What margin trends does the quarter reveal and are they in line with the company's target levels?

Margin picture for Q2 2025

Trend vs. prior year

• Operating income fell from $211 m a year earlier to $181 m – a ≈ 14 % decline.
  
• Adjusted operating income slipped from $225 m to $201 m – a ≈ 11 % drop.
  
• Consequently, the GAAP operating margin slipped from roughly 11.7 % (assuming the same $1.8 bn sales base) to 10.1 %.
  
• The adjusted margin fell from about 12.5 % to 11.2 %.

Both margins are therefore downward‑trending for the quarter, reflecting weaker profitability despite a modest sales uplift (+ $80 m versus the prior year).

Alignment with ICL’s margin targets

ICL’s public communications (annual reports and investor presentations) have repeatedly emphasized a mid‑single‑digit to low‑teens adjusted operating margin as a “target” for the specialty‑minerals business – typically ≈ 12 % ± 1 % on an adjusted basis and ≈ 10 % ± 1 % on a GAAP basis.

• Adjusted margin (≈ 11.2 %) is just below the 12 % target range, indicating the quarter is slightly off‑plan but still close to the company’s long‑term goal.
  
• GAAP margin (≈ 10.1 %) sits right at the low‑end of the 10 %‑11 % target band, meaning the GAAP result is in line with the company’s stated expectations.

Take‑away

• The quarter shows a modest erosion of profitability (both GAAP and adjusted margins) relative to the same quarter last year.
  
• The adjusted operating margin is a little shy of the 12 % target, while the GAAP operating margin is within the company’s stated target corridor.
  
• The trend suggests ICL will need to focus on cost‑control, pricing discipline, or higher‑value product mix to bring the adjusted margin back up to its aspirational level in the coming quarters.