FMC Corporation Q2 FY2025 earnings call

• The company achieved critical objectives to position for growth, with FMC products in distribution channels normalizing in most countries.
• Rynaxypyr strategy is underway with components like lower manufacturing costs and new formulations; Brazil direct sales to large growers have a trained staff and early customer engagements.
• Strong demand for new actives fluindapyr and Isoflex; fluindapyr herbicide containing Isoflex active was registered in Great Britain, and Dodhylex active had its first shipment this month.
• Decided to divest the India commercial business due to a fragmented market, intense competition, and high working capital; retained active ingredients, manufacturing, and research in India.
• Second quarter results were at the higher end of expectations, with EBITDA and EPS exceeding guidance, sales up 1% driven by volume growth, price down 3%, and a 1% FX headwind.

Second quarter sales were 1% higher than prior year, driven by a 6% volume growth. Regionally, EMEA showed strong growth due to higher volume of herbicides, diamide partner sales, and branded Cyazypyr. Latin America revenues increased slightly versus prior year. North America sales declined 5% due to expected destocking in Canada, while the U.S. had solid volume growth of branded product post-destocking actions. Asia was down due to lower pricing and volumes, particularly in India. The growth portfolio was the driver of higher sales, with the core portfolio essentially flat.

• Revenue excluding India is guided to be down 2% versus prior reported results, with adjusted EBITDA expected to be 1% higher at the midpoint and adjusted earnings per share flat to prior year at the midpoint.
• Q3 revenue excluding India is expected to be down 1% versus reported prior year results, with adjusted EBITDA expected to grow substantially up 14% at the midpoint.
• Q4 revenue excluding India is anticipated to be 5% higher at the midpoint, with adjusted EBITDA expected to be 4% higher at the midpoint and adjusted EPS expected to be 3% lower than prior year.

• Uncertainties surrounding the divestment of the India commercial business, including timing and financial impact.
• Market competition, particularly in India's fragmented channel and generic competition for Rynaxypyr.
• Regulatory environment challenges in various regions.
• Currency fluctuations affecting revenue and earnings.

Q: Richard Garchitorena asked about volume, pricing, and 2027 targets.

A: Pierre responded on growth portfolio, Rynaxypyr strategy, and product contributions.

Q: Joshua David Spector inquired about the cost basket.

A: Andrew Sandifer discussed cost drivers like raw materials, fixed cost absorption, and restructuring.

Q: Frank Joseph Mitsch asked about India sales, EBITDA, and marketing.

A: Pierre provided details on India sales in H2 '24 and '25, and marketing preparation.

Q: Vincent Stephen Andrews asked about the Brazil order book and farmer economics.

A: Pierre and Ronaldo talked about Brazil orders and farmer conditions.

Q: Patrick Duffy Fischer asked about Brazil direct sales and diamide partner pricing.

A: Pierre responded on Brazil sales impact and diamide contract terms.

Q: Christopher S. Parkinson asked about TAMs of products.

A: Pierre discussed confidence in new products and Rynaxypyr strategy.

Q: Kevin William McCarthy asked about pricing stabilization and cash flow.

A: Pierre and Andrew discussed pricing outlook and cash flow drivers.

Q: Aleksey V. Yefremov asked about diamide pricing.

A: Pierre and Andrew talked about Rynaxypyr and Cyazypyr pricing.

Q: Michael Joseph Harrison asked about pheromones and revenue outlook.

A: Pierre discussed pheromones pilot and future revenue expectations.

Q: Arun Shankar Viswanathan asked about Q4 building blocks.

A: Pierre talked about growth portfolio and Brazil route to market.

Q: Joel Jackson asked about India decision complexity.

A: Andrew Sandifer explained differences between GSS and India divestment decisions.