Improvement in the quality of the business in the first quarter of 2024 with the ‎Company achieving significant improvement in cash flow and in its gross margin, despite a decline in sales; Transformation plan being implemented throughout Company, benefits to be seen over a period of three years First Quarter 2024 Highlights: - Sales down 16% to $1,057 million (-13% in RMB terms; -14% in CER[1] terms), mainly reflecting a 10% decrease in prices and a 5% decrease in volumes - Gross profit amounted to $288m (margin of 27.2%) vs $340m (margin of 27.0%) in Q1 2023 - Adjusted EBITDA amounted to $132 million vs. $165 million in Q1 2023  - Adjusted net loss of $10 million; Reported net loss of $32 million - Improvement of $322 million in operating cash flow; -$103 million in Q1 2024 vs -$425 million in Q1 2023 - Improvement of $348 million in free cash flow; -$194 million in Q1 2024 vs -$542 million in Q1 2023  BEIJING and TEL AVIV, Israel, April 25, 2024 /PRNewswire/ -- ADAMA Ltd. (the "Company") (SZSE 000553), today reported its financial results for the first quarter ended March 31, 2024.      Steve Hawkins, President and CEO of ADAMA, said, "As market conditions continue to be sluggish in the first quarter of 2024, the Company is focusing on the implementation of a cross-company transformation plan aimed at improving the quality of the business and repositioning ADAMA as a key player in the Value Innovation customer segment. This plan, the outcome of hundreds of employee-based initiatives, has a clear roadmap, deliverables and is focused on delivering profit and cash targets to be achieved over the period of the coming three years. "While we expect the benefits of this plan to be gradual, we are continuing to respond to the current market situation. In the first quarter of 2024 the Company presented an improvement in the quality of the business, succeeding in improving its gross margin, despite a decline in sales, achieved through the positive impact of new inventory sold, priced at market levels and an improvement in the sales mix of higher margin products. The Company also continued to put strong focus on cash generation, presenting a significant improvement in cash flow, which is typically negative in the first quarter due to seasonality."   [1] CER – Constant Exchange Rates       Table 1. Financial Performance Summary USD (m) As Reported Adjustments Adjusted Q1 2024 Q1 2023 % Change Q1 2024 Q1 2023 Q1 2024 Q1 2023 % Change Revenues 1,057 1,259 (16 %) - - 1,057 1,259 (16 %) Gross profit 256 310 (17 %) 32 30 288 340 (15 %) % of sales 24.2 % 24.6 % 27.2 % 27.0 % Operating income (EBIT) 51 92 (45 %) 21 10 72 102 (30 %) % of sales 4.8 % 7.3 % 6.8 % 8.1 % Income (loss) before taxes (21) 10 23 10 2 20 (91 %) % of sales (2.0 %) 0.8 % (0.2 %) 1.6 % Net income (loss) (32) 12 22 9 (10) 22 % of sales (3.0 %) 1.0 % (0.9 %) 1.7 % EPS - USD (0.0138) 0.0052 (0.0042) 0.0093 - RMB (0.0977) 0.0357 (0.0297) 0.0633 EBITDA 120 166 (27 %) 12 (1) 132 165 (20 %) % of sales 11.4 % 13.2 % 12.5 % 13.1 % Notes: "As Reported" denotes the Company's financial statements according to the Accounting Standards for Business Enterprises and the implementation guidance, interpretations and other relevant provisions issued or revised subsequently by the Chinese Ministry of Finance (the "MoF) (collectively referred to as "ASBE"). Note that in the reported financial statements, according to the ASBE guidelines [IAS 37], certain items (specifically certain transportation costs and certain idleness charges) are classified under COGS. Please see the appendix to this release for further information. Relevant income statement items contained in this release are also presented on an "Adjusted" basis, which exclude items that are of a transitory or non-cash/non-operational nature that do not impact the ongoing performance of the business, and reflect the way the Company's management and the Board of Directors view the performance of the Company internally. The Company believes that excluding the effects of these items from its operating results allows management and investors to effectively compare the true underlying financial performance of its business from period to period and against its global peers. A detailed summary of these adjustments appears in the appendix below. The number of shares used to calculate both basic and diluted earnings per share in both Q1 2024 and 2023 is 2,329.8 million shares. In this table and all tables in this release numbers may not sum due to rounding. The General Crop Protection (CP) Market Environment[2]  Key commodity crop prices continued to decline in the first months of 2024 and global supply continued to improve. Crop prices remain above average historical levels but the current price level has a negative impact on farmer income compared to previous years. Despite this, farmer demand is expected to remain stable under the current conditions. The channel inventory situation is easing up, but there still remains above average inventories in several geographies, including Brazil. In addition, the high interest rate environment, continue to drive a just-in-time purchasing approach by the channel. Active ingredient prices from China remained low during Q1 with some molecules even experiencing further price declines, on one hand reducing input costs but on the other creating pricing pressure on crop protection products and supporting a "wait and see" approach in the market.   [2] Sources: CCPIA (China Crop Protection Industry Association)‎, BAIINFO, FocusEconomics, peer quarterly financial reports, internal sources   Update on the War Situation in Israel ADAMA is headquartered in Israel and has three manufacturing sites in the country. Following October 7th, 2023, the Company continued the production in its global manufacturing sites and in Israel, with certain non-significant restrictions (which have been lifted in February 2024). This situation did not have a material impact on the Company's ability to support its markets or on ADAMA's consolidated financial results. On the 14th of April, Israel was under an attack from Iran, with no consequences to the Company's ongoing activities. Update on Impact of Shipping Obstructions In January 2024 some major shipping lines announced that they will suspend shipping to Israel through Israeli ports and through the Suez Canal due to tensions in the Red Sea. This has led to longer transportation times, with shipping lines being diverted around Africa. As of the date of publication of this report, shipping time and costs have increased significantly, mainly in the Asia-Pacific Israel route in comparison to before January 2024. These cost increases impact only a small portion of the Company's overall shipping costs and ADAMA has been ordering relevant materials ahead of time to ensure timely supply. Currently, the Company does not anticipate this to have a significant impact on its financial results or on the ongoing supply of materials to its production facilities, although this situation might impact the company's ability to respond quickly to changing market demand. Transformation Plan – Update As announced in the Company's full year 2023 financial results report, it initiated a plan in the first quarter of 2024 to revalue ADAMA through improving the quality of the business to turnaround the ‎Company. The Company-wide transformation plan is aimed at gradually delivering profit and cash targets over a period of 3 years (2024-2026). Main aspects of the plan include: Commercial excellence Operational efficiency Cash generation Building our sustainable structure focused on: Leadership team structure: redesign to focus on performance excellence- Streamlining senior leadership team- Organizational changes to R&D marketing, commercial and operations Market and customer focus: anchor on core markets- Focus on strategic crop segments within the Value Innovation customer segment with high-value differentiated formulations Tailored portfolio: refocus our portfolio to win in value innovation- Increase the portion of high margin products out of the sales supporting the quality of the business and the gross margin (continuing the improvement in sales mix of higher margin products achieved during the full year of 2023 and first quarter of 2024)- Transitioning out certain products- Strong Pipeline – continuing to invest in differentiated products that provide the customer added value  Network optimization: Adjust production footprint to match market realities- Revisiting operational model including procurement vs manufacturing as well as supply chain optimization Support functions redesign to fit the business needs- Enhancing the operating model to better serve ADAMA's markets Portfolio Development Update Product Launches, Registrations & Formulation Mastery Update: During the first quarter of 2024 ADAMA continued to register and launch multiple new products in markets across the globe, adding on to its differentiated product portfolio. New Product Introductions (NPI) percentage out of the full year sales of 2023 reached 22%, referring to products launched over the past 5 years. Differentiated products include products that are based on recently off-patented active ingredients (AI's) that have been classified as high commercial potential – "Core Leap" AI's, and products that are based on unique proprietary formulation mastery, products with more than one mode of action, and biologicals. Select launches of differentiated products during the first quarter of 2024 include: Launch of Prothioconazole based products, part of ADAMA's comprehensive portfolio of innovative solutions for cereal fungicides, including:- Soratel®, Forapro®, Maganic® in Serbia, powered by ADAMA's proprietary Asorbital® Formulation Technology- Maxentis® in Serbia and Canada, a dual mode broad spectrum fungicide Launch in Canada of triple mixtures MCPA & Fluroxypyr based herbicides, Outshine All In™, ‎Forcefighter All In™ with dual mode of action and Esteem All In™, focusing on ‎broadleaf weeds for use in cereals.‎ Launch of Sonavio® in Italy, a unique PPO herbicide (inhibiting the enzyme protoporphyrinogen oxidase) for use in additional vegetables based on proprietary active ingredient Bifenox. Launch of Goltix™ 700 SC, a unique Metamitron based product, in the US states of Nebraska and Colorado, having received a FIFRA ‎Section 18, emergency exemption during 2024 from the US Environmental Protection ‎Agency following the pressing need for a herbicide solution for Sugar Beet to control ‎glyphosate-tolerant Palmer amaranth (Amaranthus palmeri). ‎ Selected registrations of differentiated products during the first quarter of 2024 include: Registration of Prothioconazole based products, part of ADAMA's comprehensive portfolio of innovative solutions for cereal fungicides in Europe, including:- Avastel® in Malta, Turkey and Lithuania, powered by ADAMA's proprietary Asorbital® Formulation Technology- Forapro® in France, powered by ADAMA's proprietary Asorbital® Formulation Technology- Soratel® in Czech Republic and Greece, powered by ADAMA's proprietary Asorbital® Formulation Technology- Maganic® in Poland and Latvia, powered by ADAMA's proprietary Asorbital® Formulation Technology- Maxentis® in UK, France, Northen Ireland and Morocco, a dual mode broad spectrum fungicide Registration of Chrome® in UK a triple mode-of-action herbicide for use in winter cereal crops Registration of Highcard™ in Italy, a dual mode-of-action herbicide for use with the with the RiceTec Max-Ace™ Rice Cropping Solution Financial Highlights Revenues in the first quarter declined by approximately 16% (-13% in RMB terms; -14% in CER terms) to $1,057 million, presenting a decrease of 10% in prices and a decrease of 5% in volumes. The lower sales reflect lower market prices and lower demand, attributed to the market dynamics of pricing pressure in the crop protection market and in active ingredients from China, high competition and a "wait and see" approach mainly in commoditized products as well as unfavorable weather conditions in some regions and the channel opting to hold lower levels of inventory and purchase closer to the season in light of higher interest rates.     Table 2. Regional Sales Performance Q1 2024 $m Q1 2023 $m Change USD Change CER Europe, Africa & Middle East* 368 430 (15 %) (10 %) North America 191 211 (9 %) (9 %) Latin America 191 233 (18 %) (21 %) Asia Pacific* 307 384 (20 %) (18 %)  Of which China 154 182 (16 %) (13 %) Total 1,057 1,259 (16 %) (14 %) Notes:  CER: Constant Exchange RatesNumbers may not sum due to rounding Europe, Africa & Middle East (EAME): Sales in EAME decreased in the first quarter of 2024 led by a contraction in the overall European crop protection market mainly from low demand following channel destocking, erratic spring season causing just-in-time purchasing patterns and lower famer demand in areas impacted by lower grain market prices. This market also experienced pricing pressure, mainly in commoditized products. North America: Consumer & Professional Solutions – Sales were lower impacted by prices, in light of declining active ingredient prices from China, as demand from the end-users in both the consumer and professional markets recovered during the first quarter. Declining active ingredient prices from China also supported "just-in-time" purchasing patterns. In the US Ag market sales in the first quarter of 2024 were lower reflecting weak pricing, ‎lower ‎demand and strong competition. The overall pricing was‎ lower in the first quarter of ‎‎2024 than in the first quarter of 2023, as market prices began to decline only during the ‎second quarter of 2023. While channel inventory levels are steadily declining‎, demand is ‎being impacted by sales being pushed closer to season application, with the channel ‎opting to hold lower inventory levels due to high interest rates. ‎ ‎ ADAMA's sales in Canada declined in the first quarter in light of a "wait and ‎see" approach in the market, high fungicide channel inventories, as well as strong ‎competition particularly in commoditized products. Latin America: Brazil – the Company's sales in the first quarter following the overall challenging crop protection market due to unfavorable weather conditions, a "wait and see" approach" in the market and softer pricing impacted by strong competition, particularly in commoditized products. Despite this, the Company's differentiated products continued to be well received including fungicides Almada® and Armero® and herbicide Apresa® for use in soybean. In the rest of LATAM sales in the first quarter reflected the overall ‎challenging crop protection market due to unfavorable weather conditions ‎in Northern LATAM and "wait and see" purchasing patterns combined with softer pricing in commoditized products. Despite ‎this, the Company's differentiated products in key strategic crop ‎segment continued to be well received in the market including fungicide Armero®, herbicide Apresa®, insecticides Plethora® and Trivor® and ‎biologicals such as Actavan®. Asia-Pacific (APAC):  In China, the branded formulations achieved business growth in constant exchange rates driven by bio-formulation new launches and a positive spring season while the Company also focused on improving the quality of the business with differentiated products despite that the market is still experiencing high channel inventories and pricing pressure especially in commodities. Market pricing in the non-ag business began normalizing from heights seen in recent years and the tech sales were mainly impacted by a "wait and see" approach in the market. In the Pacific region, sales in the first quarter were impacted by softer pricing following decline of active ingredients prices from China as well as overall high channel inventories. This was despite better weather conditions than anticipated in Australia. Sales in India were impacted by softer pricing, exceptionally dry and hot weather, high channel inventories as well as "wait-and-see" purchasing behaviour mainly in ‎commoditized products. Sales in the wider APAC region continued to experience pricing pressure following intense competition from China, particularly in commoditized products, while dry weather and higher channel inventories impacted demand. Gross Profit reported in the first quarter reached $256 million (gross margin of 24.2%) compared to $310 million (gross margin of 24.6%) in the same quarter last year. Adjustments to reported ...