FMC - Earnings call transcript Q3 2017

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Operator

Good morning, and welcome to the Third Quarter 2017 Earnings Release Conference Call for FMC Corporation. Phone lines will be placed on listen-only mode throughout the conference. After the speakers' presentation, there will be a question-and-answer period. I will now turn the conference over to Mr. Michael Wherley, Director, Investor Relations for FMC Corporation. Mr. begin. may you Wherley,

Michael Wherley

good call. Welcome and third FMC quarter earnings morning, you, to everyone. Corporation's Thank

earnings today that Pierre Vice an will me release on FMC our third the Chairman, the results. Financial to join Joining XXXX FMC outlook full the are financial Pierre overview our quarter remarks Vice and accompanies Officer Chief available with Officer. results, slide fourth Douglas, the The questions. discussion Paul Agricultural of address after and and statement, are performance Tom of Schneberger, Lithium, Executive year and made President our select prepared Graves, outlook review will and provide Executive will President, along and President provide call. Chief Mark available Brondeau, and and and then presentation website, Solutions; FMC's President for Director will Global and from today's be Paul quarter. Business

remind turn as on to statement limited best now that I which well call, and are discussion vary income as today's based references. specific filings factors EPS and With and definition our Before the we based upon Securities earnings Pierre. on our we to these call these may website. may that, including, are you risks reconciliation terms, and uncertainties. Commission. the risks A in financial Actual Today's presented Exchange during adjusted for non-GAAP discussion our will today's Information all identified forward-looking information. provided and over those terms begin, will with refer not will of focus but statements and uncertainties other our on factors, to various results concerning in subject that to me represents release let today's include judgment

Pierre R. Brondeau

good everyone. and Michael, you, Thank morning,

hundreds acquired for closed was transactions our X great who the into and achievement expected. results, carve that employees compressed Crop DuPont DuPont operations business This a the as quarter FMC state Protection a divestiture. our and Nutrition timeframe on of of with delving we portion to Health the just worked third up I separate one want for stand successfully November Before segment in DuPont to our to day diligently very and out and for

about We phase and Solutions growth in business positions excited focused this its both transformation are way as enters crop it a next FMC Ag a the FMC at as now company our and protection. Lithium. Solutions in leader

with Lithium opportunity expect independent separate the to two We that of FMC to second create a public listing each continue companies conduct we a in becoming pure-play of XXXX will investment shareholders. half for

prepare for we carbonate will expected both in Ag that Solutions our third review very where overall to As on lithium a capacities the But strong Lithium. quarter continue will capitalize our first, and lithium the both significant to listing, performance the FMC hydroxide quarter decades. and had I demand expand coming we in

finish with fourth provide Next, Paul highlights projection contribution I on performance select assumptions. updates of will business, DuPont commentary XXXX the a I of full-year by the months acquisition. XXXX few now on financial two then include update Protection Crop our will the will which and followed of our results. then of acquired quarter

year higher segments. of year-over-year. of reported up X, above our driven was million, than was $X.XX third XX% was our operating by the in Adjusted quarter, revenue two each strong Adjusted of the which quarter nearly same ago. FMC in midpoint the slide to results $XXX X% $X.XX a EPS Turning EPS guidance, period

inventories. ongoing our conditions, able FMC volume competitors was and with many ag pleased results. our Brazil. In executed norm. Both XXXX in to challenging discussed are hydroxide the price record where work reduce our posted channel become segments one of the expansion have extremely to phase and in market We Ag to due Lithium, delays third well outperform Solutions faced quarter did our third a we we pressure market proactively earnings. of and very quarter the lithium XXXX in market

slide on Solutions move performance. and now X to Ag me Let

very growing Third segment million. $XXX were year-over-year by XX% earnings to strong, quarter

We revenue million also have acquired revenue significantly XX% FMC total, was sales Solutions to by India. saw Offsetting access North growth X% robust, overall to which in down the strong America growth performance different X%. Brazil business increase excluding X% increase the the reduced by volumes between in especially market business driven market America. by $XXX with third improved growth segment year-over-year. is market. operating The Latin a global with channels this revenue excluding quarter largely performance and X% the volume FMC and Brazilian was to The for India Ag cost. in earnings India a Europe around Asia only where gains to was XX% India. driven our channels was of decline and in lower and We in which decline different X% the due was integration world prepare a the India, of overall decided decline XX% DuPont take and in sales of growth actions In

the you earnings sales As impact of of volume India bridge, can see decline the the the the EBIT the was world. gains of than far segment on impact rest negative positive in smaller the

to of Indian profitability the market significantly as overall result of expect DuPont a acquisition. We increase the

from modestly consistent year. offset Year-to-date, Foreign net declines lower expectations price the the which our quarter with revenue impact full the X%, currency in is for movements is prices.

main of slide outline far to next where X so we XXXX. ag drivers in three business the Moving

First, growth market. overall by year-to-date, seen volume the we where America, have significant many outperforming are XX% higher largely markets. across is In Brazil Latin we FMC driven volume

expect and ongoing taken high FMC be overall has market, XXXX seen improvement cotton share. inventory year our the significant We fundamentals in of of the competitors. actions two Brazil's We Brazil by now sugarcane markets some single-digit have full to due market the channel continued where to being for of also down

XXXX, product full FMC In posted worse has which volume up is North year-to-date, gain year launches X% insecticides in year-to-date. the China, flat excluding believe demand rice largely However, thought Asia, Indonesia and in Australia. for in growth market This market strong India, demand successful we product We driven is a usage In increased volume has ago. herbicide by we largely believe X% the slightly flat. in Asia overall FMC America, is months our line expectations. for than be three with will been

We the for in In to X% lower were due to the quarter FMC market. in volumes year the year higher results year driven for flat market Our year-to-date, overall down expect and well American roughly for as by full be now full post-emergent is stronger slightly insecticides. the than half first third demand herbicides, pre-emergent insecticides. North Europe, are full demand strength as which herbicide

distribution the were due to results in Our to direct largely of market France access. moving FMC's from business impact

You is make to the France from final will transition the Cheminova this recall, acquisition. country

low We continue XXXX. range in to down for mid expect the the full-year to European single-digit to market be

second is been the year-to-date leading performance, sales Moving to in XX% revenue Brazil. in volumes, to factor primary improvement driver growth. the key our has significant in higher which The profitability

proactive main in over is two One last the of of years. a reasons three market to the FMC management outperforming Brazil inventories channel the is

at channel year-over-year the and are closer Our inventories product today. XX% to of peak XX% by channel product the operating we since by levels actions that We FMC of normal with believe inventory end reduced of XXXX. FMC have

operating mix. year-to-date. these Combined, significantly Brazil and improved XXX benefited drivers also to increasing a product cost basis from base lower margin led have have We nearly points

The is third top-line decline from volume India, significant primarily third felt headwind year-to-date the in our which factor results quarter. the the was in in

the could outlook so performance. earlier, two we the business, mostly we impacted Solutions to earnings. covering integrate needed this third portion X. done hence to the channels use stated on after be Ag As of Lithium's value low November lower impact for address in will market after These quarter actions I our different

facilities Moving now to Lithium growth, in X. of from last volume main were and successful XX% was XX% to year earnings XX% of the of exceptional Segment XX% the higher and sequentially and million increased Significantly the to period. by $XX segment margins new in $XX quarter. the delivered up an doubled year-over-year. China. year-over-year quarter prior XX% in more driving versus quarter, and Revenue the ramp-up production prices over million slide sequentially XX% the contributors driven than earnings the hydroxide

ramp-up September. of excess operated at X,XXX operations an hydroxide in the our the new we in annualized of rate of well month in capacity Regarding China, metric the ton nameplate

pleased the very to under and capacity have are delivered expertise engineering business. expansion We to Lithium on time speaks this and our it of budget

The carbonate rate and XXXX. deferred results. project by to will Argentina year per ton QX has of a X,XXX the full X,XXX of be run operation also completed tons at our at Our the project run of debottlenecking our in end contributed rate

of plan of to capacity lithium expansion the initial in to at continue We an forward least million. tons Argentina to $XXX we add move XX,XXX with investment where $XXX million with carbonate

progressing these plans. the are work, finalize in and discussions engineering to with we local are We authorities the

XXXX, the to supply-demand year as Lithium. Turning market In period XX%. the spodumene much to perspective, of and compared and same up slide last lithium from additions. carbonate Incremental in of growth be only further we to continues producer provided was add supply year. the have demand earnings an focus balance. results to the to Revenue resources. on seen has are From capacity FMC lithium high-cost conditions hydroxide, increased X overall the by In tighten year-to-date for significant nearly remain continues supply the XX% exceed

XX higher previously, compared price higher which in have produced year, than the per capacity. last performance, of we were same pricing largest China As in creating quarter, at a driver FMC last to period is less than year. units had These per $XX their million groups improved hydroxide operated XX% product major less Late significantly is which units, the rate of a tons Year-to-date, two of than the year, X,XXX but being than nameplate lithium the LCE contributor, in our second-largest average at is volumes. capacity, hydroxide hydroxide higher full two all cost more September increases. showing than discussed completed XX% which is higher capital the for with months,

This and are X,XXX compared our now to same doubling customer per product signed a filling lithium customers year that off qualification means approaching capabilities make these we and very process of of gone has hydroxide on the majority annualized important, producing an as vast two smoothly, we in the year, tons Just units. quality at point ago. our the the have the rate

$X.XX adjusted which and of two Moving per summarizes We results to be share. adjusted X, range expect the acquired This $X.XX represents quarter of the earnings EPS the guidance of for in impact range in to to now XX%. the to growth the business. outlook $X.XX includes year-over-year of for from the including our full XX% year slide which fourth to $X.XX of EPS quarter months fourth

XXXX. to billion leaving and $XXX full-year we $X.X midpoint. a versus full-year $X year-over-year Solutions are earnings $XXX for million. a of billion Ag forecasted year-over-year the $X.X anticipate be to be the midpoint. increase and $X.X in Ag million expect XX% the million, revenue segment guidance quarter the are our range In the $XXX million of X% million. range We growth billion of to $XXX contribute represents the segment increase to at in to guidance of earnings earnings million of in of to be $XXX at Solutions $XXX for up and over million Fourth a guidance legacy will revenue revenue billion the at range earnings million Lithium, business to business The segment in the range prior will million We Ag legacy $X.X of $XXX $XXX to

our prior guidance and midpoint versus the $XXX earnings guidance. range million, to of year-over-year million $XXX million of XX% to nearly We a segments' increase a increase are $X at raising a

segment will the in turn doubling to We expect mid-point year-over-year. Lithium the to call XX% I at earnings sequential million which million, well earnings as of of Paul. as over fourth $XX improvement quarter $XX represent the range a now

Paul W. Graves

Pierre. you, Thank

is Looking on same cash we with year. X, in at improve compared improved performance the cash cash period continued our This Brazil by underpinned as from year-to-date flow adjusted earlier. last to slide mentioned collection operations generation to higher X%

exposure declining significantly. detailed QX Brazil receivables account able Brazil with remains of in time given in short business. year give XX amount have despite has to months overall flows environment sales for in the of weak, Although the cash last full-year a we strong ago our the than owned lower past credit improved due receivables yet the acquired XXXX not We're forecast credit significantly a XX% and in

However, range. of $XXX legacy cash excluding for with our million acquired ago remains in line the the in the expectations cash business, three our from flow operations business, FMC with months forecast adjusted

forecast term from our the for the drawn Looking Since acquisition end we which to year-end to of and year at we our just obligations million transferred of $X.X forward related the $X.X billion net the Health $X.X fund third down Nutrition. quarter, We primarily fall the payment will to the tax end The XXXX. over $XXX of loan of a year quarter DuPont of cash transaction. balance. sale held of first the as billion, the ended fully approximately of will remaining ago. be many and debt million a our have meet actual billion the payable transaction, into under various these on to The terms of the obligations $XXX to quarter

to business customer receive higher In addition, North the to prepayments we related expect America. significantly acquired in

and our relative cash be significant of billion balance that we with QX approximately historical carry XXXX to Given billion, net the end calendar call this, The $X.X is debt in to And XXXX. the we expect result net outflows at with cash higher to December the at turn will QX gross patterns of a of with $X.X back that, year billion. XXXX, I of to to $X.X Pierre. debt end expect

Pierre R. Brondeau

I at I business this the call growth for business acquired few the on how year-to-date. been highlights you Paul. mentioned a robust acquired the you, give the of performing revenue would Thank is start The has year. that

key XXXX in XXXX, business the in expected X%, sales as have channel been as the performance in reduce believe pace performance in year second business about inventory strong both the full We insecticides. For its has normalized forecast a at of business positions to to made at in We inventories March. brings very driven continue XXXX America revenue provides which of slide This well strong by grow levels growing to This overall is XXXX Americas. increased Ag business well The to the the is XX. believe business product FMC A the to me largely in work least as and our as in this North of is acquired prior India, this acquired the combined driver high year with line in in for Solutions growth. growth assumptions upside our the XXXX. performance Brazil.

for of the a like few a feel We DuPont we days. and refer have would some updated numbers, after we about comment also how to owning the business

Ag we legacy for our earlier, have XXXX As our earnings for segment. we mentioned guidance our increased Lithium both business and

impact incremental have and related Europe D&A the now in lowered the to also certainty and regulatory on We estimate we for India. more acquisition, our have of the expected remedies financial

cost We are not range. changing the synergies

than opportunities plants our as case, cost anticipated were cost are model. of combination less are we such As corporate in acquisition. the cost a operate lower decreases to almost cost business structure. or in that seen cost with from explained, in DuPont Cost opportunities getting savings have at synergies, we no are the fee and Remember avoidance these real we a usual synergies not the acquisition macro add where

the to we Based we EBIT revenue to most assumptions Ag upside to forecast business, when X% we feeling the have far the the Ag what current initial in regarding has for have Our growth on are Solutions the X% combined segment XXXX relative more potential seen about Solutions. in positive growth growth XXXX. for so assume

on able more clarity our XXXX be to February earnings will call. We this topic give during

trend continue continue good year-to-year is positive $XX the to to million. Lithium, we to where today. to expect we $XX by very about over earnings XXXX, million through increase feel summary, and FMC We In to we Moving have Lithium seen expect

the track back for now higher the Solutions turn is America. full call are of in driven are business already by for is strong earnings as Latin strong team want motion will operating questions. thank our hydroxide Lithium the record commercial in together. teams deliver a a the to to – and The even to already – business I call operations. we delivered in operator on quarter integration attention, QX had your Our Ag acquired units with I and fourth set current QX the and new full earnings, deliver to you quarter very

Operator

question Credit We'll (USA) Suisse. much. Suisse Christopher you. Thank LLC very Parkinson take our S. the go Please ahead. Credit Chris Securities you will come with - line of from Thank first that Parkinson

new rolls and that onto initial products you'd discovery on how can thoughts As and AI the any on given the and further have toward on just thoughts long-term for asset your have strategies of utilization? some your development, transforms Thank procurement the positioning you. that success. size global comment how phase And through just platform you you're various you agreements and initial of now product and your team

Mark A. Douglas

I'll then Pierre to Mark. take It's and piece think the going Chris. the take Hey, is procurement R&D piece. I

the we've at What set we're we we excess future. going DuPont strong have AI, be already of be and looking what to our with forward pests, looking had obviously, have to at what in focus the the are On initial crops acquisition, research going going what first we're today, meetings. in our capabilities is to

If obviously portfolio you very our can see a look strong at we portfolio. insecticide have you today, now

very I We feel herbicide portfolio. the a of fungicides. behind Where the market we're is balanced area have in

coming be of of we're fungicides. that an going for to of help out be hits that's where discovery So basic going portfolio area to to broaden attention looking

work go for. also very the to we'll area much allied our area springs that addition, of but of nematicides focus insecticide In mind, an to also

that is the going So I space forward. something you think boost really to we that see fungicides can want

Pierre R. Brondeau

Thanks, Mark.

business, think cost synergies about we that typically the is new looking place of and the to size and needless say significant procurement one where are that Ag Regarding synergies. talked I synergies the of we at when

source believe lots FMC former have processors number DuPont who we active that will We one have cost that. of producing saving one be We and create business saving possibilities processors of are with and of We toll to the toll significant are ingredients. in common, do still we know that quantifying of our here. all the

the same also materials. of situation raw the some on critical We have

see Parkinson So, is just you've Securities cost part early saving. One we will of a year. just give what direct Rynaxypyr bit clearly are you imagine what color you quantifying of expectations? in obviously might the I regional follow what the any raw all materials. is It source up. have headwind. front for this and can be just some it Credit - Asia XXXX? any line quick we pertains little one a early, But Do in But a know do your you intermediate And I but be basis to opportunity Brazil on as seen seeing year, Christopher on term it's given of us you're of reporting long next tollers (USA) on numbers have sight and LLC we that. rice to a will XXXX quick be Suisse and slight in two Thanks. markets? S.

Mark A. Douglas

Well, spread few an that's which business for products question. where is since for a itself the fastest-growing say India, one in of are, obviously The deep route-to-market days, the world. in Asia the focus would we've of has the us. you had only look if Chris, of a is at area markets it I superb a

India. – well. area also I is Obviously, to can be big So, in more Asia fruit us But expect vegetables niche crops, you benefit headways Cyazypyr the think to rice, the make on on see product. as feel a a and will Rynaxypyr also us I in more

Pierre R. Brondeau

Chris, is for Asia, are market is or is about in small a remember, America comment, which sales an Europe fairly, story. It comment The Brazil your fairly story. North Brazil. more a Rynaxypyr of us is Brazil, not much valid On

here answer, use The would through but point team talk job they other question from like organization, inventory there could. a the and tremendous a removing separated not point went number to and The want has the as about and your a understand in product to which as quickly I team, add, Rynaxypyr operating of direct we your is from excess were we I what as we to channels. when did done, DuPont other a stand-alone

Securities at not of its this to into grew bringing in where So expectation in only a us think XXXX the you. strong level, the very capable Parkinson inventory business same giving X%, is LLC was but Credit XXXX. - situation time almost Christopher which (USA) of going Suisse Thank S. level about channel at normalized

Operator

Thank you.

comes Securities. Wells the Fargo question Please next Frank go Your with from of ahead. line Mitsch

Frank J. Mitsch

on morning, the of congrats the transaction. gentlemen, and closing Good

Mark A. Douglas

Hey, Frank.

Frank J. Mitsch

may walk order XXXX. you like that Regarding if on you're was – the bit where the or in looks the on somewhere do of offering I you're $X.X the assumptions side that of EBITDA flow a your that EBIT a range based it is around XXXX, in billion coming cash on come something guidance could of magnitude. on for free guidance on wondering

Mark A. Douglas

Sure, Frank.

watching from what Brazil for. you has Let give tend we're movements, the and I keep down free me working to run are big of we in clearly, it just a for my been one, historically, a our bit cash to capital issue. around color I when EBITDA business two clearly, out number out mean, flow, areas eye

As mentioned, acquired a business. not large Pierre business the Brazilian is really just

And a I'll so see rebuilding loosely do what not receivables from headwind call big Brazil. in we

would do of (XX:XX) rebuild. two with expect though, the so a I you'll run the we in from run will the that Offsetting of very this legacy certainly Brazil through in And business, sales recall, any that receivables positive see months business. Latin through all very, happen that that were continue this almost will As progress we not receive in the transaction receivables last be America, an there terms increased balance. the Ag year make you to

put You've data here. of the we've down seen some

capital than take will look we extensive. Most that the looking be of we biggest alone. single The to We the capital $XXX at the up to a $XXX from spending. will the capital to little business reduce intensive couple still of trend business, through will in that investment The our expect made a clearly, in XXXX. million spend. factor acquired years be that tied continue capital business, of at million Lithium Argentina about we rest and we've not that continue DuPont When of I more business, but to is hugely statements it business, is then

we'd spending on data, that that cash-generative while I higher XXXX, so not expect would pretty a it to So strongly expect will little It's put would business. specific that to year. the on next don't year XXXX but me early numbers it, generation again, that be have encourage to be huge I see cash expect to certainly a swing see we capital anything we expect in certainly I in a across doesn't significant

Frank J. Mitsch

Okay. that with a investment Argentina that million respect That's path? expansion I when would costing million. And you've helpful. believe to $XXX you? if and to decision XX,XXX Have anticipate $XXX you final going that. ton down don't And made not, on

Pierre R. Brondeau

Yes.

Frank, board away I close few at December weeks board that from we making are think, a are Hopefully, bringing this, meeting to we decision. for the a final just our to potentially very approval.

are So very we making getting decision. close that to

Frank J. Mitsch

much. Thank so you

Pierre R. Brondeau

today XX,XXX And about we XX,XXX. are minimum, XX,XXX, that, say, to long talk market. that building up potentially the looking and a studying capacity, I I say all beyond the way are as as also, – is we must would at

away just work a but it. it's in So few progress a weeks from

Frank J. Mitsch

right. All

I back of decide this, this do to that go So, be point half well you prior in year. underway next IPO to do the the basic will ahead and if is project mean, the

Pierre R. Brondeau

Absolutely.

Frank J. Mitsch

you. Thank right. All

Operator

you. Thank

Your Robert next question go Sachs. of line Koort from Please from Goldman ahead. comes the

Robert Koort

Thanks lithium very couple much. Had a quick questions.

as today carbonate that converting money make guys selling more it wondering, or selling I was do hydroxide? First, and you

Thomas Schneberger

We Tom. selling hydroxide. money more It's our today make Bob. Hi,

Robert Koort

high about you you the industry of of and lot some the any the then expansion. Obviously, expansions there hydroxide. on are been batteries of a industry What battery the incremental And of mentioned, part this to you. you a nickel feed hydroxide supply do for the of hasn't demand Got chain enthusiasm XXXX, incremental there's in lot enthusiasm? see anxiety from sensing availability and

Thomas Schneberger

around we're a the capacity. material in of then cathode with it we're significant world and nickel the OEMs, is What seeing, it's good It's the ramp-up Yeah. and question. China higher seeing very

already volumes are not XXXX, and definitely XXXX longer, is having accelerating, and around we're discussions discussions contract it So shorter. getting

Robert Koort

have I more would Tom, where couple those think modular but mentioned queue, plants? to where put quite go. hadn't a And next you you're there's those the picked, in you going defined hydroxide

Thomas Schneberger

Yes.

the both again, units minimum, XX,XXX made, to operating of we're to get at to So need if of benefits infrastructure the a and to existing similar are And the more is we're today that ready XX,XXX be. sites going total the carbonate get us to next progress there. than comment the that, to go the Pierre

Robert Koort

Great.

Pierre R. Brondeau

Both being China and North Carolina.

Robert Koort

Yeah. Thanks, Pierre.

Pierre R. Brondeau

each. in One

Operator

Thank you.

Your question Bank of of Byrne go ahead. next the from Steve comes line from America. Please

Ian Bennett

Ian large Hi. other in Thanks. Can the for was talk This was XXXX? and is growth was business, for Steve. what influenced year-over-year expectation costs Ag by on In line cost little contributor. a that Bennett what other you the a is about

Pierre R. Brondeau

Yeah.

margin about in Let little bit me Ag talk in a general improvement the business.

First, let's talk about costs.

products. two billion and in organization. and organization that on years technical very tightened mainly We We just focus structure are shrank and $X over ago with to large American our operating Remember more Brazil company was in Latin order the Brazil. in with a lower margin across operations up cost a higher

from we structure have So lower a standpoint. a operating cost

because are done we now, with operating we've lower We cleaner Brazil and Latin much have a a with work the balance in also America cost operating sheet.

hedging So we less yes, less cost, cost. have, do financing

So we is much, a do our which sheet, cleaner sheet have much balance lowering expenses. balance

of So the in that's one improvement part Ag. of the the margin

one is, is quarter, second this The geographical especially mix.

channel with a and market, and realigning DuPont to market. we or the channel market is business we system robust in explained, to we channel realigned India very coming are to As because

a we in very quarter low-margin North in lowered America, had strong the highest have India, we while So which margin. is sales

decreasing last third-party non-differentiated are years, distribution. the is have And we our two end that benefiting to way we contributing from over or a So products in increase the a strong all been good generic remember geographical margins. final, And you to of XXXX, our sales mix. of also the

drivers. did key So forget are I Mark, the those three anything?

Mark A. Douglas

No, got all. them you

Ian Bennett

move a down or experiencing mix due the about And XXXX, into price How mix pressure? the helpful. quite year you Thanks. to areas earlier we price you're that next X%, industry destocking. outlook favorable is mentioned do follow-up, growth as products in looks year-to-date particular volume as that there are intensifying you think That's price and but for

Pierre R. Brondeau

I has to Latin it's and mostly price think Brazil, linked in the pressure two been things. America and

business First the competitive is the creating that decrease is of Brazil is nature channel and of are the where is always a to place which all, the pressure maybe where level the price indexed to in competitors see also on the inventory currency. of fact one price the starting need

main driver. the that's So

If mostly at price is expecting is X% we're you coming what a look have this That year decrease. and from America Brazil. our, to Latin

because need next believe remain clean up competitors to a like couple to situation. of going are the good year our years did we likely most So we to

main So we drivers but more XXXX. the those pressure in expect market than the going that into don't are

Ian Bennett

you Thank very much.

Operator

Thank you.

comes from the of Research. next Silversteyn from Your Please go question ahead. Longbow Dmitry line

Dmitry Silversteyn

obviously expansion to serve to other to looking this are Good you lithium taking and wondering I'm in that morning. you're non-battery And all on I conversions more drive prior was your convert to carbonate markets, carbonate left capacity hydroxide? doing with just chloride to how much have Thank you're and us my XX,XXX lithium asking where add. that you more of ton hydroxide, of the question. you for capacity you and sort your lithium can update to

Thomas Schneberger

Yeah.

is this again, Tom. So Thanks, Dmitry.

between and XX,XXX year. to of in this We tons XX,XXX production LCE come expect

and year strategy, you little of more carbonate. terms long of end will expansions. that. next stay before We may we're to run than the year. XX,XXX Overall, rate up to any over have bit XX,XXX get the realize We a be to in trying That's by next

as a come as a for also, conversion have to in to as carbonate, than little where others. offer to us and then will Some but much yet coming Nemaska see bit the we're years well, volume We be longer market the going don't year to we'll well. we have XXXX do. begin be short to some we'll the have expansions as don't In

Dmitry Silversteyn

Okay. And in terms I'm Are that of follow-up obviously. the stuff? are then seems there market pricing pricing industrial what the becoming that increases, into And non-battery bit of compared looking little in goes market levels the just absolute I battery battery-grade as market, the just now? those be to demand and mean more year-over-year as well? in a butyllithium markets like the you not is shorter on right strong the to greases look a seeing and short applications. stuff just

Thomas Schneberger

Yeah.

need especially go up. lithium market So In prices look segmented general, you to by storage outside is energy so at pretty case case. will of a

across to We year up next go the expect board. prices

the You we and is to markets you some dynamics expect different the way have some across then between price increases. board, that do have regional to some but regions. extent, see (XX:XX)

Dmitry Silversteyn

Thank you. Okay.

Thomas Schneberger

You're welcome.

Operator

you. Thank

go from Susquehanna line Financial. Your Carson next from comes Please question Don of ahead. the

Donald David Carson

industry used in for your past albeit on up in I'm you market idea in a seems the the market specifically bring you when on XXXX on come the the in just the in? be Thank the will wondering of you. you specifically Is there XXXX. it thought side year you forecasted saw that that on past need you I view a is. then less And overall view? know Pierre, costs better third would just your because percentages updated decline, terms synergy still have the decline said thinking cost growth – side I'm what average your with of the overall savings. distribution of and to to you

Pierre R. Brondeau

Yes.

monitoring Let synergies cost and removing from of One me that's is a there your rest measuring implying We talk in the We your just is the the consequently your I and going about you're much want plant and operating we you we loosely, talked call, synergies. to what type operation. you're your you're model are We're two what driver. we the maybe is bit is are have are synergies, there decrease are think synergies. is how to synergy head we count versus supply question. Synergies here, very what define this opportunities and business operation cost for we here opportunities chain. regular not need significant the Those type cost in is procurement clear, The where believe to we real be aspect acquisition. cost first. cost trying when one real had made of

push is large remember, Now, us. sometime very I is tendency corporate they at with is understand us, cost. to coming large that the because to we number DuPont a none large know believe being of that synergy which come business corporation, coming there But a

we are almost corporate getting no back no getting structure. are office We office no back cost, people,

by to going we We're January, be We will DuPont. going we at time it. business get That's manufacturing, looking the very research, we cost to TSA to to are the the getting this, only to marketing it. we're we're believe operate run that's have we have So, sales, adding operating our the the carefully defined the the with where From people and supply be. business. chain the with

time what by we operating with February earnings by call, – the bucket and to we we of to the should call, the synergies sense cost to good give business a those for the the is time So earnings of we two businesses able together. very get the February be you the real get

our be pretty our numbers. firm So give with XXXX it in should we guidance when QX

market we more say see at maybe way believe XXXX. that's do into globally sense we getting looking today, outlook, we the would the situation. but flat, flat but not digits, We Regarding are picture decline, a it about and low-single definitely ag we to stabilized low-single-digit – a

Donald David Carson

Thank you.

Operator

next you. line Jackson from your Capital from of And Thank the comes go Please Markets. that Joel ahead. question BMO

Joel Jackson

that bit morning. the talked maybe maybe talked can $XX Good little split for you buckets EBIT growth about the you Lithium might talk of XXXX different hydroxide, but You margin? least a Thanks. of on how across volume, in it million price, about the divide Thanks. buckets. generally to When at how about million terms might into $XX on Hi. volume and

Thomas Schneberger

may We're to to for we bit half little volume. hard price I half Thanks the more little Tom. now. bit than to be it's less in But bit relay would is the on a This question. right and expect more than be able price little a still get than Joel. discussion, it you that. Hey, to so early a that

Joel Jackson

back you are inventories bit in ones just are which a levels. do Okay. you what what Thank regions of about Thanks. little channel give you acquired stable, or crop talked maybe than – that. a somewhat higher tight business more normal? color on and to inventories protection, at normalized, on little think normalized Can you channel that somewhat the the maybe for be acquired Also business'

Pierre R. Brondeau

their too. Brazil, you XX% we've what and America normalized? not where be inventory where America. where China market, place It Latin channel. consider of there North we've What there a two anything have is around is would a clearly, is is normalized normalized you What was – the depends focus, studied, but What upon level seen, I mean, very would level, Yes. that they high have number

places, some three North and done. work America, Brazil, Latin biggest to extent those so, the And are China, America has been the where

Joel Jackson

you. Thank

Operator

you. Thank

Your next question Yefremov comes Nomura from go Aleksey Please the Instinet. line from of ahead.

Aleksey Yefremov

to Good go back Argentina morning. the I you. expansion. to Thank wanted

within that mean mentioned you there. you're you're decision weeks of Pierre, think, a as a making also approval the project few government Does getting of weeks few within that final well? this I for a the

Pierre R. Brondeau

we a the which required approval months. When weeks, business few say it's to separate Yes. everything is get a few build expansion, to to within about

internal, So, yes, it includes all external. approval,

Aleksey Yefremov

conclude or pricing to carry a Thank lower? a you risk negotiations still of the next Great. Does the XXXX price? of year terms lithium for question. in a In of forecast do you. volume, higher lot of And lithium follow-up point have being lot words, pricing then other your this at on

Thomas Schneberger

got we is within under risk so most pricing contract, But of Tom. a defined there. carry defined to I'd actual Yeah. it's the say I discussion there's range. that don't the some already and a as We've muted risk. think still volumes This lot of a price XXXX

Aleksey Yefremov

you. Thank

Operator

Thank you.

from comes question the of next from go ahead. Sison KeyBanc. Please line Mike Your

Michael J. Sison

guys. quarter. Hey, Nice

Pierre R. Brondeau

you. Thank

Michael J. Sison

those You will you a of and the not molecules impacts but a XXXX? legacy bunch in you – have unfolding are How any Ag had had on number you a bunch, were of developing business.

Mark A. Douglas

quarters. where the to absolutely we've Yeah, Mike. The on portfolio itself, track pipeline is communicated past in

the market will that That to in the bixafen. of XXXX first molecules America. comes in second half of hit North is One

have will so have be of that XXXX rest it Then, we XXXX, feel So coming somewhat about But everything whole across now. in end anywhere comes as we part impact the and pipeline on said the well as pipeline. is good know, timeframe. through of it of we're range mid-decade the before, exactly really will really track is but much suited next in some you the XXXX, muted. portfolio Obviously, decade, but early it the we right from to more DuPont the stage

Michael J. Sison

Right.

do year-over-year be basis? DuPont's Okay. expect from in to type the think And about you business, next what you year, DuPont legacy about the see for single growth next would the of up business year, terms asset on think them as you mid I noted But then what digits. on of

Pierre R. Brondeau

same demonstrate and we've analysis the very that channel QX. absolutely countries, that. here to it growth we by not to to the solid at we need early by we XXXX. region say grow driven we'd that done had look is least crop was decrease call with work look XXXX The done, inventory. no dive with the drivers decrease Between numbers I'd a because to in this and was into are to we going we year inventory, knew specific have we the growth was the customers a finalize and really think the a The sense. initial driven Actually, plus a have to X%, and I looking of you crops business especially to with see significant give rate reason X% the going knowing had, into specific in in

strong So QX. XXXX, same at in least, the pretty number, starting

Michael J. Sison

you. Great. Thank

Pierre R. Brondeau

you. Thank

Operator

Thank you.

next that Your ahead. the from of line comes Jester Daniel go Citi. question, Please from

Daniel Jester

Hey. taking for question. everyone. Good Thanks morning, my

volume weakest happening you XXXX can of on frame Europe, there? you kind and has know in So, just were Europe evolve that I how year-to-date been else there, Thanks. there there guys. region could probably weather the is but issues the for some anything

Mark A. Douglas

the that rest through the we're script here last as from country we're it we acquisition. from Pierre else the of in channel impacts really year. on to year, the alluded obviously, then nothing weather Cheminova that apart from is And the saw the No, changing going the France Yeah. the we that distribution earlier

right the So would now QX the into next where normally part distribution into in we're doing selling year. of first and not we'll channel, directly be as that we that QX we ourselves because selling go season be in

been have north impacts there's pretty meaningful which from But the the weather apart other a has that depending been the severe issues south, on and in impact. no somewhat fundamental the business. So

Daniel Jester

strong of just in year you U.S. quarter, U.S. another last the quick guys pre-emergent the a pull then really If sales Okay. And forward had the herbicide remember I in very fourth one. into

As you seeing could of headwind are it doesn't this if same trend be that you quarter type the see the year, evolve a Thanks. fourth or work?

Mark A. Douglas

a the leader No. trend. We're America market our pre-emergent and a there's doing and changes Authority exactly herbicide very the seeing and brands orders market strong. do Pre-emergents of are well are in in are well North lot same to but continue

Daniel Jester

very Thank Okay. much. you

Pierre R. Brondeau

quarter just as the a despite mostly strong before driven expecting but had to not which the things as clearly understood. but comment in America we're trend One the are strong is by fourth America growth same which quarter, see strong it forward quarter, is make with in third space mean sure in quarter. and significant also moving falling question We North orders third Latin we I healthy very a fourth want about that was or it situation

no So by early there our was pull customers or buys.

sales quarter. So the it's see important right fully are in in place to

Daniel Jester

you. Thank Great.

Operator

you. Thank

Please ahead. Jaffray. line from Your Brett next from the go Wong comes of question Piper

Brett W. S. Wong

for I to just wanted earlier an one. my guys. Thanks questions. on taking up follow Hey,

You or on color categories. provided some talking Ag going talked focus R&D really your forward, about about product

crops the So on on. that color you can I was little just focus wondering going if to provide you're a

Mark A. Douglas

focus, tree have Brett, niche somewhat sugarcane, crop past more focus. we're the When some and you and our we of a of look said that more in obviously corn, and various at a so in as the crops in the all Yeah. vegetables. mix, we've such then niche cotton fruits less niche heavy

and that with crops. Rynaxypyr obviously, niche think on the expands acquired big portfolio, I Cyazypyr

exposure that rust do regards a with major, niche of fungicides, that on give space, come in outside would can to the depend But focus. of it's products that space, crop to will crops. soybean we very into and be Latin we we If products if down we Brazil. major that think so, But forward, happy America us the focus the in types out soy into to more can Going I go is will on Asia much that, also on of develop in going issue.

Operator

you. Thank

go Please will Your Alexander come now next from the line from Laurence ahead. question of Jefferies.

Daniel Rizzo

in It's Laurence. that you? for fungicides. Is crop on end and forward there You be that a as of of be nematicides well Dan are the kind they Hey, that those terms products mind? categories focuses guys. for most go or those apply with to how would mentioned growth in focus going a particular those would in How with product Rizzo shows promise or mind

Mark A. Douglas

Yeah.

we I to it clarify, bring given from longer to would term nematicide, and a from takes much that what an market. to said discovery, was, obviously more R&D product to Just perspective, expand fungicide XX like that's to our XX years

Our strong focus looking a we we the portfolio be then differentiated the now, potential to for the Obviously, be are portfolio near-term with that going soy much acquisition, and corn. any or so to have. cereals bringing continuous will niche there broader we're the with crops at crops it's products have across growth that opportunities of row whether

Daniel Rizzo

what down the with going to that's with Brazil, there? there. just kind cheaper trading out farmers are then about And environment maybe counter regards is products to Okay. there But as this laid a how occurring year as of any you've to things concerns

Mark A. Douglas

No. than there. a I used more normal Brazil – having don't We're think any operating to is marketplace. very competitive

years. lot party the You of will a a of products generic last third over remember our of – couple we jettisoned years couple

portfolio. Doing doing area of more the insecticides, on focused is very strong. specialty cotton well cane, Obviously, for been insecticides really are we've sugar well. in So soy our proprietary

So but big it's normally we're opinion. is than my no in it not there worse

Daniel Rizzo

much. very you Thank Okay.

Operator

your Loop Capital. question of Chris Please Kapsch And line ahead. the you. comes from from go Thank last

Chris Kapsch

Good had segment. in for each a follow-up Hey. I morning.

that are the cost I'm to place. absorb how that ag more opportunity business. up about costs there juxtaposed avoidance, acquisition. in or on in that TSAs don't around big words, appreciate following have curious opportunity focused on But about with – is the Just I piece DuPont is against the the in layer the as you really in other you the synergies of is discussion there

to figure avoid, identify don't you out avoidance just then in you of what the TSAs you do those trying what necessary As to to place. some cost need the recalibrate as when are able magnitude what I'm exclusive to fade be or you mutually or associated costs with you you'll have costs TSAs? real of So current understand are do to the businesses. run have to opportunities costs – on are those

Pierre R. Brondeau

Yes.

cost, putting the to in to place to we good At we These progress, almost are are get defined, pose. which So TSA And that's phasing next million way keep structure to below months, And end. this to the range we model going define point, services. business. making we this. $XX finance, and others we're but points would going well will not don't we a our mean sure what bare for be be we for and TSA have a to in all the us that have were which pose this XX is the in the strong operate they well-defined business minimum team TSA out, TSA be for expecting be operate to was had place front this the where need with to Once two-year of DuPont IT while we'll will the the able are us. TSA that enough functional very we a over this period the

run what to we the strong business bare model pretty that plus should So operating next into into of we our need the idea create are the would I is say we process will year have following targets. by early a XXXX. minimum which going do

Chris Kapsch

up That's think for business sequential quarter here, earnings looking on the And Lithium helpful. growth. then Thanks. Okay. guidance XX% following the I fourth at just

fully progression. that's into of case, qualification in are in running Is pricing about at you that mentioned metric new into And the or you one, And progressing assumption curious that's the hydroxide qualifications? XXXX? talk that that imply X,XXX then if to sequentially still September, of also that ramping Just can tons. was your that baked the you see producing the about, up plant that is quarter the sequential how you're in month just earnings process product qualified you and the

Thomas Schneberger

Yeah. Hi. This is Tom.

it's markets, seen I've months. XX Traditionally even question. the X extraordinarily processes. with to multiple went starting customer of these year well. So in qualification qualifications The

the few across base. relies in There's on our but customer qualified are still processes. customer a it We process

that So minor on concern. it's pricing, of QX there's the the mixes in it's way QX to go, QX. the have for we And no forecasted. relatively We're terms qualified the that volume minor impact sales relatively price, to mostly QX

Chris Kapsch

could extrapolate XXXX just last Thank And then you. you you Based contract that juncture? into on took. the on comment this at that

Thomas Schneberger

going So to the indicated earlier more benefit be price had I than we XXXX of just we those half into expect and started conversations.

be could it bit So little a better.

Chris Kapsch

you. Thank

Operator

remarks. Thank you. over for I'd like call to Wherley turn to closing Michael the

Michael Wherley

time the have for we all call the today. That's

always, following you Thank available a to the questions. address and have any As additional call day. good I'm

Operator

you. Third Thank FMC Earnings Quarter Release you. call. Thank the This conference Corporation XXXX concludes

Michael Wherley	FMC Corp.
Pierre R. Brondeau	FMC Corp.
Paul W. Graves	FMC Corp.
Mark A. Douglas	FMC Corp.
Thomas Schneberger	FMC Corp.
Christopher S. Parkinson	Credit Suisse Securities (NYSE:USA) LLC
Frank J. Mitsch	Wells Fargo Securities LLC
Robert Koort	Goldman Sachs & Co. LLC
Ian Bennett	Merrill Lynch, Pierce, Fenner & Smith, Inc.
Dmitry Silversteyn	Longbow Research LLC
Donald David Carson	Susquehanna Financial Group LLLP
Joel Jackson	BMO Capital Markets (Canada)
Aleksey Yefremov	Nomura Securities International, Inc.
Michael J. Sison	KeyBanc Capital Markets, Inc.
Daniel Jester	Citigroup Global Markets, Inc.
Brett W. S. Wong	Piper Jaffray & Co.
Daniel Rizzo	Jefferies LLC
Chris Kapsch	Loop Capital Markets LLC

FMC (FMC) 7 Nov 172017 Q3 Earnings call transcript