FMC at Wells Fargo Conference: Strategic Growth Amid Challenges

On Wednesday, 11 June 2025, FMC Corporation (NYSE:FMC) presented at the Wells Fargo Industrials & Materials Conference 2025, outlining a strategic shift towards growth after a period of restructuring. Chairman and CEO Pierre Brondeau conveyed optimism about achieving a 9% to 10% growth rate in the second half of the year, despite challenges such as competitive pricing and the expiration of the Rynaxypyr patent. The company is leveraging new products and strategic partnerships to navigate these hurdles.

Key Takeaways

• FMC targets a 9% to 10% growth rate in H2 2025, driven by new products and collaborations.
• The company projects $200 million to $400 million in free cash flow for 2025.
• A $750 million debt offering aims to maintain FMC’s investment-grade credit rating.
• Strategic partnerships with Corteva and Bayer are expected to boost product growth.
• FMC is addressing the Rynaxypyr patent expiration by transitioning to new technologies.

Financial Results

• Q2 and H2 Guidance: FMC remains confident in its Q2 guidance and reaffirms a 9% to 10% growth target for H2.
• Free Cash Flow: Expected to be between $200 million and $400 million for 2025, lower than the long-term conversion rate due to working capital rebound and restructuring.
• Cost Savings: Achieved $165 million in savings in 2024, with a target of $250 million by the end of 2025.

Operational Updates

• Strategic Reset: Completed in Q1 and Q2, focusing on inventory management and channel cleanup.
• Regional Restructuring: Divided Latin America into Brazil and the rest, expanding the sales force in Brazil.
• Collaborations: Entered into a strategic collaboration with Corteva for Fluentepir fungicide and with Bayer for Isoflex in Germany.

Future Outlook

• Growth Drivers: New active ingredients and biological products are expected to drive significant growth.
• Geographic Expansion: FMC plans to replicate its successful strategy in Brazil in other regions.
• Sales Targets: Projects sales of Fluandapir and Isoflex to reach $250 million in 2025.

Q&A Highlights

• Corteva Collaboration: FMC sells a finished Fluentepir product to Corteva, who commercializes it under their brand.
• Rynaxypyr Strategy: FMC aims to expand market share through new combinations and a competitive price point.
• Industry Demand: A normal planting season with no significant impact from tariffs or crop prices.

For a deeper understanding, please refer to the full transcript below.

Full transcript - Wells Fargo Industrials & Materials Conference 2025:

Operator: Great. Good morning everybody and welcome back. Now we have on stage FMC. It’s my pleasure to introduce Senior Management. FMC is one of the world’s leading crop protection companies with a diversified portfolio serving all crops in all regions across the globe.

With me today is Pierre Brondeau, Chairman and CEO, Bernardo Pereira, President and Andrew Standifer, CFO. Welcome gentlemen.

Pierre Brondeau, Chairman and CEO, FMC: Thank you.

Operator: Thank you for being here. So Pierre maybe we can start off with a bit of history. It was basically a year ago at this conference where the decision was made for you to return as CEO. Curious just what motivated you to come back? It’s obviously been a very challenging couple of years in the industry.

What do you think you can improve and what do you want to accomplish I guess as you’re here in your time as CEO?

Pierre Brondeau, Chairman and CEO, FMC: Yes. Motivation to come back is of all obviously I care about the company. I’ve been there for a while And I have a deep trust in the ability of this company to get back to the kind of growth in terms of revenue growth and earnings growth that we had in the past. I also believe we have maybe the strongest potential portfolio this company ever had over my entire time with the company. So looking at what the company could be at the time the Board asked me to come back was enough of a motivation because we have all of the ingredients we need to get back get back quickly to this kind of performance.

I have to say that in term of coming back and where I feel the biggest the most important period since I’ve been back for me have been Q1 and Q2 this year. I think it’s when we decided with the team in the fourth quarter last year looking at the situation in-depth really understanding where we were and looking at the potential. We thought we have too good of a portfolio. We have too good of an opportunity for growth to not reset the company over the two quarters to be able to apply the strategy we’re going to put in place without having any constraint. And I think those are six months from call it December to or seven months December to June are maybe the most important period since I mean back as a CEO in terms of preparing the company for the future.

Operator: Got it. So maybe we start there I guess in terms of what you’re seeing so far in the second quarter. How are trends on the inventory side within your channel within the industry? And then obviously you gave guidance for the second quarter. Where are we trending within that guidance?

Pierre Brondeau, Chairman and CEO, FMC: Well, let me start with Ian on the guidance. I think we are comfortable with the guidance. Obviously, there is always a couple of weeks to go in June, but we are comfortable with the guidance for Q2. The planting conditions are normal. The demand is normal.

So we have no issue. But I’d like to be very clear, Q1 and Q2 are more important in terms of reset than the guidance. As I said, we are comfortable with the guidance. That is not the problem. The things we were and we are watching is how we delivering what we were set to deliver when we declare we are resetting the company in the six months of the year to be prepared for the half.

And what I can tell you is I could not expect to be in a better place than where we are right now. So at the end of the second quarter, our inventory level will be exactly or better than where we wanted that to be. The channel will be clean with our products and it will not be a handicap going into Q3 and into Q4. I would say, I would put a little except India. India is still an issue overall, but it’s an industry problem, number one.

Number two, I think we’ve done a lot of work in establishing strategy for all of our core and growth platform and Ronaldo had a process in place to make sure that those strategy would be then defined for each country, each region, each sub region, each country has an actual level strategy. All of that is currently in place for the entire company. For the half of the year, you remember we are penetrating the new market segment in Brazil, which we’ve never been able to penetrate and we can do that because of the new product we have. Our sales force has been hired. Those sales people, agronomists, tech service people know those customers.

They have been trained and the organization is in place and the commercial discussions have started to take place. And finally, we did a lot of restructuring. We changed a large part of the leadership of the corporation. And if I look at the commercial leadership, the regional presidents, we have four out of five who are in new positions to lead the regions and we’ve changed the organization. We used to have four regions.

We went to five regions because we wanted to break down Latin America into Brazil and Latin America because we believe Brazil is big enough of a market that it deserves its own focus. So we get to the end of Q2 with all of that in place. So I can tell you that beyond the guidance, we are where we want to be exactly to go to the next phase of the company which is revenue growth and earnings growth as we committed to for the half of the year.

Operator: Got it. And then maybe in terms of industry dynamics, we’ve had a lot of competitive price pressure to start the year. How is that trending so far? And how do you expect that where do you expect that inflection point I guess in the half?

Pierre Brondeau, Chairman and CEO, FMC: So I think there is price pressure. Let’s not negate that, but it’s not as dramatic as the numbers are showing. If I take a case, of all, there is two driver for FMC in terms of price. One is contract with our partners where we have to link sales price to them to our manufacturing cost. So the Rolex Appear cost decrease manufacturing cost decrease has a big impact on the price somewhat half in the first quarter of the price.

Now, there is pricing pressure, but there is no big change in the pricing sequentially from Q4 to Q1, Q1 to Q2. The issue is we are comparing year on year to very high prices, which still on the back of twenty twenty two, twenty three being period with very high pricing post inflation. So, yes, there is price pressure, but nothing dramatic for the half. Are watching the low single digits.

Andrew Standifer, CFO, FMC: For half to low to mid single digits.

Pierre Brondeau, Chairman and CEO, FMC: What’s that? Low

Andrew Standifer, CFO, FMC: to mid single digits.

Pierre Brondeau, Chairman and CEO, FMC: Low to mid single digits for the half, knowing that we have these partner sales in the which are negatively impacting. But it’s more a year on year comparison than a sequential situation.

Operator: Okay. Got it. Maybe we can turn to the recent announcements I guess in terms of news release from yourself. Number of collaborations one with Corteva, one with Bayer. How do these come about?

Maybe if you could talk about maybe some of the economics and what strategically how does this benefit you and how do you see this sort of growing going forward?

Pierre Brondeau, Chairman and CEO, FMC: Certainly, the most important is certainly the one with Cortiva and the flow and the peer based. It’s a good agreement because of all we like to work with Cortiva. We do have more complementary strategies knowing that it’s a seed focused company. We are solely crop chemicals. It’s a reliable company.

And when we do a marketing plan and a forecast, we don’t include a lot of penetration of crop protection products into corn and soybean which belongs to Cortiva. So it’s additional to what we have in our marketing plan. There is very little competitive overlap between the two companies because they do work around their seeds. So, it’s a very important contract because of all, Fluent Epi we believe is an excellent fungicide and there is nothing like a party validation by a company of the quality of Cortiva. So that’s number one.

of all, the volume could be very significant because it’s a big corn and soybean company and mostly additional. of all, the economics, what do we sell to Cortiva? We sell them a three way mixture, which is equivalent to the one we are commercializing in North America. It’s a North America contract. We’re selling them obviously at a lower gross margin than what we sell in the market.

But because we do not have any SA and R expenses because they are the ones selling the product, it is the EBITDA level as a percent of revenues is the same as the rest of the portfolio. So there is no dilution through these sales at the EBITDA level. So very positive contracts. We like it. And I think it’s going to significantly speed up the growth of this product.

Operator: Great. And in terms of the deal structure, do you get any licensing through revenue or is this you basically sell them the product and they formulate it? As much as they can sell you offer them?

Pierre Brondeau, Chairman and CEO, FMC: We do all of the work around the product. We sell them the product and they resell the product. You can explain, we do the formulation, we do

Bernardo Pereira, President, FMC: It’s a finished product. We sell a finished product and they will commercialize that with their brand.

Operator: But

Bernardo Pereira, President, FMC: there’s not it’s not that we’re selling one active ingredient and then they have some other developments there. It’s the product that we developed branded for Corteva, exclusively for Corteva,

Operator: got it. And then I guess this deal would you look at this as a template for future collaborations or how should we think about this maybe bigger picture for future active ingredients?

Pierre Brondeau, Chairman and CEO, FMC: So with Cortiva, we like to partner with them. We like the model where we sell a formulated product And certainly if this type of cooperation would be to be expanded, we would be certainly positive about it. Could we think about the same type of cooperation with obviously different formulations, because they do have the exclusivity on this one with other companies? It’s possible. It would not be with all of the companies.

I think we have to be selective with the partners with whom we are working. We just can’t give this molecule to everybody. But yes, are open to cooperations. If there is companies which like Cortiva do not create a very high competitive situation where we are giving a product to a competitor who then competes with us with the same product in the same market that has to be taken into account. So it’s going be on a case by case basis.

Operator: Okay. Got it. And then last question on this in terms of how this impacts guidance. Obviously, the deal with Corteva starts 2026 is when they start to sell the product. But any impact on 2025 in terms of maybe potentially speeding up sort of the acceleration of adoption among farmers?

So how do you think about that?

Pierre Brondeau, Chairman and CEO, FMC: Yes. In terms of guidance, well there is two questions. One is, I suppose the part of your question connect to the one. Are we going to change the guidance because we’re going to be selling to Corteva? Listen, no respect to everybody.

We’ve been told for six months that we are crazy with our H2 guidance that it was too high. So I’m not going to start to think about increasing that guidance. I commit with the team we have committed to a number. We say 9%, 10 So we’re going to stay with this number. We believe it’s highly achievable.

We are highly confident in our H2 delivery, but we’re not going to try to finesse around this number 9,000,000 is the number we are committed to. But yes, yes, the Cortiva deal will impact sales of Fluentepir positively most likely in the fourth quarter. They were not in our forecast.

Operator: But it’s the year.

Pierre Brondeau, Chairman and CEO, FMC: I think the ramp up is restarting to come in year two. So we just signed the contract. So yes, there will be some impact of sales of We believe there is a possibility that the new technology Fluandapir and Isoflex, the target sales of $250,000,000 for this year coming from $130,000,000 last year might be underestimated and we might see bigger number when we get to the end depending upon how big we grew in Brazil with the new route to market.

Operator: Got it. And then maybe taking a bigger picture look at it, you talked about the four active ingredients that are going to drive growth and offsetting maybe revisit sort of where we are on the diamide side where you have a patent rolling off. You talked about in the past about the strategy of maintaining margins by cutting costs. How is that going on the

Pierre Brondeau, Chairman and CEO, FMC: Let me try to if you don’t mind. What I’d like to do about Rynaxypyr, I’m not going to talk about the strategy because I’ve talked about it 200 times. It hasn’t changed. But let me try to size what it is, put things in perspective around Today, we sell $800,000,000 of Roanaxapir in 2025. That’s the forecast.

Of these $800,000,000 $200,000,000 are to partners with whom we have contract until the end of the decade into the beginning of next decade. So those sales, those $200,000,000 sales do not go away. So we’re down to $600,000,000 sales of branded products. As I said before, of those $600,000,000 sales, we have already converted $250,000,000 to new technologies, mixtures, high concentration and now we’re launching the tablets. So those conversion have taken place because farmers wanted the performance of the product.

So now we are down 600 less to 50, we are down to three fifty of solo molecule sales. Now think about three fifty and I’m going to make take a shortcut in the calculation, but about 35% of our sales are in high in place where it’s difficult to change to generics. Those are the high cost crops like fruit, vegetable, tree nuts. There is very little quick substitution. 35 of $3.60 is another $100,000,000 So really what we have which is exposed today to generic where we’ll have to fight to protect is $250,000,000 of ramexapir sales.

All right? Now, what do we have to protect $250,000,000 We have a manufacturing cost, which by 2026 will be competitive with generic manufacturing cost. We will be there, number one. Number two, we have technology. Three products this year, three new products next year addressing ease of use, resistance and spectrum technology, six new products.

And we know more than anybody else how those products behave because we’ve been selling those products for a long time. We have a strategy which is in place and which has been communicated to our entire sales organization taking into account the new technology we have and the manufacturing cost we have. And finally, we have a brand. And I want to go back to the incidents which took place in China. I think when you buy from FMC and you buy an FMC brand, it’s a very well known brand.

It’s a quality brand. It’s been sold for twenty years and it’s a guarantee of supply. So we have all of those tools to protect $250,000,000 and grow $250,000,000 So there is a lot of drama around Rolexa here. But if you break it down, it’s $250,000,000 with a lot of tools to not only protect, but grow. Obviously, we have to grow this knowing that price is going to go down, but our cost is going down too.

So, volume should increase with lower price and our only objective we have which doesn’t seem to be a total order with the way I broke down the sales is to hold earnings 25%, 26%, 27% at the same level. That’s it. So, we believe it’s not a stretch. It’s a strategy which we should be able to put in place without much of a challenge.

Operator: Okay. That makes a lot of sense. Clarifies a lot.

Bernardo Pereira, President, FMC: Sorry, just to add to what Pierre said, Rynaxypyr became the largest insecticide in the world and it only accounts for 9% market share. The entire diamide group accounts for 9% market share. So what also gets lost is the potential for expansion of this market once one we have other combinations, other products based on the timelines, primarily Rynaxypyr. And two, at a different price point that will come, we know that. But at a different price point, there will be many more growers willing to use that type of technology.

If with only 9% willing to go for the top technology, that became molecule. So we do believe firmly that there is a lot of room for expansion there.

Pierre Brondeau, Chairman and CEO, FMC: And to complete the answer to your question, do we feel good about H2? Why do we feel good about ’27? And why as a CEO I came back and feel good about the future What we have to protect is quite limited with lots of options to expand that franchise from ronaxapir. But then you put on the other side the new product we have, four new active ingredients for which demand keeps on being stronger than what we’re expecting, party validation like the Fluentopia contract or the ISOFLAX contract in Germany with Bayer.

Our competitors like this product. So guess what our customers like it even more. We say those products could reach $2,000,000,000 We could be underestimating not only the speed at which they will grow and the final sales and maturity. We do have also an old suite of new product biologicals and we still have sales appear which is protected until 2028 or 2029. So, a limited risk on Rolex appear and a very high number of new products in the market which are growing very fast.

Operator: Got it. That definitely helps. Makes lot of sense. Dave, one thing that we’ve seen in the industry, there’s been a lot of questions around this plant explosion in China. You talked about it briefly.

But maybe if you could just clarify how do you see this impacting the industry? I mean some producers use that as a source of an active ingredient. But do you think this impacts supply at all maybe a tightened supply among generics?

Pierre Brondeau, Chairman and CEO, FMC: What seems to be well, of all, as I’m sure you’ve seen multiple announcements were made and we are seeing it on the places where there is export of ronexapia to some countries, pricing of generic ronexapia are going up very significantly. There is multiple reasons for that. Number one, the explosion took about 25% of the G and A’s capacity out and it was one of the generic producing product on the high side of the quality. So it’s taking 25% of the generic, but it’s taking a very large part of the quality of Nexapier from generic. And this plant is most likely shut down for a long time.

Operator: Okay.

Pierre Brondeau, Chairman and CEO, FMC: of all, when such an issue happen, the Chinese government run immediately audits on all of the producers of that molecule. And we have the pleasure to have them in our plant the day following the explosion running an audit on our process, which they liked what we did. They know us. They very often use us as a reference in term of process safety and they gave us a green light to carry on producing the same day in the evening. So we never stopped operations, but we also know that they are going around auditing all of the producers of CTTR generic China.

Could that result in further tightening of capacity because some of those process could be seen as unsafe? Is very possible. We don’t have this information. We just know the process

Operator: is

Pierre Brondeau, Chairman and CEO, FMC: the reason for which prices are going significantly up is, let’s face the fact, manufacturers in China thought they could penetrate markets where they were not allowed to like Brazil, like North America, like Europe and they produce more inventory than they could sell to the countries like China, India, Argentina and Turkey. So they were sitting on enormous inventory. They had to convert into cash and sell at prices which were in those countries below their manufacturing cost. So we are getting back to a place where they have gotten rid of all of those inventory. They are back to normal manufacturing.

There is less capacity. There is audit. The consequence is yes, it’s creating a more stretched supply and price are significantly going up on the generic EDPR.

Operator: Great. Okay. And then maybe if I could quickly ask in terms of just the overall outlook for the industry and demand. Have you seen any impact on demand in any region specifically from tariffs or from any concerns about weaker crop prices? How is that trending so far?

Pierre Brondeau, Chairman and CEO, FMC: Maybe you want to answer, Ronaldo. We’ve not seen a lot of change in demand because of tariffs.

Bernardo Pereira, President, FMC: No, no. Growers continue to plant. There was a lot of debate here in U. S. But when it comes time to put seeds on the ground, what we’re seeing is a very normal season in terms of planted area, in terms of level of investments.

We haven’t seen any dramatic change. There is a bit more corn than soybean in U. S. Because of commodity prices. It has it is not related to tariffs.

This is just a normal cycle in the ag industry. And honestly, in overall representation for us, that swap that delta from soybean to corn, it’s not material, either way. So what we’re seeing is growers committing to the same level of technology and planting around the same area. Well, it’s off from a good start though. The season in the Northern Hemisphere has started probably on the normal side and this has not been the case in recent years.

So we like what we see. It’s not exceptional, but it’s normal. There is no big weather concern. And in terms of planted areas, just regular business.

Pierre Brondeau, Chairman and CEO, FMC: With what’s been happening over the last few years, normal is good.

Bernardo Pereira, President, FMC: Normal is good.

Operator: Normal

Bernardo Pereira, President, FMC: is

good.

Operator: And then maybe Andrew maybe you can shift over to the balance sheet and cash flow generation. You put out guidance for free cash flow for this year, how is that trending? And then I noticed you also put out some debt and maybe you want to talk about how that impacts sort of leverage and that type of thing?

Andrew Standifer, CFO, FMC: Sure. So, just briefly, looking for cash flow and that 200,000,000 to $400,000,000 range this year, midpoint about $300,000,000 It’s a bit lower than our long term cash flow conversion for two reasons. One, we had a big rebound in working capital and outperformance last year with working capital and the cash release from working capital that came out of the 2023 correction. part of the restructuring actions that we took to really make a step change in our rent action cost structure has some ongoing cash obligations with it that hit 25,000,000 ’26 depressed our conversion by about $40,000,000 a year in terms of restructuring take or pay payments we had to make to break a supply contract. So, do think as we look to ’26, we’ll continue to trend in that 60% to 70% conversion of earnings and free cash flow.

We’ll get a little more granular as we get there. Working capital continues to be the key driver and that’s just endemic in our business. We’re a fixed asset light business, but we do need working capital particularly to grow. To your question, and certainly, about two weeks ago, we completed a debt offering, a subordinated debt offering often referred to as a hybrid debt offering, thirty year notes that the rating agencies, because of the long tenure of those notes and the structure of those notes, treat as quasi equity. So about 50% credit for on rating agency metrics only on that being treated as equity.

So, we sold $750,000,000 in notes, so only about $375,000,000 of that gets treated as debt. It’s debt neutral overall for us. We used the proceeds from that transaction to pay off notes that were coming due in May of twenty twenty six as well as to reduce commercial paper outstanding. So it was an important step to show our continued commitment to an investment grade credit rating. We’ve had metrics out of line with our rating for a couple of years.

This we did make a divestiture last year of a non core business that helped us pay down some debt. This year, the step we could really take was to improve the debt mix to where that it improves our credit metrics. And with two out of the three agencies, actually puts us at year end and metrics back in line with our rating. And in early and through 2026, we’ll get back in line with our rating with the agency. So a bit of an interest rate premium we acknowledge, but really the trade off there was really protecting the investment grade rating.

Operator: Great. Maybe Pierre, you did a lot of significant cost cutting in 2024, annual run rate $165,000,000 you expect to increase that this year. Maybe talk about how that’s going? Where are the other buckets for initial additional cost improvement?

Pierre Brondeau, Chairman and CEO, FMC: I don’t think that we are in a further cost cutting process. I’ll tell you why. of all, if you look at the total cost tailwind, they were significant. The number for this year was Yes.

Operator: We’ll be at a run

Andrew Standifer, CFO, FMC: rate of $250,000,000 in savings versus 2023 at the end of this

Pierre Brondeau, Chairman and CEO, FMC: year. Frankly, now that that is done in place, I’m shifting my mind. I think I’m looking at growth. We do have a product portfolio today, which is proving to become stronger and stronger, which is allowing us to penetrate market we were not able to penetrate. What we’re doing in Brazil could be a model for what we do in other places.

So if you would ask me, protecting technology and increasing the presence on the front end of the company, the commercial part, tech service, sales is maybe more of a priority today because I just do not want to limit our capability to grow by keep on doing further cost cutting. So we’ve done the cost cutting as we wanted to do a big, big focus on manufacturing, the administrative cost, even on sale. I think it’s about time now that we have reset the company. I feel we’re going to finish the second quarter even a better place than where I wanted to be when I declare the reset of the company. I think H2 we need to position ourselves to grow as we said, to deliver the numbers, but to carry on with the same momentum going in 2027.

I have very high confidence in the product. So our mind is shifting more now to growth rather than to cost cutting.

Operator: Great. It’s good to hear. So last couple of minutes here, guess if there’s one thing that you wanted investors to take away from this, obviously it’s been a challenging couple of years. What should people think about? You talked about growth.

Is that really what you want people to focus on? Yes.

Pierre Brondeau, Chairman and CEO, FMC: I’d like to investors to know and to understand is the potential upside due to the growth over three growth platforms, the four new active ingredients, the biological and Cyosypyr far outweigh the size of the risk on ronaxapir. And I think it’s been looked at differently. I hope that contracts signed with Bayer or Cortiva are proving the value of our product. I think the growth rates we’re going to double the size of our new product from last year to this year. And the only limitation is because we do not have registration everywhere but those registration are coming.

We need registration for ISOFLAX in European Union. It’s going to be a very big impact. So it will be step change. So when I look at the company today there is a pocket of risk, which is Rynaxypyr, which I tried to size to the reality of the problem with lots of tools to expand the franchise and then a very broad high quality growth capabilities with new technology. So that’s what people have to think about.

And now that the reset has been redone, that the cost is appropriate, that our inventory level is where we want, time for us to shift the mode of operation to a growth mode.

Operator: Great. With that, thank you very much.

Bernardo Pereira, President, FMC: Thank you. Thank you.

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