Q1 2026 ICL Group Ltd Earnings Call

May 13, 2026

Operator 2: Hello, everyone. Thank you for joining us, and welcome to the ICL Q1 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 one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Peggy Reilly Tharp, Vice President of Global Investor Relations. Peggy, please go ahead.

Operator: Hello, everyone. Thank you for joining us, and welcome to the ICL Q1 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 one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Peggy Reilly Tharp, Vice President of Global Investor Relations. Peggy, please go ahead.

Speaker #1: 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 Riley Tharp, Vice President of Global Investor Relations, Peggy, please go ahead.

Peggy Reilly Tharp: 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 conference call. This event is being webcast live on our website at icl-group.com. There will be a replay available a few hours after the live call. 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 on our presentation, are also 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.

Speaker #3: Thank you. Hello, everyone. I'm Peggy Riley 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.

Speaker #3: 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.

Speaker #3: 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 also available on our website.

Speaker #3: 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.

Peggy Reilly Tharp: 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. Elad Aharonson, followed by Mr. Aviram Lahav, our CFO. After the presentation, we'll open the lines for a Q&A session. I would now like to turn the call over to Eyal.

Speaker #3: 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.

Speaker #3: We will begin with a presentation by our CEO, Mr. Elad Aharonson, followed by Mr. Aviram Lahav, our CFO. After the presentation, we'll open the line for a Q&A session.

Speaker #3: I would now like to turn the call over to Elad.

Elad Aharonson: Thank you, Peggy, welcome everyone to a review of our Q1 2026 earnings. We delivered a strong start to the year with sales of $2 billion, up 14% year-over-year, as you can see on slide 3. ICL delivered solid sales growth for each business segment in the Q1 and reported a 26% increase in adjusted net income. We also reported a 15% increase in adjusted EBITDA and an improvement in adjusted EPS of 22%. This successful performance was achieved as the company demonstrated exceptional execution and operational resilience. We also benefited from our distinctive global presence with regionally diversified operations. In the Q1, we continued to execute against our strategy to drive growth in specialty crop nutrition and Specialty Food Solutions.

Speaker #4: Thank you, Peggy, and welcome, everyone, to a review of our first quarter 2026 earnings. We delivered a strong start to the year, with sales of $2 billion up 14% year over year, as you can see on slide 3.

Speaker #4: ICL delivered solid sales growth for each business segment in the first quarter and reported a 26% increase in adjusted net income. We also reported a 15% increase in adjusted EBITDA, and an improvement in adjusted EPS of 22%.

Speaker #4: This successful performance was achieved as the company demonstrated exceptional execution and operational resilience. We also benefited from our distinctive global presence, with regional diversified operations.

Speaker #4: In the first quarter, we continued to execute against our strategy to drive growth in specialty crop nutrition and specialty food solutions. We completed the acquisition of approximately 50% of Biotech ingredients and we established our first specialty fertilizer production facility in India.

Elad Aharonson: We completed the acquisition of approximately 50% of Bartech Ingredients. We established our first specialty fertilizer production facility in India. For Q1, we delivered good growth across key financial measures. Adjusted net income was $139 million, which translates to $0.11 of earnings per share. Consolidated adjusted EBITDA of $412 million improved year-over-year. This growth was despite higher costs for raw materials and more than $20 million of impact from currency exchange fluctuations. As a reminder, as a dollar-dominated company, a stronger shekel makes it more costly for our operations in Israel. Operating cash flow of $195 million improved 18% on an annual basis. Free cash flow was $61 million in Q1.

Speaker #4: For the first quarter, we delivered good growth across key financial measures. Adjusted net income was $139 million, which translates to 11 cents of earnings per share.

Speaker #4: Consolidated adjusted EBITDA of $412 million improved year over year. This growth was despite higher costs for raw materials and more than $20 million of impact from currency exchange fluctuations.

Speaker #4: As a reminder, as the dollar dominated company, a stronger shekel makes it more costly for our operations in Israel. Operating cash flow of $195 million improved 18% on an annual basis, and free cash flow was $61 million in the first quarter, while we benefited from higher prices for bromine, potash, and commodity phosphate.

Elad Aharonson: While we benefited from higher prices for bromine, potash, and commodity phosphate, we also had to manage higher raw material costs, mainly for sulfur, but also for other inputs used by our specialty fertilizers. Let's review some of these pricing benefits and cost impacts in relation to our business segment and begin with Industrial Products. On slide 4, you can see Q1 sales of $349 million were up slightly year-over-year, while EBIT of $86 million was up 13%. Bromine prices had their best quarter since the end of 2022, even as some end markets, such as building and construction, remained soft. For flame retardant, overall sales increased. Bromine-based products benefited from higher prices and improved electronics and market demand. Sales of phosphorus-based flame retardants were impacted by continued softness in the construction end market.

Speaker #4: We also had to manage higher raw material costs, mainly for sulfur, but also for other inputs used by our specialty fertilizers. Let's review some of these pricing benefits and cost impacts in relation to our business segments and begin with industrial products.

Speaker #4: On slide 4, you can see first quarter sales of $349 million were up slightly year over year, while EBITDA of $86 million was up 13%.

Speaker #4: Bromine prices had their best quarter since the end of 2022, even as some end markets, such as building and construction, remained soft. For flame retardants, overall sales increased.

Speaker #4: Bromine-based products benefited from higher prices and improved electronics and market demand. Sales of phosphorus-based flame retardants were impacted by continued softness in the construction end market.

Elad Aharonson: Sales of clear brine fluids, which are used by the oil and gas industry during well completion, decreased as some activity in the Gulf of America shifted from Q1 to Q2. Specialty Minerals, which includes magnesia, calcium carbonate, and salt products, delivered higher sales year-over-year. This growth was due to increased demand from the food and pharmaceutical end market. Significant winter weather in North America in both Q4 of last year and Q1 of this year resulted in strong de-icing sales for the season. Turning to our Potash division on slide 5. For Q1, sales of $503 million were up nearly 25% year-over-year. EBIT of $172 million was up more than 45%. Our average potash price for Q1 was $362 CIF per ton.

Speaker #4: Sales of clear brine fluids which are used by the oil and gas industry during well completion decreased. As some activity in the Gulf of America shifted from the first quarter to the second, specialty minerals which include magnesium, calcium carbonate, and salt products delivered higher sales year over year.

Speaker #4: This growth was due to increased demand from the food and pharmaceutical end market. Significant winter weather in North America in both the fourth quarter of last year and first quarter of this year resulted in strong de-icing sales for the season.

Speaker #4: Turning to our Potash division on slide 5. For the first quarter, sales of $503 million were up nearly 25% year over year. EBITDA of $172 million was up more than 45%.

Speaker #4: Our average potash price for the first quarter was $362.50 per ton. This amount was up more than 20% year over year, and up 4% sequentially.

Elad Aharonson: This amount was up more than 20% year-over-year and up 4% sequentially. Potash production volumes came in at 1,177,000 metric tons in Q1 and were up 11% versus the prior year. These gains were achieved at both the Dead Sea and our operations in Spain as we continued to improve equipment availability and shorten downtime, amongst other efforts. During Q1, we continued to maximize our potash sales by prioritizing the best global markets. We also benefited from higher prices in the quarter. While potash remains much more affordable than nitrogen and phosphate, farmers require all three nutrients. Now turning to a review of Phosphate Solutions division on slide 6. For Q1, sales increased 18% to $679 million.

Speaker #4: Potash production volumes came in at $1,177,000 metric tons in the first quarter and were up 11% versus the prior year. These gains were achieved at both the Dead Sea and our operations in Spain, as we continued to improve equipment availability and shorten downtime amongst other efforts.

Speaker #4: During the first quarter, we continued to maximize our potash sales by prioritizing the best global markets. We also benefited from higher prices in the quarter.

Speaker #4: While potash remained much more affordable than nitrogen and phosphate, farmers require all three nutrients. Now turning to a review of phosphate solutions division on slide 6.

Speaker #4: For the first quarter, sales increased 18% to $679 million. Higher commodity phosphate prices helped drive sales growth, while specialties results were in line with market dynamics.

Elad Aharonson: Higher commodity phosphate prices helped drive sales growth, while specialties results were in line with market dynamics. Q1 EBITDA came in at $131 million and was impacted by higher raw material prices, especially for sulfur, which was up more than 100% in the quarter. For commodity phosphate, demand varied by region with significant price volatility as the escalation of the Middle East conflict accelerated price momentum. For specialty phosphate, customers in all regions focused on secure and reliable global supply chains. This is something ICL can uniquely provide as we have specialty phosphate production in six key regions. For our growth engine, Specialty Food Solutions, sales increased in Q1, reflecting the addition of new customers, continued growth in China, and the acquisition of Bartech Ingredients. In North America, specialty food sales were strong in Q1.

Speaker #4: First quarter EBITDA came in at $131 million and was impacted by higher raw material prices especially for sulfur, which was up more than 100% in the quarter.

Speaker #4: For commodity phosphate, demand varied by region, with significant price volatility as the escalation of the Middle East conflict accelerated price momentum. For specialty phosphate, customers in all regions focused on secure and reliable global supply chains.

Speaker #4: This is something ICL can uniquely provide, as we have specialty phosphate production in six key regions. For our growth engine, specialty food solutions, sales increased in the first quarter, reflecting the addition of new customers, continued growth in China, and the acquisition of Biotech Ingredients.

Speaker #4: In North America, specialty food sales were strong in the first quarter. These were led by our dairy plus products, with growth driven by new business conversions, which were up double digits.

Elad Aharonson: These were led by our Dairy Plus products with growth driven by new business conversions, which were up double digits. We continued to target higher growth food specialty products and to focus on plant and protein-based beverages in key regions. We also launched a new digital marketing campaign targeting high protein dairy and dairy alternatives. For emerging markets, especially Asia, we also saw good growth. In China, we saw improvement in the processed meat category and an overall increase in sales of our Specialty Food Solutions. For our YPH joint venture in China, sales increased year-over-year on higher prices. We also saw improved efficiencies with reduction in fixed costs. This brings us to our Growing Solutions business division on slide 7. Sales for the Q1 increased 11% to $551 million.

Speaker #4: We continued to target higher growth food specialty products and to focus on plant and protein-based beverages in key regions. We also launched a new digital marketing campaign targeting high protein dairy and dairy alternatives.

Speaker #4: For emerging markets, especially Asia, we also saw good growth. In China, we saw improvement in the processed meat category and an overall increase in sales of our specialty food solutions.

Speaker #4: For our YPA joint venture in China, sales increased year over year on higher prices. We also saw improved efficiencies with reduction in fixed costs.

Speaker #4: This brings us to our growing solutions business division on slide 7. Sales for the first quarter increased 11% to $551 million. EBITDA of $49 million was up 4% versus the prior year, even as higher raw material costs impacted most regions.

Elad Aharonson: EBIT of $49 million was up 4% versus the prior year, even as higher raw material costs impacted most regions. Sales of specialty fertilizers increased on both higher volumes, mainly in China and India, and higher prices. In Europe, overall sales and profitability increased on higher prices and volumes, driven by continued mix optimization. For Asia, results were robust with growth from all major products. Sales growth was driven by higher prices and volumes and favorable exchange rate. Gross profit, however, was flat. For North America, profitability was stable versus prior year. However, due to a slow start to spring planting, sales were flat in this region with higher prices and lower volumes. For Brazil, global uncertainty and market competition impacted results. Sales decreased on lower volumes, and gross profit also declined with a less profitable product mix.

Speaker #4: Sales of specialty fertilizers increased on both higher volumes, mainly in China and India, and higher prices. In Europe, overall sales and profitability increased on higher prices and volumes, driven by continued mix optimization.

Speaker #4: For Asia, results were robust, with growth from all major products. Sales growth was driven by higher prices and volumes, and favorable exchange rates. Gross profit, however, was flat.

Speaker #4: For North America, profitability was stable versus prior year. However, due to a slow start to spring planting, sales were flat in this region, with higher prices and lower volumes.

Speaker #4: For Brazil, global uncertainty and market competition impacted results. Sales decreased on lower volumes, and gross profit also declined, with a less profitable product mix.

Elad Aharonson: As I mentioned earlier, in India, we opened a new specialty water-soluble fertilizer facility. With 30,000 metric tons of annual capacity, these operations will help to expand our local manufacturing capabilities. This new facility also support growing market demands and strengthen our supply chain. Finally, the sales process of our Boulby operation in the UK remains ongoing. Before turning to slide 8, I would like to provide a brief update on the situation in the Middle East. While we faced some operational challenges in the Q1, which were caused by the war, our efforts to minimize disruption and maintain good production levels were successful. Now for some Q1 key takeaways. We delivered a strong start to the year with good growth across all key financial metrics. This success was despite events outside of our control.

Speaker #4: As I mentioned earlier, in India, we opened a new specialty water-soluble fertilizer facility. With 30,000 metric tons of annual capacity, this operation will help to expand our local manufacturing capabilities.

Speaker #4: This new facility also supports growing market demand and strengthens our supply chain. Finally, the sales process of our Balbi operation in the UK remained ongoing.

Speaker #4: Before turning to slide 8, I would like to provide a brief update on the situation in the Middle East. While we faced some operational challenges in the first quarter, which were caused by the war, our efforts to minimize disruption and maintain good production levels were successful.

Speaker #4: Now for some first quarter key takeaways. We delivered a strong start to the year with good growth across all key financial metrics. This success was despite events outside of our control.

Elad Aharonson: Nonetheless, we swiftly navigated changes in market conditions and demonstrated operational resilience with exceptional execution. We also focused on what we could control and made production improvements to help drive efficiencies across our operations. While the teams have made great strides, some of this success is being masked by exchange rate fluctuations. In addition to currency headwinds, which could potentially linger throughout 2026, we have seen high raw material costs across several of our business segments. We will continue to manage these inputs and, if necessary, work to offset any impact through efficiency efforts. Now before turning the call over to Aviram Lahav, I would ask you to turn to slide 9 and a review of our guidance for 2026. After a successful Q1 that benefited from higher bromine and potash prices, which are expected to remain elevated, we are raising our guidance by $100 million.

Speaker #4: Nonetheless, we swiftly navigated changes in market conditions and demonstrated operational resilience through exceptional execution. We also focused on what we could control and made production improvements to help drive efficiencies across our operations.

Speaker #4: While the teams have made great strides, some of these successes are being masked by exchange rate fluctuations. In addition to currency headwinds, which could potentially linger throughout 2026, we have seen higher raw material costs across several of our business segments.

Speaker #4: We will continue to manage these inputs and, if necessary, work to offset any impacts through efficiency efforts. Now, before turning the call over to Aviram, I would ask you to turn to slide 9 and a review of our guidance for 2026.

Speaker #4: After a successful first quarter that benefited from higher bromine and potash prices, which are expected to remain elevated, we are raising our guidance by 100 million dollars for 2026.

Elad Aharonson: For 2026, we now expect consolidated EBITDA to be between $1.5 billion to $1.7 billion. For Potash sales volumes, we continue to expect this amount to be between 4.5 million and 4.7 million metric tons as we continue to benefit from the operational improvements made at the Dead Sea and in Spain in 2025. Finally, we expect our annual adjusted tax rate to be approximately 30%. For 2026, we plan to remain on our current path to operate with resilience, execute against our plans, and deliver shareholder value. In addition, we will continue to monitor the exchange rate between the shekel and dollar and higher raw material prices. With that, I would like to turn the call over to Aviram for a brief financial overview.

Speaker #4: We now expect consolidated EBITDA to be between 1.5 billion to 1.7 billion dollars. For potash sales volumes, we continue to expect this amount to be between 4.5 million and 4.7 million metric tons as we continue to benefit from the operational improvements made at the Dead Sea and in Spain in 2025.

Speaker #4: Finally, we expect our annual adjusted tax rate to be approximately 30%. For 2026, we plan to remain on our current path to operate with resilience, execute against our plans, and deliver shareholder value.

Speaker #4: In addition, we will continue to monitor the exchange rate between the shekel and dollar and higher raw material prices. And with that, I would like to turn the call over to Aviram for a brief financial overview.

Aviram Lahav: Thank you, Elad, and to all of you for joining us today. Let us get started on slide 11 with a quick look at quarterly changes in key market metrics. On a macro basis, global inflation rates for Q1 were down slightly versus the prior quarter, with the exception of India, which was up 200 basis points. Turning to interest rates, which were also relatively stable across all regions at the end of Q1, including for Brazil. Looking to exchange rates, the shekel strengthened versus the US dollar in Q1. As Elad mentioned, as a dollar-denominated company, this makes it more costly for operations in Israel. While we use hedging tactics to help reduce some of this exposure, if the shekel remains strong into H2 of the year, this effect will become more pronounced.

Speaker #2: Thank you, Elad. And to all of you for joining us today. Let us get started on slide 11 with a quick look at quarterly changes in key market metrics.

Speaker #2: On a macro basis, global inflation rates for the first quarter were down slightly versus the prior quarter. With the exception of India, which was up 200 basis points.

Speaker #2: Turning to interest rates, which were also relatively stable across all regions at the end of the first quarter, including for Brazil. Looking to exchange rates, the shekel strengthened versus the US dollar in the first quarter.

Speaker #2: As Elad mentioned, as the dollar denominated company, this makes it more costly for operations in Israel. While we use hedging tactics to help reduce some of this exposure, if the shekel remains strong into the second half of the year, this effect will become more pronounced.

Aviram Lahav: Wrapping up our macro metrics, you can see that US housing starts trended up slightly by the end of Q1. For fertilizer metrics, the picture was more mixed. On the positive side, the grain price index improved on a quarterly basis, with corn, rice, soybeans, and wheat all trending up. However, when compared to previous Q1s, most prices are down significantly. In the US, for example, farmers are facing 1 of the widest gaps in a decade between what they pay to produce food and what they earn from selling it. Not surprisingly, farmer sentiment in the US declined in Q1 as global affordability for fertilizers dropped to its lowest in nearly 5 years due to fertilizer price spikes following the advent of war in the Middle East.

Speaker #2: Wrapping up our macro metrics, you can see that US housing stocks trended up slightly by the end of the first quarter. For fertilizer metrics, the picture was more mixed.

Speaker #2: On the positive side, the grain price index improved on a quarterly basis with corn, rice, soybeans, and wheat all trending up. However, when compared to previous first quarters, most prices are down significantly.

Speaker #2: In the US, for example, farmers are facing one of the widest gaps in a decade between what they pay to produce food and what they earn from selling it.

Speaker #2: Not surprisingly, farmers' sentiment in the US declined in the first quarter, as global affordability for fertilizers dropped to its lowest in nearly five years.

Speaker #2: Due to fertilizer price spikes, following the advent of war in the Middle East, farmers' sentiment dropped again in April, with 46% of farmers stating high input costs as their biggest concern, while 14% cited input availability as their biggest concern, up from 11% at the end of the first quarter.

Aviram Lahav: Farmer sentiment dropped again in April, with 46% of farmers stating high input costs as their biggest concern, while 14% cited input availability as their biggest concern, up from 11% at the end of Q1. According to Argus, nutrient affordability fell to 0.57 points in March, the lowest since November 2021. As I just mentioned, while crop prices have improved, they have not strengthened enough to balance out the increases in fertilizer prices. In Q1, spot Potash prices in the US declined nearly 6% on a sequential basis. ICL's Q1 average Potash price was $362 per CIF ton, up 4% sequentially and 21% on an annual basis. During Q1, prices for TSP, urea, and sulfur all increased.

Speaker #2: According to Argus, nutrient affordability fell to 0.57 points in March, the lowest since November of 2021. As I just mentioned, while crop prices have improved, they have not strengthened enough to balance out the increases in fertilizer prices.

Speaker #2: In the first quarter, spot potash prices in the US declined nearly 6% on a sequential basis. However, ICL's first quarter average potash price was $362 per CIF ton, up 4% sequentially and 21% on an annual basis.

Speaker #2: During the first quarter, prices for TSP, urea, and sulfur all increased, and as we are consumers of these three inputs, we experienced higher raw material costs in the quarter.

Aviram Lahav: As we are consumers of these three inputs, we experienced higher raw material costs in the quarter. In addition, there was a mid-single digit increase in ocean freight rates over the same time frame. Beyond agricultural indicators, we also track other metrics, including those that are relevant to our Phosphate Solutions and Industrial Products segments. Our phosphate specialty solutions are an important part of the food and beverage end markets, and this is an area we are targeting for growth, both organically and via M&A. In the US, retail trade and food services improved in Q1. For P2O5, prices remained stable. For our Industrial Products segment, we track the consumption of durable goods. In the US, these expenditures picked up in Q1. The spot bromine price in China is clearly an important metric for this segment.

Speaker #2: In addition, there was a mid-single-digit increase in ocean freight rates, over the same timeframe. Beyond agricultural indicators, we also track other metrics. Including those that are relevant to our phosphate solutions and industrial product segments.

Speaker #2: Our phosphate specialty solutions are an important part of the food and beverage end markets, and this is an area where targeting for growth was organically and via M&A.

Speaker #2: In the US, retail trade and food services improved in the first quarter. For P205 prices, they remain stable. For our industrial product segment, we track the consumption of durable goods in the US.

Speaker #2: These expenditures ticked up in the first quarter. The spot bromine price in China is clearly an important metric for this segment. Bromine prices continue to increase in the first quarter, and reached another peak in April.

Aviram Lahav: Bromine prices continued to increase in Q1 and reached another peak in April. Although prices have moderated somewhat since then, we expect they will remain elevated throughout 2026. If you will now turn to slide 12 for a look at our Q1 sales bridges. On a year-over-year basis, sales were up to $156 million or approximately 14%, with all 4 segments demonstrating growth. Turning to the right side of the slide, you can see a $159 million benefit from higher prices this quarter, which was enhanced by higher volumes. Exchange rates also had a positive impact on sales in Q1. On slide 13, you can see our Q1 adjusted EBITDA, which improved approximately 15% versus the prior year, with Industrial Products, Potash, and Growing Solutions all contributing.

Speaker #2: Although prices have moderated somewhat since then, we expect they will remain elevated throughout 2026. If you will now turn to slide 12 for a look at our first quarter sales bridges, on a year-over-year basis, sales were up to $156 million or approximately 14%, with all four segments demonstrating growth.

Speaker #2: Turning to the right side of the slide, you can see a 159 million dollar benefit from higher prices this quarter. Which was enhanced by higher volumes.

Speaker #2: Exchange rates also had a positive impact on sales in the first quarter. On slide 13, you can see our first quarter adjusted EBITDA, which improved approximately 15% versus the prior year, with industrial solutions, potash, and growing solutions all contributing.

Aviram Lahav: Prices had a +$159 million impact, which was partially offset by exchange rate fluctuations. As a reminder, this trend is expected to continue if the shekel maintains its strength versus the dollar. In Q1, we also saw a significant increase in raw material costs, especially for sulfur, as previously mentioned. We are aware that concerns over higher prices for raw materials, energy availability, and fertilizer supply are expected to continue until the situation in the Middle East is peacefully resolved. No matter what comes next, we plan to continue on our current path to operate with resilience, execute against our plans, and deliver shareholder value. Turning to slide 14 and a few more Q1 financial highlights. Our balance sheet remains strong with available resources of $1.5 billion.

Speaker #2: Prices had a positive impact of 159 million dollars, which was partially offset by exchange rate fluctuations. As a reminder, this trend is expected to continue if the shekel maintains its strength versus the dollar.

Speaker #2: In the first quarter, we also saw a significant increase in raw material costs, especially for sulfur, as previously mentioned. We are aware that concerns over higher prices for raw materials and energy availability and fertilizer supply are expected to continue, until the situation in the Middle East is peacefully resolved.

Speaker #2: But no matter what comes next, we plan to continue on our current path—to operate with resilience, execute against our plans, and deliver shareholder value.

Speaker #2: Turning to slide 14, and a few more first quarter financial highlights. Our balance sheet remains strong, with available resources of one and a half billion dollars.

Aviram Lahav: In the quarter, we delivered operating cash flow of $195 million and an increase in free cash flow. Our net debt to adjusted EBITDA rate is at a stable 1.5x. Fitch and S&P both reaffirmed ICL's bond rating at BBB- with a stable outlook. Once again, we are distributing 50% of adjusted net income to our shareholders. This translates to a total dividend of $69 million in Q1 and results in a trailing 12-month dividend yield of 3.7%. Before turning the call over to the operator, I would like to honor the occasion of my final earnings call with ICL. It has been a remarkable 4+ years, and I want to thank all of my colleagues who have been great partners and friends.

Speaker #2: In the quarter, we delivered operating cash flow of $195 million, and an increase in free cash flow. Our net debt to adjusted EBITDA rate is at a stable one and a half times, in such an S&P, both reaffirmed ICL's bond rating at BBB minus, with a stable outlook.

Speaker #2: Once again, we are distributing 50% of adjusted net income to our shareholders. This translates to a total dividend of $69 million, in the first quarter, and results in a trailing 12-month dividend yield of 3.7%.

Speaker #2: Before turning the call over to the operator, I would like to honor the occasion of my final earnings call with ICL. It has been a remarkable four-plus years, and I want to thank all of my colleagues who have been great partners and friends.

Aviram Lahav: Over the next few weeks, I will be assisting with the transition to our new CFO, Asaf Alperovitz, I am confident that I am leaving you in good hands upon my retirement. With that, I would like to turn the call back over to the operator for the Q&A.

Speaker #2: Over the next few weeks, I will be assisting with the transition to our new CFO, Asaf Altorovic, and I'm confident that I'm leaving you in good hands upon my retirement.

Speaker #2: And with that, I would like to turn the call back over to the operator for the Q&A.

Operator 2: We will now begin the question-and-answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Benjamin Theurer with Barclays. Your line is open. Please go ahead.

Operator: We will now begin the question-and-answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Benjamin Theurer with Barclays. Your line is open. Please go ahead.

Speaker #1: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand.

Speaker #1: To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Ben Toirer with Barclays.

Speaker #1: Your line is open. Please go ahead.

Benjamin Theurer: Yeah, good afternoon to you, thanks for taking my question. First of all, congrats on a very good Q1 results, and Ari, congrats on retirement. My first question really is about the phosphate business, and you've highlighted a few things, obviously, as it relates to the cost headwinds, et cetera. I was just wondering what prices are and what you're seeing in the different areas, be it on the specialty side or more on the commodity side. How is demand currently shaping up? Obviously we're seeing all these high costs, and you've called out sulfur. I was just wondering what's demand looking like both on the more industrial side of it and then obviously on the ag side. Are there any signs of demand destruction?

Ben Theurer: Yeah, good afternoon to you, thanks for taking my question. First of all, congrats on a very good Q1 results, and Ari, congrats on retirement. My first question really is about the phosphate business, and you've highlighted a few things, obviously, as it relates to the cost headwinds, et cetera. I was just wondering what prices are and what you're seeing in the different areas, be it on the specialty side or more on the commodity side. How is demand currently shaping up? Obviously we're seeing all these high costs, and you've called out sulfur. I was just wondering what's demand looking like both on the more industrial side of it and then obviously on the ag side. Are there any signs of demand destruction? Where are we right now in phosphate? That would be my first question.

Speaker #3: Hi, yeah, good afternoon to you and thanks for taking my question. First of all, congrats on a very good first quarter results and congrats on retirement.

Speaker #3: So my first question really is about the phosphate business, and you've highlighted a few things, obviously, as it relates to the cost headwinds, etc.

Speaker #3: So I was just wondering were prices are and what you're seeing in the different areas, be it on the specialty side or more on the commodity side, how is demand currently shaping up?

Speaker #3: Because obviously we're seeing all these high costs and you've called out sulfur. So I was just wondering what demand looking like both on the more industrial side of it and then obviously on the ag side.

Speaker #3: Are there any signs of demand destruction? Where are we right now in phosphate? That would be my first question.

Benjamin Theurer: Where are we right now in phosphate? That would be my first question.

Elad Aharonson: Okay, Ben. Thank you. Thank you very much for the question, which is a very valid one. As you know, the sulfur prices are skyrocketing now, continue to increase. Also there is an availability issue. We heard that some of the other players reduced their production volume all across the board. For us, by now we see a solid demand, but I cannot guarantee that it will continue like this as we have to increase prices because of the mainly because of the sulfur prices. I don't know, it's fortunately probably for us that we are less in the business of DAP and MAP, which requires also ammonia, which also has a very high price nowadays.

Speaker #4: Okay, Ben, thank you very much for the question, which is a very valid one. So, as you know, the sulfur prices are skyrocketing now, continue to increase, and also there is an availability issue.

Speaker #4: We heard that some of the other players reduced their production volume all across the board. For us, by now we see a solid demand, but I cannot guarantee that it will continue like that.

Speaker #4: As we have to increase prices, because of the mainly because of the sulfur prices, I don't know, it's fortunately probably for us that we less in the business of DAP and MAP, which requires also ammonia, which also has very high prices nowadays.

Elad Aharonson: We are suffering from the sulfur prices, but less from the ammonia prices. Having said that, I would expect demand to be lower than usual in the rest of the year for phosphate fertilizer.

Speaker #4: So we are suffering from the sulfur prices, but less from the ammonia prices. Having said that, I would expect demand to be lower than usual in the rest of the year for phosphate fertilizers.

Aviram Lahav: I just want to add Ben one thing. It's the, in phosphate, we're basically facing two situations. One is obviously the issue of the sulfur and the rising prices. At the same time, there's another phenomenon, which is China and basically blocking export. The latest I'm aware of is that it's probably going to happen for the remainder of 2026. They are not forecasted to I mean, every year in the last few years, they've delayed it. They are actually the number 1 factor before the war, before the sulfur, that kept phosphate prices actually high and basically divergent from the potash side. At this time, with China basically blocking exports, it will become an issue of tight supply and probably some demand damage. Overall, there will be demand out there.

Speaker #3: I just want to add, Ben, one. It's the phosphate. e. Basically facing two situations. One is obviously the issue of the sulfur and the rising prices.

Speaker #3: But at the same time, there's another phenomenon, which is China and basically blocking exports and the latest I'm aware of is that it's probably going to happen for the remainder of '26.

Speaker #3: They are not forecasted to I mean, every year in the last few years they've delayed it. They are actually the number one factor before the war, before the sulfur, that kept phosphate prices actually high and basically divergent from the pot aside.

Speaker #3: But at this time, with China basically blocking exports, it will become an issue of tight supply and probably some demand damage, but overall there will be demand out there.

Aviram Lahav: Somebody has to fulfill it. It might be the case that, for ICL as a player, we will not face an issue to sell the stuff that we have. The prices side and how much they can go up, that's a different topic. I believe this sort of paints a picture of where we are now.

Speaker #3: Somebody has to fulfill it. It might be the case that for ICL as a player, we will not face an issue to sell the stuff that we have.

Speaker #3: The price aside and how much they can go up, that's a different topic. I believe this sort of paint a picture of where we are now.

Benjamin Theurer: Okay. Perfect. Thanks. My follow-up just for clarification, Gur, is it fair to assume that the increase in EBITDA for the year that give or take $100 million that you're looking at, that that is predominantly coming from a very solid Potash business where you have the volume, but actually now you get some momentum on the pricing side, which obviously flows right into EBITDA? Is that fair to assume?

Ben Theurer: Okay. Perfect. Thanks. My follow-up just for clarification, Gur, is it fair to assume that the increase in EBITDA for the year that give or take $100 million that you're looking at, that that is predominantly coming from a very solid Potash business where you have the volume, but actually now you get some momentum on the pricing side, which obviously flows right into EBITDA? Is that fair to assume?

Speaker #4: Okay, perfect. Thanks. And then my follow-up, just for clarification purposes, is it fair to assume that the increase in EBITDA for the year that give or take $100 million that you're looking at, that that is predominantly coming from a very solid potash business where you have the volume, but actually now you get some momentum on the pricing side, which obviously flows right into EBITDA?

Speaker #4: Is that fair to assume? Yeah, yes. And also, I think bromine prices will be higher than expected. Maybe less than the there was a spike at the beginning of the war and now prices are a bit down, but still it's higher than expected.

Elad Aharonson: Yeah. Yes. Also I think, bromine prices will be higher than expected.

Benjamin Theurer: Okay

Elad Aharonson: than the, you know, there was a spike at the beginning of the war, and now prices are a bit down, but still it's higher than expected.

Ben Theurer: Okay

Elad Aharonson: than the, you know, there was a spike at the beginning of the war, and now prices are a bit down, but still it's higher than expected.

Aviram Lahav: Much better demand.

Speaker #3: And much better demand.

Elad Aharonson: And much-

Aviram Lahav: Yes.

Speaker #4: yes.

Benjamin Theurer: Okay. Perfect. Thank you very much. I'll pop you off.

Ben Theurer: Okay. Perfect. Thank you very much. I'll pop you off.

Speaker #3: Okay, perfect. Thank you very much. I'll pass it on.

Aviram Lahav: Thank you.

Elad Aharonson: Thank you, Ben.

Speaker #2: Thank you.

Speaker #4: Thank you, Ben.

Speaker #2: Thank you, Ben.

Aviram Lahav: Thank you, Ben.

Operator 2: As a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Laurence Alexander with Jefferies. Your line is open. Please go ahead.

Operator: As a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Laurence Alexander with Jefferies. Your line is open. Please go ahead.

Speaker #1: As a reminder, if you would like to ask a question, please press star 1 to raise your hand. Your next question comes from the line of Lawrence Alexander, with Jefferies.

Speaker #1: Your line is open. Please go ahead.

Laurence Alexander: Good morning. Two questions. One, on the productivity front, can you give a sense for what levers you think you have to pull over the next, say, three to five years? Secondly, with you know, back to the phosphate, can you just give a rough rule of thumb for your sensitivity to sulfur cost? It sounds from your comments, do you think that the margin headwind there is a lag issue and that pricing, phosphate pricing should catch up to sulfur, as the supply-demand balance tightens?

Speaker #5: Good morning. Two questions. One, on the productivity front, can you give a sense for what levers you think you have to pull over the next say three to five years?

Speaker #5: And secondly, back to the phosphate, can you just give a rough rule of thumb for your sensitivity to sulfur costs? And it sounds from your comments, do you think that the margin headwind there is a lag issue and that pricing phosphate pricing should catch up to sulfur?

Speaker #5: As the supply-demand balance tightens?

Aviram Lahav: Yeah. I have to ask you again to repeat the first question, if I may. Sorry for that, Laurence.

Speaker #3: Yeah. I'd have to ask you again to repeat the first question if I may. Sorry for that, Lawrence.

Laurence Alexander: Just wanted to ask about structural productivity gains. I mean, you know, just how do you think about the net fixed cost savings you could generate over the next, say, 3 to 5 years? Like, what are the levers you can pull across your portfolio now?

Speaker #5: So just wanted to ask about structural productivity gains. I mean, just how do you think about the net fixed cost savings you could generate over the next say three to five years?

Speaker #5: What are the levers you can pull across your portfolio now?

Aviram Lahav: Okay. On the structural productivity side, let me say, you know, we rather like to show results when they are there, and the proof is in the pudding. However, since you asked this directly, I will answer that we do believe and we are currently engaged in significant structural productivity projects. They, over time, they should prove, I think, beneficial and importantly so, for ICL. I don't believe it is a good time yet to go into really deep down the phase as to what's happening. Suffice it to say, I believe that these projects are in motion, and they should basically give us a lot of wins.

Speaker #3: Okay. So on the structural productivity side, let me say by we rather like to show results when they are there. And the proof is in the pudding.

Speaker #3: However, I since you asked this directly, I will answer that we do believe and we are currently engaged in significant structural productivity projects. And they over time, they should prove I think beneficial and importantly so.

Speaker #3: For ICL. I don't believe it is a good time yet to go into really deep down details as to what's happening, but suffice it to say I believe that these projects are in motion.

Speaker #3: And they should basically give us a lot of wind. I will say that also on the productivity of the sites, what we are seeing is improvement as you've seen Lawrence what's going on on the pot aside.

Aviram Lahav: I will say that, also on the productivity of the sites, what we are seeing is improvement. As you've seen, Laurence, what's going on on the Potash side. We have basically increased production in both Israel and also Spain, and we continue to look into that. Other places are running at, our Phosphate sites are running at, also at the capacity, which is a good sign. Generally speaking, we are looking into all these aspects, and this should be, as I said before, should prove to give us quite a lot of back wins going forward. We'll report to on these things as they surface, and then we can show solid like proven there. This was the first side.

Speaker #3: We have basically increased the production and both Israel and also Spain. And we continue to look into that. Other places are running at phosphate sites are running also at the capacity, which is a good sign.

Speaker #3: But generally speaking, we're looking into all these aspects and this should be, as I said before, should prove to give us quite a lot of backwind going forward.

Speaker #3: We'll report on these things as they surface and then we can show solid improvement there. This was the first side. I don't know if there'll be a follow-up.

Aviram Lahav: I don't know if there'll be a follow-up. I already answered that. you asked something which is a different question. Second question was different. It was basically the sensitivity to sulfur, which is basically dependent, you know, on the product. there is generally, there obviously there is a significant correlation between the price of sulfur and ultimately either the price or the margin that we take out on phosphate. The catch-up, this is the main question, and a very good one, is basically to what extent are we able to compensate fully or not so on the price of phosphate to basically to forego this increase? I would say it is partial. It is not full.

Speaker #3: I'll gladly answer that. You asked something which is a different question. The second question was different. It was basically the sensitivity to sulfur, which is basically dependent on the product.

Speaker #3: But there is generally obviously there is a significant correlation between the price of sulfur and the ultimately either the price or the margin that we act out on phosphate.

Speaker #3: The catch-up, this is the main question or a good one is basically to what extent are we able to compensate fully or not so on the price of phosphate to basically forgo this increase.

Speaker #3: I would say it is partial. It is not full. The prices of phosphate were already elevated when the price of sulfur was way below.

Aviram Lahav: The prices of phosphate were already elevated when the price of sulfur was way below. It was around $400, $500, and already prices were high. This was predominantly, as I stated to a previous question on the issue basically of China blocking export. At this stage, we do not see the prices rising up again to fully compensate. At the end of the day, partially, at least it should be the case. The forecast, I believe, and Elad knows, I do not feel this is one of the issues that we're pointing out and in the course of the whiteboard in saying that this is quite the challenge going forward. The big question is, what will happen on the price of sulfur?

Speaker #3: It was around $400, $500. And already prices were high. And this was predominantly, as I stated to a previous question on the issue, basically of China blocking exports.

Speaker #3: At this stage, we do not see the prices rising up again to fully compensate. But at the end of the day, partially at least, it should be the case.

Speaker #3: So the forecast, I believe in a lot more. I do not see this is one of the issues that we are pointing out. And the calls were straightforward in saying that this is a quite a challenge going forward.

Speaker #3: The big question is what will happen on the price of sulfur. Because not only the price is the extent, the news keep changing. I believe something like 50%, 50% of sulfur comes through the Gulf States.

Aviram Lahav: Because not only the price is the extent, you know, the news keep changing. I believe something like 50% of sulfur comes through the Gulf states, and this is something that can basically change overnight. It's a good question to see how this will transpire, for how long, what will be the effect. I can tell you that we continue to manufacture to speed. We are very careful with our purchases, thinking very carefully about how much we stack up, and this can change during the year. We were taking all these things into account whilst raising our guidance, and this obviously needs to continue to follow up. I'm not sure.

Speaker #3: And this is something that can basically change overnight. So it's a good question to see how this will transpire, for how long, and what will be the effect.

Speaker #3: I can tell you that we continue to manufacture full speed. We are very careful with our purchases. We're thinking very carefully about how much we stack up.

Speaker #3: And this can change during the year. So we were taking all these things into account while phrasing our guidance. But it's obviously to continue to follow up.

Speaker #3: I'm not sure.

Laurence Alexander: Thank you.

Aviram Lahav: Thank you. Thank you very much, Laurence Alexander.

Speaker #5: Thank you.

Speaker #3: Thank you. Thank you very much, Lawrence.

Operator 2: This concludes the question and answer session. I will now turn the call back to Elad Aharonson, President and CEO, for closing remarks.

Operator: This concludes the question and answer session. I will now turn the call back to Elad Aharonson, President and CEO, for closing remarks.

Speaker #1: This concludes the question and answer session. I will now turn the call back to Elad Aharonson, President and CEO for closing remarks.

Elad Aharonson: Thank you very everyone for joining today. A strong start of the year for ICL. We believe also the rest of the year will be positive, even though, as was mentioned, we will monitor raw material costs and also the exchange rate of shekel versus the dollar. You saw the guidance. I'll take this opportunity and thanks once again, Aviram Lahav, for four and a half years as a friend and a partner here. Huge contribution to ICL, and good luck in the retirement.

Speaker #2: So thank you everyone for joining today. Strong start of the year for ICL. We believe also the rest of the year will be positive.

Speaker #2: Even though, as was mentioned, we will monitor raw material costs and also the exchange rate of shekel versus dollar. And you saw the guidance.

Speaker #2: I'll take this opportunity and thanks once again, Aviram for four and a half years as a friend and partner here. Huge contribution to ICL and good luck in the retirement.

Aviram Lahav: Thank you so much, and everything. Good luck to all of us.

Aviram Lahav: Thank you so much, and everything. Good luck to all of us. Perfect. Thank you very much.

Speaker #3: Thank you so much and everything. Good luck to all of us. Perfect. Thank you so much.

Elad Aharonson: Perfect. Thank you very much.

Aviram Lahav: Thank you.

Elad Aharonson: Thank you. Thank you.

Elad Aharonson: Thank you.

Speaker #2: Thank you. Thank you.

Operator 2: This concludes today's call. Thank you for attending. You may now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

Speaker #1: This concludes today's call. Thank you for attending. You may now disconnect.

Operator 1: This event has now concluded. Thank you for joining ICL First Quarter Twenty-Twenty-Six Earnings Call International. The line will disconnect automatically.