SEC Form 6-K filed by ICL Group Ltd.

ICL Group Ltd

 

 

Tel Aviv, Israel May 19, 2025 – ICL (NYSE: ICL) (TASE: ICL), a leading global specialty minerals Company, today reported its financial results for the first quarter ended March 31, 2025. Consolidated sales were $1.8 billion versus $1.7 billion in the prior year. Operating income was $185 million versus $203 million of operating income in the first quarter of last year, with adjusted operating income of $208 million versus $215 million. For the first quarter, net income attributable to shareholders was $91 million versus $109 million in the prior year, with adjusted net income of $110 million compared to $118 million. Adjusted EBITDA was $359 million versus $362 million. Diluted earnings per share were $0.07 versus $0.08 in the first quarter of last year, with adjusted diluted EPS of $0.09 – the same as in the first quarter of last year.

 

 

This Financial Results and Business Overview is based on the Company’s unaudited interim condensed consolidated financial statements as of and for the three-month period ended March 31, 2025 (hereinafter - Interim Financial Statements), and is prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting”, unless otherwise stated. The Financial Results and Business Overview contains certain non‑IFRS financial measures and forward-looking statements, which are described in the “Financial Figures and non‑GAAP Financial Measures” section and the “Forward-looking Statements” section, respectively.

 

 

ICL Group Ltd. is a leading global specialty minerals company, which creates impactful solutions for humanity’s sustainability challenges in the food, agriculture, and industrial markets. ICL leverages its unique bromine, potash, and phosphate resources, its global professional workforce, and its sustainability focused R&D and technological innovation capabilities, to drive the Company's growth across its end markets. ICL shares are dual listed on the New York Stock Exchange and the Tel Aviv Stock Exchange (NYSE and TASE: ICL). The Company employs more than 12,000 people worldwide, and its 2024 revenues totaled approximately $7 billion. For more information, visit the Company's website at www.icl-group.com^[1].

 

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We disclose in this quarterly report non-IFRS financial measures titled adjusted operating income, adjusted net income attributable to the Company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA. Our management uses adjusted operating income, adjusted net income attributable to the Company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA to facilitate operating performance comparisons from period to period. We calculate our adjusted operating income by adjusting our operating income to add certain items, as set forth in the reconciliation table under “Adjustments to reported operating, and net income (non-GAAP)” below. Some of these items may recur. We calculate our adjusted net income attributable to the Company’s shareholders by adjusting our net income attributable to the Company’s shareholders to add certain items, as set forth in the reconciliation table under “Adjustments to reported operating, and net income (non-GAAP)” below, excluding the total tax impact of such adjustments. We calculate our diluted adjusted earnings per share by dividing adjusted net income by the weighted-average number of diluted ordinary shares outstanding. Our adjusted EBITDA is calculated as net income before financing expenses, net, taxes on income, share in earnings of equity-accounted investees, depreciation and amortization, and certain adjustments presented in the reconciliation table under “Consolidated adjusted EBITDA, and diluted adjusted Earnings Per Share for the periods of activity” below, which were adjusted for in calculating the adjusted operating income.

 

You should not view adjusted operating income, adjusted net income attributable to the Company’s shareholders, diluted adjusted earnings per share or adjusted EBITDA as a substitute for operating income or net income attributable to the Company’s shareholders determined in accordance with IFRS, and you should note that our definitions of adjusted operating income, adjusted net income attributable to the Company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA may differ from those used by other companies. Additionally, other companies may use other measures to evaluate their performance, which may reduce the usefulness of our non-IFRS financial measures as tools for comparison. However, we believe adjusted operating income, adjusted net income attributable to the Company’s shareholders, diluted adjusted earnings per share, and adjusted EBITDA provide useful information to both management, and investors by excluding certain items that management believes are not indicative of our ongoing operations. Our management uses these non-IFRS measures to evaluate the Company's business strategies and management performance. We believe that these non‑IFRS measures provide useful information to investors because they improve the comparability of our financial results between periods and provide for greater transparency of key measures used to evaluate our performance.

 

(1a) The Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting, and quantifying certain amounts that are necessary for such reconciliation, in particular, because special items such as restructuring, litigation, and other matters, used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material, and therefore could result in projected GAAP net income (loss) being materially less than projected adjusted EBITDA (non-GAAP). The guidance speaks only as of the date hereof. We undertake no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect actual outcomes, unless required by law. The Company provides guidance for Specialties-driven EBITDA, which includes Industrial Products, Growing Solutions and Phosphate Solutions, as the Phosphate Solutions business is now predominantly specialties-focused. For our Potash business we provide sales volumes guidance. The Company believes this information provides greater transparency, as these new metrics are less impacted by fertilizer commodity prices, given the extreme volatility in recent years.

We present a discussion in the period-to-period comparisons of the primary drivers of change in the Company’s results of operations. This discussion is based in part on management’s best estimates of the impact of the main trends on our businesses. We have based the following discussion on our financial statements. You should read such discussion together with our financial statements.

 

Adjustments to Reported Operating and Net income (non-GAAP)

 

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Consolidated adjusted EBITDA and diluted adjusted Earnings Per Share for the periods of activity

 

Calculation of adjusted EBITDA was made as follows:

 

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Calculation of diluted adjusted earnings per share was made as follows:

 

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Recent Developments

 

Impact of new United States tariffs

 

The Company is actively monitoring current and potential tariffs imposed by the US and other countries and is evaluating their potential impacts on our business and financial condition. While we do not believe that the tariffs will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact remains uncertain and will depend on several factors. These include the effective date and duration of such tariffs, any future changes in their scope or magnitude, potential countermeasures that the target countries may take and any mitigating actions that may become available.

 

 

In October 2023, the Israeli government declared a state of war in response to attacks on its civilians in the south of the country, which escalated to other areas. The security situation has presented several challenges, including disruptions in supply chains and shipping routes, personnel shortages due to recurring rounds of mobilization for reserve duty, additional costs to protect Company sites/assets, effects of reluctance to perform contractual obligations in Israel during hostilities, various bans and limitations on trade and cooperation with Israel related entities, and fluctuations in foreign currency exchange rates relative to the Israeli shekel. Additionally, regional tensions involving Houthis attacks and threats to commercial vessels have intensified, disrupting shipping routes and commercial shipping arrangements, leading to increased shipping costs.

 

The Company continues to take measures to ensure the safety of its employees and business partners, as well as the communities in which it operates. It has also implemented supportive measures to accommodate employees called for reserve duty, aiming to minimize any potential impact on its business, and to avoid disruptions to production activities at its facilities in Israel.

 

The security situation has not had a material impact on the Company's business results. However, as the developments related to the war, as well as its duration, are unpredictable, the Company is unable to estimate the extent of the war’s potential impact on its future business and results. The Company continuously monitors developments and will take all necessary actions to minimize any negative consequences to its operations and assets.

 

 

Consolidated Results Analysis

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* See "Adjustments to reported Operating and Net income (non-GAAP)" above. 

 

 

 

 

 

 

 

Financing expenses, net

 

Net financing expenses in the first quarter of 2025 amounted to $37 million, compared to $35 million in the corresponding quarter last year, an increase of $2 million. This increase is primarily due to higher expenses of $4 million from net exchange rate differences and hedging transactions, partially offset by a decrease of $2 million in net interest expenses.

 

Tax expenses

 

In the first quarter of 2025, the Company’s reported tax expenses amounted to $42 million, compared to $42 million in the corresponding quarter of last year, reflecting an effective tax rate of 28% and 25%, respectively. The Company’s relatively low effective tax rate for the corresponding quarter was mainly due to higher profit being derived from tax jurisdictions with lower effective tax rates.

 

 

Segment Information

 

Industrial Products

 

The Industrial Products segment produces bromine from a highly concentrated solution in the Dead Sea and bromine‑based compounds at its facilities in Israel, the Netherlands and China. In addition, the segment produces several grades of salts, magnesium chloride, magnesia-based products, phosphorus-based products and functional fluids.

 

 

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Potash

 

The Potash segment produces and sells mainly potash, salts, magnesium and electricity. Potash is produced in Israel using an evaporation process to extract potash from the Dead Sea at Sodom and in Spain using conventional mining from an underground mine. The segment also produces and sells pure magnesium, magnesium alloys and chlorine. In addition, the segment sells salt products produced at its potash site in Spain. The segment operates a power plant in Sodom, which supplies electricity and steam to ICL facilities in Israel with any surplus electricity sold to external customers.

 

 

 

 

 

 

 

 

 

 

Global potash market - average prices and imports:

 

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Sources: CRU (Fertilizer Week Historical Price, April 2025), SIACESP (Brazil), United Port Services (Brazil), FAI (India), Chinese customs data, Global Trade Tracker (GTT).

 

 

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First quarter 2025

 

 

 

 

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Phosphate Solutions

 

The Phosphate Solutions segment operates ICL’s phosphate value chain and uses phosphate rock and fertilizer-grade phosphoric acid to produce phosphate-based specialty products with higher added value, as well as to produce and sell phosphate-based fertilizers.

 

 

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In January 2025, the Company signed a strategic agreement with Shenzhen Dynanonic Co., Ltd. to establish LFP production in Europe. The new facility is planned to be located at ICL's Sallent site in Spain and could substantially expand the Company’s Battery Materials business.

 

In early April, the Company formally commissioned its Battery Materials Innovation and Qualification Center (BMIQ) in the US. This is the first facility of its kind in the US, and it has been designed to accelerate development of fast-track customer solutions, and to prove that ICL’s technologies are scalable.

 

 

Global phosphate commodities market - average prices:

 

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Source: CRU (Fertilizer Week Historical Prices, April 2025).

 

 

 

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Growing Solutions

 

The Growing Solutions segment aims to achieve global leadership in plant nutrition by enhancing its position in its core markets of agriculture, ornamental horticulture, turf and landscaping, and by targeting high-growth markets such as Brazil, India, and China. The segment leverages its unique R&D capabilities, substantial agronomic experience, global footprint, backward integration to potash, phosphate and polysulphate and its chemistry know-how, as well as its ability to integrate and generate synergies from acquired businesses. The segment continuously works to expand its broad portfolio of specialty plant nutrition, plant stimulation and plant health solutions, which consists of enhanced efficiency and controlled release fertilizers (CRF), water-soluble fertilizers (WSF), liquid fertilizers, straights (MKP/MAP/PeKacid), FertilizerpluS, soil and foliar micronutrients, biostimulants, soil conditioners, seed treatment products and adjuvants.

 

 

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Liquidity and Capital Resources

 

 

In the first quarter, cash flow provided by operating activities amounted to $165 million, compared to $292 million in the corresponding quarter last year. This decrease was mainly due to changes in working capital.

 

 

In the first quarter, net cash used in investing activities amounted to $192 million, compared to $95 million in the corresponding quarter last year. This increase was mainly due to lower proceeds from deposits and higher payments for property, plant and equipment.

 

 

In the first quarter, net cash provided by financing activities amounted to $5 million, compared to net cash used of $249 million in the corresponding quarter last year. This change was mainly due to changes in the credit facilities and repayments of long-term debts in the corresponding quarter.

 

 

As of March 31, 2025, ICL’s net financial liabilities amounted to $1,993 million, an increase of $142 million compared to December 31, 2024.

Credit facilities

 

 

In April 2023, the Company entered into a Sustainability-Linked Revolving Credit Facility Agreement between its subsidiary ICL Finance B.V., as borrower, and a consortium of 12 international banks for $1,550 million. In April 2024, all banks agreed to extend the RCF agreement for an additional year until April 2029. As of March 31, 2025, the Company utilized about $541 million of the credit facility framework.

 

Subsequent to the date of the report, in April 2025, eleven of the participating banks agreed to extend the RCF agreement for an additional year until April 2030. As a result, effective April 2029, the credit facility amount will be $1,400 million.

 

 

The total amount of the Company's committed securitization facility framework is $300 million, with an additional $100 million uncommitted. As of March 31, 2025, ICL had utilized approximately $251 million of the facility’s framework.

 

In June 2024, Fitch Ratings reaffirmed the Company’s long-term issuer default rating and senior unsecured rating at 'BBB-'. The outlook on the long-term issuer default rating is stable.

 

 

In July 2024, the S&P credit rating agency reaffirmed the Company’s international credit rating and senior unsecured rating of 'BBB-'. In addition, the S&P Maalot credit rating agency reaffirmed the Company’s credit rating of 'ilAA' with a stable rating outlook.

 

 

As of March 31, 2025, the Company was in compliance with all of its financial covenants stipulated in its financing agreements.

 

 

In the three-month period ended March 31, 2025, there were no material changes in the critical accounting estimates previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2024.

 

 

On March 6, 2025, the Company’s Extraordinary General Meeting of Shareholders approved the following resolutions: (a) the compensation terms for the newly appointed President & Chief Executive Officer of the Company, Mr. Elad Aharonson; (b) the grant of an equity-based award to the newly appointed President & Chief Executive Officer of the Company, Mr. Elad Aharonson; (c) the renewal of the compensation terms of the Executive Chairman of the Board of Directors of the Company, Mr. Yoav Doppelt; (d) the grant of an equity-based award to the Executive Chairman of the Board of Directors of the Company, Mr. Yoav Doppelt.

 

Mr. Raviv Zoller concluded his tenure as ICL’s President and Chief Executive Officer on March 12, 2025, and was succeeded by Mr. Elad Aharonson effective as of March 13, 2025.

 

Following the appointment of Mr. Aharonson as ICL’s President and CEO, Mr. Eli Amon was appointed as Acting President of the Growing Solutions Division, replacing Mr. Aharonson, effective as of February 27, 2025. After the date of the report, on April 1, 2025, Mr. Nir Ilani was appointed as President of the Growing Solutions Division, effective as of June 1, 2025, and will be considered an office holder of the Company as of that date.

 

On November 20, 2024, Mr. Nadav Turner, who served during the past five years as CEO of our YPH joint venture in China, was appointed President of the Phosphate Solutions Division, replacing Mr. Phil Brown, effective May 1, 2025. Mr. Turner will be considered an office holder of the Company as of that date. Additionally, as of that date, Mr. Brown will assume his new position as President of the Company's Battery Materials Business.

 

In addition, on April 1, 2025, Mr. Ilan Barkai, who served during the past four years as SVP of ICL Phosphate Israel Operations & EHS, was appointed President of the Potash & Global ESH Division, effective May 1, 2025, replacing Mr. Meir Mergi who served as President of the Potash Division & Global ESH. Mr. Barkai will be considered an office holder of the Company as of that date.

 

 

In the three-month period ended March 31, 2025, there were no material changes in the risk factors previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2024.

 

 

Reference is made to “Item 11 – Quantitative and Qualitative Disclosures about Market Risks” in our Annual Report on Form 20-F for the year ended December 31, 2024.

 

 

For further information regarding legal proceedings and other contingencies, see Note 6 to the Company's Interim Financial Statements.

 

 

This report contains statements that constitute “forward‑looking statements”, many of which can be identified by the use of forward‑looking words such as “anticipate”, “believe”, “could”, “expect”, “should”, “plan”, “intend”, “estimate”, “strive”, “forecast”, “targets” and “potential”, among others. We are relying on the safe harbor provided in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in making such forward-looking statements.

 

Forward‑looking statements appear in a number of places in this report and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward‑looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and the actual results may differ materially from those expressed or implied in the forward‑looking statements due to various factors, including, but not limited to:

 

Changes in exchange rates or prices compared to those we are currently experiencing; loss or impairment of business licenses or mineral extractions permits or concessions; volatility of supply and demand and the impact of competition; the difference between actual reserves and our reserve estimates; natural disasters and cost of compliance with environmental regulatory legislative and licensing restrictions including laws and regulation related to, and physical impacts of climate change and greenhouse gas emissions; failure to "harvest" salt which could lead to accumulation of salt at the bottom of the evaporation Pond 5 in the Dead Sea; disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; general market, political or economic conditions in the countries in which we operate, including tariffs and trade policies; price increases or shortages with respect to our principal raw materials; delays in termination of engagements with contractors and/or governmental obligations; the inflow of significant amounts of water into the Dead Sea which could adversely affect production at our plants; labor disputes, slowdowns and strikes involving our employees; pension and health insurance liabilities; pandemics may create disruptions, impacting our sales, operations, supply chain and customers; changes to governmental incentive programs or tax benefits, creation of new fiscal or tax related legislation; and/or higher tax liabilities; changes in our evaluations and estimates, which serve as a basis for the recognition and manner of measurement of assets and liabilities; failure to integrate or realize expected benefits from mergers and acquisitions, organizational restructuring and joint ventures; currency rate fluctuations; rising interest rates; government examinations or investigations; disruption of our, or our service providers', information technology systems or breaches of our, or our service providers', data security; failure to retain and/or recruit key personnel; inability to realize expected benefits from our cost reduction program according to the expected timetable; inability to access capital markets on favorable terms; cyclicality of our businesses; changes in demand for our fertilizer products due to a decline in agricultural product prices, lack of available credit, weather conditions, government policies or other factors beyond our control; sales of our magnesium products being affected by various factors that are not within our control; our ability to secure approvals and permits from the authorities in Israel to continue our phosphate mining operations in Rotem Amfert Israel; volatility or crises in the financial markets; hazards inherent to mining and chemical manufacturing; the failure to ensure the safety of our workers and processes; litigation, arbitration and regulatory proceedings; exposure to third party and product liability claims; product recalls or other liability claims as a result of food safety and food-borne illness concerns; insufficiency of insurance coverage; closing of transactions, mergers and acquisitions; war or acts of terror and/or political, economic and military instability in Israel and its region; including the current state of war declared in Israel and any resulting disruptions to our supply and production chains; filing of class actions and derivative actions against us, its executives and Board members; We are exposed to risks relating to its current and future activity in emerging markets; and other risk factors discussed under ”Item 3 - Key Information— D. Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 13, 2025 (the “Annual Report”).

 

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events. Investors are cautioned to consider these risks and uncertainties and to not place undue reliance on such information. Forward-looking statements should not be read as a guarantee of future performance or results and are subject to risks and uncertainties, and the actual results may differ materially from those expressed or implied in the forward-looking statements.

 

This report for the first quarter of 2025 (the “Quarterly Report”) should be read in conjunction with the Annual Report of 2024 published by us on Form 20-F, as of and for the year ended December 31, 2024, including the description of the events occurring subsequent to the date of the statement of financial position, as filed with the US SEC.

 

Consolidated Financial Statements (Unaudited)

As of March 31, 2025

(in millions of US Dollars)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

 

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

A.

Basis of Preparation

B.

Reclassifications

 

Amendments to IFRS 9, Financial Instruments, and IFRS 7, Financial Instruments: Disclosures

 

The amendments provide clarifications relating to the date of recognition and derecognition of financial instruments. In accordance with the amendments, an exception is added regarding the timing of derecognizing financial liabilities settled by electronic cash transfers, as well as clarification relating to disclosure requirements for financial instruments with contingent features that are not directly related to changes in the basic risks/cost of the instrument.

 

The amendments are effective for annual reporting periods beginning on or after January 1, 2026. The Company is examining the effects of the Amendment on the financial statements with no plans for early adoption.

1. Information on operating segments

1.  Information on operating segments (cont’d)

2. Segment capital investments

3. Inter–segment transfers and unallocated income (expenses)