Ladies and gentlemen, thank you for standing by, and welcome to the ICL Analyst Conference Call. [Operator Instructions] I'd like to hand the call over to the first speaker today, Ms. Limor Gruber, Head of Investor Relations. Please go ahead, ma'am.

Thank you. Hello everyone, welcome and thank you for joining us today to our fourth quarter and full year 2019 conference call. The event is being webcast live on our website at www.icl-group.com. Earlier today, we filed our press release to the securities authorities and the stock exchanges in the U.S. and in Israel. The press release is also available on our website. There will be a replay for the webcast available a few hours after the meeting, and the transcript will be available early next week. The presentation that will be reviewed today was also filed to the securities authorities and is available on our website as well. Please don’t forget to review the disclaimer on Slide number 2. Our comments today may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are not guarantees of future performance. We will begin with the presentation by our CEO, Raviv Zoller, followed by Kobi Altman, our CFO. Following the presentation, we will open the line for the Q&A session. Raviv, please?

Thank you, Limor, and hello, everyone. Let's begin today's call with the review of the fourth quarter and full-year results on Slide 3. As expected, our fourth quarter results were impacted by a combination of the plant shutdown at our Dead Sea facilities which resulted in a significant short-term reduction in potash production and weak commodity market environment. Also unlike Q4 2018, we benefited from large sales volumes to China and India following the late signing of supply contracts that year. No potash sales were made to China in Q4, 2019 as no supply contract has been signed, and they were lower sales volumes to India as well. Exchange rates also had an unfavorable impact both on the quarterly and on the annual results as the appreciation of the Israeli shekel weighed on operating costs and impacted results by $33 million for the year. Nevertheless, adjusted operating income for the full year increased slightly to $760 million driven mostly by the performance of our specialty businesses which offset the weakness and commodity fertilizer markets. Our continued focus on cash generation and the successful implementation of our working capital optimization plan resulted in a six year record annual operating cash flow of $992 million, marking a 60% increase compared to 2018. Free cash flow increased almost nine times compared to 2018 to $446 million. The ICL Board of Directors has approved to continue with our policy of returning up to 50% of adjusted net income to shareholders in the form of dividends. This resulted in the distribution of about $0.02 per share in the quarter and a total of about $0.18 per share for 2019 reflecting an annual dividend yield of almost 4%. We are very pleased that the Dead Sea facility upgrade project was executed successfully. The upgrade increased potash…

Thank you, Raviv, and good day everyone. As Raviv already mentioned, we are pleased with what we have accomplished in 2019 and with the progress we have made in our strategic direction. Q4 was a unique quarter characterized by significant reduction in quantity sold, due to the factors Raviv discussed, namely the facility upgrade related shutdown at the Dead Sea, and weak environment in the commodity market. Sales analysis on Slide 12, reveals that water reserves dropped by 22% over the last year, almost thoroughly due to the lower sales volume, mostly of potash, phosphate commodities and bromine. Q4 2018 was one of the strongest quarter of the potash division in recent years. Their volumes were almost 1.5 million tonnes due to the late signing of supply contracts with China and India that year. InQ4 2019, we had no potash sales into China, which resulted in overall potash sales volumes of less than 800,000 tonne. A weak market environment also impacted phosphate commodity fertilizer sales beyond the regular seasonality expected in the business. Sales volume of bromine and bromine compounds also decrease due to the Sodom facility shutdown and due to low availability of chlorine. The pending antidumping claim against ICL's magnesium business in the U.S. resulted in lower magnesium production and negatively impacted sales by $16 million in the second half of 2019, which in turn impacted the production of chlorine. Despite the $18 decrease in the average realized price of potash compared to Q4, 2018, and a 25% decrease in the price of phosphate commodities, mainly TSP. The impact of pricing along sales was relatively minor due to the offsetting impact of higher selling prices of bromine compounds and specialty fertilizer. Full year 2019 sales decreased by only 4% excluding the 2018 divested business of Rovita. The $293…

Thank you, Kobi. The second half of 2019 certainly presented some challenges. We were able to improve most of our financial metrics and more importantly, advance our strategic long-term goals. We reviewed some of our key milestones and accomplishments earlier in this call and – summarized on Slide 16. I'll briefly touch on those that we've not discussed. Under assets and operations, we recently inaugurated a new modern deep sea terminal at the port of Barcelona, which will enable us to ship larger potash and salt volumes from Spain to end markets and reduce costs. As previously mentioned, we furthered our strategic goal shifting elemental bromine customers to compounds and signed major long-term strategic supply agreements of bromine and bromine compounds with customers in Asia. These agreements are expected to generate significant additional annual revenues beginning in 2021, laying the foundation for the bromine division’s future growth and further strengthening our position in global bromine market. During 2019, we also began laying the foundation for future growth renovation. Many of our projects will materialize in the coming years, and we're incubating early stage technologies, novel materials and cost effective processes for future product lines. We also continue to develop our digital Ag platform and introduce the technology solution for the compaction granulation of standard-grade Polysulphate. We also launched a series of industry 4.0 projects to improve processes and solutions in our production site. In line with our ESG focus, we're actively promoting circular economy sustainability initiatives and launched the world's first phosphate recycling plant in Amsterdam replacing phosphate rock with sewage sludge and bone meal ash. Additionally, we're actively searching for external business partners to use our waste streams, which contain valuable industrial minerals as a replacement for raw materials. Finally, our finance legal and compliance teams have worked to…

[Operator Instructions] First question comes from the line of Joel Jackson of BMO Capital Market. Please ask your question.

This is [Brie Murphy] on for Joe Jackson. Thanks for taking my question. Firstly, given weak potash fundamentals in Q1, I presume with the product not moving significantly do we expect an inventory buildup in the first quarter?

Not really, I don't see a big difference being created by the amount of production, the amount of sales in Q1 at the moment.

Okay, thanks. And then just given cyclicality in bromine, was 2019 a peak earnings year for that segment and what's your outlook for 2020? And how blurred is this due to the impact of coronavirus?

We're pretty much fully committed in terms of orders for next year. So other than some uncertainty that we have for clear brine fluids which no more short-term sales, there's very little uncertainty in terms of our sales. It looks to be a good year. Having said that, with coronavirus and other things happening in the world you never know what happens next. Currently at the moment that has not affected us in any way. The ports are open. No orders have been cancelled. So we're still sold out almost of our product.

And then just one last one from me. You’ve spoken in the past about acquiring specialty fertilizer assets. Where's the pipeline right now and is your preference still for NOP and SOP asset?

It's getting closer, our preferences, our product portfolio, southern hemisphere and technology. All those three and it's closer than before.

The next question comes from Vincent Andrews with Morgan Stanley. Please ask your question.

This is Jeremy Rosenberg on for Vincent. Thanks for taking my question. Want to start out in potash just thinking about sales volumes for 2020 and are normally, the plan is to sell what you produce, but just given delays in the Chinese contract signing, do you still think you would kind of sell what you produce or and that for 4.8 million to 4.9 million range? Or I guess what do you think about for sales volumes for this year?

Hi Jeremy, as you know we're a price taker in the market. So I can't give you a good outlook on pricing, it's too early in the year. But in terms of quantities, we’re pretty much so what we produced.

And then just one more on potash, just thinking about the operating costs, you've done the facilities upgraded at the Dead Sea, just kind of how you're thinking about potash operating costs for this year and how they're going to trend?

So the costs in 2019 were higher than usual because of the capacity increase the facility shutdown and a couple of other issues. We're going back to the same cost as 2018. On the one hand, we have an additional cost that we didn't have in the past which is salt harvesting, that is part of our agreement with the government. But that will be offset by the additional capacity and the additional production in Sodom. So all of now we'll be going back to the more or less the same cost of 2018.

The next question comes from the line of Mark Connelly of Stephens Inc. Please ask your question.

This is John Rider on for Mark. My first question is, so with respect to Polysulphates, you have talked about a 1 million tonne production target for 2020. Can you tell us what the market for Polysulphate looks like now and how we should be thinking about pricing power as your production ramps up?

Our average price currently is a little over $100 a tonne. And that should be pretty stable in 2020. We are pretty confident about our ability to produce 1 million tonnes. We're producing at a run rate of 800,000 tonnes now and the ramp is nice. Sales are naturally lagging. So we sold 500,000 this year our work plan is to sell above 800,000 this year and in 2020. So I would say we expect production about 1 million in sales between 800,000 to 900,000.

And then, so with the Dead Sea project complete, what are the most significant capital spending programs for 2020 with the China specialty plan finished, should we expect operating and launch costs to be materially higher there? We’re just trying to get a feel for how the transition from commodity to specialty there will flow through the numbers?

In general, we've gone through a couple of transition years with some mega projects being completed. So the salt harvesting as you heard has been completed and we've launched that project just this week. We launched the new port in Barcelona in January. We are about to launch our P9 project P9 is the largest pumping station, over $200 million project on the Dead Sea that's done about once in a generation. That's pretty much complete we start commissioning in May. Then we have the other mega project in Spain, which is the ramp which is expected to be completed in October this year. So all these major projects have either been completed or will be completed in 2020. In terms of the new plant in China, we started the plant up in December. And so, we expect that we'll start sales somewhere around March or April. In terms of the cost, the CapEx has been expended the, total capital expenditure of the plant was about $40 million, all included. And the only additional operational costs is a relatively marginal additional OpEx costs because they were basically transitioning part of the production to downstream products, which means that we're not creating a lot of additional tonnage. We're just going up the value chain. I hope that answers your question, so most of the additional OpEx will be the depreciation on the CapEx.

[Operator Instructions] Your next question comes from the line of Tom Wrigglesworth of Citi. Please ask your question.

Hi, Raviv and Kobi, thanks very much for your presentation and a couple of questions if I may. Firstly, on the potash markets I mean, what I hear you're saying you're just going to take price and produce volume. But I was wondering if - if you could give us your thoughts around the current level of port inventories in China. And I think your EuroChem said they were expecting a Chinese contract solution at the end of Q1 beginning of Q2, would you agree with that just in your opinion and views on the market. Secondly on the specialty phosphates, would you give us a more info site solutions? Could you give us a split or the profitability between the commodity business and specialty for the fourth quarter, and just around that, what's the current spot level of profitability of the commodity business? Is that, given the rally in phosphate prices is that now back to profit today? Thank you.

Okay, so let's start from potash. I think that most players in the market thought that late Q1 or beginning of Q2 is the right time for a Chinese contract. I think there's a little bit more uncertainty at this point because of coronavirus. So I think, let's wait and see what happens with the agricultural season in China, which is just beginning now. I know that the Ministry of Agriculture in China is trying to normalize what they can in terms of transportation and movement of employees because they're very concerned about the agriculture season and fertilizer production, fertilizers moving and getting to the right place. If that situation stabilizes, and I agree with end of Q1 or beginning of Q2 but if you don't get that at hand or something unexpected happens, then it can be delayed further. That's on potash. On the phosphate market, basically on specialties we've seen stable price environment in North America and South America. We see some price pressure in China coming from commodities. Most of our commodity price decreases hedge by sulfur price. I think the fourth quarter was softer and it usually is softer because there wasn't a lot of room to place product on the market. There wasn't a lot of demand and quantities went down. So quantities went down. We had inventory that wasn't sold. It was only sold in January when we sold it at January, in some cases we sold at a price that was marginally negative. So we actually wrote down I think about $5 million in our commodities in Q4. So I don't see that happening again in Q1. January actually started on a positive note, there was some price increase in North America. There's plenty of demand. So sales were strong in January. So I don't see any significant impact of additional price pressure on commodities in the first quarter. In general, our model is that most of our profitability comes from specialties, commodity is pretty, pretty stable ground zero. And our profitability comes from the specialty businesses. I hope that answers your question.

Your next question comes from the line of [indiscernible]. Please ask your question.

I have two short questions. You mentioned that you think the Polysulphate price will be approximately $100 a tonne this year? Is that the same as last year? A – Raviv Zoller: Yes.

Okay. And the second is, I'm presumably… A – Raviv Zoller: …price because we have different products that's our outrage of our output

I'm presuming that yuan or YPH roughly broke even last year using EBIT or operational profits. Could you make $25 or $50 million of operational profit this year in yuan once China resumes normal industrial and agricultural activity?

Actually we had about $20 million of positive EBITDA.

EBITDA?

Yes, because we can do those.

EBITDA, not EBIT?

Actually, we had $19 million of EBIT, and EBITDA was little over $25 million. So, yes, we can reach those numbers, we can actually reach better numbers because this is all commodity.

We have no further questions at this time. Please continue.

Okay, thank you very much. Thank you everyone for joining us today. Have a good rest of the day and the weekend is around the corner. Thank you, and good bye.

That concludes the analyst call for today. Thank you for participating. You may all disconnect.