Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the Fourth Quarter 2022 Earnings Call for FMC Corporation. This event is being recorded and all participants are in listen-only mode. [Operator Instructions].

I would now like to turn the conference over to Mr. Zack Zaki, Director of Investor Relations for FMC Corporation. ahead. go Please

Zack Zaki

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

Joining results. are and quarter. the and and an Andrew overview Mark me outlook Executive an review Andrew full Sandifer, Chief today will select year well of Executive will Mark year Douglas, for performance provide Vice as fourth full first President our Chief as Officer. and Financial financial quarter President provide Officer; and XXXX

questions. take the prepared will Following we remarks,

release slide remarks our today's available today's earnings website, and discussion made on Our are available and presentation be call. the from after prepared the will

limited you Let those our in release various remind forward-looking and Commission. factors statements and and are earnings filings with in that Exchange me not discussion and risks will factors, include the to, today's presentation specific Securities uncertainties identified to subject concerning our that but including,

uncertainties. may free supporting growth, measures. Actual upon EPS, which Information net these on of today's to operations, references adjusted presented understanding. adjusted and organic and debt financial discussion flow, all best are based adjusted EBITDA, represents cash vary based judgment non-GAAP will include Today's from results cash and our risks revenue materials the

provided discussion, today's we may terms refer EBITDA and means definition our financial to which Please as non-GAAP on terms are as website. used of well EBITDA. during A note that conference in adjusted and these adjusted earnings earnings means reconciliation as call other today's

Mark. that, I turn With over now call will the to

Mark Douglas

and actions. of to doubling of a performance sales representing the and year-over-year Thank the continue quarter, morning, record pricing accelerate the driven good by Sales growth of volume and you, quarter. combination in products in nearly XX% everyone. delivered FMC total new robust Zack, strong

both U.S. through and make to gains from actions This as Brazil. Pricing basis than margin and to the price gap FX the and key We FX, market and is XXXX. including and in offset expected positive of expanding quarter in headwinds between more cost resulting headwinds investments in our excess expansion move geographies, access from continue XX in continue forward points. cost EBITDA we in

with commodity crops and sentiment, backdrop for Agricultural for positive prices, high increasing FMC. remain solid a markets robust providing grower acreage

are organically, results was price to with the up EPS and up XX% on X contributors The results, drove X. driving Brazil's and major business, QX results. Revenue Slides while and up Our Brazil X, volume FX the U.S. EBITDA detailed XX%. price U. S. XX% were quarter's and and

above midpoint $X.XX higher Adjusted lower-than-anticipated With the earnings share this range. diluted were outperformance guidance of the driven our per taxes. XX $X. by quarter, in and EBITDA

corn our the XX% for U.S. In Selected herbicides rapidly North fungicides growers partners crops strong for sentiment as for and other quarter. the well among America, sales as the increased upcoming distribution by and driven season. year-over-year, soybeans in in grew

We almost of revitalizing have quarter's American from great X the progress the made our years. XX% branded in North product products last portfolio coming in launched with sales

access. enabling We have retailers tech more more market expand in our us to newest resources, to and sales service also invested and promote our technologies reach

actions, sales in region. year-over-year results drove access our organically, selective market X% well America, Pricing XX% the increased as for by investments Latin our Brazil. In herbicides and for as and demand led fungicides

the benefit of Our to investments quarter. in strong the a was market FX XX% contributed also quarter, access BRL. the growth the about region's by in driven

soy and dry Southern in corn Argentina. Brazil and impacted However, negatively weather

which region. fourth Overwatch the growth and herbicide, in organically. quarter versus is led the flat Isoflex, up and was pipeline, Asia the first XX% last continues launched organic a in quarter, significant Asia in XX% years. Almost from came on the from based share herbicides selective on the double-digit active in year the Insecticides headwind our the offsetting gain of was to Australia. X sales products cereals FX in growth. last branded

EMEA was year XX% and up versus X% up prior organically.

driven in sales came years In XX% the strong quarter. broad-based especially for results formulations almost the cereal branded of last of demand, quarter [indiscernible] in herbicides. X were from the and by products doubled addition pricing, sales to launched in

grew Plant our in digits quarter, our strength Health the double In business, Biologicals the of reflecting portfolio.

offset for quarter increase XX excess price Overall, was headwinds. margin an $XXX to in quarter FX adjusted $XXX compared million, increases the of EBITDA the points. period, and million EBITDA expansion contributed the resulting more Average X% in the prior year and of fourth of XX% in cost than basis

high Slide XXXX We basis despite Russian from XX% than reported the strong X and growth. on the to reported growth single-digit a years, million XX% the earlier Diamides mid- $XXX grew year products last over FMC's revenue is in business the and the to in in launched record reflects from technologies. year. sales trend of a for XX% growth products of billion million X organic came came our $XXX XXXX, about in Moving from year. range the in multiyear results. year previous increase new launched which This in $X.X More continuing full in exiting

billion, cost input year $XXX million million. of have significant headwinds. This ever FX Exiting in pricing compared most and we $XXX to to Russia negatively headwinds headwinds million. The was benefit necessary was $X.XXX from X% actions by the in despite EBITDA $XX experienced. our overcome $XX Adjusted an was approximately impacted XXXX, increase cost the million EBITDA in

share believe expenses of and taxes. forward. diluted third cost We were partially increase headwinds quarter higher per EBITDA was earnings them input count, driven $X.XX peaked versus XXXX interest XXXX. increase by to offset and going an adjusted and This the primarily share, X% increase by ease expect lower in the

as our also achievements to Slides continues other zero to detailed on X. addition and on goals. net had FMC significant we X in results, substantial financial and the make progress these In year sustainability

growth. our Scope X the the delivering at least by and sites at For X example, in gas greenhouse reduced at time, year, X% we emissions while last same operating record

their FMC now on metrics various or above that us at raters. ESG made average industry was rankings recognized we up XXXX. raters several progress The have across these in by stands consistent on moved

new X as regions well spread our XX as launched In biological all business, Plant X micronutrient Health new we products. across products

XXXX. also BioPhero We acquired in

As before, pioneer platform technology to said BioPhero enables lower fermentation that production biologically we've current a significantly standards. in with compared produced patented a cost pheromone is

found products our over FMC. now buy we use Precision Arc Intelligence FMC's platform, through to growers continue Ag, predictive Arc and acres million solution spanning across XX manage are In we pressure advance tending Farm pest is from XX who range of a farmers proprietary helps modeling. mobile Arc broader countries, to have the that deployed

Ventures collaborations several and and XXXX new strategic companies, or our ag to FMC disruptive and capital Finally, our in working drone start-ups arm, including investments in continued engagements, venture its segments, new pheromone. robotics, These fintech, internal early-stage or detection, span technology peptides technology, build support on pathology soil capabilities augment which portfolio with health, technologies.

example, start increased Micropep, molecules in the its and genes developing target XXXX, and that in an Ventures proteins. natural investment short FMC of peptide As regulate plant

our to a investment, solutions Micropep weeds. entered to with addition collaboration we year develop late into strategic to last In equity herbicide-resistant control

ag in FMC needs Ventures fintech also an invested of in growers startup, addressing Brazil. capital working Traive,

X, XXXX outlook. market which Turning our and dynamics underpinning to key provides cost the Slide

our growers commodity We rely high while deliver remain around combat continue yields advanced erratic weather expect robust technologies will that crop on they the and to prices patterns. to to world

assumption grow the normal of market to low expect an We range with North in single-digit weather conditions. American the

have which in believed price grown primarily in a American in product The to Latin is significantly due market does not XXXX nonselective increases participate. rapidly herbicides, to segment FMC

gains by those digits nonselective in XXXX, we to as reverse. some market of contract In expect mid-single American the Latin herbicides

to markets up to be with are to expected increasing improvements high acres last flat is for digits single Asian expected And EMEA driven cereals. by be year.

Taking regional overall into grow growth crop strong dollar this protection XXXX, market market low in U.S. range and the projections expect in on very the account we basis. light year these the market a single-digit of in will

technologies for demand further our well the grow rates. provide pricing as continued are FMC's top gains as FMC's newest actions, above for portfolio, market to our solid to particularly access expected support market line product strong

the anticipated headwind to year-over-year remain are Costs a throughout year.

year-over-year expected to in second become input a these However, aren't cost and inflation seeing deceleration the costs we of tailwind are half.

Plant new biological Ag continue through to will SG&A to grow in and invest technologies and products. business, develop new Precision expand our Health access, We and synthetic market R&D deploy

Overall, cost in headwinds, half FX and in second margin to resulting increases price the expansion offset expect more than of we the year.

Turning outlook. to XX XXXX Slide full year our for

revenue year full the midpoint the $X.XX billion billion representing the expect range $X.XX to growth X% in XXXX. We of compared at a to

full drive FX year. top be market launches the New headwind is mid-single-digit volume pricing expected access to expected a growth to results. and line for moderate initiatives with will

year, with last be the significantly of is to of forecasted headwinds the $X.XX growth lower to anticipated driver expected is at to in those reflecting be year-over-year experienced EBITDA in billion, billion EBITDA year. growth the XX $X. than primary range the Price midpoint. X% to be cost Adjusted

year in a Increases portion the headwinds of cost in input progresses as cost the and half. decelerate anticipated second become year-over-year the are tailwind to

We and interest increase to earnings tax per rates. diluted with by higher share, the representing of X% expect at a $X growth adjusted EPS $X.XX limited midpoint,

does share a the approximately potential factor of assumes XXX.X year. This in count of not benefit any and share million in the repurchases

the XX, Looking quarter to XXXX. the revenue be midpoint growth representing billion, first we $X.XX on billion outlook forecast compared first range of at X% quarter $X.XX to in to the Slide the at of

revenue which implemented. expected much to the We to anticipated been are driver increases mid- quarter. quarter. of be is be price the in growth in headwind the targeting a of primary is high FX to single-digit has Price already

at the gains forecasted headwinds. flat offset pricing headwinds. to year are period expected versus FX-related be range to due of gains $XXX by the the offset by Adjusted to million in midpoint, mainly expected prior EBITDA cost million, to be Volume being is $XXX

We representing million. due of diluted of to approximately be a earnings taxes. higher the midpoint to interest to share $X.XX rates $X.XX, in of count expect XXX.X decrease the and per range share a This X% at assumes adjusted

of Moving I of that could now to drive the the highlight to factors Slide results our end some range. potential want either to guidance XX.

the FMC the For to range achieving and mid-single-digit year become price to EBITDA decelerating be the a growth expected are progresses, is low while FX adjusted throughout Input we and midpoint year. market guidance, tailwind assuming single-digit in expected continue headwinds are cost the as a increases. our headwind of

a higher a chain, any disruptions minor market cost grows guidance high realize end are we've With case rate or to impact, and than deliver single-digit supply the has into at able lower could of assumes if if at base we rapidly, prices range. Alternatively, mitigated. we high our more headwinds forecasted results ease the are FX our the built if resilience our

are supply Major of critical that midpoint inputs drive results or of range. below the factors of the examples guidance services disruptions would

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

Andrew Sandifer

Asian in Thanks, a revenue partially was weakness headwind in income statement items. strength real. and Mark. key the fourth offset currencies, review Brazilian I'll of European some start with of by X% this to quarter, the FX morning a with

For rupee, was lira full year strong euro, headwind most X% Brazilian significant and by from XXXX, FX in offset a Turkish Indian real. with a headwinds coming part the the overall,

Looking November call. XXXX modest to the we initial horizon, we on outlook provided ahead the the with XXXX, FX headwinds continued on see consistent for

XXXX, For the range first European quarter and Asian of are currencies. of across these headwinds a

for quarter XXXX expense interest the year full of quarter year million, were prior the million both fourth higher million for $XX.X Interest versus million, period. driver the rates $XX.X for primary the the Rising year. up U.S. up expense was prior $XX.X year. full interest $XXX.X was versus and Interest the expense

of to be the $XXX to million higher interest ahead of versus expense by driven than interest million, year $XX more to range million full XXXX, at XXXX, midpoint expect primarily U.S. in rates. Looking $XXX increase we an the

relative Our XX% across in at than the X% shift anticipated tax driven mix slightly true-up XXXX adjusted fourth in by rate XX.X%, modest XX. earnings on of quarter the principal reflects year earnings the the came rate through quarter. rate full year full rate effective operating accrued third The companies. tax better to of for a effective to

of U. foreign XXXX, GILTI we to the S. For be XX% increase higher earnings that XXXX. driven XX% should anticipated rate versus tax estimate to the tax in our subject by range with

X.Xx. full was year-end to debt sheet to down to EBITDA from quarter. year-end liquidity. at basis, net debt-to-EBITDA Gross was was the trailing was year X.Xx. $XXX balance next billion, a the debt-to-EBITDA while while EBITDA gross prior debt average net Gross below was $X.X XX-month Moving X.Xx slightly at X.Xx, On and debt million

used more Adjusted by Moving Growth generation on cash FMC $XXX working and on operations cash in cash prior by was XX. free million generated to to year. year. and versus $XXX provided nearly of down were million flow offset compared deployment Slide in XXXX, capital. nonworking flow items EBITDA XX% than from by cash the the capital cash prior down

payments and grew Receivables revenue customers the cash impact major receivables net a were and headwinds. Advanced in price of rebates, advanced slower offset payments inflationary by much cost increases America rate on to vendor of were up but financing driven North use somewhat, growth. than from

the in the year-end higher, of levels with was and Inventory given season inventory first Northern of impact of as our inflation cash XXXX on Hemisphere of the a anticipation inventory use expected, values. strong half

a was compared Capital of additions investing spending million cost inflation. of capacity other with $X driven were directed payable activities by million the year, towards Accounts $XXX of prior with half nearly the source cash expansion. up and

absence substantially transformation the Legacy proceeds would proceeds. been to have decrease these of from in with flat the Legacy entirely disposition and of site. and transformation due an was year-on-year essentially the down inactive

XX%, with average X-year our at slightly impacts the rolling Overall, cash average on free flow of cash due for XX% goal conversion conversion to or earnings conversion more inflationary cash below XX%, adjusted XXXX long-term working capital. was flow free X-year from for

modest we repurchases. debt cash free million of in to in flow this With shareholders $XXX $XXX share and in million with deployed dividends and increase nearly returned million million $XXX XXXX a through net year-on-year, $XXX

slightly XXXX through following to FMC call. deployed repurchase equity not to year, was third Ventures. With leverage we acquire above ranges, chose cash of remainder through BioPhero in to and The our earnings levels targeted shares additional investments our quarter used make the

on deployment Looking ahead free now flow to XX. for generation cash and XXXX Slide

growth $XXX the and growth interest This cost our in Underlying slower of We adjusted million, easing by more million up are free forecast growth year-on-year is driven million and with offset cash from inflation. in working flow cash $XXX midpoint. capital at XXXX, the million midpoint, higher XX% sales to input million partially taxes. increase is of operations $XXX expectation this $XXX from of cash the up EBITDA at forecasting to and in lower resulting than by $XXX

to to We for introductions. inactive site essentially cashment to be meet expect growing further Legacy the from to for product continue and to the expand of adjusting midpoint up after capacity transformation capital to disposal XXXX. additions and demand benefit expected ramp modestly as we new support flat is the

free XXXX, XX% flow the targeted flow a just XX% year. to With range the for under XX% conversion improvement this guidance, we X-year or more. be anticipate free last of conversion cash midpoint significant our of The conversion at conversion expected average cash rolling from is XX%

the this to With higher million cash interest rates first mitigate the Free Directors fund substantially and for cash dividend approximately capacity our of flow. so used the utilize impact cash flow higher, we and raised do will by share year authorized $XXX Board use in incremental as to to interest per of borrowing not deployment cash intend be of at December. expense dividend on earnings newly

be remaining used if be available. Free growth, will cash investments fund share then inorganic such become flow will then cash attractive Free flow to opportunities directed any after repurchases. to

heavily intend more FMC at will the any in offset from dilution year. weighted we said, be of do That the Given to flow, the compensation. quarter first repurchases repurchase our enough cash nature to a to part minimum, of the seasonal any share shares share-based latter

that a States. I this change in capital this as adjust permanent must structurally FMC. not higher in temporary policy emphasize Rather, United for interest we is the rates is

incremental using intent our would rates the rates is interest deployable higher manage impact Our cooler of debt in consider Should XXXX. ease, expand to here we actively to capacity cash.

XX. Slide to on moving Finally,

cash our from Since in me and free is flow sciences focused free cash improvements XXXX, deployment in flow put into made Let conversion substantial and company earnings. perspective. we've generation agricultural generation FMC a launching cash flow free

XXXX, we of in well can from earnings the convert to targeted single of conversion. cash our adjusted at in XX% a average XX% free rolling we to we've cash average way more can year, cash this X-year of than more XX% left-hand XXXX shown XX% conversion in page, as to earnings improved did on are you X-year from we the our and or We've on flow guidance. rolling As XXXX midpoint side see

billion to returned cash cash Equally how as while inorganic growth we've in we've Strongly equally as shareholders share approach dividends, utilized XXXX and balanced near very we growth, in acquisition repurchases over fully nearly long-term this between with flow to $X well been organic and rewarding important, split XXXX, generation. our the our recent directing both like balances deployment feel this of funding as Overall, million over investments to BioPhero. shareholder $XXX horizon. cash improved rewards

I'll And hand with that, to back call Mark. the

Mark Douglas

cost the and performance year. largest new a significant cost, FX products in as company's gains well record market you, supply FMC the the overcome Thank initiatives and growth input challenges access facing headwinds despite history. of by in as continued strong volumes delivered Andrew. XXXX to pricing Robust driven accelerated inflation our helped in the

be economy XXXX. We the expect volatile broader to in

and However, agricultural should expected industrial in solid. market remain benefit from momentum fundamentals continues, the broader deflation to FMC's pricing are potential we chains. the supply

our invest We Ventures. and ag synthetics, in FMC biologicals, to portfolio continue precision technology of

market expanding of are and countries. the pace across these to in we continue access increased Our investments growth, intend profitable resulting initiatives more

are factors Overall, last compared time fewer this our disruptive strengthens there provided. to period and we narrow we range have the see guidance that same confidence in year, today the

year expect another We strong XXXX. growth profitable to in deliver and of

November. now you the host in to our our at plan, seeing an are are we Investor forward our here Finally, in will new share look year strategic strategic we we and of Day as final At headquarters global planning details that current Philadelphia of this plan time, person. we in to

event announce for the Investor date this of will, soon. course, Day We

Zack Zaki

Thank you. Emily, you may questions. now take

Operator

Parkinson from Mizuho. question first Christopher Our with Instructions] [Operator comes

Christopher Parkinson

see it revenues. on projected you and in terms you been the like in into just a know of bit potentially some of which you cost little 'XX. first on the progressing the I on approach implications you side forecasting. can the that price midpoint specifically throughout throughout benefit think your more second -- versus even would have half your EBITDA prudent does the built look It just taking progresses growth cost the and even year, cost the a Great. year, talk how how your of have half But you've

Mark Douglas

Thanks, Yes. Chris.

So let where mentioned versus that me take the -- we year. talk step about we last were on little a a back where this I are just year in script and bit one

up of of at the of this we at did had a Last wave million that We of beginning the coming our magnitude. as ended at And year, year the truly, order forecast -- not what costs. time, $XXX we costs nothing had understand inflationary number. with like

we're gets I cost will cost would see year, don't we And amount what modest will our the meaningful just second call this margin half guidance. say costs would we impact where the of of second XXXX, in We time this end year. early receding, built is exactly position. be. see it We expect we exactly of how through of into much the us into reverse the the have expansion I as midpoint know in us that become a line know to do reduction tailwind I do really see We year. the through us. what But for here of go year half a that and the a

and have on add will about a fact end continue SG&A at We couple Andrew did I'll of details in here that talk the here. invest comments we R&D, and to the

I areas quickly customers I from those the other chain. about whether we very profitable new those those the growth value paying from Asia, Brazil in of gather We are growth or of how seeing think off frankly, of and in parts terms growth investments, we investments think parts sales new the about in or in because U.S. are are investing new the

to because we're talk also we've our discovery R&D year, in not And investing Precision in is investment a that Health year Day. of pipeline. this we molecule we'll Ag. and synthetic our and growing simply into more invest about moved in only development, another and Plant R&D, in full Investor from very we got run continue rate BioPhero But

bit will the roughly are if pretty be think expect will flow half. rate should year. what above half, it half, still as in R&D, half we close about then in input X%. we And little last of about a you in were the to margin have we'll you for top So And expansion. that. That's X% They go see we the first bought SG&A of legacy the the through costs. growth abate then QX, said you through the growing The how line, a costs what second input in year. a we second get can and to of higher that the high Those

already -- that. We seen we we've reports don't we been still trend at being conservative? we there. prudent. some are saw But all last the flash lines volatile. that enough be. to same are So year, where night trend say of we're confident world are I quite is seeing the lines, We the know know think the last I've as somewhat we'll The just

I when improvement? So script, talked absolutely. could we see about Yes, on have we'll where areas the

we'll we call we see with we'll as us So where for better a have an make forward. be materials. raw because are on will go view The call much important

Our year, price of XX% a we of for when target from just have was timing about implemented. pricing is pricing year probably pure actions, this last simply rollover our

side, is Andrew, as side. you there good for through we the We're it feel the line there? less the but cost we sure about year. trend add go about get want the better do So anything pricing to

Andrew Sandifer

Yes.

reiterate a your Let on thoughts of me expand couple just and Mark. there,

they the headwind is think are line, than in at I they significantly a input cost, certainly, XXXX our XXXX. COGS were in cost smaller

basis. described, Mark sales, in And our the BioPhero, platform. them might they in grow grow, to of all but second first the in a growth we faster R&D as spending have and will tailwind line half. described, on in a investments the headwind half, addition in the Health should us SG&A Plant R&D with Mark growth, SG&A of a remain bit as The becoming dollar we anticipate generally a support

into ingredient pipeline. development moved another active discovery ingredient have an in active We from

cost spending go will a XXX against dollar basis, year. expand as percentage of on But past years, of is R&D as sales. said, basis XXX stay basis contract slightly. as D sales and of X we continue percentage out of sales SG&A SG&A taken to a points of the the R&D this That and points through we've a out SG&A flat. where a be percentage relatively will headwind R& that So over the over

So while on cost our kind get the more competitive we sales, percentage SG&A very, more structure. flat might basis a and still not leverage of same this The than R&D XXX as SG&A year, nearest a very competitor. of than points lower

So is to headwind, I to as on cost that year. think we what will basis, you'll progress the EBITDA we'll see through R&D need through and and always a adjust have, dollar that we as as a the year SG&A be carefully we continue we manage

Mark Douglas

good. Very Thanks, Andrew.

Operator

with Vincent question Morgan from Stanley. next comes Our Andrews

Vincent Andrews

bit. to pricing the I just want a on little touch environment

about sort lot hearing for atmospherically, how I just the with Of I gone pivoting seeing fair already first We're heard of pricing in that increase products very price XX%, of got I have need but for of from rollover you've different point? all partners out are already half prices into back year. sort to much to a come a you Mark, the XX% we other the a come terms you think we're for continued I glyphosate understand out there's And environment. say, half channel year. the you're inflationary the you that or are just from amount with your sort just out what thinking of receptivity entering those of headlines what this versus in fertilizer versus, deflationary environment. of Just want assume sell, down a know of go you last place of and prices down. at

So any, partners? the channel if feedback change in are you from getting what,

Mark Douglas

Canada Vincent. year, it, Europe and pricing of is of Thanks, mean, the getting pretty underway. Yes. most the I as Well, markets are much I already now. is in now, The right said, listen, active active for half first U.S.

through. increases So those price are

we don't quarter probably you're in we I know. roll where the into American a as ask. is to will think to valid referring It's Latin the market, We be. fourth question what

We increases. price are planning

Andrew last for the still that lower At plants, the around inflation amount. were we're year. of They the et significant but costs input still world, alluded not day, fact to, within end are increasing than much at as are cetera. seeing the increasing. manufacturing only just they Plus SG&A, They're our just labor a cost higher

So environment is for still a their last price that still come peaks, there different have Europe, over Yes, few conducive In the high down you years. but energy cost to increases. they're costs. off the to average is me, they've meaningfully

not we with course, will number products. in continue we to see about price talked where fit. move the before. of It's So And this standard different it's a markets around We've world. different different

price. to to move continue We that use differentiation

But overall, are price think negotiation, see I They're operate easy. chains move any we the margins It's like they're of getting the need us back we get always to difficult. most value we that never want. to that EBITDA in to really do we that inflationary the environment.

right herbicides. You're nonselective on the

up value And selling contract. that's metrics, seeing that them that come We're environment. on you don't at We really see key of the coming you're a not us. where basis look through for went the just products can of They in not a those are curve more specialty down cost quickly. very very You all quickly. We type They differentiator commoditized. a They truly sort nonselective don't down. for operate have herbicides.

Vincent Andrews

than grow to the And digits year I function better last thought would you now digits. as market you say for believe you're I last Is for Okay. thinking a in a overall low the you just low single just -- believe of coming that mid-single I quarter, Mark, hear market did thought. year. follow-up, this

different compare? sort So Or what just for is you of globally? expect a this there year about at all harder anything

Mark Douglas

Yes.

the have frankly, But lower the a We for driven be despite it's I at in still very America. year. strong a we cereal reasonable expect look There Latin when to by market. overall year. the up. coming view past American do growth be how North America we think which to overall, in in good mean I was is of are see increase I now positive. sentiment right acres, do will market, North the we the have we -- it Europe, market expect

Europe So see up. we

Asia a will be Asia, and slightly parts flat. other Indonesia There has offset of good Australia. issues in been some in weather by Southeast market India,

independent reason may of going billion I because XXXX. grown American Latin Latin would in are suggest have the $X the we're that America. in is market the lower today world say There numbers

and that with Now price then majority herbicides, mainly nonselective the ingredients. for is active of vast pricing other

that Brazil watch November. think really is to is it The close and where be the but which of nonselective herbicide it overall would market is rest. Argentina. it so rest calling that So it that That's we a lower said focused in to large, I we're for the need impact segment, market, probably people in particular reason do does in

Operator

question The next comes Adam Goldman Sachs. from Samuelson with

line Sachs, Goldman with Samuelson Adam open. is your

you'd proceed like your to If please question. with

Adam's Unfortunately, so we're Aleksey we'll Markets. move any not from with our KeyBanc audio line, to Yefremov question, receiving comes on which from next Capital

Adam Samuelson

you first and for Could 'XX your back items just in way quarters the you EBITDA get just in lower guiding of reported you're and In are to these flat the to of quarter quarter. first provide bridge maybe quarter to had expansion some margin wanted margins guidance, what Just QX. fourth some different?

Mark Douglas

Aleksey, some still Latin QX, just European is into. color in quick sense where And the obviously, give in the in very QX, I'll to commentary of give and you're different kick markets is in markets a please which business Andrew, but lesser view here. huge important America, Argentina, Very high-level Yes, you starting different. to selling then a in, then QX Brazil, degree.

why look have And the on business quarters. Andrew, the to world ever for mix you cost impossible about very that never revenue we see. So the to we talk at some it's geographic light. how the sequential you side. if It's on and different comments side almost want a across But make

Andrew Sandifer

certainly. Yes,

different each to at the very, country challenging a basis, I for yes, think, sequential on comment, our take business regional quarter. to look very given Mark's mix

and in increases we're quarter. to cost quarter, into quarter, following I to due with way solid that them any in first get price cost revenue we until and will to flat be close the first don't we entirely positive think comparison is what price EBITDA, offsetting get headwinds looking for really strong growth but we're the at the

at QX really So a understand comparison of we cost period 'XX QX would performance. getting be which looking is dilution part EBITDA of past last 'XX wave some to trying see and QX to the from better this the Again, do by it's to suggest inflation. margin I driven

Now anticipating, received the as into see costs we of when input half you really second we're year, to as start improvement. margin the that's as move

Adam Samuelson

or you to high as -- you higher little -- the fairly that the could mentioned a And be mid-single-digit forward growth, as sort mid-single-digit going years. a they normal? dip of diamides single-digit growth over this Is diamide, see X, of lower? to did territory it follow-up, level X next Or

Mark Douglas

launch We new the will the I mid- do continue think time. the we've world Cyazypyr in past, over wouldn't to formulations as very that it think is out view digits registration. said to new single that we sort nicely and diamide now. is growing we pan high get right of around where change I

high single of is range perfectly good mid- digit the to think a legacy. I So

Operator

The next with question UBS. Spector comes Josh from

Josh Spector

you've what pretty just Yes. I earlier. to questions months on guess buying. raws the some about been of past, you the have of X visibility I clear you're mean, in follow up to

view quarter your year-over-year half adjust doing as dynamics is there? second of And then. that curious the near-term to with now, raws half on second be. something on there in So be you'll I view, will view what your there? any look the your would Does mean can a where next have and you're what just way you stronger well. an your some aligned Is of is seeing buy And frame kind this what impacting disruption at have if China pricing impact of

Mark Douglas

Yes. it's what talked Listen, about. exactly I

material I view think the what going will second quarter, in second the half. view bought in which to of, go what raw buying a better quarter, through have inform much we and as second we a, our are we have we're the

we'll So lot in giving area. think I a the that at more call, May be detail

at years, us round and disruptions. of latest has manage process X to through of up X We network have over some China really closures impacted a we've the all COVID. But how robust built supply. this to last not of did

huge a and a we perspective. for the it's So materials we markets. a not significant opening sense not from that us the get that, China. see obviously, It's positive didn't sales It's had through COVID Year one deal but through New up it's with. raw leading from market for nice us any market, growth of our in China is they Chinese disruptions wave the to

China manufacturing X distributing opening We've as at pace. continues to So other out of a been a the neutral of We've raw us, China. bit up. over network material years it's That event, well a managed our countries. for last

we So feel from I think right standpoint supply overall, good pretty now. position a

Josh Spector

if specifically. poke on just Okay. and plus versus digit those look digit, at your And end EBITDA you single upside. one price the variables range on could guess $XXX high and just I say of million I guide of it's take I mid-single if high do

whole you is of scenario million bunch list out. $XX Your could and guess play higher a that I positives

Or we are get about? should that that visibility you upside is So potentially what be there? thinking higher the if possible more negatives

Mark Douglas

a think that on inflationary I of next it is or the negative see I would would be say. creates disruptions, be of environment highlighted supply world I one. Outside that, one, pricing raw in the lack Well, side, materials. don't which Weather something an disruptions for the that the today. would obvious We

that of we could X one would end us items look range. that the said, script, X upper way. mentioned basically move the mentioned you I to the or As midpoint from the come at other the We

will. can you read that into you So what

Operator

with question of Bank comes Stephen Lynch. America next Byrne Merrill from The

Stephen Byrne

out Cyazypyr affect. this came this concern? the on view? this risk how appear be compare this adversely to impacts to with on recently and this likely meaningful -- Is assessment would other draft Cyazypyr insecticides? normal? this used? fairly a they Is Could from EPA terminology a how is in Or your The there And concluded is you

Mark Douglas

no, can what time, you our much some following on is as guidance Yes. been business. this for concern, the a the going. don't has call EPA EPA We the -- the see of into one is Cyazypyr chemistries, Thanks, any softer and where we targeted. more Steve. we've not Top impact it's line, imagine. We're clued well

old to has very of from It more the targeted. at grow take There quite are a world. We are and Cyazypyr would fast share pesticides around share is from. broad are see that Cyazypyr that lots continue taking insecticides in and numerous rate attributes nature that

our we ruling. see So any this don't impact business to from

Stephen Byrne

Is synergistic and a focus just wanted you're or of in I find Shelton Do chemistries. And that that drill had clearly the synergy into is between be, biologicals view on. with on think there's lot the an a the that area you It's outlook your view I biologicals. has that to devoting combination? used prior synthetics Okay. your potential to that Kathy it synthetic in still years. that was the say,

Mark Douglas

about, look so. products Yes, Health year. talk the XX% from excess it our It's million you you the very growing It's is pretty twofold. we now business. synergistic per not top that. which biologicals, will business. in When getting about growth close that million in talk close our And of of growth roughly effect be the of is new but is line coming to the much $XXX Biologicals only size. Plant that at half This year, $XXX rate to

all, of in formulation. the First developing we and biologicals are synthetics same where are products

getting different action synthetic of lowering and the amount material modes the in from different and So of attributes you're a formulation. biological

replace a synthetic is programs one with spray you in biological The spray. spray second will a where

a So in but and what the are you that once again reduces are augments it synthetic using the pure amount material. biological synthetics using doing of way a

We're that see XX we launched said, new last I from whole launching, So products year as both growth biological space. the aspects. coming we in

space rapidly. growing see I that continue to

We are investing more in R&D.

well. as We are investing through ventures

one terms for spots investment overall and growth the I of the bright the portfolio of company. in it's So think in

Operator

comes Kevin from Partners. with Research Vertical question next The McCarthy

Kevin McCarthy

inventory Mark, where in and the how Brazil nonselective herbicides of channel Argentina would the compete? levels exclusive don't you U.S., characterize you

Mark Douglas

Yes.

percent bit think now, but a a enter -- most in channel inventories you American think on that's our sales would before. from up levels so about a I say, I stocked of very the as particular, year. is for the think a of distribution little good for and I season, we're U.S. are we FMC North normal. to same right year basis, compared the retail I were perspective, When place elevated inventory

it's I normal. think So pretty

a and Brazil Argentina, different story.

we that just nonselective the talked about. Forget

there is at a be very the we of conditions dry was area, I in it not the fourth I no that all. elevated Brazil inventories surprise think of because channel quarter. south saw in and have that Argentina, would in the in that doubt

high hangover pretty In season. around talked run in Northern South we've I last because the world, the rest is If of think. India Asia, much is the the I of past. The again in didn't Europe help Europe, Europe of from again weather XXXX. about okay,

are inventories is in which through. good. we'll working see similar, be we of So somewhat channel high Rest Asia Parts Indonesia high. India, of

volume So what of in of in vast price, overall, terms it and And it's expect. wasn't are the growth. recognize. focused don't pretty much The was Brazil on happened would in forget, Brazil what you majority that's people growth to important

parts we weather think the South Argentina, are that fine. I other out the patterns and I in So of in saw of think the country

Kevin McCarthy

update a an so far. seen was roughly as months provide for may, so second you now you've on And if wondering helpful. X I I you've question, if That's owned BioPhero could and what

X bought just you an is by about launching when an biologicals you potentially it, years that think as going you to new aspect sales pheromone I Maybe toward talked of over could of $X with X to XXXX. next X update eye how the here? the provide billion pipeline

Mark Douglas

we Great the acquisition We're Yes. Thank question. you. made. happy very with

R&D key had say, pheromones is product, the I we're looking metrics X In Today, pipeline. would that new number the we in we of the at when think X. that I fact, acquired when

accelerated the application and So discovery of new pheromones of rate growing. is

marketplace. of into have We and first made them the products move our batches

had that. a -- just was milestone. was We've quantities. So scale of making acquired, major very not BioPhero the commercial that company that I The past got at now we beginning

that the manufacturers We trial the around pheromones we are And own We we're today, work looking world I in have very And at place. some substantial do would world. we invest trial already well. use on that to those across balancing are toll but our the say out work, in have going trial the manufacturing. works looking

which gone well. out is very coming development rate discovery has my I from But very encouraging. pipeline, an see integration So accelerated more perspective, that importantly, the of of and

Operator

The next Garchitorena comes with Richard question from Wells Fargo.

Richard Garchitorena

where question First to $XXX looks XXXX. talk where you're of your step about a a new you capacity. million It bit currently? 'XX, versus CapEx. products on rates operating adding are be Can increase? $XXX What plan million up And to for to like going

Mark Douglas

Andrew, talk you don't overall about CapEx. the why

Andrew Sandifer

Yes.

million to under about in up just about in at stepping we CapEx million. midpoint So spent $XXX $XXX the XXXX. We're

capacity about additional in of that a manufacturing new increment lot to support good-sized active ingredients. is our CapEx for A So CapEx.

Australia So our we're a around which several we couple ago rolling world. production broadly is the and serial of introduced in years now [Averside] Isoflex expanding more of are out

largely position Europe. on we today in that have that in the to for parts other countries We're that of years. strong earlier, Fluindapyr, we key expanding China, a mix the We're that? just in you and in That comments to more of material balance of helping that starts of building expanding we that CapEx, that have. capacity have anything Mark, and sourcing places And sources complement the sourcing the if capacity CapEx several of becoming we sort add Asia I capacity in want get is think, We're to couple fungicide as much China. next outside introduced expanding we've into directed

Mark Douglas

added. would top of things just what of I couple a say on Andrew Yes,

capacity formulation have, here but Formulation attribute capacity of we we're our Brazil important. capacity is is and is as is in the expanded year, last also we where It's go spend formulating same Having also 'XX, expanding one scale active it in capital. well. as U.S., key expanding the And into a Europe, the ingredient over important. nowhere your near but capital, the in capacity we thing, of

overall an so become focused in on well. of that expansion capacity dollars that So but won't of it we're apparent as terms -- you see doesn't important attribute is

Richard Garchitorena

Okay. that Great. potentially the -- business, follow-up, you volumes monetizing they are to the on And thought to growth this you're some solution. Maybe your term, on out slides and efficient of how you a And who be mobile applying expectations talk touch say could also, folks on about if in in farmers Precision for Ag be given a as that could going volume the it provided there Arc your those. less Precision details of can a platform. plan What make longer you to may negative product. what Ag could more would you Maybe there's future?

Mark Douglas

Yes, sure.

you the take are I'll you volume. apply I going think methodology, something use So from last once first. de a Listen, precision one to less facto

discussion especially this has is capture very value what large world, think some space. herbicides area are in interest bringing developed to of is around products Spray technology, nonselective used around that do missed what how you back been that value? an gets that the value. topic. the is and in I which Where and & there go volume area obviously gets and mixed to that are See Obviously, you

I are capture from in look we not value to very when Arc, products We're we at put broader products only from capture remove need It the you're do best also perspective. from the is portfolio growers. selling today you what insects. how precisely those grower the allowing the For a something That's value doing? time they to field us, when great where you but the sustainability to that sell to

of provide of terms We is charge. another it you does tremendous Arc. where portfolio the but in I in for we it the mix has it don't also, see attribute, anywhere uplift world don't that charge expense, anything it It million have on difficult forget, the sell. of for a And A SG& else. We're an believe that That's company very high-profit a value process differentiator like defending is that. XX once dollars we few to more using acres, is a that somebody business products to adds quite hundred million us. defends than remove free

business portfolio separate So profit element grow it do as an how but have we the see we to necessarily we don't today. a the important defend of continue as see we center, and it

Operator

with comes The from RBC. final Arun Viswanathan question

Arun Viswanathan

by expect could ‘XX and and as to a of X% maybe to maybe thinking little bit longer the biologicals as well and you Are growth to inflation. longer-term of an ‘XX you if strategy? Investor bigger get X maybe and think give part ‘XX you And EBITDA Or back when some of just years at unveil X ‘XX you X% rate? maybe to term. have you ‘XX, you look about explain us and a maybe When next have planning the that? can what strategy a cost be you’re FX strategy-wise of But Day on been ‘XX, to impacted

Mark Douglas

Yes. the Thanks question. for

we script, As future, that have I We’ll end year. the there’s just dates Day re-empt in Investor coming. want between near-term the do years then now within giving but at then goal the are give for a the would a both, because of I will said going to I the view lot an this to the and don’t company. be and of work to of say, longer-term we aspirational a few

right before, of has that despite for revenue. of It now bottom longer-term view is well good We’ve we on important above company of last that X-year EBITDA talked that cycle, we company line forward. the the through the drive $X in as feel the managing have been Andrew billion costs. very pretty right far much in we our excess about we’re so But metric as

until just the of to question you say get year. I the hold to So we would that have end

Zack Zaki

very that time a have for all Have Thank the All we Emily. day. you right. you, That’s Thank much. questions. good

Operator

conference concludes for This the you Thank Corporation call. FMC attending.

disconnect. now may You

FMC (FMC) 8 Feb 232022 Q4 Earnings call transcript