FMC Corporation

Ladies and gentlemen, thank you for joining us and welcome to the first quarter 2026 Earnings Call for FMC Corporation. This event is being recorded and all participants are currently in listen-only mode. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1. 1 again. Should you experience difficulties during today's call, please signal a conference specialist by pressing star 0. I will now hand the conference over to Mr. Kurt Brooks, Director of Investor Relations for FMC Corporation. Please go ahead.

Good morning, and welcome to FMC Corporation's 2026 First Quarter Earnings Call. Today's prepared remarks will be provided by Pierre Brondeau, Chairman, Chief Executive Officer and President, and Andrew Sandefur, Executive Vice President and Chief Financial Officer. After prepared comments, we will take questions. Our earnings release and today's slide presentation are available on the FMC Investor Relations website, and the prepared remarks from today's discussion will be made available after the call. Let me remind you that today's presentation and discussion will include forward-looking statements that are subject to various risks and uncertainties concerning specific factors, including but not limited to those factors identified in our earnings release and in our filings with the Securities and Exchange Commission. Information presented represents our best judgment based on today's understanding. Actual results may vary based on these risks and uncertainties. Today's discussion and the supporting materials will include references to adjusted EPS, adjusted EBITDA, free cash flow, organic revenue growth, and revenue excluding India, all of which are non-GAAP financial measures. Please note that as used in today's discussion, CTPR means Chlorine-Tranilla Pearl, earnings means adjusted earnings, EBITDA means adjusted EBITDA, and sales refers to sales excluding India. A reconciliation and definition of these terms, as well as other non-GAAP financial terms to which we may refer during today's conference call, are provided on our website. With that, I will now turn the call over to Pierre.

Thank you, Kurt, and good morning, everyone. During the first quarter, we delivered results that exceeded the midpoint of our guidance ranges. In addition, we made good progress on our 2026 operational priorities, which are listed on slide three. These are strengthening the balance sheet through targeted debt reduction of approximately $1 billion, improving the competitiveness of a core portfolio, managing the post-patent transition for Renax APR, and supporting sales growth of new active ingredients, including Isoflex active, Fluindapyr, and Dodilex active. I will start by providing an update on the progress of these four operational priorities, beginning with the debt reduction. We are continuing to target approximately $1 billion of debt pay down during 2026. The sale of our India commercial business continues to progress very well. We are in late stages with several potential buyers and expect to sign a definitive agreement in May. In addition, we're in advanced discussion with multiple potential partners regarding licensing of one of our new active ingredients, which we expect would include upfront payments. We anticipate concluding talks in the coming weeks. The remainder of the debt pay down is expected to come from proceeds from the sale of non-core assets, including potential sales of non-core businesses and or molecules, as well as multiple sizable real estate opportunities, some of which are in advanced negotiation. Next. FMC continues to take decisive action to optimize our manufacturing cost structure and rebuild the competitiveness of a non-diamide core portfolio in a market increasingly impacted by low-cost generic competitors. We intend to shift production from high-cost plants to lower-cost sources in Asia. We expect this transition will be completed by Q1, 2027, and that will result in a more competitive core portfolio. Additionally, in advance of the sale of our India commercial business, we have already completed the restructuring in Asia to account for the reduced size of the business. We continue to look for opportunities to further optimize our cost structure across the company in 2026. Regarding Renexa Peer, we continue to advance our post-pattern strategy with a clear focus, driving sales growth while keeping overall branded earnings data flat. Our strategy is progressing and we're seeing early signals that give us confidence. For example, we are observing positive reaction to a price repositioning with strong volume growth for high load formulations and differentiated mixtures. In addition, we are already seeing some small early share gains from other classes of insecticides. On the earnings side, ongoing cost improvements are supporting margin that are in line with our expectations. We continue to pursue additional opportunities for cost reduction which will further improve the competitiveness of the Renex APR business. We are still in the early stage of a post-patent Renex APR market and believe that some customers are adopting a wait-and-see approach as they gauge the availability and efficacy of CTPR generic offerings. Our strategy will pay out over the coming quarters as we implement our plan. And finally, regarding our new active ingredients, we are seeing solid growth. Sales of these products doubled year over year in the first quarter, highlighting the increasing demand from growers. The growth of these products is expected to build momentum, driven in part by new launches and additional registration. For example, We recently received regulatory approval for Isoflex active in the EU. This is a significant achievement as it is the first new herbicide approved in the EU since 2019. We expect product launches to begin in 2027, giving us new or expanded expanded access to more than 55 million planted hectares of cereals, corn, or sea grape and potato in the EU. In addition, many of our customers have requested pre-registration exemptions to use Isoflex in Italy, Germany, France, and Spain this year. If granted, this would represent upside to our outlook for the second half. We continue to concentrate on these four operational priorities as the basis for improved results. In parallel, the board authorized evaluation of strategic alternatives announced in February 2026 is progressing and multiple options are being evaluated. Turning to our first quarter results, slide four, five, and six provide details on our performance. First quarter crop protection market conditions were mostly in line with our expectations. Challenging margins and stressed liquidity for customers and growers led to cautious purchasing in most countries. Lower grower margins also increased the willingness to use generic products or skip some preventative applications. As expected, The regions with more pronounced combative pressure were LATAM and Asia, where generics are more prevalent. First quarter sales of $762 million were $12 million above the midpoint of the GANs, driven by better-than-expected effects and volume. While sales were 4% lower than prior year, sales were up 1% on a like-for-like basis after excluding India from both current and prior year periods. Sales made under the FMC brand grew 6% on a like-for-like basis and included strong volume growth in EMEA and North America in herbicides and sales appeal. This was mostly offset by lower sales to diamide partners. These partners accounted for nearly half of our overall price decline of 6%. The remaining drivers of lower price were Brennan Renacepio price, repositioning to support our post patent strategy, and a competitive market for our legacy core products. Volume grew 2% and FX was a 5% tailwind. The growth portfolio significantly outperformed the core portfolio due to higher sales of branded sales appear, new active ingredients, and plant health. First quarter EBITDA of $72 million was $17 million higher than the high end over guidance range with ethics, cost, and volume all favorable to expectations. Adjusted loss per share of 23 cents was $0.15 better than the guidance midpoint due to higher EBITDA. Looking ahead to Q2, our financial outlook is listed on slide seven. We expect second quarter revenue to be between $850 million and $900 million. A 17% decline at the midpoint is almost entirely due to lower sales to diamide partners and the removal of India. Excluding these two factors, the results would be similar to prior year as branded volume growth in most regions and the low single-digit FX tailwind are offset by lower branded pricing due to a competitive market in our core products, as well as a brand-relaxed PR pricing action. Adjusted EBITDA is expected to be $130 million to $150 million, down 32% at the midpoint to prior year. Lower sales are driving the decline, partially offset by favorable costs. Adjusted earnings per sale is expected to be between 16 cents and 26 cents. This represents a decline of 70% at the midpoint to prior year, due mainly to lower EBITDA and higher interest expense. Turning to slide eight, our full year 2026 financial guidance ranges are unchanged from our last call. Sales of $3.6 billion to $3.8 billion represent a decline of 5% at the midpoint as a mid-single digit price decline and the removal of India sales are partially offset by volume growth, including strong contribution from new products. EBITDA is expected to be $670 million to $730 million. At the midpoint, this is a 17% decline, mostly in the first half, as lower price and the Netflix headwind are partially offset by lower cost and volume growth. Adjusted EPS is expected to be $1.63 to $1.89, which is a 41% decline at the midpoint, mostly due to lower EBITDA and higher interest expense. We are maintaining a four-year guidance despite the increased uncertainty related to tariffs and the conflict in Iran. We are beginning to see higher energy, transportation, and petrochemical costs flow through the product costs. At the same time, current tariffs are lower, and there is potential to recover previously paid tariffs. At this stage, it remains difficult to forecast product costs or the magnitude and timing of future tariffs impact or recoveries, given the uncertainty around the duration of the conflict in Iran and potential additional U.S. trade actions. As a result, we are currently assuming that the Iran-related cost pressure and tariff-related benefits largely offset each other. We expect to provide an updated outlook at our next earnings call as we gain greater clarity on how these factors may affect full-year results. Slide 9. provides our implied second half guidance using our first quarter results and our second quarter outlook. At the midpoint, we are expecting sales and EBITDA to be largely consistent with last year's second half. Sales, excluding India, are expected to be up 1% at the midpoint versus last year, with volume growth outpacing mid-single-digit price decline and a minor FX headwind. EBITDA is expected to decline 6% at the midpoint as lower price and minor FX headwinds are partially offset by volume growth and lower costs. Adjusted EPS is expected to be down 15% due to lower EBITDA, higher tax, and higher interest expense. Turning to slide 10. I'll walk through the key factors bridging second half 2025 EBITDA to 2026, and why we are confident in our expectations for the second half. We expect volume contribution to EBITDA to grow with roughly two-thirds driven by new active ingredients, particularly in LATAM and the MEA. We anticipate the mean single digit price decline, which is consistent across the full year. An FX headwind is expected to be mostly offset by cost favorability. Our expectation for the second half volume growth are reinforced by positive signals we are seeing in LATAM. At the end of April, we already have orders representing 32% of our H2 direct sales in Brazil, which validates our confidence in the second half outlook. By the end of June, we are expecting orders representing about half of second half direct sales. We have a higher percentage of commitment on higher sales number versus last year, reflecting the impact of the new direct sales organization put in place in 2025, which is now in full action. The positive signals we are seeing in that time, combined with the demand for new active ingredients, give us confidence in achieving our sumo health targets. By the end of Q2, we also expect to have more clarity on a review of strategic options, as well as debt paydown progress. We anticipate communicating these updates at the next earnings call. We will now turn the call over to Andrew.