Caesarstone Ltd. Q3 FY2025 earnings call

• The company is rapidly advancing the transformation of its business model, focusing on innovation, product development, and marketing while collaborating with production partners. • Decided to move production to global manufacturing partners and close Bar-Lev manufacturing activity to optimize the production footprint, aiming to increase competitiveness, improve profitability and cash flow, enhance service, and drive cost savings. Annualized cash savings of approximately $22 million are expected, with total savings since 2023 over $85 million. • Currently, over 70% of production is sourced through global partners, and upon completion of Bar-Lev closure, will reach 100% outsourced production excluding porcelain, where they operate and invest in the plant in India. • In September, signed a share purchase agreement to acquire the remaining shares of Lioli, strengthening the position in the expanding porcelain category and enabling capture of new market opportunities. • Building a company focused on innovation, brand strength, and customer value creation with lighter capital production assets.

Global revenue for the third quarter was $102.1 million, compared to $107.6 million in the prior year quarter. On a constant currency basis, third quarter revenue decreased by 5.7% year-over-year. In the U.S., sales were down 10.9% to $46.7 million. Canada sales decreased by 10.8% on a constant currency basis. Australia saw sales increase by 8.5% on a constant currency basis, which was the first year-over-year growth in that market since the silica ban implementation. EMEA had strong performance with sales up 12.4% on a constant currency basis. Israel sales increased by 2.5% on a constant currency basis.

• Intends to return to positive adjusted EBITDA in the third quarter of next year. • The Bar-Lev closure will generate noncash impairment expenses of $40 million to $45 million and cash costs of $4 million to $8 million starting from the fourth quarter of 2025 and continuing through 2026. • Combined with prior cost reductions, total annualized savings will exceed $85 million compared to 2022. • Acquisition of Lioli's remaining shares further strengthens the position in the expanding porcelain category and enables capturing new market opportunities.

• U.S. tariffs impact: ~48% of revenues in the first 9 months of 2025 were generated in the U.S. market, and a petition was filed with ITC by a U.S. quartz manufacturer seeking restrictions on quartz surface product imports. • Legal risks: 514 lawsuits alleging silica-related injuries, with a $46 million provision recorded and $24.3 million in insurance receivables. Legal proceedings regarding interpretation of insurance coverage were initiated in July 2025 and are in early stages. • Proposed legislation in the U.S. (Protection of Lawful Commerce in Stone Slab Products Act) is in early stages with no guarantee of adoption.