ICL Investor Day October 2022

Hello and welcome everyone. I'm Peggy Riley Tharp, Vice President of Global Investor Relations for ICL, and I'd like to thank you for joining us here today. We have a lot to pack into the next two and a half hours, so let's get started. First, let me give you a rundown on who you will be hearing from today. Aviv Zalman, our President and CEO, will kick the day off with an overview of the progress we have made since our 2020 Investor Day and share a roadmap of how we are going to grow our Specialty's impact to the next level. Next up, Yaniv Kabalek, President of our Industrial Products, will take you through this industry-leading business and tell you how we plan to build on our solid foundation and expand into innovative new products. From there, Phil Brown, President of our Phosphate Specialties business, will tell you more about last week's exciting news to invest 400 million dollars into new lithium iron phosphate manufacturing capabilities in St. Louis as we look to lead efforts to develop a sustainable supply chain for energy storage in the United States. The President of ICL Growing Solutions, formerly known as Innovative Ag Solutions, will talk about ICL's aspiration to become the global leader in specialty Plant Nutrition and how we plan to advance our market position. Ron Baruchi, who leads Agmatix, ICL's digital ag startup, is going to tell you about the Agmatix platform and share more about ICL Leaf, a revolutionary diagnostics tool we announced just last week. We're going to wrap the day up with my boss, Aviram Lahav, ICL's Chief Financial Officer. He will walk you through our focus on sustainable shareholder values and how we plan to support our accelerated strategy execution. From there, we'll move on to take your questions. Now for the legal part, please be sure to review the disclaimers found in today's slides. And as a reminder, our comments today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are not guarantees of future performance. The company undertakes no obligation to update any information discussed on this call at any time. And with that, I would like to welcome Aviv Zalman.

Thank you, Peggy, and welcome everybody. Thanks for joining us for our Investor Day today. So today, what we want to try to do is to share with you our updated Five-Year Plan. It's all about capitalizing on sustainability mega trends and more than doubling our EBITDA over the years of the plan. But first, let me give you a brief overview of ICL. So ICL has 100 years of experience, over 12,000 employees. We're very proud to be leaders in ESG rankings with 3.3 billion dollars of EBITDA. Our average dividend yield for the years since 2018 was 4.6 percent. We have a distributed global footprint, and we're very proud of it because it allows us to be close to our customers like we need and to our business partners. We currently sell to over 100 countries across the world. In terms of strategic advantages, we have the highest concentration of minerals in the Dead Sea. We have the world's leading bromine derivative site. We have brands, certifications, licenses, unique know-how, endless unique know-how with an amazing number of patents and IP, tremendous R&D capabilities. We have logistic advantages through proximity to ports and our global locations, and we have great access to the startup nation Israel, access to high-tech and agritech ecosystem which is thriving. Our strategy was and continues to be to be a leader in everything we do. So it's to be a leader in all of our specialty downstream businesses based on our unique global resources, customer relationships, and technological ingenuity as we continue to optimize our commodity resources. That's the way we look at business. We try to be a leader in everything we do, and if we think that we can't be leaders, then we'd rather not be in that business.

Now let's stop for a minute and see where we are today. ICL today is a global leader in two of its three specialty businesses. Our Industrial Products business, which is close to 70 percent based on bromine solutions, is a global leader with 33 percent market share globally. Phosphate Specialties business is the only global specialty phosphate player in the world and currently has a market share of 20 percent, also a globally leading business. And our Growing Solutions business, which has just been rebranded, is our division for Plant Nutrition products. And our Growing Solutions business aspired to become a global leader, and it has actually become one of the leaders in the recent couple of years through very significant organic and non-organic growth headed by two very accretive and successful acquisitions in Brazil. As a result of those, Growing Solutions has become a significant division for ICL. Before last time we presented, the profitability of the division was relatively marginal in terms of overall ICL, but now we enjoy a much better balance between the three divisions. So Industrial Products and Phosphate Solutions are already in a leadership position, and Growing Solutions is becoming one of the global leaders.

Let's look at our progress since the previous Investor Day. So we can see that all four of our divisions, and this is the view of our divisions, we actually have four divisions. So the three specialty divisions we talked about, one of them is the Phosphate Solutions division which has both Phosphate Specialties and phosphate commodity products. Then we have one commodity division which is magnesium, that is a whole division that is dedicated to only commodities. The overall growth of ICL EBITDA during the first two years of the previous plan was 40 percent, and the Specialties growth was 50 percent. Mind you that we're only presenting the progress until 2021. We look at 2022 as an extraordinary year, and therefore the numbers presented here are only until the end of 2021. We see very nice double-digit growth, and in the case of Growing Solutions, which also had non-organic growth, we see triple-digit growth. Let's look at the progression of EBITDA over the last few years. So we can see very, very nice progression of sales and EBITDA, and specifically if we look at the recent few years, even in 2020 which was a down year all around, we can see that the Specialties businesses performed well and we kept in stride with our plans. And if you look at 2022, again an extraordinary year.

A few other things have happened during the first two years of the recent plan. Our geographic footprint has changed considerably and in a very, very good way because we grew our business in South America almost doubling it over the past two and a half years through organic and non-organic growth. And the result is that we have a much better balance between northern and southern hemispheres. So on top of the very fast organic growth, the inorganic growth allowed us to leap closer to where we want to be.

I want to talk a little bit about our journey on sustainability since our strategy has been to capitalize on sustainability mega trends. We have in recent years done substantial work in order to strengthen our sustainability culture. When I talk about sustainability, I always say it's about doing the right thing, of course, but not just doing the right thing, doing things the right way and in the right timing. And I'm very happy to say that all the employees in ICL are very connected to the sustainability culture that we're building. And we're going through a journey, a process. That journey is to go from a company that extracts minerals to a company that is committed to solve sustainability challenges globally using its minerals and its technological capabilities. And of course, when you tie sustainability into technology, you get a company that is completely dedicated and focused on creating sustainability-related products and solutions in order to succeed in business. So sustainability in our case is not just about checking the box, it's about who we are and what we do and how we build value in business. Our culture is growing by the day. We've decided to adopt all the benchmark reporting possible, and Aviram will talk about that a little later. We've also decided to participate in every ranking possible with the thought process being that standardization still does not exist for all sustainability measurements, and we want to build the fastest learning curve possible in the world. And one of the ways to do that is participate in the various rankings that are out there and try to do our best in each and every one of them, get insights from each and every one of them that will help us grow our sustainability culture and become better by the day. And of course, the business impact is when we take a sustainability criteria and focus and turn it into product innovation and new product offerings, then the business impact comes. We're also in the process of mapping all of our products in terms of impact on emissions, and of course, the low-emission products also have business impact. We're even measuring our impact on global food security in terms of how many people ICL actually feeds. And I can tell you that ICL feeds the equivalent of about 150 million people globally. We're very proud of that, and we're doing everything we can in order to grow that number every day.

So I talked about sustainability, and of course, our brand mission today, which is also our brand promise, is to create impactful solutions for humanity's sustainability challenges by leveraging our unique resources and technological ingenuity. And that brings us to technological ingenuity. We have put a lot of emphasis over the past few years in growing our technological capabilities at ICL. It becomes natural to us, but we've also created a unique ecosystem to ensure that ICL DNA is innovative DNA. And one of the main pillars was an internal accelerator that we created called BIG, which is Big Innovation for Growth. I will get to it in a minute, but what that did is got all of our employees to feel part of the new revolution that we've created in our innovation transformation. And employees, managers submit ideas, create projects, they turn into successful business ideas that are implemented and create additional EBITDA and growth for the company. We also put in place an external accelerator to source innovation that could be complementary to our internal innovation and can create additional opportunities for growth. And some projects we call breakthrough innovation, and we give them separate focus to make sure that they come to fruition and to maturity. And a couple of them you'll hear about later today from some of my colleagues.

Operational excellence. We've stepped up our efficiency work, and we have in place about half of the total of 320 million dollars of additional efficiencies that we intend to implement over the years of the next plan. We stepped up automation, and we've stepped up our work with external parties, with third-party startups. And as a result, we've created significant savings, significant efficiencies for ICL in recent years, and we have an aggressive plan for the next few years. In addition, we also put together a couple of startups. At ICL, a few years ago, we came to the conclusion that the gold of the future in agriculture is data, but it's not enough to know that. It's also necessary to figure out how to create value from data. And we came to the conclusion that the best way to go about it was take our strategy and implement great ideas in separate independent startups that have the capability to energize themselves and not be dependent on any kind of corporate obstacles. And we'll tell you a little bit about one of those startups, about Agmatix, later today. I'll mention it soon. Open innovation. We've quadrupled the number of partners that we work with on creating innovation together, both with universities, academic institutions, and others. And that's also part of our growing ecosystem. And altogether, the result is that ICL lives and breathes innovation every day, and the results are recording.

I talked about our BIG accelerator program. So just to give you an idea, we're talking about over 992 projects that have already gone live, additional almost 1,400 projects that are live. We've already realized 222 million dollars of EBITDA growing from the BIG accelerator program, and we have exceeded all of our expectations. And this is not just a one-time effort, this is growing quarter to quarter and creating great new opportunities for ICL. ICL is involved in so many great things these days that I thought that I would pause here for a second and give you an opportunity to view some of the fantastic things that ICL does and maybe you're not aware of. So please, let's see the short video.

Okay, so I hope you remember that ICL is all around you. Let's get back to business and talk about where we are versus the former plan. So we've exceeded expectations. We had plans to get to 1.1 billion dollars of EBITDA by 2025, and we were very close in 2021. Actually, in terms of run rate towards the end of 2021, we surpassed that number. So in terms of what we intended to do, we did in a little over two years what we originally intended to do in five years. We have Industrial Products as the market leader. Phosphate Specialties is the market leader of phosphate specialties, but now also with a sustainable double-digit growth which we didn't have before. And we have Growing Solutions, a real contender for leadership in global Plant Nutrition business. But relative to the former plan, we also now enjoy very, very strong momentum, sustainable double-digit growth overall of our Specialties businesses, and we also have a stronger balance sheet than we did before. Actually, a much, much stronger balance sheet because we also enjoyed the commodity upside of recent months, as you all know, and we expect to continue to enjoy that momentum for quite a while. And of course, that creates additional opportunities including for additional investments in creative M&A that can move us forward even quicker.

And in general, why do we have to update the plan? We have to update the plan because it's become irrelevant. And why has it become irrelevant? Because part of the execution, actually most of the execution, has already been achieved. We executed M&A quicker and better than we expected. We went through turnarounds and turned our bleeding businesses into profitable businesses. So our joint venture YPH in China, Baldwyn UK, our polysulfate business, and our magnesium business in Israel have all become profitable, and the turnarounds have been completed. Actually, we also went through some divestments of non-core or non-profitable businesses, and so we're a lot more focused and don't have as many unnecessary non-core businesses to deal with. We also signed as many long-term contracts as we thought we would sign until 2025 in 2021. Our Industrial Products division completed in 2021 the whole plan of moving into strategic partnerships with our customers or taking into outsourcing bromine solutions from Asia to Israel. And in fact, that was so successful that we're using this kind of plan for other businesses now. So Phosphate Specialties, magnesium business, our fertilizer plus business based on polysulfate, all of those now have long-term contracts that give a lot better visibility to the business, and in fact, that continues to grow in terms of percentage from overall business. Innovation transformation, geographic alignment, so far achieved and is still in full swing. So we're continuing with accelerated organic growth in Asia and the non-organic growth that's gotten us to be significant in Brazil. Another thing has changed since the recent plan. There's a new market that we didn't address in the recent plan, and that is the energy storage solutions market which has opened up to us mainly because of LFP, but also electrolytes and other, and I'll get to that in a minute. So there's a significant business opportunity that allows us to have sustainable double-digit growth in our specialty businesses, and it wasn't taken into account in the previous plans. So now we have an opportunity to update the plan and be more aggressive about accelerating growth. Finally, in terms of our plans for capacity additions, most of the capacity additions that we planned for specific products that were growing have been completed. And what we have left is capacity increases in Spain, which actually are a little behind plan, but still we plan to finish the capacity increases in Spain in the coming years. Nothing new, but again, because the new growth requires additional capacity, then of course we need to update our capex plans as well.

So let's talk about our new winning aspiration. What are we trying to do? So what we're trying to do is we're trying to again more than double the EBITDA from our Specialties business, from our differentiated products business. We're trying to do that with high double-digit growth, and we intend to achieve leadership in all of our specialty businesses, which means we also aspire to win the Plant Nutrition market and become leaders in global Plant Nutrition, and then to be in a situation where we have three divisions that are all global leaders. And of course, with sustainable double-digit growth going forward. So let's talk about Industrial Products. And to remind you, we have the finest resource in the world, and as a result, that allows us to have a leadership position in the market. But what we did very well in the past is we increased the market by outsourcing some of the bromine solutions that were produced by our customers, outsourcing them to us, and then the addressable market suddenly grew. And we want to continue to grow the addressable market by introducing new applications in bromine and new applications in some of the other minerals that we use. And that requires two things: one is to complete the innovation and partnerships, and to additionally expand the capacity. I want to use one example here to give you a sense of the kinds of things that we're doing. So let's talk about electrolytes for EV batteries. One of the most significant innovations that we're working on is solid-state electrolytes based on bromine. And we have been able to partner with leading technology companies in the world to try to bring that vision into fruition. In the meantime, liquid electrolytes are currently produced in China. They're produced in China based on phosphorus, and now that global supply chains are coming up in the Western world, in Europe and in the US, a new opportunity presented itself because we are leaders in phosphorus-based specialty solutions in Europe and in the US. We actually have some available capacity in Europe, and we're building some additional capacity in the United States in order to produce PCL3 and or PCL5 for LiPF6 electrolytes. And we are well positioned to become a leader in that space as we have the know-how and the capacity and the capability to work with phosphorus on this solution. And what that does is it puts us in a unique position where we can be very significant in the electrolytes market in Europe and the US, and at the same time work on the future disruption to disrupt the whole market with solid-state electrolytes based on bromine. So in the short and mid-term, we're working on liquid electrolyte raw materials, and in the long-term on electrolytes based on bromine solution.

Okay, with Phosphate Specialties, it's all about our unique global position as we're the only phosphate specialties company that has a global footprint. And here again, I can give an example from the energy storage solutions space where we got into LFP raw material production in China through our joint venture there, YPH. And now that global supply chains are being established in Europe and in the US, what's happening is that we have found partners to build capacity in Europe and the US for those global supply chains. But at the same time, we're leveraging our position and our know-how and our global footprint in order to go downstream. So we're actually putting together, we're actually going to set up a plant now for cathode material based on raw materials that come back to us. And you may have seen our recent press release. So we're setting up a new plant in St. Louis, and that is an opportunity that came to us through our expertise that comes from China, global footprint, partnerships, ability to go downstream, now with the opportunity presented to us that presented itself through a global sustainability challenge: electric vehicles globally.

So on Growing Solutions, it's all about our geographical expansion. It's all about how we execute the geographical expansion while building a very diversified portfolio, how we create synergies from the acquisitions that we have made and continue to go through acquisitions and creating even more synergies, and being close to our customer and adapting to growing needs in the market and the growing innovation in the market. We're well positioned for that growing innovation because we have the distributed global footprint, we're very agile, we're very flexible, and our global supply chain has proven itself is very resilient to geopolitical and other issues that we dealt with in recent years including COVID, as you saw in the results I presented before. So we will continue with the geographic expansion and continue to build our innovative product portfolio which has grown very nicely, and you'll hear a little about it from Eli, the president of the division, a little later.

One more new business that I want to talk about today. The three specialty divisions you already know and you've heard about, and they're in good momentum, nice growth. But one of the elements of our new Five-Year Plan is growing a totally new division. I talked about data being the gold of the future. So how do you create that gold? And when we got started on thinking about our digital strategy a few years ago, we decided that it's not enough just to augment our fertilizer sales with digital capabilities or our digital supply or our global supply chain, but we have to think from the perspective of the future customer, of the future farmer. And the future farmer will use digital for almost everything. The physical world is already solved in terms of its ability to work almost autonomously, but the farmer is not digital savvy, does not really have the right tools to use digital in order to get what the farmer wants, which is to make a living and have things much easier. So we thought about our future customers, and we reached the conclusion that a significant digital tool in the future will not necessarily be limited to fertilizer because the farmer needs to interact with seeds, with crop protection, with irrigation, with all the different aspects of agriculture. And so we thought of a common denominator to all of those, and the common denominator is that everything that happens in agriculture starts with field trials. Field trials are the essence of how products get vetted and how products come into the market, how they get benchmarked versus other products. And what we decided to do is to become a standard for field trials through digital technology. And we built an amazing tool through a startup that we set up in ICL called Agmatix. And what that tool has done is it has reached a point where it is becoming a standard. And I'm very proud to say that about 50 percent of leading academic institutions, leading universities in the world are already using Agmatix. And through this capability and know-how, Agmatix is becoming a data superpower. And a little bit about Agmatix you'll hear today from its CEO, from the CEO of Agmatix, from Ron Baruchi. And we're very proud of this. We have a very ambitious goal to have impact on 20 percent of global farming by 2027. And if that happens, and we think it could definitely happen, then data could become a fourth specialty division in ICL.

Probably by this point you're asking yourself, okay, he hasn't said anything about commodities, right? And commodities are about 50 percent of EBITDA in ICL. In the case of 2022, maybe even more because of the year we're going through. Well, the reason I haven't said too much about commodities is that we're not really updating our plan on commodities. So we're still going to have the same capacity increases. We're going to increase from 4,900 tons run rate to about 5,300. Most of that is going to come from Spain that I mentioned earlier. In terms of the pricing, we updated the pricing in our plan a little bit to reflect mid-cycle prices. So we're using a second half 2021 potash prices which are equivalent pretty much to the CRU average expected price. And additional phosphate that we will need because of the accelerated plans for Phosphate Specialties growth, especially in the US and Brazil, will come from partnerships that we're working on. And of course, when we will be able to tell you a little bit more about that, we will. But we will need more phosphate resources given the limitations that we have on our current resources, especially like I said in North America and Brazil. The plan is still the same plan as it was other than the need for additional phosphate resources, and we're still focused very much on lowering cost per ton and benefiting from market conditions. I talked about 320 million dollars of efficiencies. Of those, about 220 million dollars are on the commodity side, so it's very significant. And this is on top of the previous plan. So we have updated our efficiency plans based on automation, increase of capacity, and additional efficiencies that we plan to bring in.

So what does that all mean? What does it mean for the results? So what it means is that we plan to grow at a 13 CAGR and 5 percent in Commodities. That will bring us to almost doubling our revenues to about 12.8 billion dollars. And EBITDA, we're going to grow by 16 on the specialty side, and the result is going to be a significant margin expansion from 24 to 28. And this margin expansion is created because we're going to lower the G&A in terms of percentage of overall sales, and at the same time introduce the leverage of efficiencies and the leverage of our Specialty's growth. And the result is going to be that this margin expansion that we're showing here from 24 to 28, which is very significant. So this is our plan to capitalize on the sustainability mega trends and to keep momentum and accelerate our momentum. And what you're going to hear today from my colleagues is a little more details on our plans, how we're going to increase beyond 100 percent our Specialty's EBITDA over the next Five-Year Plan. But all of the ingredients that I talked about and the technological transformation and the sustainability upgrade that's happening these days in ICL, none of it could happen without an amazing management team that I have. And I feel very lucky and honored to be working with such an excellent group of people. And I think what's important for you, the shareholders, is that management is extremely engaged and committed, and I would say excited, which is even more important, to do what we do because we do have a significant impact on the world, and it's growing by the day. And it's exciting when it happens and we can feel it in our fingertips. And it's also important that the goals and the KPIs and the compensation of management is fully aligned with shareholder value, with the goals of our strategic plan, and thus with shareholder value. And Aviram will talk a little about that as well. And the end result is that what you've seen in my presentation today is that we delivered what we promised in 2020. We did it much sooner than expected, and we were coming out with very strong momentum into a new updated plan. But there are tremendous opportunities for ICL. And at the global sustainability challenges, the global sustainability mega trends, with ESS being the major one, we have the right fundamentals, we're positioned to achieve the growth, we have an excited, enabled, and committed management team and over 12,000 employees that are fully engaged. And of course, we have our expansion plans to accelerate growth. The end result will be almost 13 billion dollars of sales at an 11 CAGR and an EBITDA of 28 percent with a 4 percent margin expansion by 2027. So all around, we're on track to become the global leader in all three of our specialty businesses. You're going to even have a view of a new specialty business that we're building. And I hope you enjoy the rest of the day. Thank you, and back to Peggy.

Thank you, Aviv, for kicking things off today. We really appreciate it. And now let's move on to Yaniv Kabalek, who is President of our Industrial Products division.

Thank you, Yaniv. And that's a great thing we can all hope for, our world being a better place to live. And now we're going to ask Phil Brown, President of Phosphate Specialties, to join us.

Good morning, good afternoon. I'm excited to be here today to talk to you about what's coming for the future for Phosphate Specialties. But first, let's talk a little bit about what's going on right now to give you a little bit of background in our Phosphate Specialties business. First, let's talk about who we are and where we are. You'll notice from the slide behind me that we truly are a global player in the Phosphate Specialties market. Not only do we have sales and marketing and innovation and distribution around the world like some companies do, but we have meaningful assets on the ground producing in every major geography around the world. And you'll also notice on this map that we have a substantial market share in every market around the world, which leads us to an overall 20% or so market share on a global basis. And you might notice that China is at 10% and think that's low, but actually that's coming from being at almost zero five years ago where we made our first real entry into the China market. So we've had substantial growth in that market in the last couple of years.

Next, let's talk a little bit about the competitor landscape. And again, you'll notice on the slide that ICL is the only company showing up around the world with a true geographic presence. If you look in each region, like North America, we have regional competitors like Innophos in North America, Prayon in Europe with a small presence in North America, and the Chinese players only produce in China and export. And it's also worth noting when you look at that list of phosphate specialty companies, we're the only public company in that list.

Now let's talk a little bit about where we've been. If you look at our results over the last few years, we're coming from about 150 million dollars worth of EBITDA in 2019 to over 200 million dollars in 2021. And if you look at our trailing 12 months, we're at over 350 million dollars on a little over 1.3 billion dollars worth of revenue. So next, let's talk a little bit about what we've been doing. Well, you can see substantial growth in the last couple of years, starting from 2019 at about 150 million dollars worth of EBITDA on 1.1 billion dollars worth of revenue, and moving to in 2021 about a little over 200 million dollars EBITDA on 1.3 billion dollars worth of sales. And during that period of time, the market CAGR was about 2%. And when we talk about the market CAGR, we're talking about a combined acid, salts, and solutions that our products go into. And that CAGR has been pretty consistent for the last 15-20 years, close to GDP at 2%.

And we're expecting a huge transition in that market in the next several years, primarily because of new demands, large demands that are being generated out of the battery and EV markets, shifting that from a global market CAGR of about 2% to well over 7%. And so that brings us to new targets that are over 600 million dollars worth of EBITDA and about 3 billion dollars worth of revenue. And why do we think we can capitalize on that? Well, one, we talked about we're number one, two, or three in every key geography around the world. We're vertically integrated with our fertilizer businesses as well. We're the only Western producer with a presence in China, and we have the broadest portfolio of all of our competitors in the market.

So how did we do what we've done in the last couple of years? Well, if you look at the last couple of years, growth from that 1.1 billion dollars of revenue to our trailing 12 months of over 1.6 billion dollars in revenue, and the EBITDA correspondingly moving from 150 million to over 350 million dollars in that time period. It's been in a number of key areas. One, geographic expansion in South America and China. I mentioned China before; we had a new joint venture in China in the last couple of years. We've transformed that from really a commodity business, a commodity company, to a specialty company, and that's given us access to completely new markets that we didn't have in China before and allowed us to grow substantially in the food markets and also those energy and EV markets that have really started in China. We've developed in new industries with new products like our alternative protein that we talked about in 2020, and also with energy and products as critical raw materials into the energy sector in the last couple of years.

And all of that has also brought us to a position of long-term agreements. Historically, we've done mainly annual agreements or spot business with most of our customers. But with a lot of the changes and challenges in the global markets, whether they be supply chain or geopolitical issues, the big global national companies that we deal with, whether they're in food, consumer packaged goods, have seen the value of ICL's overall global footprint and us being the most reliable supplier to the market in the last several years. And that's resulted in us moving to more and more long-term agreements. We're just at the beginning of that. We're targeting right now about 25% of our sales in those long-term agreements, multi-year agreements, moving to a place of about 50% there. As an example, most recently we signed a long-term agreement with General Mills to supply their ingredients for the long term.

So how are we going to achieve this growth? Well, if we look at our roadmap for the next five years, we're really going to focus on four key pillars. One, the energy markets that we've been talking about. Two, focusing on the high-value markets that we're in today and expanding our share there, leveraging some of our unique assets that we have that other competitors don't have, going from standard offerings to the most specialized, high-purity offerings. And then continuing our long history of innovation and really focusing on innovation and sustainability and functional ingredients.

So let's talk about the first one: energy storage, including EV. We look at this market. Again, we started as a critical raw material supplier into the market. And that position as a critical raw material supplier gave us access to a number of things, like insights into trends, demands, access to customers, access to partners, access to suppliers, that create unique conversations beyond being a critical raw material supplier that have allowed us to evolve to a solution provider and partner to this entire ecosystem. You can't wake up today and read the news without reading something about what's going on in energy storage markets, EV markets. It's everywhere, every morning, every evening, it's in the news. And you might have recently seen ICL's press releases about this, where I recently had the opportunity to talk to President Biden in the U.S. about what ICL is doing as part of the energy ecosystem in North America. We have a unique opportunity. The government is behind this and supporting it in the U.S., as many other regional governments are as well. And the most recent announcements we've made about building an over 400 million dollar investment in producing lithium iron phosphate is going to be a shared investment with the U.S. government, where they're going to cost-share about 50% of that with ICL. And that's critical because it allows us to move faster and with more confidence in these markets to provide the materials that the downstream customers and partners that we were working with need to supply the materials into the cell factories, into the batteries that are needed to fuel this new change in clean energy.

The next area we want to talk about is our continued expansion into high-value markets, and we'll focus a little bit right now on the food portion of that. When we think about food and the progress we've made in the last several years, it really comes from taking our business and being an ingredient supplier or provider to our customers to being a solution provider for our customers, moving from just selling them ingredients to adding other ingredients like texturizers, proteins, spices, flavors, to provide a full solution for our customers. And I would be remiss if I didn't talk a little bit about alternative protein. Alternative protein, you see it in the news as well, lots and lots of news about it recently. And our alternative protein business is also behind our aspirations that we talked about in 2020, about one year or so behind. That's primarily as a result of COVID. Food service and menu choices during COVID drove a delay in that market overall, but at the same time, it allowed us to accelerate what we were doing in other areas. We go to market specifically in four different areas: meat, poultry, seafood, dairy and beverage, bakery, and vegan, vegetarian, flexitarian options. But what's been really changing a lot in the last couple of years is our ability to improve the affordability of food for our customers, to extend shelf life for them, to help improve food security, to help them enrich the protein content of things they're selling, bring more value to their products, but all the while making sure that they're tasty, appetizing, and also giving them options and alternatives to make their products healthier, like low-sodium options and also organic options. So we continue to see good growth in our overall food business as we move from an ingredient supplier to a solution provider.

Next, let's talk a little bit about our unique assets that we have around the world. Again, we have the broadest portfolio of products, but we also have the broadest capabilities as well, from standard offerings to solutions to ultra-high-purity products. So a couple of examples of those unique assets we have: you also see a lot in the news these days about the semiconductor industry or chips being short in many geographies around the world, and a lot of governments and regions moving to localize their production of semiconductor chips. And we are again the only Western producer of high-purity phosphoric acid, single part per billion level quality, that is being supplied into those markets. So we have the opportunity to grow along with those, with our long history of being a best-in-class provider to them and growing alongside their needs. And we're also looking to leverage that also into the pharmaceutical industry. We have some of our products registered today, a small portion of that broad portfolio, and we plan to register our entire portfolio to move into the phosphate industry as there's a large demand in pharma for phosphates. And we're going to leverage also that ultra-pure capacity or capability that we have coming from our knowledge in the semiconductor industry to provide best-in-class, high-purity ingredients for the pharmaceutical market. And last but not least, really, is our extremely robust global supply chain. We've talked about it a little bit earlier, but we really do have regional production in every place around the world, and we use that to back up our production and our supply chain around the world as well. So if there's something going on regionally and disrupting a market, we can back that up from another region. We have that flexibility that nobody else has. And so we're going to continue to leverage that as we grow into these new markets and new industries.

The next area we want to talk about is innovation, and specifically our innovations that we're working on in the areas of sustainability and really new functional ingredients or solutions. The first part I would talk about there is our paints and coatings business. We have a very specific paints and coatings business that helps improve the durability, sustainability, the stability, adhesion of paint systems for our customers. And we want to grow upon that by introducing a completely new line of products that are more environmentally friendly. Some of this is being driven by regulation where heavy metals are being taken out of historic corrosion inhibitors, but we're also moving towards low-VOC or no-VOC, really water-based solutions for these markets that are much more friendly than existing products. Next, when we talk about alternative protein, we continue to expand what we're doing in alternative protein. We have a very broad portfolio that provides emulsions, texture, and fiber to the market, and now we're going to give our customers even more options within there to choose the protein of their choice that they want to use in those solutions. We're also making investments in startups in this area. We've made two investments here recently, one in Plantible, one in Proterra, both really focused on finding new proteins that are functional, not just providing the protein content or the nutritional part of protein, but functionality in ingredient systems and solutions for the customers, and doing that with natural proteins. And then again, we're also growing our capabilities in managing proteins and stability around proteins in the beverage markets, and specifically Dairy Plus, which we call Dairy Plus but is really non-dairy dairy applications. And the last area is recycling. We've had a long history because of our broad portfolio of products, from fertilizers to the furthest downstream solution, that provides us opportunities to bring products back into our value stream, whether they came from a solution back into something further upstream or something in midstream. And we see big opportunities for this as the EV markets and battery markets evolve as well. When batteries go to end of life, they'll need to be recycled so that they don't go to landfills. And we think we have unique offerings here that allow the recapture of raw materials, whether those be lithium, phosphate, or iron in the case of LFP, back into our value chain.

So where does that bring us over the next five years on this roadmap? Well, if you look at the revenue side of things, again, we're expecting to grow from about 1.3 billion dollars worth of revenue to 3 billion dollars worth of revenue in 2027. And on the right-hand side of the slide, you can see that on the EBITDA side, we're going to move from about 200 million dollars to around 600 million dollars worth of EBITDA. And you can see the categories or the areas that we just talked about. We see the largest growth in the ESS or energy storage markets, EV markets. We see substantial continued growth in the food markets as we continue to invest R&D, time, money, and energy in this market, so about 60 million dollars worth of growth in food on the EBITDA side. And in those other areas that we talked about, like the semiconductor market, pharmaceutical, and paints and coatings, we expect another 30 million dollars worth of EBITDA growth. And you also see in that chart 130 million dollars worth of M&A activity. We are working very diligently today in all three of those areas, whether that be energy storage and battery EV markets, to make investments that would be accretive to our existing business, and also in the food business and in those other areas of advanced additives, some areas very specifically like paints and coatings. So you can see overall moving from 200 million dollars to 600 million dollars and how we're going to get there.

So again, just to recap, four primary areas of growth for our roadmap: energy storage, EV markets, focusing on high-value markets like food, pharma, and cosmetics, leveraging our unique assets that we have around the globe, including our global footprint, and continuing our long history of innovation and focusing that primarily on sustainability and functional ingredients. So in summary, we've delivered on what we promised in 2020. We're ahead of that in our trailing 12 months. We're exiting 2022 with extremely strong momentum. We have new growth opportunities that we didn't have in 2020; they weren't in scope or on our radar screen at that point in time, primarily around energy storage and the EV markets. And we think we're extremely well positioned with our global footprint, our long history in these markets, our process capabilities, and our unique assets to really capture the value and outgrow the market and have substantial margin expansion over the next five years to reach our 3 billion dollar sales and 600 million dollar EBITDA targets. Thank you for your time this afternoon.

Thank you, Phil, for sharing more about Phosphate Specialties. And now we'd like to welcome Elad Aaronson, President of Growing Solutions, to join us on stage.

Thank you and hello everyone. I'm happy to be here with you today. And let me start by putting up front our aspiration, and our aspiration is to become the global leader in the specialty plant nutrition market. And the good news are that we believe that we are on our way to get there. Let me show you why. But I'll start with a short description of the market. So that's how we understand our market, with a CAGR of 6 to 7%, with some upside this year and a little bit at the end of last year because of the market cycle. What are the reasons for this growth? So first one and most important one is the need for higher agriculture yield because the population is increasing. We are almost 8 billion people living on Earth today, while we were only 4 billion like 50 years ago. And then the resources are going down with less arable land and less water, so we need improved yields. This is one thing. The other thing is the global environmental awareness, the new green regulation is expected to grow globally. That will create more demand for quality food, and it means also that we need to have better nutrient use efficiency. Then when it comes to the different markets, we believe that Brazil, China, and India, those three countries, they account for 70% of the growth in the specialty plant nutrition market. And that's the reason why we are very much focused on those three countries. So for us, the specialty plant nutrition market represents a huge opportunity because it is large, it is growing, and it's becoming more and more sophisticated. By sophisticated, I mean the demand is for affordable, efficient, and sustainable solutions where we have the right technology to support. So that's about the market in general.

Few words about our performance in ICL. So two years ago, we set the targets for 2025, and as you can see here, we have already reached those targets. And those are the reasons for that. So first, very successful two acquisitions in Brazil at the right timing, and also very successful integration within the ICL group. That brings us to a better-than-expected result. So this is the first reason. Second one is the optimization, or actually consolidation, that we made between our sales and marketing channels into one, under one organization, where we can leverage from one position to the other. Third one is about Fertilizer Plus. Fertilizer Plus is our brand for polysulfate-based product. In that respect, we increased the production capacity dramatically, we increased the sales quantities and also the price per ton, and we are very close to completing the turnaround for this Fertilizer Plus business. So this is the third reason. And the fourth one is the various successful execution of our market expansion strategy. I've already mentioned the success in Brazil, but also in India and China, we doubled ourselves versus 2020, and also in some other areas. So that's the reason why we are very happy with the performance, which exceeds our expectation. And that brings me to ICL market positions. So two years ago, until two years ago, we considered ourselves as a second-tier player in this market with revenues of less than one billion dollars. Today, with revenues of more than 2 billion dollars, we can say that we are part of the leading group in this market. But more important, in 2027, we are going to be the number one global leader in this specialty plant nutrition market.

Okay, so that's about where we are. And now let's talk about our way forward. So these are the basics of the acceleration plan for the coming five years. So we start with innovative and sustainable offerings, and then go expansion, which we are going to continue with focus on major markets, operational optimization, or actually operational excellence, with leveraging the vertical integration to the minerals within ICL, data-driven ag services, and M&A and partnerships. As we are very happy with the recent M&As that we've made, based on those five pillars, we set the targets for 2027 on 4.25 billion dollars of sales and EBITDA of 18%. And once we get there, we'll be the global leader in the specialty plant nutrition market.

Let me say a few words about some of the different vectors. So I'll start with the innovative and sustainable offerings. And as you know, we are the global leader on controlled-release fertilizer technology, but also recently we were the first one to launch to the market the biodegradable coating solution under the brand EcoCoat. Then we have a leading portfolio of fertigation solutions. Fertigation stands for fertilization by irrigation. In that respect, we are focused on India and China, as they use irrigation, micro-irrigation, very much. Also in the professional markets, the turf, ornamental, and horticulture, we are the leaders in the world, and you have the example of Osmocote, which is the hottest brand in this market. So that's about the nutrient use efficiency, only few examples. Then comes the biostimulants and the ag-biological and micronutrients, which is a new vector for us. We have a strong and robust pipeline of products under the brand BioStim. Next one is the organic fertilizer. Well, we have the organic mineral polysulfate, and based on it, we have a very vast portfolio of downstream products. And recently, we got into the recycled nutrient-based products developments with the PureLoop, which is based on sewage ash, where we recycle the phosphorus and make it like a new fertilizer. On top of it, we are the first one to get the FPR certification by the EU. And all those developments are based on ICL's strong agronomy organization and knowledge, advanced R&D capabilities, digital arm, and the close proximity to the growers and the farmers. And all of that brings more precise, more sustainable, more efficient agriculture, and that's the basis of the new generation ICL fertilization products.

Next one is the geo-expansion, and I'll start with Brazil, where we had this successful integration with the two companies that we acquired then. And that brings us to a leading position in the specialty plant nutrition market in Brazil. We also leverage the ICL global portfolio towards the Brazilian market and vice versa. And we plan to extend our operation in Brazil in order to support the business growth. Also, we are looking for additional M&A in Brazil. So that's about Brazil. Next one is our China and India. They are not similar, but in some aspects, they might be similar. For example, both of them are very much based on fertigation, where we have the advantage of a very nice and attractive portfolio. We doubled our sales in both China and India versus 2020, and we're extending our local operations. The sales force is going to new states, new counties in India, and in China, but also the operation in China, we extend our YPH operation with new product lines. And in India, we are going to establish a new production site for specialty plant nutrition. So that's about China and India. Next one is the U.S. This is a mature market where we focus on the higher-margin specialty crops. We are looking for M&A in the U.S. market, but also strategic partnerships, both with the distributors and retailers on one end, but also with other players on the other hand. So that's about the U.S.

In order to support this business growth, we have to also have production growth. Here we have the advantage of the vertical integration into some of the minerals like potash, phosphate, and polysulfate, which give us an advantage. But also when it comes to the specialty plant nutrition production, then our strategy is to put the production sites in the target markets, like Brazil, China, India, and the U.S., as close as possible to the end users. We are going to optimize our production. We have a lot of sites in different parts of the world, so we are going to optimize it and to optimize also the global supply chain. And at the end of the day, it's about economics of scale. When you produce a lot in many different countries, you have much better cost structure. So that's about that. And another aspect of the geographic expansion is the split between the different countries or markets. While in 2020 we were very much dependent on Europe, with more than 50% of ourselves coming from Europe, you can see that now we are much more balanced. And in 2027, we'll be even more balanced between the major markets like Brazil, Europe, China and India, and the U.S.

And the complementary effort is the digital effort. That's an enabler for, on one end, better performance for the farmers, but on the other hand, better services for those customers. And let me give you some examples. So for example, we provide our farmers with AI-driven agronomic prescriptions based on what we are doing with Agmatix and ICL Lift. For example, we quantify the carbon footprint in order to optimize the crop management practices at the field level. So those are two examples. Then we implemented the ICL Link, our e-commerce new system. We started the rollout in some countries in Europe. It gives seamless, effortless service to our customer. We also have a model that predicts the product supply needs and also plans and tracks the delivery until the end point. And we optimize our marketing and sales efforts. Everything together supports our customers with higher yield, sustainable results, and at the end of the day, superior customer experience.

We're happy you could join us a lot. And now to continue with our AG digital story, we're welcoming Ron Baruchi of Agmatics.

We'd now like to welcome Ron Baruchi, who's going to talk to us a bit more about Agmatics, our AG Tech startup. Ron, what can you tell us about Agmatics?

Thank you, Peggy. I would love telling you about Agmatics, but let's start with a short video.

Growers, agronomists, researchers, and AG industry experts are tackling today's biggest challenge: providing food security for the world's growing population. While searching for a solution, each of them is creating and collecting vast amounts of data and expertise. But in order to face this epic challenge, they will need to be able to share the data and knowledge between them. Enter Agmatics, a holistic technology solution that unites, standardizes, and leverages agricultural data, allowing to effectively manage agronomic research trials, develop predictive data models, and leverage them to optimize supply chains and improve sustainability levels. Because providing food security begins with high-grade, standardized agronomic data. Growing data for impact.

The story of Agmatics started a few years ago as part of the innovation transformation happened in ICL, where we identified digital agriculture as a future growth engine of the company. Our vision is to focus on AG professionals, co-ops, consultants, and agronomists, as we believe that this community is the one that will drive digital adoption in agriculture. Our vision is to empower AG professionals with high-quality data to drive change at field level, both to optimize AG practices to improve yields and to improve sustainability. We are very happy to be part of the ICL group, where you can gain access to the Israeli startup nation for the best talents and the high tech that we can take from other domains and put in agriculture in order to solve one of the biggest challenges on Earth today.

We're looking at those challenges as part of the ecosystem itself, either the climate change or sustainability issue or the food crisis. It's clear that the entire ecosystem needs to collaborate. Even though we see data points per acre is increasing in the last few years, data is still siloed, not connected, and in low quality. This is a big barrier to solve those issues that we need. It's very clear that data and systems that can interconnect those AG professionals to work together to solve those issues are an absolute must. This is also crucial for the ability of the industry to translate data and insights into real-life actions. And as such, we see Agmatics as leading collaborative data and AI in agriculture.

We were able to develop a very unique engine that drives the agronomic innovation cycle from experimentation, field trials on and off the farm, all the way to insights and real-life actions. Those real-life actions are translated into digital prescriptions that can improve results for the AG professionals who are using them. Our professionals on a global level can now focus on actually driving change instead of 80% of their time spending on cleansing data and gaining access to high-quality data they need.

We also have the ability to use our customer relationship management platforms that we gained as part of the acquisition of Growers in 2020, that allows us to reach both farmers and ag retailers in the U.S. Well, part of our differentiation is the fact that we are focusing on data which is coming from field trials. We see that field trials and experimentation are at the core of agronomic research and agronomic practices for years and will be in the future. Our estimation is that there are more than 150 million of those field trials and experimentations which are happening on an annual basis. They are truly at the core of the agronomic practice.

Our target is to gain a leading position in this market and to disrupt field trials and experimentation via our digital tools. We believe this decision will allow us to generate high-quality data in real-time and impact AG professionals very fast, and will eventually shorten the innovation cycle time in the industry. It will shorten the ability for us as an industry, either farmers or our input companies or food companies as well as governments, to shorten the time to market for new innovations via data-driven research.

This ability to translate data from field trials can generate values in three main areas. The first one is efficiency. Our tools and solutions can optimize the trials operations for the companies that we work with, either by gaining faster results from field trials, short-term innovation cycle times, reduce trials operation cost, and from the fact that you can share data on trial results either within your organization or between organizations and eliminate redundancy. From a revenue perspective, translating this data into prescriptions allows field staff and sales teams to provide recommendations to the farmers, to show insights, and to improve customer retention. And last but not least, it's all about sustainability. The ability to generate data from field trials can definitely promote the adoption of regenerative agriculture, reduce carbon emissions, and generate the right protocols to measure carbon and sustainability in a standardized way, which we believe is very important for the future.

Well, digitizing field trials will allow us by 2027 to impact 20% of the global farms. We plan to do this by digitizing more than 500 million field trials. We plan where we estimate that we'll reach more than 50 million acres, and we plan to serve more than 3 million AG professionals, co-ops, consultants, and agronomists that in turn will affect more than 300 million farmers, really driving a big change in the industry. We have an independent unit within the ICL group, and this allows us really to solidify our partners' ecosystem and customers. A portion of those you see already here on the screen. Many of those have already decided to use Agmatics as their platform of choice to lead their data-driven R&D and to augment sales staff with digital prescriptions.

One of our first activities was to gain access or to partner with leading universities globally. More than 40% of the leading AG universities in the U.S. and 50% of the universities globally use our system. That will generate the right trust in the market for our solutions. Well, even though we are an independent business unit within the ICL group, the fact we are part of ICL gives us the power and the ability to reach global markets and to understand local needs of local farmers. Together with the acquisition of Growers in 2020, we gained access to farmers and our retailers in the U.S. Agmatics, Growers, and ICL together, it's a multiplier of power that allows us to generate scale fast and with the right professionalism which is needed.

In terms of market, we believe that digital AG, collaborative data, and AI market will reach $5 billion in the next decade with a CAGR of 13%. We plan to capture this market by focusing on B2B enterprise sales. We developed our solutions to be low-touch, which are platform-agnostic and sensor-agnostic, which allows us to generate recurring revenues from user licensing. This business model is already in motion, and since we went live with our products in 2021, we were able already to generate revenues from existing customers, which are growing double-digit growth each and every quarter.

This is also reflected in our adoption rate, where we see the number of digital field trials we are able to generate and the number of data points increasing. We also have a very wide range of coverage in terms of AG domains and different locations, which actually gives us data for more than 150 different crops. This unique asset, together with double-digit growth in data, generates a real data source for the industry that can really drive change.

We are presenting here as part of the ICL Investor Day not only because we are part of the ICL group, but also because we have the ability to provide services to the different ICL markets, especially the two markets which are growing: India and Brazil. Where in India specifically, we were able to support more than double-digit growth in sales in the last few years by providing digital prescriptions from field trials to the sales staff in the market itself, coupled with data which is coming from water and soil testing, including some very exciting technology we just launched and had a nice PR a few days ago about rapid leaf testing that can really shorten the ability to gain results from four weeks into a few days only with the leaf testing done by X-ray and infrared technology together with our partners in the Volcani Center in Israel. This technology is really remarkable in the ability to drive sales for the ICL markets and for other customers globally.

Another aspect of this is sustainability, where we are able to optimize our practices according to the carbon footprint that they generate. On average, our recommendations save more than 140 kilograms of carbon per ton of yield. And looking at the current deployment rate, both in the Brazilian market of ICL and the Indian market of ICL, we estimate that by 2027 we can reduce fertilizer-use related carbon emissions by 6% in Brazil and 1% in India.

Lastly, I'm very happy to share that we just went live with one of the biggest open data platforms in the industry for plant nutrition. We did this together with our partners in the International Fertilizers Association, the Wageningen University, APNI, and ISDA, where we were able to digitize more than 2,000 different data sets coming from more than 50 different organizations who donated the data, more than 50 countries actually, allowing our professionals globally to gain access to high-quality data and develop the next generation crop models. This is in fact the vision of our company, but we enable our professionals to gain access to high-quality data to drive change. Thank you.

Thank you, thank you for sharing the Agmatics story with our investors today, Ron. And now I'd like to welcome my boss and our CFO, Avraham Nahum.

So thank you, Peggy, and I want to take the opportunity to thank my colleagues, starting from Raviv, Yaniv, Phil, Elad, and Ron. Let me try and summarize for us how it all comes together, what you've seen throughout the day. So we are focusing obviously on sustainable shareholder value. We are delivering against plans with consistent execution and disciplined capital allocation. To be more specific, we will be accelerating our growth of differentiated specialties business. We will be prioritizing capital and R&D investments to support high return on growth initiatives. We will be driving operational efficiencies and value chain excellence to remain ahead of competition. We will be maintaining our industry return to shareholders throughout the life of the plan. We will be targeting timely opportunities for strategic M&A, and we will be optimizing sustainability efforts and risk management.

We are targeting more than $2 billion specialty EBITDA business, up 100%, with a CAGR of 16%. To be more specific and shed some color on our plans, our sales will grow substantially from about $7 billion all the way to $12.8 billion during the life of the plan. Growth on the specialty business will be 13% CAGR. At the same time, on commodities will be 5% CAGR. In EBITDA terms, we'll be growing our EBITDA from $1.7 billion all the way to $3.6 billion. On the specialty business side, we'll be growing at a CAGR of 16%. On the commodity side, our CAGR will be 10%. In terms of margin, we will be growing the EBITDA margin from 24% all the way to 28%.

I'll return to our shareholders. First of all, on our adjusted earnings per share, as you can see, massive growth from 2020 with just 20 cents adjusted EPS all the way to $1.50 in the trailing 12 months. Our dividend yield has also grown significantly from 2.7% in 2020 all the way to 8% in the trailing 12 months.

We're driving efficiencies. The efficiencies, as you can see, our G&A expense improvement, we're down from 4.6% in 2020 all the way to 3.1% in our trailing 12 months. And our operational excellence savings of $320 million are embedded in our new five-year plan.

On the sustainability front, we are at the forefront of sustainability with TCFD disclosure. We have well early adopters of the disclosures, and we're enhancing the management of climate-related risks and opportunities. We are also utilizing the sustainability-linked financing. We're on track to achieve sustainability-linked loans KPIs.

When we look at the CapEx that has been put in place in order to support our strategies, we are targeting high growth of the specialty businesses. We are investing in growth, expanding capacity for growing specialties business. At the same time, in ESG, we are the industry leader focused on continuous improvement. On maintenance, we are investing in safety and efficiencies that are foundational and non-negotiable. And of course, we're leaving space for M&A. We are targeting timely opportunities for strategic M&As.

Our return on invested capital has also grown substantially, or will grow during the life of the plan, all the way from 13% to 18%. On the divisional side, in the Industrial Products, we will be growing from 28% to 34%. On the Phosphate Specialties, we will be growing from 14% to 21%. In Growing Solutions, from 10% to 19%. On the commodity side, we'll be growing from 10% to 13% return on invested capital.

Looking at our financial position, it's a very compelling one and supports accelerated strategy execution. As you can see on the left-hand side, our net debt to EBITDA ratio has gone down dramatically from 2.3 in 2020 all the way to 0.6 at the current time. We're well within our bank covenants, of course, and well within the rating agency's profile. And we are stable outlook, BBB- and both S&P and Fitch ratings. Translating this financial position gives us compelling financial flexibility, ability to fund growth and plans, and deliver shareholder return at the same time. I have firepower is in place to move forward and deliver increasing shareholders' returns.

Just before I leave you, I want to reiterate the ICL new five-year plan. We delivered world performance in 2020 much sooner than expected with strong momentum. There are significant opportunities for ICL amid growing global sustainability challenges. We have the right fundamentals and are well positioned to achieve expected growth and margin expansion plans. Translating into numbers, we are targeting sales of $13 billion, that's 11% CAGR, and EBITDA margin of 28%, that's 13% CAGR by 2027. By achieving that, we are on track to become a global leader in all three specialty businesses. Thank you.

Thank you, Avraham, for wrapping up with the financial portion of today's segment. I'd now like to welcome everybody to the Q&A portion of today's event.

So thank you everyone, let's move on to the Q&A. We're going to start with a question I think this might be for Phil Brown. A lot of people are trying to break into the battery market. What makes you think you can be competitive in this space?

Thank you, Peggy. That's great to start with an easy one. So what makes us think we can break into this space? Well, in our presentation before, we are a global player. We're in every geography around the world. We're the only supplier that can work with our partners and customers in every geography, regardless of where they want to do this. We also have as well a great history in phosphates. Lithium iron phosphate is a phosphate. We've been producing phosphates for over 140 years, and we have a lot of technology in that area. And specific to lithium iron phosphate, since it's new to us, we've picked a very experienced partner from a technology standpoint with Li-Cycle, who has over 15 years of experience in producing lithium iron phosphate and highly recognized in the industry. So with those key components, we feel very confident about our entry into the LFP market.

We have a couple of questions here. Actually, let's start with why it's from Joel Jackson. Why is the Growing Solutions organic growth rate from 2022 to 2027 growing at what seems to be less than GDP? How sensitive to commodity prices is the segment?

So first, we believe the organic growth is higher than the growth of the market. And the reasons for that is that first, we have a global presence in all the major markets. We go and grow organically in China and India. We are doing great in Brazil, and also we are very well positioned in Europe. And I believe that based on our vast portfolio and some differentiated products and also the strong pipeline that we have, we'll be able to outperform the competition on that.

Maybe I'll just add that in terms of profit margins, when we look at 2022, which is an extraordinary year, then we see profit margins of well over 20%. That's not the plan. The plan is to get to about 18% EBITDA in 2027. So that means that in a normal year, we would be tracking around 15% as of now. So yes, there is an impact of commodities. The underlying business is growing margin considerably over time.

Excellent. Next question up, this would probably be for you again, Aviv. Now that you've integrated Brazil, what else do you need to add to your specialty fertilizer portfolio?

So I think one vector that we've already started to develop and invest in is the ag-biologicals, like biostimulants, microbial biostimulants, and new micronutrients. I think this is a developing vector, and also to increase our investment in nutrient use efficiency solutions. In some areas, we are the best in the industry. Some other, we need to invest more, and I think that will bring us to a very good portfolio.

Excellent. Oh, Ron, I think this would be for you. How important, Ron and Raviv, I guess, how important is digital to your targets and strategy, and how big can this business become?

Okay, so maybe I'll start. In terms of ICL strategy, the way we track new innovation is short-term, medium-term, and long-term. Short-term is how we manage the next quarter, the next year. Mid-term is new product sales, which we measure according to the contribution after five years. And long-term, we track big initiatives over 10 years in terms of future EBITDA expectations. So in the case of digital solutions or data-driven solutions, they come into the long-term, which means it's not something that is going to move the needle in ICL in the next few quarters or in the next year. They will have, Agmatics and other parts of the digital business will have significant sales in terms of new product sales five years from now. Still won't be very significant for ICL, but over 10 years, if and when we achieve the goals that Ron presented, it will be a very valuable business five years from now, and we'll also know that we can take it into account into our short-term and medium-term goals. And Ron, if you want to add to that, please.

Thank you, thank you, Raviv. I think we are building a digital business in ICL. It will take time to build it to be significant in the P&L of the company, but the revenues that we have already generating and the impact we are generating are significant for us for the digital business. And we are definitely seeing very positive progress in the recent years and also in the upcoming years, and we definitely believe we can reach the value that we're talking about.

Okay. Phil, I think this would be for you. In the Phosphate Specialties in St. Louis, where do you obtain the phosphate or other materials and minerals you're going to need for the LFP batteries?

Sure, thank you, Peggy. So one, as we talked about, we have a global footprint around the world, and we produce and are back-integrated into a number of different places around the world. So we have our own back-integration points and phosphate rock in multiple places around the world. We also have hybrid models that we operate where we convert intermediate materials to further downstream materials, and we rely on strategic supply agreements as well with a number of players in the market, and we leverage our back-integration and vertical integration with those. When we talk specific about LFP phosphate, I think that's pretty easy. I don't know that we need to spend a lot of time on that. When we talk about iron, that's one of the very nice things about lithium iron phosphate compared to some of the other cathode active materials. Iron is a very prevalent material. We have a lot of it in a lot of different regions around the world. That's a beauty of it. It's one of the advantages. When we talk about lithium, you can see every day in the news that there are challenges bringing lithium to market fast enough. There's plenty of lithium around the world. It's a matter of timing. And in lithium, we're working really in a unique model where we're leveraging not only suppliers for ourselves but also our partners and our customers who, many times as large consumers of end products, have secured their own lithium and bring their lithium to the manufacturing as well.

Raviv, this probably is for you, and it may be the larger group, but what kind of M&A can investors expect? Is there a particular industry or region it goes on? What kind of multiples are you seeing? What kind of multiples are you willing to pay?

Okay, so this really hasn't changed a lot from our previous plan, other than our appetite has grown because we want to accelerate growth and because our financial position is even better than before. We're targeting in two divisions expansion of geographic reach and global distribution, as well as portfolio growth. And that's in Growing Solutions, where we aspire to be the market leader, and that means that we want to keep on being aggressive and leverage our success with accretive acquisitions that create additional value and enhance our portfolio and our geographic expansion. And we're going to be even more aggressive than we were in terms of our targets for the next five years. And we're targeting the Americas for inorganic growth. So that would be South America and North America. That is the same as in our last plan, but maybe in a larger magnitude. And the other division is the Phosphate Solutions, where we want to go further downstream, whether it's in the food business, where we're also diversifying to some extent away from phosphate, and now there's the new opportunity, and this is new, there's the new ESS opportunity, which means that we could be opportunistic and go further downstream. And we could leverage that also, there are tremendous market opportunities now because of what's happening in markets. New opportunities have become available to us. It's very timely because this is where we're strong, this is when we're strongest financially. So we're going to look at the opportunities there, and we can also be opportunistic now.

In terms of multiples, I would say in general that we're only looking at accretive acquisitions. So any multiple that's close to the company multiple is relevant, even though the company multiple is temporarily very, very low. But we're looking at the long-term company multiples. And of course, beyond a certain multiple, it doesn't make sense for us. We were looking at an acquisition in the Growing Solutions space just recently, and the multiple there was around 16. We thought that there are better opportunities. It was a good target, a great target, but we thought that there are better opportunities in terms of the pricing. And we don't have to make an acquisition. We want to make it, we want to make the right acquisitions. And so we decided to back out based on valuation. And we're sure that, you know, others may be willing to pay, and then I have pain, we're not there. We don't have to do anything. We're enjoying great momentum. So in general, long-term company multiples would be where we're looking at. And of course, we could look as high as close to the numbers I just talked about. We can be at 10, 12, 13 multiples if there are enough synergies to create the accretion that we're looking for. So again, same as before, but we're going to be a little more aggressive because there are more opportunities and we want to be more aggressive about accelerating growth as well.

Great. Thank you. Next up is from Ben at Barclays. There's been some pressure on electronics and construction slowness in the industrial products end segments. When do you think these symptoms will begin to abate?

So there's actually an add-on to this question from Ben. He also wants to know for this segment, why do you think you have a higher portion of customers willing to agree to long-term contracts even in these market conditions? So what sets ICL apart in this area, and how can you keep this alive?

So a little bit of an overlap between you and Phil potentially, and I know Raviv will know the answer as well. Can we talk about how much overlap there potentially be between phosphates and bromine in the battery markets? You both talked about it today.

So maybe I'll start and you guys pitch in. We're addressing different segments in the market. So LFP, we're working on cathode materials, electrolytes, phosphorus, and Industrial Products business. We're also working on innovation for the future, so solid-state electrolytes based on bromine or battery storage or even recycling is more towards the Industrial Products business. But we note that the opportunity is very significant, and although we manage it in separate divisions, going downstream, there could be some additional synergies. And that means that we're open to the idea in the future of maybe even creating an independent unit, maybe even to the size of a division in the later future. And right now, we're seeing a fantastic cooperation between the two divisions, and we're really seeing one plus one equals more than two because we're working with companies that in the past worked with both divisions, and suddenly they see the strength that ICL can bring to the table when innovation and new business is being built. Please, guys, add to that if you'd like.

I think Raviv did a great job of answering that question. But you know, I would just stress that the cooperation between IP and Phosphate is extremely strong, and we see a lot of benefit and synergy there. Every time we're having a conversation with a customer or a partner about LFP, we're also talking to them about electrolytes. When Yaniv's talking to them about electrolytes, we're also talking to them about LFP. And so we're sharing a number of things there from business development and connections with those customers as we move forward.

So it wouldn't be an ICL conference call if we didn't have a question about commodities. So the question is, if we reduce commodity prices to the levels where they were at in 2020, what would the impact be on your 2027, both for specialties and commodities?

Okay, that's an easy one because we did the math yesterday. We showed a plan to get to $3.6 billion of EBITDA. If we had 2022 prices put into that model, we would get to $5.4 billion of EBITDA in 2027. Yes, okay, Avraham proved it, so it's okay. The other part of the question, though, was we took as an assumption, and we shared it with you in the presentation, that we are talking about at least potash prices of $400. That is somewhat above the prices in the down cycle of 2020. The reason for this is a few-fold. First of all, the focus that the people that are following the market are citing. Second, the supply-demand equation. And third, the developments that we see coming, utilizing it together with the specialty side. So combinations should carry the day. So we believe these are the right figures. If it were to go below that, as much as Aviv said about the upside, obviously it works for the downside as well. So we have a wrinkle to that question: what if it was 2020 prices? Yeah, that would take away, that would chip away something to the tune of $500 million from that. If it was all the way down to the low price, the mid-cycle is down cycle of 2020, then that could potentially be the penalty. The question is, is this likely? And then for how long also, because you know, if it's temporary, that's one thing. If it's long-lasting, it's another thing. As I said before, we don't see such a scenario materializing.

Raviv, do you have any final thoughts you want to share? I know I would like to encourage everyone to reach out to me directly if you have any additional questions. We will be getting on the road this November and December, and our earnings call will be in about two weeks on November 9th. It's Wednesday, and I hope you can join us. But I will turn it over to Raviv.

So I just want to say thanks to everybody for joining us for our Investor Day. We tried to give you an overview of everything that's going on in ICL, and there's a lot going on. We're very excited about the current trends in the market. Yes, there are always short-term challenges, but I think innovation and our strong sustainability-based culture is the way that we feel comfortable in moving forward. And we're very proud that we can return to you time after time, quarter after quarter, and demonstrate to you that we've performed and we delivered on our promise. And all of our management team is very proud to do this day in and day out, and looking forward to meeting all of you soon on our conference call for the third quarter. And we look forward to coming back to you and reporting about the progress on this new plan that we're all excited about. Thank you very much, and thanks a lot to Peggy and to my colleagues for your interesting presentations and for the work of preparation. And let's get back to work. Thank you very much.