...Welcome to the first day of the Jefferies Industrials Conference. Joining us is their CTO, Anantha Desikan. Thank you for joining us today. Let's start with the ongoing transformation of ICL. For me, it's about culture and market mix and technology platforms. Can you give an update on these initiatives? Yeah, thanks. Thanks for having me, Laurence. Good morning, everybody. So I think starting twenty nineteen is when we started talking about the transformation, the new strategy. And I think our CEO, Raviv Zoller, has this thing of doing the year of something, and we started with the Year of Employer of Choice, like putting the employee at the center of the whole transformation. And then followed on with Year of Innovation, where we really focused on organic growth opportunities, creating these innovation domains linked to both our core competence and also external trends that were happening in crop nutrition, food, energy and sustainability. Novel solutions, where we were thinking about how do we create solutions to solve problems based on the minerals that we are backward integrated to, and then digital agriculture. So this kind of was the fundamentals of the Year of Innovation. Of course, you know, when we start this year off, the innovation doesn't stop at in 2020. So it's in the mindset and the culture, and the company has transformed quite a bit. And then we followed on with customer experience, sustainability, partnerships to build on the innovation aspects. We also launched an internal accelerator, which we call the Business Incubation for Growth, in 2020, which over the last four years has created about more than four thousand ideas. But where we constantly follow up on how these ideas become growth opportunities, and this has created a couple of growth opportunities that you may be familiar with. Like for example, the battery materials growth opportunity that we can talk about later, and also opportunities around microbial and synthetic biostimulants, for example. And so that's kind of like where we are, and this kind of got written up in a Harvard Business Review case study, which we are proud of, but we're not stopping there, right? Like, so we are continuing to identify these opportunities. And also, in 2021, we created this ICL Planet Startup Hub, where it is a strategic investment vehicle for startups, which kind of have importance for our businesses. And so we've made five. It's not a CVC, but it's a very strategic investment vehicle. But we made five investments in food and ag tech companies, which is creating growth accelerating growth in our portfolio, like for example, in clean and functional ingredients and things like that. So this is. We want, like. Where we are now is our specialties business sequentially has been doing well in the last three quarters. We think this quarter also, the specialties business will be good. And we want, as much as we can, control the growth of our specialty business and not be linked to the commodity cycle. So that's kind of the transformation, what we've done so far. Yeah. I guess I have to ask, you know, any, do you guys have a bet on what 2025 will be the year of? It's a good one. This year is the year of the winning, so we are creating a winning mindset, but it's always a surprise. Okay. Yeah, yeah. Obviously, next, near term, the ag cycle has been a big driver of ICL's volatility. Let's start with potash. What are you seeing in terms of demand trends and then prospects for a pickup in demand in 2025? Yeah, I think demand is actually relatively strong this year. I think our peers have also reported a robust potash demand, I think. I think 2025, we see the same demand cycle. We have the advantage of being able to choose the markets because of our location and where we are and what our cost position is. So we are trying to maximize this as we think about this. There is softening of ag commodity prices that can also impact some of the things we are doing. We think we are at the bottom of the potash price, and I think that's what we're trying to leverage. Our Spanish asset is doing well. I think we will hit the rates we were thinking about, we have been talking about in the next year. And our low cost position in the Dead Sea still gives us a competitive position. We have some short-term issues because of the crisis with respect to logistics, some maintenance issues that we are dealing with, but that's. We really think it's a short-term thing that we will go over, I think. I think overall, long run, with the Spanish and the Dead Sea asset, I think we should be in a good position. Yeah. And then can you contrast that with phosphate? You know, both on the commodity phosphate side, and of course, you alluded to the opportunities for specialty phosphates with new applications- Yeah ... such as battery materials. So on the phosphates, I think on the commodity side, we see price appreciation in the second quarter of this year. We see that continuing in the third quarter. And I think, for the specialty side, it's all about volume, I think. And we maintain our market share. I think we are the only global specialty phosphate player in all three regions, and we leverage that presence. And the phosphate export actually helps us in terms of pricing. I think right now, I think that's actually been a positive this year. I think the Chinese policy is prioritizing the domestic market, so that's kind of helped us in the export market or markets outside of China. And we are focused on new products, where how can we expand our phosphate specialty space? So I think we see record sales in China, for example, for our battery materials business, where we are selling monoammonium phosphate and phosphoric acid to the LFP producers. And we've taken a strategic move to become an LFP technology leader outside of China. And so that's something that's a real big business and growth opportunity for the phosphate business. The LFP business, you know, I think you mentioned this when we talked last time. Two, three years ago, nobody was talking about LFP outside of China. Now, we all expect 60% to 70% of the batteries to be LFP based, not only for electric vehicles, but also for energy storage, which is actually growing quite a bit, in terms of renewable integration and things like that. And we see that as a growth opportunity. Of course, we want to be positioned to be producers of LFP, but we also want to be technology leaders outside of China. China is the leading, you know, leading this activity, but I think we want to be technology leaders outside of China. So we are completing our pilot innovation and customer qualification center end of this year in St. Louis. Louis, where we will be starting to make battery-grade LFP cathode active material and then synchronize this with customer qualifications that's going on. And we want to match the customer demand with respect to our investments in North America and also in Europe. So that's something that we are focused on. And again, there's also opportunities around food ingredients on phosphates, both for meat, poultry, dairy activities, and also non-traditional plant-based proteins and plant-based dairy, there, where we see opportunities for phosphates and other functional ingredients that we are focused on in that space. So it's all about new products. How do we think about new products with respect to phosphates and things like that? Yeah. On bromine, what are you seeing in terms of global electronics and construction demand? I think the electronics demand has not recovered as we've expected, but I think we are again going through the bottom, I think, and we see increased demand. We expect demand from the whole artificial intelligence boom based on the servers and the infrastructure of servers being built, that the servers actually have a lot of flame retardants in as they build in, and also the advent of laptops and computing devices with enhanced artificial intelligence, like the Copilot type things. We see that as an uptick. Electric vehicles and ICEs, like, internal combustion engines, I think the incorporation of electronics into those areas of demand, which kind of equalizes some of the decrease in demand for other devices and things like that. So that's what we see. It's not. We are not. We've not seen the demand completely recover, but this is an opportunity that we are focused on. Construction has also been quite low. Demand has been quite low in Europe. It's been at the two-decade low, I think, in terms of demand. So that's something that we hope that we'll go past that, I think, in 2025. Yeah. And then also on bromine, how are you thinking about the evolution of the cost curve? I mean, are you seeing higher cost capacity exit the market? Is process technology making, you know, Dead Sea economics more expensive over time? Just can you walk through kind of how we should think about the cost curve evolution for that business? I think we still have the lowest cost position for bromine production, the highest concentration in the Dead Sea. Again, there's some issues around, you know, people talk about the Dead Sea, the levels and things like that. Of course, it's not linked to anything we are doing. There's natural reduction through evaporation and also the inlets of the Jordan River and things like that. But we are keenly focused on how can we maintain our cost position in the Dead Sea. We've not seen complete exit of high-cost production yet, but we see that happening soon. I think investments that were projected with this high cost bromine supply is not going to happen. Mm. And we are keen to maintain our market share, and that's what we're doing, I think, in terms of where we are in the bromine price cycle and things like that. We are not, we are maintaining our market share, increasing our volumes as best we can. I think soon enough, you will see these high-cost things exit the market, and we'll be positioned well. So the Dead Sea, in terms of process technology, we are always looking at improving the extraction of the salt from the Dead Sea. Mm-hmm. Because most of the water goes back into the Dead Sea, you know, and so the efficiency can be improved, and it's a zero discharge plant, right? Like, so it has to be. So that we are always looking at how can we improve extraction efficiency, things like that, I think. Yeah. ... And so putting this together, how are you thinking about the baseline for free cash flow generation and potential for capital deployment over the next three to five years? I guess, assuming a dangerous assumption, if ag markets return to mid-cycle. Yeah. So I think our CapEx is focused on growth opportunities, M&A, and ESG-related capital investments. We will see, based on the growth projections we are seeing, we'll see an increase, but we want to maintain a strong balance sheet, always, at investment grade. This year, our free cash flow will be close to what we had last year. Mm-hmm. It's $500 million. And so we will maintain and manage this free cash flow. 2024 investments are lower than projected because of the cycle of the cathode active materials and things like what is happening in the market. So that's kind of where we are focused on, I think, in terms of the this, yeah. Can you elaborate on M&A transactions you've done, and in particular, your appetite for larger acquisitions, appetite for business platforms as opposed to technology platforms? Like, what are you looking for? Can you characterize the pipeline? M&A and growth opportunities are key for our Growing Solutions business. Again, we are looking at a strategic and opportunistic M&A in all our businesses, but in Growing Solutions, it's a part of our strategy to grow through M&A and through organic new products and things like that. And we've assembled a strong M&A team. We've had Uri Perlman join in as the Corporate Development Officer for ICL in the last six to eight months. And so we are scouting for opportunities. We've made, I think in 2021 or 2022, we made this big acquisition in Brazil, the Compass Minerals business and specialty fertilizers. That gave us this footprint of being one of the largest specialty fertilizer company in Brazil, which is a key market for specialty fertilizers. We also made a smaller acquisition that year with Fertilaqua. We've done great integration of those businesses within the Growing Solutions business. And we are looking to expand into the biological space with some strategic acquisitions. We made an acquisition in Nitro 1000, a biological company, and it was a small acquisition, but what we are seeing, what we are trying to do there is acquire somebody who's manufacturing biological based products, which can also help us in our product development cycle in terms of bringing new products with biological biostimulants in the space. That's kind of been the focus. We also made a small acquisition in the U.S. because for the Growing Solutions business this year, Custom Ag Solutions. And that's because we saw our cost position in the U.S. for some of our water-soluble and formulated products not as competitive, because we had to bring material from outside of the U.S., so this was a strategic investment, a acquisition that we to grow the North American business or provide a platform for growth in the North American business. So that's kind of what we have done so far. You know, we are looking at acquisitions now, so there might be an acquisition by the end of the year. And the appetite is there for larger acquisitions, but it has to be strategic, and it has to give a transformational opportunity for ICL. I think that's been the focus in terms of M&A opportunities, I think. Yeah. I wanna just come back to two things. One is on bromine in terms of innovation. Over the years, there was a lot of chatter about, you know, China safety standards in China relative to Europe and the size of the market that that could create. Data centers, more recently, as a new application area, and then polymeric solutions, so that you solve the problem of the bromine compounds being released and absorbed. Can you talk about how large those could be for ICL, where you see movement, where maybe you see too much hype? Yeah. So I think the you know, we are always focused on standards, but standards are hard to project a timeline, for example, right? Like, so China standards are there. I think most of the China standards are around the manufacturing of thing that is happening in China. The building standards are already in place, in some cases, bus and EV standards. We've been working pretty hard at the standard thing. So that's. I think that growth opportunity is modest, but I think that- Mm-hmm. ... we are doing the same thing for in India, for example, right? Like, so can we do... but it's long, and it's regulated and things like that. In terms of data centers, I think this is a real opportunity in terms of the infrastructure that is being built for the artificial intelligence, like what you've seen, billions of dollars being projected in the next couple of years by the large Big Five or, or- Mm-hmm ... in terms of artificial intelligence infrastructure. Most of it is going into the chips, I think, but also quite a bit into the data centers, and there we see an opportunity for both existing flame retardants and also new flame retardants, because people are looking at low latency in terms of data transfer that might require that is requiring new resins, and also that means new flame retardants that go into those resins, so that's something that we are actively working on, and that doesn't need to be bromine, it can also be phosphorus-based, which we are one of the largest phosphorus-based flame retardant companies as well, right? Like, so I think we are kind of agnostic in chemistry. We'd love it to be bromine because of our cost position and where we are, but it's not. We are also looking at what the customer needs and what the market needs, and developing solutions based on that. And we are pretty proud of our transition into the polymeric and reactive flame retardants over the last five plus years, right? And I was leading R&D in before my role in flame retardants. I ran the flame retardant business, and we made a strategic choice to focus on polymeric flame retardants and reactive flame retardants, where they're embedded in the matrix. Mm-hmm. Of the polymer and prevent moving into the environment and things like that. So that's something that we have done. We constantly are working on it. We are looking at a reactive flame retardant now for polyurethane foam, and to kind of also address some of these issues. So I think that opportunity is quite big in terms of some might replace existing products, but also maintain our position there. Mm-hmm. Yeah. And then also a high-level question, just to close. I mean, chemical companies often have. They're differentiated either because they're tied to a molecule, you know, they were original in the molecule going back to the 1800s, or they're process innovators, or they're really application innovators. As you look at ICL's edge, you know, and what it's trying to turn itself into, where do you see kind of your core strength? Yeah, it's a good question. It's tricky for ICL because it's, we are a diverse business. Mm-hmm. So I look at our business as in three verticals, right? Like, in one is crop nutrition, the other is food, and then the third one is industrial chemicals, specialty chemicals, and materials. Again, there is phosphates that goes into industrial materials and things like that. So in crop nutrition, I think our innovation is going to be around nutrient use efficiency, and reducing emissions, recycled nutrients. That is going to be more around product innovation, and delivering solutions to it. And that could, we might be not linked even to our Dead Sea. Mm-hmm ... products that, you know, and things like that, where we are more focused on products that can help the farmer improve the nutrient uptake, reduce emissions for, you know, GHG emissions and things like that. For example, can we reduce nitrogen emissions? Even though we are not a nitrogen player- Mm ... can we develop solutions to reduce nitrogen emissions? So that's, I think that's more product oriented. In the chemical space, I think our core competence is in scale-up manufacturing, and large-scale production, right? Like, so what I see ourselves as we will be develop solutions based on that, but we can also partner with people who develop solutions, and we can help scale up, scale the technology. So for example, in battery materials, we want to be a technology leader in LFP, by... And by as emerging technologies happen, we can actually help startups and other innovative companies scale. And that's a key core competency that we can think. And then in the food area, we are looking at how can we look at functional and clean label ingredients? So that's more product focused also. So I think- Mm ... depending on the application, and so we see it, and that's important for us to realize this is where our core competence is and focus on that. And that's what we did in the LFP, where we got a technology from a Taiwanese company and focused on the scale-up aspect. So that's kind of how I see it. Yeah. Okay, great. Yeah. Okay. Well, that's... Thank you very much for the time today, and, you know, thank you, everybody, for listening in. Thank you. Thank you.