Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to the First Quarter 2023 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, Investor Relations for FMC Corporation. ahead. go Please

Abizar Zaki

Welcome Glenn. Corporation's Quarter First Thank to Call. Earnings you, FMC

will will select year for imply Officer. President are outlook quarter Vice He second Executive Financial an our first outlook today provide as update me as of an and half quarter President half will performance first Mark Chief Executive Joining provide implied second Sandifer, provide Douglas, Chief well results. to Andrew review Andrew an Officer; and Mark and financial overview the expectations. expectation. and also our full and

questions. Following the prepared remarks, we will take

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

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

and cash discussion to adjusted terms other conference our financial adjusted EBITDA. as and that today's definition reconciliation include and will free provided today's non-GAAP on means of from which of refer A means as earnings website. adjusted are growth, revenue references and operations, terms measures. well earnings are discussion, the cash as EBITDA adjusted we call these during EBITDA, to adjusted Today's may Please note all EPS, supporting flow which organic financial materials non-GAAP used in

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

Mark Douglas

everyone. morning, good and Zack, you, Thank

delivered X% and In prior on We with organically. billion reported Slides basis year points reported and discipline, X. is solid pricing up access driving accelerated flat in and and XX flat market expansion new FX products, lower detailed due X, a revenue, Our actions, to quarter cost period. which QX over QX, are the headwinds of on $X.XX Revenue growth results margin of results increased strong basis X was FMC versus first volumes.

period. $XXX of were X% compared period midpoint This above X% cost XX were of range. pricing increase was and to $X.XX strong the discipline. diluted in margin was but EBITDA our the and EBITDA of expansion XXXX share to driven the by the an year guidance range. QX million Adjusted basis guidance earnings $X million, mix increase a of above the margins Adjusted per year $X.XX prior quarter, our compared XX.X%, midpoint gains, points prior over decrease versus of an

North record versus or sales America a of FX the XX% excluding quarter growth XXXX. had first XX% of with quarter

aided as the market performance the and strong year advantage You customer due such of for the region drivers launched in MaX, Canada. inventory were increase another Canada available strong supply in will record recall, by were quarter to of of year inventory last to gain access. We especially Canada. at in achieved investments anticipation market share, our the we able built mix end to take particularly revenue compared recently effectively quarter for doubled also FMC the sales for first period for increases in channel to and products, to Coragen the low high demand price prior product insecticides and

crops. grew FX in tree formulation a derived of Branded and new including X Product eVo from and year-over-year launch patented declined X% Sales the with Ukraine XX% year the products digits prior grew other Romania period. than new the impact region. continued Switzerland, significant nuts the of FX. herbicides to and core last registration compared Altacor quarter. Turkey, more in use Russia. diamides in double grew in for in of were diamides contribution also excluding EU Hungary, headwind successful the the years, losses mid-single discontinued volumes countries, year from lower products diamide anticipated a Robust sales pricing digits on EMEA mix North period. X%, be in and all America versus quarter up the to of launched the across a higher Branded within benefited from sales actions offset the XX% prior revenue branded of

now Moving prior to versus XX% where period. revenue Latin America, the declined year

remain the applications and drought Brazil volumes in growing to Demand Australia the expected, As the organically. Andean conditions Asia, and in Mexico decreased in impacting sales down quarter. XX% XX% sales season experienced lower area. dry the and start led region Southern to Argentina stable. and In in were missed a

them to And channel quarter Japan. finally, the India's continue we than new of more grew addition, XX% actively down. elevated XX% manage quarter. to branded contributed driven sales products the by bring In Fungicides the inventories in to region's in

And $XX a Overall, was adjusted the lower Price was by mid-quarter, million and especially $XX saw quarter. the volume costs. we partially overall costs, offset impacts million headwind up volumes, limited by SG&A. costs X% pricing the action for was control $XX gains, driven to up the EBITDA deliberate FX input higher million for to headwinds. headwind. took driven first cost slowing FX quarter once in Hence, year-over-year by we on in was inflationary quarter,

share the growers yields. products XXXX elevated, of rest advanced the to year innovative commodity Crop and year. outlook, Before the view maximize overall is anticipated I continue earnings review conditions. updated on was rely new the QX the me FMC's our for reflected and quarter to for our and market remain in prices in the success of technologies This continued full our first momentum technologies of let

we However, nonselective has Brazil, Droughts geographies as accelerated, the in participate have impacted key last now segment and not such does highlighted especially Australia. in which herbicides, a FMC normalization America. Latin Argentina quarter in that price

have some their are higher working rate this We interest result to a seen as of where manage We environment. a distributors delaying capital. trend see purchases the

versus and now segment to a digits, to dollar the basis. be to now expected not Asia still to Taking To FX expect the a our market changing are digits protection clear, account, of up we the And these down projected Breaking now is to new herbicides. digits. EMEA be digits. high forecast factors single to outlook crop our which headwind be up region, the by global down prior does key nonselective and view driver is this be expected still we into North low let America low market FMC low be single is down revising in reiterate, to now mid-single is digits. digits. up Latin market down be this participate. low to expect projected America be is of single me is market a overall single single growth U.S. on

environment the prior we by as market Excluding year. expect protection still deliver growth flat volume nonselective expect be herbicides, crop as well to growth in gains market global new this versus revenue We through access. products expanded pricing driven the and to

demand. after of India this earnings X year. FMC's remain increases, to purchase revenue FX to second first headwinds. quarters overall return very Channel with year Channel it new the offset further in to strong consecutive prior growth We compared will inventory normal half outlook. and cover as a anticipated the X full in well patterns expected are particularly products second America is in X and -- quarter inventory volumes EMEA, the price gains to focus year, and be access of QX X, by rest Slide as anticipate be to flat to market as of levels North lower for

compared capital Our the by guidance decline the diamides and expected prior lowering EBITDA partners volumes working and year. levels due the rates. is to to inventory light year-over-year, of in flat in is higher are their of of concerns QX million, year primarily to $XXX interest X% impacting rest EPS

billion representing of X% and XXXX. FMC's an forecast higher product Driven at full year unchanged as pricing from as in to billion, $X.XX the volume is midpoint increase XXXX increasing market access. new range sales by of gains revenue benefits well the $X.XX versus

from products be $XXX contributions increased has in headwind continue revenue. million new to a to for $XXX over forecast Our FX guidance from our these previous will to now. approximately million

pricing on $X.XX representing projected the positive We now tailwinds. quarter X% full year $XX midpoint. the EBITDA gains, are growth raising billion year-over-year to and based mix of adjusted for expect million at first in cost be to guidance outperformance, $X.X year the EBITDA billion, continued range by full We

do adjusted share. Representing diluted is share by the at be factor and guidance. not benefit of as higher expense. to we any EBITDA, expected of per with $X.XX $X.XX into increase per now XXXX is share $X.XX well potential benefit year-over-year in raised interest earnings EPS reflecting as repurchases the higher an Consistent repurchases at future midpoint to completed from share practice, past midpoint, the our X% range of in in QX somewhat the

half expected is increase and of compared prior first half 'XX the at to flat by Looking half halves, period. versus XX% first 'XX to expected is be implied the second year revenue revenue by to the guidance 'XX

impact in XX% for market year pricing half implies of year the in products first pricing as sales the growth While actions. of year-over-year half, is well by period, half a the first from half and expanded drought Full driven higher-margin conditions and in expected a guidance are in access. Latin second revenue growth as America growth the of especially the indicates to X% guidance America new anticipated over year. continued EBITDA benefit and prior 'XX EBITDA in North gains second to the

in is our due half second with year, input QX year-over-year cost outlook Compared projected to to last weighted EBITDA tailwinds. gains growth significant

X herbicides. disruptions. to major now lower Turning and by of global outcomes. the protection costs be range of nonselective EBITDA primarily digits market likelihood Input prior low crop continue updated versus year, expected is the prices is to of driven to decelerate and Slide supply normalizing there single XXXX a The down

well a gains better anticipated, share as markets. resulting New pace mix as products previously growing are at in significant than in selective faster

and have commercial to pricing minor tight year full our FX is invest very the resources continue Africa market agronomic Despite to be cost strong we the now headwind East, results to continuing Brazil, internal grow and to the of positive EBITDA. U.S., our are a and still in in expected to to We controls, We've these Canada the and expanding seen are Asia. parts from Middle access. program and we investments

a have by all result the our guidance narrowed $XX As we end raised I've of of million. guidance mentioned, factors and the the low range

to the over details now to items. Andrew other and cash call cover flow I'll turn on

Andrew Sandifer

income impacts Euro headwind the review statement start from renminbi. dollar, a I'll the a the Turkish most FX revenue Pakistani Thanks, with key some X% rupee, Mark. to lira, morning items. with Chinese first of Canadian quarter, growth and was coming in this significant

through Looking second of ahead see the through rest which the XXXX, we the continued we the year. move in quarter, diminish modest FX headwinds rest of as

stemmed XXXX, rupee. Pakistani of the quarter second and rupee Indian Asian primarily the the these headwinds particularly from For currencies,

interest increase rates the versus was the of the Interest full expense year range quarter. increase interest expense working $XX.X million, the now million be of $XXX assumed. midpoint Substantially primary quarter U.S. capital million by to driver somewhat for were in the million expense first We in million, up higher to interest prior higher $X period. an of short-term higher support expect previously year with $XX.X at driven borrowings than the the $XXX to

rate rate of XX% for quarter of XX%, tax line first midpoint effective the expectation our earnings full to the XX%. was on tax Our with year adjusted in for

to the X.Xx to was XX, Gross normal EBITDA expected, prior Gross balance was as X.Xx, was seasonal working March debt $X.X debt-to-EBITDA liquidity. net next while the build. $XXX billion trailing million sheet approximately from up Moving debt the capital given at and quarter. XX-month

the capital more additions generated for and repurchases. used deployment million. in The non the the shareholders versus compared and the free entirely diluted working share transformation million the of million compensation, of of by We this and modest was the million other cash Legacy to from first weighted cash at XXX,XXX in and generation We shares operations. inventory, quarter. and investing Moving returned dividends combination than of Slide were down million on was $XX adjusted FMC lower flow offset with the FMC roughly nonworking in growth average of increases cash versus cash flat in higher year more cost and flow just through capital, to of $XXX than quarter, on inflation in share-based $XXX well $XXX in future due rest of approximately year, Capital the receivables XX. growth outstanding absence -- prior as activities the to other share cash of count remain spending higher first offset a expect by year prior under for any was price prior repurchase $XX which million The now $XX as million dilution particularly the slightly quarter negative and the of shares $XX essentially XXX.X level share driven repurchases. at resulting EBITDA in to down year. million other items.

our maintaining of XXXX, year-on-year $XXX are $XXX the We at guidance up free more in million than to cash midpoint. million XX% flow

$XXX changes We continue offset at with million in operations other to to in million up EBITDA expect adjusted to the $XXX $XXX be by minor cash from increase guidance the million, items. midpoint,

We XX%. average conversion XXXX. approximately million XX% to capacity spending cash remain at legacy for the be continue of to an at transformation expand new adjusting of benefit the XXXX demand to flat rolling conversion $XXX cash for introductions. midpoint X-year from $XXX as flow additions flow to and guidance meet site in essentially product capital support expect inactive of growing to cash midpoint after Legacy free the million the disposal free and is expected This we implies with

for to cash the directed will deployment additional flow Cash then through of be share Free the will the to $XXX At midpoint dividend. become further remainder attractive opportunities used a $XXX would flow repurchases. guidance cash growth imply any million returned first of in approximately million for be will repurchases. fund to this to shareholders available. up XXXX, cash inorganic such after to investments should free and remaining used be year, Looking share dividends fund the be to

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

Mark Douglas

Thank you, Andrew.

you headquarters I'd in Day November like Philadelphia. make invite to here I on our my Before closing at Investor XX FMC's comments, to

Our to and with showcases executive speakers areas be and dynamic with promises from a functional team. FMC's chance multiple to agenda robust interact commercial leadership

and your attending. look at short- expectations. an share goals long-term more in provide will We register about interest and our to outline strategies, XXXX visit early our financial Please long-range website

with humanitarian of I'm a by collaboration livelihoods organization the new that through people a nongovernmental also affected demining pleased activities. conflict Trust, to Halo restores announce

X first protection and year to Ukraine we company you crop to Russia exit As and initiatives. various may recall, support through farmers was FMC continue the ago, its

Trust, As demining expansion is Halo this Halo Ukraine FMC revenue funding, of the donating part in of be of Trust the support able collaboration X% its the efforts. will the XXXX to sales with With to its and contributes globe. the remove land security ensures project but harvest return increase for improving Ukrainian it from food only its farms. to capacity mines to safely farmers Ukrainian also This can not to their fields around planting significantly

time, share world have and initiative to targets on greenhouse among XXXX, just at in emissions science-based its the Scope revenue reduced proud in protection its growth goals. The while operating by crop globally net X% the first I'm progress in and FMC Finally, year, the has X verified and is the organization. sites by and company last net by X made that volume. company its gas sustainability at increased companies substantial to years the record FMC at X same delivering X -- X least increased recent target

to perform in continues FMC strongly market. closing, In a volatile

a applications reflection is of across our of power which product of is diverse and innovative It biological and to with of needs a synthetic continues of exciting address grower performance products technologies. that new also portfolio crops, the variety provide pipeline, a result geographies. Our us our

the have taken actions help time. second Market of We investments past Input in our into at tailwinds costs year. improved mix the for XX years the receding, provide made we our the over especially pricing good products. of unprecedented have from cost visibility access strong inflation half opportunities, the of year-over-year months are product growth same and and recover new to couple

in raised These and us guidance expanding confidence increased earnings and be market deliver access. position growth cash to managed of But factors another year while our maintaining finally, and will prudently in us R&D flow. give investments other costs

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

Operator

Instructions]. [Operator

The comes from Christopher question first Parkinson Mizuho. from

Christopher Parkinson

on for that it well for them least at you XQ result. in appears key the you the inventories Just be given the to just reducing is you would it, your given cost year where who confidence And your to you may those inclusive speak to have trending the skeptical growth how outlook what on margin price volume for of Can of think progress your regions? balance say year. begin

Mark Douglas

the Chris. market. making of talked the on a Yes. comment by about Maybe just elements terms I'll overall start in I

crop put a perspective thing I QX, and you although just about volume, was lot not QX an have think talking market year in one remember by terms protection driven volumes have to in year total is to we're price. record absolute you for that of in chemicals, last

So although absolutely lower. we it's somewhat volumes, the consider not we're looking at first what It's low in low. would half

operating perspective. that robust The level. high still most world. very a the is at put let's in in usage parts very is of market On-the-ground So very,

looking of So plant we 'XX, season. are can. are enter to this area the as actual good increase going growers end year soft in We're as market commodity Brazil the itself to through elevated, is as 'XX go we of remaining looking as much they the terms prices see in

all why about So the some good. we we improve let for And overall, the talked about think terms will volume signs But about as think me Yes, we're FMC. I marketplace. that that is. the how perspective seeing go are the year talk through we all adjustments of in

talked product The the this over second new to the year. $XXX comes from products. our are those majority introductions. increased products last last that us, of revenue We lot First half of just about over a And million million for the from that year the all, X of are $XXX guidance we since years. those of introduced in

grow. have and These places new we brand are like to Brazil. continuing the that U.S. growth that's are like So formulations in

products launched that million year. new our of It's revenue than half participate. of wish fact this is share to taking come from about $XXX more year that dynamic again, weighted The we this is X% will this half second products weighted. see first we markets also So in

what an brand-new formulation bifenthrin of as us. well. we're you use Give a of that for on Brazil, Rynaxypyr example That's in like for market launching access and corn new some looks soy

come our which is is in think is We prioritized And again fungicide those in have soybean registrations why pests Brazil. there Fluindapyr, pretty products million formulations about What new X this they're critical to I Onsuva, to does These is launch to close of which new important metric that market. first our treat that just new increased expect we've are new combat got growers reasons new thought. which product year called registrations our one mean? introduction $XXX the see they means as It a than seen your you what's and enabling to much quicker that. to because Asia by rust, we

the So new Argentina. parts access from talking the and drought where Latin introductions in weather backdrop product gains America, in We normalized been this world us, of we've for in well market year frankly, now the forecast and the conditions. Brazil because the of a the in market that South other U.S., suffered whole about as as in

be Latin year. end we that weather through of as normal the to a the in go expect America So we condition

the are confident in of we half. sort the volume are those reasons than second Chris, So in why half the we're more of first

Christopher Parkinson

spoken you than to just hit the little Mark, that And growing the of diamides a quick a faster digits. the original that -- with just -- actually then assumption to as -- you've non-diamide mid-single true portfolio some helpful. the NPIs, when That's follow-up on bit about was and question.

first commentary. us as something growth XXX seems terms in think there wrong, me on XXX quick well if volumetric about track plus based your It of about your assumption, there of biological give like contribution. on PowerPoint as could to were quarter as I speaking update well a If you you I'm you're the correct

one could level, dynamics on down very that X just further you other If to this further would be helpful. hit go

Mark Douglas

Yes. Thanks.

growing making at had So portfolio the that as When diamides the the good They rough of the we for say and products. in the will a than rate. the portfolio not That's year, portfolio the that portfolio grew we weren't have mid-single-digit the company. listen, products. diamides. were, year, sort on growth. the to same at been diamides and strength itself, you to aiming the they acquired itself, we've range, XX% X% rate. investment of that's we're grow And This And rest that a expect the in faster the we at been year, new last last the of year growth look since this rest grow of our

insecticides So and we have of the how herbicides. company view is a balanced fungicides, very growing across

The close the biological which grow business, component, to grow will and over year, to is major XX%, XX%. of biologicals if expected XX% that over this business pretty not Plant Health is

So again, have we a mix strong there.

portfolio, about from new just perspective, But more balanced have about FMC marketplace. not you but as We the across forward, growth from you should as going also think perspective. intent think the products into an coming that a more geographic overall

Operator

from next from comes The question Andrews Morgan Stanley. Vincent

Vincent Andrews

your cost material Wondering of if the the outlook. sort side raw your of of the equation for I that could the year. expectations midpoint ask for on of half of noticed costs I are the back sort at still

like talk $XXX could of be than there it's if sort it you million $XXX just revenue look the visibility about about So year-over-year. why half, and the XQ guiding what million to XQ? looks you're up think EBITDA is then about I overall up have we more to, as year-over-year. you second And at going loaded about And

in Is SG&A the there is embedded being up So or or up, and the being in numbers of beyond catch-up material back being an that? an year? half there price there raw like X between just of sort else those anything down? in R&D volume anything else costs That's

Mark Douglas

Andrew, then high-level the Yes. of dig you you I'll out raised. give couple see some into playing the Thanks, picture cost a year. details that on through comments to how want Vincent if the Vincent. I And overall

and terms all finally raw very it, Certainly, do et a have input other logistics, put cetera. of materials, certainly We close cost QX from pretty of supplies, QX. a cost good in view -- in to let's now

about a gets X-month inventory we flow costs through way the to remember pushed hang-up through have our you as revenue. P&L, If

we raw that QX year, our are today? extremely reason ever is do QX and is in QX costs the see half QX. was second We saying front-end locked know high into already. in what more from the we're of the now And year we've inputs, loaded material seen. We see that most So the that for fact, last of impact highest reversing an

we know significant we have So a QX. in uptick

So area don't won't see has the It second into think QX of good, the costs. where half loaded the not. mean doesn't say It's QX because QX. we will of been to that be be back-end but biggest EBITDA improvement

we On But in FMC where for X flexible done SG&A, very can, need continue QX. to last to move more save, ahead. want about go Andrew, the you that in has well exhibited around cost to our the flows we the talk little X we of and bit years. we to of if that well. a manage We're SG&A how and some we that

Andrew Sandifer

the pretty year. from Yes, of and expect half from headwind half. beginning then for a the reversal second those Vincent, We costs our unchanged a of in I cost tailwind into in the still is think, essentially outlook the substantial first input look, a

QX biggest year increase ever history, noted, $XXX the increase was last X quarter. in cost in Mark million had of we've our of As cost

half in QX reversal the EBITDA pretty really pronounced is year very stronger split QX the for being heavy in drives for growth. anticipated that certainly So that second this results much than and

order is business something go headwind bit that growth evolving saw saw of a SG&A the SG&A the And commercial of that modulate the of portion the world. as R&D. did our QX, year, actually we investing SG&A spending is in through and intend in as in and slowed on for new access continue growth is the support quarter. the reported was agronomic, of some I as That nontrivial in development market do and FX in cost in investments part we the you through that benefits, And cost down headwind to new the and think net investment the you XX%. both certainly, resources, our out a to P&L, probably the of quarter products we also noted, fully a product of

you a last adjust business SG&A than we bit particularly We'll quarter. going at into If continue as we slower benefits, in the the year did than FX in did the spend we anticipated go pace but areas and evolves. to remove noncustomer-facing more year see we'd this the nongrowth what supporting probably those through how spending, year,

the But the line is is expected. I as think, we environment pretty cost much bottom look,

managing that. we're 'XX driving our a of lapping, factor half big through in headwind think that I big And that growth. is EBITDA QX from second

Vincent Andrews

And Okay. the just on follow-up. deployment. quick I if ask Slide a XX cash could

through if comes potential about the of going do talk smaller year. of assume this for sort not that You is side would growth Or to on inorganic equation, correct? the M&A be I that's to fruition? the anything

Mark Douglas

last Space, whether million. the the or our think, in the we make close especially Health tend be Yes. No, pretty although biologicals year, of I that technology Vincent, times of They dollars investments lower millions one in we've did said in to adding other of do to Plant was tens many to we're which acquisition elements. very portfolio, $XXX the interested BioPhero

But into there it of on buying. of millions at are couple the is you're what speaking, right depending can things you up in million, more generally of looking we're get hundred So the dollars tens the now.

Operator

question from Redburn. from next comes Tony Our Jones

Tony Jones

material also I to talk costs wanted a bit. about raw

continues do maybe an up presumably, level? your in that go FMC 'XX, holding industry and you how into So and as an cost HX prices see deflationary

Mark Douglas

I I think was the -- a certainly an We not company. I'll FMC last call, on we're it chemical as commodity perspective. talk Tony, from Yes. said,

important think Our people prices don't they and overnight And up that have that's facet shoot to overnight. I remember. an don't come down

down. still price and we've price slow not inflation. moving inflation of years went That a the of last the We move amount tremendous through We costs then today. have in and input we early absorbing to we intend started and And year to we all of couple recover spent the gained as built obviously, last we of we're year. will input terms of that costs price in 'XX, seen

customers our as side a So the bit other absorber went to to as curve, curve. while intend keep we we we of of go we the this up were shock for that a

we're ability So confident price. our of very to hold

continue rest as rightly of that well. QX will say, year saw you QX in You and this through that in the 'XX into as

Tony Jones

new And product then obviously should your how was wondering I couple growth. capacity then CapEx sorry, for But expecting follow-up, positive -- some in years? on see the be very CapEx do you're next a we sort you of for of if over developing acceleration new capacity,

Mark Douglas

Andrew, plan the please you give my jump on curve. We're We us CapEx just I'll forward. X of numbers. into running stages initial do and Obviously, to then facilities well already and up that it X, years planning. view X, Yes. new from get those of takes in some

of planning synthesis. We active longer-term have investment folded we ingredients, a a in even that get When November, company tends new to for you very into real like view our will be. in the robust give investing CapEx. CapEx we'll pipeline together near-term is CapEx of more be ingredient the modest and ours, view of we're when active what

company. not major So a petrochemical like we're

need So to our Andrew, we But include want forecasts comment? a make today. what you do

Andrew Sandifer

Yes.

level step growth. terms and the products the that versus to the activities this in Mark to seen step that's reflects in range we're pointing that a is and increase million. midpoint, investment the guiding very of for certainly, million And support So prior little $XXX million $XX what year At Tony, of CapEx I to up $XXX the capacity the in over capital a of new investing much in year. think up you've additions

growth the of to I the right to number million of We $XXX think a new million coming next do market $XXX succession that is couple will all have years. production and products, broad products that to and for probably range not their for to to investment require including support be their of continue the of build support biological. out our in which able least capacity

think years. I don't you range much north next XXX it should further go XXX, that the over XXX to expect than to several

in pace on capital shouldn't of in sales, just in at from lower intensity million midpoint and a of I intensity again, of of $XXX difference guided think our just there. very growth, CapEx this as a terms the the be business. billion But a business Mark year capital low mentioned, our the $X.XX significant

Operator

comes America. Next from of Bank Byrne from question Stephen

Stephen Byrne

differently time than in they of view characterize that's retail more driving driving importantly, what your you're new mentioned, this your just doing faster you on Would quoting sales the Or products and to the this is farmers new sharing X What's are XX% Is crop Is ramps products ramp margin say, is You some ramp, in this? that outreach way? from the staffing that? as introduced with that it? to historical last that this to you on about investing a drive Our generally this a take metric chemicals years. or commercial. long in channel? Mark,

Mark Douglas

Yes, I a think couple Steve. things. of

don't it side, as the I products to It's being of as don't right an grow this at growth for normal pretty being now. this -- rate. On see accelerated I see exceptionally rate sort

think unique that is introducing. we're is I what for number us the

our of in because formulation research local number ingredients, every whether the from it bigger number just slowing work every new think increasing. Therefore, year gross seeing we're region, that our laboratories down. get the active in pipeline it's not based Our year, discovery or development number whether is you're I be introductions, are and of

can XX old, are I think years XX, developing still some and insecticides XX, and the that they're that have viable new still formulations. they're we of growing still of

number So is I key. would say, products a of

high. been is piece on growth. couple is second R&D the So And the in the support investing we've productivity I organization is then what years, of resources think ground last the of which real over our to

launching talking market about about people talking about not talk access, talking talking i.e., that We're We're region. perspective sales invest an we're commercial just activity in marketing people. it that from sure people. about tech in we We're to agronomists. who launch have getting can of to products service the traction when background SG&A type So products make you about a that people, you're are needs. It's the

that So holistic from to approach bearing more is it's that think products fruit I us. new

in years, is coming to year. this expect it the at our not it. of last from but I couple X% to products accelerate. That's regions, of continues that for that very of been number, to continue. and And year revenue a when about got number I launched look ingredients We the pipeline, see and hitting think development the work this the themselves, of mean, we just product active we've high

one products the not thing. we built to It's So delivers it's market. the holistically how engine new that

Stephen Byrne

market. excluding little bit price-driven for with maybe a volume? little nonselective a primarily your that a overall seems herbicides, outlook on Mark, just the you're And for looking cautious like then, It the you're or more it's market. now flat Is

Mark Douglas

Yes.

the explain market. feel I'll driving nonselectives just why think I we overall the are

region and all I say of I think North and in we going do any one combination, Middle would think oil depending a and I to that be Europe price or volume and don't mean Africa. I growth East on there's America volume. it's see it's the price.

be a we're and about So as mainly combination Volume price. pretty markets market. see America, is good. down driven volume. price That a will will that talking continue. We of those Latin

in As into year we we Brazil. next go I said, acreage expect through increase as the an this season

perspective America. So good. It's we that see volumes be price overall Latin in mainly from will an

Asia it be than Again, likely is then And digits. is down volume. to more low single priced

we've as there market volume higher in talked places India, some higher inventories India the has inventories. have about, Although be well. know channel channel may as We impacts like we

Operator

comes from Garchitorena Our Fargo. Richard Wells next from question

Richard Garchitorena

XX% in EMEA, Just like Health Plant it only the the God, wanted organically. LatAm, ask It looks Oh business. to XX% about X% grew

for you XX% through seeing given you're of So of overall growth, year America your rest sort North that the expectations out how about what and of there sort should play overall. talked the

Mark Douglas

in like Protection. the segments Yes. its just the Crop Segment Listen, ups Health and of the has downs any other Plant

it's market to the that to business regions. So a America not rapidly. see grow expect unusual we across North trends similar the is

that big as formulations new we're to a We market new well tools. as pretty already have some is synthetics aid sophisticated biologicals products to of introducing, to us of give Brazil number of continues the grower a them and them for grow.

we're of but in some just think more as not traction the piece biological getting the in terms piece, well. I nutrition Europe,

we market that. key Europe very for world. micronutrients is a a have that around of the sell we full So range

say would I then And the next piece is Asia.

in each should We're another good be we places of Asia terms India these is that of more Korea. in very like making own selling its as now country feel we very market into. has We're targeting requirements. fragmented products progress

growing talk pretty different percent XX-plus I to close biologicals plant world, and a much but every the growing the from in XX% pretty health at very about coming when overall mix. is region with So really

Richard Garchitorena

And big a a Great. product America just saw the versus in follow-up quarter in first fourth. terms in uptick XX% sales. at of the XX% new North

say, fair cumulatively. So as to year, you the continue to going through move is that's add it to

it you the quarter, be well, as that's fourth to assume. get to time get So how could would big by the helping margins going definitely I

Mark Douglas

year a we're mean I you year, within think this $XXX basis, targeting sales of million Yes. of when full something introductions this product the like new on year.

at quarter, half little and much of season. it's the it's America lower the So second America, getting Latin in pretty look ready if North because more next a bit you first for terms on weighted

So you year. launch this go through season, part you and initially then benefit full the of at you gain the as the

you So that see to build. should expect

million years. go launched getting the of we've across the $XXX is those last north overall overall through is as that just million traction building the of what $XXX all year. of in X number We're But year, this nicely launched we number the products we

Operator

UBS. And from We have Josh from Spector next our it comes question.

Joshua Spector

guess half aren't What's partner you bleed that on inventory first where Two back second as of shortfalls volume at you into conditions, guess, and into the questions the diamides, some the visibility next channel levels think in well? or when risk about destocking. doesn't kind I you that, because I side. to on that half the talk drought the similarly the of year? gives the And confidence about the volume half Latin America what

Mark Douglas

Yes.

quarter. I second how The think the channel the on go inventories, see through we'll moving. we markets are

will much, hangover the occasionally next doesn't go into we there season. as channel market That the inventory if what, change some yes, be know happens. You

As we second eating be quarter, the the should inventory. that some go away as of patterns at we weather improve through

to. where see we'll So the market gets

we're Latin Our is QX year forecasting we and normal in a QX for expectation, as next into enter as more season America.

you what is now that through telling On rest of are guidance reducing continues an we're the the in that inventories, diamides, year. partners that event not that's now the just our the

So guidance. that's already built our into forward-looking

Operator

Aleksey from from KeyCorp. comes question Yefremov next Our

Aleksey Yefremov

describe -- there is far Mark, much this that adjustment, inventory and could how you the take? just happened longer India has On progress could so

Mark Douglas

sure. Yes,

we now. talked of very the north and So year, it to monsoon had we years X Last reduction. acreage a about X We of in south. rice patterns different had quarters for couple significant

year early probably are those the and into work higher catalysts year. We're for having inventories. to So next this going that through

are different products the in India, Given of types different where sold X crops. on are seasons

it's It's wait until if So once next as through you've got you continuous. to part, season. get X the not

next So year path market this -- on continue a in India, us. case India. our it's of really, early then it very down year in into it's important of for Still a and growth very, work

the New of inputs the carrying, needed are product launches improve obviously, portfolio good productivity to And there. growers. are Indian

Aleksey Yefremov

negative to Asia about comments broader sort dry bullet they continue than as Asia most you this whether of you Australia be also a just the any and Asia, sales in region you was drag because a this negative conditions Was And this mentioned larger come for have quarter, in will first comments. this largest on India? your And do the year?

Mark Douglas

in Australia quarter, within was obviously. mean doing terribly people of country -- we're important impact terms you're being it the as often like Australia, India, what the X because season. can than the I think was in don't about But Yes. bigger overall be A starting portfolio.

region, terms So when saw in that weather can happened you delay, have a impact in Asia. of you what that a and

the nicely us. Those the pick is China, ASEAN, past like we Now Asia of expectation parts And into is growing get Pakistan that markets for will in that. other slack. up countries get we'll once the

do replicated this weather-related. of it It's is last those expect driver. with numbers didn't performance Obviously, as the about to key wouldn't and be when gave through we know really year. to forecast I portfolio. anything it our Australia the a was go So not we we

Operator

Our from Sachs. next Goldman question Samuelson comes Adam from

Adam Samuelson

Andrew. be this for might and Question,

specifically Just I and cadence appreciate the capital as through I of sales the line. mean, about year, flow we cash the kind there's think on working inflation of

in receivables the does than this normal higher Can about you're cadence is and how capital through there quarter. slightly working would seem step-up -- tightly about the normal but or help the and flow current that us a environment? in managing of to the thinking bigger and you you're just think in cash than build just So first average how normally like seasonality, it

Andrew Sandifer

prepayments to. I Look, and from negative timing cash the world the in customers growing North flow. free of QX don't glad and very America Sure, us, think from seasonally, in always in we've the quarter. forget fourth also -- substantial we're Both for I profoundly taken But is where sales geographically.

product in lot a shipping QX So that's collected. we're been of essentially already

prior So year. mean, over just the reflects of of flowing support size $XXX the that. cash grew inflation I free business in cost that's up the of versus million and year flow size about $XXX of through The we to growth and business. particular the the XXX, That negative the the million receivables year. of inventory this last amount price

internal forecast. honestly, the this was quarter free negative $XXX better million we in $XXX actually million, roughly cash our than Quite flow that turned slightly

pleased were that. we with So

big of and expected flow-through year-on-year And the receivables -- really than inflation inventory. of driver terms be forecasting again, the the good the working capital. Some and quarter. We in discipline collected to at in The quarter. collections it's are through of performed around that beginning were actually was better what we slightly actually what really

is years, when strongly I and you've also of turn repurchases, QX positive QX, On free do. modestly our significant If QX. to see So you it cash back to that more the flows positive half cash be it's weighted third are tend generating This do cumulative very until our positive and because tends our flow quarter. be some flow to QX, line in we the basis, we point in don't we're we a the think share last free going for year this pattern deployment flow. cash in X of to in and negative seen in working cash capital what will flow then similar cash positive cash in impacts

number, and are it's realities So a quarter. we go a we working we again, better our with We the through we anticipating of than rest I pleased recognize of slightly the were expect free seasonality normal would but -- the just we capital, was the the that's of say, performance summary, were what as year. big first cash pattern just flow in actually in our

Adam Samuelson

that that All the think differences should year-on-year right. a side, and control would the growth -- just range on can just towards color. in of spending -- of year-on-year and what R&D, kind of -- cost outcomes in can just some we growth the us about appreciate what SG&A of the for SG&A quarter-to-quarter and have sometimes of in some terms you how helpful you help get timing the on spending. of And That's the the But kind year? be then of balance

Andrew Sandifer

rough you give can because X-month a falsely easy it's thoughts some We be Yes. to here precise outlook very with here.

I year. have choices we this given SG&A both of and some I when growth general and ability in with that make think conditions, timing from a not depending We could year that is generally market our think But sales full adjust we sales spend is a the assuming to expectation growth with line slow for assumption. on is we that some SG&A line period. growing in down could in bad investments, probably

growth of the above substantially sales grow year. this to expect would I R&D,

forward Fairmont and continue results continued are in to we here acquired We what step-up heavily the versus investing bring a XXXX do line had product and products very product nontrivial Fairmont we the shortly. pipeline amount in are of the investing differentiated start we incremental new have business to market a where of our this drive And development year R&D in formulations. to

growth level what be for of would expect. the I would something R&D growth sales north So

Operator

question BMO. next from Joel our from Jackson comes Well,

Joel Jackson

elaborate on what stickier or Could you types a than products or little of pricing more bit maybe others? see would likely products

Mark Douglas

the Yes, I differentiated Joel. call we I metric I NPI portfolio, that mean, have portfolio, talked what look lot about. we of a when across at think from I the that products especially

pests on recent modes all put more new highly action more the ingredients the of in about new bringing advantageous the think recent you active ways growers. to if that removing are they're of place, formulations, we've So

hold industries. on for more of large like all portfolio would a lot business you've of of us. because So pretty got say opportunity the we the The certainly I sort more have price. our those the all characteristics. chunk opportunity they're much different insecticides, therefore, it's for a to see fungicides differentiation, specialty on more nature you have almost new And

holding herbicides then where new North And us on the we formulations an then Those areas and example, of the whether herbicides they're America, are herbicides, for in other types see the on price. pre-emergent specialty of as areas cereals.

Joel Jackson

X, hit maybe And could mix, mix upside is range X your anticipated then upside? better most likely EBITDA but can or your you where give statement, guidance give just a which get Better general X you on for than drivers. the to drivers you examples anticipated Slide

Mark Douglas

the fungicides, the just for in is seeing the new are thing and insecticides, a market have certainly, soy improving. structure Once this that been mix really not better as of things mix been new that, U.S. tried especially upside that share the will to Yes. the Andrew couple way One to gains activities receive, driving are focused think to portfolio. we're as share And I you U.S. very of the about market on we and had in on don't people starts gains of across happening sheer portfolio, mix element mean, that I here although the talking inflation just become corn we've the see because those our portfolio. very important. we around was apparent. the magnitude The about say, more now around we And for that improve we've going look, the

market corn and more on last we've years few products and in share soy access to market around over even the that. definitely Certainly where Brazil bringing improved our are improve

Asia, putting Indonesia, on here lot and in are share. I thinking lot think to say investments of a specialty Philippines, areas the crops, Thailand, X of the ASEAN so upside. again, of gain rice where a the in those countries, there is I would the

chain We're normal X But The because I thought seeing Things going That's we're or that. QX. certainly we wouldn't see, midpoint, hesitate do disruptions now. well. XX very our pretty to positive said, would, going seeing months back I are decelerate supply it mid-single-digit really I were do any cost not getting the easily be at -- certainly, For headwinds rate as are really to we're in price to increases. managing we the where we year say to ago. what much very we compared

I product were we the on here was lower market mix other lower end a deteriorate. only and seeing all guidance, then thing We're on before, of to is us. raised frankly, momentum environment downside, expecting we're inflationary And positive Input the than slowing. the we're that's The for highlighted seeing an here think seeing we not costs not these probably We're growth are returning downside. price not elements. we the not thing the a

from So you up world. good. the about looking world can pretty see The midpoint is how we're thinking a is

Operator

Mike from comes question from last Seaport The Harrison Partners. Research

Michael Harrison

with more has little the to this In with seeing? acres? volume maybe do weakness or terms And maybe there. growing planted get you're more on dynamics? color has herbicides you what us of do competitive something we if conditions EMEA, help to mentioned Can Or understand a

Mark Douglas

spot distribution, I would market, Germany, world. in core than Europe, and capital so describe other think parts their the way notice particular, really in lower working Europe Cereals taking growers of Yes, Mike, I are Northern cereals this France, in is, the Europe, U.K., of area. it in countries prices

the using chain, approach we products. their They Europe season. the on replenish they I The cereals the the inventory is in chain much prudent as right go of how do from now. think value it's just will through a be question rest

FMC of point. industry dynamic So this an it's is a more at peculiar dynamic than it

Michael Harrison

those the year? get we And into right. All as the in and half terms QX losses and of Are Russia exit? impact some then the registration the during in second EMEA, I guess, the of lapping of of we headwinds

Mark Douglas

Yes, you lap Russia will now QX.

So that about be we'll won't be a anymore. factor talking

registration have still will losses We Europe. in

north year, X%, that in we're just revenue. think something of of terms I this talking about like

in So the it's a Europe nothing the say. ordinary of Europe, area the given regime have I to more but the of would be we pretty rest would year, does -- the a call of regulatory these out that's where for number. normal I what tend

wrap very have like we mean, good. So make I'd to been The as to from just everything questions the X comment. up P&L balance ranging I sheet. the in here,

good feeling hear about can half terms about we're the second the think in you that half of second from I of of very the the term we're year. talking the year

SG&A structure good as insight We from an the is go cost have very, manage through to where perspective costs and into R&D the very our ability and our year. we

in exciting for think million X on that the well Thank innovation year. within NPI company the and the of new R&D a FMC. marketing is $XXX tells very we for and machine of think years, machine is coming growth a the I how the of launched your you from you're rest revenue us is and $XXX-plus million you. That very the When booster about the last working having in for confidence together. the of products like year. volume terms products launched That

Abizar Zaki

and day. all the you, that's today. we call have time for And Thank good that have the a

Operator

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

disconnect. now may You

FMC (FMC) 2 May 232023 Q1 Earnings call transcript