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, at which time if you wish to ask a question, you will need to raise your hand using your mobile or desktop application or press star, nine on your telephone keypad and wait for your name to be announced. I must advise you that this call is being recorded today. 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.

Thank you. Hello everyone. I’m Peggy Reilly Tharp, Vice President of Global Investor Relations. I’d like to welcome you and thank you for joining us today for our quarterly earnings call. The event is being webcast live on our website at icl-group.com. Earlier today, we filed our reports with the securities authorities and the stock exchanges in the U.S. and in Israel. Those reports, as well as the press release, are available on our website. There will be a replay of the webcast available after the meeting and a transcript will be available shortly thereafter. The presentation which will be reviewed today was also filed with the securities authorities and is available on our website. Please be sure to review the disclaimer on Slide 2. Our comments today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are not guarantees of future performance. The company undertakes no obligation to update any financial information discussed on this call at any time. We will begin with a presentation by our CEO, Mr. Raviv Zoller, followed by Mr. Aviram Lahav, our CFO. Following the presentation, we will open the line for the Q&A session. Raviv, please?

Thanks Peggy, and welcome to everyone. In the third quarter, we once again saw benefit from our strategic focus on our differentiated long term specialty solutions which was in addition to upside from commodity prices. We delivered record third quarter results on a consolidated basis for sales, operating income and EBITDA, as did all three of our specialties businesses. This quarter’s strong performance reinforces our recent investor day message as it reflects the significant contribution from our specialties businesses which are expected to help us deliver long term sustainable shareholder value. While we expect the road to get a bit rougher in the future, we know we have the right fundamentals in place to build on our strong momentum and to leverage the significant opportunities ahead of us. On Slide 3, you can see an overview of the quarter which includes the records I just mentioned and also highlights one more, as our Dead Sea operations achieved production records for the third quarter and on a year-to-date basis. In addition, we’ve had record year-to-date operating cash flow totaling $1.6 billion and our focus on long term cash generation resulted in very strong quarterly free cash flow of $429 million, which was up nearly 200%. Our year-to-date adjusted net income was a record $1.9 billion and our adjusted earnings per share for the quarter of $0.49 was up nearly 200% year-over-year, resulting in record year-to-date EPS of $1.55. We continued to return value to our shareholder through our policy to pay out 50% of annual adjusted net income which resulted in a third quarter dividend of approximately $0.24 per share. In total, ICL will pay out $314 million in dividends for the quarter. Now please turn to Slide 4, where you can see once again significant year-over-year improvement. Sales of $2.5…

Thank you Raviv and to all of you for joining us today. While you have already seen Slide 14, I would like to call out a few additional highlights. First quarter adjusted operating income of $928 million was up nearly 200%, and adjusted operating margin of 36.8% was up dramatically from 17.6% in the third quarter of last year. For the quarter, adjusted net income of $628 million was up more than 180% year-over-year. If you return to Slide 15, you will see an overview of the macro trends impacting ICL, our peers, suppliers and customers. Trends continue to evolve and general uncertainty persists. Inflation remains high due in part to soaring energy prices globally. The cost of living is higher overall and this includes food prices. Global forecasts are being slashed for 2023 with slower growth expected into 2024. Governments and central banks around the world are reacting to inflation, which is leading to rising interest rates. Many currencies are seeing a significant disparity versus the U.S. dollar, which has for now maintained a position of strength. Supply chain disruptions remain an issue for ICL and our customers. We have continued to leverage our advantageous production occasions and global supply chain capabilities which have enabled us to provide our customers with consistent and reliable supply, and to extend our relationships through long term contracts. In the regions and end markets where we do business, we are seeing divergent trends; however, one factor remains in common, the continuation of geopolitical tensions. Despite this persistent theme, we have seen some moderation in commodity prices down from the peaks we saw in the second quarter of this year, and these trends are shown on Slide 16. Prices for potash are still elevated year-over-year but have declined quarter-over-quarter. Phosphoric acid prices were stable…

[Operator instructions] Our first question today will come from the line of Joel Jackson from BMO Capital. Please go ahead. Joel?

Can you hear me?

Yes, go ahead.

Great, thanks. I have a few questions. I’ll try to ask them one by one. My first question has got multiple parts. In the potash segment, can you talk about where you see potash prices, your realized potash price shaping up in Q4? What’s your comment on potash inventories around the world, including Brazil? Yourself, you’ve been building inventory in potash now for a couple of quarters. Would you expect you would also build potash inventory across Q4 at the ICL level? Thanks.

Okay, good morning Joe. First on the potash prices, we see in the U.S. that the market is leveling out, and it seems that healthy demand is emerging now with price being about $600 currently. We see in Brazil that de-stocking has happened and stock levels are returning to close to normal. There’s still not abundant demand but we see shipping lines going down from 11 to 12 weeks to one to two weeks, and we see things normalizing there again, around the same price level. Currently Brazil and the U.S. are the lowest price destinations for potash, and as we know, around the world things tend to level out over time. All in all, the deliveries this year are going to go down by about 8 to 9 million tons relative to last year, though we expect next year that they’ll go up by about 5% relative to this year. In terms of--so I talked about price and inventory. We are not growing our inventory levels in ICL, so it’s relatively marginal if we end up the quarter with operating levels of potash stocks, so it’s transitional. It’s nothing--we’re not building up inventory. As you know, we’re a price taker, so we place our product where the best opportunity is, and the best opportunity in the first half of the year was Brazil, so we placed about 90% of our annual allocation in Brazil in the first half of the year. We continue to be opportunistic and we’ll sell where the price opportunity is the best, and we don’t intend to build up stock. I hope that answers.

Then would you be able to give an idea of--you must know your book for Q4 for potash. Would your average selling price be north or south of $600 a ton, maybe?

It will be close to $600.

Okay, that’s helpful. Can you talk about the magnesium business, which, you know, no one ever talks about until the last couple of years. It’s always kind of been a loss leader, but now it’s been maybe a nice little kicker. Looking into ’23 and the way your different contracts work, do you have an idea of what magnesium earnings might be in ’23 versus ’22, and versus what we’ll call midcycle?

Right now, we’ve contracted about 50% of quantities for 2023 and 2024. It’s a little more than 50% - it’s around 60% for 2023 and it’s less than 50% for 2024. Those 60% are at a higher average price than this year. Magnesium business in the first nine months of the year has made $56 million operating income. It used to--I mean, the year before, it made a loss of over $30 million.

Okay, that’s really helpful. I think that’s my questions. Thank you very much.

Thanks Joel.

Thank you. Our next call will come from the line of Alexander Jones from Bank of America. Please go ahead.

Great, thanks very much for taking my questions. Two, if I may, mainly around the LFP investment. I guess the first question is that you’re already making raw materials for LFP cathodes in China. Can you give us some details on the profitability and returns of your activities specifically in LFP in China? Then the second question is sort of translating that to the U.S. I suppose the difference at the moment in the U.S. is that you don’t have a captive source of raw material domestically. Do you see a risk that some of the domestic U.S. phosphate players move into this space, and what barriers to entry do you see to protect your return in that scenario? Thank you.

It’s a very good question. I’ll start from the basics. Our profitability in China is around 20% in this business. Looking forward, the opportunity is higher because we’re leveraging the situation now that new supply chains are being built, and we’re going further downstream and getting close to the customer and getting more value on our side. We have the right partnerships lined up both on the raw material side and on the customer side, so it’s sort of a closed loop operation where when we go into it, we know the input and the output, and that takes into account the plans of some of our competitors. Ultimately, some of our competitors are going to go into this business because it’s a relatively huge business and it increases significantly, everything that’s based on white phosphoric acid, so. Our competitors are also going to get into this business. We have not only a first mover’s advantage but we’re also at the next level, we’re downstream, so it wouldn’t be a surprise if we partnered with one or more of our suppliers. Today also for our current specialties phosphate business, a huge chunk of our product comes from nutrient.

Just to add for China, it’s China for China.

Yes.

China is not export. It’s two local battery manufacturers--LFP manufacturers, actually.

Thank you. Just a follow-up on your comment, Raviv, around a huge chunk coming from nutrient, are you able to give us a split for the specialty phosphate business of what share of your raw material is internal versus externally sourced?

The overall internal is about 55%, but in North America it’s much less than that. Over 50% of our supply in North America is based on third party, and a huge chunk of that is nutrient.

Great, thank you.

Thank you.

Thank you. Our next call comes from the line of Ben Theurer from Barclays. Please go ahead.

Hey, good afternoon. Can you hear me?

Yes.

Okay, perfect. Thank you very much for taking my question. I wanted to follow up a little bit on the outlook you’ve presented and the challenges to overcome and the price environment. Obviously in light of what you’re talking about - you know, the long term contracts you’re targeting for with your customers, can you talk us through how you think about 2023, maybe early stages just given what we’re seeing on the crop economics being very favorable, but then at the same time we’re seeing some of the prices coming down, so how flexible, or what does that mean for some of your long-term contracts and relationships with your customers?

Okay, hi Ben, it’s Aviram. You asked, I think, quite the right question. The answer to that is I have to by the different markets. First of all, I think in the agricultural world, it’s one picture going into ’23, and again in agriculture, I think there will be quite some difference between, let’s say, our bio-stimulant side to the potash side to all sorts of things that make up agriculture. The other markets, it’s a different story. Now, the way we look at it is the following. First of all, when we look at 2023 for now, generally speaking the issues that haunt or bug the world in late 2022 don’t seem to find a solution. It can be the--I would say the sticky inflation, the energy prices, geopolitical issues, going all the way to currencies, I think the macro side would suggest that for now, a lack of more clarity or any change in direction, it will be similar to what is with us in, let’s say, the second half of ’22. What can be different? Again, going by the markets, is I think generally the world is learning to cope with the new reality. It was a novelty in the first half of 2022, leading to a lot of, I would say, exaggerations on multi things, and later on came second half in a way which if you look at it is some correction to the first half. 2023 should be at least analytically less volatile. Going by markets on the agriculture side, there were some things that were not done in 2022 and will have to be done in ’23. We’ll have to wait and see how the yields behave. Generally speaking, there is a belief that they will be impacted, which means that quantity-wise there…

Maybe to sum it up by minerals, I think that on potash and phosphate, we expect our markets to continue to be tight next year with basically the Belarussian product missing on potash and some of the Chinese product missed on phosphate. On the bromine side of things, since we’re a significant--since we’re a market leader, we don’t expect a significant fluctuation of prices on the renewals of contracts next year.

Perfect, and then just one last one, and thank you very much for all that. Clearly it’s a strong year and you’ve showed this on the cash flow side and the specialty business being growing a lot. Do you still consider, and would you think about looking into opportunities maybe to accelerate the growth by focusing maybe some M&A capital into the specialty business, just taking advantage of the commodity environment, good cash flow, and we’ve seen it in the quarter, to just reinvest that maybe into growing pieces within specialty? Is that something on the table for next year? Do you think there’s some opportunities?

Of course, Ben. There’s a growing amount of opportunities given two things that are happening. One is the very high level of liquidity, even though we already returned a billion dollars to shareholders this year. We have growing liquidity and a strengthening of the balance sheet, and at the same time the world is going a little nuts and opportunities are coming by the day, so, That doesn’t mean that we’re going to buy everything that comes by, but we want to be very focused and go through the right accretive acquisition, just like we did when we took advantage of an opportunity during COVID and acquired two excellent Brazilian companies that have become a significant part of our growing solutions DNA. We want to--that made us, our appetite even bigger, and we definitely are looking at M&A, and hopefully it’s in the cards.

Perfect.

If I may, Ben, just to add that if you think about this analytically, what’s going on, the story of the very much tightening of the capabilities and abilities on the financial side, I’m not sure it is yet well understood by a lot of bodies that tend to think that times are as in the past. As time passes, that’s why for us it’s critical because we have a very strong balance sheet with a very, very focused strategy, analytically it would seem that there would be more opportunities in the near future rather than less, because I think still multiples are things that people are not exactly realistic on valuation, and I think this is coming, it’s going to be more and more clear in the coming periods.

Okay, thank you very much.

You’re welcome.

Thank you.

Thank you. As a reminder, if you wish to ask a question, please raise your hand using your mobile or desktop application, or press star, nine on your telephone keypad and wait for your name to be announced. Our next question today will come from the line of Mubasher Chaudry from Citi. Please go ahead.

Hi, thank you for taking my questions. The first one is on the potash side of things. Can you please talk about the [indiscernible] Chinese potash contracts? I assume you’ve been part of the discussions. Just interested in what level those contract prices are coming in at and what level we should be expecting for 2023.

I don’t--go ahead, sorry.

Sorry. The second question is on the third quarter volume decline--third quarter volume declines in IP. I think from 1Q to 2, 3Q, it’s had volume declines every quarter. Just wanted to check up on the outlook here, both on ICL’s own production side of things and then how demand is progressing as we head into the fourth quarter and then 2023.

Okay, so with contract prices, there have been initial discussions. We are not the major players in these discussions, so I have a limited amount of information. I don’t think that there have been significant exchanges regarding pricing yet, but the schedule seems to be clear to everybody that it’s shaping into first quarter contracts. The Indian situation is a little more urgent, meaning that India doesn’t have the required inventory that is needed for the next season, so that may accelerate things somewhat. There have been situations like last year, when India signed contracts before China and also got a better price to an extent, so that may happen. If not, if it’s a Chinese contract first and we’re looking at around new year, around the Chinese New Year, and if it’s an India-led contract, it will be beforehand. That was on potash contracts. Regarding quantities, so first of all, potash quantities went up and so did phosphate quantities. Phosphate specialty quantities went up significantly in the quarter. Where we see the lowering of quantities were two places that I would call out. One is around bromine compounds, where first of all our view of the world is value over volume; and second, we’re in annual contracts where when there is significant over-demand in the first parts of the year, then there is less quantities left for the back side of the year, and also seasonally fourth quarter--third quarter and fourth quarter are weaker with fourth quarter expected to be less than third quarter, but it’s a perfectly normal cycle - again, value over volume. In phosphates, the quantity decline this quarter has to do with a situation in our joint venture IPH because of an overhaul of two weeks, and also export restrictions which caused us to accumulate inventory, but that’s temporary. I can tell you that we’ve worked through the export limitations and it looks totally different in October. Overall if you look at the nine months, over the nine months we’ve had the significant increase in volumes and specialty phosphates, and we haven’t accumulated any phosphate commodity inventory. In potash, again totally transitional, there’s a little bit of operational inventory, and in bromine compounds, like I said, it’s value over volume, so overall we see quantity is increasing in all of our businesses. In growing solutions, we’ve said in the past that part of our results improvement is that we’re selling less third party products, so we’re selling more of our own products and less third party products, and the result is that you can’t really see the quantity increase, where quantity is increasing. It’s increasing in three of our four businesses. The only place where there is no increase in--the only place where there is no increase in quantities this year is in bromine compounds in our industrial products division - again, value over volume.

That’s very helpful. Just to come back on the potash contracts, is there any kind of expectation on your side for what the pricing could be coming out at? I mean, I’ve seen headlines talking about contract prices starting with a 4, so--yes.

I don’t think it would be prudent, but of course we don’t even think of anything that starts with a 4. We don’t have that in our mind process.

Understood, that’s very helpful. Thank you.

Thank you.

Thank you. That concludes our question and answer session for today. Please proceed.

All right, thanks all for joining us. We appreciate your attention and look forward to reporting back to you next quarter. Thank you very much. Have a great day.

Thank you.