FMC (FMC) 3 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the Second Quarter 2023 Earnings Call for the FMC Corporation. This event is being recorded and all participants are in a listen-only mode. [Operator Instructions]

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

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

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

prepared remarks, take we the Following questions. will

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

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

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

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

and you, good Zack, Thank everyone. morning,

on slides detailed X results X. quarter and second are Our X,

regions. volumes by impacted across significantly were all substantial a quarter the decline in in four Sales

crop We outlook and we reduced believe our protection that year. this would this no low single earnings already During it now our a for quarter by call, decline market is longer first digits market thought had and now by to the the global intense Considering growers quarter, protection we distribution crop double valid high to digits. single expect the digits in destocking second abrupt low in contract assumption. by the the channel

by and remains levels consumption geographies. continue on-the-ground year at as to to last similar acres Even growers grow in key planted

the a are ordering. factors: rates in increased price the fertilizers carrying inventory; feedback result cost second, Channel product of of first, actions is there herbicides led supply have a of higher the third, to increased availability the in confidence eased; indicates have three wait-and-see disruptions have chain and few past approach as and nonselective reductions interest to years destocking

application growers distribution are possible. in a as close As the channel to result, orders placing as

to sales years five the introduced portfolio. which year FX. was the challenging new value mix quarter FMC, and remained were reduced the the last market levels XX% of our and resilient lower that similar of led second to XX% revenue at than in product and the products excluding volume For prior illustrates conditions, aided year Despite lower, last innovative

also implemented gain diamides the were rest portfolio. X%. quarter of of the outperformed increases Branded average an in the with Price broadly

which illustrates every compared reported period widespread of dynamics. the While a the generally newer perform basis, on our country prior better channel lower relative nature current volume to nearly year products

American down. to excluding second XX%, Overall, sales Turning regions. North quarter volumes prior the versus declined year. were FX the XX%,

pressure growth, total primarily Coragen MaX, in insect grew and including showed diamides, five to the the due introduced XX% comprised record in elevated of products new last for However, Branded Canada. years XX% a region. also revenue, strong

destocking lower year-over-year volume declined than XX%, as offset Stronger and XX% was was by in adverse excluding in Sales EMEA weather across FX. by compounded quarter the Europe. down pricing more were

the historic faced to region Southern Shifting volume year to Latin the versus a headwinds America. from Argentina. Brazil XX% prior declined in as drought Revenue and additional period

the the adverse volume of South North were impacted declined continued in high by season in were India, excess and ASEAN sales delayed rain added down organically. and challenges channel Australia XX% inventory. weather. to also parts In Asia, XX% from monsoon In and

the EBITDA year-over-year the the Costs to in first momentum as quarter. headwind closely $XXX in Overall, decline. to was tailwind spending. prior continued year XX% primarily volume a period, quarter. input quarter, continue was million Pricing for became since decline, down and compared in the the costs manage time due EBITDA XXXX to a to the we FX

half our for be outlook line by the is in X the offset lower for expect from the the Overall, during shows to modestly negative our as Moving earnings of second first our expectations costs. provided Slide to with volumes we rest impacts guidance second year. EBITDA half. the quarter call the guidance lower

second assuming that half the are especially be management inventory below prior and the in expect revenue at the slightly QX. midpoint to continue, period We active will channel's year

expect fourth volume by destocking we headwinds be partially Latin higher in product the quarter. However, new and America to offset in launches

expected solid are assuming applications are remain consumption planted to Business as is to to remain projected We and growers product products will season. increase. and continue acreage fundamentals order the steady to grower planting closer

majority forecasted with a already expecting be are of second to in benefit pricing We in minimal. low place. actions the pricing FX the single-digit half impact is

the EBITDA half by guiding main drivers products of partially midpoint, prior result to expected expansion. year in margin lower offset expected the year a from volume are the improved in This and the mix to modest costs, is XX% which is new from growth and $XXX pricing a headwinds. EBITDA input million for are healthy results. higher tailwind, second tailwinds We be than The

inventory the the South season quarterly timing result to purchases applications, of channel, quarter guidance year. to closer of the recent Slide the and the of making Volumes start the during hand-to-mouth half America. the are especially second growers the heavily expected distribution planting more in X forecasted is to fourth provides towards management the for as weighted in

midpoint expected decline year Our prior in is continue, percentage. third at destocking guidance low-teens is XX% in resulting than a the lower quarter as revenue to the volume the

shifting midpoint the launches decline. headwind quarter orders third Fourth America. timing than the favorable higher the growth expected slight is X% and earnings the midpoint we both revenue input the at per prior the from year product year higher at the driven and costs to the offset share revenue to from acreage by EBITDA products. anticipated from as However, in midpoint, the volume are from be are higher primarily XX% EBITDA versus are prior and volumes quarter, projecting the be positive Latin at expected new to additional impact of mix still

tied Slide guidance at X channel largest the the variable end second of is destocking. closely our assumptions the duration outcomes range range. for provides of the is each volume, to which The in half

single-digit guidance range, in we we Across and the are input are We tailwinds. our cost price benefit. cost discipline, single-digit assuming confident decline a low and high volume expect a still

trend aggressively which in are our unabsorbed of in patterns, fixed production not we will response levels across some costs. the order lines to capital working lines. However, current including result manufacturing currently Many operating of adjusting managing our are our

I to over to will now items. turn cover it and flow cash Andrew financial other the

morning Thanks, of Mark. I'll items. with this statement key a income review some start

a the growth the headwinds was second and in X% revenue Indian rupee, headwind the dollar with Canadian significant FX the to Turkish quarter, lira. rupee, Pakistani the coming the from most

with modest diminished through the in third of fourth impact headwinds the see we XXXX, FX quarter ahead Looking the rest quarter. in

Asian from rupee the headwinds Pakistani primarily stemmed rupee. Indian and particularly currencies, quarter Third

due cost was points margin the versus higher steep XXX input up Gross mix, in EBITDA quarter was lower EBITDA higher moderately a margin. points favorable percent prices year-on-year spend basis revenue the prior operating XX.X% drop down margin year XXX to and of but in in more basis the tailwinds, period. resulted than and

EBITDA expense in margins EBITDA of increase expansion XXX basis expected first second mix strong EBITDA roughly discipline. tailwinds, basis by points points half to cost input QX QX anticipating in up the with and are operating with margin to pricing basis forecasted be despite in the the XXX We roughly are and points of continued margins half year. year full improvement, XXX XXXX tough

to We $XX.X expense expense $XX.X higher in million the driven debt up our Interest the capital. the working period. year along to were in resulting quarter, levels. second capital from compared levels rates due working was full the of prior an interest higher to million higher guidance. expect expense midpoint This balances the $XXX is million year U.S. now of driver at versus range the elevated elevated interest million, prior overall Substantially quarter higher be primary increase interest $XX by with of for increase debt $XXX to million,

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

of and liquidity. to results XX-month up and X-year, were in this issued the sheet the quarter, XXXX maturities. at term we in balance times. used senior paper XXth, XXth, the debt pay million and to $XXX tranches On $X.X was financing commercial of and After net second notes trailing and was offering May reflecting the these while actions billion balances. quarter. prior from Company the loan X.X from Proceeds equal XX-year debt next unsecured debt-to-EBITDA times, down was $X.X retire XX-year Gross X.X the to June EBITDA Moving billion gross

channel the bank us During thereafter. agreement. current its we leverage We inventory which revolving final started our amendment XXth, magnitude March amend the We ample on with through the group leverage discussions entered covenant reset the times June, and times to XX, raises as of business ratio XXXX, on to our X.XX signed disruptions. to the X.X credit apparent, this amendment navigate implications to into room June our provides become through covenant on and believe our

flow slide cash versus offset $XX for operations use generation Capital negative million XXth additions negative impact current million as Moving million impact more the was cash of as million, lower cash on activity well and while substantially spending flow $XX the prior to in legacy than working of in June reflects the flow year free investing drop was prior up year-on-year nearly year. reset. other FMC than cash capital channel on This $XXX million line. this flow and more receivables spending free lower down EBITDA the generated deployment Cash of on from second cash every $XX than by quarter, declined the $XXX down. at result, period. XX. on the as was other inventory year-to-date With was

shares XXth, million $XX an of and million FMC $XX repurchases. in returned to dividends cost at May $XXX.XX. purchased average in million XXth approximately and of the combination in share in May Between We XXX,XXX a $XXX shareholders we quarter

With these remainder for shares expect of diluted million XXX.X we outstanding purchases, XXXX. average approximately to now be shares the weighted

for reduced resulting year of We as at to an flow XXXX. EBITDA, in we the zero sales pronounced the decline free payable midpoint a result lower demand. and half first with in second guidance adjust is collection cash balance inventory lower in production accounts This expected cash decline in of the our half the to

support million $XX $XXX million substantially versus slightly between cash from plans our lowered spending to million, site in spend as product after to disposal be we and new Legacy inactive and operations adjusting now to of capital Adjusted year. expected is continue from expect midpoint We additions is remain expected at introductions. to transformation benefit for $XXX the to $XXX an the cash essentially prior to down now the flat the for XXXX. invest and million

below average a guidance due three-year cash conversion well of the XX-plus-percent our targeted to rolling entirely This flow inventory reset. free flow impacts the channel implies of cash XX%,

comment to disruptions. While we cash expect move current the it's early in as to detail, rebound do too we past flow

used with year further near-term reduce be this year. dividend flow to generated the second borrowings. do deployment priorities repurchases current free the With Free cash will have plan used outlook, pay to short-term We the any not cash half changed. remaining share in cash flow first cash

XXXX We will evaluate targets. to in restarting levels leverage as share repurchases return

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

Thank you, Andrew.

everyone in Day I remind to to up our headquarters Before holding Philadelphia Investor it on November we our the will Q&A, here that Thursday, open be want we at XXth.

will interacting our forward. new be and to team with our on addition strategy executive going attendees leaders, In updated

To clear forecasted is is the we performing in that than year. the different very close, at it a had way the fundamentally market of beginning

demand, short-term costs, as R&D applications. namely for our is inventories and lowering pipeline control time, time, profitability, goods focusing in of in our on overall match Latin future we while as newly soy real products raw finished We well what our materials for tightly coming to are new products, at launched investing which have critical this selling managing to the to same QX, and finally, add at the internal especially the our in America value our adapting

again, world. change especially the am volume the good business. before, not same have at happen more I will magnitude we successfully around regions we benefit While seen profitable of have the our as products demand this the confident this always managed past demand have emerged across of through shocks multiple for we and stronger, a grow time in have

I'll now questions. operator for the to the call turn back

first question Paribas. We Laurent Instructions] from Favre have from [Operator BNP our Exane comes

the to like went much with I you low I end outlook consumption has to back mentioned think inventories digits Thank reasons abnormally up and or do yet the for channel guess May year. you. your at last you low to how will volumes I'd low wondering, double seen year, And reversal you changed since it volumes it's and and way changed being hope of go was what up there a of if asking XXXX? to are -- into into ground digits a flat. big this that broadly single now assessment the Mark,

especially we made, we end and from around orders we Yes. started really the Thanks, of see all, deceleration May onwards, a through first very of quarter can to aggressive from basically. you the comments Laurent. the of world, the as went by Well, tell

was came, before. have on. not And that their country not seen level. levels growers for we be reducing growers to let's was hold any So suspect is think, something not And that in basically that cash usually inventory. at I normal were holding really they the it's clear, What spend to through inventory starting season It's now volumes. this grower

until When our world. we pretty that seen to analysis don't growers, seen And to and course, that the to it holding announcements. it said, industry to with other back complex says now" of anything sell right were We've us. growers starts we've through retail the growers So, need inventory. today up through around basically "Well, in chain this public their players a supply comes went

of that inventories. tell reset can You this fundamentally global is a

has different last inventory think of chain, nervous, disruptions unwound. is couple these being happened supply the supply and nodes through obviously, the all built was been in What now that that made we years over as people

phenomenon we've forward, of what Now low-teen sort continue own we're down will We across QX, expect we do expect? in going we do as that that And our see be to indicating this range volumes said. world. the in

that to QX. through expect We continue

assumption the is Our as will evolve. evolve seasons this that

hand. Brazil placing So particular, the growers and We've occur. they're South doesn't America, QX certain for do the we talked all. that into in we and orders not go of at past expecting America in be same percentage time normally this the be of this in they closer but at year those to planting the We're year, Latin and as have instance, to a about on orders That's going orders, Argentina, That much we expect to flow through late will season. QX.

in that's Latin America. Now

the QX won't the the way expect end to same QX, American just start the QX season of we'll in start seasons in of North as that buy We see QX to phenomenon. the We of into into see people QX, Europe the and until because flow. beginning

Hemisphere. Northern Asia a because more Southern we is both have little balanced and

case start a as And first start QX into normalizing go normalizing. we to and go as year. we next will order be going of expect we is continue the through to it patterns of half to that So inventories

XX I've Brazil this volume. was a been never seen totally different I've pockets in a of years. I've in everywhere. XXXX, this this in before. which circumstance, seen is This but reduction still industry

everywhere else where or three was year-on-year, saw revenue increased think I two had countries world in we only the we down.

magnitude tells So dealing what you that we're the of with.

pricing I'm the that the as you fertilizers avoid discipline variable price and you for to I cuts diamides, but gives In for next deflation? you of behavior. And cost into especially into mentioned aware context, the in the a in also what change Thank growers that can story. you. in reason, be maybe particular, and different industry, price guess, the nonselectives such declines of it half not a given context year, might strong second confidence

lot what very quarter five price, so Listen, the hold have are robust strength to Yes. years portfolio, alluded do year. the That's a we're about differentiated. you think the to last fact is in and of this ability were products of which products I the differentiation, with the now. been our the given have with launched far just that bringing And talking in I and we're the type that to

second in the pretty much QX, already we into place have Price of year particular, the half in prices. in the and

through the Now it's and a holding go case we're of disruptions price which forward, doing. of the managing as we confident

size in from perspective of of the years. our QX products last to from Given you, was XXXX. XX% NPI That today, the XX% came in in sales in QX, five launched put the about it revenue up for

about into full $XXX rapidly. as to year-on-year grow to when up million think versus the number about the before. you year, look year rolling gets that And million new continues it the we So products $XXX QX, at about

a of almost new today. they It So the products we're the is Company introducing, value heart the increase. XX% the That's bring.

is talk brand-new about will new to be Those insecticide America, valuable go QX. two the that products soybeans, other soybeans; expected into large have Very forward. on traditionally is now. very we're are that be fungicide an going brand-new and important first. Now players for I launching volume a as is but for One did cotton launched in products we right we QX Latin in

So, It portfolio. it's the price. not is just

about diamides. We the also talked

performed versus of portfolio. rest branded the the of diamides Our well sales

year. else the impacts down back the to is They which our the we these which them. sales same about same everybody diamides, sell come in overall declined I That be before. to. think for doing industry, reduction that high partners digits which diamides will drawing can't something technical they XX%. next have the our the partners like inventories, been We their talked our thing That of in are as single versus about people said

inventory like We've doubt them. their that. no just are. They're about we to talked managing have We

are of that out will XXXX. a So right that events you've unwind we as think go into seen I now playing confluence

We Parkinson from have Mizuho. our question comes from Christopher next

end and the and urgency overshoot Mark, past think few of is co-op of but wholesaler I'd the just volumes but given within being that's how are of various America. once right just on behaviors inventories, lack thoughts to your and that on kind some on North are what's actually of just again, years, -- everything key not know what sprayed, healthy in that's that focus various your market you. going to of the specifically what Thank kind geographies, strong given do the I of given demand? the channels probability the say perhaps retail relative downside on I'm terms you asking now,

Yes. I to think pockets It's There listen, on Chris, big see are people going such to these inventory industry. you're many different nodes of a channels. reduction. overshooting

You could come we forecast the of that this curve, probably what this went out tell to as industry's it's coming, as the same we was down ability curve.

and So expect run faster at has inventory come do will places I much down where back see to too a pace. been

There and drawn what are was high call to is would other normal places where levels. more being down inventory we

combination So, not would large supply two. -- chains as such said, of and me it industry a I complex It's surprise that it's a to the going see it's be that. to

North think America, America in would expect shape. Europe I you'll particularly certainly Latin think I it see see we see I it and North as don't well. you'll is in much else. anywhere phenomenon say, just any as same in to as the America in different

that how U.S. levels as season. and by inventory comments their through we to expect they public next the come seen distributors they have about reducing back see go in the We major see how

So going probably to overall, see I you're both impacts. think

people won't. overshoot people some and Some will

specifically little 'XX thinking cash early, a three-year free be lot know going as of improvements? investors Perhaps about movement considerations how been of generation a follow-up. it be investors And there a either as a there's the on obviously, and in longer-term you of bit should to 'XX, about fourth pertains averages -- of Thank But it kind lot could helpful. and just trends. how be or always flow the the understanding key obviously, to I the Andrew exiting between rolling and bit thinking but is hit broadly a longer-term algo lot your can as how we're first hiccup Very that you. quarters. of have 'XX a it's quick a focus just on hopeful as

XXXX Thanks. Sure. Hey. Chris. relatively Andrew, the cash is actually free for story think flow in Look, It's simple. I that

might However, it challenging in term. disappointing and be immediate the

in second on well, collect the EBITDA know sales the for The We flows the in second weighted the those we have more of guidance half year, sales you cash are through sales in the flow. regions are made, as directly growth year those lower. a substantial which sales the collections our that drop given in balance half, won't so is and is

prepared anything comments means we on not remarks, lot our as not moment. building inventory -- levels production ample adjusting across the we're in lines Mark That right our have But we of made are at operating manufacturing a buying now. we're

So, we're lot material. manufacturing not a of new

anything. buying not we're So,

So, of payable north at flow payable simply year. had guidance at for drop accounts in cash a this million in out mean wipes in we're somewhere a I $XXX accounts year-end. guided $XXX we free drop looking million $XXX the and basically million the drop EBITDA

cash we into Now would pretty back a flow. we pointed a a swing We’d to, normal pretty as more in you a balance as reduction see of collection inventory, and in conditions we the rapidly. see in of you free rebuilding halves cross, flow normalized expect get cash between periods more 'XX, We’d that is cycle, time that rebound can year. more do payables. move And lumpy. We as see to the free

of plus us any and long-term much have our adjustments -- XX% nothing this overcome a this cash is the at six-month these that average It's free we should channel in business year this unfortunately, reset inventory too flow expectation period. just the feel operate So generation. just rapidity in we that goal rolling makes these to about different

over that But normalizes. the confident this reality feel will situation think flow. the the long you free of term, very that's I we and cash rebound business So see of about the as again, capability cash-generating

Salvator from next from Bank have America. of Tiano our We comes question

what to I to about flat understand seem thing in little is, -- farmer this versus farmers in actual your point go what volume is understand the confidence you what true is be obviously, a farmers are decline have understanding Can level up. much destocking. mentioned how do you want how Because first the ultimately holding decline trying critical bit applications you and talk here? year-on-year doing you So to demand of how

Yes, sure. mean, there's methodologies able have to for is I some into happening grower to at us level. what different be the insight

gets you're First planted. of acreage crop all is using Obviously, you're that planting, protection products.

So, that's consultants something that we world, well recorded independent look at at that. and look around it's the and many

is second strong what the that particularly of get an The independent industry in the rest Europe and which puts and put strong That's market aggregate in we Asia. you information It's are less less there then in so in doing. in particularly output, information other you U.S., and is sources the so Brazil. the tells in

everybody. being So, then applied It's and independent it's third-party ground what available a also couple the our what's of sources, is planted and then which to getting things. of on understanding are

my Great. Thank a little you. little is a And understand bit partners. trying happening your what's to follow-up diamide with bit on

firstly, about So the destocking. talking you're

own business branded the think U.S. What the months specifically impact U.S.? And in to and So partners, is firstly. essentially, your or your its ago. UPL and branded from your their a whether view product up, but beyond with UPL lower diamide partners to entered that are for secondly, holding in demand, understanding going I Shenzi purchases above market your your is products this few AI is the like it's

things. couple of a Well,

technical So, all, our material first of grade we supply essentially as us of partners, when about diamides supplier. think raw and a to talk

raw treating they're as So, same as a we're raw our suppliers. supplier, us treating material material the

obviously is their than part they're to We have are doing simple nothing we So, case a of and are to inventories our right own that more do and suppliers on having reduce, It it now. of it's demands they that. that that.

see that. you So,

From don't down just is as at a neither perspective, on. think slowing all, demand we commented we demand is ours, their

some competition parts our U.S., world diamides. making with selling the concentration are we've to second more for that the sophisticated, products In to your To that our and of is branded competition know years five the selling customers. the not seen same in we moving that many we're the formulations time What part introductions needle. new in regards with question do the selling ago. of products words, current new formulations we're of higher the we other We're were

are in completely not with product, generics different. coming a something type We're certain those selling of we're selling anymore. products So, where

So, mix it's very how a is been our product and through case our talking of fruit management that it changing our last much been of cycle now the in terms we've years, going for bearing for life is about branded five we've product diamides.

We next have Morgan Vincent from Andrews question from Stanley. comes our

bit into year. I'm a second that raw start costs. and we if material little was wondering next could talk Obviously, story, good a year about news supposedly just this in the half of

end and but should do more to the be on presumably XXXX? deflation, maybe obviously, the have same into in we reduction thing, others as production will move we your with wondering, immediately, expecting Just not

if me we've it been talk side. just question. second an start the and lower costs off good expected in to that Andrew, let started QX, through Vincent, we granularity of Certainly, the see is the order as we've we half know there. go difference a more We little talked you and Yes, And which year. in want of then cost to on anticipating we QX, about magnitude and

prices say come I have the down. industry, generally continue down, would come to in

that what lot on what selling long. been the I keep of We're going the shutdowns think at has scenario does. below they've lot A at products, depends believe better can't beginning we costs. China year. a little seeing perhaps been you thought a looking in we than of Obviously, for we're very China after

be are to right the of many probably producers it'll happens now. significant interesting what in So, some to financial issues Chinese see that

smaller that to some We -- expect disappear. companies those of we expect

the view comment expect level is to into you on further? Our costs current do that to that just of and materials see intermediate lower want through raw Andrew, we'll But roll XXXX.

certainly. Yes,

pressures we spot of QX, on volume still in for Vincent, quarter. chain. think in Despite as improvement value substantial have tailwinds destocking in the I the every the cost seeing we I hit that think, stage weak the outlook the are in costs you're

ago. cost what we three stronger months anticipated the tailwinds fact, now In are than

Some move that packaging improved. more for our like materials, and of the example, things into quickly inventory through have cost

costs. We're are had costs what actually think in QX. expecting saw that in in QX. benefit see than better I expected We initially improved QX. continued we we expected you than So stronger of And seeing

going out dynamics So, very set a too to should into look position a year what input start favorable very back we I up the to chain, see, far pushing from situation. cost XXXX into but the in just yet, these favorable XXXX. cost can think bit hard we A

been of you've the of a this two, it opening doing out as your the better look efforts then is I markets near-term balancing to made came or the do. to very guidance cash challenge that you successful And with and I how sort cost Okay. when flow going sense just for the we've earnings and you're improve and that a with would reduced And doing investments pre-announced, talking versus new get some that. obviously to like it incremental things year like sort about desire situation you're last through know follow-up, and up were of you what

sort of growth of continuing in do invest term. to period you of right with long So, sure the to making obviously the right challenging things a how business trying sort to the are that the over It's you're balance? of to medium now very time

of, the that R&D. point. long R&D very the I it's Company is of of and run the is overall that longevity I that pipeline. this That's listen, in And for will Vincent, Company very way we term. our really built mean, Yes. back that a drive the the the good valuation terms on of think, cutting something long haul. us. pipeline important not We We're believe strength to of R&D company over the

in the standpoint, So, That costs down the projects from message. say we're That's can't doing down operating can main not we to we doesn't everything mean R&D in projects. but we're important slow R&D. slowing the save to not an

Company, and things the items demand. front pointy cutting all line drive the our terms and On rest There many sales admin very is focused That's revenue really at back. end, the commercial which all we the the groups where of that of look a are which groups from and general we're in of we're marketing perspective. Company, end on the

term back us we not on demand impact customer cutting intimacy, stop our things the in will won't or we're know that short volume out there. So, that's getting

really spend. to focusing we're back, want anything? customer the doing you reduce add customers. the we from Andrew, Everything can So, to that do everything on

just I that emphasize controlling spend. are Yes. would we

commercial did with We as R&D we're that We're just the year pointed and closer last that not spending market Similarly fast. dollars investing building of year. SG&A. be intimacy going are we Company access quite And to the not compromises with still in on operations more growing in Mark any expanding than as this customer. making to, and the

past XX, have are in occurred can different our And we've is very particularly in We number X. years that being last this that in of metering think in we I the over do, XX disruptions careful the spending something areas. that other demonstrated a

we investments any below to spend, we'll that will started be year doing Company. the drive has Company's to So, we're are ability but And continue the make that future planning grow. nothing we the to what well structural going to impact the long-term spending to of

Our Josh UBS. next question from from comes Spector

This is Josh. on Beaumont Lucas

volumes, could. back So I if we just to wanted the to get

a was your into and it's customers of sort over driven the the understood So earlier correctly comments more growth ordering basically are going demand. of chunk I underlying last two inventory volume by the if sort versus of years that and

of So, two, year in sort line basically in of with over sort of this you're a volume single-digit I three-year the mean, kind if growth low your at long-term of last kind trends for that rate. then of look we period, kind

about as that of next to we mean that? think level guess I for from this should that going basically So just expect rebound, we about Thanks. that growth we and kind not should like more to really lower how setup of think a or the trend return does year,

question. good Yes,

I is think thesis we pretty think your to it. about close how

for through now. XXXX us I to early going to it's forward, almost right think listen, August, it's impossible think

We the see well quite the and grains they peak the what we our I about, at We soft very in started certainly that not and months at back a for see? a these but market about do marketplace. haven't products. far prices above think just we're take process. even fundamentals and about really talking budget commodities if the But ago, of the average off Not were good XX long-term year, step

You the the down. have been Because ratios, stock-to-use soft stock-to-use look at Why? world. had we've ratios around commodities issues many in trending of yield the

what right price Brazil flooding South happened higher drought Latin got dry We've the As north last Europe. year, you in in does those We've yields. could agriculture, we about All change contribute unprecedented impact Midwest as in Argentina. and a U.S., in in heat to really India. and commodity things the see America a talked lower of of climate now had

good to into. that's for So, a sell backdrop somebody

at by the know we year just fundamentally, demand. know X% have So there increase keep bay about to is productivity we We around world. a hunger to

in increases the season. and next I is go Brazil anticipated, into think the America backdrop We as of So Latin acreage solid. especially parts see we other

on-the view for is would So it's now, world to hard the me, positive. that. what see that ground right And grower change of

little XXXX. So, year, say I positive growth a roll be as backdrop but expecting we it's would a next early through what rates am to our

the normal volume And through that fourth Thanks. margin more just are So of Great. expect trends? you the your us is to raw then much there materials in getting quarter? of much kind And quarter XQ fourth assumptions help specifically, you your on that to do catch-up versus guide? could from how Thanks. walk how

volume. have specific above. strong Brazil volume for. QX. it's cost for We mix. continued and we products a contribute We two have It's Andrew products here, sustain when volume, we benefits. that positive We all of that favorability newer positive we mentioned do contribution. Look, we But have Mark it's But broad the of the modest quarter. that include tailwinds. in on I expect to remember, new will We high a look us for input cost have very in portfolio It's product quarter to mix at do introduction. pricing do fourth more expectations a think some do have margins for

necessarily new point still this prices to prior year-on-year price not over but where comparison carrying increases, raised at from year. it's versus the we've Now, the

factors us of combination broad-based all a it the all be time input we've volumes, discipline, quarter. of of quarters does pricing is it's already one it's continued the allow quite the benefit those to deliver it’s So it's taken, strongest factors. there. for some And actions what in in margin cost, those fourth a will really FMC. it But of operating combination of expense It's

We from have our Laurence next comes question Jefferies. Alexander from

in was again. I Rizzo Dan risk different on for of is a are you things channel somewhat a is that wondering became XXXX Thank and for that I remembered This question. if issue. I destocking now Laurence. taking XXXX, multi-season my how to inventory thought happen

now, and got XXXX, to was again, back into products time event XXXX, was it's scarcity a a that currency remember Yes. It you've it particular it leading inventory, of Brazil. in to seems long ago both but that was, impact that.

were right they In it's seeing much broader sense the faster. on it's happening think is before. of in other they're the quarterly and than decreases I now, extreme basis more we're much different this a words,

it's particular, the That factor form. was today the although Brazil introduced think other way, play was time or in people a in new insecticides impacted by a seed within shape for us, a there any of was for was event, certainly impacted lot there which soybeans, into frame. a Brazilian trait short thing at that not I that reasonably

back So, for Brazil look what a is happening on I as proxy today. necessarily don't

will year? Thank the you. levels headwind you lower then That's the about what talked given helpful. right. second All quantified half of a And production guys of have the unfavorable you cost absorption be kind in

Yes.

a moving -- depend QX. bleed now we offsets how will to input it's through operating it mitigates benefits amount early over of how year, in It do of very because it's in headwinds might We cost we on going be the not based be it's too that know our QX. modest in have We have yet on levels right fixed are because small anticipate guidance, year. part cost into there of rest terms into But quantified the to next target. that That's built the absorption operate what some a that our in clear.

to think of down ourselves managing to demand, I very be position line but current in our thoughtful we're market. capitalize also recovery to being inventories, in able with bring on about the a them leave trying eventual

to QX reflect QX is the costs in unabsorbed it fixed a rest and of next to really guidance impact year, key as look moving it's going the out. bit expectations year plays But how for the periods. And of a target. think So, our our forward I these we both depend message, of any

from We have comes from Goldman Sachs. Adam our next Samuelson question

between as I diamides is for orders bit quarter and maybe was trends and hoping change where to just not the again, -- decline the the we in closer and second a of have been it's distinction recent in global, activity the between decline from other of any little I'm than supplier draw channel? -- there a those supplier other where a customers to trying distinction to magnitude levels has manufacturers think with of the to meaningful you're to Kind chem occurred, magnitude of how of precedent, sales where in two distinguish you're there sales was a about glean but from the were now that historically. terms sales bigger And just terms into mean, you your really those actually trends? kind it's if trends seeing to sales distinction I change any in crop manufacturers of you're that's

products market overall fact, marketplace into to The market pest better other of words, I the new for. think new the that them looking ourselves enable introduction. et we're branded did newer Adam, looking what that is That's the That's portfolio. just much subset cetera. that we're In resistance, than introducing product branded very on the differentiated. for diamides Listen, the that are diamides that commented a remove we is Yes. selling brake

it's sales the partners, of to that seed different a think treatment I used whether applications. applications, for number portfolio our is or it's for whether

as launched their indication, There's end managing said in no emphasize their about earlier, the to our well, inventory falling sales, going off. branded own in It's do management diamide own as perspective. their users But fact the way products. inventory extremely I that to are. I are the our they're volumes they doing more own are especially products So recently their business that an want

where the product the magnitude of if think I in return channel the a buying in the that really you expected XQ of fourth a kind for that and versus have but balance to notably? new of just just normal most -- of contribution growth in quarter discrete kind introductions about cadence then, from from America, those just us not where firm building some patterns XQ. just Can volumes partners, revenues return is assumption what an talk per the to to meeting and more block you improving where orders And help about the se, your of Okay. of year presumably South

competitive to growers numbers Yes. distribution, any large America. on how interest for because give in our channel, for don't I doing. Latin I'm the partners that these at whether it's to co-ops mean the products. new really from products or we targeted are want significant already new the well going give not But information away have I we're

we're excited market. to those very about bringing products So,

so interest the And our is very, growers with generated very that positive. we've far,

Our next KeyCorp. question comes from Aleksey Yefremov from

through us so stand levels weather regions? inventory is much. and some conditions Paul seeing the Thanks walk you This on you Can in where Aleksey. for are those of adverse

we've Turkey. comment in obviously, of the go U.S., dry Spain, France, you I had dry difficult earlier weather. in south of drought. of very in Europe mean, South very Listen, We're just Greece, through in conditions Italy, Argentina made through conditions as of and half year, conditions about Yes. a first the Midwest I the the the Brazil seeing the

We're of have more weather on. volatility the seen dryness also north than goes of in with India, year. flooding We last ever mean China, the south have I in on dryness Australia. and dealing flooding the the we India, in over in list

countries, types the as field. doesn't care And deal things to it's have certainly we manage something mother impactful. in it's we have us. nature play are that's that some very, And the of that with but we financial at course, agricultural about But throws that very those So quarters of real. mother to nature the all in

follow-up, a environment Great. normalize, And see of competitive more entering do and logistics materials the supply as you start the market? as to the raw products

you generic a what guess, from little from from could you're you a a elaborate bit -- just -- a looking standpoint, mean more what you mean I for?

Yes, standpoint. yes, a generic from

to pressure the say in those been are a differentiate in Listen, lot and that in they are. generics don't a It's of are bring markets. major they marketplace. in They not because either we we of around how of play generic not active to through don't We lot have they have mainly role new a But we a necessarily play our the formulations that valuable, lot ingredients play new around. of or product lines, market. markets

get but don't So, I play the we that market space. in to competitive, generic expect more

Garchitorena Richard from from comes Wells Fargo. question next Our

a macro Great. change Thanks. your from My there environment has have inventories. that you like the to what move as generation of in managing of of Is we the mid-cycle mentioned good terms look the customers $X.X terms the is? think just base Should about forward? sort at in what any from that way business earnings billion going sort bigger changed been picture, of question, you of a

X% for forward last we've the line, years in I fair X% over of a the rate to very X.X to good times But question. a then years. been going from to along X.X mean, our look market three we've Yes. and view bottom We outgrown back we're just times top of line. November, clicking X% XX going a a X% This is anywhere give the you aspiration. did to longer-term and a world next at

I thinking some we think how see Company. I a growth. portfolio we a type massive we of as that's deliver as happen. So that about generation of next the the don't going I next then to is have to of know rebound can a reset model think it, don't a year. that year think growth good and way to it do this bring and do

right the the channel lesson think carrying amount is learning I of the inventory. of

reset look And move forward. think in EBITDA we November top So going and think we'll this algorithm growth what like you share with we'll that new EPS then potential line, we'll forward, and will of in I year. terms

November how get CAGR the to you. years? Okay, in has we an be great. biological business now in as on Do would right I you still change that the the market just a at Thank next growth all great. know X% update impacted any thoughts environment? few but for And the follow-up, see X%

of listen, product think market has mean, not whatever or whether impacted in I this I market. micronutrients way, same there's biologicals a been bringing protection the they're Yes. single that you're to piece crop or the don't

everything has by seeing. the reset been impacted I we're think significant

that the more, Now, invest range. that continue R&D. business having The plant see We'll grow said have health to are in biologicals especially will even growing expectations we that, we still in faster. that accelerate XX-plus-percent as

by So, we us see teaches long us going that portfolio perspective. going to continuing. It's recent reset. broader value forward it not something having that we If help this that has is hampered feel a anything, been from term that

see and do for we the the So, it us, some major continue health focus will degree. to Company rest outpace the to a by plant biologicals of be continues as

question from last from comes our have Joel BMO. We Jackson

This on is Joseph Joel. for

rebate half pull second So FMC from volumes get help just to forward would programs half to some XXXX? in increasing help volumes consider first again, moving the

we And the a meaningful being always are the some of rebates not is parts the markets, package put but world. U.S. to to are there market, in way one Listen, like go question. rebates together. all else, used a commercial those Good be that everybody of over world

all delivering value appropriate we're the tools to we're So, that the and FMC. consider that we getting to the to value have we make sure growers

rebate value but the will So, bringing. the we're if be there context changes be it done be are made, in made, they'll to of

at just and QX in how in essentially costs, would of volume locked are then, and back expectations are now, QX, And they to much risk, Okay. coming you terms all of price say?

want you to… do Andrew,

at the question. chime I'll least of on part first that

and more every we fourth QX can particularly logistics items continue There we're or structure, our every because mix The quarter. product that cost think input through we does into that are reductions actually locked. move are to quickly packaging across have. we are uniform the I cost as final the move items seeing costs move not largely for that matter

tailwind of QX much locked it in in of the So, quite I is just confidence and do that think level preponderance we of we're yet. a high expecting a pretty not but all vast have cost in,

of of to I maybe -- quarter the Mark, fourth in visibility there. you think, in to want in volume and speak terms terms price

A Yes. little very it early the the we've I exactly mean, moving. be will playing we'll but volume how is get to how we we're the listen, price and there, close as and quarter know this say be, as said, point, at will to within market or quarter.

and as very I've said what expectation, numerous expect be season, we gearing to to coming orders the Our that's for. we're times, planting close up is

Zack time I will closing you. now to Zaki for Thank to Due back constraint, remarks. pass Mr.

today. for have that call Glenn, have No, it. that's you, you Thank all thank we the and right. day. much. That's a All time the very good

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

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