FMC (US:FMC)2025-10-30 14:00Financial 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]