FMC - Earnings call transcript Q1 2020

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Operator

Good morning, and welcome to the First Quarter 2020 Earnings Call for FMC Corporation.

Michael Wherley

Thank you, and good morning, everyone. Welcome to FMC Corporation's First Quarter Earnings Call.

Joining me today are Pierre Brondeau, Chairman and Chief Executive Officer; Mark Douglas, President and CEO-elect; and Andrew Sandifer, Executive Vice President and Chief Financial Officer. Pierre will review our first quarter performance, Andrew will provide an overview of select financial results and Mark will discuss the outlook for the rest of the year.

your address then will questions. We

the and Our the presentation on will this presentation we Fluindapyr after available morning to slide slide website, earnings be an and on slide available discussion acquisition. release our today's the are from note, one today's prepared updated Please call. add made published remarks

earnings in not various with Actual these discussion identified limited on best in factors, statements the upon that forward-looking let remind SEC. me release include specific factors uncertainties. understanding. you Finally, those concerning subject to, that risks our to and will including, judgment our Information results today's our based uncertainties and filings today's but may vary presented presentation and represents and risks based are

include financial the growth, to that Please adjusted income flow and adjusted EBITDA, free materials for EBITDA non-GAAP from revenue earnings statement and shall mean organic earnings discussion all references. are EPS, measures. supporting cash which and adjusted operations, EBITDA cash adjusted mean note adjusted shall of references all Today's

as A well these our today's are on definition non-GAAP financial we of refer terms call provided as to during reconciliation website. may terms and which other

I'll the over that, call With to turn Pierre. now

Pierre Brondeau

underlying global These strong the morning, work supply for FMC in good exceptional pandemic, teams. and driven X% Michael, you, our our Thank the healthy delivered performance another products were and very quarter. first revenue Despite demand chain, everyone. by commercial by all COVID-XX posed of the very growth. in remained organic with quarter, results the operations the challenges

view in uncertain important it QX our of global economic our the to company Before results, this detail of state going provide high-level a the felt was of environment. we into

considered to are avoided all and operate, essential our have agricultural an we we Since an industry significant is the agriculture operational. sciences critical and our plant are We facilities the in where supply food chain. countries global are products company, closures

through operated holiday in do our fact, continue to all today. plants the so and Year Chinese In China key New

of our well-being top priority. The employees is FMC's

around these world been operating employees facilities employees weeks, FMC blending during who have most we from home sites, warehouses. working distribution manufacturing several packaging Although and and the and have hundreds continue of last

as locations variety as best address authorities. in COVID-XX. practices precautionary protocols, expanded the and using Besides includes of social other leading by nonmanufacturing limited are measures with certain office facial distancing employees of This well the procedures use cleaning a recommended PPE, to health

headwinds, and continue increased already a Therefore, given the the price measures the headwinds field But stay-at-home we and of our virtual the in to later. in as potential use well webinars have FX detail the of COVID-XX digital cost-saving across teams and rest days potential increases in we commercial Due working are to risks the the the We year. cost orders globe, with variety of containment conscious closely more Mark pricing March and and actions of company. implemented describe as of will the our QX. including pandemic workshops, around in successfully technologies, customers mitigated spread impact demand. the generate

Brazil, in increase the year, This against three. Canada. U.K., performance X% we and financial quarter reflects comparison. organically Turning in This quarter year-over-year by grew Russia, in growth. a an driven to slide organic France, XXXX in reported first Mexico, FMC's was India, revenue, which our continued year, billion and Pakistan, strong $X.XX from Argentina on QX. Last industry-leading reported growth basis X% growth XX% double-digit business first

and $XX the headwinds of million, an $XXX compared costs period. from million combined prior quarter. X% margins in year to was the flat FX EBITDA increase with prior EBITDA despite were essentially Adjusted XX.X%, year, in

in EBITDA, largely interest partially Adjusted versus offset of QX of performance driven million count This higher the rate, XXXX. share was by X% EPS increase expense. reduced year-over-year increase an by and tax quarter, was $X.XX a the in benefit the lower $XX

grew four. by prior a slide pricing regions. FX. X%, We all QX with X% year, to adding now partially X% headwind Moving achieved growth volume versus from offset higher by revenue and in contributing price X%

X.X% New product we planned offsetting we of in the top our rationalizations cancellations call. of were launches QX, X% X% this from earnings growth half because in of products registration that last discussed and for year or posted have generated line the either headwind that discontinued

in herbicide FX, Brazil driven growth Latin in Mexico America especially XX% and sugarcane year-over-year Insecticides driven soybean cotton, Brazil was replanting. and grew and in growth Argentina. by and Brazil, by excluding strong XX%, double-digit on were sugarcane

for we As at we inventories be in the low portfolio. to many closely. the the increased our come Argentina, season. we levels In Brazil for present opportunities And And sales. of Mexico, very in fruit commented channel end for channel diamide demand insecticide in to solid as to continue quarters, have continue vegetable drove monitor product exports our new our and

our driven increased continue demand by herbicides insect adoption, control our an concern. fungicide weak well gain Authority year-over-year, resistance herbicides America, In by North X% strong to Edge. In sales Canada, Authority pre-emergent as for and as Rynaxypyr new driven

North not the combat formulations past we our with focus older has allowed And inventories have reduce franchise channel channel reason to starting, forward. to changing sales with of in season herbicide invested a Post years, going couple see concern upgrading in new continued to Authority on for newer, improve. the effective formulations us resistance. we lower and more Over America our less of to This inventories. effective do

in and new headwind. increase and newly in in revenue. overall in Sales grew demand FX, and and over solid drove rationalizations products XX product due cancellations introduced X% X% saw Registration excluding fungicide cereals. countries a EMEA growth year-over-year for We growth for a X% were herbicides robust to

were but These partially return demand. Australia flat along China, was In broad-based well driven offset COVID-XX-related currency Asia, growth as product to with The weather and by revenue growth headwinds rationalization and the which decreased in improved. decline India supply by challenges as X% year-over-year, excluding Pakistan, primarily was double-digit both foreign FX. as impacted in and in

the quarter EBITDA five. first to on Turning slide bridge

growth. which see You the million drove $XX the volume year-over-year contribution,

$XX price $XX of million FX million against increases realized headwinds. also We in

now I over it turn to Andrew. will

Andrew Sandifer

Thanks, Pierre.

me with during brief strengthened first start we The this morning currencies FMC by few when major income we the important FX statement. a of to currencies broad anticipated remainder. and the virtually important dollar had reducing note accounting a the revenue is to QX against U.S. European level highlights of with the quarter, the represented guidance. Let the only on set twice from all X%, Asian last gave half revenue, It for BRL headwinds that growth

second he now of headwinds to when with up in an continue we FX these throughout expect the As half impacts Mark QX, elevated will outlook, our discuss FX during at further level XXXX, year. catching trailing shares but the pricing

and Interest quarter of partially million, up offering the paper XXXX was debt from loan our for due offset foreign lower quarter $X.X commercial debt the the million impacts period, balances, third expense by balances. prior $XX.X year to higher primarily and term

With our the the million interest and beginning the now interest than in full of for somewhat guidance. anticipate we year, expense better $XXX the year, prior since rates decrease million between $XXX

rate earnings consistent with of for effective rate XX.X%, the tax expected was quarter our year full XX.X% Our on to XX.X%. first tax adjusted

this, markets significant than pandemic. liquidity. have Global balance FMC and and and March, credit by the more in to volatility next disruption had driven Moving to saw Despite sheet continues the COVID-XX to support on capital paper paper liquidity our are historically working the in capital. source U.S. finance to commercial world. working cost-efficient relied has ample FMC the markets most commercial operations. of financing

needed. to a also credit direct that backstop $X.X our commercial as serves both facility billion borrowing Additionally, and when as a of revolving have paper program we source

a COVID regardless clear million of sufficient U.S. more markets. revolver abundance paper near-term mid-March, of FMC of out ensure our we to in down volatility $XXX in liquidity caution, in As became an the crisis had drew commercial on

normal has continued in market. to to to conditions. we returned place However, stay paper commercial market the now That more active

to As mid-May have million through revolver them to paper such, commercial reduced we market borrowing stable. remain anticipate taking our X, we conditions presuming when $XXX

at we end balance borrowing. of million quarter quarter the sheet on billion, excess $X.X in surplus revolver surplus cash the end $XXX the million. was in Considering Gross $XXX draw, at had cash, including revolver of Because the this EBITDA X.X times capital targeted end working the business intrinsic leverage gross the first reflecting and our was debt seasonal our of build above quarter, to average trailing XX-month annual in to X.X quarter. first times the debt at

our covenant set As leverage to may was March aware, be at maximum June to tighten from XX. X.X many X.X X.X times XX of you to times debt-to-EBITDA on

if cash potential more that As in situation that we the downside scenarios assessed wide COVID could during of we X.X really see did company. further being to scenarios are we resulting likely, levers of any and began range to the deteriorate. not as pull for leverage we times greater We crisis became than conserve the a confident have pronounced March, the

covenant decided an again, abundance reach our group to out discuss we However, to of the bank amendment. out caution, of to

we group times was XX, to our on very XX, aligned on debt-to-EBITDA covenant and stepping moving bank X.X March X.XX X.X for June XXXX, down XXXX, remainder the Our to of times XXXX. and supportive, on times quickly

the significantly and specifically QX. transfers. the assets of Inventories the Moving cash capital variance and flow than lower site higher is primary receivables offset delayed negative prior increased cash to payables prior positive somewhat. period, collections for Free benefited benefits increased flow cash by driver were operating offset cash The catch-up other versus the liabilities. which and on and from working period which was partially on slide six delayed the partially however, million. to $XXX deployment. year Net was related from by Payables, elevated improved year sales, quarter of

steps year, of the such range cash $XXX to our capital deferring free full $XXX the the in million environment, and business cash global managing prudent and we to taking to increased are and in are reduce protect maintaining guidance million. XXXX, discretionary several cash we to ahead position. investment balance Looking collections the as outflows Due flow of aggressively payables to uncertainty

we expect to of of we substantial free XXXX, until to While cash line to generate clear more flow are COVID-related we in suspending temporarily share a disruptions. sight repurchases normalization have continue

to change we declaration by to our remains week, dividend Board anticipate Our the committed last and not as the any do policy. dividend evidenced dividend, made

We moments. such detail compelling morning. we making announced investment fully growth in this few Mark plan, describe more fund smaller will also continue including will this a investments, our the in as to technology-driven transaction

policy To changed. deployment not has be our clear, capital

environment. current the given repurchases share pausing only are We

to solid Over are committed share of long metrics. to while the maintaining firmly through the what the fund and required term, is dividends and cash beyond repurchases credit to growing shareholders mid- investment-grade growth company returning we

live system. XX% me which of extremely were midst on also of literally business FMC. the S/XHANA our been progress earnings At DuPont, in the let roughly our implementing successful. going represents Finally, last SAP has new That give acquired in an across call, update we from go-live

XX% with the the new closed This end, company quarter's of first was close we the quarter where S/XHANA system. on

Additionally, organization. of remotely, process COVID-related was workplace of closed restrictions, due nearly completed to reflecting team the with working this finance our all our agility

implementation remainder efficiencies in back-office are the thoroughly and We system of SAP further modern by will FMC the entire a of year-end, give new across the completing enable us the which focused across will company system our processes. on

with that, Mark. And over to call the turn I'll

Mark Douglas

versus to and year, XXXX. digits All in market you, the dollars. not forecasted the and project U.S. are FMC global to market, market. U.S. global crop strength of for from will previously forecasts the up markets Shifting in to Thank Andrew. various the the flat single the these the the impacts COVID-XX We prior due are dollar. be now protection be We low

the North the as crops years assumptions American ago, in acreage digits, on row the Canada dry recovery low based that forecast of and in of thought market months we for single after will grow two conditions. three increased We same a

grow and by a faster expect little will before, digits, Eastern but single in driven We the and thought in corn still we in Europe the cereals than low market Europe markets. strength

versus low expect India in our impact to other already be of growth, on China, the FX single-digit seen Asian the will now based market slightly countries, COVID-XX headwinds. and from down we have estimate We addition prior in

growth the weaker rather we in mid-single our by than demand. it forecast now currencies This contract Latin prior significantly, to our view. versus by market is driven as low slight decline expect lower digits for to lowered also American We

to challenges to guidance seven and downside full more our FMC the Moving and slide company COVID-XX on ranges QX the year pandemic of potential is XXXX by headwinds, guidance. earnings and the the outlook. XXXX, full in as FX certain risk range estimates year-over-year incorporate the now adjusted prior of brought widening to a our review XXXX the be to increase per diluted are year which include X% $X.XX benefit earnings suspending, expected in in Andrew to is of company do the any at repurchases not the of indicated. of midpoint. share, share $X.XX Factoring EPS

in $X.XX of growth, billion will range the at of now organic an $X.XX be versus deliver growth. to X% midpoint high We to of is us and the trend X% our single-digit multiyear performance. organic billion, XXXX increase believe portfolio strength revenue continuing of XXXX a to the forecasted above-market allow

to are the share midpoint versus range QX expected the QX $X.XX XXXX. to range forecast be We of now QX is revenue and at $X.XX at at to compared expected COVID-XX $X.XX midpoint billion to be billion related flat which X% believe EBITDA Adjusted challenging uncertain to is year-over-year conditions will $X.XX, second in to to be in billion, represents in range Adjusted most $X.XX of quarter the to the diluted $X.XX XXXX. a We the midpoint. earnings per represent growth and currencies. billion, the of flat the which

headwinds, driven products Western the Adjusted Europe, Latin America be decrease improvement FX expected versus forecasted midpoint EBITDA year in million, is million the to organically, of at is X% world. period. by traction around the $XXX to in representing prior and new range the Excluding X% $XXX significant a increase to an strength revenue the primarily gaining in

with revenue to North Revenue X% in and from Turning expected growth, is benefit expected Asia. to drivers. full and largest eight year America growth volume slide the

total products from the EMEA. contribution with in New coming driving growth, about revenue are X.X% largest

FX With top can be see significant to global the now in currencies, headwind. X% you forecasted shift that line a is

X% were currencies. For reference, only in from a headwind we forecasting February, revenue

with the throughout year. to price of these increases expect However, headwinds offset we most

we're expecting To $XX approximately quickly chain price to in proactive addition pockets currencies. COVID-related and supply headwinds, to of EBITDA, anticipated to of help global measures the implemented mitigate costs, these, Regarding significant impacts we demand cost-saving increases. offset million

to guidance our is price reduce When out guidance. expected still net measures $X.XXX lower million. increases, of and COVID-XX billion our range $XX or including midpoint a currencies, million prior Therefore, could than our of by the EBITDA the $XX COVID-XX cost-saving impacts, EBITDA million with $X current

I should the higher the end measures the headwinds towards pushing cost-saving the second half range, note further of the the that if implement see we impact net we will in year. of

obviously is impact rupee, factor This timing We price by Mexican the full real our movement now driven peso, of outlook. an the foresee versus $XXX important and factor including how critical euro, exchange Indonesian Indian year, recover a we etc. is numerous broad-based in Foreign for Brazilian the for the currencies, million will FX. rupee, an in

is second $XX main million, the of expect an quarter, In XX%. we impact FX price-to-FX elements. or million $XX with by two price gap of This driven recovery

very to harvest. it pricing First by is on and in quarter the of is this and changes the are specifically the fact volumes tend in lack America that and are growers the second relative in Latin the end Brazil. at driven season in of is season Brazil pricing the focusing tail be This historically lower little power the as time, in made

significantly in as at it over the to appropriate to approach do the we looking QX. market part that rather our would be of impacted in Asia. prices increase COVID-XX, be will year And is Second this recover the we not to pricing than time. by latter feel In such, market

America as the and coverage new as another Looking exchange at normal is This to prices in we rates for price is part which Pricing recovery of actions we pricing in year, the in headwind. the change the XX% year in pattern. will recovery a in are of latter season the seeing previously $XXX QX, Asia the approximately discussed. reflect the full element, are of mainly Latin of expected is million cover set FX

have some for around already shutdowns is seen factor also chain our an outlook, world. temporary the as we Supply important

plant have COVID-XX-induced has customers. restrictions. teams and met China now in situations our FMC navigate know, As the over successfully successfully past years. the managing you the we industry in managing been two The active shutdowns helped are us that And of those very same demands

taking may are we approach and see availability. of In demand due that food chain addition, labor dislocations to reduced a pockets we conservative

savings these will focused cost-saving R&D. headwinds. each SG&A and year. implementing help savings in elements, Our The measures cost March, quarter on we realize will early offset two them in and are began We this

hiring. are expenditures frozen and eliminating have We or nonessential all delaying

growth In projects, long-term this not lower the our canceling phasing lines. impact we confidently are R&D, cost-saving we These some fundamentally year to we not of say any temporary. that costs time differently allow are and but in without will company. be these impacting cost of actions can will return Most we will XXXX,

headwind X% FX nine, slide see is the expected discussed quarter, On due the previously. fall you second reason is significant as main the EBITDA to to in

will launches overall in organic product volume Asia revenue in Europe, expect and solid New gains X%. we and to QX, of contribute North America all growth

to this and the for we strategic we this Turning Fluindapyr the our Isagro already to XX. we to control technologies on announced added remaining Please new note, today, fungicide EURXX million. binding deck fungicide didn't portfolio the slide slide from rights geographies offer for acquire for is our to intent expand Earlier updated a morning.

You may coming pipeline. as one active of the about of ingredients recall our first R&D us talking out Fluindapyr

We spectrum in and the have in been for codeveloping the this with several to are this launch and U.S. ingredient broad set fall active spring. next years Paraguay fungicide Isagro

including the believe $XXX American global we Isagro's and sales territories. With estimates European, million in Asian for be now peak will rights, $XXX range the full key of Latin million, to

of one crops row As of including in applications. a range plant the specialty diseases, a targeting rust carboxamide, fungicides, soybean newest to belongs Fluindapyr classes crops, of Asia broad turf and

launch the Paraguay in U.S., in and expect to Fluindapyr XXXX we in XXXX. XXXX, in the Argentina Europe and China Following in launches Brazil and

end of the the by acquisition XXXX. third We expect to of close the quarter

weeds received active Isoflex million. with active addition regions to active a new is We to progressing mixture launch million also strategies. serve intend anticipate herbicide in our $XXX registration winter for our new It now exciting sales a to crop Overwatch for season. by many recently all Isoflex launch of peak segment and pipeline, of from in as to action cereals. the $XXX second herbicide bixlozone, R&D Australia a to launch. grass towards as centerpiece portfolio is active set mode We the full Isoflex herbicide will XXXX, ingredient crop an in and is four in Isoflex of our we offers XXXX Additionally, and and branded

received EPA to formulated in recently control action diamide bifenthrin. superior Rynaxypyr new the U.S., important Finally, we an allows rapid franchise. Elevest our the while of residual upgrade for of the in insecticide growers approval expand product. diamide-based role the play plans to a It insecticide, will keeping

country the receive While launch the we to the all to product expect geographies. in U.S. first registration, is key this

highlight ACC close, the Before annual FMC's is Year and safety health, excellence Responsible recent the would like as third the sustainability. environmental, Chemistry leadership in Company for Care distinction American the Council's since I I highest XXXX. and of time for to This recognition award

While past and remained FMC many undergone sustainably operating years, has our changes steadfast. safely commitment few the over to

turn call I'll to the back Pierre. now

Pierre Brondeau

business our ability today. and to difficult views share that to uncertain it an the usually at process difficult important remains recover Mark. environment. this Even we show felt a we broader was in We our despite intact such situation you, Underlying than are forecast FX Thank forecasting the for and price facing is impact is that our with we on of and guiding realize if demand range what time, the is the adverse products strong, markets.

strong two and deliver FMC will at within and challenges of Even EBITDA year our year, X-year us close to for a facing adapt with we our to revenue, what long-term comes the continue are EPS plan through company challenges but that XXXX, the above another market. target solidly to quickly growth. expect we will again, growth years in over once face believe the we

CEO is and the FMC leadership your last new last my over the for is challenges ever company. Thank transition of proud support, we This years. than the is over accomplished of earnings XX and have the questions to years. am you I call in place. as stronger transformation the

the operator the I back turn for will call to questions. now

Operator

of Instructions] And go Please question comes our ahead. Credit with line Chris first Parkinson from [Operator Suisse. the

Christopher Parkinson

you. thank Great,

First the your basis, more time, obviously, is far the what a still to market of after a broader global of transaction all, growth your luck. concerned, as given either and it to portfolio? and talk as trajectory acquisition this bit wishing bit on products just little before Pierre, add morning? is best also, way, was be Just enhancing further thinking you the of the about And question well access? is congratulations. the a say little as just And made we to A competitive just should you fungicide crazy can you as And but this how about safe positioning? FMC fungicide acquisition then that the willing

Mark Douglas

to the When on this we started as we Fluindapyr And said we've Yes. we other Frankly it's for we I in speaking, range. ago, ones the molecule to what the Chris, many our today, we're FMC that over million million an built developed million. the can view it's Mark. work had closer a believe million $XXX in appreciation together, think Fluindapyr, that years $XXX were than years $XXX the of think do. range. we pipeline $XXX $XXX million

see peak can $XXX-plus somewhere of you acquisition. the revenue in with million this we're adding of region So

to to we grow. many things think new we I've we build it to build our forward. like third where to as position, last list for are. add is out but and continues go out. fungicides. with few parties said fungicides. an and us We interesting It certainly will for we do scale a and growing. area fast portfolio the we fungicide world continue the as is available, very for have quarters And good years, more to is at us We targets We're what some doing getting the to look Overall, certainly, access around acquisition

Operator

you. Thank

Samuelson the comes question Sachs. from Goldman go Please ahead. next line Adam with of Our

Adam Samuelson

that And dig bit little more the outlook USD clearly, market a outlook bit. shared, by hoping a was just But maybe a FMC kind the revised organic market getting and of year issues bit channel? of that traction that maybe where little crops lot vegetables market crops specialty frame you're under lowered and growth global is encouraged and about specifically the the color just most And in kind deeper hear demand around of to the I areas rot a closely? we you outlook of just strength watching in in part you're areas little guess any outlook. the revenue and around fruit and first into thinking keeping of labor I the of the issues half on that

Pierre Brondeau

Yes. Thank you. I'll how But ask believe situation Mark is. a what to of go into make crops in statement and this around the a maybe where me built are it the bit opportunities. we we details the forecast, let is

with to important forecast say it's be the to the we cautious. think that intent I created

We as and very today, months year year-to-date product speak, are into we underlying and four for demand is the our strong.

address. we else, at So had do we like manufacturing what From are, issues logistical could standpoint, nothing not this a year and everybody happening has have, of so far. where specific stage not but the we for been concerns we

weaknesses the So when area are area the are of we we've about in many heard corn, at cases, standpoint. where we balanced could from we looked of by build where demand we opportunities. cotton. where have In have and the heard from logistical issues Knowing those could places places that forecast, a about standpoint cases, a weaknesses where we've many are

this we cautious. out built forecast we're of So prudence, being

but situation. a we into year. fluid Things May, four Today, are months well, I very have the going first of say, it's week are to

to forecast us, into build had had opportunities? growth to issues could to the we maybe So details want opportunities. at possibly the be some with go of you counterbalance which do Mark, we coming on

Mark Douglas

of performing, extremely I I'll soy, where such to Canada. pre-emergent areas which you we're Authority of products, also high and you where right complicated what the it's terms Adam, right a Certainly, and going our very the in our Yes. now, a the slowdown. also in some in may well, of focused with around as the wheat Edge, see U.S. see but very at as a Sure. corn would marketplace. really is business world. I look now we on and balance are doing not highlights think on in especially U.S. only have hit the try some when we know, say all newer with positive say is we

We have a and view actually a on herbicides another that negative. The wheat. it an from Brazilian negative, very we are them very to Sugarcane the as somewhat is to and as people don't which sulfur some in participate a see urea by extremely world U.S. demand weak view strong it ethanol offset area is Brazil the producers on portfolio sugar it of big lower that greater in actually actually for in BRL, we a degree continue. expect benefiting obviously, market, allows to was strong But us QX, of

The fruit been and veg area is somewhere we've focused on.

You know our it's an important portfolio. of part

product about I'll where X.X% of see we fruit example. vegetables. we growth. we couple about, we in coming launches Part have that give a an applications lot growth, A of growth. of and our talk the of new is from see to continue reasons We you that believe

of of this specialty We crops, crops. focused across many the have about XXX all those for niche the on world and sorts year different new registrations

talk labor So or availability, very on. or we're where about would when I demand and we the food destruction yes, eye a chain of in vegetables close think dislocations the is fruit keeping one areas

for new in we're growth areas, the where in particular, soy, In instance, there. other into herbicides, in parts seeing expanding have we're new India, in of we world, sugarcane,

the fragmented. is It's us, balanced portfolio very once for world. across again, well So the

demand. of areas see do we So lower

year, I right extremely Brazil from area planted given well. the obvious COVID-XX. the expect will for now is us probably The is, of have this situation demand is ones challenged, cotton cotton. One market India a as lower world given where

potentials we're those demand. lower for So watching places as two

Adam Samuelson

That color is Thank color. on That's helpful. Pierre, you. And the retirement. helpful very congratulations,

Operator

you. Thank

Citi. go question comes line Please next the ahead. PJ Your from Juvekar with of

PJ Juvekar

Rohm thank help Haas you Pete, luck. and first for and and FMC, at good then at your

You commented U.S. about dollar getting pricing to offset strength.

are Given regions? of some that emerging extending any you And or COVID in America impact, in amid in Latin they there to the areas, would secondly, particularly of other in is this price kind some your system expect credit of credit markets any customers lack concessions?

Pierre Brondeau

of the I Let me pricing second you But have are a at year, question, go and It you yes, do FX can the with mean, a what are detail if first And the pricing start pricing such a we is is half. doing Mark, deficit topic have in conscious we half more you decision headwind. when sensitive we in the situation. the in versus made. a look

and the Brazil, Mark you're it's at all, pricing season. end FX difficult recover when to of when said, in of especially America as First the headwind Latin

have So to who more you a strategy, two a gave we pricing of bit of on conscious the and because hard EMEA, our where the of or regions world we a had a and QX even prepared year. to lot are offset, push to too economic a in Asia towards effects. made QX adverse in we leverage We take those customers regions price in not situation will little don't targeting half the of pricing be in of lag decision those but break a the second

X. quite in in different BRL the business quarter this the year is there It between fourth X.X. quarter situation. to the just operating where country built with X.X well We've model. It's we've business Brazil a is model, well to year, been and close with first a been is BRL operating a last a currency, pricing the in very and

the when of which going the we're into pricing. a I new to orders get preparing it. a mechanism season, are mechanism you where And just that's think year for you reset happens. for half the second there And is

EMEA Asia why second focus a lag So pricing first on do in half we are different you're the and half. and that's situation. take the year the in of it's right, a to of that bit to in prepared And a

Mark Douglas

Yes.

in to of for I of been on the stress has everywhere. look think, time. terms, PJ, tend not doing under lot are question Brazil, places your second liquidity some U.S. well. is the the that growers extremely like you at around currencies, A But part where bad local to the market people focus

are particular not those markets, extending large at in us, So which we're looking terms. for

over we're bit them that obviously growth will seen the that's The have last us. longer is you some year. to DSOs, grow that our and little we're at for look natural accept reality you have is terms, something jurisdictions willing a profitable in growing If

then but we're not growth bit, with. to a will a So the very something obviously, And we to We're of out price that different watching jurisdictions that causes and in closely. little move it's mixture unconcerned DSO markets. react

As the lead And price. the we some especially markets move. markets, move, on we will cases, in

PJ Juvekar

Great, you. thank

Operator

of go Your ahead. comes Please line Exane. Favre next from question with Laurent the

Laurent Favre

given the have euro your not was on but about strength. is strongholds. also believe, fact this of bit My seem they Europe only peers bit where feeling in I of, question your as the mentioned one is on your weaker surprised seeing a better to an And that the are one market. a comments fungicides area I

if little wondering you your I bit us could So was a Europe. tell comments on more about

Mark Douglas

is in Europe. good. Laurent. mean season Yes, Yes, the are in raining we more feeling Northern which it confident started dry, little Europe, although a now obviously, is I has very

We market our the Europe Southern which a Italy, sell. extensive new Europe, that has good. cereals. better. been tools have really FMC That in for actually even product has during different is much do into. growing using lockdown big Teams very launches been in in very to herbicides is business And are

we be extension insecticides, don't of to continue to the grow we very an well. sales see to our the to market for linked And necessarily then diamide Europe grow as to growth continue in us So have well.

in insecticides So new as place some putting of well. third-party combination we're a herbicides, and that fungicides

very You're in big not right, we're in Europe. fungicides

say So had huge in that growing is we there lot in over never, in a growth those years, a to of the confidence also can help that will growth. do That other last Eastern two number effort those we've in piece into for Russia, on Europe The Ukraine, would we're of countries. Europe, the presence, where is I team put our anything we but the our are growing expanding boosts and Europe. we ground, our the people areas. boost

Laurent Favre

you. Thank great. That's

Operator

line of Andrews of Stanley. the from comes Vincent Morgan question ahead. Please next Your go

Vincent Andrews

question costs, they're if be in Obviously, of year of showed I in raw right you sort the just in direction. Congratulations, the might you on lag full timing would material Pierre. you cost equation, My be can the that contextualize bridge the the just moving particular. side wonder some what's some sort assume it. that what seeing and intermediates and guidance that that that versus just well? But move in of might are as embedded oils to I of move lower provide as of down, sort going range with crude happen chemical the buy you XXXX to help

Andrew Sandifer

Sure, Vincent.

XXXX, increase looking cost in have still part. at some think I modest we in do

year cost half second see year. this we roll first into of increases last half the remember, in forward the that of you If

petrochemical that of non-active improvement of that some for of would forget kind We discussed cost formulations. the impacts call But These for value cost opportunities lower seeing part some in savings are there's the of directly lower I are inert oil some caution cost some our there. costs. ingredients, to that our Mark the not are really earlier program with things the room line. definitely

$XX in that the outlook. in cost savings into of year improved the rest about million So there's that's cost built

million costs. you we're if So versus versus that's managing an logistic of networks. And back about just-in-time our benefit increase additional guidance net because $XX lower really see actually dealing costs, that from of more is costs that guidance. And raw in difficulties prior in our logistics COVID-driven of we that material anticipating costs prior coming shipments with out,

to we the It's disruption flows, raw XXXX. XXXX. that anticipate we well. to past should on petrochemical these underlying of and years, two over impacted outright seeing tailwind COVID not otherwise costs yet we're in costs of inputs of way be easing the just normalization some And the material gone fade disruptions due product have also a see hard if the with certainly, some easing to But away, costs if of as of global should other that all increased

but a XXXX. it's certainly, cost bit absolutely, early dimension fully, going some on the to tailwinds So there are side solid

Operator

comes ahead. line Mitsch Fermium the Frank with of Research. Please question from next go Your

Frank Mitsch

I can a on add year being the was mainly not that Was wish Executive you that give that I are XQ comment? of that if wondering impact, a you Chairman. Europe And Fermium of or a rest I products obviously to would believe Any reregistered could great. with to the from respect you the and all products to Was you coming in Pierre, team a decrement those was move X% best on seeing as comment? of there you're some Asia. that believe the the wants from said a was be negative rationalized. you more color some little was off that rolling color more

Pierre Brondeau

I carbofuran. into it's will rate, remind we going pronounced or there when ourselves more decide to talk And to we're to is negative because product, it, discounting the is about growth We we detail. just last to year, said at growth want to the due year announce Frank, to are a go Yes, what bit the a X% a every you registrations, world. quarter. continue this Mark we But not to around decided of product, being which there a sell. specific lost

years. So very it It's situation are unique have is not we we for facing. situation a facing been a

and do is was go product than pronounced a because difference, and this there the in stop, the a bit to is we Europe past. of year a EMEA more you into Mark, there more more want on bigger, concentration bit to Now detail? which decided

Mark Douglas

Yes.

at year. Pierre. exit and to fungicide. insecticide. the older is of been some combination we the Carbofuran, Carbofuran it's of Tebuconazole then that You is of which a big insecticide. couple which another hit highlight, ones removal would of with end a hit a decided say the dimethoate, this I last has products Europe year, smaller

Asia hit removal. by the was also carbofuran

rest that outside So the I the when go to of related older about we year, of it's you of expect occur insecticides the the think vast of And removal. out as majority removing to Europe in portfolio. it, really would carbofuran we're that through the

Frank Mitsch

helpful. you. Thank Very

Mark Douglas

Thanks, Frank.

Operator

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

Steve Byrne

Yes. have the or your in gives What in it ask commercialization Also down about you your few quarters that Latin you see that drill region, that into I'd a to results wanted is the the peers. that edge America your region? to herbicide. portfolio little sugarcane strategy there, an your have last like there outperformed you bit

and replanting surge not Was the get You that maybe help Just a crop. there any that details mentioned a of assess that's replanting, growth might that down you're in like showing that's region? therefore, of the would multiyear recurring? sustainability us to

Mark Douglas

Yes. Sure, Steve.

return Argentina So very us. about a talked many for growth and I growing what to Brazil But Latin with most listen, in We mean, which seen people Argentina over last a lot years Latin business. think I Latin the America we've we've parts two how and associate America. FMC, rapidly the restructured America, is is fine. of is

then portfolio of in of Ecuador, and the fruit We vegetables that Colombia, Chile. benefiting insecticides In we're for have and the with lot in pre-emergent a returning the herbicides position our Latin Good from diamides. growth soy the a on meets many specialty And there. crop to countries, very of good portfolio terms and Peru crops. Mexico America, needs rest is and down Andean

Brazil, major the talked being the acquisition of focused last are the in we balance look grown over few really position we've careful have We we about on of seeing but only not since at how that growth So from years. never you in of the then we portfolio, had been couple last sheet, our really our geographic co-ops, portfolio. very Brazil on but south, new the years until we've the a expanding careful

our in have turning us gaining there. attention coffee, the to now market in also soy/corn we very where That major in We're presence north turning for in sugarcane. access the in cotton, We're We're access business. market portfolio the well. also market shares suits

we big see the have and small, which in we expect to market on been for very crops row continue to share. a low us, Brazil, never market never really have growth single-digit a So

on range. of XX% to part tends replenishment occur second of and the things multiyear a right. to One crop, your is question XX% the the Sugarcane the sugarcane, you're at is,

lower. years years some Some higher,

We looking for than is are as possibly growers the they yield normal. higher happening a are get. little as is higher what But can

will And highest quality yield allow therefore, using which the they're come that forward. products, to

We have good market-leading very herbicides position. in some

yields we past. So sugar would they in the for more a share normally when looking of growers take do the are than higher

Operator

Please line ahead. the from question comes Connelly next Thank with Mark our of And you. go Stephens.

Mark Connelly

Pierre, now I'm far how chain be position war thinking view you're to evolved really of And end sight of in COVID, seem diversification there with further? about supply has with whether your the China's also in but you further? curious along your doesn't to Mark, are diversifying any in sourcing, trade China. your

Pierre Brondeau

Yes.

with is it at slow want think doing. certainly I something not we've the down looking and to we been something current situation,

operating India, raw and places we're We to less XX%. Today, with of our are North of used and And down be investment to material our to us, lots like we than critical China so Europe, like in active partners. of course, XX% increasing America. are is supply. China payments ingredient it's

very years, which thinking, of non-China if looking certainly, one the world. will XX% product to Rest future, It from rebalance sites, to yes, are coming are you XX% calls we are see manufacturing the in which in ago, Mark important. anything, the very A often target the be based. bringing the are between Registrations of at five is next you to World. for said, we are the rest about from new takes supply continue think the couple rest of So the us not-too-distant would China market, But and his our time. be of we to China,

Mark Connelly

What about the MERCOSUR?

Mark Douglas

ingredient it and Yes. manufacturing Brazil. with to for infrastructure of around place Argentina perspective. lot demand especially a problem and south it's us obvious be It's go specialty lot. the America, fine It need into in you Mark, down we put active a you. we between will a only don't talk an about from Latin chemicals, The Why is

And are then intend that in to Brazil, and close not You is we the there not formulate in Argentina. MERCOSUR of sometimes Unfortunately, supply import that therefore, active in to intermediates ingredients difficult many infrastructure easy package make. region. not chemical and need

Mark Connelly

Thank you.

Mark Douglas

you. Thank

Operator

Thank you.

the of next Yefremov Aleksey line Your comes question from go Please ahead. KeyBanc. with

Aleksey Yefremov

were And on elaborate recent Mark what or in Ag. interview, this? has a would I been Could Pierre. precision newspaper different asked about in And you you he noted be in when everyone Mark doing you. join you might Mark succeeds investing congratulating that Pierre,

Pierre Brondeau

very with last we a transformation. and would very, And years. five working I I, Yes, Mark absolutely. been went each the we've Listen, closely say, through for other

of over technology, has champion don't FMC been But company. and look to think the So change push of you been the at the the here last and of team senior his has role within I among you back he's things, the leadership been a expect if couple sustainability Mark Ag. other years, direction for should and fundamental precision

among think the you if to those next he's where areas, going places about others, level. the believe, we're in I three So to take company,

Mark, you want making? being we Ag are progress and precision to So are of progress. We're one. where on a Maybe, making say words couple we

Mark Douglas

it data, very roundabout about the because we of over in in of that spoil from sustainable the what of weeks will we going the But Sure. that talked we be doing couple far. Ag our of the part We've next forward-looking industry. way many a the up terms applications use And to we've been the that want invested to something thunder behind a the perspective, that. team's last I'm to year in scenes. of use mechanization in not in has do be help public. believe, like we have so and coming industry

amount right our utilize sustainable that used. terms and much products point would in seeing and next we're time be thinking that growers products from with weeks competitors to the you but of will be going to And applications many to where of applications, our product are do things will as different their of way few therefore, that same shows invest. something we us used in continue in very We the not more the for it allow in is some at

the making move will stay we we're tuned. will be more be but So This making, first moves.

novel that's growers in interesting of where ideas enabled have by We be take very we will can some but very, our to base, the core and not technology, distribution.

Operator

from go comes the BMO. line question with Your last Please Jackson ahead. Joel of

Joel Jackson

conditions need what the you Quick or question. you to to When program? reinstitute see would feel buyback comfortable would

Pierre Brondeau

day we haven't want cautious been confident carefully. put From day well we forecast. that in let is believe after no today how And our watching But to forecast. We we've reason We my because around flow. cash my standpoint, were But today. change good are the Andrew doing day, very over going it feel to see going complement a the to had evolving. we I'm after we things date we to very a flow cash company question. friend, the are generate ability

sheet good is shape. balance Our in

soon clarity to have a do more get but we not buyback. be believe situation So as to us not from back program, it as prudent on stay would how would be buyback surprised the is evolving the we with into I

returning said have per There That comments, in reason gave we his not Andrew prepared stock in of December the X-year we the XXXX. has buyback are prolonged it to is the changed. cash a suspension to plan no program. committed And

and possible to as So pandemic is I clarity get you coming want as we Andrew, words? going. soon as expect us add around situation would soon this a couple do more in as of

Andrew Sandifer

Pierre. Sure, Yes.

I lines, would free it think certainly where tick at the flow, this to cash uncertain during very a buying the back I environment cash is mix cash the I really think is us two think moment. high trigger points. feeling flow strongly thing be biggest discussed. flow We're bright confident leverage positive Joel, the stock in pretty don't about but our should that they're be in terms the second I is or year of But say, for half. Pierre

that year just I'd being the a comfortable cash cash uncertainty, there is half see like And support more first with in buybacks. given the capital. hand we working full flow The to to before get of build

way So our well I we're think there. on

particularly and We're collections quarter, good the Europe with in in Latin progress seeing first very America.

cash put forecasting uncertainty, on of cash to a more down see think the range a where a pattern just of the past second our sort We driving repurchase. get seasonal recognize generation really to the this get half, we But drive flow, want and I target through collection into improved restart strong that base share much better tremendous then the of continued and bit all focus to to in of of back collections. leverage

the as come situation. to more more of we So view get global

Michael Wherley

the for is that call That good today. all and have a day. Thanks, the we have time you. Thank

Operator

FMC This concludes Corporation you. Thank conference the call.

FMC (FMC) 6 May 202020 Q1 Earnings call transcript