ADAMA Ltd. ($000553)

Dear investors, good afternoon to everyone. I am the Board Secretary from ADAMA. I'd like to welcome all of you to this online roadshow for the year 2025. we've provided a simultaneous interpretation in both Chinese and English. In your Zoom, you will see a select column, so you could choose whichever language you feel comfortable with. Today, we've invited Mr. Gael Hilli, the President and CEO; Ms. Efrat Nagar, the CFO, George, the Global Investor Relations. They will present us an outline for Q4 and FY 2025. We also have with us Mr. Yang and Jeff Han, our independent directors. If you have any questions, you could use the chat box one. As usual, we will also show the presentation -- and on the first slide, you will see a disclaimer for your information. And next I'd like to give the floor to Mr. Gael Hili to kick start our online roads today. Gael, the floor to yours.

Yes. So once again, good afternoon, good evening to everyone. I will start actually by making some comments and probably answering some questions that we have received not probably entering some questions we have received about yesterday events in our site of Neova in Israel. So as probably many of you have heard because it's been in many mainframe medias, our site in Israel of our 2 sites in Israel, the cycle mill came up. Have been hit yesterday afternoon by what we believe at this stage is an indirect missile strike. By indirect, I mean, it's a piece of a missile that has been blowing the air by the air defense that landed on our neotradit site. Now the consequences of this event. First of all, I want to stress the most important thing. Nobody was injured, nobody die in this event. We had 400 employees on site at the moment of the strike and everybody is safe. So that's the very great news I can share with everyone today. Now in terms of how this event will impact the site and the company. Obviously, it's too early to draw a final conclusion, but I can tell you a few things. First, the area that was hit by this piece of missile is a warehouse. This warehouse contain a mix of finished goods and raw materials, which for most of them went on fire. The fire is over, by the way, was already over last night. But this warehouse was significantly damaged. We cannot tell at this stage, if there are damages in the operational equipment around the warehouse. Obviously, we hope not. We're assessing this as we speak and we will do in the next days. but there could be some indirect consequences of this fire on some of the operational equipment around this warehouse. So that's where we stand today. The last thing I want to stress is that a is 1 of our sites in Israel. It represents less than 15%, 1/5 of the total volumes that Adamas sells globally. -- these plants. And we have plans -- we have another plant in Israel, we have plants in China, in Brazil and in Poland. So in terms of impact, if there is any impact commercially, it will be limited to the numbers I gave earlier. And that's the total sales out of the site, knowing that the impact is only 1 part of the site. So that's for the event of yesterday. I wanted to start it by this because I think it creates a lot of attention and a lot of questions. If there are further questions on this, I can answer them at the end of the call. I hope that with what I said, it answered most, if not all of the questions. Now moving to the results of Q4 and the year. I'm very pleased to report those numbers, they show significant progress, in a market that has been relatively stable for the last quarter. So what I'm going to tell you now, I've been saying for maybe a year, maybe more than a year -- so we have -- we continue to have a market that is characterized by a significant oversupply of raw materials and active ingredients, especially out of China. This is putting -- this has been putting pressure on the prices since already more than a year, and the prices of many products out of China are at their historical low and has been for the last few quarters. That hasn't changed. -- but has not changed either in Q4 and for the whole of 2025 is that the price of commodities that the growers are producing and selling were lower as an average than the last few quarters. or few years, sorry. And this resulted in margin compression for growers, which put additional pressure on our industry. Last, but not least, those prices are stabilizing, but at levels that are lower than the average of the last 3 years. Last, but not least, we see now as a new normal in our market, a very careful buying pattern from both the channel and the growers they wait the last minute to buy. It has been the case for the whole of 2025. It's not new, but it became a center behavior in the market, which required us to adjust to. So in a nutshell, this is a market that continue was a market in 2025 that continue to be challenging for our industry and ADAMA had to perform into those conditions. And you will see in a moment that the performance is very promising. Next slide. So for us in ADAMA, 2025 was the second year of our turnaround program, named the 5 transformation, which was mainly to achieve 2 things. The first thing, which you see on the left of the slide, it was through the first part of this program was to launch more than 1,000 initiatives across the company, across all countries, functions and businesses to reduce -- to increase EBITDA through cash to increase EBITDA and cash through lower cost and lower operating cost of the company. So these actions have resulted in a significantly better EBITDA performance in '24 versus '23, but you would see in 25 versus -- the other part of the 5-for transformation is about or was above because this transformation officially ended at the end of 2025 was about increasing our geographical focus and our cost competitiveness, but also establishing a more agile and streamlined operating model for the company and a better balance between headquarter and countries and geographies. All this took us a lot of energy and a lot of time over the last 2 years and is putting us in a position now as a company to be much more healthy and much more equipped to be competitive in the market conditions I described a minute ago. Next slide. So in that context, I'm very pleased to report the -- both the Q4 and 2025 year full year results. So first of all, the full year sales in 2025 declined by 2%. This is stable volumes, a combination of stable volumes and 2% price decrease, which is broadly in the industry average. So we don't think we're being any different than the rest of the industry with our prices and our volumes remain stable. Knowing that 2025 was still a year, as I just mentioned, where we decided on a voluntary basis, on an intentional basis to walk away from some low-margin products which explains also the fact that we are -- our volumes were flat. Now in terms of financials, our Q4 gross profit were up 12% above Q4, 2024. And our full year gross profit was up 12% before above full year 2024. Our EBITDA was up 14% in Q4 versus Q4 2024 and our full year EBITDA was up 25% above the full year of '24. So you see that there is a real improved quality of business both in gross margin and in EBITDA margin, both in Q4 and in the full year, that is the result, the consequence of this 5 for transformation I was talking about, which has made us -- which has significantly decreases the cost of both the product we sell and the cost to operate the company, making us competitive again in the market. We had a positive full year -- we are -- we will be posting for the full year a positive figure adjusted net profit and a significantly reduced net losses. So we are still reporting losses but significantly reduced versus 2024, which was already better than 2023. Last, but not least, I'm very pleased to report a strong cash flow performance with an operating cash flow for the full year of $567 million and free cash flow of $269 million, which represents an increase of respectively EUR 39 million and EUR 51 million versus last year. So in a nutshell, if we think about where we are at the end of 2025, we are in a place where the company -- the company's financials are stabilized. They're healthy again with a significant improvement versus last year and they put us in a position where our profitability as a company is back into market standards. And we are generating a weak level of profitability with a strong cash generation. which gives us a lot of confidence in our ability to grow from this healthy base in the future. Next slide will be with the happening.

Yes. Thank you, Dan. So how it looks from a P&L perspective. So starting from the top line. So as explained by the 8% reduction in sales reaching to $126 million, 8% decline in volume. This is reflecting the company's decision to reduce basic clinical sales as part of our strategy. and also 2% lower prices aligned with the market direction. And with 8% lower sales, we are generating in Q4 2025 gross profit increase, reaching to above 30% gross noise by improved costs, significantly improved cost is not the compensating the decrease in volumes in prices. The improvement that lower cost resulted by improved operational efficiencies and lower cost of inventory sold for the situation of the overcapacity in China and with slightly higher OpEx, mainly due to increase in the company's performance basically compensation as we deliver our target in 2025. We are finishing Q4 2025 by 14% increase EBITDA versus last year, $157 million, with lower financial expenses due to a better debt structure and also lower had costs due to the Turkish lira and the shekel. We are finishing Q4 2025 with more or less 0 net losses versus $58 million less in 2024. And with the additional restructure restructuring that we made during Q4 during 2025, I started our site forward plan -- our reported net loss is $88 million by 41% versus last year. In the next slide, which was present the full year results, basically, we see the same story, more or less a 2% lower than last year coming from stable volumes, as explained with is a combination of market trend recovery from -- together without a decision to pivot a way to optimize our portfolio, our geographical presence and to reduce the basic chemical sales -- and in Q1, if you remember, we have the decline in sales from Turkey. So didn't bring us to this 2% lower sales, but also for the full year, we can see that also and despite the fact that we sold less -- we are improving our gross profit by 12%, reaching to 29.4% gross margins. Also for the full year, we can see that its main impact coming from better cost part of our site forward plan, which more than compensated the lower volume and the lower prices. For the full year, we also see slightly higher OpEx. One reason, as I already explained, the company performance-based employee compensation. However, we also had to record some credit losses due to distributor liquidity issue mainly from a -- and this increase in the compensation in the liquidity, offset by our operate efficiency as part of the forward play which brings us to EBITDA of $587 million, 25% more than last year. And if we are looking at the quality of the business, EBITDA to sales ratio, we are 14.5%, which is higher than what we performed last year, which was only 1.3%. Also for the full year, we are presenting lower financial expenses and lower tax expenses, which lead us to net income to adjusted net income of $28 million or after 3 years in a row that we presented losses we are proud to mention that we are reaching to adjusted net income of $28 million versus losses last year of EUR 206 million. And our reported net losses with the restructuring cost that we generated executed during 2025 as part of our 5 -- Forward, we are narrowing our reported net loss for $407 million last year to $147 million only this year. Next slide.

Before we go to next slide, can you go back for a second to the current slide, please. Yes. I won't insist on 1 factor here that has mentioned, we are with the EBITDA, the profitability that we reached in 2025, the EBITDA percent to sales puts us in our -- if you look at the standards of our industry, finally, after very difficult years in a safe place. By safe place, I mean that with 14.5% EBITDA to sales, we are in the average of the industry for off-patent chemicals -- and this allows us to say -- allow me to say earlier that we are -- we have built the base now to grow in a healthy way, okay? From that base, we can grow. From the base we had in 2024, we couldn't, because it was not solid enough. The base now is sold. Next slide. So in terms of geographic sales, the split of the performance of our sales starting with Europe, Africa and Middle East at the top. Actually, Europe, Africa and Middle East had a quite strong sales performance, even if you see this minus 3% in U.S. dollar, if we actually compare apples with apples and exclude Turkey, because we were not allowed for regulatory reason to sell in Turkey anymore in 2025, because of an embargo of the Turkish government to our Israeli companies, we would then post a 2% growth which in a market that has been actually slightly declining, is means that we gained market share in Europe, Africa, Middle East in 2025. So strong performance in Europe. Very strong performance in North America. Our business in North America after a few years of few difficult years is now performing much better. We made some changes to the way we approach our go-to-market strategy, which are starting to pay off. We're still if we're honest with ourselves, we're still a small player in the U.S. on the agricultural side, but we're growing, and we have strong ambitions for the future. Latin America around 3% in dollars. This is mostly and mainly it's actually only product. Latin America, especially Brazil, which is the biggest crop protection market in the world, as shown in 2025, very, very competitive pricing environment with the behavior of the channel, the oversupply by behavior of the channel, meaning proving in competition different players between themselves constantly until the last minute, has resulted in the biggest price pressure amongst global markets. And this has affected us has affected other industry players. Our volume actually went up in Brazil last year. But as you see because of the pricing dynamic in that market, we -- in order to remain competitive and relevant, we have to adjust our prices to be competitive, and this resulted in this type of trend. In Asia Pacific, you see a minus 11%. This is mostly India. India is a market, a very important market, strategic to ADAMA, where we took the strategic decision in 2025 to change our go-to-market approach and in order to reduce the amount of sales return. So basically, we're putting less -- we decided to put less product in the channel in 2025 that we did in 2024. The result is that we have a healthier business from that point of view, but we had to take that impact on our sales in 2025. it will not be recurring. So it's a one-off in 2024. In China, we also have a small reduction. If we would exclude China, the drop will be only 5%. And the reason of the drop in China is very simple is we've decided to to stop the production in the small assets we have on 1 of our Chinese sites. This asset will produce commodity chemicals, not for the agricultural market at a low margin. So it's not a strategic business for us. but we don't have it it impacted the top line. It really didn't impact the profitability because as I said, it was a very low profitable business. And it's the logic of our 54 transformation to walk away gradually from low profit business. All this put together, you see a 2% drop in total in sales, as I was saying before, which is mostly driven by price, as I was also saying before. And I think this puts us for 2025 in the market, okay? where we feel that we believe from the data we have to date, we have maintained our market share in 2025. Next slide.

I think we can skip the sales bridge. Let's jump to the EBITDA bridge. I think it's more important. So just to demonstrate what we already explained about our EBITDA growth -- so 2024 to 2025, reaching to $587 million. So you can see here the big companies $244 million positive cost impact, which more than compensated the lower volumes, the lower prices and which enable us 3% to 14.5% EBITDA to sales gross Russia. In the next slide, we can see the cash flow, okay, which as I say I'm proud to present -- so we can see here that during 2025, we succeeded to generate $567 million of cash on operating activities. The collection -- the focus on accounts receivables more than compensated the cost, the outflow due to multiple procurements of many inventory to capture the momentum in the market. And also in terms of free cash flow, which includes also our test that we are using to invest in our CapEx and our investment in a global operation in our product. It's also we continue our trend on our best investment to make sure that we are investing in the best and the highest project and it's reflected with free cash flow of $269 million, which enabled us to reduce our debt end of 2025 scope support our financial expenses in 2025 and going forward. Next slide, correct.

From now on, please allow me to report to you how we have carried out the evaluation enhancement program. So we have followed the requirements of CSRC to announce this project -- the aim is to enhance the quality of governance quality of listed companies as well as the operational efficiency and profitability. And we are also aimed at enforcing the quality of the information disclosure and transparency. So you can see we have carried out in several aspects, and we have taken a number of measures -- and actually, I think the outcome has been displayed in the presentation or the -- or the explanation of our CEO and CFO as well. So we are making efforts to to better to better improve the information disclosure, quality -- and we have been making efforts in ESG as well. You can see from the enhanced results of different agencies such as wind, avoids and Greene in Israel. And of course, we have paid great attention to the management of Investors Relations. We organized 4 public online roadshows in 2025 to present you the market dynamics and our performance. We have also organized the Phase II space meeting between our executives and investors to answer the questions in detail about how the company has been operated and performed in different regions. And you -- we have also received many phone calls, responding different questions in different platforms. We will keep doing this. We will keep enhancing the disclosed -- the information disclosure quality in the new year to carry out the valuation enhancement plan in a concrete way. So that ends my presentation.

Good let's move on and back. Let's move on to a few elements of what we believe, as I was saying for good foundation, a solid foundation now in ADAMA for profitable future growth. First and foremost, our portfolio is strong, its growth and its balance -- we have a diversified portfolio of more than 300 -- 300 active ingredients that we said globally, and we sell them in more than 1,300 different mixtures and formulation to end users. We have a global registration network that allow us to access with our products, all the tier country market. We achieved more than 174 registration only in 2025, and this excludes renewals of existing registrations. These are real new registrations. We have a balanced portfolio, 45% of our portfolio is made of differentiating the products that are delivering return on investment to growers and that are showing a higher profitability to ADAMA. And last, but not least, we have a strong portfolio, a strong pipeline of launches. Only in 2025, we launched 139 new products across the globe. So -- and you have here a couple of examples of new products that we planned recently, the Aprea, which is a sole herbicides, Soybean is 1 of the major -- it's the biggest crop in Brazil and 1 of the most important for the agriculture in Brazil. It was launched at the end of 2022, let's call it, the first year of 2023, with proprietary TOB formulation. This is a specific formulation that is patented by ADAMA because the other thing which is important to remember is that many of our products are actually patented, not the active ingredient, but either the formulation or the usage is patented. This product has a very strong residual effect is safe, simple application with high efficacy. And this is 1 of the products that drove the increase of volumes in 2025 in Brazil. Another example of innovation of ADAMA is Casado, which we launched in 2025 in Canada. We actually run out of product in the first year. We sold every single liter we had to sell in Canada. This is featured new as virtual formulation of 2 mode of actions. And it's the first time that those 2 mode of actions are coming in 1 bottle in Canada, and it's helping the growers to fight resistant weeds. So just a snapshot of the type of innovation that in ADAMA we're able to grow -- to bring to market through our regulatory capabilities, our research and development capabilities and our commercial capabilities. This type of portfolio plus what you have in the next slide, we can go to the next slide, which is a very strong market access across all key markets is allowing us to build and believe on growth in the future on this healthy financial base that Efrat and myself have been describing to you as part of our 2025 full year performance. So you see on this slide that we are the #6 crop protection company in the world with about 6% market share -- we are very balanced regional, which allows us to both manage our risks and also aspire to grow globally. And half of our sales is coming from emerging markets. We are working -- we are investing a lot in our commercial capabilities in order to get even better at selling this type of innovation, I was showing previously on the slide. These are innovations that have a value for the grower -- and the purpose of our commercial organization say the marketing is and will be to get stronger at extracting value from that value that we create at grower level. Next slide. The other thing that we have in ADAMA, and this remains absolutely true despite what I told you about the Netbasite in Israel earlier this all -- we are -- we have a resilient and reliable supply chain, which is a global one, which, by the way, allows us to manage risk -- if something happens in Israel, we have sites in China, we have sites in Europe. We have sites in Latin America. We have a very strong industrial footprint. And we have, over the last 2 years of 4 rebuild cost leadership in core molecules and these sites are close to their markets. We have a world-class safety, just unsustainable centers. We have 0 incidents on environmental incident in 2025. No significant injury or fatality in 2025, and we have a significant part of our site, which are already certified ISO45001 and 14001 -- now what we do is that we are prior what we will do in the future and have done in the past 2 years, we're prioritizing investments to even increase our cost excellence, our manufacturing excellence, while optimizing the existing assets. We have multiple sources in terms of purchasing. We, of course, we manufacture some of our products, but we also buy some of them. We buy raw materials -- and we are leveraging 2 R&D centers in China and in India in order to have the best possible engineering expertise in our plants. So the message here is that this is a company that not only has innovation, not only has, in a way, reach or achieve financial stability after 2 difficult years, but also we have the tools industrially and from a supply chain point of view to grow. Now if you put all this together, what are we looking for 2026 and beyond 2026, whether it's simple. We're now looking for top line growth, profitable top line growth. So we want to keep the discipline that we have acquired over the last 2 years around -- especially around how we manage our costs and how we ensure our competitiveness. We want to keep that discipline and even improve it. But we've shown significant progress there and at the same time, grow the top line without losing the profitability that we have acquired over the last 2 years. Now this will require raising our commercial capabilities in some markets, which we're working on. It will require some targeted investments in portfolio, innovation pipeline as we've been doing in the past. But we will continue to invest where we see we can grow both from a portfolio and a go-to-market point of view. We will continue our manufacturing optimization to build an ever more efficient and responsive global manufacturing and supply network, where we've already done a lot in the last 2 years. And we will continue working on operational efficiencies, which includes a big project around merging our legal -- our Israeli legal entities which will give us amongst other things, will give us simplicity, but will also give us some better allow will allow us story to better optimize our tax structure. So -- all this is what we believe we are ready now to do after 2 years of turnaround where we recovered the profitability of the company and now a time to grow on the top line again and the whole company is focused on that objective. So that's it for the presentation. I think we can go to the question now.

Thank you, Gael, for your presentation. And that leads us to a Q&A session. And I've already seen questions coming. The first 1 as a multinational company headquarter in Israel, how have recent geopolitical fluctuations affected atmos production, operations, supply chain and other aspects.

So the single way went for this before yesterday, -- there was no major disruption of any of our operations in Israel, our plans never stopped running and we never stopped producing and shipping products from those plants. So long story short, until now, the 2 yesterday and this indirect missile impact that I was mentioning at the beginning of the call, we had no disruption. Now of course, with the situation of yesterday, we had to stop our plants. And we're looking at, as I was saying before, we're evaluating the damages, and we will look at restarting the operation as fast as possible. I don't know where this will be -- but I can tell you that our team in Israel, our engineering team, our production team have shown in the past such a resilience in such situation, but I'm pretty sure that they will resolve the plan as humanly and safely possible as fast as possible.

The second question, since the first quarter. Price increases in major commodities under geopolitical disruptions have been transmitted to agriculture, prices of corn, soybeans, cotton and other crops, have risen. AI prices are also correlated with crude oil prices to some extent. So how have ADAMA's product sales and prices change in the first quarter of this year? And what are the original differences?

So thank you for the question. It's a very good question. I cannot comment on Q1 result. This will need to wait the Q1 report. But what I can tell you is that the dynamics that impact the pricing of our product in the markets are complex. They're not as straightforward and they may sound. They depend on many factors. And even if the commodity, the price of commodities have been raising recently. They still remain lower than the previous 3 years period. First of all, Second of all, it does -- it's not because the commodity of prices are raising that it translates straight away into a range of profitability to grow, because some inputs like energy and fertilizer have also risen significantly recently. So cost of raw material of logistics are rising is true. And -- but it doesn't -- unfortunately, it doesn't always translate right away into the market with a price increase on our products. The reason being that the overcapacity that I was mentioning at the beginning of the call is still very much there. It's not changing, which means there is still a very, very fierce competition in this industry for prices. So even with the pressure on costs that we may see in the future -- we also have to take into consideration these other factors to see how the market is going to evolve ahead of us in terms of pricing, especially in terms of pricing. But it's not 1 of my point here is we cannot directly link the price of commodities, agricultural commodities to the price of agrochemicals crop protection in the key markets because it doesn't work this way. Unfortunately it's more complex.

So next question. How will the 1 registration same product label policy in China change competitive landscape that's the industry in the long term? And how should we evaluate the value of Anima's portfolio of product registration.

So first of all, this change of regulation in China is impacting the Chinese CP market only. okay, which is a big market, but for ADAMA, it represents a relatively small percentage of our total business global. Second, this policy has been interest, and we are supportive to his policy to develop a healthier competitive environment and it reduces the chance of the risk of registration of users that we've seen in the sector in the past in China. So he also encourages companies to build their own registration capabilities and not to rely on others, which for ADAMA is very good news. We have those registration capabilities in China, and we have them globally, as I was saying before. only in 2025, we gained 174 new registration in ADAMA globally. So our focus is not actually the total number of registration, but the quality, the performance and the return on investment for growers of our innovation portfolio. And this innovation portfolio obviously is supported in ADAMA by a strong regulatory network and stronger regulatory capabilities. that we believe will serve us very well in the future, including in the Chinese market, including with the change of regulation that has happened with 1 registration regulation.

Thank you. Next question, we see in 2025, the company launched multiple new products. So what are the new launch plans for 2026? And how can these new products impact the company's financial results in a more qualitative way, for example, revenue contribution or changes in profit margin, et cetera.

Sorry, which question was this, Ge?

This is about the number. Yes.

Sorry, sorry, I was sorry, lead. So the company launches multiple new products globally every year. And was a very good year, actually, for us in terms of new product launches. I can talk about names like CeraVe, COSE and and the 21 I was mentioning earlier, like Avadina we have real strong pipeline. The new product launch and growth of product introduction in the past 5 years are very important component in our 26 business plans. So everything we launched in the past 5 years is supporting our growth in 2026. What we did in the last 2 years with 5-Forward is we sharpened the focus on less product and less countries to optimize our existing assets also to enable new growth projects. And in 2025, as I was saying before, we had as much as 139 product contracts. This is a lot for a company like ADAMA. And we will keep on going investment in the future to maintain the flow of new products in the market. So this allows us to have today and even more in the future, a little bit less than half of our total sales, which are made of this differentiated innovative products, which is a differentiator for us in the market against pure generic companies that are selling me-too products. So yes, innovation is and will continue to be a very strong pillar of the growth of other market in the future.

Actually, you have negative profit belong to the parent company for the last consecutive 3 years, how do you evaluate such influence? Do you see it will it will have -- it will be imposing some listing risk onto this company according to the rules of Canadian Stock Exchange.

So what I can say is that ADAMA did not trigger the financial metrics, the financial criteria, sorry, for leasing risks. -- as the key financial metric showed earlier in IFRS and my presentation, ADAMA's profitability kept improving, including gross profit margin, EBITDA margin along the last 2 years. And in 2025, while it is true that we're still reporting a net loss this net loss is significantly reduced versus previous years. And if we exclude the extraordinary items, which -- things like the expense and impairments related to our Picor transformation, which requires some restructuring, Adamas adjusted net income actually turned positive for the full year in 2025. for the first time in the last 3 years. So in 2026, we will continue to focus on continuing this journey. We have a healthy foundation to pursue profitable growth, as I explained earlier, with our portfolio, with our assets, with our commercial capabilities -- and we are looking at forward for growth. And turning around the positive report -- the net income -- the reported net income sorry to positive is obviously has been and will be a continuous focus in 2026 and for.

Number 7. What are the main drivers for adjusted net profits turning positive? Are these factors sustainable?

So presented dividend due to, first, I think the most important thing is our better operating income. Our operating income is higher in 2025 versus 2024, led by the better gross profit -- this supported also by the lower financial expenses and also lower taxes and did bring us basically to positive adjusted net profit . Today 3 components that I have been mentioned is our focus also for 2026 onwards, starting with the operating profit supported by better quality of business. Financial expenses are to be reduced, and our focus will remain cash generation. And last, but not least, about the tax that we launched an Aon project to have better efficiencies around tax expenses during the next few years.

So let's go to see the other questions. One of the investors asked was the burn down warehouse in Israel insured by the company.

We have insurances in -- for our operations globally. We're still checking, obviously, what we can activate and what we cannot as part of this insurance. So I will not give -- I cannot respond straight to this question. Not because I don't want to respond, but we're still assessing based on the damages. We still don't know the -- exactly the list of concrete damages to the site to that warehouse maybe potentially, as I was saying in my introduction to the operating units around the warehouse. Once we have that list of damages, we will, of course, assess the insurance coverage related to those damages. But it's too early to say.

We have 2 minutes to go, and we will be able to answer 1 more question maybe. Let's see question. So in the annual report, the increase in adjusted operating expense is really driven by higher employee performance-related compensation, negative impact from exchange rate fluctuations and expected credit losses arising from liquidity issues at some local distributions in Latin America. How much do each of these negative factors contribute to operating expense, respectively. What is the outlook for 2026? In what areas is Fiord expected to improve the expenses.

Okay. I will take it. So the higher compensation due to the better results of the company is around $10 million, and it's representing increasing operational expenses because last year, we didn't -- we were not eligible to this compensation because we did not fall. The impact of the FX is due to the stronger dollar, it's around $5.5 million, which means that on 1 hand, we are enjoying from a better -- our performance on the sales, strong dollar means that we have positive impact on the sales, but negative impact on our operating expenses. And last but not least, about the bad debt, it's around $4.4 million, and this is as likely mentioned due to the LATAM situation. All this are compensated by $25 million benefiting from the release of people during 2024, 2025. So where we see this increase in expenses, we also see some decrease in expenses of $25 million. So it's even more than compensated the higher expenses. And of course, going forward, Epic is not under our control. Currently, it seems that the dollar is weak. So probably have seen this benefit in our sales and maybe negative impact on operating expenses. Bad debt is our focus. We are managing our collection mainly in LatAm countries in a very careful way in order to minimize as possible any impact of bad debt provision both expenses and higher compensation for performance. I really hope that also in 2026, we will be eligible for compensation due to that we will meet our target. But year-over-year, the difference will be marginal because we basically have these costs already in 2025.

There we're about to conclude today's session. Let's give the floor again to Gael to summarize today's session.

Yes. Thank you very much. Thanks to all of you for your support. I really appreciate your attendance, and I reiterate that ADAMA is after its 2025 result which we're very pleased and proud of is in a much better place now financially and is focusing its effort its resources now on growing in a profitable way. Thank you very much.

The only roadshow concludes your questions and more communication, are most welcome. Thank you very much.