longer to recover. I didn't actually hear the whole first question, so I will pass it on.

Yes. On industrial products, the price is relatively stable and there's a little bit of seasonality. Like for now, there's a little bit of price going up because of winter stoppage in China, but the prices have pretty much stabilized in the past few months. There is a little bit less sales of clear brine fluids in the quarter, which has to do with seasonal effects, nothing significant.

Hi Alex, and thank you for the question. Basically, when we look at Q4, the way it is shaping up in many ways, it should be a similar quarter maybe to Q3, but with seasonality potentially causing Q4 to be a bit lower than Q3. Obviously, a lot of the differential vis-à-vis the quarter will potentially come from the potash, which I spoke about earlier. If I zero in on the three business divisions that comprise the specialty side of the business, then I would say that they should all be seasonally adjusted, not as strong as Q3. The differences aren't that big, and if we do the math and compile Q4 to what we came out with in the three quarters that we are reporting today, then we should be firmly in the territory of our new guidance, which is definitely better than what we saw after Q2. We tend to be conservative and take extra care to fulfill our obligations to the market.

And maybe just to add on the fourth quarter that typically, seasonality has an impact. So in industrial products, there's a real question on how December looks, and for growing solutions, typically at the end of the year, we see a drop in the strength of demand. So we see Q4 typically a little weaker than Q3.

Also, there's the Brazilian market, which in the second half of the year, has a lot of importance. Brazil is so important from the agricultural point of view, but it's quite volatile. So a lot will be determined by how strong the very end of the year is, and that will only be known in the early days of 2025, but we seem to be well on track.

Thank you.

Welcome.

Thank you, Alex.

Thank you. Our next question comes from Joel Jackson with BMO Capital Markets. Please go ahead. Your line is open.

Hi, good afternoon. Could we talk about when you've raised the specialties guidance for the year by about $100 million? Can you break that down as much as you can between specialty phosphate, commodity phosphates, bromine, and growing solutions? How are they contributing to the $100 million increase?

Yes. So growing solutions is going to be a little weaker than Q3, and industrial products are going to be a little weaker than Q3. But phosphate solutions will be relatively similar to Q3. We don't break up specialties and commodities on phosphate for a simple reason that we leave ourselves the flexibility to sell whatever makes sense in the market. We're short on both specialties and commodities, so we look at the best alternative at the time. And the year still has almost two months to go, so it's too early to break them up.

I think the surprises that we got, some of them surprised us in phosphate. Phosphate is enjoying a good period versus the last year, and a good period versus what we internally budgeted. We understand the macro side that is contributing to that, both the commodities and the specialty side, without going into a breakdown there. What we are getting more and more confident with and happy with is what's going on the agricultural side in the company. The strategy has always been there to differentiate and to grow the specialty fertilizer side, to grow in biostimulants, etc. And that is working, and we see that we are getting a healthy margin. That’s not necessarily a surprise, Joel, but we're happy with it. On industrial products, we also had a good quarter, but the selling price was nowhere near where we would like it. We were able to deliver a solid quarter, so those three divisions have done better.

That's helpful. And my final question is, in your release and presentation you use language like you intend to limit total potash sales this year to 4.6 million tons in expectation of improved conditions. It looks like you don’t have the production to do more than 4.6. You mentioned holding back volume to get a better price next year. Is this improved conditions in logistics? What message are you putting out there today about production, sales, and discipline?

So the message is simple. Currently, we're capable of producing about 4.65 this year. And we're capable of selling about 4.75. But at this point, it doesn't make sense to sell any more than we've already committed. The reason is twofold. One, is because prices are firming for next year. We have already sold for January and February. And second, due to the current logistic challenges, we feel that if we can defer sales, we can get better transportation costs. If the security situation improves, it’s beneficial. If it doesn't improve, then it's only the pricing. Additionally, we took preventive maintenance steps this quarter, resulting in our maximum production for this year being just over 4.6 million tons.

Thank you.

Thank you, Joel.

Thank you. We will move next with Kevin Estok with Jefferies. Please go ahead. Your line is open.

Hi, good morning, good afternoon everyone. I guess with respect to the innovation platform, I'm just curious about your appetite for investing in white spaces. If the EU goes forward with allowing gene editing for fruits, vegetables, etc., could ICL get into that space as a way to possibly hedge risk, improving nutrient efficiency?

Could you repeat the question? It was difficult for us to hear.

Sure. I was asking about your appetite for investing in white spaces, like gene editing for fruits and vegetables. Would you consider investing in those areas to hedge against risk, potentially improving nutrient efficiency?

Okay, I'll take that and try to answer you, taking it a little broader. Starting with the mere setup of Growing Solutions, it's our flag to be innovative and differentiate ourselves. We are investing in areas we believe will be significant in the future of agriculture, specifically in biologicals, delivery systems, and better uptake inside the plant. However, what we are not doing is making leaps into exploratory areas like gene editing today. We will expand gradually, building block by block in our innovation without jumping too far ahead. That's the strategy we are following.

Thank you very much.

Thank you.

Thank you, Kevin. Okay. Thank you very much for joining us for our conference call for Q3. I want to thank ICL employees for their great contribution to a fine quarter. We're very positive about the way we're positioned for future growth now, with the markets looking the way they are. Hopefully, when the geopolitical constraints go away, we're ready to take off. I look forward to reporting back to you on fourth-quarter results and full-year results. Thank you very much for joining us today, and have a great rest of the day.

Thank you.

And this does conclude today's program. Thank you for your participation. You may disconnect at any time.