FMC - Earnings call transcript Q1 2024

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Operator

Good morning, and welcome to the First Quarter 2024 Earnings Call for FMC Corporation. This event is being recorded. [Operator Instructions]

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

Curt Brooks

everyone, earnings morning, to Corporation's FMC Thanks. and quarter call. first Good welcome

today President Chief Joining Officer; Mark are me Douglas, Sandifer, Vice and and Executive President Officer. and Financial Andrew Executive Chief

outlook financial will expectations. our outlook review select and full overview implied as provide quarter quarter Mark Andrew an an for expectations. update of will second He first the half year half will provide well provide implied performance results. as second an also first our and to

prepared the take Following we remarks, questions. will

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

conference well today's and EBITDA during non-GAAP other are as organic financial as are definition will growth, from and operations, may means terms and adjusted specific Securities you include all EPS, factors our and discussion Actual forward-looking today's cash as terms refer Exchange today's website. and subject Commission. risks earnings earnings in to are in Information cash Please adjusted may flow factors, on risks me which results of and uncertainties. discussion with today's not references these vary these concerning our filings represents EBITDA, free means various note measures. based discussion, earnings that materials understanding. best limited the adjusted upon adjusted adjusted reconciliation supporting non-GAAP provided which and EBITDA. of to, to including, statements our remind identified estimates release that we but those that the on our will in A financial revenue presented include and to Let uncertainties based Today's presentation used call and

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

Mark Douglas

you, Good everyone. Thank Curt. morning,

X. a in of higher We and QX are first and guidance with EBITDA X, the our improvement cash detailed on solid generation. end at quarter delivered results range X Our Slides excellent

And largely Market was XX%, in by above quarter to consistent Volume application. in of quarters. until we've driven continued closer conditions the purchases the the with the the and we in were end range. would some EBITDA XX% prior midpoint end anticipated. by timing range guidance magnitude prior per declined returns behavior in as have share high reduction not declined sales Argentina, revenue in negotiated year for observed versus and earnings if quarter destocking of in lower volume grower delay line We first of our guidance. channel First X period. change the with to the The our guidance delivered of the been is

we reported addition, a versus free In in improvement period. the flow very prior year cash significant

net from actions, year. expect million to earnings to inflation restructuring of targeted million the of Our we deliver this benefited still and $XX savings $XX

sales at a XX% period. was lower our sales detail due provides X level. essentially North prior Slide year against volume to on declined Price America regional a flat. record

which fluindapyr. introduced fungicides, strong years, the is last which the is active Adastrio, based flutriafol; on including products versus NPI, resilience based with Xyway, greater our showed New portfolio launched region's the of or growth in and on newly rest ingredient, in X

of reported from to down returns were our FX. excluding in a countries most Am and of in Turning Latin least regions. was lower distribution the Volume volume included America. XX%, X the a Argentina, Sales decline Lat relationship. in XX%, negotiated resulting change decline

digits performed recently in our continued grew and well. by Branded double insecticide aided brands. Premio launched products growth differentiated Cyazypyr portfolio the diamides Our of the Star

Onsuva is including sales growth, strong based on of reported products fungicide, New fluindapyr. which

the most outperformed the were essentially in Australia weather. China Pricing was portfolio, sales the sales the in driver weather of destocking declined Overwatch single including was high based driven limited significant in Sales Isoflex. applications. year lower primary XX%, poor digits. excluding by dry herbicide continues, and the Asia to XX% the on channel Reduced volume of NPI India rest FX. pressure although prior with in flat downturn

of a more and grow FX, excluding registration A including weather by of low notably by Poland, We partially primarily than from volume, Adjusted the EMEA XX%, period, parts restructuring moderate volume declined primarily our headwinds and sales Italy offset driven in price. were and the headwinds. rationalization was year were lower due XX% COGS other Europe, France, removals contributions prior poor and Europe. from and Costs favorable offset EBITDA actions price lower input by a lower-margin with XX%, increases. to than U.K. Spain. Northern costs FX other lesser single-digit decline products in most degree, volume to did significant of headwind and

changes moved includes Slide on we we'll quickly making how in actions. We've strategic way investment strong continue reducing as we plant in model, our and areas and R&D to where without restructuring we rightsize our made spend. remain detail indirect transform to progress, These have We're and organized, pipeline. been organization X health operate our and the work. our further diligent operating including sacrificing such our and cost are

Restructuring quarter. provided significant year-on-year savings in the first

reflected QX progresses, the comparisons compared taken to cost through in we will the in year expect prior include actions resulted QX spending. an QX. cost limit XXXX year in will outsized As saving what prior in This be to our versus year

million deliver inflation cost to million in to our range costs. savings of to within impacts tracking $XX our net $XX XXXX, operating are any We

round of the The robust realized $XXX XXXX. to by well. anticipate mix a now and financial end interest been Global We both There of business bid the continue has significant rate from sponsors. Specialty to of savings of a progressing of buyers be our strategic Solutions is process. sale in run second million We're

this business be year. to the We the towards sale the of of expect end completed

QX full Slides X outlook. and X cover FMC's year and earnings

the favorable are see been Data from in ag actions outlook has positive industry. The a Overall, which as peak of year the third has many in steady come product in incomes well Generally unchanged. countries, that led the speaking, commercial teams but parties Grower our input application from Our to levels, of fundamentals from business inventory healthy remains as on have making are with basis, America ground. countries. down we to reduce full these pace operate lower-than-normal inventories our targeting the varied. reduction progress. strong. channel see condition, weather grower a remained most while inventories level the their is good similar destocking North is still levels. now level of in working at both to with and weather. are In hit retail a by our furthest distributors to of We at in inventory. along unfavorable customers EMEA are regional countries geographies, except On back normal, shows

materially trend to through normal more are as inventories America, and the lower levels the Latin of expected are In rest year. towards move we

Asia, parts but made We expect persist to Pakistan, strong destocking destocking in in have such into and ASEAN well as India QX. progress XXXX, of

the customers While encouraged patterns. are to return starting signs these activities that costs, continue to historical to by first we're run their order

North the continue for now the of depleted. In in products inventories indicates such current used which orders products we to America, have be that receive season, that will early been

In season's last Brazil, next year. customers we not are that now volumes did visibility discussing have providing

improves seek progresses, to of assumes outlook full year but the lower inventory. Our market the hold levels will as year customers the that

second our year. quarter forecasting be prior to are results similar the We to

during of digits by the volume to $X.XX improvement billion midpoint, expect a the to the mid-single which is low Price between is higher report be year-over-year first represents an This destocking. since in FX the start headwind quarter be outlook anticipated in global to and neutral. we growth to X% which is at year-on-year a billion, volume. of and $X expected are driven Sales the

of customers the outlook Our and in inventory assumes countries continue the growth maintain significant volume forecasting we're many levels from quarter products. coming a to in amount new reduce with

At These Brazil, due fungicide X% year we in the is fungicide Adjusted Argentina of and include midpoint, million, offset lower the earnings and the an in Germany. and share and EBITDA quarter expected million JORDI be Coragen expect midpoint. expense U.S. to and Star that lower $X.XX, will between the and be U.S., price at between COGS insecticide at eVo by the versus XX% growth per $XXX to restructuring expected volume prior the insecticide mainly in up headwinds. second and is in D&A. be increase in the $XXX benefits $X.XX interest midpoint, to Adastrio Premio EBITDA

growth on Onsuva new Slide from X.X% in with market at of Isoflex We're expected is Star in expected our throughout between from major unchanged update. Volume with in be Sales year QX an countries come and last amount midpoint. in insecticide billion, conditions from We also full and insecticide our half and to are of herbicide Brazil other is the which increase products coming provides growth formulations to from $X.X and the the strong financial to Brazil, forecasted improving outlook, a Australia, substantial Argentina anticipate the second products. launch $X.X new X Argentina Coragen between benefit growth billion contributions diamide and and Australia to Asia. and QX excited active eVo U.S., Premio new in in Argentina. fungicide the in Indonesia

for pricing half. be is the the in with year expected minor full pressure FX expect impact moderate headwind. first a We largest to the

midpoint to to increase Our EBITDA the growth outlook COGS per share remains share, by price is D&A. X% from be interest $X.XX to midpoint. and XXXX billion, and of benefits and $X.XX Volume headwinds. be is and expected an lower per at earnings the at restructuring Adjusted offset essentially forecasted which are lower million flat between $XXX to expense $X.XX

we've the growth achievable. and Slide deliver on second XXXX considering delivered in basis, year and outsized that X growth comparison, EBITDA basis low of XXXX. and the illustrates second in the XX% of range half but our dollar half an a is percentage the both in implied the to of growth and XXXX guidance. Revenue are required EBITDA sales midpoint in the may implied revenue absolute EBITDA we full XX% a appear on half growth The second of believe

and to We progress in we throughout conditions more expect as conditions normal improving XXXX. the year transition market

various of the the factors XX guidance variable. our EBITDA improving timing impact and remains magnitude the that biggest The outlines conditions Slide market results range. will within

Our half. market we recovery But improvement expectation the by broadly is meaningful in in region. that second conditions speaking, will vary anticipate

new expect trend will to sales, show products which continue is for a in resilience We demonstrated quarters. several greater they've

favorable comps flat that will pricing shift mainly to be We material year, in half. the stay we raw and as more the half modest a costs first in second the also for anticipate headwind, the

benefits what our delivering also we As million of the restructuring confident to not products new we're million ability $XX directly $XX for launch in to only successfully XXXX. but in in control,

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

Andrew Sandifer

a by start X% with quarter, Mexican first headwind the some Brazilian key Turkish in FX was the Thanks, euro. with morning stronger coming less items. Mark. minor, significant in to most this a lira review from offset the statement growth part income I'll and a real, than peso of revenue headwind

quarter, the Mexican strength primarily to Interest FX versus up see ahead Indian to paper minor degree, lira, Turkish the in Looking we rupee part first higher peso. lesser second million borrowings expense offset commercial higher for year interest the continued by and headwinds, by by from driven was $XX.X rates. quarter prior period, $XX.X million, a the and, in the

We to change continue slightly down debt by the in $XXX year, year, short- to as range be mix lower a of million, long-term by expect full and million part XXXX. interest compared of the expense balances in reduced to borrowings driven in the as we through prior to year debt the to offset $XXX

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

As X and associated to point tax changes reflect our uncertainty versus with a a increase we impacts in providing tax recently tax are Swiss related X awarded related midpoint as incentives. guidance broader at rate to law forecasting and well transitionary as the range Pillar reminder, a XXXX to

$X.X adjustments the Gross to to million, million prior approximately in Gross with denominator, debt hand was leverage debt $XXX quarter end, our and Cash quarter. $XXX X.Xx. compared X.Xx approximately while March debt $X.X leverage on was next to number at sheet to XX increased to at balance over X.Xx. both of EBITDA from net Moving billion. the resulting leverage. up trailing was million Relative and $XXX numerator of the to covenant, was which of EBITDA as to a billion, a debt covenant X.Xx measures net XX-month

at through was of again step to to June down As a XXXX. temporarily X.Xx X.Xx XXXX, limit December leverage XX September covenant XX, and at It X.Xx year. our reminder, will XX, this to then raised

free as these as cash the through our have flow the to believe we the Solutions We progress through improving we Global year-over-year proceeds debt strong reduce business. as Leverage divestiture half EBITDA Specialty through we and ample year. headroom limits second from we is generation comparisons under in positive of anticipated shift and

expect by our We leverage returning to ratings remain long-term BAA leverage to consistent year-end. BBB better. We to credit to be committed approximately or X.Xx with our targeted covenant levels or

As basis. XXXX shifted we've midterm I discussed our average target rolling November Day, to our X-quarter Investor on Xx approximately net at leverage a

still end the the will should confident and XXXX. be we of meaningfully by end While this XXXX, of management, that with growth we targeted leverage are cash approach disciplined at we above level EBITDA be

well deleveraging Moving working additions flow as the cash in XXXX, as as continue first Free only prior a related an we our the our release program. on costs quarter Adjusted plan. which driven is period in critical $XXX projects. cash over $XXX year operations million free cash This to prior constrain step Legacy Slide inventory to improved lower lower were is most high-return improving substantially accounts was transformation from from the the cash towards and on to essential cash compared XX. flow investment first year by up spending of Capital to versus to flow critical to lower period. due by part receivable. million improved capital restructuring

a receivable the of billion by XXXX. be for We and by the growth to items from flow the full $X XXXX this is increase of for the cash of million XXX% anticipate with With expect due XXXX, $XXX than such as significant improvement release offset to payable million partially year, midpoint to cash at revenue in modest This accounts of expected $XXX inventory, midpoint flow reducing guidance, half [ other accounts second of performance interest. cash ] cash on we and to higher a free continue more year to at conversion range. the from the rebuilding continue driven swing free

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

Mark Douglas

restructuring structure to turn XXXX as behavior, customers deliver more improved well We cash we Andrew. delivering crop much innovative on market planned, targets improving cost started you, to protection started as our technologies, serving Thank has with our The flow. to as through normal pest rest buying for we Growers move is looking are we and these technologies of into innovative new to FMC the year continue conditions XXXX. products. combat market will delivering the as and believe constantly resistance and improve new to

is on introduced years, revenue from the this XX% the will for year from XXXX. growers in X growth our your industry the has over technologies. take record and in despite approximately that, With expect questions. the ready last to our come up products XX% we the We are of place a shows faced new challenges company, This last year value now

Operator

Vincent [Operator Morgan question today Instructions] First from Andrews of Stanley. comes

Vincent Andrews

bit sales. on more you if a can color first Wondering give quarter the

us you're product XQ expecting more to of largely sounds that, XQ? what that understand from guidance. help issue happened new us the have you have to initiatives. Argentina referenced growth could then your you volume just your sales of Could like low come might also would midpoint gotten end little have to tell a that It gotten bit You you that, the and about in

order hit guide? So does do the business need what in in base to to your XQ

Mark Douglas

Thanks, Yes. Vincent.

we me comment, the our before back saw distributor and had protecting obviously, balance Let how Argentina. we that we that decided issue in diligent expand very on a an of did just distributor we and material with that extremely business -- about very first and We relationship. been distributor arrangement in a Cone take Argentina, changed We've from Brazil. in sheet. the talked to careful We all. highlight, Southern in do We QX being that in

it it absolutely activity was thing from right a do. the So balance slowed line. that, to perspective, down top the the of sheet But that's yes, type

that us Northern the not were in feature that expecting Europe. really terrible was QX think second I impacted in the we weather

Germany, That has brought of our factor wettest had, you revenue. that think -- same spring about down in follow years the those For other Holland, the these same and in XXX that for U.K. Belgium. the things, really its Scandinavia, I was in the

pretty above as regions and else, much over all So performed everything expected. the we

Brazil, of I Moving of through pockets the there and has first are the communication but the impacted, at start seen remains they where find. were with conversation on higher significantly What into they growers year, then protecting would of level I the a last does say, on speaking, market, of with mean technologies this than growers Yes, in crops future market, QX by and year. are today a the where are, products would last hand couple use rest ground looking today the all, terms the robust the than are for that around we've relationships fundamental year. the and generally examples. of forward us? the world. Well, about saying, in our I'll weather technologies our give and their time can best orders different

now They have growers us need words, their given orders season. we the a us? they're us next into in depleted We other season so gives have Brazil, good and In Acreage 'XX, manufacturing bringing lines hand. materials confidence also that of back into second have increase that are to is last much for year. half, better year. going asking retail to It in FMC, those mean on distribution hence over it's start expecting been 'XX and carefully now does inventory. now closed expected insights the but What the the

and that means we've now, later. hand little basis the buy can Andrew that to for of on raw I the on time So That is we're we Brazil. year, orders over materials, first bringing would also a started payables we're the the really which back manufacturing have on last comment say, extending

season this for need for be I growers are I than what with do to need rest of changing week what do the conversations the the Europe, or next week. rather In now

the longer-term totally So in have products that selling the to you that their that going In of May, the business, even Yes, those We're season, you? more still they're and have U.S., operate there unusual. give does are the way selling their in used tells inventories What feel that that's but that will starts for asking be It used early materials. products changed been inventory very tell products levels, now. of you is we're for the view. that they're right is a depleted. people which to

So products alone. forward. that through resistance of us better are contributes the drive in listed looking through That our go for are launches in that products numerous what is you I we and take that's technologies There we of also our X insecticides. to being scripts visibility those breaking, for launched the as value growers regions big view new provide. It's new the tools fungicides new from to and and herbicides new invest the always new products.

the expect speaking, to generally in February. are how we we versus forecast So year we confident leave to It's where in feel were flow. today that's May, our why they do where

where we a have are in better customers our than sight of had February. We today

Operator

Yefremov comes The KeyBanc. Aleksey from next from question

Ryan Weis

Aleksey. This on is Ryan for

be quick one the Can versus me. of would in for the any diamides level Just brand for color a there about of portfolio? helpful. you your Just guys pricing talk the rest

Mark Douglas

products our our give Yes, other for we parts don't of products. pricing versus

for soybeans, allows gain been look I are the backdrop. highlight the We double all what would newer you said insecticide QX Star they portfolio. being they to and year, a marketplace. difficult we FMC, I and did that to new brand-new at will the the producing and look and and a growth. than market Day. is products think in digits has are QX Brazil be formulations exactly that release very the franchise that diamides that older is reason Premio diamides accepted perform products continues I diamides market. in at and us grew better The our move do that differentiated, in so. this is When it very in well We're to expect attended against the healthy That overall Investor share by we in a grew from we the the know are at November for

Operator

comes The next Research. question Parkinson from of Wolfe Christopher

Harris Fein

Harris for is This on Fein Chris.

me. Just held pretty on were a for a In quick price but comp one still America, significantly, tough down flat. North you obviously, volumes

be to are something Just volume think you're get necessary exploring? curious the potentially that structures slowing adjusting or that what thoughts your on that Is again. rebate you could

Mark Douglas

introducing the look last like Adastrio. change new The they're of they North something higher the American one introducing think to profitability years. mentioned, kind No. highest brand-new price when When one facets great in going a for American the of in opportunities new That's I of such on introduced at we new I there, a mix in done FMC's job from we Generally X team the products, This point, our on getting based launched products us. North as the has just Xyway is come is bringing are have the speaking, higher of probably those new attributes has and that's insecticides we fungicides, market region missed world. revenue business sheer any diamides, XX% point portfolio, in a the the growers. and that's at

business when we that mix, So change the starts to change. see we obviously,

believe availability American is, where is feel North business no, our rebate technology and grow in good doing is. upon proposition North that with very So not of to our based anything the technology. America. We we're programs We about that

American North Canada. fundamentally was we year, same good That's pressure There shape. your markets, I in that in is Frankly if said, pest last business think a of these the QX was mainly in at why I year. ag for and very that that? good, looked seen if but quarter, why by haven't on business huge statement, normal QX, that driven XX% pressure -- this dropped face is is Canada you XXXX blockbuster pest you speaking, the but

Operator

from question comes Spector Josh next UBS. The from

Joshua Spector

specifically I ask guidance. second half on to So your wanted

normalizes flat the high or point? that in America year-over-year. down single in especially pricing at of Asia. parameters digits Can today, you're What I think level seeing that of have at given mid-teens confidence half down you not Latin would your one in in flag out just second that you risk that? you And there characterize is this

Mark Douglas

a comment? Andrew, you want to do make

Andrew Sandifer

Look, have Thanks, is and Yes. correct. to we where overall of at I the the Josh. look think price you are progression

prices year low and quarter of in significant QX mid-single Latin first last overall a minus We this low as in but QX, amount in of of with QX, have ranges downward single minus movement in single, price as pricing the being year of digit, mid-single-digit QX well X% digit, kind overall, with in X% America.

As fall, we finished the America. season, we new Latin price in the will be season going reductions into in significant very the anniversarying

So price and we're we anticipating season not big where into are. go that already shifts there's less new as we given the

Operator

comes The Goldman question Sachs. Adam from from next Samuelson

Adam Samuelson

to sight maybe love kind running lower that for is just area inventories. color X now. what exist ending, was any I the there? expectations performance in a to disaggregating think to India. gives from And potential market kind maybe if of still to high line It market application how hoping rates where more that one consistent that's of bit moving kind destocking like channel you're might destocking I and a It's years and the get feels the in pretty been trend that narrative get you And of on of competitive pressures on channel anything?

Mark Douglas

unique that it. reasons the market as and monsoons market it's that And continue the individual very the industry-wide We're own necessarily takes was as for that. world not also time the this. hoping of it's weather have purely pressure of the is Yes, through to on conditions just weather India phenomenon. inventory great. on It's last The there is for year. of is same dislocated the a Others important us not rest years. its is that would inventories. only related monsoon facing, through over channel better an Yes. channel the in the one the almost say comment to facing few sense the the is -- Thanks, challenges, commented in us we to and Adam. We're India to get last season participant not we rest due I face

quarter. are We reducing every inventory channel

markets Some The fair the time what but It markets growers good. the is where inventory. the that is latest Generally themselves have like quarters technologies. some India technologies like drones. a good of really than do the it markets very highly will more is just from are It's of speaking, technology quickly. spray others, appear right to we only take services do where remove India to weather advanced that shows use with you in the online some channel world adopt in one and the faster Indian now degree fragmented,

we're So drone spraying.

run and them right over take That's I very is to think acres beneficial approach us we number the X,XXX That that farmholders because way now. in our is products growing. allows it differentiated a to brand-new a apply small in India.

Operator

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

Kevin McCarthy

about world, some on relates a you to internal as would million on higher. question like where like about bringing you you inventory. down parts looks talk correct. of is comment, inventories a other destocking, own now made but are basis, if versus year-over-year my had It a Can back I it your that lot in a came $XXX frame out of maybe A bit the think thinking where Mark, be inventories you manufacturing online to Brazil, little I math

thoughts you related for put of So rationalization operating just appreciated. effort context would us? leverage that internal And maybe into any of on be could kind

Mark Douglas

much there pretty to hence, macro our We're getting our do fast into getting peaked remove basically point. inventory point where first we for back be. since however, came bringing around they We're manufacturing. some about absolutely, internally. close be if have really inventory, going be. comment not we you We want we're levels Yes, with close a to we're level in yet. at where where channel to Andrew, the destocking And Kevin. August inventory jump as I'll this make we've then views. question. the an track we could. different And to to up year and quite than now pockets, for want been the the Thanks last we overarching We're should Yes, lower inventory obviously on to as are

we the As pretty the But the moves I be. be we the and this we're that by But mean any in versus organization to to do important crash inventory in going rebuild reset took want some It's revenue through ours. forward. to normal, at of sense QX, pace. other comments? not hard shape demand see do would year will we same everything now And get other manufacturing the manufacturing. in through That's say we steps that you has stock here. QX we're inventories side good coming really as into notice make specific an where of we needs terms painful I to where really come did our that. Andrew, to time of in like

Andrew Sandifer

Kevin. certainly, Yes,

I mid-innings getting certainly think inventory own our in place. the journey the right and in we're

Mark we As June reported to, $X.X down XX just quarter. to was this pointed billion. under -- We're our about at billion $X.X inventory

algorithm payables bit supply to that we on have where delicate that current have couple sales year maintain the think but of as big inventory ramping mentioned, there's go. the will as by level. build are back of more up It balancing another this with cash bit be free is one I are inventories for -- step. sell-through. will We normal it and be Mark we production, a historically This of line hundred a our up because to more production, already hand and products It balancing ramp in part its generating with in levels, particularly it short for very very be we million our won't flow a up

expect you translate it the our inventory rest of year, and but another of balance be million -- a be couple the will that year. there cash sheet contribution to generation of hundred won't one out big come free step, the of for to should So through to will flow

Mark Douglas

their for position ask shutdown. many same the to and suppliers feed they words, material raw other pipeline. them we And have products in Andrew, that we have I'll of balance. one here fine we Yes. Kevin. it's it a fine go Remember, Andrew call balance, the just dense. to what find I mentioned to add our are. comment, In manufacturing are this that call

you quite supply this think I a chain that and long. is very know very, complicated

notion customers. suppliers whole to product from how our of to us, this the So flows

It's be is us holding we as not the over used some to inventory. occurring have some with places in run to inventories not the is our starting this last down be going their our easy got lines. because going in year, That product and up to interesting world customers

and So historical, running low folks that. I distribution done this the whole inventory retail we've levels to think very of compared never notion at

as growth to see to be come to going back. we how and plays for the manage going it's value this chain, starts forward out So interesting how inventory

Operator

The Joel from Capital next from question BMO comes Markets. Jackson

Joel Jackson

questions in I'm ask one. going to few a

seeing with I what you Brazil. Just reset, think, it. what's senior you've there, you're what maybe in you new talk at looking about learned first Maybe there, management changed could eyes the

said a reconcile just Second of of morning. all, things on this couple to you this call

with I running may said you So right? wrong, be you think got you're to I have. going can you that I have are that giving lower if think but visibility hand reconcile also -- but X later mouth, they I you customers order those customers bit normally a inventories that out said to comments, than seeing got that they than were put now

Mark Douglas

Yes. outside FMC Thanks, very has Joel. Yes, Brazil. of somebody in company. It's time long the a new in to time be the president region brought that the the first management in from

inside also the industry a in bring and distribution from brought a move talent human the We the veteran, have We develop we world. around a where capital process background, background. crop company them time has both good retail talent we very outside, was experienced but and now very to in felt who robust protection and

both getting of we're wells the So there. best

the pockets that What market into. in expand and that presence are customer we can are can we of learning? sense go the We're we where our expand learning

sign So we market very that of that's channel bringing good to part that allows us mentality a portfolio a how and into growth Also to attractive. make about of FMC's the our perspective. distribution offers build think retail overall

caring. might that the what are have. it be It the I of think they levels inventory, they say are inventory, of people Joel, is but from have fact in the holding about. inventory retail service I it's levels hold have customer think that to But you distribution from lower to to not chain of because may The thing. wants that order visibility one where lower is both levels and lower would

as actually don't So think X do other. each hand-in-hand. the work of pieces being They to opposed

Operator

Byrne comes America. question next Steve from from Bank of The

Steve Byrne

volume first is years When Am. in there half between first Lat years, volume by difference we a like trends X But X this at they're and over we look meaningful look lower your volumes half to at your nearly is last quarter, that's fairly the than And perhaps X of a growth. the second driven second half. reflection when half of

in contraction XXXX. first levels back presumably led XXXX something second to So but really yet Am -- Lat looks your the quarter half to like reversing they're just volumes in get going are that to sharp volume,

to understand some second is half South robust just additional -- for insect So There why difference pressures your And by I days. the trying half your? driven is in between and I'm second first that demand are insecticides? America guess these potentially

Mark Douglas

make some comments? Andrew, do to you want

Andrew Sandifer

question. Steve, Yes, it's the Andrew. Thanks for

this First, just where -- QX some is disruption QX of think QX, comparing earlier, for a As quarter QX record inventory excuse last the put to was quarter I mentioned a is here world, 'XX 'XX Mark right? we're context, of pre-channel us. the to of in me,

XX% perspective, of in a XX% was we've QX all seen mean -- me, 'XX, region this very to kind up with excuse of So 'XX, America we're it zone. North correction with correction. what year-on-year the channel with And to dealing I from in swing Our XX% return. least a this XX% big year before dropped volume of put peak line right? performance in we I was volume. an of dropped correction going QX kind put that just 'XX, change dropped is would always say, any at that just take performance, context, to XX% we This is said anniversary QX, you -- the we've seeing start volume. get to out would to of a continuation of channel the QX more in of had in much quarters you clear of QX volume XX%. X QX we through

QX think part that an But to interesting So of the question, I'd put in it's second your one. I context.

you very of the the look presentation, if and large line, top get bottom the size, XX% line that's at terms second growth look it. half. XX% slide look, percentages the But In you And numbers. second when the growth half. in in historical the to Those like in feel are I of our revenue than size and EBITDA of XXXX at half that performance between dollars we're dollars 'XX did the of business, are XXXX, similar in sort lower our we in of before what well second XXXX. the in second XXXX. actually overbuying implying the half

So we're here on was massive What acknowledge overbuying. return we a counting counting not positions, recouping type have correction. on more normalcy. to we not there XXXX We're where is

Lat Am of about a second of market in businesses chunks prestocking you Lat and particular, think of the 'XX corrections remainder through our And certainly, the drives and big taken Am given what season. U.S. big those this is half, of chunk QX, big Both it. in in the big it. took if corrections and have

America in inventories, the current level. As Mark particularly grower up described, and retail finishing lower much season Latin with we finished -- we're at

improving normal, going the that market we're And conditions. So a into I think is that's but the key, improving. not market

the the half absolute comparisons. these we think that smaller in we of are -- from second growing past certainly And that we're given doing of net-net, business reasonable the forecasting dollar growing we're year-on-year base. is the a So worst size from

here, careful, doing in of by what we the business XXXX. XXXX compares be again, change to absolute just don't overwhelmed the the much dollar or were again, pretty size get So to percentage

Operator

Andrew next from Barclays. from question comes The Keches

Andrew Keches

Andrew, I hit couple you a question the discussion cash a on on have of ago. questions flow that

at rebuild you've back those cash of payables that be in heard already weighted talk indicated or will XXXX. Mark to said also I some you've So flow Brazil. half more least in But about starting

give the a quarter source sense a from expect you should cadence on for the back-end weighted can relative flow And sneak follow-up. cash flow then just sense here, typically can basis, of I of So cash a tiny sort but free a second it? we just in us and is any how if

inflows as that EBITDA Or well? deleveraging next You driving year XXXX. continued did to to This year is debt mention mostly be Is repayment more and going cash repayment about appears debt in include growth? that.

Andrew Sandifer

guide breakeven a but the levels probably year. capital in negative the of I working would is in Certainly. flow. second Thanks, it going free I And of But flow And is the -- normal, all many inventory. is you the free for cash -- in the in tell right? may cash have we not dollars years a I be of too positive second appreciate come There a so flow change still and of inventory and all free we spool moving traditionally this have the again, inventory talking don't would half. it's that precisely. the QX, we're We to this prior manufacturing weighted flow key it's would variables. half cash flow Andrew, the morning, growing the us, less on I until cash and of this where reduced very been that heavily than marks Mark up about negative balance are free full lines. first quarter, significantly I flow, to year for that's quarter starting cash the And expect restart the big basis, and think year dance, to for were drivers questions. with Look, on cash rebuilding the QX inflection to And payables. this we build as essentially

finished pull are the to higher level while of production. expecting rate create absolute sell continuing to at that purchases, carefully to second we we're flows will the half, that through. through in work What inventory through sell down is the bring our in add and That new selling and will then goods process in balancing inventory inventory some we

as a be again, reasonable of bring more today. a level So a to hundred it the couple back payables rest inventory, through up are we million to we will where less get to the go step stagger of and than year

the really combination half the be through will from cash to second those that full So it and X, will the benefit of get those actions. take

paying is As year priority we very paying after The the thinking debt. of question leverage, cash we've clear. this the about dividend second about down your and for available been all part think certainly,

So that organically. cash divestiture, proceeds generate free we from flow from

right still we XXXX, place. way leverage to get to significant the In have go the a to

to growth by that X be will EBITDA. repayment. to debt back driven are balance be and more free prioritize continue a this have to will us use into in see we for EBITDA But to covenant by help level the of kind sheet absolutely will just instead at. improvement, we We We right? continue it debt driven cash be normal repayment get but leverage to leverage in until bring well It range place, the growth business should will of factors also of for will we within the right expecting

it be as XXXX where end about think in free go time through place we'll of targeted levers. as to still will growth the be will as by think the XXXX. utilizing leverage get that right the the a us X It that EBITDA be levels in that XXXX of well flow to I combination that So to right we get gets the to cash we to commitment we

Operator

Rodriguez Mizuho. comes from from The next question Edlain

Edlain Rodriguez

Just a on follow-up quick market normalizing.

XXXX As and do comes as portfolio XXXX. and you see like the you for get growth volume inventory destocking into XXXX, how an to end in

Mark Douglas

and I through Brazil. Yes. normal we've what think of go a America for the Acres more Latin we said expect we would we growth marketplace. certainly, type Listen, in, to as continue consider 'XX, that grow in

be a we driver. point, inventory. don't And forget lower resetting that So that then of will to at expect level be people a from

like would per our a from long And grows normal with market market generally expect annum. growth. in more of outgrow market the we portfolio, X% X% haul. Typical anywhere you So this at speaking, differentiated the to

more it's normalized think I market. So about a

said, good. Demand very on is conditions these we the ground, in even as

We expect pressure that continues continue to to change. as

being Obviously, NPIs our robust. growing market as rapidly. piece we are that So see pretty

just growth us of and of 'XX, margin. but we than expect would now depressing and the not in the view 'XX faster other against 'XX flowing lot -- which had EBITDA And then our So be see really our actually are we market-driven, a of 'XX. obviously headwinds right EBITDA a piece we that cost to is

couple comment earnings also more out sense a market, how as into want as got go the going year. have certainly next think significant picture the that? And important 'XX through tailwinds but turn of robust it's pretty I you more external an we do we build P&L. calls we to think what about tailwinds facet Those of we into walk next on is our we Andrew, to have of the in stable, some you like, look as

Andrew Sandifer

Yes.

delicate I we're we think, 'XX, activity. get this from of year as morning is Mark, this dealing go one manufacturing unabsorbed as dance headwinds obviously, relatively and -- the we get been end look with By year, at costs That fixed back that, through to describing headwinds costs low from we've this of the where operating this had fixed unabsorbed there. significant are we the time past this the to no normal we year more to we've rates. anticipate longer being

for a the the you base stronger a being headwind 'XX, tailwind outlook. that key element be if think will 'XX itself of bit a about our adding in or of So of a going certainly performance into absence

unabsorbed way to got costs really that ease how time the we get planning up fixed based think see volume the that develops. production, variance the of see to we But of rest by expect do how things year we've and to through the we're I on today year. the piece this Now end ramp

Operator

Seaport comes question Mike next Partners. The at Research from Harrison

Michael Harrison

the and launches, help new now expect relative 'XX. understand you and 'XX maybe you recent you launch how and that hoping change on expectations. those just a adoption for that product the from then some Maybe acceleration second performing third post-launch into year how you little the those was give would us could I grower And products. bit color year adoption additional mentioned see of to and new rates evolve they're in

Mark Douglas

Mike. Yes. Thanks,

XXXX, launched If portfolio in call about terms we those what been we've was about years, it in of you X talking our NPIs. 'XX, of XXXX, back new look about at in XX% we think XX%. how about products what we've last from today In from gone NPI the

this about be We XX% it to year. expect

be old to I in takes going you some active mean never continue numbers this years find we as have years. get them. XX are up. years see can of XX-plus for Peak start those that X creep still reason peak X. that to number to anything from market. applications impossible sales a ingredients You for we that year in to it through new years is, it's And sales grow mean I to the

about job, in the of launched go and other the 'XX. North fluindapyr-based Argentina, doing world through talked we especially good fungicides. as America in be the been in launched We've Brazil parts They've fungicides. with and a now very they'll

the 'XX about Star about continue talk It easily So it that fluindapyr fungicide well of We new you to launched growing us nicely grown The in their 'XX, expect insecticide 'XX. track QX. the in through diamides introductions, we Premio in QX. has rapidly. should very grew talked

season 'XX-'XX growth. be interesting and to the We continued very expect

going Pest not by pressure Brazil. of in And away world. the we have, insecticides robust portfolio is far, the in most

probably into will of as And of It more continue grass me, top now That So Argentina. that's Australia. a to herbicide grow. have those do pretty expect go in released is market all other put they're that that trust molecules. parts of to Asia On through then we is which and go 'XX we that, season. we the exciting exciting being we Isoflex, into than the

We have game a comes herbicide the And XXXX. brand that rice new changer. that in really is

rice in not grass killing and grass a is is Rice easy.

mode new years. of XX in first the action have We

that, that on in that we the progress decade. 'XX We're the means built. have whole outside of for launch of through biological terms and that new Brazil And and 'XX side, making us really of Asia major build XXXX. the our target So excellent and first it pheromone our That's 'XX then soft pheromone we've is of in next will first a R&D. will in beyond platform first launch and in in

manufacturing of our through coming pheromones We're amounts these together very first We process. new our chain supply well. producing and our have real

So you the really, next really can portfolio, robustness tell of that years, few strong. it's that over the

Operator

question from Viswanathan Arun next comes The from Capital. RBC

Arun Viswanathan

QX good here. a on Congrats

And it wanted provided your second on that half half. I looks you to very ask comments. Andrew, levels. XXXX guess dollar guidance, a So guess, you the midpoint about basis, on your I say, just or noting the $X.XX according least to an exiting so like billion be second annualized or at at XXXX useful looks at be should basis. some will you at I like

If annualize half that second you to were guidance.

I informing encapsulates in guidance away, your is So second XXXX, did just maybe you're did how billion XXXX, you you it's of really kind kind the think in of ways know comments, $X.XX that thinking if half I of that that 'XX and about you $X.XX think still billion; that but EBITDA. thinking normalization.

Andrew Sandifer

Yes.

inventories regional right the situation I mix look, going very and XXXX quarter few a combination a But think but XXXX. levels always multiyear a to light. now means, would business, annualize more over not It's granular years are I think to top targeting that EBITDA right, where inventory certainly, an necessarily different the any bigger sales line, period, into like business look your that People those. in where are product levels to dynamics and too cautious point, that ago, really in think And not return more a unreasonable of cetera. do mix, a we trying and of in not et levels But are we're obviously assumption each here. seasonal too by right? was with downstream early argue I getting downstream sustainable get from more sales

quickly. confident going has use protection to, has thing there there one the and very comfortable steady some we've rebalancing chemistry could pointed back into to Look, But we're time, over throughout with, some point, be happen some been and grower just more be disruption. getting this flow. not and normal rebalancing to At increasing and that's the of crop

with up by consumption inventory. or costs and those as rapidly overbuying our XXXX. down XXXX. we an an more be we've start When supply about in bit had up in going will more XXXX that the top down XXXX channel talked getting excess into half, tailwinds from has balance healthier in built into than had there we with to XXXX growers. drawing in ramping That that we've the on right, little through production manufacturing drive and and will headwinds to down cost capacity We in manufacturing seen channel and We've when operations look absence sync overcorrection a back demand utilizations, line XXXX fixed what's in normal back the unabsorbed go you EBITDA, draw that and underlying as of second to get in

to manufacturing us the was with Mark better that line. about and new line of the So some for long new products, of things terms benefits top should costs with growth in with drivers more that that talking from mix drop growth exciting bottom introduction product growth just of term

again, outlook 'XX, give pretty So firm feel do early for we out but there. there's too positive to strongly I outlook a think that

have market We inflection QX into a more get saw couple a from that? to back of to really XXXX. And quarters improved big return conditions in second getting with is if then you want much the Mark, we here. through to to volume add growth. a what half

Mark Douglas

review, good No, Andrew.

Operator

comes today from question final Alexander Laurence Our Jefferies. from

Daniel Rizzo

is Laurence. This Rizzo on for Dan

well. was inventories has terms something and working I were be where about there wondering just those. a on that's -- getting worked as are, if talked with receivables, with lot in to You and they comfortable that you're payables of down

Andrew Sandifer

the Thanks for Sure. question.

receivables. about correction a you return -- period some to we There's opposed -- some second balance as be our use There brings and we cash I more peers, think pricing But that to some yes, there. and growth very we've comfortable get that been be I think we have chasing how business. half think we're not our been naturally sheet. of growth with manage of to And continue This to will look receivables. have at carefully our about the through I working to as if capital-intensive in wasn't chosen managing always is it. volume efficient. in disciplined We this opportunities

not and So collection risk. to it's build receivables longer-term up

there wasn't where to but the at understand -- and that then really here always with this I position by are. market working second upturn when in will where volume not into with a lumps strong in we some the volume we've understand what into extra instead, XXXX a can good receivables. position. are We again, -- our think a we're collection And half now risks risk, healthy balance pursuing so through we be sheet not taken be very there's in had. an We come

continue very our room opportunity to to working improve sheet, we capital efficiency. of confident. of feel So to ways again, always and our for the balance in look But terms quality

Operator

Q&A our concluded now session. We've

Curt to back call the Brooks. hand I'll So

Curt Brooks

day. Have a good everyone. Thanks,

Operator

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

now disconnect. You may

FMC (FMC) 7 May 242024 Q1 Earnings call transcript