FMC (US:FMC)2025-05-01 13:00Financial Data and Key Metrics Changes - Company sales declined 14% year-over-year, with pricing down 9% and volume down 1% [16][17] - First quarter EBITDA declined 25% due to lower pricing and FX headwinds [21] - Free cash flow in the first quarter was negative $596 million, significantly lower than the prior year [35] Business Line Data and Key Metrics Changes - The Plant Health business outperformed the portfolio with sales up 1% year-over-year, driven by biologicals [17] - North America experienced a sales decline of 28%, primarily due to lower volume from cautious purchases [18] - Latin America grew 17% excluding FX headwinds, with increased direct sales to cotton growers in Brazil [19] Market Data and Key Metrics Changes - A strong U.S. Dollar led to a 4% FX headwind [31] - Asia saw a sales decline of 21% excluding currency impacts, driven by prudent selling and lower prices [20] - EMEA reported 7% lower sales excluding currency impact due to lower volumes [20] Company Strategy and Development Direction - The company is focusing on reducing channel inventory and implementing a post-patent strategy for Renexapia [6][11] - A new route to market in Brazil is being established to sell directly to large corn and soybean growers, expected to provide significant growth opportunities [11][12] - The growth portfolio is positioned to deliver strong growth with new active ingredients expected to perform well in 2025 [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial objectives for 2025, with expectations for significant momentum in the second half of the year [38] - The company anticipates revenue growth of 7% in the second half, driven by new products and the new route to market in Brazil [29] - Management noted that the impact of tariffs is manageable and will not significantly hinder reaching 2025 goals [28] Other Important Information - The effective tax rate on adjusted earnings was 14% in the first quarter, with expectations for a full-year rate of 13% to 15% [33] - Gross debt increased to approximately $4 billion due to seasonal working capital build [34] - The company expects free cash flow of $200 million to $400 million for 2025, a decrease from the prior year [35] Q&A Session Summary Question: Price trends in the crop protection market outside of diamides - Management indicated that pricing comparisons will ease in the second half of the year, with expectations for more stability [41][42] Question: Guidance on strong growth in the second half of the year - Management expressed high confidence in revenue growth driven by new products and a healthy channel situation starting in Q3 [46][49] Question: Actions to offset tariff impacts - Management clarified that cost-saving actions were planned regardless of tariffs and that they are confident in offsetting the tariff headwinds [54][56] Question: Reducing channel inventories - Management explained that they shifted focus to promoting products directly to growers, avoiding the need for significant rebates or discounts [62] Question: Updates on the DaiMod strategy - Management confirmed that pricing is lower compared to last year, and they are confident in maintaining competitiveness with generic manufacturers [66][68] Question: Customer order patterns - Management noted that customer orders are picking up speed in Q2, with a positive outlook for demand [82][84] Question: Differences between selling directly to farmers and through the channel - Management indicated that EBIT margins are similar for both sales methods, with cash conversion linked more to regional dynamics [88][90] Question: Second half EBITDA bridge - Management explained that the pricing and FX headwinds are interconnected, with expectations for a lower impact in the second half [94][96] Question: Impact of the new route to market in Brazil - Management confirmed that the new sales organization is in place and expects positive results in Q3 [106][108]