Exhibit 99.1
FMC Corporation
UBS Grass Roots Chemical Conference:
“Catching the Asian Wave”
February 10th, 2004
Marty Kisliuk
Director, Global Supply Chain & Asia
Agricultural Products Group
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Disclaimer
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
These slides and the accompanying presentation contain “forward-looking statements” that represent management’s best judgment as of the date hereof based on information currently available. Actual results of the Company may differ materially from those contained in the forward-looking statements.
Additional information concerning factors that may cause results to materially differ from those in the forward-looking statements is contained in the Company’s periodic reports filed under the Securities Exchange Act of 1934, as amended.
The Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Use of Non-GAAP Terms
These slides contain certain “non-GAAP financial terms” which are defined on FMC’s Investor Relations web site (http://ir.fmc.com) in the Glossary of Financial Terms section. In addition, in the Conference Calls and
Presentations section, we have provided reconciliations of non-GAAP terms to the closest GAAP term.
These slides also contain references to segment financial terms which are defined below in reference to Note 18 of FMC’s 2002 Form 10-K:
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the sum of Income (loss) from continuing operations before income taxes and cumulative effect of change in accounting principle and Depreciation and Amortization.
EBITDA Margin is the quotient of EBITDA (defined above) and Revenue.
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Grass Roots Chemical Conference—New Orleans
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| | | | |
Sales: | | $1,921.4 | |
EBITDA: | | $ | 309.3 | |
Margin: | | | 16.1 | % |
| | | | |
Sales: | | $770.6 | |
EBITDA: | | $ | 93.9 | |
Margin: | | | 12.2 | % |
| | | | |
Sales: | | $515.8 | |
EBITDA: | | $ | 132.2 | |
Margin: | | | 25.6 | % |
| | | | |
Sales: | | $640.1 | |
EBITDA: | | $ | 111.3 | |
Margin: | | | 17.4 | % |
Agricultural Products Group
Agricultural Products: Group Overview
2003 Segment Sales: $640.1 million
Herbicides 24%
Insecticides 76%
Asia 15%
North America 36%
South America 32%
Europe/Middle East/Africa 17%
Manufacturer of proprietary, branded insecticides and herbicides
Key crops: cotton, corn, rice, cereals, fruits and vegetables
Strong focused market positions in the Americas (crop & non-crop)
Key positions in Europe and Asia via alliances
Innovation: ~10% of sales on R&D
FMC differentiated by: - Concentration in insecticides
- Virtualizing manufacturing
- Depth and breadth of partnerships
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
The Conventional Crop Protection Market Has Declined 1.3% CAGR Since 1996
Global Agrochemical Market $Billion
Conventional Crop Protection
Includes Biotechnology
Source: Phillips McDougall – AgriServices, FMC
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Off-Patent Sales Increase
Source: FMC; Phillips McDougall
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
We Have A Multi-faceted Plan To Reduce And Variabilize Manufacturing Costs . . .
We are midway through this cost reduction initiative
It is based on a proven, low cost manufacturing and process development strategy
It is not just where, but with whom and how
The supply chain has and will continue to change — optimization is also underway
Period costs, capital spending, and inventory will be lower also
Costs of partner & new chemistries can benefit from the initiative as well
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
The Supply Chain For AI’s & Intermediates Has Changed
1999
FMC US
| | | | |
Zeta-cype | | Clomazone | | Cypermethrin |
Permethrin | | Bifenthrin | | |
DVE | | 7OH | | Pentenoate |
Sulfentrazone | | MAC | | TMOA |
| | | Site A | | |
Toller US
|
Carbofuran |
Carbosulfan |
Site B |
FMCAPI
| | |
Carbofuran | | Cadusafos |
Site E | | Site
F |
Now
| | |
Zeta-cype | | Clomazone |
Permethrin | | Bifenthrin |
DVE | | 7OH |
Sulfentrazone | | MAC |
Site A | | |
|
Carbofuran |
Carbosulfan |
Site B |
| | |
Bifenthrin | | OCBC |
TFP Acid | | CPC |
Site H, PRC |
| | |
TFP Acid | | BFA |
Permethrin | | Cadusafos |
Cypermethrin | | Carbosulfan |
Site I, PRC | | Site F |
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
FMCAPI Operates In The Same Countries,
And For The Same Reasons As Others
PRC, India, Mexico primarily
– Home of the generics
They have developed chemical industries
– Technical talent
– Raw material availability
– Infrastructure
Available capacity
Able and willing partners
Low cost inputs and services
Low cost manufacturing models
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Significant Product Cost Reductions
AI -1 AI -2 AI -3
AI—4 AI—5 AI—6 AI—7 AI—8 AI—9 AI—10 AI—11
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Product Cost Structure Is Being Variable-ized
Change In % of Product Cost
Other Variable Cost
Materials
Fixed Cost
D&A
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Five FMCAPI Tollers Do 34 Steps With $41 Million Of Assets
34 Total Chemical Steps
Prod A
AI #10
Interm C
AI #8
AI #4 Interm B
AI #9
Interm A
AI #6 AI #2 $41M Gross Toller Assets
Toller 5
Toller 1, PRC
Toller 2, PRC
Toller 3, PRC
Toller 4
. . and FMCAPI invests $12 million to use these $41 million of assets
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Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Manufacturing Assets Can Be Significantly Less
Physical Manufacturing Assets
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
As A Result, Capital Investment Is Reduced
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Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Efficient Models Drive Staff Reductions
Global Supply Chain Staff
Excludes O/S Formulations
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Each Partner Contributes In The FMCAPI Model
Contract Manufacturing By FMCAPI
Factor A Factor B Factor C Factor D Factor E Factor F Factor G Factor H Factor I Factor J Factor K Factor L
Includes Elements Of : Design, Technology, Investment, Improvement, Operations, Support, Regulatory, Logistics, Raw Materials, Responsible Care®
Relative Contribution
FMCAPI
TOLLER
…and this “How To” is a competitive advantage
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Most Value Is Added In US—More Can Shift To PRC
Value-Added By Country—% Of COGS
Brazil 10%
2%
US 54%
China 14%
Japan 6%
Europe 5%
India 4%
Mexico 5%
2003
2%
US 44%
China 22%
Japan 6%
Europe 5%
India 4%
Mexico 6%
Brazil 11%
Possible
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
Superb Project Management Is Key To Implementing The FMCAPI Model
10 February 2004
Grass Roots Chemical Conference—New Orleans
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Agricultural Products Group
FMCAPI – Our New Manufacturing Paradigm
Buy many services & from low-cost sources
Be selective in creating partnerships
Back-integrate; use excess capacity
Build/use local resources, many local methods, knowledge
Core staff: experience, hands-on, external focus
Always:
Make the risk acceptable Minimize investment Be tax efficient Protect people & environment Act ethically
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Grass Roots Chemical Conference—New Orleans
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THANK YOU
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Grass Roots Chemical Conference—New Orleans
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