FMC (NYSE:FMC) 2026 Conference February 25, 2026 02:45 PM ET Company ParticipantsAndrew Sandifer - EVP and CFOPierre Brondeau - Chairman, President, and CEOConference Call ParticipantsNone - AnalystNone - AnalystModeratorWelcome back, everybody. As we kind of move into the afternoon, I'm pleased to be welcoming Pierre Brondeau, CEO and President of FMC, and Andrew Sandifer, who's EVP and CFO. You know, FMC been a long-standing participant in the conference and obviously a very fundamentally important player ...

Financial Data and Key Metrics Changes - In Q4 2025, the company reported sales of $1.08 billion, an 11% decline year-over-year, or a 5% decline on a like-for-like basis excluding India [17] - Adjusted EBITDA for Q4 was $280 million, down 17% year-over-year, and adjusted EPS was $1.20, a 33% decline [18] - Free cash flow for Q4 was $623 million, with GAAP cash from operations of $657 million, up $230 million from the prior year [18][19] - The company ended 2025 with net debt of approximately $3.5 billion, down over $550 million from the third quarter [19] Business Line Data and Key Metrics Changes - Sales of the core product portfolio, excluding Rynaxypyr, were approximately $2.2 billion in 2025, with nearly $1 billion from high-cost facilities [9] - Rynaxypyr sales were just over $800 million in 2025, with expectations for generic offerings beginning in 2026 [10] - Sales of new active ingredients increased from approximately $130 million in 2024 to approximately $200 million in 2025, but fell short of the $250 million expectation [11] Market Data and Key Metrics Changes - The company faced intense competition from generics, particularly impacting pricing and sales in Latin America [17] - The removal of India from the portfolio is expected to represent a 2% full-year headwind, impacting only the first half of 2026 [12] - The company anticipates a 5% decline in sales for Q1 2026 compared to the prior year, driven by pricing headwinds and the removal of India [14] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet by targeting over $1 billion in debt reduction through asset sales and licensing agreements [8] - A strategic review has been initiated to explore options, including a potential sale of the company, while continuing to sell the India commercial business [6][8] - The company aims to improve the competitiveness of its off-patent portfolio and drive growth of new active ingredients [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth portfolio, particularly the four new active ingredients, which are expected to exceed $2 billion in sales by 2035 [11][24] - The company anticipates 2026 to be a bottom year, with growth expected to resume in 2027 and 2028 [62] - Management acknowledged challenges in the core portfolio outside of Rynaxypyr, which has been impacted by generics, but remains confident in addressing these issues [56] Other Important Information - The company expects full-year sales for 2026 to be between $3.6 billion and $3.8 billion, down 5% at the midpoint versus the prior year [12] - Adjusted EBITDA for 2026 is expected to be between $670 million and $730 million, with a significant headwind from the legacy portfolio [12][15] Q&A Session Summary Question: Can you help us understand the contributions from different product groups to the $700 million EBITDA target? - Management noted that they do not break out profitability by product line but emphasized that the core portfolio is a significant contributor to profitability [29][30] Question: What gives you confidence in achieving mid-teens EBITDA growth in 2027 and 2028? - Management highlighted confidence in the growth portfolio and the expectation of improved competitiveness in the core portfolio by the end of 2026 [34][37] Question: Can you clarify the strategic review process and potential outcomes? - Management explained that the strategic review is separate from ongoing asset sales and is focused on maximizing shareholder value [40][43] Question: How do you plan to manage upcoming debt maturities? - Management stated that they intend to refinance $500 million in bonds maturing in October and are focused on reducing total debt by $1 billion [65][66] Question: What factors contributed to the shortfall in new product sales? - Management indicated that delays in registration and lower-than-expected direct sales in Brazil contributed to the shortfall [70][71]

Financial Data and Key Metrics Changes - The company reported third quarter GAAP net sales of $542 million, a 49% decrease year-over-year, primarily due to significant long-term actions taken in India [4][16] - Adjusted EBITDA was $236 million, reflecting a 17% increase year-over-year on an as-reported basis and a 23% increase on a like-for-like basis [9] - Adjusted EPS was $0.89, up 30% from the prior year, driven by higher adjusted EBITDA [9] Business Line Data and Key Metrics Changes - Excluding India, third quarter revenue was $961 million, down 4% year-over-year on a like-for-like basis, driven by a 6% price decline [5] - The company's growth portfolio increased by mid-single digits, with sales of new active ingredients nearly doubling compared to the prior year [5] - Sales in Latin America lagged by 8% year-over-year, attributed to low liquidity and pricing pressure from generics [6][8] Market Data and Key Metrics Changes - The market landscape in Latin America is challenging due to constrained credit for customers in Brazil and Argentina and increased competition from generics [3][6] - Sales improved in North America and EMEA, driven by higher volumes, including contributions from the recent launch of Isoflex™ Active in Great Britain [8] - The company observed generic pressure in Asia and to a lesser extent in North America and EMEA [8] Company Strategy and Development Direction - The company is focusing on being a pure play agricultural sciences company and has a strong pipeline of innovative technologies [3] - A strategic review of the manufacturing footprint is underway to transition production to lower-cost sources [13] - The company aims to become cost-competitive while growing a portfolio of IP-protected products that command higher margins [14] Management's Comments on Operating Environment and Future Outlook - Management expects the challenging conditions observed in Q3 to continue into Q4, with anticipated sales excluding India in the range of $1.12 billion to $1.22 billion [10] - The company is adjusting its full-year guidance to reflect lower sales and EBITDA expectations, with revenue now expected between $3.92 billion and $4.02 billion [11] - Management acknowledges the need for a disciplined approach to cost control and pricing to navigate the current market challenges [9][12] Other Important Information - Free cash flow guidance has been lowered to a range of negative $200 million to $0, driven by lower cash from operations [12][23] - The company has initiated a significant reduction in its quarterly dividend, which will reduce the funding need for the dividend by $250 million in 2026 [24] - The company is taking immediate actions to amend financial covenants to provide additional flexibility [24] Q&A Session Summary Question: Can you talk about the buckets of what's eating up that cash flow? - Management indicated that the primary issue is lower sales leading to reduced collections, compounded by liquidity constraints affecting cash sales [32][34] Question: What do you expect the sale price for the India business might be? - The estimated value of the India business is about $450 million, with strong interest from local and international companies [40][41] Question: How do you remain committed to the investment-grade rating? - Management is focused on reducing cash use for dividends to allow for debt repayment and restructuring costs, aiming to return to healthier metrics over time [49][50] Question: How much of your portfolio is reassessing production costs? - The company is starting to reassess its manufacturing portfolio, with some products being candidates for relocation to lower-cost sources [70] Question: Are you considering partnerships or acquisitions? - Management believes partnerships will be increasingly important, especially in technology, but is not currently considering selling any active ingredients close to commercialization [79][97]

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