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 two. 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, everyone. Earlier today, we announced our second quarter results, which are compared to an all-time record quarter last year. As you can see on slide three, second quarter sales of $1.83 billion were in-line with revised expectations, but down as expected, versus an extraordinary second quarter in 2022 when commodity prices peaked. While the year-over-year decline in price has impacted all of our businesses, and we generally saw lower volumes. Our Potash segment volumes increased in the second quarter, as we sold more products to China, India, and the United States. Lower prices in the second quarter also significantly affected our adjusted EBITDA, which was $441 million. However, we did see some benefit from lower raw material and transportation costs. We continued destocking throughout the second quarter, and proactively adjusted production as needed. Also, we adapted our savings and efficiency plans to react to the challenging near-term macro conditions. As a result, we were able to reduce costs, including through production improvements at our industrial products and at growing solutions in Brazil, and through additional G&A cost reduction efforts. While the cyclical decline was more rapid than expected, ICL delivered a well-executed quarter as we quickly adjusted to current market conditions, ensuring continued strong cash generation, while adhering to our long-term strategy. We delivered operating cash flow of $391 million in the second quarter and free cash flow of $221 million which was identical to the first quarter of this year. We continue to return value to our shareholders in the second quarter, as we reported diluted earnings per share of $0.13 and declared a quarterly dividend of $0.06 per share. We also remain committed to our long-term specialty strategy through our investment in lithium iron phosphate battery materials production. Just yesterday, our Board of Directors…

Thank you, Raviv, and to all of you for joining us today. Let us get started on slide 12, where you can see a review of the external macro pressures, we have been discussing for several quarters now, with many of these remaining unchanged. Inflation rates started to decline year-over-year, but prices remains elevated for the end market consumers in the second quarter. As we've previously discussed, this forces families to make choices about their discretionary income. For example, home improvement and curb appeal projects are being delayed. While food demand remains resilient, as soon as our phosphate specialist results. In addition, these trends are further impacted by interest rates which remain elevated on a global basis. In general, global growth continues to be subdued, which is why it is important for companies like ICL to have a varied geographic footprint. We also benefit by participating in a wide array of end markets, not only across our four segments, but within each line of business as well. Being a global company means reacting swiftly to conditions around the world, which we did in the second quarter. Still, many geopolitical obstacles persisted as the situation in Ukraine remains unbalanced. The food insecurity crisis in Africa threatens to expand and uncertainty regarding China's recoveries have increased. Just three months ago, China's economy appeared to be rebounding faster than anticipated. However, recent indicators suggest otherwise, sluggish domestic demand in China, which represents the second largest economy in the world, is being compounded by ongoing concerns around the country's housing and construction markets. In terms of global agricultural demand, crop prices remain elevated above pre-COVID levels as farmer affordability continues to be resilient especially in the U.S., while fertilizer prices have declined from the peaks we saw in 2022, they're beginning to show signs…

Thank you, Aviram. [Operator Instructions] Our first question will be from Alex Jones at BoA.

Thanks. Good afternoon, everyone. Thanks for taking my questions. The first one on, like, good dynamics you talked about destocking and lower demand in Growing Solutions. Can you give us a little bit of color on how that's evolved into the third quarter? I guess some of the spot prices indicate that the pond is improving, it would be good to hear your thoughts on that and how it differs by region? And then the second question, if I may, on industrial products, I know that pricing in the division has turned negative for the first time since 2020, and I think, Raviv, you cited lower elemental prices. Can you talk a little bit about how you expect that to evolve in the second half, or that pricing will recover or turn more negative, and maybe even into 2024, if you have any early thoughts? Thank you.

Sure. Thanks, Alex, for the questions. I'll start with Growing Solutions. We've been going through destocking now for almost three quarters. And the dynamics of the market are that the farmers were in wait-and-see position given a price is going down for such a long time. That has halted. So, now we're seeing prices stabilized and even go up. But at the same time, we're still selling product with raw materials from the past, at least two quarters. So still, there is some, high cost inventory that's flowing through. So, we're not completely normalized in the third quarter, but at the same time, we're in much better shape, because prices are not going down anymore, they're going up. And the raw materials were in a downwards trend. So, we expect to see an improvement already in Q3, especially in Brazil. Please note that in terms of overall sales, sales were actually pretty positive B2C sales were very positive, B2B sales we actually pulled a little bit because of profitability reasons. So, it was a conscious decision. So overall, going forward, we'll see better third and better fourth quarter also because of seasonality in Brazil as well. As far as our IP division is concerned, yes, prices have trended downward, and we're seeing the lowest prices in the last 15 years or so. We don't see the prices trending further down for a simple reason that, they're below the cost levels of some of our Chinese competitors. We've actually seen a first bankruptcy of a small producer in China, and we expect that most of the Chinese producers are in bad shape at this point. So, there could be some, and we expect some supply balancing and some supply capacity coming out of the market, which is, as far as we're…

Thank you.

Thanks, Alex. Our next call is from the line of Joel Jackson with BMO. Joel?

Good morning. Good afternoon. A few questions, in the Potash business. So, can you give a bit of your expectation for what pricing might be in the third quarter? And then it looks like potash production, is a little bit lower in Q1 and Q2 than it has been last year. Can you talk about what the production run rate would be like for the rest of the year in 2024?

Yes. So for us, the production in the first quarter was lower than last year. Second quarter was back to normal and even a 100,000 more than originally planned, because it was a 100,000 tons deferred from the first quarter to second quarter. Going into the year, we expected that we'd be able to produce about 4.8 million, that's down a little bit because some issues that we had in Spain, and I won't go back into them, but the bottom line is that we're going to produce about 4.7 million. We expect that the sales volumes in Q3 and Q4 will be relatively similar to Q2. In terms of the average potash price, that becomes easier for us now, because we're completely sold out of granular product until the end of the year. We still have some standard product to sell, because the shipments to India were halted, and we haven't supplied all of our India contract. There's ample demand. So, if we need to sell outside of India, of course, we will. But given that we have clarity, then we expect the average potash price for the second half of the year to be around 340, and maybe a couple of bucks more. But that's pretty certain from our perspective. In terms of the dynamics, dynamics turned at the end of June. Right now, we're seeing strong inland demand in China. And the result is that the prices are actually moving up inland and China. We see Brazil prices rebounding from 310, 320 to over 350. Europe is relatively stable after somewhat of a downward spiral, for a few months. And the U.S. looks relatively healthy even though it's fluctuating. So, I can't say that the prices have been established in the U.S. A little bit longer term, we do see some, buying interest for January and February, in Brazil, which is very positive because that was not happening last year at all. There was no spot buying last year in, July and August. Like I said, we're not selling anymore this year, but we're starting to sell for next year. So, that's positive. So, I'd say the overall dynamics in the potash market also given the new policy it seems of, our Canadian competitors, to curtail some of their production capacity that also gives more stability from the supply side. So that's in short, the potash dynamic at this point.

Maybe to add, I'm sorry that, I think we're seeing the Russian bellow side stabilizing and not continuing to close the gap. So, there is some volume that is removed from the marketplace on that account as well. We put it all together, and we do not have a situation, I believe, anymore, where supply is significantly higher than demand, which will lead to a constructive surrounding for pricing. Put it all together. I think that's the picture that we see. That's the picture our peers see. And I think it makes a lot of sense. That's it.

Okay. And just finally, when you think about your current opportunities at Boulby or Cleveland potash for polysulphate and the different variants that you have with products, now potash prices go a bit back down to 300s, sort of, the higher end of the mid-cycle range. What is that business, like you're doing great production of polyhalite, polysulphate. Is that business now generating a significant return -- a reasonable return to keep the business going? What do you need to -- what kind of earnings are you making on it this year? What do you need to make it a viable long-term business?

Okay. So, that's a great question. First of all, it's a profitable business, but it's not a very profitable business like it was last year. The potash price going down and the relatively weak demand all around fertilizers in Europe has hurt that business. So, yes, we're producing great, but we're not selling at the kind of global premium that we'd like. We're selling, for very nice premium in Europe, because Europe appreciates the organic premium and the value of the product and has more experience with the product. Unfortunately, in Brazil and in China, customers still view this product or this family of products actually, because we've developed a whole family of products, still is too close to commodity and tend to negotiate, taking into account the effect of the potash price. So, the bottom line is, we're getting a good business in Europe and not that great business in China and in Brazil. And we need to continue to educate the market and to demonstrate the value that the products bring to the table. And that will help us get from, a business that has, relatively normalized profitability to, higher profitability. It's not home run fertilizer with 30% EBITDA. But, we believe that over time we could achieve a 15% plus EBITDA this year. It'll barely be double-digits, whereas last year we made a very nice 20% plus EBITDA. Hope that answers.

Thank you.

Thank you.

Our next call is coming from the line of Rahi Parikh with Barclays. Rahi?

Perfect. You guys can hear me?

Yes.

Yes, yes.

Great. Well, I just have one question. So for IP, as you've seen there's been some issues in the last quarters, though external. I'm just wondering is there, like, any game plan to kind of help the sector besides, like, what's been happening? Is there any strategy to go around the lower demand, the electronic slow down, just your thoughts on that? Thank you.

Thanks for the question. Look, the flame retardants for electronics and construction, there are very significant component of our offerings. So, it's not like we can circumvent that. We're suffering from the cycle like everybody else. It's a significant downturn because, normally, when there's a slowdown, we produce we produce a little less. We take the disciplined approach. We demonstrate the value to our customers, and are able usually to affect the strong pricing. Currently, the drop in demand is so significant. There was so much stock built into the supply chain. And it just, has taken quite a while to get that stuck out of the supply chain, and the demand still has not built back up. I'm talking about the demand for TVs, laptops, cell phones, still the demand is not back. Construction, which is also a significant component there the cycle is longer. So, electronics is expected to come back quickly, for refill of product, on construction, given the interest rates, and overall activity globally, it's going to take longer, put that together with abundant supply. That as I said, due to the dynamics that have caused the pricing to go down below the cost of some of our competitors, supply is going to come down somewhat in the coming months. And as supply normalizes a little bit, and as demand normalizes, we expect to go back to normal. In the first half of the year, we thought that, if we sold -- if we didn't participate in the lower pricing game, we thought that we would get a better result. Unfortunately, we didn't, because the cycle was longer than we expected. We are keeping our market share with our long-term customers now. So, we're going to lose less of volume in the next few months, and we're going to allow the market to take its course for a few more months, until we get back to normal. The end game here is that, we believe in the fundamental strength of the market. We believe that we're going through the bottom side of a cycle, bottom that hasn't happened for 15 years. And we were sure that the market is coming back. And, the only question is how many more months we'll have to endure the current situation. Right now, we're positive that we're not going to see a significant return to normalized business in the third quarter. Fourth quarter, the jury is still out, but typically the fourth quarter is a weaker quarter. And, customers are not looking to build up stock towards the end of the year. So my guess is that, we'll start seeing some more significant improvement in the beginning of 2024.

Just as a reminder.

I'm sorry.

Rahi, just as a reminder in mid-June, when we came out with the new guidance, we did a pretty dramatic $200 million, we chopped-off directly on the bromine business, because already at that time, and that's what we guided, we did not see the recovery more suddenly in Q3 and maybe not even in Q4. So it's, in a way it's covered by this, but, again, it's a good question, and we're waiting for the recovery. Please.

Yes. Makes total sense, and thanks for clarification. And, just so that the -- we can get the clarity. The stock that's built up, it's all high cost, high cost stock that you're trying to get through.

Yes.

Correct? Because it's made probably in the first half of this year, last year.

Sure.

Okay. Perfect. Thank you so much.

Thank you.

Okay. So, I understand that we don't have any more questions. So, I want to thank you all for participating in this call and joining us, as usual. We appreciate your questions and appreciate your following us and supporting us. And, with that, thanks again to our employees at ICL. Thanks to my colleague, Aviram.

Thank you, Raviv.

Helping me on this call, and looking forward to coming back to you next quarter and reporting about our progress. Thank you very much. Take care.

Thank you.