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 ...

Group 1 - FMC Corp. reported Q4 2025 sales of $1.08 billion, a decrease of 11% year over year, with adjusted EBITDA of $280 million, down 17%, and adjusted EPS of $1.20, down 33% [1] - For 2026, FMC projects full-year sales between $3.6 billion and $3.8 billion, with adjusted EBITDA expected to be between $670 million and $730 million, while Q1 sales are anticipated to decline by around 5% and EBITDA by nearly 60% year over year due to one-off costs and tariff headwinds [3] - The company expects approximately $20 million in tariff-related headwinds in 2026, primarily impacting the first quarter [3] Group 2 - Moody's downgraded FMC's senior unsecured ratings to Ba1 from Baa3, resulting in junk status, and assigned a negative outlook due to challenges from patent expirations of its insect-control product Rynaxypyr in multiple countries [4] - FMC is an agricultural sciences company focused on crop protection, plant health, agriculture, pest control, and turf management, offering a range of products including insect control products, herbicides, insecticides, flutriafol-based fungicides, and bionematicides [5]

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 - 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][18] - Adjusted EBITDA for Q4 was $280 million, a 17% decline compared to the prior year quarter, down 8% on a like-for-like basis excluding India [18] - Adjusted earnings per share for the quarter was $1.20, reflecting a 33% decline due to lower adjusted EBITDA and higher interest [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 to begin 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 anticipates a 5% decline in full-year sales for 2026, with price expected to be a mid-single-digit headwind driven by Rynaxypyr [12] - The removal of India is expected to represent a 2% full-year headwind, impacting only the first half of 2026 [12] - The company expects modest volume growth in 2026, driven by new actives and branded Rynaxypyr [12] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet, targeting over $1 billion in debt reduction through asset sales and licensing agreements [8] - A formal strategic review process has been initiated to explore options, including a potential sale of the company [6][7] - The company aims to improve the competitiveness of its off-patent portfolio and drive growth of new active ingredients [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenging market conditions, including intense competition from generics and weaker grower margins affecting product mix [17] - The company expects 2026 to be a bottom for performance, with growth anticipated starting in 2027 [62] - Management expressed confidence in the growth portfolio and the ability to stabilize the core portfolio by addressing manufacturing costs [56][62] Other Important Information - The company has retained financial and legal advisors to assist with the strategic review process [8] - The strategic review does not impact the ongoing process to sell the India commercial business, with binding bids expected in the second quarter [8] Q&A Session Summary Question: Can you help us understand the contributions from different product groups to the $700 million EBITDA target? - Management indicated that they do not break out profitability by product line but noted 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 need to improve the competitiveness of the core portfolio [34][36] Question: Can you clarify the strategic review process and potential outcomes? - Management explained that the strategic review is separate from the base operating plan, which includes debt reduction and improving competitiveness [42][43] Question: How confident are you in understanding the challenges facing the company? - Management acknowledged the challenges in the core portfolio outside of Rynaxypyr and expressed confidence in the ongoing restructuring efforts [55][56] Question: Why initiate a sale process now rather than waiting for restructuring results? - Management stated that both paths are valid and could benefit shareholders, emphasizing the importance of exploring all options [62][63] Question: Can you provide an update on upcoming debt maturities and plans? - Management confirmed plans to refinance $500 million in bonds maturing in October and emphasized a focus on reducing total debt [65][66] Question: What factors contributed to the shortfall in new product revenue? - Management attributed the shortfall to registration delays and lower-than-expected direct sales in Brazil [70][71]

Financial Data and Key Metrics Changes - In Q4 2025, FMC reported sales of $1.08 billion, an 11% decline year-over-year, or a 5% decline on a like-for-like basis excluding India [16] - Adjusted EBITDA for Q4 was $280 million, down 17% year-over-year, and adjusted EPS was $1.20, a 33% decline [17] - Free cash flow for Q4 was $623 million, with GAAP cash from operations of $657 million, up $230 million from the prior year [17][18] - The company ended 2025 with net debt of approximately $3.5 billion, down over $550 million from the third quarter [18] 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 [7] - Rynaxypyr sales were just over $800 million in 2025, with expectations for generic offerings to begin in 2026 [8] - 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 [10] Market Data and Key Metrics Changes - Price declined by 6% in Q4 due to lower Rynaxypyr prices and strong competition, particularly in Latin America [16] - The company anticipates a mid-single-digit price headwind driven by Rynaxypyr in 2026 [11] - The removal of India is expected to represent a 2% full-year headwind, impacting only the first half of 2026 [11] Company Strategy and Development Direction - The board has authorized exploring strategic options, including a potential sale of the company, while focusing on operational priorities for 2026 [5][6] - The company aims to pay down over $1 billion of debt through asset sales and licensing agreements, including the sale of its India commercial business [6] - FMC is committed to improving the competitiveness of its off-patent portfolio and driving growth of new active ingredients [6][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenging market conditions, including intense competition from generics and weaker grower margins [16] - The company expects 2026 to be a bottom year, with growth anticipated starting in 2027 [60][62] - Management expressed confidence in the growth portfolio and the ability to stabilize the core portfolio by addressing manufacturing costs [29][34] Other Important Information - The company is in active discussions regarding licensing agreements and asset sales, with a focus on maximizing shareholder value [5][6] - The strategic review process is at a preliminary stage, and the company has retained financial and legal advisors to assist [6] Q&A Session Summary Question: Contribution to EBITDA from different product groups - Management does not break out profitability by product line but emphasizes that the core portfolio is a significant contributor to profitability [25][27] Question: Drivers for mid-teens EBITDA growth in 2027 and 2028 - Growth is expected from the established growth portfolio, with confidence in the continuation of trends seen in previous years [32][35] Question: Timing of strategic review and potential sale of the company - The strategic review was initiated to explore options for increasing shareholder return and improving growth potential [37][38] Question: Confidence in understanding company challenges - Management acknowledges the core portfolio's challenges and is focused on addressing them while maintaining confidence in the growth portfolio [53][55] Question: Update on debt maturities and refinancing plans - The company plans to refinance $500 million in bonds maturing in October and is focused on reducing total debt by $1 billion [64][66] Question: Factors affecting new product revenue projections - The shortfall in new product revenue is attributed to registration delays and lower-than-expected sales in Brazil [69][70]

Core Insights - The company faced significant challenges over the past year, prompting a reassessment of its strategies and operations [1] - The CEO reflected on the initial expectations versus the actual outcomes, indicating a need for strategic adjustments [1] Financial Strategy - The company aimed for a soft landing by balancing EBITDA protection while gradually paying down debt and maintaining dividends [2] - Key focus areas included managing inventory levels in the channel, addressing the Rynaxypyr strategy, and reshaping leadership in India [2]

FMC Conference Call Summary Company Overview - **Company**: FMC Corporation (NYSE:FMC) - **Date**: December 03, 2025 - **Speakers**: Pierre Brondeau (CEO), Andrew Sandifer (CFO) Key Points Industry Context - FMC operates in the agricultural chemicals sector, focusing on crop protection products, including innovative molecules like Rynaxypyr and Cyazypyr [1][2][3] Financial Performance and Strategy - The company faced challenges over the past year, leading to a reassessment of its strategies and financial health [2][3] - FMC's approach shifted from a "soft landing" strategy to a more aggressive stance on balance sheet management and cost control [5][6] - The company has $2 billion in working capital, with potential for significant extraction to improve financial flexibility [10] Product Portfolio Insights - FMC's core portfolio includes Rynaxypyr, which has seen a decline in market share, resulting in negative growth of approximately $2.5 billion [7][8] - The company is facing pricing pressures, with potential price decreases of 10%-30% for Rynaxypyr, but aims to offset this through volume gains and premium pricing strategies [18][19][21] - Cyazypyr is projected to generate around $500 million in revenue, with no expected impact from Rynaxypyr's pricing changes [27][28] Future Outlook - The company anticipates a challenging 2026, with expectations for lower pricing and continued headwinds, but aims for a significant transformation and improvement in 2027 [39][40] - FMC plans to launch four new molecules by 2028, potentially reaching $1 billion in revenue, with growth rates of 20%-40% [42][43] - The company is exploring strategic licensing opportunities to enhance market reach and reduce debt [12][49] Market Dynamics - The agricultural chemicals market is experiencing increased competition from generics, necessitating a focus on innovation and cost management [53][54] - The separation of Corteva into independent entities may create additional partnership opportunities for FMC [56][59] Leadership and Management - The CEO is committed to leading the company through its transformation and will remain until a suitable replacement is found [70][72] - The company is not actively seeking a COO but is restructuring to improve operational efficiency [70][71] Investor Sentiment - There is a perceived disconnect between the company's potential and its current market valuation, attributed to past strategic missteps [60][62] - FMC's management believes that the company's capabilities and portfolio position it well for recovery and growth in the coming years [64][66] Additional Insights - The company acknowledges the need for a more aggressive approach to its balance sheet and product portfolio management [5][11] - FMC's focus on specialty crops over row crops differentiates it from competitors, providing unique market opportunities [47][48] This summary encapsulates the key discussions and insights from the FMC conference call, highlighting the company's strategic direction, financial performance, and market positioning.

Financial Data and Key Metrics Changes - Organic sales increased by 11% year-over-year in Q3, with both seed and crop protection contributing to this growth [20] - Year-to-date organic sales were up 6%, driven by a 3% increase in price mix and a 4% increase in volume for seeds [21] - Operating EBITDA for the quarter was positive, showing over 600 basis points of margin expansion compared to the previous year [20] - Full-year operating EBITDA is now expected to be in the range of $3.8 billion to $3.9 billion, reflecting a 14% growth at the midpoint [13][24] Business Line Data and Key Metrics Changes - The seed business achieved $200 million in productivity and deflation benefits, alongside $90 million in royalty improvements [9] - Crop protection business is expected to see full-year EBITDA growth in the high single digits, driven by demand for differentiated technology [10] - New products and biologicals in crop protection delivered double-digit volume gains compared to the prior year [21] Market Data and Key Metrics Changes - The overall agricultural market fundamentals remain mixed, with record demand for food and fuel, and major crop inventories within normal ranges [12] - In Brazil, the crop protection market is expected to stabilize pricing, moving from high single-digit losses to mid-single-digit growth [60] - The crop protection industry is anticipated to see low single-digit growth in 2026, with high single-digit growth in biologicals [16] Company Strategy and Development Direction - The company plans to separate into two public entities by the second half of 2026 to better position its seed and crop protection businesses for long-term growth [6][8] - Focus on differentiated technologies and collaborations is expected to drive innovation and market success [7] - The introduction of hundreds of new products is anticipated to enhance returns for farmers and contribute to volume growth [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong early demand for safrinha seeds in Brazil and a robust R&D pipeline valued at $9 billion [8][30] - The company is raising its full-year operating EBITDA guidance due to broad-based organic sales growth and cost improvements [24] - Management noted that the agricultural market is experiencing competitive pricing dynamics, particularly in Brazil, but underlying demand remains strong [12][60] Other Important Information - The company expects to achieve a free cash flow conversion rate of approximately 50% for the year, alongside $1 billion in share repurchases [15][26] - The anticipated separation is aimed at sharpening focus and accelerating innovation, with a commitment to delivering strong results during the transition [18] Q&A Session Summary Question: What should the independent company focus on post-separation? - Management highlighted the importance of their strong R&D pipeline and differentiated technology as key areas for growth and margin improvement [30] Question: Will there be further pruning of the AI portfolio? - Management expressed satisfaction with the current portfolio and indicated openness to partnerships and collaborations to enhance offerings [36] Question: How are credit market conditions evolving for growers in Latin America? - Management noted that while there are higher borrowing costs and increased bankruptcies, Corteva is managing risks effectively with minimal losses [40][41] Question: What are the expectations for biologicals growth? - Management reported strong growth in biologicals, with expectations for continued high single- to low double-digit growth rates in the future [53] Question: How is the company managing working capital? - Management indicated that working capital improvements have contributed significantly to free cash flow, with expectations for typical inventory builds in Q4 [73]

Financial Data and Key Metrics Changes - Organic sales increased by 11% year-over-year for the third quarter, with both seed and crop protection contributing to this growth [17] - Year-to-date organic sales were up 6%, driven by a 3% increase in seed price mix and a 4% increase in seed volume [18] - Operating EBITDA for the third quarter showed a significant improvement, with a margin expansion of over 600 basis points compared to the prior year [17] - Full year operating EBITDA is now expected to be in the range of $3.8 billion to $3.9 billion, reflecting a 14% growth at the midpoint compared to the previous year [10][21] Business Line Data and Key Metrics Changes - The seed business achieved $200 million in productivity and deflation benefits, alongside $90 million in royalty improvements [7] - Crop protection business is expected to see full year EBITDA growth in the high single digits, driven by demand for differentiated technology [8] - New products and biologicals in crop protection delivered double-digit volume gains compared to the prior year [18] Market Data and Key Metrics Changes - The overall agricultural market fundamentals remain mixed, with record demand for food and fuel, and major crop inventories within normal ranges [10] - Competitive pricing dynamics continue in some major markets, particularly in crop protection [10][15] - In Brazil, crop protection pricing is expected to stabilize, moving from high single-digit losses last year to mid-single-digit losses this year [41] Company Strategy and Development Direction - The company announced plans to separate into two public companies to better position its seed and crop protection businesses for long-term growth [4][6] - Focus on differentiated technologies and new product introductions is expected to drive solid returns for farmers and premium market positioning [15] - The company anticipates rolling out several hundred new hybrids and varieties in 2026 to enhance farmer productivity [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong early safrinha seed demand in Brazil and a robust R&D pipeline valued at $9 billion [6][25] - The company expects low single-digit growth in the crop protection industry, with high single-digit growth in biologicals [14] - Management highlighted the importance of maintaining a strong balance sheet and cash flow outlook, with a commitment to $1 billion in share repurchases [23] Other Important Information - The company is on track for a free cash flow conversion rate of approximately 50% for the year [12] - The anticipated separation is expected to unlock value and sharpen focus on innovation [16] - The company is committed to maintaining R&D investment at 6%-7% of revenue to support ongoing innovation [28] Q&A Session Summary Question: What should the independent company focus on post-separation? - Management emphasized the strength of the crop protection business and the depth of its R&D pipeline, indicating that the focus should remain on differentiated technology and collaboration opportunities [24][25] Question: Are there plans for further pruning of the AI portfolio? - Management expressed satisfaction with the current portfolio and indicated openness to partnerships and collaborations to enhance offerings [29][30] Question: How are credit market conditions evolving for growers in Latin America? - Management noted that while there are higher borrowing costs and increased bankruptcies, Corteva has managed risks effectively, resulting in minimal losses [31][32] Question: What are the expectations for synergy costs post-separation? - Initial estimates for synergy costs were projected at $80 million to $100 million, with ongoing efforts to minimize this number [34][36] Question: How is the biologicals segment performing? - Management reported strong growth in biologicals, with expectations for continued high single-digit to low double-digit growth rates [39] Question: What is the outlook for crop chemical pricing? - Management expects crop chemical pricing to stabilize, with Brazil showing signs of improvement compared to previous years [41][42] Question: How is the seed market share performing? - Management expressed confidence in gaining market share in key crops, particularly corn and soy, with expectations for Conkesta to reach double-digit market penetration in Brazil [50][51]

Core Insights - FMC Corporation experienced a significant decline in stock value after missing Q3 2025 revenue estimates and slashing its dividend by 86% to 8 cents, although it still offers a dividend yield of over 2.2% at current prices [1] Company Performance - The Q3 report is part of a broader trend, with FMC stock trading at its lowest levels since 2008, having lost a third of its market capitalization after missing Q4 2024 earnings estimates and being removed from the S&P 500 Index [2] - Following the Q3 2025 report, FMC lost nearly half of its market capitalization and recorded its worst single-day performance [2] Industry Challenges - FMC faces macroeconomic challenges within the agricultural chemicals industry, particularly a demand-supply mismatch, with tepid demand and expanding capacity, especially in the generic segment [4] - The company is exiting the Indian market and has marked down the fair value of that business to $450 million [4] Supply Chain Issues - Tariffs on China are exacerbating FMC's situation, as the company incurs upfront costs that take a long time to recover due to the lengthy supply chain and high inventory issues [5] Competitive Landscape - FMC's core portfolio, consisting of post-patent or nearing-patent products, is facing intense competition, with specific mention of Rynaxypyr, which is experiencing non-competitive manufacturing costs and delayed customer purchases ahead of generics entering the market in early 2026 [6] Growth Prospects - While FMC's growth portfolio, featuring newly launched patent-protected products, has provided some offset to the slowdown, the growth is still limited, with expectations for significant contributions only by 2028 and a challenging year anticipated in 2026 [7]