ADAMA Reports Fourth Quarter and Full Year 2024 Results

Company reports initial success reflected in certain key metrics including improved free cash flow and adjusted financial results

Beijing, China and Tel Aviv, Israel (March 13, 2025) – ADAMA Ltd. (the “Company”) (SZSE 000553), reported its financial results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Highlights:

• Sales down 2% (-2% in RMB; +2% in CER) to $1,113 million, mainly reflecting an increase of 7% in volumes more than offset by a decrease of 4% in prices and negative foreign exchange impacts
• Adjusted gross profit up 14% to $280 million, representing an improvement of gross margin from 21.5% in Q4 2023 to 25.2% in Q4 2024, reflecting lower costs and improved product mix
• Adjusted EBITDA up 45% to $137 million representing an improvement of EBITDA margin from 8.3% in Q4 2023 to 12.3% in Q4 2024
• Adjusted net loss narrowed 43% to $58 million from $101 million in Q4 2023; Reported net loss of $149 million, including one-time restructuring costs associated with the Company’s transformation plan, compared to $79 million in Q4 2023
• Operating cash flow reached $126 million in Q4 2024 vs. $293 million in Q4 2023
• Free cash flow reached $38 million in Q4 2024 vs. $130 million in Q4 2023

Full Year 2024 Highlights:

• Sales down 11% to $4,141 million (-10% in RMB; -8% in CER), mainly reflecting 8% decrease in prices and stable volumes
• Adjusted gross profit reached $1,061 million (margin of 25.6%) from $1,060 million (margin of 22.7%) in the full year of 2023, reflecting lower costs and improved product mix
• Adjusted EBITDA up 15% to $469 million, reflecting an improvement of EBITDA margin from 8.7% in 2023 to 11.3% in 2024, demonstrating an improvement in business quality
• Adjusted net loss narrowed by 13% to $206 million from $236 million in the full year of 2023; Reported net loss of $407 million, including one-time restructuring costs associated with the company’s transformation plan, compared to $225 million in 2023.
• Improvement of $172 million in operating cash flow reaching $528 million in 2024 vs. $356 million in 2023
• Improvement of $364 million in free cash flow reaching an inflow of $217 million vs. an outflow of $147 million in 2023

Gaël Hili, President and CEO of ADAMA, said, "In 2024 we launched our Fight Forward strategic transformation plan. Our Fight Forward plan includes improving the way we work to win in the value innovation segment where the market is looking for high-quality solutions with a strong return on investment. As part of the plan, we are streamlining our operations, focusing on products and territories where we can maximize value for all stakeholders, and prioritizing support for our countries to deliver value to our channel partners and to end-customers. I’m pleased to report that we’re already seeing tangible results, including improved operational and free cash flow, and growth of adjusted gross profit and EBITDA and their margins vs. last year. As well, sales volumes in the second half of 2024 were up compared to the previous year. I’m optimistic Fight Forward’s early accomplishments provide momentum towards further successes in 2025."

The General Crop Protection (CP) Market Environment

Key commodity crop prices remained subdued in 2024, pressuring farmer income, despite some ease in the prices of inputs. Global crop protection industry sales are estimated to have declined in 2024[1].

While channel inventory levels continue to ease following pandemic-era stockpiling, the high-interest rate environment, coupled with ample product supply (driven by significant over-capacity production of active ingredients (“AIs”) in China) contributing to low AI prices, continue to drive a just-in-time purchasing approach by the channel.

‘Fight Forward’ Transformation Plan

In early 2024, ADAMA launched 'Fight Forward', a strategic transformation plan aimed at gradually delivering improved profit and cash targets over a three-year period.

This plan has three main pillars:

1. Optimize financial management: With a focus on improving the company’s financial fitness in both the short and long term through cost reduction, as well as commercial and manufacturing excellence. Improvements in certain key metrics, including free cash flow and adjusted financial results in 2024 reflect the plan's early impact.
2. Streamline ADAMA’s operating model: Focus on key geographies and centralize global functions to leverage expertise in order to enable the Company’s commercial unit resources to primarily focus on customer needs to maximize ROI for all stakeholders.
3. Focus on the Value Innovation segment, where value is provided by using off-patent AIs enhanced by proprietary formulation technologies that are designed to address farmers’ needs and improve their efficiency by delivering tangible benefits such as rainfastness, improved leaf penetration, ease of use, as well as enhancing ROI.

Sustainability

In 2024, ADAMA remained committed to developing innovative formulations that enhance both farmers' productivity and sustainability, while also advancing sustainable manufacturing practices.

Sustainability in Products:

• In 2024 ADAMA launched EDAPTIS®, a unique formulation which not only expands the spectrum of efficacy but also improves the effectiveness in combating resistant weed populations. In addition, the product is formulated as an oil dispersion using refined rapeseed oil, a renewable resource, thus eliminating use of hydrocarbons found in conventional oil dispersion formulations.
• Feralla® a novel molluscicide active ingredient, achieved a key milestone with EFSA’s positive assessment towards EU approval. Its unique and patented formulation, powered by ADAMA’s Desidro® Technology, enhances pest palatability, while its low active ingredient concentration supports farmers in achieving their sustainability goals.

• ADAMA continued to grow the market presence of Sesgama™ based products. Sesgama™ is ADAMA's proprietary formulation ‎technology platform addressing high-load and otherwise challenging formulations enabling less use of ‎co-formulants, transport and packaging materials per acre treated with a resulting ‎improved product sustainability profile.
• During 2024, ADAMA continued to register and launch products based on its proprietary Asorbital® formulation technology platform that improves the leaf penetration and systemic movement of the AI in the plant. This technology provides greater efficacy and sustainability and can be used to reduce application rates.

Sustainability in manufacturing:

• Opening of the new energy-efficient chloralkali production facility – The advanced technology utilized in the facility allows ADAMA Makhteshim to produce chlorine up to 40% more efficiently, reducing energy consumption and ensuring a safer, more sustainable process. The chloralkali plant utilizes cutting-edge membrane cell technology, replacing the company's mercury-based system. This transition not only eliminates the risks associated with mercury, but also significantly improves energy efficiency.
• Installment of Regenerative Thermal Oxidizer (RTO) – In 2024, an RTO system was installed in ADAMA Agan’s wastewater treatment plant to effectively manage odor and pollutant emissions. This initiative aims to enhance air quality for both site employees and neighboring communities. The system is scheduled to become operational in the second quarter of 2025.

Portfolio Development Update

During 2024 ADAMA continued to register and launch multiple new products in markets across the globe, adding on to its differentiated product portfolio. As part of the Fight Forward plan, the Company is focused on improving its overall portfolio mix, particularly by targeting the Value Innovation segment, with the intent of improving value delivered to all stakeholders.

New Product Introductions (NPI) percentage out of the full year sales of 2024 reached 22%, referring to products launched over the past 5 years.

Several products were highlighted in the Company’s previous 2024 quarterly reports. In Q4 2024, launches of differentiated products included:

• Forpido® in India. A new GR-type innovative insecticide formulation. Combining Chlorantraniliprole, Fipronil, and Zinc, it effectively controls resistant rice stem borer while enhancing early crop establishment, ensuring healthier rice cultivation. The formulation incorporates a patent-pending technology that delivers a prominent phytotonic effect, clearly evident in the field.
• Edaptis® in Poland, Italy and Greece, with plans to expand across other European nations.This innovative post-emergence herbicide combines the actives Pinoxaden and Mesosulfuron-methyl, providing effective control over a very broad spectrum of grasses, including enhanced performance in the presence of resistant populations. Its advanced formulation, protected by a patent, stabilizes this unique combination ensuring efficacy and reliability.
• Matos®in South Korea as the first country, with expansion plans targeting additional markets. This innovative SC insecticide formulation, powered by Spirotetramat, offers effective control of sucking pests across various fruits and vegetables crops as Apples Cabbage Peppers etc. The formulation leverages the patent-pending Ayalon formulation technology for enhanced efficacy.

• ADAMA continued to expand the Prothioconazol based products into new regions. Forapro®, combining Prothioconazole with Fenpropidin, was introduced in France and Malta; Maganic, featuring a blend with Difenoconazole, expanded to Italy. Both products leverage ADAMA’s unique Asorbital® Formulation Technology, delivering enhanced uptake and exceptional systemic performance.
• Paramer, a pre-emergence WG herbicide featuring Pyroxasulfone, was launched in Argentina. Designed to control grass and broadleaf weeds, effective in key crops such as wheat, soy, corn, and barley.

Registrations of differentiated products during Q4 2024 included:

• Cazado, a new innovative OD herbicide formulation, has been registered in Canada. Combining Pinoxaden and Thiencarbazone-methyl for a dual mode of action, it offers wheat growers the first in-crop solution to effectively control wild oats and proactively combat grassy weed resistance.
• Expanded registrations of Prothioconazol based products, all powered by ADAMA’s proprietary Asorbital® Formulation Technology, into new regions, including Soratel in Netherland and Romania, Maganic in Belgium, UK and France, Avastel in Greece, UK, Ireland and Czech Republic, and Forapro in Germany, Spain and Romania.

• Gilboa™, an innovative proprietary fungicide, submitted to the Fungicide Resistance Action Committee (FRAC) for classification as new mode of action for cereals.

In addition, patents granted during Q4 2024 included:

• China: Approval was secured for a patent covering the formulation of Saflufenacil in a soluble liquid form.
• Australia: A patent was granted for the proprietary formulation of Quadrant®.

Geopolitical Situation: No Material Impact

ADAMA is headquartered and has three manufacturing sites in Israel. The regional tensions which escalated on October 7, 2023 have had no material impact to-date on the Company's ability to support its markets or its consolidated financial results.

Financial Highlights

Revenues in the fourth quarter declined by approximately 2% (-2% in RMB; +2% in CER) to $1,113 million, reflecting an increase of 7% in volumes more than offset by a decrease of 4% in prices and negative foreign exchange impacts. Volumes were up compared with Q4 2023 driven by demand recovery in many regions due to improved channel inventory levels, while the Company has continued shifting away from selected low profit products, marking the second consecutive quarter of volume growth. However, the positive impacts were more than offset by lower prices due to just-in-time purchasing patterns of the channel in light of overcapacity and a higher interest rate ‎environment, and negative foreign exchange impacts, primarily depreciation of the Brazilian Real.

These results brought the revenues in the full year of 2024 to $4,141 million, a decline of approximately 11% (-10% in RMB; -8% in CER), reflecting a decrease of 8% in prices attributable to reasons stated above and stable volumes.

For more information, see ADAMA's report.