ICL Group Ltd (ICL) 2024 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the ICL analyst conference call. (Operator Instructions) 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.

女士們、先生們，感謝你們的支持，歡迎參加 ICL 分析師電話會議。（操作員指示）我必須通知您，今天這個電話正在錄音。我想將電話交給今天的第一位講者、全球投資者關係副總裁 Peggy Reilly Tharp。請繼續。

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 ilc-group.com. E

謝謝。大家好。我是全球投資者關係副總裁 Peggy Reilly Tharp。我歡迎您並感謝您今天參加我們的季度收益電話會議。活動正在我們的網站 ilc-group.com 上進行網路直播。乙

Earlier today, we filed our reports with the securities authorities and the stock exchanges in the US 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.

今天早些時候，我們向美國和以色列的證券監管機構以及證券交易所提交了報告。這些報告以及新聞稿可在我們的網站上取得。會議結束後將重播網路廣播，隨後不久將提供文字記錄。今天將審查的簡報也已向證券監管機構提交，並可在我們的網站上查看。請務必查看投影片 2 上的免責聲明。我們今天的評論將包含 1995 年《私人證券訴訟改革法案》含義內的前瞻性陳述。這些陳述是基於管理層目前的預期，並非對未來業績的保證。該公司沒有義務隨時更新本次電話會議中討論的任何財務資訊。

We will begin with the presentation by our CEO, Mr. Raviv Zoller, followed by Aviram Lahav, our CFO. (Event Instructions) Raviv, please.

我們將首先由我們的執行長 Raviv Zoller 先生進行演講，隨後由我們的財務長 Aviram Lahav 進行演講。（活動說明）請拉維夫。

Thanks, Peggy, and welcome, everyone.

謝謝佩吉，歡迎大家。

As I have in the past few quarters, I would like to provide a brief update on the situation in Israel. Although we still faced challenges caused by the war, we once again executed against our plan in the second quarter and delivered solid results. While the geopolitical situation remains tense, our teams have done an excellent job of managing existing risks while planning and preparing for different potential scenarios.

正如我在過去幾個季度所做的那樣，我想簡單介紹一下以色列的最新局勢。儘管仍面臨戰爭帶來的挑戰，但第二季我們再次按計畫執行，取得了紮實的業績。儘管地緣政治局勢仍然緊張，但我們的團隊在管理現有風險、同時規劃和準備不同的潛在情況方面做得非常出色。

Now, if you will, please turn to slide 3 for a brief overview of second quarter results, which were down versus the prior year as expected. However, sales of $1.752 billion were up for the second consecutive quarter, while adjusted EBITDA of $377 million was up for the third consecutive quarter, with EBITDA margin increasing to 22%. For the second quarter, adjusted earnings per share were $0.10, up 11% on a sequential basis. Next month, we will distribute a dividend of about $0.05 per share as we continue to return value to our shareholders.

現在，如果您願意的話，請翻到幻燈片 3，簡要概述第二季度的業績，該業績與去年同期相比有所下降，符合預期。然而，銷售額連續第二季成長 17.52 億美元，調整後 EBITDA 連續第三個季度成長 3.77 億美元，EBITDA 利潤率增至 22%。第二季調整後每股收益為 0.10 美元，季增 11%。下個月，我們將派發每股約 0.05 美元的股息，繼續為股東回報價值。

All three of our specialty-driven business divisions, industrial products, phosphate solutions, and growing solutions delivered consecutive quarterly and year-over-year growth in EBITDA.

我們所有三個專業驅動的業務部門、工業產品、磷酸鹽解決方案和成長解決方案均實現了 EBITDA 連續季度和同比增長。

For potash, we saw fertilizer prices stabilized during the second quarter. We continued to drive efficiency efforts in cash generation in the second quarter, and Aviram will provide some more detail later in the call. We also continued to gain market share across our specialties driven business divisions, both organically and via acquisition.

對於鉀肥，我們看到第二季化肥價格趨於穩定。我們在第二季度繼續提高現金產生效率，阿維拉姆將在稍後的電話會議中提供更多細節。我們也透過有機方式和收購，繼續在專業驅動的業務部門中獲得市場份額。

I would ask you to turn now to slide 4 and look at both year-over-year and quarter-over-quarter trends with some key financial metrics. As you can see, we delivered quarter-over-quarter improvement across the board. Our specialty driven business divisions also achieved year-over-year improvement in margin expansion versus both prior periods. In the second quarter, we delivered quarterly sequential improvement in operating cash flow of $316 million and free cash flow of $175 million, up 8% and 19%, respectively.

我想請您現在翻到投影片 4，透過一些關鍵財務指標來查看同比和環比趨勢。正如您所看到的，我們全面實現了季度環比的改善。與前兩個時期相比，我們的專業驅動業務部門的利潤率擴張也實現了同比改善。第二季度，我們的營運現金流和自由現金流分別較上季成長 8% 和 19%，分別為 3.16 億美元和 1.75 億美元。

Let's start with the review of our divisions and begin with our industrial products business on slide 5. For the second quarter of 2024, sales were $315 million with EBITDA of $74 million. While sales were up 5% year over year, they declined slightly as expected versus a seasonally strong first quarter. Industrial products EBITDA improved sequentially for the third consecutive quarter.

讓我們先回顧一下我們的部門，然後從幻燈片 5 上的工業產品業務開始。2024 年第二季銷售額為 3.15 億美元，EBITDA 為 7,400 萬美元。雖然銷售額年增 5%，但與季節性強勁的第一季相比，銷售額如預期略有下降。工業產品 EBITDA 連續第三個季度環比成長。

During the quarter, we continued to prioritize cost savings and efficiency efforts. We achieved higher capacity utilization and were able to increase market share, despite end market demand remaining mixed with softness in electronics and building and construction lingering. Sales of clear brine fluids for use in the oil and gas industry declined year over year due to weather and a shift in oil rig schedules.

本季度，我們繼續優先考慮節約成本和提高效率的工作。儘管終端市場需求仍然存在，且電子產品和建築業持續疲軟，但我們實現了更高的產能利用率，並能夠增加市場份額。由於天氣和石油鑽井平台計劃的變化，用於石油和天然氣行業的透明鹽水的銷量同比下降。

We maintained our focus on expanding customer relationships and long-term partnerships, and we are now introducing new phosphorous based solutions in North America and Europe. We are also expanding customer trials for FruitMag, our specialty minerals solution, for post-harvest citrus fruit treatment into China, one of the world's top citrus producers.

我們繼續致力於擴大客戶關係和長期合作夥伴關係，現在我們正在北美和歐洲推出新的磷基解決方案。我們也將 FruitMag（我們的特殊礦物質解決方案）的客戶試用範圍擴大到中國（世界頂級柑橘生產國之一），用於柑橘類水果採後處理。

On slide 6, you will see our potash division results for the second quarter of 2024 with sales of $422 million and EBITDA of $118 million, both relatively in line with the first quarter. Total sales volume was down 108,000 tons year over year, but up sequentially due to annual maintenance in the Dead Sea in the first quarter of this year. We also experienced some shipping related issues as the events in the Red Sea presents a challenge for ICL as well as for other global companies. Regardless, we have been able to deliver our quantities by adjusting delivery destinations to some extent and when necessary are shipping routes.

在投影片 6 上，您將看到我們的鉀肥部門 2024 年第二季的業績，銷售額為 4.22 億美元，EBITDA 為 1.18 億美元，兩者與第一季相對一致。總銷量年減10.8萬噸，但由於今年第一季死海年度維護，季增。我們也遇到了一些與運輸相關的問題，因為紅海事件給 ICL 以及其他跨國公司帶來了挑戰。無論如何，我們已經能夠透過一定程度地調整交貨目的地以及必要時調整運輸路線來交付我們的數量。

In Spain, we saw continued improvement and remain on track to meet our 2024 production and cost savings goals. Cost per tonne has improved, and we are also seeing benefit from shifting our efforts to a higher grade mineral location. In total, the average potash price decline in the second quarter to $300 CIF per tonne, down approximately 26% year over year and 7% sequentially.

在西班牙，我們看到了持續改進，並有望實現 2024 年的生產和成本節約目標。每噸成本有所改善，我們也看到了將努力轉移到更高品位的礦產地所帶來的好處。整體而言，第二季鉀肥平均價格下降至每噸 CIF 300 美元，年減約 26%，較上一季下降 7%。

Turning to slide 7 in our phosphate solutions division, where second-quarter sales of $572 million and EBITDA of $146 million, both increased on a year-over-year and quarter-over-quarter basis. EBITDA margin increased 26% and improved versus both prior periods. Our phosphate specialties are ahead of plan for 2024 with sequential quarterly improvement as our food strategy continued to deliver strong results.

轉向我們磷酸鹽解決方案部門的幻燈片 7，該部門第二季度銷售額為 5.72 億美元，EBITDA 為 1.46 億美元，同比和環比均有所增長。EBITDA 利潤率成長了 26%，與之前兩個時期相比有所改善。由於我們的食品策略持續取得強勁成果，我們的磷酸鹽專業產品提前於 2024 年計劃，連續季度有所改善。

For the second quarter, we saw exciting double-digit year-over-year growth in our alternative dairy base beverage. We also expanded our capacity in China to meet growing customer demand for our food specialties solutions with our new food ingredients plant.

第二季度，我們的替代乳製品飲料實現了令人興奮的兩位數同比增長。我們也透過新的食品配料工廠擴大了在中國的產能，以滿足客戶對我們的食品特色解決方案不斷增長的需求。

Also in China, we continued to reach new production records and to improve efficiencies as we strive to meet customer demand. Our growth trend in that country continued with higher battery materials volumes in the second quarter.

同樣在中國，我們不斷創造新的生產記錄並提高效率，努力滿足客戶需求。我們在該國的成長趨勢持續，第二季電池材料產量增加。

For our North American battery materials expansion, we expect our customer innovation and qualification center to be operational in St. Louis by year end. And we already have customer interest in recent R&D advancements we have made, including the use of rapidly developing process technology with improved power density and high performance electrochemical properties, and we will be able to qualify new products at our customer innovation and qualification center by the end of the year.

對於我們在北美電池材料的擴張，我們預計我們的客戶創新和資格中心將在年底前在聖路易斯投入營運。我們已經引起了客戶對我們最近的研發進步的興趣，包括使用快速發展的製程技術來提高功率密度和高性能電化學性能，並且我們將能夠透過以下方式在我們的客戶創新和鑑定中心對新產品進行鑑定年底。

For our commercial LFP plant in North America, we are evaluating alternative incentive opportunities and also more actively and conservatively managing our construction schedule and capital expenditures to match anticipated customer demand timelines. This is expected to push commercial production to a later start, more in line with most of our customers’ requirements.

對於我們在北美的商業 LFP 工廠，我們正在評估替代激勵機會，並更積極和保守地管理我們的施工進度和資本支出，以符合預期的客戶需求時間表。預計這將推動商業生產推遲，更符合我們大多數客戶的要求。

Turning to slide 8 in our growing solutions business division, where second-quarter 2024 sales of $494 million were up both sequentially and year over year. EBITDA of $45 million also improved versus both prior periods. We continue to target the very specific needs the growers have in different regions and responding with innovative new products which were designed for each individual market. On a regional basis, we were able to increase market share in the key and growing markets of Brazil, China, and India by expanding specialty fertilizer distribution.

轉向我們不斷發展的解決方案業務部門的幻燈片 8，該部門 2024 年第二季度的銷售額為 4.94 億美元，環比和同比均有所增長。與前兩個時期相比，EBITDA 也有所提高，達到 4,500 萬美元。我們持續針對不同地區種植者的具體需求，並針對每個市場設計創新的新產品。在區域基礎上，我們透過擴大特種肥料分銷來增加在巴西、中國和印度等主要和不斷增長的市場的市場份額。

In North America, we continued growing our specialty plant nutrition footprint with the acquisition of Custom Ag Formulators, a provider of liquid adjuvants and enhanced nutrients as well as various other specialty products. This latest acquisition advanced our goal of targeting opportunities to expand our growing solutions product offerings and to position the business for further growth in new and adjacent end markets.

在北美，我們透過收購 Custom Ag Formulators（液體佐劑和強化營養素以及各種其他特殊產品的供應商）繼續擴大我們的特殊植物營養足跡。此次最新的收購推進了我們的目標，即尋找機會擴大我們不斷增長的解決方案產品供應，並使業務在新的和鄰近的終端市場進一步成長。

I would like to wrap up with a few highlights on slide 9. I'm pleased we were able to deliver our third-quarter sequential EBITDA improvement as we continued to build momentum by focusing on the areas under our control and achieving against our strategy. To that end, we were able to increase market share for our specialties driven business divisions in key regions as we remain committed to growing our leadership position for these three businesses.

我想用幻燈片 9 中的一些要點來結束。我很高興我們能夠實現第三季 EBITDA 的連續改善，因為我們透過專注於我們控制的領域並實現我們的策略來繼續建立勢頭。為此，我們能夠增加關鍵地區專業驅動業務部門的市場份額，因為我們仍然致力於提高這三個業務的領導地位。

One way of achieving this goal is the acquisition as we do with growing solutions this quarter. The acquisition of Custom Ag Formulators was our second for 2024, and we look forward to additional opportunities.

實現這一目標的一種方法是收購，就像我們本季不斷成長的解決方案一樣。對 Custom Ag Formulators 的收購是我們 2024 年的第二次收購，我們期待更多機會。

For our phosphate solutions business division, we already discussed the expansion of our food phosphate capacity in China, and we are eager to further advance our strategy in China for China. We're also looking at new global battery materials partnerships in phosphate solutions as we seek to leverage the proficiency we have built in China and expand to other parts of our global footprint.

對於我們的磷酸鹽解決方案業務部門，我們已經討論了在中國擴大食品磷酸鹽產能的問題，我們渴望進一步推進我們在中國的策略。我們也正在尋求在磷酸鹽解決方案方面建立新的全球電池材料合作夥伴關係，因為我們尋求利用我們在中國建立的專業能力並將其擴展到我們全球足跡的其他地區。

We expect to harness our phosphate expertise and work with our global partners and customers to introduce new products as we look to become a global leader in battery materials and we expect to begin qualifying some of this technology by year end in North America. Along with our investments in innovation for battery materials and other areas, we continue to drive cash generation in the quarter and to target efficiency efforts. Our pipeline of innovative new products and solutions is robust, and AI is allowing us to both accelerate new product development for future growth and to achieve industrial efficiencies in the areas of cost, safety, and quality optimization.

我們希望利用我們的磷酸鹽專業知識，並與我們的全球合作夥伴和客戶合作推出新產品，因為我們希望成為電池材料的全球領導者，並且我們希望在年底前開始在北美驗證部分技術。除了對電池材料和其他領域的創新進行投資外，我們還將繼續推動本季的現金產生，並以提高效率為目標。我們的創新產品和解決方案陣容強大，人工智慧使我們能夠加快新產品開發以實現未來成長，並在成本、安全和品質優化方面實現工業效率。

Finally, I would like to call out that ICL has once again been voted one of the best places to work in Israel, Brazil, and St. Louis by our employees. It's an honor to work with the entire CL family of employees around the world and to experience their outstanding work, dedication, and support first hand.

最後，我想指出的是，ICL 再次被我們的員工評選為以色列、巴西和聖路易斯最佳工作場所之一。我很榮幸能夠與世界各地的整個 CL 員工大家庭一起工作，並親身體驗他們的出色工作、奉獻精神和支持。

And with that, I would now like to turn the call over to Aviram.

現在，我想將電話轉給阿維拉姆。

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

謝謝拉維夫和大家今天加入我們。

Let us get started on slide 11 and take a look at some key macro indicators. We are seeing signs of stabilization in terms of inflation and interest rates. Industrial production continues to gradually improve, and this trend is expected to continue into the second half of the year. In the US, housing starts moderated in the second quarter, small uptick in June after week nine.

讓我們從投影片 11 開始看一些關鍵的宏觀指標。我們看到通膨和利率穩定的跡象。工業生產持續逐步好轉，預計這一趨勢將持續到下半年。在美國，房屋開工量在第二季度有所放緩，六月第九週後小幅上升。

Turning to slide 12, in key fertilizer market metrics, grain prices stabilized in quarter two versus quarter one, and farmer sentiment moderated. Concerns about higher interest rates and expectations of farm income to continue to fall this year after reaching record highs in 2022, weighed on farmer sentiment.

轉向投影片 12，在關鍵化肥市場指標中，第二季糧食價格與第一季相比趨於穩定，農民情緒有所緩和。對利率上升的擔憂以及農業收入在 2022 年達到歷史新高後今年將繼續下降的預期打壓了農民的情緒。

While prices for potash and phosphate declined year over year, fertilizer prices in general have stabilized. Freight rates remain elevated as global container operators have been forced to send investments around Southern Africa's Cape of Good Hope to avoid the Red Sea, creating a shortage of vessels and port bottlenecks.

儘管鉀肥和磷肥價格較去年同期下降，但化肥價格整體穩定。由於全球貨櫃業者被迫在南部非洲好望角周圍進行投資以避免紅海，造成船舶短缺和港口瓶頸，運費仍居高不下。

On slide 13, you can see key energy storage market metrics. There has been no fundamental change from past quarters because more rapid growth is still expected in the outer year with more gradual growth in the near term. As Raviv mentioned, we are being conservative in our capital spend to achieve higher certainty aligning with our customers' product qualification and commercial production timelines.

在投影片 13 上，您可以看到關鍵的儲能市場指標。與過去幾季相比沒有根本性的變化，因為預計外部年度仍將出現較快的成長，而短期內的成長將更為緩慢。正如拉維夫所提到的，我們在資本支出方面採取保守態度，以實現與客戶的產品資格和商業生產時間表一致的更高確定性。

If you will now turn to slide 14 in our second-quarter sales bridges, on the left side, you can see year-over-year improvement for each of our specialties-driven business divisions resulting in second quarter of 2024 sales of $1.8 billion. On a quarterly sequential basis, specialty sales also increased. Turning to the right side of the slide, you can see year-over-year increase in quantity, which was offset by lower prices, especially for potash.

如果您現在翻到我們第二季度銷售橋樑中的幻燈片14，在左側，您可以看到我們每個專業驅動的業務部門都實現了同比改善，導致2024 年第二季度的銷售額達到18億美元。按季度連續計算，特種產品銷售額也有所成長。轉向幻燈片右側，您可以看到數量同比增長，但價格下降（尤其是鉀肥）抵消了這一增長。

On slide 15, you can see the impact lower potash prices had on our second-quarter 2024 EBITDA of $377 million. And this is evident on both sides of the slide. On a quarterly sequential basis, EBITDA was up 4% with a roughly 65 basis point improvement in margin. I would like to note that while the year-over-year impact from transportation costs looks roughly flat on the slide, this excludes amounts related to the war in Israel. Even as potash prices continue to decline in the second quarter, ICL remain the leader in terms of average realized price.

在投影片 15 上，您可以看到鉀肥價格下跌對我們 2024 年第二季 EBITDA 3.77 億美元的影響。這一點在幻燈片的兩側都很明顯。按季度計算，EBITDA 成長了 4%，利潤率提高了約 65 個基點。我想指出的是，雖然運輸成本的同比影響在幻燈片上看起來大致持平，但這不包括與以色列戰爭相關的金額。儘管第二季鉀肥價格持續下跌，但就平均實現價格而言，ICL 仍處於領先地位。

As you can see on slide 16, we continue to maintain the flexibility that allows us to rapidly shift in and out of markets based on profitability and to maximize our cost efficient resources. Once again, I would like to point out ICL's position in the global bromine market, which you can see on slide 17. The Dead Sea is the premier and most cost competitive source of bromine and accounts for approximately two-thirds of global supply capacity.

正如您在幻燈片 16 中看到的，我們繼續保持靈活性，使我們能夠根據盈利能力快速進出市場，並最大限度地提高我們的成本效益資源。我想再次指出 ICL 在全球溴市場的地位，您可以在幻燈片 17 中看到這一點。死海是最主要且最具成本競爭力的溴來源，約佔全球供應能力的三分之二。

If you turn to slide 18, you can get an idea of how global ICL is as a company and we are diversified on a regional basis and continue to grow market share in high-growth countries like China and Brazil. We are also diversified in terms of our business division and end markets. Some say this makes the ICL story more complicated and it might. But it also means ICL is not as dramatically impacted by swings in commodity prices.

如果您翻到投影片 18，您可以了解 ICL 作為一家公司的全球性，我們在區域基礎上實現多元化，並繼續擴大在中國和巴西等高成長國家的市場份額。我們在業務部門和終端市場方面也實現了多元化。有人說這會讓 ICL 的故事變得更加複雜，而且確實如此。但這也意味著 ICL 並未受到大宗商品價格波動的顯著影響。

Our specialties driven businesses are either global leader or are well under way to becoming one, which is the case for our growing solutions business. Across our specialties driven business divisions, we have been benefiting from increasing market share. And this is just one of the highlights on slide 19.

我們的專業驅動業務要么是全球領先者，要么正在成為全球領先者，我們不斷發展的解決方案業務就是這種情況。在我們的專業驅動業務部門中，我們一直受益於不斷增長的市場份額。這只是幻燈片 19 上的亮點之一。

We have also maintained our focus on cost savings and efficiencies both across our business divisions and on a corporate-wide basis. And our year to date results in this area are in line with our 2024 plans. We'll continue to prioritize cash generation, and we ended the quarter with available resources of approximately $1.7 billion.

我們也始終關注各個業務部門和整個公司的成本節約和效率。我們今年迄今在該領域的成果與我們的 2024 年計畫相符。我們將繼續優先考慮現金生成，本季末我們的可用資源約為 17 億美元。

Our net debt to adjusted EBITDA rate at the quarter end was 1.3 times We also maintained our commitment to distributing up to 50% of adjusted net income to our shareholders. And in September, we will pay out $63 million as a dividend to our shareholders, bringing our trailing 12 month dividend yield to 4.6%.

截至季末，我們的淨負債與調整後 EBITDA 比率為 1.3 倍。9 月份，我們將向股東支付 6,300 萬美元股息，使我們過去 12 個月的股息殖利率達到 4.6%。

Finally, if you turn to slide 20, I would like to update you on our 2024 guidance. For our specialties driven business divisions, which include industrial products, growing solutions, and all of phosphate solutions, we now expect EBITDA to be between $800 million to $1 billion in 2024. This is up from previous guidance of $700 million to $900 million. There is no change to our previous quarter's guidance. Our effective tax rate for 2024 is now expected to be approximately 28%. For the second quarter, our effective tax rate was 27%, which declined versus the prior year and reflected in lower surplus profit leeway, mainly due to a decrease in product prices.

最後，如果您翻到投影片 20，我想向您介紹我們 2024 年指導的最新情況。對於我們的專業驅動業務部門，包括工業產品、種植解決方案和所有磷酸鹽解決方案，我們現在預計 2024 年 EBITDA 將在 8 億美元至 10 億美元之間。這高於先前 7 億至 9 億美元的指引值。我們上一季的指引沒有變化。目前，我們 2024 年的有效稅率預計約為 28%。第二季度，我們的有效稅率為27%，較上年同期下降，反映在盈餘利潤空間較小，這主要是由於產品價格的下降。

And with that, we can begin to Q&A.

這樣，我們就可以開始問答了。

(Operator Instructions) Ben Theurer, Barclays.

（操作員說明）Ben Theurer，巴克萊銀行。

Thank you very much for taking my questions. Congrats on those very strong results. Two quick ones.

非常感謝您回答我的問題。祝賀這些非常強勁的成果。兩個快的。

So number one, I just wanted to understand and maybe help us frame a little bit what you're seeing in terms of demand particularly in the industrial products segment. Clearly, I guess of the improvement and also the profitability, the sequential improvement here is clearly a good sign. Just wanted to see if you could talk a little bit about just general economic activity and what your expectations are within industrial products for the second half and then into 2025 as we move maybe into a little less easier comps than what we're having now in the short term. So that would be my first question. And I have a quick follow-up.

第一，我只是想了解一下，也許可以幫助我們了解您所看到的需求，特別是工業產品領域的需求。顯然，我認為對於盈利能力的改善和盈利能力的改善，這裡的連續改善顯然是一個好兆頭。只是想看看您是否可以談談一般經濟活動以及您對下半年和 2025 年工業產品的期望，因為我們可能會進入比現在更容易的比較階段短期內。這是我的第一個問題。我有一個快速的跟進。

So in terms of demand what we're seeing is that electronics are coming back but slower than we expected at this point. There's a lot of room for improvement. And of course, we're waiting for the effect of the new AI boom and Microsoft pilot success and -- Microsoft Copilot success, et cetera. And of course, EVs, which are moving us slower than expected this year, but ultimately, are going to move as fast as anybody expected.

因此，就需求而言，我們看到電子產品正在回歸，但速度比我們目前的預期要慢。還有很大的進步空間。當然，我們正在等待新的人工智慧熱潮和微軟試點的成功以及微軟 Copilot 的成功等等的影響。當然，電動車今年的發展速度比預期要慢，但最終，它的發展速度將與任何人預期的一樣快。

And construction, of course, also not really any change these months, but that was expected the construction cycle is always longer. So I would say that in most other industry, demand is very healthy. Electronics is still below normal but improving. Construction is below normal and not improving yet. Otherwise, there's nothing to nothing to report.

當然，這幾個月的施工也沒有真正發生任何變化，但預計施工週期總是更長。所以我想說，在大多數其他行業，需求是非常健康的。電子產品仍低於正常水平，但有所改善。施工進度低於正常水平且尚未改善。否則，就沒什麼好報告的了。

First quarter clear brine fluids were a little higher than expected, and second quarter, a little lower than expected. That has to do among other things with the weather issues and rig schedules. But nothing important there.

第一季透明鹽水略高於預期，第二季略低於預期。這與天氣問題和鑽孔機調度等因素有關。但那裡沒有什麼重要的。

If I may -- hi, Ben, just a moment before you move on to your next question. With regards to IP profitability or profits, I also want to suggest that's the fact that we are pursuing aggressively sales of quantities to our customers and are running at the next two full yield means that we are collecting on the way a much better absorption of our cost, which translates into tens of millions of improvement in dollars. And this is something that a decision that we have taken and we are pursuing it to the maximum. So you can imagine what will happen when the demand picks up and we can basically translate also positive price variance, it will be very, very good.

請容許我－嗨，本，就在你繼續下一個問題之前。關於智慧財產權獲利能力或利潤，我還想指出的是，我們正在積極追求向客戶銷售數量，並在接下來的兩個完整產量中運行，這意味著我們正在更好地吸收我們的智慧財產權。成本，轉化為數千萬美元的改進。這是我們已經做出的決定，我們正在最大限度地追求它。所以你可以想像當需求回升時會發生什麼，我們基本上可以轉化為積極的價格差異，這將非常非常好。

But in the meantime, we're not waiting and it's quarter after quarter, and you're seeing the results of the IP division are being very similar in Q2 to Q1, and that is entirely because of what I just described. Thank you.

但同時，我們不會等待，每個季度都如此，您會看到第二季和第一季智慧財產權部門的結果非常相似，這完全是因為我剛才描述的。謝謝。

Okay. And then just on phosphate solutions, there was obviously a very strong result here on the growth, let's call it, stable sales, but EBITDA actually improving. So first of all, on the top line, could you help us understand how much was volume related? How much was price related? And then in order to understand a little bit that margin expansion and that strong EBITDA growth, if you could give us a couple of examples where like the more specialty piece of phosphate solutions really comes in and kicks in from a margin potential, driving that EBITDA growth to that 13% level year-over-year?

好的。然後就磷酸鹽解決方案而言，顯然在成長方面取得了非常強勁的成果，我們稱之為穩定的銷售，但 EBITDA 實際上有所改善。首先，您能否幫助我們了解與交易量相關的程度有多大？與價格有多少相關？然後，為了稍微了解利潤率擴張和強勁的 EBITDA 成長，您能否給我們舉幾個例子，其中更專業的磷酸鹽解決方案真正發揮作用，並從利潤潛力中發揮作用，推動 EBITDA同比增長13 %？

So on commodities is the easy part. There's a little bit of price appreciation in the second quarter. It's also continuing in the third quarter. So we see a little bit of price appreciation on commodities phosphates in the third quarter as well.

因此，商品是比較容易的部分。第二季價格略有上漲。第三季這種情況仍在持續。因此，我們看到第三季商品磷酸鹽的價格也略有上漲。

On specialties, it's really all about volume. It's introduction of new products and increase of sales in certain markets, including additional capacity that we added in in China on the food business and also strong sales in North America and South America. The tailwinds hit here are from the fact that when commodity prices are not under pressure and WPA is not coming in from China to Europe and Brazil, then there's less pressure on price and prices are relatively stable as we increase volume. So on specialties, it's mostly volume and on commodity, it's mostly price talk about.

就專業而言，這實際上取決於數量。它推出了新產品並增加了某些市場的銷售額，包括我們在中國增加的食品業務產能以及北美和南美的強勁銷售。這裡的有利因素來自這樣一個事實：當商品價格沒有壓力並且WPA沒有從中國進入歐洲和巴西時，那麼價格壓力就會較小，並且隨著我們增加數量，價格相對穩定。因此，在特產方面，主要是數量，而在商品方面，主要是價格。

Joel Jackson, BMO Capital.

喬爾傑克遜，BMO 資本。

Good afternoon. Okay, a few questions. I'll do one by one. I thought maybe a high-level question to start, if you don't mind, LFP materials. It feels like when looking at some of the industry data lately that LFP inventories are extremely high in China, certainly more than what electric vehicle demand would suggest is required right now. You're delaying your plant in St. Louis. Would you comment on the LFP kind of dynamic right now and how that affects your business with high-purity asset and things you're thinking about that business to adjust to the tougher dynamic lately?

午安.好的，有幾個問題。我會一一做。如果你不介意的話，我想也許可以從一個高級問題開始，LFP 材料。最近查看一些行業數據時，我覺得中國的磷酸鋰鐵庫存非常高，肯定超過了目前電動車需求所顯示的需求量。你正在推遲你在聖路易斯的工廠的建設。您能否評論一下目前 LFP 的動態以及這對您的高純度資產業務有何影響，以及您正在考慮該業務以適應最近更嚴峻的動態的事情？

Sure. So LFP is increasing in market share and in finance to well. The market is not exactly moving as fast as anybody expected. LFP is gaining market share significantly this year. So it's going up from less than 40% to expected about 70% within the next year. And as a result, our sales of raw material for LFP are actually an all-time high in terms of volume. And we expect that although EVs are moving slowly globally, what is moving very fast, both in China and globally is LFP for storage. And since there's very little capacity for LFP in the Western world, it's just a matter of time that demand turns into actual deliveries. But it will take time because the infrastructure for the production does not exist in the Western world as of yet. So on the one hand, if we look globally, EVs are moving much slower than expected. Stationary storage is moving faster than expected. LFP is penetrating and increasing its market share much faster than expected.

當然。因此，LFP 的市場份額和財務狀況都在增加。市場的發展速度並不像任何人預期的那麼快。LFP 今年的市佔率顯著增加。因此，明年這一比例將從不到 40% 上升至預期的 70% 左右。因此，我們磷酸鐵鋰原料的銷售量實際上創下了歷史新高。我們預計，儘管電動車在全球發展緩慢，但在中國和全球發展非常快的是用於儲存的磷酸鐵鋰。由於西方世界的 LFP 產能非常少，因此需求轉化為實際交付量只是時間問題。但這需要時間，因為西方世界尚不存在生產基礎設施。因此，一方面，如果我們放眼全球，電動車的發展速度比預期慢得多。固定儲存的發展速度比預期快。LFP 的滲透和市佔率成長速度遠超預期。

So really you're not worried about an oversupply of LFP cathodes right now in China that would require some sort of rationalization over the short term to right size inventories and maybe require you to sell less in the end terms of the markets more balanced.

因此，您實際上並不擔心中國目前磷酸鋰鐵陰極的供應過剩，這需要在短期內進行某種合理化以調整庫存規模，並且可能需要您在市場更加平衡的情況下減少銷售。

We're not worried because in China, we're not producing LFP cathode. We're producing a raw material for all of the cathode. So how do we have excess demand for MAP and other fertilizer type products in China. So if we have to sell less cathode for battery raw materials, then we would just sell more specialty fertilizers in China. It's not a concern for us in the short term.

我們並不擔心，因為在中國，我們不生產磷酸鐵鋰正極。我們正在生產所有陰極的原料。那麼，為什麼中國對磷酸一銨和其他化肥類產品的需求過剩呢？因此，如果我們必須減少銷售電池原料的正極，那麼我們只會在中國銷售更多的特殊肥料。短期內這對我們來說不是一個問題。

In the long term, if you look at the Western part of the world, it's really not relevant for us for '24, '25, or even the first half of '26. We need to look at what's going to happen in the market '26 and '27 vis-a-vis what our customers in North America, and hopefully, Europe, because we have other ideas for Europe, what they need and when they need it. Because we're not going to put the capital to build capacity for customers that are not going to be ready to produce their batteries before '27 or' 28.

從長遠來看，如果你看看世界的西方地區，你會發現這對我們24年、25年甚至26年上半年來說確實無關緊要。我們需要看看 26 和 27 年市場將發生什麼，以及我們北美客戶的情況，希望是歐洲的客戶，因為我們對歐洲有其他想法，他們需要什麼以及何時需要。因為我們不會投入資金為那些在「27」或「28」之前未準備好生產電池的客戶建立產能。

So what we're doing is we're building innovation qualifications center in St. Louis that will be up and running by the end of the year. And we are going to qualify a product with multiple customers. By the way, many of them in the stationary part of the business. And we expect that we will optimize whatever production capacity that we can create with long-term agreements with these qualified customers. And so most of the news is going to be coming out next year.

因此，我們正在做的是在聖路易斯建立創新資格中心，該中心將於今年年底投入運作。我們將向多個客戶驗證產品的資格。順便說一句，他們中的許多人從事固定業務。我們希望透過與這些合格客戶的長期協議來優化我們可以創造的任何產能。因此，大部分消息將於明年發布。

Okay. Thank you for that. Turning to IP, Aviram, you talked about how Q1 earnings were similar to [Q1]. It's clearly showing in the results. How do you think second-half IP operating results earnings-wise will look versus the first half again for IP?

好的。謝謝你。談到 IP，Aviram，您談到了第一季的收益與[問題一]。結果清楚地顯示了這一點。您認為下半年 IP 營運績效（獲利方面）與上半年 IP 相比如何？

I'll give you my take and then obviously, Raviv will add, hopefully, agree. I think it's going to be quite similar. I think we are on a positive track. Although I would say that the market from the demand side is not there yet with the prices. That should come further. But I believe we'll continue the positive trajectory that we're on. And my guesstimate, as I said, for the for the IP second half would be quite similar to the south.

我會告訴你我的看法，然後拉維夫顯然會補充說，希望我同意。我認為這將非常相似。我認為我們正走在正面的軌道上。雖然我想說，需求方面的市場還沒有隨著價格的變動而出現。這應該更進一步。但我相信我們將繼續保持目前的正向軌道。正如我所說，我的猜測是，IP 下半年的情況將與南方非常相似。

I mean, just one more question, if I may sneak it in. So when you raised your guidance this year for $100 million more of EBITDA from specialties, could you break that down? How much of that ex $100 million is coming from commodity phosphate, specialty phosphate, growing solutions and IP?

我的意思是，還有一個問題，我是否可以偷偷地問一下。那麼，當您今年將專業產品的 EBITDA 增加 1 億美元的指引時，您能分解一下嗎？這前 1 億美元中有多少來自商品磷酸鹽、特殊磷酸鹽、種植解決方案和智慧財產權？

No, no, I think that we did our math, Joel. And without getting into the particulars, each of them -- by the way, the range we put, you're right at the midpoint has been raised by $100 million but we're now given the range of $800 million to $1 billion, which is quite wide. I think we are in a good spot there. And what I can say that it is -- this is very good news because it's coming across the board from all our specialty units. It breaks down. It's much, much more fluid. And I don't want to get into [specifics].

不，不，我想我們已經算過了，喬爾。無需詳細說明，每個人 - 順便說一下，我們設定的範圍，你正處於中點，已經籌集了 1 億美元，但我們現在給出的範圍是 8 億美元到 10 億美元，這相當寬。我認為我們處於一個很好的位置。我可以說的是——這是一個非常好的消息，因為它來自我們所有的專業部門。它崩潰了。它更加流暢。我不想陷入[具體情況]。

Why didn't you narrow the range? We're already half through the year. Why is the range still $200 million?

為什麼不縮小範圍？我們已經過半年了。為什麼這個區間還是2億美元？

It's a good question. And I think the reason for that, and I agree with Aviram's take, all three of our specialty businesses are above budget and above expectations. I think the reason for that is that we're in the middle of a war and it would be unconservative of us to give investors the feel that the risk doesn't exist anymore. There's still risk on our business and we need to be more careful this year. But other than that, though, we're a lot more optimistic than we were at the beginning of last quart.

這是一個好問題。我認為原因是，我同意阿維拉姆的觀點，我們所有三個專業業務都超出了預算和預期。我認為原因是我們正處於戰爭之中，如果我們讓投資者感覺風險不再存在，那就太不保守了。今年我們的業務仍有風險，需要更加謹慎。但除此之外，我們比上季初要樂觀得多。

And we take extra care never to disappoint, so more than that to go that way.

我們格外小心，永遠不會讓人失望，所以更重要的是要走這條路。

(Operator Instructions) We have an incoming question which I will read out. That comes from the line of Lisa De Neve from Morgan Stanley.

（操作員說明）我們收到一個問題，我將宣讀該問題。這來自摩根士丹利的 Lisa De Neve。

Can you please share the dynamics you're seeing in the bromine market and provide an update on your commercial strategy? How are you managing value versus value? Can you also share how the EU duties on phosphate-based flame retardants from China has impacted the EU market?

您能否分享一下您在溴市場中看到的動態並提供您商業策略的最新資訊？您如何管理價值與價值？您能否分享歐盟對中國磷酸鹽阻燃劑徵收關稅對歐盟市場的影響？

Okay. So I think we answered the question earlier. I think Aviram gave the key points. Some maybe I would add on phosphorus that because of the new situation that actually allows us to bring in new innovative solutions that are suddenly competitive because we couldn't introduce some products because of low prices of phosphorus coming out of China in Europe. And we have some unique products that are a lot more sustainable and safer, but they demand a premium. So they suddenly become economic. And that means that we have the opportunity to grow our phosphorus business in Europe.

好的。所以我認為我們早些時候回答了這個問題。我認為 Aviram 給了要點。也許我會補充一下磷，因為新的情況實際上允許我們引入新的創新解決方案，這些解決方案突然具有競爭力，因為來自中國的磷價格低廉，我們無法在歐洲推出一些產品。我們有一些更永續、更安全的獨特產品，但它們需要溢價。所以他們突然變得經濟起來。這意味著我們有機會發展我們在歐洲的磷業務。

We estimate that the same is going to happen in the US, and as a result , we have to mature products that will be pretty significant flame retardant products that are coming into the market and show potential for additional business for our IP division. So it's good news for us.

我們估計美國也會發生同樣的情況，因此，我們必須使產品變得成熟，這些產品將是相當重要的阻燃劑產品，這些產品即將進入市場，並為我們的IP 部門顯示出額外業務的潛力。所以這對我們來說是個好消息。

Otherwise, I think the dynamics were described. It is important to note that in the bromine business, most of our business is contracted for quantities for the long term. And that gives us the flexibility when we want to sell more quantities to deliver more on these contracts. And as a result, it's easier for us to take additional market share when we feel that it's in our interest. And right now, it's in our interest, and that's what we're doing. So we're taking market share until prices start going the other direction, and then we'll be back to more of a value over volume type strategy. I hope that answers.

否則，我認為動態已經被描述了。值得注意的是，在溴業務中，我們的大部分業務都是長期簽訂數量合約的。當我們想要銷售更多數量以交付更多合約時，這為我們提供了靈活性。因此，當我們認為符合我們的利益時，我們就更容易獲得額外的市場份額。現在，這符合我們的利益，這就是我們正在做的事情。因此，我們將佔據市場份額，直到價格開始朝另一個方向發展，然後我們將更多地回歸價值高於成交量的策略。我希望能得到答案。

Maybe just to augment this, if you watch out quantity variance, it's very significant. It's a positive, significant in the quarter if you benchmark it vis-a-vis the respective period of last year. And that's obviously a direct decision to commercially to go after opportunities that we have, and it's working, and I think it's a very positive one.

也許只是為了增強這一點，如果你注意到數量差異，它是非常重要的。如果您將其與去年相應時期進行比較，那麼本季的表現是積極的、重要的。這顯然是我們在商業上尋求機會的直接決定，而且它正在發揮作用，我認為這是一個非常積極的決定。

Thank you. We have another incoming question from the line of Erica Yu. Which ports are you using in Israel for exports? Which issues are you facing the Red Sea? How much operating income/EBITDA you generate from exports from Israel?

謝謝。我們還有一個來自 Erica Yu 的問題。您使用以色列的哪些港口進行出口？您在紅海面臨哪些問題？您從以色列的出口中獲得了多少營業收入/EBITDA？

So first of all, we're using the same ports. We're using the Port of Eilat, which goes to the Red Sea -- which is an outlet to the Red Sea less than before. So we're taking some of our shipments around -- some more of our shipments around Africa. It has some additional costs. Even though we have been compensated to some extent from our customers, but the same amount of export is coming out as was before. There's been no change.

首先，我們使用相同的連接埠。我們使用埃拉特港，該港通往紅海——通往紅海的出口比以前少了。因此，我們正在將一些貨物運往非洲各地——更多的貨物運往非洲各地。它有一些額外的費用。儘管我們從客戶那裡得到了一定程度的補償，但出口量還是和以前一樣。沒有任何變化。

Obviously, any export that is done through the Red Sea is under danger of attack and many of our ships were in danger of being attacked during the past 10 months. And we have only to thank those shipping companies that have worked diligently with us and done everything possible with us to keep staff safe. And we've been lucky enough to stay safe until now. And hopefully, that will continue.

顯然，任何通過紅海進行的出口都面臨著遭受攻擊的危險，而且我們的許多船隻在過去 10 個月裡都面臨著遭受攻擊的危險。我們只需要感謝那些與我們辛勤工作並盡一切可能保護員工安全的航運公司。到目前為止我們很幸運能夠保持安全。希望這種情況能夠持續下去。

But in the interest of safety, not because we can't -- in the interest of safety, we are delivering less through the Dead Sea, and we're hoping very much that the overall security situation will improve soon. And we're very hopeful that that will be the case.

但為了安全，不是因為我們不能——為了安全，我們減少了通過死海的運送量，我們非常希望整體安全局勢很快就會改善。我們非常希望情況會如此。

The long-term effect, of course, could be additional costs. It's not very material, but it's still millions of dollars that, of course, we would like to avoid. I hope that answers.

當然，長期影響可能是額外成本。這不是很重要，但它仍然是數百萬美元，當然，我們希望避免。我希望能得到答案。

There was another question, given the operating income, how much of it is derived from Israel? If you want to address it, and I'll say a bit more if you want.

還有一個問題，營業收入有多少是來自以色列？如果你想解決這個問題，我會多說一點。

Yeah, I guess, the relevant question is because a lot of the export income comes from Israel. It's about the two-thirds of the overall and the part that is concession related is about one-third of overall profitability of the company. I hope that answers.

是的，我想，相關問題是因為很多出口收入來自以色列。約佔整體獲利能力的三分之二，與特許權相關的部分約占公司整體獲利能力的三分之一。我希望能得到答案。

By the way, it was about two-thirds just five years ago. Two-thirds was concession related, and now it's about little more than one-third.

順便說一下，五年前這個比例大約是三分之二。三分之二與特許權相關，現在大約只有三分之一多一點。

Thank you. You have no further questions. Please proceed.

謝謝。您沒有其他問題了。請繼續。

Okay. So thanks again for joining our call and reviewing the quarter with us. We look forward to coming back to you with next quarter with Q3 results. And I want to thank all ICL employees and to everybody that made this call possible. Thank you very much and have a great rest of your day.

好的。再次感謝您加入我們的電話會議並與我們一起回顧本季。我們期待在下個季度向您提供第三季的結果。我要感謝所有 ICL 員工以及促成這通通話的所有人。非常感謝您，祝您有個愉快的一天。