Exhibit 99.1
Exhibit 99.1
Agricultural Products Group
Welcomes:
Mike Judd – Greenwich Consultants Jay Chen – Wellington Management Company Josh Kaufthal – Reich & Tang Jim O’Melia—Sunnymeath Joe Pilaro – Brae Partners Richard Rosen – J. & W. Seligman & Co., Inc.
Wayne Simon – Mutual of America Capital Management Corp.
10 June 2004 1
Agricultural Products Group
Agricultural Products Group
Business Overview and R&D Presentation Milton Steele and Ann B. Orth, Ph.D.
FMC Investor Meeting 10 June 2004
10 June 2004
Agricultural Products Group
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 differ materially 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.
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Agricultural Products Group
Use of Non-GAAP Terms
These slides contain certain “non-GAAP financial terms” which are defined below and 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 of the web site, we have provided reconciliations of non-GAAP terms to the closest GAAP term. Lastly, these slides contain references to segment financial items which are presented in detail in Note 19 of FMC’s 2003 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.
ROIC (Return on Invested Capital) is the sum of Earnings from continuing operations before restructuring and other charges (gains) and after-tax Interest expense divided by the sum of Short-term debt, Current portion of long-term debt, Long-term debt and Total shareholders’ equity.
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Agricultural Products Group
FMC Corporation
Diversified chemical company with leading market positions in industrial, consumer and agricultural markets globally
($ million, 12/31/03)
FMC
Sales: $1,921.4
EBITDA: $309.3
Margin: 16.1%
Industrial Chemicals
Sales: $770.6
EBITDA: $93.9
Margin: 12.2%
Specialty Chemicals
Sales: $515.8
EBITDA: $132.2
Margin: 25.6%
Agricultural Products
Sales: $640.1
EBITDA: $111.3
Margin: 17.4%
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Agricultural Products Group
FMC Products & Markets
2003 Sales by Product
2003 Sales by Region
Herbicides 24%
Insecticides 76%
Asia 17%
EMEA 15%
N. America 36%
L. America 32%
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Agricultural Products Group
Attractively Positioned and Focused Product Portfolio
Crops/Markets
Fruit & vegetables
Specialty markets
Tree, Fruits & Vines
Rice
Cereals
Sugar cane
Cotton
Corn
$27B
$640M
Chemistries
Pyrethroids
Carbamates
Niche herbicides
Flonicamid
Accessing complementary chemistries
Key Geographies
N. America (Crop and Specialty)
Latin America (Brazil & Mexico)
Asia (Japan, Indonesia, China, Australia, India & Pakistan)
W-Europe, CEE, CIS
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Agricultural Products Group
Serving Specialty and Crop Chemical Protection Industry
Size
Projected Growth1
Drivers / Trends
Herbicides
Insecticides
$13.2 bn
0.9%
$6.7 bn
1.1%
Increased demand for food / changing diets
Increased productivity on “fixed” arable land
Growth in developing markets as production
becomes less labor intensive
Commodity prices
Penetration of GMO technologies
Success of R&D investments
Generics
Regulatory environments / Farm Subsidies
Fungicides
$5.8 bn
1.7%
12002-2007 CAGR. Source: Phillips McDougallAgriServices, FMC
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Agricultural Products Group
3-Tier Industry Structure – Creating Significant Market Access Challenges…
2002 Sales ($M)
Tier 1
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
6197
6176
4433
3809
2795
2717
Tier 2
802
776
615
564
352
324
298
Tier 3
Syngenta
Bayer
Monsanto
DuPont
BASF
Dow
Sumitomo
MAI
FMC
Nufarm
Griffin
Kumiai
Ishihara
>100 Generics
Source: Phillips McDougall
Herbicides Insecticides Fungicides Others Seed/ Biotech
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Agricultural Products Group
Recent Industry Threats / Changes and APG’s Response
Over the past six years, four phenomena, in particular have significantly impacted the chemical crop protection:
Genetically Modified Crops (GMO)
Asian generics pesticide competitors
Low commodity prices
Declining industry profitability and massive consolidation leading to significant market access challenges
APG is successfully implementing a multifaceted strategy that is dealing with these threats and industry inflection points;
Our Goal is to Create a
Sustainable Business in Focused Global Crop Protection and Specialty Markets
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Agricultural Products Group
Our Strategy is Enabling Us to Contend with the Key Challenges & Opportunities Facing the Business
People / Org Growth & Development
Focus
Global Cost Competitiveness
Innovation
Growth in Specialty Crops / Markets
Leverage Alliances
Voluntary Stakeholder Alignment
Become Tier 2 Market Access Vehicle of Choice
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Agricultural Products Group
Strategy – Focused Insecticide Innovation
People / Org Growth & Development
Focus
Manufacturing Flexibility
Innovation
Growth in Specialty Crops & Markets
Leverage Alliances
Focused on insecticide discovery only
Annual R&D spend 10-12% of sales
Robust insecticide pipeline with >20 insecticide-active chemistries
Anticipate novel insecticide pre-development decision in 2005
Pursuing alliances as opportunity to expand portfolio, reduce risk, reduce time to market, and reduce spending
Significant success in accessing complementary chemistries
Recently conducted an external evaluation that is strongly positive regarding FMC’s scientists, organization, technology, and innovation strategy…
Innovation not confined to the laboratory
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Agricultural Products Group
Agricultural Products – ’01-’03 Performance
($ in millions)
$700
600
500
400
300
200
100
0
2001 $22 15.4% $653
2002 $21 16.1% $615
2003 $16 17.4% $640
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Revenue
Capital Expenditures
EBITDA Margin
Declining global chemical crop protection market since 1996
2001 exit from pre-emergent herbicide for row crops
Strong underlying growth in insecticides
Significant refocusing and related overhead reductions in 2002-3
Effective implementation of manufacturing and supply chain restructuring/redesign strategies
2003 growth in Brazil, specialty (non-crop) markets and new labels
Margin improvement in 2003 driven by higher-value mix and manufacturing cost reductions
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Agricultural Products Group
Positive Outlook in 2004 Driven by robust crop markets and our focused strategy
Improving global farm economy:
Rising global crop prices
Significant cost savings from productivity initiatives:
Manufacturing initiatives continue to produce savings
Refocus and deployment of SG&A
Global supply chain redesign being implemented
Success of market access strategies (alliances) in various key markets
Focused, successful innovation:
Label expansions in both crop and specialty markets
Novel ISK chemistry targeting sucking pests to launch 2005
Access to two other new and complementary chemistries being negotiated
Discovery efforts have resulted in many promising chemistries, several of which are now entering global field trials
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Agricultural Products Group
Research and Development
Dr. Ann Orth
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Agricultural Products Group
Agenda
Insecticide Market
People (This section omitted for 8-K filing)
Discovery Technology
Development Capabilities
Research Strategy and Pipeline Status
Summary
Q&A
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Agricultural Products Group
APG R&D Overview – Focused Insecticide Innovation
Consistently invests 10-12% of sales on R&D innovation
Recently completed external evaluation puts our APG’s Insecticide discovery program as among the most competitive in the industry
Sustainable long-term growth enabled by robust pipeline; we have >20 chemistry areas with activity between 0.1-100 ppm
We have the potential to commercialize 2-4 new active ingredients (ai’s) in next ~10 years
We have three new ai’s (molecules) that we’ve accessed externally
We have created a novel development approach that should reduce total spending by millions of $’s, and reduce time to market by years
State-of-the-art technologies are leveraged by world class scientists
New technologies allow a sustainable HTS (high throughput screening) program for whole insects and complex biochemical insect targets
Investment in genomics technologies created a unique asset, enabling previously unattainable understanding of gene targets & new ai MOAs
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Agricultural Products Group
Consistently Spends ~10-12% of Sales on R&D…
12%
10%
8%
6%
4%
2%
0%
‘97A
‘98A
‘99A
‘00A
‘01A
‘02A
‘03A
Discovery Pre-Development/Development Defense & Cost Reduction Label Expansion
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Agricultural Products Group
The Insecticide Market…
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Agricultural Products Group
Global Insecticide Market of ~$7B is ~25% of $27B1 Global Chemical Crop Protection Market
Mites 10%
Piercing-sucking 36%
Nematodes 8%
Chewing 46%
1Philips McDougal, Sigma and FMC Internal, 2003 data
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Agricultural Products Group
Insecticide Market is Projected to Grow Slightly over the Next 10 Years1
R&D Focused On These Market Segments
Piercing-sucking pests ($2.4B)
Increasingly important due to decreased use of broad-spectrum insecticides
Resistance due to multiple applications
Chewing pests ($3.1B)
Market crowded, dominated by organophosphates (which are under significant regulatory pressure) and pyrethroids
Portfolios with different MOAs needed for resistance management
?Mite pest segment ($0.7B)
High resistance, thus shorter product life cycles
Need activity in other pest segments to add value to a new acaricide
Nematode pest segment ($0.5B)
Unmet need for new products
Ease of use and safety are key
1Philips McDougal, Sigma and FMC Internal, 2003 data
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Agricultural Products Group
Older Chemistries are >60% of Total Insecticide Market; Growth Favors New Chemistries
Other (6%)
Other IGRs (2%)
Natural (8%)
Benzoylurea (3%)
Acaricide (6%)
Organochlorine (2%)
Neonicotinoid (12%)
Pyrethroid (20%)
Carbamate(13%)
Organophosphate (28%)
-15
-10
-5
0
5
10
15
* % Total insecticide market
2007F/2002 % p.a.
Source: Philips McDougal, 2002 data
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Agricultural Products Group
Future Insecticide Discoveries Span a Wide Range of Potential Outcomes…
Broad Spectrum
Family-Focused
Sales >$250M
New FMC Insecticide Sales $50-150M
Sales ~$30M
“Game changer” ?
New MOA; 1st to market
?Broad spectrum activity (2-4 different insect orders) ?
Excellent application flexibility ?Broad crop, non-crop, and animal health utility
?Imidacloprid ~>$600M; Fipronil
~$ 345 1
Moderate to narrower spectrum
High-value markets
Generally safer
Positioning & product understanding can be crucial
More focused non-crop and animal health utility
Spinosad ~$115M; Indoxacarb ~$105M; Pyriproxyfen ~$30M 1
Flonicamid: Launch in 2005
10 June 2004 1Cropnosis, 2003 estimates 23
Agricultural Products Group
The Market – Implications & Conclusions
Increasing populations, changing dietary habits of majority of the world’s population, restricted growth of arable land are likely to drive need for increased agricultural productivity;
Older products likely to decline due to resistance and regulatory pressures at the expense of newer, safer products;
New chemistries with different Mechanism of Action (MOA) needed and valued for resistance management;
The insecticide market potential likely to be in replacement markets and new uses that include unique pest or product combinations;
GMOs remain a limited threat to high-value crop and specialty markets:
Prophylactic treatments on row crops the main target of GMO input traits, and majority of the impact on row crops has already occurred;
New opportunities will arise as pest spectrums shift due to GMO, and we move to protecting crops with valuable output traits;
APG’s key focus areas are global high-value crops and non-crop Specialty markets
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Agricultural Products Group
Our People…
World-Class Scientists State-of-the-Art Technologies
An Organization Passionate and Motivated about Discovering Novel Insecticides
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Agricultural Products Group
Discovery Process and Technology…
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Agricultural Products Group
Core Competencies
Compound Handling: Safely and efficiently store and retrieve compounds, our most valuable physical asset; build quality chemical library for screening
Target Research (Genomics): Identify novel, commercially viable, registerable new insecticide targets
Biochemistry
MOA: Elucidate the biochemical target of active chemistries
ADMEET: Understand and solve barriers to delivering activity
High Throughput Screening: Test compounds against new, validated biochemical targets
Whole Organism Biology: Test compounds against broad insect spectrum; characterize biologically
Chemistry: Synthetically optimize the lead structure; analytical studies
Data Management: Store, retrieve, mine and model all data generated from above testing
Intellectual Property: Protect our inventions
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Agricultural Products Group
Discovery Research Process
Compound Library
Targets & HTS
Insect screens
Leads
MOA
Chemical lead optimization
Efficacy / spectrum
Field translation ADMEET
Advanced Projects
Chemical lead optimization
Biology; Pilot Field Trials
Global Field Trials
Pre-Development
ADMEET
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Agricultural Products Group
Technology Applied to Discovery Research
Chemical Optimization
Insect-Active Leads
Advanced Projects
Mode of Action for Active Chemistry
Assays & Genetics on fruit fly & C. elegans (Devgen)
DNA Sequence & Bioinformatics
Compound Logistics
Fiber-Optic Gigabit Ethernet Backbone
Backup Sun Server
IBM Servers
SGI Server
Cloned insect gene to build screen
HTS
Insect-Active Leads
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Agricultural Products Group
Technology Applied to Insecticide Discovery
Automated, High Throughput Insect Testing
Pilot/Translation Field Trials
Continuous Chemical Optimization
Global Field Trials
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Agricultural Products Group
Development Capabilities…
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Agricultural Products Group
We Have a Full Complement of Development Capabilities, Technology and Scientific Expertise
Analytical Sciences
Formulations
Residue/Environmental Fate/Metabolism
Toxicology/Ecotoxicology/Risk Assessment
Product Understanding
Process Chemistry & Engineering
Quality Assurance
Global Regulatory
Internationally recognized scientific experts
Globally staffed with facilities in USA, South America, Europe, and Asia
Experienced in conducting studies in compliance with regulatory guidelines to support registration, re-registration, label expansion, and product defense
Excellent relationship with leading regulatory agencies
In-house risk assessment capability (occupational, residential, dietary, ecotox, probabilistic RA)
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Agricultural Products Group
Recent Development Accomplishments
Increased Efficiencies and Add to Sales Growth
Flonicamid—new, novel insecticide licensed from ISK:
Rapid submission of registration package and reduced risk document; granted OP Replacement status; and greenhouse registration in September 2003
Two additional new molecules accessed externally (confidential) Carfentrazone-ethyl – herbicide label expansion:
Completed 17 residue/metabolism studies in <12 months (normally takes18-24 months) for IR-4 submission; will result expanding label by 630 crops
Consistent support for all core products, including label expansions, product defense, new formulations (e.g., completed 15 Risk Assessments in <1 year for label expansions/product registration) New Non-Crop Specialty uses for our core products: Created a novel Development approach:
Should reduce total spending by millions of $’s
Should reduce time to market by years
Uses early data development, use of low cost labs and maintaining in-house, core competencies
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Agricultural Products Group
Success in Discovery, a Robust Pipeline…
10 June 2004 34
Agricultural Products Group
FMC’s R&D Focused on Insecticides
Utilizes Advanced Technologies to Drive Innovation…
R&D Approach
Balance of biochemical target and insect screening
Pipeline of projects moving into Pre-development
Exceptional use of advanced technologies
Close alignment with business objectives
FMC R&D Evolution
1990 1995 2000 2005
Discovery Focus
Insecticides Herbicides Nematicides
Fungicides
Plant Growth Regulators
Insecticides
PPO Platform (Herbicides)
Insecticides
2000 2001 2002 2003 2004
10
Field-Level Insecticide Chemistries
10 June 2004 35
Agricultural Products Group
Pipeline Status 2002
Assay Screening Advanced Field Pilot Field Global Field Pre-
Development Greenhouse Translation Trials Trials Development
Testing
MAP* Ant-18* MAC
CASK*
GAGA
DAG*
Chitin
Synthase*
CAMP
Worms (chewing) insects Piercing/sucking insects
*Eventually terminated
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Agricultural Products Group
Pipeline Status 2003
Assay Screening Advanced Field Pilot Field Global Field Pre-
Development Greenhouse Translation Trials Trials Development
Testing
Receptor MAP*
PSL018
GAGA
Channel PSL014
CASK I* ADV1
SAT009
CASK II* ADV2
MAC006
CAM034
15-20 new lead areas
Worms (chewing) insects Piercing/sucking insects
*Eventually terminated
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Agricultural Products Group
Pipeline Status 2004…
Assay Screening Advanced Field Pilot Field Global Field Pre-
Development Greenhouse Translation Trials Trials Development
Testing
Receptor B SAT013
PSL028
Receptor A PSL018 F2704?
GAGA ADV1
F2704
PSL014 PSL066
PSL003
Channel A ADV2
MAC051 F7663
PSL007 PSL065 1H-05
Channel B PSL017 PSL044
PSL048
CAM179 F7663?
15 New Leads
Worms (chewing) insects Piercing/sucking insects
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Agricultural Products Group
Discovery Research Process and Pipeline
Receptor A Channel A Channel B
Receptor B
Receptor C
PSL003
PSL007
PSL017
PSL048
PSL065
PSL018
PSL014
PSL044
CAM179
SAT013
PSL028
PSL066
MAC051
ADV1
ADV2
Library Screening
Leads
Advanced Projects
Translation/Pilot Field Trials
+15 Other New Leads
F2704? 1H-05 F7663?
Pre-Development
F2704
F7663
Global Field Trials
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Agricultural Products Group
Approximately Thirty-Fold Increase in Insecticide Field Trials Since 2001…
Total number of trials/year
140
120
100
80
60
40
20
0
2001
2002
2003
2004*
micro-plots pilot field trials global field trials
*Projected
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Agricultural Products Group
More than Twenty-two Countries in which R&D Field Efficacy Trials are Conducted
CAN
USA
MEX
BRA
ARG
SPA
UK
FRA
GRE
EGY
ISR
PAK
IND
CHI
KOR
TAI
JAP
THAI
PHIL
SA
AUS
NZ
Global micro-plot field/lab bioassay locations
10 June 2004 41
Agricultural Products Group
A Full, Sustainable Pipeline, State of the Art Technology, and World-Class Scientific Talent…
10 June 2004 42
Agricultural Products Group
Recent External Assessment of FMC’s Discovery Program, Science and Talent Strongly Positive
“The FMC APG Discovery organization clearly has the talent, structure and leadership to be a significant player in the arena of proprietary insecticide chemistry.
“This organization’s current and emerging patent portfolio (i.e., discoveries) is replete with diverse chemical scaffolds demonstrating a rich array of physical and biological properties, with significant potential for both near- and long-term commercial utility.
“The FMC APG R&D organization promotes individual and team empowerment, leadership, entrepreneur-mentality, ingenuity and interdisciplinary approaches to solving problems and making successes. Such facets give this FMC organization a unique nimbleness, allowing for timely and accurate decisions, and subsequently, actions … the efficiency of the APG Discovery organization could indeed allow FMC to successfully compete with its larger commercial rivals…”
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Agricultural Products Group
In Summary…
Our pipeline is full and sustainable, from early stage leads to pre-development; recently validated by an external expert In 2004, we are conducting:
– 150 full-scale global field trials on 2 new products from two different areas of chemistry;
– 100 small plot pilot trials on 3-4 compounds, all from different chemistries;
– >50 early translation trials on 6-8 different areas of chemistry
Based on the progress we have made in discovering novel new insecticides and the extent of our current pipeline, we believe that our continued efforts should result in the commercialization of 2-4 novel insecticides over the next ~10 years We have created a new product Development strategy that can potentially reduce development costs by millions of dollars and time to commercialization by years
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Agricultural Products Group
Q & A…
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Agricultural Products Group
Agenda
8:30 – 10:30 AM Business Overview and Mr. M. Steele – VP & General Manager, APG
R&D Presentation Mr. E. Norris – Director of Investor Relations
Dr. A. Orth – Director, R&D
Dr. T. Merriam – Director, Global Product
Development
10:30 AM – 2:00 PM R&D Tour
Biology Dr. P. Rensner, Manager
Specialty Products Dr. J. Bahr, Project Team Leader
Biochemistry Dr. P. Allenza, Manager
HTS Dr. J. Russell Eldridge, Senior Lead Biologist
Insect Screening Dr. P. Rensner
Regulatory Studies Dr. M. Carpenter, Manager
TASAR Dr. J. Russell Eldridge
Computational Dr. H. Liu, Manager
Sciences
Lunch All
Chemistry Dr. B. Frank, Manager
Process Research Mr. D. Roberts, Manager
Formulations Dr. C. Martin, Manager
2:00 PM Dessert Reception R&D Management
10 June 2004 46
