ICL (ICL) 27 Jul 222022 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the ICL Analyst Conference Call.

Our presentation today will be followed by a question-and-answer session. [Operator Instructions] I'd like to hand the call over to our first speaker today, Peggy Reilly Tharp, Vice President of Global Investor Relations. Please go ahead, ma'am.

Thank you. everyone. Hello, Tharp, Global Reilly Relations. President Vice Peggy Investor of I'm you you us call. I'd welcome thank for earnings like to quarterly and joining our today for event at our live being The website is webcast icl-group.com. on reports with today, stock in U.S. the filed Earlier the exchanges we authorities and securities the our and in Israel. website. as reports our the are available press Those release as on well There will a the will available be of transcript after available be webcast a shortly replay and the thereafter. meeting on reviewed be authorities presentation, was website. filed with will securities available The the and is also today our which Please on be the X. Slide disclaimer sure to review

to Our meaning expectations comments on discussed statements Litigation of within guarantees undertakes today will at update call current contain this obligation performance. These are and forward-looking Reform any time. of statements the future financial are XXXX. management's company of Securities information the on any not based Private The Act no

will Mr. CEO, our by begin Aviram Raviv Zoller; presentation with Lahav, We by Mr. CFO. our the followed

open presentation, Q&A the the we will the line for Following please. Raviv, session.

from our and ICL profit well as of and as begin delivered our To EBITDA Solutions, and commodity as global and even prices. the X, company businesses once Peggy everyone. was another costs supply saw and prices the with upside additional businesses. Innovative specialties in Phosphate consecutive and quarter Solutions you, In along demand inflated company's margin material results chain with achieved all-time record and benefited Slide all most challenges our commodity strong increased from second focus from Industrial long-term was supported performance continue. solutions again Ag We and record as welcome, higher Thank raw The on specialty by Products, sales remained markets quarter, growth.

efficiency production we focused and We also records as achieved productivity. multiple on

upside, recently have commodity from go. and we While these cycles market come benefited

billion of of an cash nearly ICL and in $XXX nearly $X.X of again, increase made XXX%. billion benefit $X.X also billion, $X.X However, the free quarter, on an over expectations. ahead second helped terms. production have will up investments which and improvements million, more long-term record cash than us of our delivered sales more the generation we strong Once was record. long focus all-time our than deliver In the of Adjusted was EBITDA our flow

dispute Our pay our XX% resulted $X.XX versus the net $XX.XX in shareholders to quarter policy In XXX% to annual than Authority And out per second return on million finalized dividend $XXX adjusted to gained By dividend but and up certainly of year. tax a regarding least, the up Israeli ICL of future. the for a years significant surplus not will quarter. Tax more profit income, the total last share, of in settled previous disputes regarding the settling, with last regarding levy all we've a we certainty resources. natural

of his well in and call, this helps like specifics more and as have I call position the profile will management provide Aviram challenges. strongly to -- believe note regards to would related While will today's agreement of our with portion risk improve that regulatory concession public as clarity I

this better second End shift see bromine showed The strategic specialty maintained benefited resulting while performing The is first see others. sales. can still of second results, our quarter. margin XX%. once were than also diluted subdued now electronics of significant supplements and X, increased reopened quarter are up I all oil shows of Good second compound sales continue EBITDA This XX% business the the improvement nearly than are like from China also prices long-term was demand for our all-time fluids markets Quarterly five $X.XX, earnings operating to from expect brine adjusted industry was for our year-over-year. up share quarter. Sales business Products clear toward Demand in there up XXX% XX% including of to long-term and to year, up XX% moderate, up demand prices its in dietary to the turn on as continue slight million quarter more quarters. the also with Industrial we higher $XXX supply quarter shifted quarter. minerals million nearly Automotive was were bromine gas which world financial million automakers momentum This with again quarter in was record strong away also impressive begin added segment Slide contracts approximately Clearly, was and the into were XX% eased an strength as consumer quarter was Slide devices approximately and would X. parameters. key $XXX the while market quarterly flow demand up and Slide On the of higher agreements. benefit which cash reduction, industry overview review last more you than We've Products in triple-digit by some EBITDA third while have construction pharmaceutical but under more second end experiences of face the the these from year-over-year. year. and since to sales supported in the global the quarter from the XXX%. of from was mixed a somewhat to Consumer adjusted over continuing production one please EBITDA where for our nearly to challenges. products improvement Now as X, second they $XXX post-COVID. as the and XX%, our Industrial continue demand per a year-over-year. than

magnesium and applications. for chloride potassium chloride industrial also We sales higher saw of

year, of of XX capabilities half upgrade During to the in addition chain and supply the ISO continue to first we with tanks. more the invest our

unique flexibility capabilities. on bring tanks the efficiency more our logistic look to the the in half of of we year expect ISO maintain second We XX as to and

teams for a of our $XXX where EBITDA set records, Turning semi-annual in magnesium $XXX were all-time Spain production and production number others, million to Slide potash up XXX% record business. an advanced Spain, up second year-over-year. profit all-time half Cabanasses At production records quarterly our mine the the production was quarterly Dead Sea an record. our we Sea achieved Dead a and In the Works, and business among production X additional million granular expected and XXX% improvements including the and record year. all-time in of progress with of quarterly sales at of

$XXX and and lower the energy at logistical a In position, to terms sites We operational from and and we both came our the and in continue costs. price of strengthened of average from at benefit which leadership potash in higher efficiencies were magnesium improvements year-over-year both potash metal prices $XXX site, $XXX, year. quarter this realized Dead quarter and up Sea at our up both first our per perspective from was ton

to as on shipments average continued the third quarter we recent our sales due prices to higher of China. market are second the price competitor as quarter potash scheduled in in expect the We to business, metal in India space trend constraints. and a increased increase our convergence production In moderate price global to and the magnesium

specialty both joint and batteries full logistics. vehicles of million equipment long-term efficiency. both increased commodities our site, higher prices. Phosphate results maintained Ludwigshafen also in Solutions our venture demand combined more energy sales to our XXX%. increases, specialty up business quality were Europe, resulted specialties and LFP specialties from strategic also our and $XXX phosphate us commodity EBITDA energy at This than Also X division, for and ammonium year-over-year, and offerings. and prices in In our million efficient. $XXX driving Slide Ladenburg invested across fire profitability fertilizers with for following In which surge on as despite saw and for while in Germany food in site down industrial all to focus improved up of new production was record It benefited year. related saw solutions nearly which materials Demand production help returned YPH destined XX% higher production other China, last Turning a where specialties commodity for raw for cost used we as products the and fertilizers, in electric regions prices Germany, and stronger in make storage well offset grow record to continue more mono for shut

expanded while than Turning we strategic to record sales XX% sales continue all-time and were nearly XXX% Slide was X both and and million and more all-time XXX% XX% respectively. delivered representing up XXX%. momentum total IAS quarterly on approximately Innovative EBITDA Ag as up our where EBITDA $XXX positive also Solutions, an and was million $XXX fertilizer Organic up up of EBITDA of execution of sales record with

expectations in remains million in and planting hemisphere. and expansion Brazil results continuation enter this year synergies strategy even the Our trend traditionally prior quarter key season business beyond season. in $XXX and elevated in slower the up expect during robust this we demand we Southern of Overall the both as as our this contributed the delivered Brazil versus sales

a of winner terms both organic big quarter the market polysulphate and in was For price penetration.

continued have organic gain recognition and nutrients due products now product preferred plus and the additional for farmers to fertilizer Our composition. their to are many

X remains hoisting and the quarterly growth for to expansion China, to second new ICL million on target achieved time and XXXX. significant and achieve new Boulby the into Europe, production business a Indonesia. ton addition India it polysulphate contribution in In target gained as profit with a site monthly in record

and contended availability quarter. ornamental materials costs our turf products fertilizers solid like in and these all business with of Our raw of higher specialty remain lower the but

pricing. able to higher have we been these However, increases IAS across with offset

to to XX, the have areas sustainability, progress Now, innovation in Slide turn if some leadership. I like we and you made recent will of would review

the for For was where by comprehensive were responsibility MAALA, ESG in fourth we Platinum corporate awarded a the row rating most sustainability, index plus year Index the in this Israel. highest

ranked chemical received industrial, also were sustainability first efforts. score pharmaceutical and double among the our We for companies AA and

safety, prestigious was Our and Fertilizer health for Association. Leaf in by awarded site Spain International XXXX award the environment excellence Green the in

applicants a Our are the mining out confirms producer prestigious of its as In work when YPH green also in six only This a plant the for venture practices. from recognition XX sustainable list China. of our ranked of phosphate it companies Ministry achieving right comes protection. to certification comprised potash of companies, ecological joined in on its track an greenhouse of category in we the actions in leader gas reduce which the emissions. and circular XA joint and was selected award record YPH economy received to is Environment green developing mine China,

terms advancements LFP area States. innovation, battery are to we've production of the of expand into including our the and looking in United footprint we made In several

electrolytes. battery produce develop lithium-ion solid we advancing product materials, production we efforts While for our of cathode are to to currently the also liquid numerous offerings materials central in and

already optimization more and by yield touchpoints having exploring optimize We've these solution a digital of several RNAi. unique to a of both manufacturer raw leading a impact possible opportunities XXX market nutrition developing footprints. leveraging any than while providing and and are their phosphorus chemicals already carbon minimal the India, focus The with allocating digital improve range on creating are and partnered environment extra agronomist out ICL for developed through our genetic are for without and also field applications electrolyte PlantArcBio their modification. now crop the solutions to startup, and offering prescriptions crop targets and lithium-ion digital the for will production collaboratively through on We state-of-the-art in to Agmatix. yields, support nutrition yields of In putting U.S. a to farmers drive to This Europe different technology such battery the we boost shown technology ad India routes we materials rolled

our leadership supply a Potash with strengthened position long-term to organic as polysulphate XXXX. signed also We we Limited agreement through India in India

the to industry Louis, Business their Journal U.S. based the and its Innovation by Post-Dispatch award. lowest for finalist boost available feedback. on recently companies Spain three globally, since on to only fact the with the leadership Louis it was One nutrition one demonstrated Corporate the answer its received available for the by have ICL making sustainability organic U.S., India's Community as first cost-effective organic of of employee St. rating is Israel, to ICL efforts. of one to category outside the the Israeli expected these the of Philanthropy the the all ESG advanced agriculture endeavors it St work innovating span largest of in was one and The and and in item help companies China, the possible globe. program. area the workplaces in and and XX overall, the firm. in As is you ICL's of for leading all year. and business named in a state, companies are us also by The improved corporate impressive leading, the made making and to a and first traded the top In ICL the the Louis know, this governance, from received place publicly in achievements XXXX Government prior companies in they to improving Israel among banking India, employees natural best sector solely corporate highest on Philanthropy BDI, St ranked place governance it polysulphate rating also In to Entropy, also to through was from that From improvement conditions beyond, footprint team moving crop named earth Giving common Group has in for is honor. ranked information carbon ranking company We up Israel. industrial of of and XX award the the

wrap Finally, of I today's like up would portion call Slide my reviewing by XX. to

year unusual strategy to position as peers. specialty future have to strengthen far, focus more we and will our comparison been continued has continue to leadership on its we so long-term so ICL based its this the to do and allows commodity in this While

capacity to ability balance And expansion the new Our among focus do investments global remainder will performance including M&A, as quarter environment in to clarity our the allows others. the to have macro our business grow in in products specialty how not R&D, us and this out reaffirms area strategy. through We strong the opportunities play XXXX. of on sheet for

Southern additional second to the expect provider business half its the leverage reap of we Brazilian our position season. as of benefit key and to to solutions for from enters global continue Hemisphere chemical the year, specialty as our planting However, a

joint We businesses business the magnesium all venture as in and in such our had also polysulphate YPH our expect China as well profitability past. from operations metal as Kingdom, to see our continued the which in United contribution negative our

during across We it for the like find will the also markets. crisis, areas innovate to for in challenges to batteries of LFP us Especially this food agricultural important end is do production the and continue to around world. solutions time help our and part for and food innovate

is on seeing the commodity the great the and are we remember must to While we for and temporary high at strong value cash our of generation to currently a top our part results, shareholders. creation ball we cycle and then this future of focus keep that a long-term are and need on eye continue

results across the I work hard spread family want the always, As globe as thank entire employees their we ICL all of out contributions record again. and to delivered once for

over the and Aviram. proud to are will we of that, profitability sales broke history celebrating company that and years records quarter, call I again. This turn all-time with our And XXX of feel our once we

Thank joining today. for you, Raviv and to us all of you

a you've to slide additional would out seen XX, highlights. call few already While like I

income than million in Second XX.X% of more XXX% $X,XXX second of adjusted operating quarter operating from was of quarter up margin year. up the last was XX.X% and dramatically adjusted

quarter, the million year-over-year. was more than adjusted net income $XXX For of up XXX%

in remained world. greater Ukraine others chain If most the strong trends The and continued that changes some continued day growth into remained relief uncertainty. saw cases countries seems Global disruptions if limited many you has it been inflation prices both will macro brings There not to the even been will we high. situation ICL around in see commodity resolved for the and supply and soar Slide even second. to of XX, from as the each turn first as in quarter grain have in you the and and

we teams However, tirelessly capabilities. our our to the and supply supply have logistics advantageous chain overcome have leverage locations production continued worked procurement and and these to challenges global chain

trend during level decades, XX, and highest the surging In while euro. two On its you addition, prices with with U.S. currencies rates prices at nearly quarter times continues freight parity declined taper slightly. the fluctuate and potash to dollar phosphoric the to continued see can higher have to acid sulfur hovering second for its slide in

raw year. we more increase expected the of to for in were prices in While half quarter, able the uncertain materials is the second offset become to this in the

in the quarter see soy the elevated you and Turning and XX, trends can as rice nearly leveled Corn wheat. also the elevated Ukraine but declining quarter Prices sharply of prices where to the were export saw as of crop remained with progressed world's half the the of end first this the the Slide of increases for the while XX% year. Understandably, small rice towards soy economics prices throughout off combined most beginning quarter. increases moderated. second wheat higher Russia were for

Friday, beginning Ukrainian And tons of first the in agreed invasion. exports declined since Sea two to prices of just However, the the countries the June. last Black grain Russian resume time for millions via of

the side the year-over-year On impact XX, you prices see Slide sales higher of on of can our left growth.

quantities, slower recent second in sales during even from season Brazil, in the Innovative comprise saw contribution For Brazilian quarter. we and acquisitions Solutions these XX% the of traditionally Ag acquisitions positive

commodity phosphate even soared, represented of solutions on for phosphate XX% strategic which our second specialty For sales we total sales, the long-term in focus maintained quarter. prices as phosphate

to the impact of our of On you in our to segments results. the can continuing right slide, higher prices sales through improvement the with from side of see four all flow

the significant segment basis, improvement. once to of that four businesses the to contribution contributed prices higher on made Slide all our year-over-year Turning can And you again XX, see EBITDA. adjusted

highlights now would For like made Slide phosphate specialties EBITDA this review phosphate I to for of few a XX. segment. solutions, on XX% up

quarter X.X ratio times quarter, net last year. our EBITDA from in the to improved X.X times For second the of second debt

drive cost in flow we to growth efficiencies. have Raviv continued generation cash controls As mentioned, and through

to of the also peer for our end shareholder group. quarter, yield and at dividend We our is continue deliver X% second value the high nearly

to with move I Q&A, the would we Before recent address settlement like Israeli Tax our to Authority.

XXXX Levy provides settled calculation regarding $XXX discussed, Profit reported and prior In expenses through the XXXX included total of quarter, tax which the tax for expenses also previously resources. outlines final million tax XXXX of the onwards. dispute years natural in million. second for This the settlement significant for we Surplus As amount have levy tax a on the assessments of the and of $XXX year we

$XXX of XX%. our an Excluding million rate expense effective amount, this tax tax reflecting was

the year, expense For million the effective quarter The tax for the the of on first company's tax Profit prior-year last half XXXX second reflected excluding an total was XX% year. rate and for result of $XX XX% expenses the tax The XX%. represent the the of our was current Levy $XXX rate of tax higher and rate tax approximation the expenses versus half of of tax million above first impact tax relatively settlement of relating to the Surplus last rate. the was an of

we forward, the be range. tax XX% in expect Going to our rate ongoing

Slide results to increase XX. million of of in to I guidance, XXXX, million your to the in range attention which to expect deliver an from between reflects call previous strong to We million. guidance $X,XXX our updated and an $X,XXX $X,XXX very billion $X adjusted would Turning EBITDA our now like first half.

ICL congratulate a this over million. fertilizer Zoller behalf contribution an specialty from note of leader calling its before is our Sustainability like been approximately in $X,XXX honor to I are to named to And would International that his of previous Board is And the recognize million to turn among operator, Chair back Our $X,XXX role the can $X,XXX the expected Q&A. One Fertilizer final Raviv of call businesses the peers as and addition I for Executive operator, to expectations we of as Member million, a on ICL, with has the him. fantastic well-deserved we and million sustainability CEO, begin recognizing that to This contribute Committee. $X,XXX Association. up

Mubasher [Operator line Our Thank of go question Please Instructions] Chaudhry. you. today from comes first ahead. the

Hi, me? hear can you

Yes, you. thank

Hi Perfect. Okay, questions. for taking my you guys. Thank

product. on potash one with Just and the to a then market the industrial start couple on

for the to So the thoughts Belarus. around and India to on market some back then more So market remain of in is a you was is potash. specifically a Industrial potential of remaining chatter the Or some potash And expect gap? see in this continued prices the rest to price on the still can quarter. the there you thoughts we're you do the the more things, of off. hearing coming given first of you. the the into year then Chinese you Should spot and of [ASP] side China? comment year? we softening press on close or Products. see coming out for of provide coming that's average rest your to do quite to the a volumes provide supply discount for size be expect them your release, Can on The how year the see tons There the the the pressures And the to part the phosphorus pricing. around you to whether your you at and preserved contracted discount Thank

that So first why potash question. I is not maybe sure, prices. think you explain the this I'm market our on understood

up I'm a broke little sorry, you bit.

market. potash the on So

Belarusian coming wondering coming of having seeing okay. out I Belarusian -- lot tons and impact we on an tons -- was a into the market So whether more are that's market the

to From expectation the about product able without are information that going little not XXX,XXX China. through the I the according ports but small about According in and the rail is up and to they very would XXX,XXX that have their hearing, they're we're yet, a we when about sanctions that to third over various put from or month a get was Belarusians were a what [Klaipeda], XXX,XXX achievable be of tons place, better. tons of the beginning to to market think Port there to the

from the that stay is expectation market. our So will million to absent X tons X million

That's regarding So Belorussia. that's existing the Belarus information. --

a mix prices price. of spot price realized price we average on In present terms and contracts our is potash, and the average of

$X,XXX. quarter, bit. So second will Contract prices in Brazil was average prices, the over quarter, in expect know, XXX. In second the you we as the price soften a

the So still the they be significantly than in quarter, first second quarter. lower but higher than will

So around for for $XXX third our expectation quarter. quarter the is third

do Products, electronics in on question last consumer we in gas, your a also in we vehicle softness. strength and and to long see Part lockage's and change demand think Regarding in long currently demand. term is of has situation Industrial electric automotive, as that strong sectors some in see coming such the with relative certain and very from oil China in temporary automotive We the the that the term. face of

So hold. All related and is that we of business long-term our in contracted don't think will softness in business industrial all, most products contracts. bromine

any see So don't we significant effect.

business, less bit phosphorus-based Chinese quite quantities sold a but out. of two there years not but coming like coming holding. product the out, the On prices being product is ago, see We is yes, are

in on phosphate restrictions half mid-year the second we be the and the So from in another On so export, come there X on that year, China the will about don't going We quite very the until X million. what million strict phosphate, about overall good. have forward. still it's know results are of expected policy out year now beginning know tons the are very, of

tons it's that be will coming so not million it this about phosphate, in overall year came of missing market where phosphorus, compared X China. going answers. million On to to the So X be. on million XXXX, clear Hope looks out we're something like, XX like into

you. helpful. Thank very That's

may. I Raviv if one Just note,

Go ahead, sure.

is market seeing so and sort most taking that this, actually upping future the are that Russia of near a with volatility there probably, the we in That that leaders quite think, the and position the I will and out. prices are lot

a little amount, this in actually way, I think say can I it's with it's happening. if

I make that think, does sense? unsorted, it's quite

you in from head I'll across of has and softening therefore we and is bit to performance and a offset Yes, little maybe Ag sneak perspective, are had see softer in and as slightly just industrial the then pass it be quite been XQ follow-up, demand as ability demand to thoughts into the far, as so the well, innovative I'm of you've and in quarter, wondering, month it helpful? just on strong and across a any third not a your just rules a to starting XQ products was strong the quite pricing around that as a

It here. softer are depends that two into things what there because come demand means play

that seasonality. all the First of

remember tons there took you rush X and was seasonal available, year And million so the that second, would about is a tons started, softness, -- the up make once to that supply takes stocked year. a and war Brazil be will. So if was that of first stock to in distributors XX there sure million half the

of different issue So is our In and There demand still way we opportunistic that to quite But taking in more are makes at price that Brazil balance the than the tons we are we case, is have be out. XX% versus about is see convergence almost were where parts the enough last what half, for a what a prices significant maybe do first have so X but can't or year product not higher so June which prices year. to there because means and in supply the to demand be The of X types world are it Europe, been We in is those that they XXX,XXX natural been Unfortunately different difference only converge. destruction needed ones it July, does did the Brazil first year, in very don't world, of even the different we X in did competition that demand same tons our secondary of the getting example, no the the some that because million supply last or to for that's that XXX,XXX acquired. immediate today's prices half going is tons time, Hope half first we is of that tons were we discuss soil of time XX% -- that because through about XX most, market fundamentals price, need million a million are sold soil, have is we million going higher. is in going at answers. than Brazil to the prices and allocation XX% sold in levels because the destruction were those but in and the in competition. Europe, potash today. needed missing, skip are to for tons and there geopolitical implications that's sold

Thank you.

Thank you.

go Jackson Our next question Joel of Please BMO Capital. ahead. comes line from from the

Hi, do you hear me?

ahead. Yes go

Hi, you afternoon, guidance everybody. at the start couple then, appreciate or to raised some, Raviv, of it you've perspective, know, Good look looks I a give you your for year, good insight. the I'd level. conservative from a when observations, I'll maybe and that, morning wanted high different

EBITDA potash come XX in That's you're I the doesn't year. that saying typical a the explain $XXX EBITDA We're lower in of a at me may I So full excuse where Excuse Chemical. here me, year the that XX% half There's the not all for one the for the describing year the of Israeli last will all. in than years price million ICL, first of it of second second of the in will $X happen capping. the appreciate QX, you're but ton a have really that year. describing half half apologize.

Are second So the are get it first of -- in hard Or billion. Thank for in $X margin it seems modeling Because seem got the lot lower commodity be prices -- there doesn't seems the you conservative? are to here? and you're you being would you -- year? like it it issues? you. being half I half like a below conservative

for thanks Joe. Well, question, Okay. the

being that I know what, we're don't You conservative. think

we same And in at conservative Belarussian contracts there that of India. in place in were the were year China I because the think sanctions just that beginning talked and were no the about. time, being

had limitations. Almost all and any maybe the half guidance of we when new upgrade our In has because So phosphates a model of think tiny the that of in our positive much with commodities, since prepared business, this expected, looks the in But view reality. year. we not the the year, because our of in we how export bit specialties. in our different specialties of we -- we've see a very execution projection than does little projections, it good changed a to some we don't again, has surprises first do reflect for change I were Chinese updated stronger

opportunistic, So do they get point been that took with going X,XXX positively Brazil. reaching X,XXX too or you this but excited prices would were about surprised very for has concerns. we We in of we advantage Brazil commodities, the were. much our prospects projection those hold by specialties. most to And year. at we've didn't the change we even can think over We the didn't we're so one in long of think I prices, in where see for In term

pretty XX%, on difficulty] simple. [technical that So it's the

fourth to quarter. that see behave a seasonal of and It potash that three year think industrial do with said, the December. because that check third again of usually reasons those prices, I divisions, And half the we the if you'll we between year, most difference XX soft soft be second on way. But the didn't quarter our to like softer. And on of are for has years, them, a the half going it actually specialty all of businesses I last you little have and very have. one first every year, December products two business was that

only an and So in do it's the better that stronger innovative well, acquired The this because actually in is year. weakness our going hits since industrial business little a a quarter. ad last be to newly quarter expected change performing last, very, we to very than is is December, have year solution the which Brazil in product seasonal fourth there and fourth

than So not in and hope in addition Products in second into that in first half our potash lower unusual thing and the the division Industrial phosphate prices and that an fourth forecast, half, but was quarter will Phosphate in helps. softer be it original factored our that's to

little into down details each drill Kind bit of. in I'll business. more Maybe

Maybe full I be about did So QX. see, the year in call, down you thought -- dropping Do in if to QX. do still I in and that see you hold mentioned go similar still you to margin, be to about margins the XX%, QX I able XX%, QX, could And you XX%. IP. think XX% last you think seasonally

is the so? margins full So you year, for XXs in can high end IP fair up that really percent

will clear the It because and in our in the that especially is little is quarter. is go revenue one margin. gas components fluids, quarter, down the fair a growing which the oil third high but we maintain still on brine fourth quarter, somewhat are in the very fourth very, but margin we more The of can reason

talked us a brine the in more sales that less allow have will margin higher sales out lower margin even little we'll stay we clear that and So and in And about. are fluids. that perhaps to at

really course decline half for Do think do that revenue that strong comp, continue contraction revenue you growth you revenue of year-over-year trend had first will quarters, of the many which you think 'XX? into

that seeing at not We're all.

we where is coming We of for understands more but because see deliveries is and to the demand going less significant anybody automotive, don't to fact, one see stay change We In for enormous. supply out they becoming going down. current there the is the that's electric is which components, -- think think are than a of the we retardants. vehicles demand and flame and places electric softness the vehicles there wants demand case need to situation don't electric us. China is Everybody and vehicles need more where global the

not good we're we very think, So in position. a

And from when Innovative you Solutions, Fertilaqua brought Compass. Ag Okay. then

QX year, QX I hit last a of and the think it lot of books for it.

There's second growth growth build it? to all half know, little. great, -- is half year, some should know we happened none little in half That's that said the you that business. am in getting but to of -- last acquisition there second So at in no increase you either there's in organically I this year, second what see of

about half we're organic, You're year and of pro consider XX% organic businesses growth realizing some the those synergies. correct, but was in first the the forma that in it's

see to growth. expect we So

And any margin your was contraction in really bit a that contraction business you in hold? see the second half versus Should the of IAS first versus strong. half margin

hard say typically softness again influences commodity little a we a well. this not specialties into -- market a We're account little market, the of It's see at because in taking point. we the contraction to bit as

account little drama bit see of we any So don't but a there, contraction. taking we're into

is -- I'm asking a the potash, ton last given And $X my you ASP. In lot. question or so QX

I Somewhere lot So if same be it than $XXX QX? as would QX your the a in $XXX price? QX, be so lot and QX, going the and price -- compare look as potash for in in at your because QX freight, Would margins would QX? lower would margin your in of the things QX how at and cost ton QX $X potash so QX of middle a with margin QX potash to

third there energy and But lowers some India some cost from Great shifting everything be kept deliveries lot of going then in to including is uncertainties the are here which again transportation is output stable because others question. to prices and everything is to expected have will quarter. including and a stable geographies We that China very very, not ton. our per actually down obviously cost good, and

your expect So so lower. net-net, margin that change is requires [technical difficulty] in the we components a [technical difficulty] big don't but

One, Joel. second at just add half may the our first two I vis-à-vis if you half. look things,

by a upper delivering it these if obviously actually because part guidance. point, about much Part we account XX%. when further up, QX. X at billion, have significant part you you XX%, it came into seasonal, with out. it out of is all less is because of we a there And If prices. visibility took it lot things a is of part sum is of it It's it Well, the comes XX%, the we which look you we're if take from not about in And part X billion. this uncertainty

It quarter-by-quarter, might circumstances. we course -- up of it change that. the depends may follow we on So we

a It's up bottoms guidance.

Yes.

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question line will Will of the next from Morgan Our Tang go Stanley. come ahead. Please from

offers by both the months summer ago. comment This your here. can geography inventory the think on kind many of which little recently I touched I know U.S., a has guys. Will Tang both potash you the state is on but Hi, you elsewhere? probably bit of competitors for earlier, like guess, within have channel in So Vincent fill would and Brazil, potash considered I on

I'm you if may be how So elsewhere? in U.S. view wondering a up on the have the and backed system

mind view, that for a the there inventories a the the time, long cost supply that stressed. I going you in the The stock also show, real is of to you're the XX% actual chains down, to have has the use situation increased very, it's can consider we're are little think capital, that example, inventories but holding XX%. mean basically year, and at Brazil you and global global the cost trends easing inventory bit, of of interest dollar. real X%, in was beginning but process rate in They're all because that that in the I lost now a the significantly up is at almost same change keep

product a and any conditions to terms distributor yourself you there -- you're stretch to and more and costs of the such And there in get stress So taking Brazil, affordability more of Russian some were were are year. whether uncertainty Russian you want There is risk such in sanctions and of cost an is will there X%. on and markets yourself to as if cost. as labor inflation allow other hold now you of there but willing that less in the because uncertainty terms you the cost fertilizers, high in over labor the never have inventory, this to was adjustment capital

chain it is. And point, going is the than is to supply stressed. at one be currently think, I buying going more to become more So massive

market. the doing. see are don't any American to understand North probably North I or the we what guess, America a position full destruction the missing in in tight know in even only said -- very it's is for X in and tons better changing leaders the The is and they're the the tight, build-up, the million tighter the to created going the of in there in there product. that I terms We day, happen. in inflation clear and only think get demand way that before Russian of there At they happen? go to to and way destruction dynamics the inventory end world is question potash, for Canadian of We market prices be to like I where to uncertainty China starting inventory -- availability going India And getting demand think, in rates, to interest is Brazil. quickly where is see demand for destruction by it's the is and only is to helps. up That don't

headlines I energy the Got risk, for guess the how your to then you. And phosphate particularly it. Europe. you all in just months Germany, there? have reduction ICL, guess, in facilities given, wondering around moving winter been I characterize Thank I'm

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business the are food Lautenberg The So is our industry phosphorus energy long-term, of site, and specifically in has exposure. most fixed salts have non-Russian linked or European into renewable but shape. do U.S. most reason our some dependent good relatively in and food that site of prioritized. our and and energy that ICL we businesses is many actually, In price we there gas for renewable and and acid Germany, produce product, getting fertilizers are

from better could the the of the shape would we than in other mainly At feel others. some the same product we we we gas of time coming So where rationing that the U.S. replace in countries, whatever be, facilities product, in can we have U.S. can, be with

and supply have our, have a U.K., is our some site again, price exposure are we disruption. facilities our in exposure And EBITDA is main So percentage overall the we have gas risk very from we small revenues of in but where fixed Israel, Germany, the long-term our that in agreements. gas in main

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Bank comes from question go line Jones from of Alexander America. next the Our ahead. Please of

questions. may. Great, I two, got I've for taking my if thanks

just Ag is Solutions. first on Innovative The

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deceleration came in does And that be year-on-year in the pricing that down imply that pricing just looking that revenue quarter. falls? big third you. in that the indicated a the expect XX%, Thank at revenue through You you will such quarter quite second

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market. the So in has it do with XX% to high relatively is the tailwinds and

you. Great. Thank

you. Thank

from next Barclays. Rahi go of Our Please question ahead. line Parikh the Instructions] [Operator comes from

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us. it Thanks That's so for Yes. much.

our today. conclude session Q&A ahead. Peggy, please does for go That

earnings today, third in a good like Thank for of with we rest joining to you. speaking forward thank and November. summer. we us all when I'd your quarter you our you to Have look report