ICL(ICL) - 2025 Q1 - Quarterly Report

FORM 6-K Filing Information Report Details This section identifies the document as a Form 6-K report filed by ICL Group Ltd. for the month of May 2025, indicating its status as a foreign private issuer - The document is a Form 6-K report filed by ICL Group Ltd. for May 2025, under Commission File Number: 001-13742[1][2] Incorporation by Reference The report on Form 6-K is incorporated by reference into ICL Group Ltd.'s Form S-8 registration statement (333-205518) and its Israeli Shelf Prospectus (2022-02-019821), becoming part of these documents unless superseded by subsequent filings - This Form 6-K is incorporated by reference into the registration statement on Form S-8 (Registration Number: 333-205518) and the Israeli Shelf Prospectus (Filing Number: 2022-02-019821)[4] Q1 2025 Results Overview Headline Summary ICL Group reported increased sales of $1.8 billion in Q1 2025 year-over-year, with adjusted EBITDA of $359 million and adjusted diluted EPS of $0.09, while operating income decreased to $185 million and net income attributable to shareholders was $91 million Q1 2025 Key Financial Highlights (YoY) | Metric | Q1 2025 ($ millions) | Q1 2024 ($ millions) | Change (%) | | :-------------------------------- | :------------------- | :------------------- | :--------- | | Consolidated Sales | 1,800 | 1,700 | 5.9% | | Operating Income | 185 | 203 | (8.8%) | | Adjusted Operating Income | 208 | 215 | (3.3%) | | Net Income Attributable to Shareholders | 91 | 109 | (16.6%) | | Adjusted Net Income | 110 | 118 | (6.8%) | | Adjusted EBITDA | 359 | 362 | (0.8%) | | Diluted EPS | 0.07 | 0.08 | (12.5%) | | Adjusted Diluted EPS | 0.09 | 0.09 | 0.0% | CEO Commentary & Full Year Guidance ICL's CEO, Elad Aharonson, highlighted sequential increases in Q1 sales, adjusted EBITDA, and EPS, driven by specialties-focused businesses, and the company reiterates its full-year 2025 guidance for specialties-driven EBITDA and Potash sales volumes - ICL delivered sequential increases in Q1 sales, adjusted EBITDA, and EPS, primarily led by specialties-driven businesses (Industrial Products, Phosphate Solutions, Growing Solutions) which reported year-over-year growth in sales and EBITDA, mainly due to higher volumes[10] - Potash segment experienced lower year-over-year prices due to annual 2024 contracts with China and India being at lower rates than current market prices[10] Full Year 2025 Guidance | Metric | Guidance | | :---------------------- | :----------------------------------- | | Specialties-driven EBITDA | $0.95 billion to $1.15 billion | | Potash Sales Volumes | 4.5 million to 4.7 million metric tons | Financial Results and Business Overview Basis of Preparation & About ICL This section clarifies that the financial review is based on unaudited interim condensed consolidated financial statements prepared under IFRS, and introduces ICL Group Ltd. as a global specialty minerals company focused on sustainable solutions - The Financial Results and Business Overview is based on unaudited interim condensed consolidated financial statements for Q1 2025, prepared in accordance with IFRS and IAS 34[11] - ICL Group Ltd. is a leading global specialty minerals company, creating solutions for sustainability challenges in food, agriculture, and industrial markets, utilizing bromine, potash, and phosphate resources[12] - ICL's shares are dual-listed on the NYSE and TASE (ICL), with 2024 revenues totaling approximately $7 billion and over 12,000 employees worldwide[12] Financial Figures and Non-GAAP Financial Measures This section presents key financial figures for Q1 2025, Q1 2024, and full-year 2024, including both IFRS and non-IFRS measures, and explains their calculation and management's rationale for their use Key Financial Figures (Q1 2025 vs. Q1 2024 and FY 2024) | Metric ($ millions) | 1-3/2025 | % of Sales | 1-3/2024 | % of Sales | 1-12/2024 | % of Sales | | :------------------------------------------ | :------- | :--------- | :------- | :--------- | :-------- | :--------- | | Sales | 1,767 | - | 1,735 | - | 6,841 | - | | Gross profit | 560 | 32 | 557 | 32 | 2,256 | 33 | | Operating income | 185 | 10 | 203 | 12 | 775 | 11 | | Adjusted operating income (1) | 208 | 12 | 215 | 12 | 873 | 13 | | Net income attributable to shareholders | 91 | 5 | 109 | 6 | 407 | 6 | | Adjusted net income attributable to shareholders (1) | 110 | 6 | 118 | 7 | 484 | 7 | | Diluted earnings per share (in dollars) | 0.07 | - | 0.08 | - | 0.32 | - | | Diluted adjusted earnings per share (in dollars) (2) | 0.09 | - | 0.09 | - | 0.38 | - | | Adjusted EBITDA (2) | 359 | 20 | 362 | 21 | 1,469 | 21 | | Cash flows from operating activities (3) | 165 | - | 292 | - | 1,468 | - | | Purchases of property, plant and equipment and intangible assets (3) | 190 | - | 145 | - | 713 | - | Non-GAAP Measures Explanation ICL's management uses non-IFRS financial measures to compare operating performance across periods, excluding certain items not indicative of ongoing operations, providing useful information for evaluating business strategies and management performance - Management uses adjusted operating income, adjusted net income, diluted adjusted EPS, and adjusted EBITDA to facilitate operating performance comparisons and evaluate business strategies[18][19] - Adjusted operating income and net income exclude certain items like charges related to security situations, impairments, and early retirement provisions[18] - Adjusted EBITDA is calculated as net income before financing expenses, taxes, equity-accounted investees' earnings, depreciation, amortization, and specific adjustments[18] Adjustments to Reported Operating and Net Income (non-GAAP) This section details the specific adjustments made to IFRS operating and net income to arrive at non-GAAP figures for Q1 2025, Q1 2024, and full-year 2024, including charges related to the security situation in Israel, fire incidents, and provisions for early retirement Adjustments to Operating and Net Income ($ millions) | Item | 1-3/2025 | 1-3/2024 | 1-12/2024 | | :------------------------------------------ | :------- | :------- | :-------- | | Operating income | 185 | 203 | 775 | | Charges related to security situation in Israel | 10 | 12 | 57 | | Impairment and write-off of assets and provision for site closure | - | - | 35 | | Fire incident at Ashdod Port | 4 | - | - | | Provision for early retirement | 9 | - | 4 | | Legal proceedings | - | - | 2 | | Total adjustments to operating income | 23 | 12 | 98 | | Adjusted operating income | 208 | 215 | 873 | | Net income attributable to shareholders | 91 | 109 | 407 | | Total adjustments to operating income | 23 | 12 | 98 | | Total tax adjustments | (4) | (3) | (21) | | Total adjusted net income - shareholders | 110 | 118 | 484 | - Adjustments for Q1 2025 include $10 million for security situation in Israel, $4 million for Ashdod Port fire, and $9 million for early retirement provisions[23][24][25] Consolidated Adjusted EBITDA and Diluted Adjusted EPS This section provides the reconciliation for Adjusted EBITDA and diluted adjusted Earnings Per Share, showing the calculation from net income by adding back financing expenses, taxes, depreciation, amortization, and other specific adjustments Adjusted EBITDA Calculation ($ millions) | Item | 1-3/2025 | 1-3/2024 | 1-12/2024 | | :-------------------------- | :------- | :------- | :-------- | | Net income | 106 | 126 | 464 | | Financing expenses, net | 37 | 35 | 140 | | Taxes on income | 42 | 42 | 172 | | Depreciation and amortization | 151 | 147 | 596 | | Adjustments (1) | 23 | 12 | 98 | | Total adjusted EBITDA | 359 | 362 | 1,469 | Diluted Adjusted EPS Calculation ($ millions, except per share) | Item | 1-3/2025 | 1-3/2024 | 1-12/2024 | | :------------------------------------------ | :------- | :------- | :-------- | | Net income attributable to shareholders | 91 | 109 | 407 | | Adjustments (1) | 23 | 12 | 98 | | Total tax adjustments | (4) | (3) | (21) | | Adjusted net income - shareholders | 110 | 118 | 484 | | Weighted-average diluted ordinary shares outstanding (thousands) | 1,290,944 | 1,290,362 | 1,290,039 | | Diluted adjusted earnings per share ($) | 0.09 | 0.09 | 0.38 | Recent Developments Impact of New United States Tariffs ICL is monitoring potential US tariffs and their impact, but currently does not anticipate a material adverse effect on its operations, financial condition, or liquidity, though the actual impact remains uncertain - ICL is actively monitoring current and potential US tariffs but does not believe they will have a material adverse effect on its results, financial condition, or liquidity[33] - The actual impact of tariffs remains uncertain, depending on effective dates, duration, scope changes, countermeasures, and mitigating actions[33] Security Situation in Israel The ongoing security situation in Israel since October 2023 has caused supply chain disruptions, personnel shortages, and increased costs, with intensified regional tensions affecting shipping, though not materially impacting Q1 2025 results - The security situation in Israel has caused supply chain and shipping route disruptions, personnel shortages due to reserve duty mobilization, and increased costs for site protection[34] - Regional tensions, including Houthi attacks, have intensified, disrupting shipping and increasing costs[34] - The security situation has not had a material impact on Q1 2025 business results, but future impacts are unpredictable[36] Results analysis for the period January – March 2025 Operating Income Drivers Operating income for Q1 2025 was $185 million, down from $203 million in Q1 2024, primarily due to lower prices, unfavorable exchange rates, and higher operating expenses, partially offset by higher sales volumes, lower raw material costs, and reduced transportation expenses Operating Income Drivers (Q1 2025 vs. Q1 2024, $ millions) | Driver | Sales | Expenses | Operating income | | :------------------------ | :---- | :------- | :--------------- | | Q1 2024 figures | 1,735 | (1,532) | 203 | | Quantity | 89 | (65) | 24 | | Price | (21) | - | (21) | | Exchange rates | (36) | 33 | (3) | | Raw materials | - | 12 | 12 | | Energy | - | (3) | (3) | | Transportation | - | 17 | 17 | | Operating and other expenses | - | (33) | (33) | | Adjusted Q1 2025 figures | 1,767 | (1,559) | 208 | | Total adjustments Q1 2025* | - | (23) | (23) | | Q1 2025 figures | 1,767 | (1,582) | 185 | - Positive impact on operating income from higher sales volumes of specialty agriculture products, potash, phosphate fertilizers, WPA, industrial salts, and phosphorus-based flame retardants[39] - Negative impact from lower potash prices ($24/tonne YoY), lower selling prices of WPA, food specialties additives, industrial salts, and bromine-based flame retardants[39] Financing expenses, net Net financing expenses increased by $2 million to $37 million in Q1 2025, primarily due to higher expenses from net exchange rate differences and hedging transactions, partially offset by a decrease in net interest expenses - Net financing expenses increased to $37 million in Q1 2025 from $35 million in Q1 2024[40] - The increase was mainly due to $4 million higher expenses from net exchange rate differences and hedging transactions, partially offset by a $2 million decrease in net interest expenses[40] Tax expenses Reported tax expenses remained stable at $42 million in Q1 2025 and Q1 2024, with effective tax rates of 28% and 25% respectively, the lower rate in Q1 2024 attributed to higher profit from jurisdictions with lower tax rates Tax Expenses and Effective Tax Rate | Metric | Q1 2025 | Q1 2024 | | :------------------ | :------ | :------ | | Reported Tax Expenses | $42 million | $42 million | | Effective Tax Rate | 28% | 25% | - The relatively low effective tax rate in Q1 2024 was mainly due to higher profit derived from tax jurisdictions with lower effective tax rates[41] Segment Performance Industrial Products The Industrial Products segment reported increased sales and operating income in Q1 2025, driven by higher volumes of elemental bromine and phosphorus-based flame retardants, partially offset by lower prices for bromine-based products and increased transportation costs - The Industrial Products segment produces bromine, bromine-based compounds, salts, magnesium chloride, magnesia-based products, phosphorus-based products, and functional fluids[43] Results of operations and key indicators Industrial Products segment sales increased to $344 million in Q1 2025 from $335 million in Q1 2024, with operating income rising to $62 million from $59 million, and segment EBITDA also increasing to $76 million Industrial Products Segment Key Indicators ($ millions) | Metric | 1-3/2025 | 1-3/2024 | 1-12/2024 | | :------------------------ | :------- | :------- | :-------- | | Segment Sales | 344 | 335 | 1,239 | | Sales to external customers | 338 | 331 | 1,220 | | Segment Operating Income | 62 | 59 | 224 | | Segment EBITDA | 76 | 72 | 281 | | Capital expenditures | 18 | 16 | 94 | Highlights and business environment Elemental bromine sales increased due to higher volumes, phosphorus-based flame retardant sales grew with higher prices and volumes, particularly in Europe and the US, while clear brine fluids sales decreased due to increased competition - Elemental bromine sales increased year-over-year, driven by higher volumes, partially offset by lower prices[46] - Phosphorus-based flame retardant sales increased year-over-year due to higher prices and volumes, mainly in Europe and the US, influenced by duties on Chinese imports[46] - Clear brine fluids sales decreased year-over-year due to higher competition in Africa and Asia, resulting in lower volumes[46] Operating Income Drivers The positive impact on operating income was primarily from increased sales volumes of bromine- and phosphorus-based flame retardants and elemental bromine, partially offset by lower selling prices of bromine-based products and higher transportation costs Industrial Products Operating Income Drivers (Q1 2025 vs. Q1 2024, $ millions) | Driver | Sales | Expenses | Operating income | | :------------------------ | :---- | :------- | :--------------- | | Q1 2024 figures | 335 | (276) | 59 | | Quantity | 17 | (13) | 4 | | Price | (5) | - | (5) | | Exchange rates | (3) | 2 | (1) | | Raw materials | - | 4 | 4 | | Transportation | - | (2) | (2) | | Operating and other expenses | - | 3 | 3 | | Q1 2025 figures | 344 | (282) | 62 | - Positive impact on operating income from increased sales volumes of bromine- and phosphorus-based flame retardants, as well as elemental bromine[47] - Negative impact on operating income due to lower selling prices of bromine-based flame retardants and bromine-based industrial solutions[48] Potash The Potash segment reported a decrease in sales and operating income in Q1 2025, primarily due to lower potash prices year-over-year, despite higher sales volumes in Brazil and China, and lower production volumes due to operational challenges - The Potash segment produces and sells potash, salts, magnesium, and electricity from operations in Israel (Dead Sea) and Spain (underground mine)[50] Results of operations and key indicators Potash segment sales decreased to $405 million in Q1 2025 from $423 million in Q1 2024, with operating income declining to $56 million from $62 million, and segment EBITDA decreasing to $118 million Potash Segment Key Indicators ($ millions, except price) | Metric | 1-3/2025 | 1-3/2024 | 1-12/2024 | | :------------------------ | :------- | :------- | :-------- | | Segment Sales | 405 | 423 | 1,656 | | Potash sales to external customers | 305 | 306 | 1,237 | | Segment Operating Income | 56 | 62 | 250 | | Segment EBITDA | 118 | 124 | 492 | | Capital expenditures | 64 | 66 | 332 | | Potash price - CIF ($ per tonne) | 300 | 324 | 299 | Highlights and business environment ICL's potash price (CIF) was $300/tonne in Q1 2025, 5% higher QoQ but 7% lower YoY, while the Grain Price Index rose by 1% and the projected global grains stock-to-use ratio decreased, indicating firm agricultural demand - ICL's potash price (CIF) was $300 per tonne in Q1 2025, 5% higher than Q4 2024 but 7% lower year-over-year[53] - The Grain Price Index increased by 1% in Q1 2025, with corn, wheat, and soy prices rising[53] - The projected global grains stock-to-use ratio decreased to 26% for the 2025/26 agriculture year, indicating tightening supply[53] Additional Segment Information Global potash market prices showed mixed trends, with Brazil CFR spot prices up 7.7% YoY and Northwest Europe CIF spot/contract prices down 8.6% YoY, while potash imports to India significantly increased and China's imports decreased, and production was lower YoY due to operational challenges Global Potash Market - Average Prices ($ per tonne) | Average prices | Type | 1-3/2025 | 1-3/2024 | VS Q1 2024 | 10-12/2024 | VS Q4 2024 | | :------------------------ | :--------- | :------- | :------- | :--------- | :--------- | :--------- | | Granular potash – Brazil | CFR spot | 321 | 298 | 7.7% | 288 | 11.5% | | Granular potash – Northwest Europe | CIF spot/contract | 338 | 370 | (8.6)% | 338 | 0.0% | | Standard potash – Southeast Asia | CFR spot | 307 | 309 | (0.6)% | 292 | 5.1% | Potash Imports (million tonnes) | Potash imports | 1-3/2025 | 1-3/2024 | VS Q1 2024 | 10-12/2024 | VS Q4 2024 | | :--------------- | :------- | :------- | :--------- | :--------- | :--------- | | To Brazil | 2.8 | 2.6 | 7.7% | 2.9 | (3.4)% | | To China | 3.6 | 3.8 | (5.3)% | 3.4 | 5.9% | | To India | 0.8 | 0.4 | 100.0% | 1.2 | (33.3)% | - Potash production was 1,062 thousand tonnes in Q1 2025, down 69 thousand tonnes year-over-year due to operational challenges[55] - Total sales (including internal) increased to 1,103 thousand tonnes, up 19 thousand tonnes year-over-year[56] Operating Income Drivers The negative impact on operating income was primarily due to a $24/tonne decrease in potash CIF price year-over-year, partially offset by higher sales volumes of potash in Brazil and China, and lower marine and inland transportation costs Potash Operating Income Drivers (Q1 2025 vs. Q1 2024, $ millions) | Driver | Sales | Expenses | Operating income | | :------------------------ | :---- | :------- | :--------------- | | Q1 2024 figures | 423 | (361) | 62 | | Quantity | 8 | (1) | 7 | | Price | (23) | - | (23) | | Exchange rates | (3) | 2 | (1) | | Raw materials | - | 1 | 1 | | Energy | - | (4) | (4) | | Transportation | - | 14 | 14 | | Q1 2025 figures | 405 | (349) | 56 | - Negative impact on operating income primarily resulted from a $24 decrease in potash price (CIF) per tonne, year-over-year[58] - Positive impact from increased sales volumes of potash in Brazil and China, and lower marine and inland transportation costs, especially to Brazil and the US[57][58] Phosphate Solutions The Phosphate Solutions segment reported increased sales and operating income in Q1 2025, driven by higher sales volumes of phosphate fertilizers, white phosphoric acid (WPA), and industrial salts, along with lower ammonia costs, despite lower selling prices for some specialty products and higher sulphur costs - The Phosphate Solutions segment operates ICL's phosphate value chain, producing phosphate-based specialty products and fertilizers from phosphate rock and fertilizer-grade phosphoric acid[59] Results of operations and key indicators Phosphate Solutions segment sales increased to $573 million in Q1 2025 from $559 million in Q1 2024, with operating income rising to $91 million from $84 million, and segment EBITDA increasing to $139 million Phosphate Solutions Segment Key Indicators ($ millions) | Metric | 1-3/2025 | 1-3/2024 | 1-12/2024 | | :------------------------ | :------- | :------- | :-------- | | Segment Sales | 573 | 559 | 2,215 | | Sales to external customers | 536 | 517 | 2,049 | | Segment Operating Income | 91 | 84 | 358 | | Segment EBITDA | 139 | 131 | 549 | | Capital expenditures | 71 | 52 | 340 | - In Q1 2025, Phosphate Specialties accounted for $324 million of segment sales and $39 million of operating income, while Phosphate Commodities accounted for $249 million of segment sales and $52 million of operating income[60] Highlights and business environment Phosphate fertilizer prices were stable to higher in Q1 2025, driven by firm global demand, limited Chinese exports, and rising raw material costs, particularly sulphur, while ICL signed a strategic agreement to establish LFP production in Europe and commissioned its Battery Materials Innovation and Qualification Center in the US - Phosphate fertilizers prices were stable to higher in Q1 2025, with global demand remaining firm and supply impacted by China's trade restrictions and higher raw material costs (sulphur)[61] - US phosphate imports remained firm ahead of spring planting, with DAP FOB NOLA ending Q1 at $680/mt, up $43/mt from the previous quarter[61] - ICL signed a strategic agreement with Shenzhen Dynanonic Co., Ltd. in January 2025 to establish LFP production in Europe, and commissioned its Battery Materials Innovation and Qualification Center (BMIQ) in the US in early April[62][63] Additional Segment Information Global phosphate commodity prices showed increases, with DAP CFR India spot stable, TSP CFR Brazil spot up 18% YoY, and SSP CPT Brazil inland up 2% YoY, while Sulphur FOB Middle East prices surged by 144% YoY to $183/mt, ending Q1 at $280/mt due to strong demand and limited supply Global Phosphate Commodities Market - Average Prices ($ per tonne) | Average prices | 1-3/2025 | 1-3/2024 | VS Q1 2024 | 10-12/2024 | VS Q4 2024 | | :------------------------------------ | :------- | :------- | :--------- | :--------- | :--------- | | DAP CFR India Bulk Spot | 635 | 591 | 7% | 637 | (0)% | | TSP CFR Brazil Bulk Spot | 500 | 425 | 18% | 500 | 0% | | SSP CPT Brazil inland 18-20% P2O5 Bulk Spot | 281 | 276 | 2% | 270 | 4% | | Sulphur Bulk FOB Adnoc monthly Bulk contract | 183 | 75 | 144% | 139 | 32% | - Indian phosphoric acid prices settled at $1,055/mt P2O5 for Q1 2025 and increased to $1,153/mt P2O5 for Q2 2025[65] - Sulphur FOB Middle East ended Q1 at $280/mt, up $115/mt from end of 2024, driven by firm demand, limited supply, and tariff concerns[65] Operating Income Drivers Operating income was positively impacted by higher sales volumes of phosphate fertilizers, WPA, industrial salts, and food specialties additives, along with lower ammonia costs, partially offset by lower selling prices for WPA, food specialties additives, and industrial salts, as well as higher costs for sulphur and caustic soda, and increased maintenance expenses Phosphate Solutions Operating Income Drivers (Q1 2025 vs. Q1 2024, $ millions) | Driver | Sales | Expenses | Operating income | | :------------------------ | :---- | :------- | :--------------- | | Q1 2024 figures | 559 | (475) | 84 | | Quantity | 25 | (11) | 14 | | Price | (6) | - | (6) | | Exchange rates | (5) | 5 | - | | Raw materials | - | 9 | 9 | | Transportation | - | 3 | 3 | | Operating and other expenses | - | (13) | (13) | | Q1 2025 figures | 573 | (482) | 91 | - Positive impact on operating income from higher sales volumes of phosphate fertilizers, white phosphoric acid (WPA), industrial salts, and food specialties additives[67] - Negative impact from lower selling prices of WPA, food specialties additives, and industrial salts, and higher costs of sulphur and caustic soda[67] Growing Solutions The Growing Solutions segment reported increased sales and operating income in Q1 2025, driven by higher volumes and prices in specialty agriculture and turf and ornamental products, despite lower FertilizerpluS sales volumes, unfavorable exchange rates, and higher raw material and operational costs - The Growing Solutions segment aims for global leadership in plant nutrition, expanding its portfolio of specialty plant nutrition, plant stimulation, and plant health solutions[68] Results of operations and key indicators Growing Solutions segment sales increased to $495 million in Q1 2025 from $479 million in Q1 2024, with operating income rising to $28 million from $23 million, and segment EBITDA increasing to $47 million Growing Solutions Segment Key Indicators ($ millions) | Metric | 1-3/2025 | 1-3/2024 | 1-12/2024 | | :------------------------ | :------- | :------- | :-------- | | Segment Sales | 495 | 479 | 1,950 | | Sales to external customers | 491 | 474 | 1,932 | | Segment Operating Income | 28 | 23 | 128 | | Segment EBITDA | 47 | 42 | 202 | | Capital expenditures | 19 | 15 | 98 | Highlights and business environment Specialty Agriculture sales increased due to higher volumes and prices, Turf and Ornamental sales also grew, while FertilizerpluS sales decreased, and ICL acquired Lavie Bio in April to expand its ag-biologicals offerings - Specialty Agriculture (SA) sales increased year-over-year due to higher volumes (Europe, US, China, Brazil) and higher prices (Brazil), partially offset by exchange rate fluctuations[71] - Turf and Ornamental (T&O) sales increased year-over-year, driven by higher prices and volumes, mainly CRF in Europe[71] - ICL acquired Lavie Bio in April, a leading ag-biologicals company, to expand its Growing Solutions product offerings and target new markets[71] Operating Income Drivers Operating income was positively impacted by higher sales volumes and selling prices of specialty agriculture and turf and ornamental products, partially offset by unfavorable exchange rates, higher costs for commodity fertilizers and potassium hydroxide (KOH), and increased maintenance and operational expenses Growing Solutions Operating Income Drivers (Q1 2025 vs. Q1 2024, $ millions) | Driver | Sales | Expenses | Operating income | | :------------------------ | :---- | :------- | :--------------- | | Q1 2024 figures | 479 | (456) | 23 | | Quantity | 27 | (23) | 4 | | Price | 14 | - | 14 | | Exchange rates | (25) | 23 | (2) | | Raw materials | - | (5) | (5) | | Energy | - | 1 | 1 | | Transportation | - | 2 | 2 | | Operating and other expenses | - | (9) | (9) | | Q1 2025 figures | 495 | (467) | 28 | - Positive impact on operating income from higher sales volumes of specialty agriculture and turf and ornamental products, and higher selling prices across these categories and FertilizerpluS[72][73] - Negative impact from unfavorable exchange rates (depreciation of Brazilian real and euro against US dollar), higher costs of commodity fertilizers and potassium hydroxide (KOH), and increased maintenance and operational costs[73][74][75] Liquidity and Capital Resources Source and Uses of Cash Net cash provided by operating activities decreased to $165 million in Q1 2025 from $292 million in Q1 2024, mainly due to changes in working capital, while net cash used in investing activities increased to $192 million, and net cash provided by financing activities was $5 million, a significant change from $249 million used in the prior year Cash Flow Summary ($ millions) | Cash Flow Type | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Net cash provided by operating activities | 165 | 292 | | Net cash used in investing activities | (192) | (95) | | Net cash provided by (used in) financing activities | 5 | (249) | - Decrease in operating cash flow mainly due to changes in working capital[77] - Increase in cash used in investing activities primarily due to lower proceeds from deposits and higher payments for property, plant and equipment[78] Outstanding Net Debt As of March 31, 2025, ICL's net financial liabilities increased by $142 million to $1,993 million compared to December 31, 2024, and the Board of Directors authorized consideration of a potential expansion of Series G Debentures through a public offering in Israel - ICL's net financial liabilities amounted to $1,993 million as of March 31, 2025, an increase of $142 million from December 31, 2024[80] - The Company's Board of Directors authorized consideration of a potential expansion of its existing Series G Debentures through a public offering in Israel[81] Credit Facilities ICL's Sustainability-linked Revolving Credit Facility (RCF) of $1,550 million was extended until April 2029, and further extended to April 2030 for $1,400 million by eleven banks, with approximately $541 million of the RCF and $251 million of the $300 million committed securitization facility utilized as of March 31, 2025 - The $1,550 million Sustainability-Linked Revolving Credit Facility (RCF) was extended until April 2029 in April 2024[82] - Subsequent to the report date, in April 2025, the RCF was further extended by eleven banks until April 2030, with the credit facility amount becoming $1,400 million effective April 2029[83] - As of March 31, 2025, ICL utilized approximately $541 million of the RCF and $251 million of its $300 million committed securitization facility[82][84] Ratings and Financial Covenants Fitch Ratings and S&P credit rating agency reaffirmed ICL's long-term issuer default rating and senior unsecured rating at 'BBB-' with a stable outlook in June and July 2024, respectively, and the company was in compliance with all financial covenants as of March 31, 2025 - Fitch Ratings reaffirmed ICL's long-term issuer default rating and senior unsecured rating at 'BBB-' with a stable outlook in June 2024[86] - S&P credit rating agency reaffirmed ICL's international credit rating and senior unsecured rating of 'BBB-' and S&P Maalot credit rating of 'ilAA' with a stable outlook in July 2024[87] - As of March 31, 2025, the Company was in compliance with all its financial covenants[88] Corporate Governance & Other Disclosures Critical Accounting Estimates There were no material changes in the critical accounting estimates during the three-month period ended March 31, 2025, compared to those disclosed in the Annual Report on Form 20-F for 2024 - No material changes in critical accounting estimates were reported for Q1 2025[89] Board of Directors and Senior Management Updates Key leadership changes include the appointment of Mr. Elad Aharonson as President & CEO, succeeding Mr. Raviv Zoller, and new presidents for the Growing Solutions Division (Mr. Nir Ilani) and Phosphate Solutions Division (Mr. Nadav Turner), with Mr. Ilan Barkai appointed President of the Potash & Global ESH Division - Mr. Elad Aharonson was appointed President & CEO effective March 13, 2025, succeeding Mr. Raviv Zoller[90][91] - Mr. Nir Ilani was appointed President of the Growing Solutions Division, effective June 1, 2025[92] - Mr. Nadav Turner was appointed President of the Phosphate Solutions Division, effective May 1, 2025, and Mr. Ilan Barkai was appointed President of the Potash & Global ESH Division, also effective May 1, 2025[93][94] Risk Factors No material changes were reported in the risk factors previously disclosed in the Annual Report on Form 20-F for the year ended December 31, 2024 - No material changes in risk factors were reported for Q1 2025[96] Quantitative and Qualitative Exposures stemming from Market Risks For information regarding market risks, reference is made to 'Item 11 – Quantitative and Qualitative Disclosures about Market Risks' in the Annual Report on Form 20-F for the year ended December 31, 2024 - Reference is made to the Annual Report on Form 20-F for detailed disclosures about market risks[97] Legal Proceedings Further information on legal proceedings and other contingencies can be found in Note 6 to the Company's Interim Financial Statements - Further information on legal proceedings and other contingencies is available in Note 6 of the Interim Financial Statements[98] Forward-looking Statements This report contains forward-looking statements, identified by words like 'anticipate' and 'expect,' which are based on management's beliefs and assumptions and are subject to various risks and uncertainties, with actual results potentially differing materially - The report contains forward-looking statements based on management's beliefs and assumptions, subject to risks and uncertainties[99][100] - Risks include changes in exchange rates, supply/demand volatility, natural disasters, regulatory restrictions, general market conditions, raw material prices, labor disputes, and geopolitical instability in Israel[100] - Forward-looking statements speak only as of their date, and the company undertakes no obligation to update them[101] Consolidated Financial Statements (Unaudited) Condensed Consolidated Statements of Financial Position The condensed consolidated statements of financial position show total assets of $11,691 million as of March 31, 2025, an increase from $11,321 million at December 31, 2024, with total liabilities increasing to $5,568 million and total equity growing to $6,123 million Condensed Consolidated Statements of Financial Position ($ millions) | Item | March 31, 2025 | March 31, 2024 | December 31, 2024 | | :-------------------------------- | :------------- | :------------- | :---------------- | | Current assets | | | | | Cash and cash equivalents | 312 | 363 | 327 | | Trade receivables | 1,497 | 1,492 | 1,260 | | Inventories | 1,629 | 1,630 | 1,626 | | Total current assets | 3,836 | 3,907 | 3,586 | | Non-current assets | | | | | Property, plant and equipment | 6,526 | 6,285 | 6,462 | | Intangible assets | 918 | 897 | 869 | | Total non-current assets | 7,855 | 7,579 | 7,735 | | Total assets | 11,691 | 11,486 | 11,321 | | Current liabilities | | | | | Short-term debt | 570 | 623 | 384 | | Trade payables | 1,031 | 914 | 1,002 | | Total current liabilities | 2,603 | 2,440 | 2,328 | | Non-current liabilities | | | | | Long-term debt and debentures | 1,856 | 1,883 | 1,909 | | Total non-current liabilities | 2,965 | 3,002 | 3,006 | | Total liabilities | 5,568 | 5,442 | 5,334 | | Total equity | 6,123 | 6,044 | 5,987 | Condensed Consolidated Statements of Income The condensed consolidated statements of income show sales of $1,767 million for Q1 2025, up from $1,735 million in Q1 2024, with operating income decreasing to $185 million from $203 million, and net income attributable to shareholders at $91 million, down from $109 million Condensed Consolidated Statements of Income ($ millions, except per share) | Item | March 31, 2025 | March 31, 2024 | December 31, 2024 | | :------------------------------------------ | :------------- | :------------- | :---------------- | | Sales | 1,767 | 1,735 | 6,841 | | Cost of sales | 1,207 | 1,178 | 4,585 | | Gross profit | 560 | 557 | 2,256 | | Operating income | 185 | 203 | 775 | | Finance expenses, net | 37 | 35 | 140 | | Income before taxes on income | 148 | 168 | 636 | | Taxes on income | 42 | 42 | 172 | | Net income | 106 | 126 | 464 | | Net income attributable to shareholders | 91 | 109 | 407 | | Diluted earnings per share ($) | 0.07 | 0.08 | 0.32 | Condensed Consolidated Statements of Comprehensive Income The condensed consolidated statements of comprehensive income report total comprehensive income of $185 million for Q1 2025, a significant increase from $66 million in Q1 2024, primarily driven by positive foreign currency translation differences Condensed Consolidated Statements of Comprehensive Income ($ millions) | Item | March 31, 2025 | March 31, 2024 | December 31, 2024 | | :------------------------------------------ | :------------- | :------------- | :---------------- | | Net income | 106 | 126 | 464 | | Foreign currency translation differences | 90 | (58) | (247) | | Effective portion of change in fair value of cash flow hedges | (18) | (5) | (2) | | Total comprehensive income | 185 | 66 | 248 | | Comprehensive income attributable to shareholders | 169 | 53 | 197 | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows show net cash provided by operating activities of $165 million in Q1 2025, down from $292 million in Q1 2024, with net cash used in investing activities increasing to $192 million, while financing activities provided $5 million, a reversal from $249 million used in the prior year Condensed Consolidated Statements of Cash Flows ($ millions) | Item | March 31, 2025 | March 31, 2024 | December 31, 2024 | | :------------------------------------------ | :------------- | :------------- | :---------------- | | Net cash provided by operating activities | 165 | 292 | 1,468 | | Net cash used in investing activities | (192) | (95) | (694) | | Net cash provided by (used in) financing activities | 5 | (249) | (846) | | Net change in cash and cash equivalents | (22) | (52) | (72) | | Cash and cash equivalents as of end of period | 312 | 363 | 327 | Condensed Consolidated Statements of Changes in Equity The condensed consolidated statements of changes in equity show total equity increasing to $6,123 million as of March 31, 2025, from $5,987 million at January 1, 2025, primarily driven by comprehensive income, partially offset by dividends paid Condensed Consolidated Statements of Changes in Equity (Q1 2025, $ millions) | Item | Balance as of Jan 1, 2025 | Share-based compensation | Dividends | Comprehensive income | Balance as of Mar 31, 2025 | | :------------------------------------------ | :------------------------ | :----------------------- | :-------- | :------------------- | :------------------------- | | Total shareholders' equity | 5,724 | 3 | (52) | 169 | 5,844 | | Non-controlling interests | 263 | - | - | 16 | 279 | | Total equity | 5,987 | 3 | (52) | 185 | 6,123 | Condensed Consolidated Statements of Changes in Equity (Q1 2024, $ millions) | Item | Balance as of Jan 1, 2024 | Share-based compensation | Dividends | Comprehensive income | Balance as of Mar 31, 2024 | | :------------------------------------------ | :------------------------ | :----------------------- | :-------- | :------------------- | :------------------------- | | Total shareholders' equity | 5,768 | 2 | (61) | 53 | 5,762 | | Non-controlling interests | 269 | - | - | 13 | 282 | | Total equity | 6,037 | 2 | (61) | 66 | 6,044 | Notes to the Condensed Consolidated Interim Financial Statements Note 1 – General This note provides general information about ICL Group Ltd., including its incorporation in Israel, dual listing on NYSE and TASE, and its status as a subsidiary of Israel Corporation Ltd., also detailing the ongoing security situation in Israel and its potential impacts The Reporting Entity ICL Group Ltd. is an Israeli-domiciled company, dual-listed on NYSE and TASE, and a subsidiary of Israel Corporation Ltd., with the State of Israel holding a Special State Share to safeguard vital interests, and ICL operating as a leading specialty minerals group serving agriculture and industrial markets - ICL Group Ltd. is incorporated and domiciled in Israel, with shares traded on NYSE and TASE (ICL)[117] - The State of Israel holds a Special State Share in ICL to safeguard vital interests[117] - ICL is a leading specialty minerals group with an integrated business model, serving agriculture and industrial end-markets[118] Events during the reporting period The security situation in Israel since October 2023 has caused supply chain disruptions, personnel shortages, increased protection costs, and regional tensions affecting shipping, with ICL implementing mitigation measures and not seeing a material effect on Q1 2025 results, though future impacts are unpredictable - The security situation in Israel has led to supply chain disruptions, personnel shortages, additional costs for site protection, and intensified regional tensions affecting commercial shipping[119] - ICL has taken measures to ensure employee safety and minimize business impact, including supporting employees called for reserve duty[120] - The security situation has not had a material impact on Q1 2025 business results, but the extent of future impact is unpredictable[121] Note 2 – Significant Accounting Policies This note outlines the basis of preparation for the interim financial statements, confirming adherence to IFRS and IAS 34, details reclassifications made in comparative figures for interest received and paid in cash flows, and mentions amendments to IFRS 9 and IFRS 7 not yet adopted Basis of Preparation The condensed consolidated interim financial statements are prepared in accordance with IFRS and IAS 34, consistent with the accounting policies used in the Annual Financial Statements, and are unaudited, not including all information required for complete annual statements - Financial statements are prepared in accordance with IFRS as issued by the IASB and IAS 34, 'Interim Financial Reporting'[122][123] - These interim statements are unaudited and should be read with the Company's audited Annual Report on Form 20-F for 2024[123] Reclassifications Insignificant reclassifications were made to comparative figures to align with current financial statements, with no effect on total profit, and effective Q2 2024, interest received and paid were retrospectively reclassified to investing and financing activities, respectively - Insignificant reclassifications were made in comparative figures, with no effect on total profit[125] - Effective Q2 2024, interest received was reclassified to investing activities and interest paid to financing activities, retrospectively adjusted for comparative figures[126] Amendments to standards and interpretations that have not yet been adopted Amendments to IFRS 9 and IFRS 7, clarifying recognition and derecognition dates for financial instruments and disclosure requirements, are effective for annual reporting periods beginning on or after January 1, 2026, and the Company is evaluating their effects without plans for early adoption - Amendments to IFRS 9 and IFRS 7, clarifying recognition/derecognition of financial instruments and disclosure requirements, are effective for annual periods beginning January 1, 2026[127][128] - The Company is examining the effects of these amendments and has no plans for early adoption[128] Note 3 – Operating Segments This note provides detailed information on ICL's four operating segments: Industrial Products, Potash, Phosphate Solutions, and Growing Solutions, including their business descriptions, financial performance data, and geographical sales distribution, and explains the basis for segment reporting and inter-segment transfers General ICL's operations are organized into four segments: Industrial Products, Potash, Phosphate Solutions, and Growing Solutions, with other activities including innovation and digital platforms, and segment results include inter-segment transfers based on ordinary course transaction prices - ICL operates four segments: Industrial Products, Potash, Phosphate Solutions, and Growing Solutions[130] - Industrial Products focuses on bromine and phosphorus-based products; Potash on potash, salt, magnesium, and electricity; Phosphate Solutions on phosphate value chain from rock to specialty products and fertilizers; Growing Solutions on specialty plant nutrition and health solutions[131][132][133][134][136][137] - Segment revenue, expenses, and results include inter-segment transfers based on ordinary course transaction prices, which are eliminated during consolidation[141] Operating segment data This section presents detailed financial data for each operating segment, including sales, cost of sales, operating income (loss), depreciation, amortization, and capital expenditures for Q1 2025, Q1 2024, and full-year 2024, and includes reconciliations to consolidated figures Operating Segment Data (Q1 2025, $ millions) | Item | Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | | :------------------------------------------ | :------------------ | :----- | :------------------ | :---------------- | :--------------- | :-------------- | :----------- | | Sales to external parties | 338 | 358 | 536 | 491 | 44 | - | 1,767 | | Total sales | 344 | 405 | 573 | 495 | 45 | (95) | 1,767 | | Cost of sales | 228 | 269 | 397 | 364 | 40 | (91) | 1,207 | | Segment operating income (loss) | 62 | 56 | 91 | 28 | (3) | (26) | 208 | | Depreciation, amortization and impairment | 14 | 62 | 48 | 19 | 4 | 4 | 151 | | Capital expenditures | 18 | 64 | 71 | 19 | 1 | 15 | 188 | Operating Segment Data (Q1 2024, $ millions) | Item | Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | | :------------------------------------------ | :------------------ | :----- | :------------------ | :---------------- | :--------------- | :-------------- | :----------- | | Sales to external parties | 331 | 367 | 517 | 474 | 46 | - | 1,735 | | Total sales | 335 | 423 | 559 | 479 | 46 | (107) | 1,735 | | Cost of sales | 225 | 254 | 391 | 363 | 42 | (97) | 1,178 | | Segment operating income (loss) | 59 | 62 | 84 | 23 | (3) | (10) | 215 | | Depreciation and amortization | 13 | 62 | 47 | 19 | 4 | 2 | 147 | | Capital expenditures | 16 | 66 | 52 | 15 | 1 | 5 | 155 | Information based on geographical location This section provides a breakdown of operating segment sales by geographical location of the customer for Q1 2025, Q1 2024, and full-year 2024, with Europe, Asia, and North America representing the largest sales regions for ICL Sales by Geographical Location (Q1 2025, $ millions) | Region | Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | | :-------------- | :------------------ | :----- | :------------------ | :---------------- | :--------------- | :-------------- | :----------- | | Europe | 103 | 149 | 136 | 228 | 33 | (34) | 615 | | Asia | 118 | 74 | 172 | 65 | 4 | (6) | 427 | | North America | 104 | 47 | 141 | 57 | 1 | (3) | 347 | | South America | 5 | 86 | 81 | 112 | - | (2) | 282 | | Rest of the world | 14 | 49 | 43 | 33 | 7 | (50) | 96 | | Total | 344 | 405 | 573 | 495 | 45 | (95) | 1,767 | Sales by Geographical Location (Q1 2024, $ millions) | Region | Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | | :-------------- | :------------------ | :----- | :------------------ | :---------------- | :--------------- | :-------------- | :----------- | | Europe | 104 | 169 | 143 | 235 | 31 | (43) | 639 | | Asia | 110 | 76 | 160 | 61 | 10 | (5) | 412 | | North America | 98 | 61 | 137 | 44 | 1 | (1) | 340 | | South America | 4 | 59 | 69 | 100 | - | - | 232 | | Rest of the world | 19 | 58 | 50 | 39 | 4 | (58) | 112 | | Total | 335 | 423 | 559 | 479 | 46 | (107) | 1,735 | Note 4 – Loans, Financial Instruments and Risk Management This note details the fair value of financial instruments, including fixed-interest loans and debentures, presents an analysis of financial instruments measured at fair value using a Level 2 hierarchy, and discusses the company's exposure to foreign currency risks and its hedging strategy Fair value of financial instruments The carrying amounts of most financial assets and liabilities approximate their fair value, with fixed-interest loans and debentures showing a slight difference where fair value is generally lower than the carrying amount Fair Value of Financial Instruments ($ millions) | Item | March 31, 2025 (Carrying amount) | March 31, 2025 (Fair value) | March 31, 2024 (Carrying amount) | March 31, 2024 (Fair value) | December 31, 2024 (Carrying amount) | December 31, 2024 (Fair value) | | :-------------------------- | :------------------------------- | :-------------------------- | :------------------------------- | :-------------------------- | :---------------------------------- | :-------------------------- | | Loans bearing fixed interest | 297 | 283 | 329 | 289 | 287 | 271 | | Debentures bearing fixed interest: | | | | | | | | Marketable | 918 | 866 | 1,111 | 1,006 | 909 | 845 | | Non-marketable | 47 | 46 | 47 | 44 | 47 | 47 | | Total | 1,262 | 1,195 | 1,487 | 1,339 | 1,243 | 1,163 | Fair value hierarchy Financial instruments measured at fair value are analyzed using a Level 2 valuation method, which relies on observed data, with derivatives used for economic hedge and cash flow hedge showing a net negative fair value of $45 million as of March 31, 2025 - Financial instruments measured at fair value use a Level 2 valuation method, based on observed data[152][153] Fair Value of Derivatives (Level 2, $ millions) | Item | March 31, 2025 | March 31, 2024 | December 31, 2024 | | :------------------------------------------ | :------------- | :------------- | :---------------- | | Derivatives used for economic hedge, net | (26) | 13 | 1 | | Derivatives designated as cash flow hedge, net | (19) | (8) | - | | Total | (45) | 5 | 1 | Foreign currency risks ICL is exposed to Israeli shekel exchange rate changes against the US dollar, affecting debentures, loans, labor costs, and operating expenses, and the company employs derivatives to hedge these cash flow exposures based on risk assessment and its risk management strategy - ICL is exposed to changes in the exchange rate of the Israeli shekel against the US dollar, impacting debentures, loans, labor costs, and operating expenses[155] - The Company's risk management strategy involves hedging these exposures using derivatives, based on assessment of inherent risks[155] Note 5 – Long Term Compensation Plans and Dividend Distributions This note details the approval of new equity-based compensation plans for the CEO, Chairman, and senior managers, involving non-marketable options with three-tranche vesting, and outlines dividend distributions, including a $52 million dividend paid in March 2025 and a $55 million dividend declared for June 2025 Share based payments - non-marketable options Shareholders approved a new three-year equity grant (2025-2027) of approximately 4.3 million non-marketable options to the newly appointed CEO and Chairman, with a fair value of about $7 million, and an additional 1.2 million options for two senior managers, both vesting in three tranches - Shareholders approved a new three-year equity grant (2025-2027) of ~4.3 million non-marketable options to the CEO and Chairman, with an aggregate fair value of about $7 million[159] - An additional 1.2 million non-marketable options were approved for two senior managers, with a fair value of about $1.7 million[159] - All options have a vesting period in three tranches over 12, 24, and 36 months from the grant date[159] Dividend distributions A dividend of $52 million ($0.04 per share) was distributed on March 25, 2025, and the Board of Directors authorized a further dividend of $55 million ($0.04 per share) to be distributed on June 18, 2025 Dividend Distributions | Decision date | Actual distribution date | Distributed amount ($ millions) | Dividend per share ($) | | :-------------- | :----------------------- | :------------------------------ | :--------------------- | | Feb 25, 2025 | Mar 25, 2025 | 52 | 0.04 | | May 18, 2025 | Jun 18, 2025 | 55 | 0.04 | Note 6 – Provisions, Contingencies and Other Matters This note provides updates on legal proceedings, including the Supreme Court's rejection of a petition against ICL Rotem's new mining concession and the postponement of a hearing on the Israel Water Authority's decision regarding the Company's status to January 2026 - On May 7, 2025, the Supreme Court rejected a petition against ICL Rotem's new mining concession[160] - The hearing on the Company's appeal regarding the Israel Water Authority's decision to change its status to a 'Consumer-Producer' has been postponed to January 2026[160] SIGNATURE