FMC - Earnings call transcript Q2 2018

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Operator

Good morning, and welcome to the Second Quarter 2018 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 now like to turn the conference over to our host, Mr. Michael Wherley, Director of Investor Relations for FMC Corporation. Mr. begin. may you Wherley,

Michael Wherley

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

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

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

Pierre R. Brondeau

another for level. Thank quarter you, businesses everyone. revenue the earnings good strong both at and QX was and morning Michael,

ago. our the expectation with strong of products, of is The and global us laid for half. out percentage demand The the cost commercial and quarter Latin combined the with the continue half line our first revenue a of we performance XXXX very on teams much schedule in for perform For very in confidence year Ag synergies, business second Solutions, high for to were gives well. America the through great orders in rest integration hand a

to portfolio, Beyond Cyazypyr acquired especially the we insect strong immediate our future, very potential continue Rynaxypyr growth and for controls. see

launch Corporation, R&D the grow. expanded and named performance volume the North of months. and FMC with our list fungicide, six track integration year. On technology to spin in front, prices direct followed Livent to in continues a line previous our for Livent are later will ingredient continuing Realized strength this we first perform October the with shareholders our legacy from which FMC be demand announced, business, which well will The to to differentiated to by XXXX Lithium remain active We organization IPO, within products be strongly of expectations. confirming pipeline. recently is our very delivered on Bixafen, an remain the R&D new We track America in progressing on the is pipeline

was the Turning midpoint mainly mix double which driven to nearly Lithium. QX our favorable the was revenue a quarter reported billion, $X.XX quarter, revenue and Adjusted which higher performance customer XXXX. $X.XX the above stronger slide period of year due same was just X, over FMC EPS beat by operational Ag The and the versus XXX% from was combination pricing in second of $X.XX to guidance in growth Solutions in revenue ago. guidance the of up and

currencies. with in revenue increased Solutions, basis, reported from zero doubled X% on pro $X.XX basis about Ag the foreign of nearly billion a and and a forma X quarter year-over-year net slide to impact Moving on

opportunities We quarter force another with capitalize our combined the impressive second its continue portfolio. sales full on and performance to cross-selling in delivered global

half side a that pro the share demand with acquired a led in grew continue region gain see forma on this we for was very Stepping of can insect look Rynaxypyr and by consecutive growth. pro page bridge in quarter. forma first This revenue, performance XX% the and we back region. the saw growth the second delivered every at across to strong and basis Cyazypyr taking which insecticides, You and XX% every market right control, the on top a line

Second EBITDA earnings Segment mix continued the was from control. XX% of triple guidance. above despite by on achieved was government was strong industry. focus EBITDA has the the million broader our margin cases, shutting to quarter, been industrial segment was the has facilities challenges These certain and, a environmental of Chinese mitigate cost rising and of network. This shortages cost. been material The the supply the quarter and midpoint $XX on down faced $XXX year-ago chemical performance thanks million manage and to on a active causing and have parks limited of our certain global our diversified able part supply supply the of material their FMC as raw strategy. shutdowns intermediates customers, impact to in ingredients ability and

grow margin in very as higher years to portfolio shift in continues product. this margin are We with today's pleased environment future and to our performance believe the will

insecticide, by crop growth we insect estimate control. performed Cyazypyr mostly broader compared strong forma protection In X%; revenue We X, revenue America increased slide we and to North X%. the America, down a on market, North growth revenue Europe was which Asia low every revenue X%; America to strong and Latin XX%; pro Rynaxypyr increased volume in digit. grew region. very driven revenue QX mid-single to well basis now was for Turning grew saw

access which Authority of herbicide, was strong business insecticide on is in strong in increasing pro was indicator despite continues a demand seen strong In XX% we Cyazypyr niche We change forma grew super In in strong is nearly legacy and in by demand higher U.S. herbicides to a digit Rynaxypyr saw positive protection we pro last underlying In herbicides our going basis, two control. along healthy. seeing Asia, due insect gain for the growing region. basis. significantly to Mexico our our our weed This major these basis, Supreme, and to a a our due seasonally market as to market market we to and performance QX, a significant legacy dollar of In on mid-teen a from region, to traction toward the for Consequently, for the by sales double-digit single for in condition, performed change and a we very is lighter Brazil host market growth crop in demand low product. Brazilian insecticides. basis, driven latest smaller protection all business were grew forma felt conditions have primarily even In better the strong on for which inventory enough strength we quarter. made of Brazil call. of exposure The ahead control. crop growth in market as Australia driven market fungicide expansion FMC strong of trending value with weak. Cyazypyr believe growth highlighted Rynaxypyr and on strong markets, protection we low a continue distributor grew Europe, in market our revenue applications. impressive was increase and portfolio. insect delivered the forma rice as Latin drove the difficult This more Growth branded in demand herbicide model forma we led also a resistance. America, than is market also China, extremely the in that products The countries. that to weaker down delivered demand crop well offset are with Authority pro impact X%, severe herbicide line across our grow The crop model than ones our the an is due a by pre-emergent drought. which crop was channel in our XX% sales pro FMC's on performance, a the have the India, of

XX% quarter, million, up higher last Lithium ago. EBITDA $XX XX% another to segment Lithium now QX of revenue year Moving year and X. a strong on delivered than slide to compared with

remained continue very as in strong all see primary carbonate, hydroxide, to to and driver prices in demand with a in the production hydroxide XX%. increased production growth, major We BuLi at each demand the products were on all year-over-year customer year-over-year metal realized Argentina, up Volumes for prices performance also higher product. contributed higher least lithium growth. increased Higher FMC's and

the in at of XX% was first forecast due year. margin than the to mainly margin of EBITDA XX% customer year QX our favorable mix Our full the midpoint, half of higher

for share for the Turning of and EPS. summarizes fourth of year XXXX per third XXX% the our share. $X.XX and still midpoint the At to We full outlook versus slide an quarters. which per earnings this between X range, expect be the increase for adjusted year represents $X.XX to and XXXX full

Third to be $X.XX and quarter $X.XX. XXXX adjusted to and quarter is adjusted between and XXXX $X.XX $X.XX, EPS between expected is be fourth EPS expected

Ag the of forma pro to Solutions a this midpoint. revenue XXXX to year-over-year basis, increase $X.X $X.X be in range the at will a billion. We X% On expect equates billion

of $X.XX billion. will the $X.XX Ag We range EBITDA expect also Solutions' be in billion to

May. in protection unchanged from crop Our expectations market for overall we said the what remain

expect XXXX. low-single continue protection in to U.S. flat global basis digit dollar up the crop a We be on market chemical to to

Europe to and Latin up be digit, We be America expect down to digit. North to low to be be America mid-single to up mid-single flat digits, to up high-single mid low-single Asia to digits,

of in rate expected Solutions $XXX third low-single range in low-double FMC, be in fourth to be million segment range $X.X million These of to QX expected digit billion. revenue to in quarter is revenue QX. and and Ag of $XXX $XXX the forecasts is pro growth forma For digit million, represent revenue quarter to the

we integration closings is our is into for In laws. The moving sites and on. process, delayed delayed legal for magnified under major with closings. planned by countries local are and Since DuPont DuPont, due entity, and close lowest market, countries to permit third sales known is will now have of low certain are from and transfers this the there the our and along operating of the delayed internal a period registration and any XXXX, transaction FMC season the the with expect for the often we the as grow sales a events blackout be it of In second quarter sites majority occur the market sites quarter sales basis. on QX. X% our FMC's temporary are countries These to we QX. a creating registration in versus in first and Ag licenses will being protection half half permits, in crop revenues continue in majority to thus XXXX of The will pro outperformance QX. FMC sales on under related of economic this forma Solution receiving QX, are direction, and behalf benefit. which transferred

as our to in $XXX We target, forecasted million is is Brazil, have high has million America, in the our the we full roughly expected past very QX. $XXX visibility and XX% meaningfully EBITDA confidence of have XX% in what In increased our above $XXX seen reach in year seasons. to of in versus QX, range particular, which forecast our be $XXX in and which hand million in revenue previous into million represents have for in years. period, of to orders range the Segment of we over Latin

in of XX% nearly of business, half. ratio of acquired occurred year. years the is first the a XX% the in half. shift were implies is on by half driven This which The segment generated weighted in guidance of Ag XXXX when reversal the much Solutions' EBITDA first heavily is the first more previous Our the earnings

increase Lithium, we million, expect of in $XXX over midpoint. XX% $XXX range segment year to year-over-year at million revenue the of Moving to the to be full a

are We XX% to forecast $XXX midpoint. EBITDA full million year-over-year of of our a at by to $XXX a increasing million the increase year million, range $X represents which

Andrew. $XX representing and EBITDA increase the the I each of is a million for be to now to revenue and between $XXX call the year-over-year segment Our to XX% million, turn will $XX million at to guidance million $XXX in be of for the over QX midpoint. range

Andrew David Sandifer

Thanks, Pierre.

basis taxes adjusted guidance. to Let year mix reduction tax guidance lowered the with statement, me our points full effective taxes at the We've for XX to for the midpoint of and by earnings the for this impacts of of the XX% XX%, The updated our range exchange. income specifically quarter start brings XX.X% foreign provision updated of driven our a across this tax morning with of effective for a range, of the various in rate line jurisdictions. year-to-date rate second adjusted forecast the

our on increases. weakness second impacts revenue currencies, ongoing segment, American aided quarter net Ag the zero key in by Foreign offsetting for Solutions were Latin with a in strength euro exchange price

the a the in For was FX Lithium tailwind quarter. modest business,

we the always, our manage to of year We be different. closely. as is throughout Looking remainder watching the real will, and this the year year, currency Brazilian the no exposures

completely expect With the the combination headwinds our half of and full second FX hedging offset business Solutions price in to Ag activities, increases in we year. any and the the

of Moving on was the loan solid this at term and pay million $XXX the sheet outstanding in than million debt cash the $X.XX debt generation to more from and balance beginning the XX billion, flow, down net down year, cash $XXX of June of quarter. reflecting

half adjusted to first of year driven period, operations $XXX generated FMC by cash higher the prior in the up million Turning from to EBITDA. compared XXXX, slide XX% of X,

We lower than acquisition build of expected. also working was capital from DuPont the previously benefited

full Looking build the to working our we call by supported capital $XXX forecast is our to acquired million continued expectation the a Pierre. for year, for $XXX This adjusted that, With for for from to increase back turn strong guidance the by driven by increasing I'll range business, DuPont million the updated are our operations $XXX EBITDA. million. to cash of

Pierre R. Brondeau

you, Andrew. Thank

require agricultural We half the to Lithium August. on feel estimate. very its headed today. SEC business will version within on First, move and now about confidential quarter, we we October. Lithium of the strong reduce we we June, days that laws standalone XX us late confidence becoming remain delivered will Lithium Securities commentary separation. a on Livent in and to the undertake filing with business high track able to public not business we comment file IPO in We The are filing. a direction the we Q&A to company. FMC Therefore, a second good a provide be of made public S-X We on as the have on this the substantial sciences another is our the

expected Our full our XXXX, year. approaching rate in drive an drive full margin XXXX the for for be gaining will acquired realized disciplined track the business will strategic XXXX, approach Growth implementation we the to year end will synergies have our from beyond. very market help new is margin pro with nine integration than SAP improvement forma The growth as of is and above cost being on is faster months which significantly significant and progressing our portfolio ago well, our EBITDA growth revenue are XX% of would well adoption the and customers.

to for expect crop the outperform foreseeable market the We protection future.

many we turn Day to Wherley. there. Investor Q&A, see we Michael moving to you December like remind to to hope in I hosting York New call Before would back an Xrd and are now will of on I you the

Michael Wherley

Thank Pierre. you,

half can But frame may answer on we're future, very the time. Operator, questions this your performance to As in begin can first Q&A. in the we period we're that business, light. say that questions you we're forward-looking we so of about what to the in limited happy choose at not a the Lithium quiet questions for now some answer Please business.

Operator

Thank you.

question of first from from Steve Bank Your of comes America. line Byrne the

Ian Bennett

legacy describe of help XQ on the could Thank outlook it maybe structure or perhaps forma for This margin some you in business, to or XXXX? compare agricultural margin those is Steve. issues been In lower for what Ian and the would you the good XQ for in pieces Bennett the Brazil of XQ, pro morning. in trucking and currency have moving of

Pierre R. Brondeau

first lowest in explained to will – we lot of questions Yeah, has of time. and the That's be, same future – the at be and the all, QX QX, a as season.

lower. much you the revenue if margin the SG&A for is go the very a So, the margin, and think the margin your R&D because your result about is which EBITDA it, cost lower business that is against gross

math with margin the lower. is So, an makes end just up EBITDA which you

about been QX Brazil It fact Historically, cost lower. Asia your it's the is every purely quarter, Asia, the and while stronger more and fairly Europe revenues always move portfolio, are is has and QX as North quarter, while below-the-line because your So, the spending non-existing, are doesn't the even America low that a same new mostly half with portfolio Europe of an which North low, much in first magnified September. is making start even weaker. America, the is

we revenue, each expect for currency standpoint, with future, EBITDA, the QX margin. year, a going month by price any the think to strategy if lowest half much, From are the So, we headwind we from currencies pretty seeing our not at increase. with I and lowest are have of real much our the the offset with lowest to full you will consequently and hedging pretty a to look mostly the the consequently EBITDA be and – be we combination and

two look I might Now, quarters, slightly QX. be we if in you lagging would at say the

have effect couple And impact maybe could on of trucking in in the you no have sentence. chemical think was around in QX. season the Mark you positive direct industry. industry, to trucking crop question maybe There Last comment slight we're Mark on I'll a of truck I in might strike of want And the impact impact and to add strike. of will you QX. a the be negative is a question, let Brazil some FX last that? agricultural side There really your of point the full So, more when

Mark A. Douglas

Yeah.

our extremely move concentrated. our think logistics honest, we when the of materials lot not of trucks supply for a comes are in to be issues any I are contracts seeing expecting materials. not it Brazil, And and let's terms way we're our of structured to

of as the a tend bulky. inputs lot So, to some which are fertilizers Ag unlike other such we less extremely ship volumes

impact year already. think if grain how the grains I traders And talking the might this doesn't the get that this it's get I heard the when starts, harvest a necessarily but for of the certainly other you about number is resolved, see ports. to QX into think not you've moved

of maybe we are in of any end right those back in as terms issues at far delivery. the is two So, season at impacts FMC But front in concerned, right fertilizers terms see and end the the don't the as of of terms grains.

Pierre R. Brondeau

question Now, answer let your finish QX. to me around broad

QX – and today QX. clear. We be easily to $XX I'm to is you see, you America in could million – do from to in could QX specifically a quarter make see forecasting, shifting very want I predict. hypothetical, Something not to difficult $XX Latin have always million it's or Brazil but or

to a season will us, decide and secure the have the strong earlier, shift of buying of we very happen, a same level that We would a ahead customers in cotton which and supply growth would the QX much in more If range. and might the rate pattern. are rebalance QX to that create

delivered delayed Finally, The clear around creates are are I Philippines, site in in I we it. Vietnam knew knew Brazil about but taken, Indonesia, We integration a sales hope blackout a But sales explanation is a process. are be and not there or We the QX. orders was lost. facing, That like in it. countries few sales. to what in a the company. is pure transfer accounted my for will where about Those there

noise and should creates than QX creates we and So, lower that more a comes have.

Ian Bennett

the the how business, follow-up, Thanks. has prices affected year? of in declining on contract helpful. just negotiations spot half the as a And Lithium in first very China That's

Pierre R. Brondeau

we end the the is for of the us in So, back under contract negotiations business most any done have of contract year. for

contract negotiation of very year. So, in little first half we the have the

carbonate are over very said metal up up lithium between year-on-year. pricing we for market. you for even in carbonate QX and as (XX:XX) sequentially, can We sales XX% price participate little and are tell today, and our hydroxide hydroxide, I spot So, carbonate. But the for QX, also

up pricing year-on-year well as as So strong pricing. we are very sequential seeing

Operator

from comes question Jester next Dan Citi. Your line the of with

Daniel Jester

everyone. Yeah. Good morning,

that differently and this it's you ask to book the to been order in something about comment much early driven year, specific wanted remarks past. your the you're I for – prepared Is stronger made Brazil an in today book market something order doing driving how maybe drive market about it's than this or your you orders? is a this that's build more So,

Pierre R. Brondeau

very, I is we think It supplying fact market. market driven. careful very it's the in purely been the that have

in very early orders our an of is Consequently, So, a FMC firm good the there the low at placing a orders customers pretty channel their on product. who visibility are stage. inventory have demand and

we're I a we not when very Brazil careful are a a on even in much would being keep in absolutely they keep very situation in demand. because level product we not So, demand to getting of normalized today and strong high in are required more in supplying period say the inventory low channel,

said XX%, the jokingly. saying a above already Now, we because few and a XX% that is wrote number remark but I'm said I days I not ago, XX%.

to So had I think such – since a it's want maybe before more amount give it's high a in you long (XX:XX). been time color? we of one Mark, hand orders

Mark A. Douglas

through season No. Cotton do last increased and as rest Brazil us we're down inventories the us last year. that well were of advantageous in over few years of do believe the channel crop those prices believe serve well, served is in also this very in going that working I significantly to of very we acreage focus position. the very our go a have good. terms and I

acreage going So, forward. a the again significant at cotton growers in pretty increase are once looking

that eyeing legacy but market with we're with only the acquired portfolio. portfolio, So, not our

are with expect happening there. overall, Brazil So, obviously is about in growers very bullish significant on the their around growth soy, world acreage. we the feeling what And then,

soy. acres we well Brazil So, to expect in as see increase for

a of position of three combination years the shape, in a hard work last it's now. an to right advantageous good ourselves lot get over to market then two us, for So, and

Daniel Jester

to less new to to U.S. the bit with conventional soybean suppliers more in important their agnostic between China, wonder is U.S. that FMC in just and what that business Thanks. Brazil could on the on sell planted follow-up soybeans plants need given question, a Mark, touches I of going acre what's the a will have Is versus exactly what is to I going a find is for soy, on planted And wisdom I then soybean that sell have soybeans, actually And impact the kind long-term are think soybeans. my Brazil you. with FMC's how U.S.? acre if

Mark A. Douglas

Yeah. of I just it's I exposed big soy one over mean, is a around question. in XX% which good is world. follow-up portfolio that forgetting country our mean, you're mix the a country to for There's Argentina, which is us.

We is herbicide down Argentina, regions. agnostic. to portfolio and down Yeah, have acquired the in a pre-emergent growing business mean, we're significant there obviously in pretty us well. all important we three insecticide I as are

be the will one those all from Soybeans around three. three or of provided world

want grow don't So, grow with three our in it's for We we and mind. technologies. to us, – really all we'll

Operator

Your Koort Goldman is Sachs. Bob next with question from

Christopher Evans

Good forma rates morning, benefits the given for the the everyone. of This is in pro showed combined first Chris Bob. growth the Evans you clearly on portfolio seeing half. We're

expectation the on do beyond you you acquired the from pipeline for and top Ag contribution well, here? And that is rate formulations possible XH What new but drivers guiding think opine first give Could versus maybe half. context maybe some receive? product strong You're us you DowDuPont to then a decelerated you line as XXXX? as move the a secondly, can you at growth

Pierre R. Brondeau

and take the take first I'll Mark will on second technology. the the part, part new

our market, Cyazypyr benchmark We strong that the grew XX%. Rynaxypyr, by driven half very a and they and on still are first believe I demand molecules was we in yes, insecticide. had the the insecticide think,

grew customer XX%. in gain. healthy the – that creating the believe we synergies very So, of half the of We portfolio the actually overall are plus market portfolio a quality a share FMC the first also significant

we the HX, and is to are strong within in we move believe right we at FMC faster foresee because, HX before, look business growing we a the versus legacy very It more in is – HX, of business that much there now. HX. is business. you this deceleration When think is HX, business, So, said as business DuPont acquired the position I than way and mostly an

is and Latin would have half So, of growth if That a the the to less. to you first America but the FMC range rate look by more insecticide expect Brazil, in XX% extent, portfolio the an and the we will the herbicide X% driven year. business, some in and the the lot acquired at we in be the growth why do half, be second from and

Mark A. Douglas

be how products We're in the FMC for terms coming talk introduced in Day regard will we We pretty increase certainly decade, had much that think With registrations hitting the time we've formulations calls we'll numerous the that number over kind But to year in years. metric, first on we legacy of the later and in product, for talked combined of products together. of the Investor are the be portfolio, in have later strength expect some targeted season. of the the Pierre the acquired We've launches talked more of five coming that early we part revamping market at over expect a December. about more that to the prior in healthy our and going in times through active mid That's metric efficient can the come Yeah. the have every after we portfolio. year, not of are for about coming you the in a that, ingredients. just actually to this that the a some decade. at turning We had a launched metric new portfolio. to script, portfolios fungicide of so we about that said America North two Bixafen, last coming terms the as I XXXX

of legacy the for numbers mixtures. similar new have We fungicide portfolio FMC both terms herbicides in and

very So, going in a it's starting portfolio XXXX. robust forward

Christopher Evans

you in Thanks. comment large and a into Lithium the I could impact was guidance. to bigger say, a the was be, your the FMC And maybe factored Argentine quarter? peso in let's result didn't surprised devaluation on on seem hoping I of doesn't impact it

Pierre R. Brondeau

the a peso was Argentine in second The quarter. tailwind

to... Paul, maybe I you think, want

Paul W. Graves

our It to the It Clearly, that $X have of rest that to to It factored the – exposure less to quarter. seem Yeah. than the you seem as tailwind in – was the the doesn't EBITDA peso – year. the have understand of of is it inflation. is in large as one not drivers was people to peso the believe. look, depreciation is for of in cost you it's the bear mind million

And for huge do a have you've we're headwind By through the so tailwind peso seeing those, peso cost an offsetting terms. or all washed in devaluation we not time year-to-date.

Operator

of come Jackson ahead. next line Thank Please from go BMO will you. And your from Capital. Joel the question

Joel Jackson

I of give talking a for of for to QX year the to expecting quarter revenue QX is take. very QX, guide $XXX just QX for from bit like basis swinging it roughly you QX million if to the $X QX of sales normalized because the want How much Ag, to QX, from revenue moving the billion a Ag or blackout be QX? in something for is seems looks and like some lowest It you're DuPont on reconcile similar sales QX. would have a about

Pierre R. Brondeau

Yes.

$XXX in the the have two between in QX, in $XXX the at and right the at differential QX million about – the two look now, million quarters from we sales. you QX. Yeah, If quarters revenue numbers differential for

we've – are sales. talking blackout So, seen that of $XXX past, the the blackout and about a you differential million than big impact bigger not a sales, the we is in of remove it's if

millions tens of dollars. about We of are talking

So, every X%. is I million think about $XX

or So, in millions, you bring a can more quarter. X% $XX X% have a few another if you

shift of are So, talking we about. that's the kind

Joel Jackson

Thank much. you very

Operator

Thank you.

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

Aleksey Yefremov

Thank morning. you. Yes. Good

actually and the booked are issue, being made at this and Just DuPont the an to confirm, purely blackout sales is time? sales by accounting

Pierre R. Brondeau

we of do have we and question recognition. more sale just when only the we it's sale, the have It's It's the is orders, have No. being a the we the only – revenue we have to recognition. product, a product, order, do the if ship have register entitled – firm of matter product, can a so, and

revenue a entity the us for recognition, or to So, legal the for we It's the legal recognition. to get it's the or transferred and do as we the do sales. as permit, revenue issue soon account already purely ship then be able registration

Aleksey Yefremov

any ship next and to don't you're waiting get approval approval this slips that QX? in risk government So you Is into further the that product. for there year

Pierre R. Brondeau

not, ready when is when only absolutely go. transfer secured sites, to do the site you and do No, you everything because delayed

So full for it a not quarter us. is

think of going around place, transfers. a couple it's to not mostly something impacting it a a questions a weeks, – part delayed It's sometimes the is depend is August. it's or But July there on no part it's I but of month. sometimes the of

Operator

Thank you.

of Chris line Please ahead. Your comes question Loop from from Kapsch go next Capital. the

Chris Kapsch

Yeah. Good or about referring morning. of portfolio. question new pronounced is seasonality sort this to more the acute My you're that with

quarters seasonality the Just enthusiasm anything that's this about information – about pipeline two strong chemistries? a we business and cross-selling the business half wondering more having and emerged the those anything pronounced about the about the new views closed, have now the the associated inconsistent emerged new as as opportunities well – this with DuPont registrations. wondering opportunities pipeline registration both with just of is last as a around if that new DuPont I'm of quarters what cross-selling if with new there's

Pierre R. Brondeau

We No. feel the not if stronger. actually same,

Just look to the for X% if you the in have company total end the for a number, – were full we expecting X% year range. the see at to sales, of forecast at in the a to growth rate QX, at year we look the for the full

year We for the are range. forecasting today X% full

we versus enormously increased of of to at quarter. So, the first the has end year versus our we were at end where level extent and increased the synergies last confidence growth were some of around where

where less very percentage So, a there quarter and portfolio, only a low is of situation there the a acquired no the overall is change. is demand is business. business QX this where It's for

we increasing said So, there it's creating and end the is. at anything, But an of historical and we are in low That's us. growth what for term it – we the DuPont quarter. synergies all speed if is forecast which there was the versus first no quarter for are of at

Chris Kapsch

rolling and Okay. industry generally and and Lithium there's prices Thanks China, that tied in market to if of pricing between are just And spot the about over. you sort I strong the year-over-year sequential the and seeing other and both the obviously and incumbent for follow-up had are inked that. business trends on have you both obviously contract more disconnect guys players to there,

destock about the that surplus over China the sort of kind question cathode a way? plausible maybe view of side phenomenon Any on low-grade there's longer nickel those And the is that if it shift a a that's term conversion generally either possible surplus on of the and industry therefore, sort short-term of that are spodumene over one there, you explanation sort feel thing might of is sort of other just carbonate thoughts in of chemistries price, high be which low and that's the inventory that plausible plausible some hydroxide, Thanks. contributing, is creating there explanation? spot explanations have in or explanation So, of therefore, de-stocking. this China? is disconnect? constrained, that's is you DSO in material spurring course, towards the that of favoring Do the you or quality Do

Paul W. Graves

Paul. is This

I explanation What the while what goes more new there we've first other seen certainly that the if market it. really point look on is down programs. of new the spot that market really the incentives it the June. content cathodes energy of going an your rebates will keep in making the the in and of density And saw secure one had availability market seen We've we and face what carries until we've strategies. to particularly, part their state a a as half the that on rapid new their to informational for usable the very year, It amongst than meet in this incentive increased cathode a they seen on in inventory retool. I structures the closing are plants To that kick little to what as technologies the seeing between carbonate. Chinese of a them Chinese China move think bear kicked incentive production in not and contracting blue elsewhere I'll significant And requirements QX the as early is at. the hydroxide-based where looking for useful carbonate of expected. heart to trends in rebates using is cathode carbonate really carbonate year, in in we they manufacturers be drawdown they there of mind availability own the of do with are seen we've we're qualified even seen those underlying second in, that, we've towards is, able and And go focus hydroxide the is of world. market and very maybe finish of disconnect a customers And in a of the overall for the of from. hydroxide retooling

that wrong the data, So, while true I pick the I'm on to fundamentals of the that people up afraid. down it's market leading recognize path are, as everybody what

Operator

Thank the you. And go your Inc. ahead. Please Stephens, Connelly next line question comes Mark from of from

Mark Connelly

it India else pressure sourcing to you basic towards increasing DuPont deal, if R&D before to do on going up and some been efforts Is does still important, through have Pierre, fit expanding would China with your of you. shift big and question, you now? And be together and are Thank where R&D the how think your strategically that raw collaboration. you've sourcing? keeps the materials second producers, your your that

Pierre R. Brondeau

we've tell the mean, for but I plants to have at of is a the our can from towards and other locations. I manufacturing strategy, Yeah. looking some moved you you. when partners Europe toward look intermediates, been we some Europe diversified in and for also manufacturing location. with our and location, Thank different starting we Yeah. India manufacturing some of some example, that

on strong players, strategy have take China where We'll there but keep partnership time, a will we over So, stronger – produce a and diversification do to in certainly investing yes, is place. more but look be potential have we North generating in some products also are you at critical. where Europe India, will which our America as to and – of generating places most

aspect and organization always, make is the half Ag also qualified critical out what one of the your think why sure done what or has always have in multiplied years we that's that the registered. are of I we of you situation first year, intermediates, suppliers key the molecule and tough for got in who do,

I you China, one. it's very in on even depending, important; solely be cannot think

have suppliers able So, or have to to to you be two manage four capable three potential or always shutdown.

Mark A. Douglas

actually, future portfolio. new in FMC, you or very we're to can in into to past is point in that we're get I'll R&D, research for interested heavily FMC. new it fungicide On may trade terms And you strong because give developing access That you means we're sense, we the in legacy what Mark, trade did willing mean the one, basic fungicides. it is expanding collaborations basic herbicides technologies. obviously, example. of That your technology broadest the the to question an good in helps have research. technologies to we're as actually the our a of that collaborations that comes that insecticides have very when now,

with enhanced the vastly is that that do to ability Our capabilities last we acquired year.

last we toolbox continue to a over years. We've that very broaden technologies. we tool we that that of to will successfully the keep it's to well. game as played continue for it So, look very very our portfolio know five us, much And in

Operator

you. Thank

question comes Please ahead. Seaport Your Harrison line Securities. Mike Global of next from from the go

Michael Joseph Harrison

Hi. Good morning.

Pierre R. Brondeau

Mike. morning, Good

Michael Joseph Harrison

and this, the mitigate how under the ended increases talk steps I taking was a and think a in you last real wondering impact this real FX Brazil what Thanks. comment about in Pierre, the I saw little comment mentioned business. of exposure if seeing time Brazilian in in pressure your you was America. you're a little since second and has hedging changed half? The bit, detail issue to more an the price business challenges your a like in could we Can on Latin time little up bit just you last you lot the on activities.

Pierre R. Brondeau

Absolutely.

from I a to think lot to get learned can do XXXX, we'll not back equivalent. a and situation we we all

are looking very is from I Brazil, and it about ask talk we at we the to are on and close what in hedging. I'll going two think Andrew different angle, to

as we only change long that between business also way as of very with few price in have amount, the are price half and now very, list, and we And list to the price think there currency in on do abrupt I structured the the be our significant a over establish is and dollar pricing, very remember I negotiate the not very denominated. a from think, line tight is much Brazil first, of the we weeks connection currencies.

pricing. side do the of moved we've pricing. So, in that had approach Andrew, hedging, doing very do on we've from beginning one of could the to connecting about vulnerable the to business since And I tighter how (XX:XX)? of we a issues and say, we with talk the limit Plus, control year, the potential change to well have less been the you

Andrew David Sandifer

Sure. speak Thanks. things. to I'll two

I portion XXXX, think we've BRL. order significant routine become since in been hedge of and practice denominated approach once XXXX systematic It's – think confirmed sales our hedging way from BRL anticipated I customer. have the much to since a a the more the we the we

invoicing actually between time some customer Now, confirming with the order it sale. can and be the the

volatility currency their between time to and sale. continued the demand in additional orders on from fast with some against enough price to saw we the confident portion anticipated hedging, protects movements as we BRL chose the year, a volatility rapid to that where of sale, that the fixing invoicing confirming sheet in Brazil, anticipated advance us of order of ability our also actually take in do in sales some table. terms the hedging and So, This felt movements currency the customer in of the order, risk of the move off some confirming we higher the

this currency regular, for the of taking that off to work potential volatility confirm through in risk So we some systematic, table and prepare the year it's combination additional a we as year. did really orders, the then

Michael Joseph Harrison

to I then ask business. the about also Ag All wanted right. Asia And

dynamics going forward? strength mentioned the the application a the growth India little wins market in new bit to You some you're with you about for just DuPont? in Is positioned since just talk China. rice in or markets the combination in that Asia market how rice and related Could

Mark A. Douglas

sure. China markets: Southeast and Asia. Yeah, India, big Three very

the in such And traction XXXX that us. portfolio acquired channel. into obviously, having We Asia, legacy portfolio, we different like products model. share pieces countries then FMC now, the selling to India. herbicide changing made in broader taking market year would the channel think to first, take rice so very, the China. of very acquired for half distributor the in super laterally, this key gain affording the portfolio from get I in both rice to story. we portfolio, drive I That Philippines. a hence, a Vietnam. acquired some assets, is acquired Thailand, introduced were FMC us continuing portfolio, with And with go-to-market that continuing the China legacy India is with in helping That Southeast combination synergies a where access access as also, the and very sales portfolio slightly access in legacy is the FMC complements very step i.e., with insecticides very acquired first more we key rice in In significant opportunities we adopting Indonesia, say strong And the by China, very well places a market new and in with good have a model good

So, and us, overall, synergies sales good a lot very for terms insecticides. as of it's in a of herbicides well portfolio as strong

Operator

Thank you.

line the last from go McCarthy question ahead. from of Kevin comes Your Vertical Please Partners. Research

Kevin W. McCarthy

you're you chemicals including industry of inventory are on low least levels levels inventory if of and of perception the FMC's in Mark, other could morning. Brazil. was that in levels? quite key like your in Good channel Yes. own inventories seeing it your outliers, sounds both crop comment wondering markets, I terms at protection

Mark A. Douglas

Yeah. Thanks, Kevin.

FMC general, FMC in I no issues an good few Obviously, our inventories Brazil, would around about think, for the say, last perspective, channel on focused from feeling the I absolutely in years we've we're world. very for Brazil.

terms of I think the in last rootworm where although about had America, holds we've insecticide, legacy rootworm years. we more applications. corn have certainly on in still That are than seeing true, insecticide we we've corn few North pressure talked inventories

that probably I is portfolios. Market, how forward to see on would different Europe. this biggest general, So, develops. the going we'll companies' area season in is depending I say going see be spotty

I the conditions in seen because much Given has conditions conditions. with China, expect severe mainly and rest – market we've dry up channel inventories drought this to of I one very the just both levels market sorry, normal higher would given end The channel think end Australia oh high would would fungicides, the expect inventory more, inventories the that of China world, there. weather than this elevated given pretty of extremely and will Europe, season season. I okay. Australia, India with

Kevin W. McCarthy

could XQ? Is Paul, the your for function on expect if Lithium pattern perhaps I then a in that earnings decrement And per sequential there wonder you as EBITDA just helpful. That's comment of you the price guide. that of if you to tell Not other your can I discern stated or that us you XQ or what be versus volume, helpful that. can answer guide sure might compare factors if for

Paul W. Graves

Yeah.

QX basis move we factor but have which and the in different quarter. is in don't annual today, through of mentioned for a customer an bear revenue timing given contracts, can the customers feature I business this necessarily And you to are the a think of while hydroxide margin, meaningfully ship ship the business to every in year. everything regions contracts any again it equal in mind to Most will one there and to on really different in it we of this we'll is business. as mention which in be

I talked in than customers richer this, we about think the saw first half So, we the and certainly, we've half. in expect of a second mix

look So, to if the year essentially and saw encourage people the replicable the instead the our margin at is strip guidance, half, you'll first full our full-year year. throughout equalizing look first you see not that at what guidance. across in half first of the out just year, you impact entire assume I

Just all we done and both is of our time price contracting the basis. an bear predetermined that by on start almost volumes much are pretty annual in year. mind And the

of as to simply these is a question to it of that timing which when some customer So we ship drives movements.

Michael Wherley

the for time have the that we call It's all today.

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

Operator

all FMC conference Corporation's for time release you. today. quarter earnings That's the XXXX concludes second we you. Thank have call. the This Thank

FMC (FMC) 2 Aug 182018 Q2 Earnings call transcript