Mark Douglas: Yes, I mean, this is — that will obviously happen as patents roll off and jurisdictions change, generic products will come. I mean, that’s normal in this industry, we see it every molecule that has ever existed. What we’re doing about that, changing the formulations, bringing new technologies into the Diamides as we just talked about, expanding that geographic base, those are the things that we’re doing. The branding of our products, we have extremely strong branding around the world. The brands that we sell are some of the best known brands in the pesticide industry. That is a very powerful tool in places like India, in places like Brazil. Brand matters, quality, assurance of performance. So all you bring all those things together, and we’ll talk about that on the 16th, those are the types of activities that allow you to continue to grow your market share in an expanding market.
Mike Harrison: All right, thank you. And then in terms of the, where you see channel inventories today, and your visibility on normalizing order patterns. Can you maybe walk us around the world and talk about where you see those channel inventory levels? I guess are the challenges right now, mostly focused on Latin America, or is visibility still pretty limited in other regions as well?
Mark Douglas: Yes, it’s not great right now, Mike. It’s very difficult to walk around the world. You could tell by the types of results that FMC is putting out there, as well as our competitors, that everybody is having the same issues in judging where the market is. I think the focus is on Latin America, because Latin America is now at the beginning of its season, where we’ve had time in the Northern Hemisphere to work through some of this in US, Canada, obviously Europe. So I think Latin America has all the focus now, just because it’s late to the game in terms of where its season is. That does not mean to say that there is not channel inventory elsewhere in the world. Hence my comments, I see this working through Q1, possibly into Q2, and then off we go. So I think that first half is where we’re really focused on to make sure that we understand, as we come out of that period, exactly where are we and how is volume flowing.
Operator: Our next question comes from Vincent Andrews of Morgan Stanley.
Vincent Andrews: Thank you. Good morning, everyone. Mark, I wanted to try to square some of your preliminary comments on 2024. I recognize they’re at a high level. I understand raw material costs can be down next year. I understand that you’re going to have some restructuring cost savings, and that’s going to help EBITDA grow year-over-year, where I would appreciate some more color. It’s just on the top line. I think you said you expected FMC to have sales growth next year. And I’m just thinking through, like, if 1Q has to lap, what we’ve seen in 2Q through 4Q ‘23, which is kind of like a mid to high 20s sales decline. And I think you only had volume down about 3%, yes, 3% in 1Q ‘23. In my model, I just sort of assumed that the headwind from lapping things in 1Q ‘23 on the top line was kind of too much to overcome in the balance of the year to get growth.
So, particularly if we assume that once the destocking is over, it’s just sort of a reset of sales levels and we go back to the industry growing 3% and perhaps you guys doing a bit better than that. So is there something I’m not thinking about right that helps you get to the idea that you can overcome the 1Q and potentially even a little bit of a 2Q top line headwind to get full year sales growth next year?
Mark Douglas: Yes, I think there are. I’m not going to go into those details today because I actually, we’re preparing for all of that as we go into our Invest Today. You’ve got to understand that the NPI, the growth of the new product is accelerating, so that gives you a tailwind. You do have a full season of LATAM in the second half of the year, which is also a positive tailwind. You take those big pieces together. We believe we’ll have positive growth next year, Vincent.
Vincent Andrews: Okay. Well, I look forward to the detail on that in a couple of weeks, and maybe just as a follow-up, just trying to understand the inventory drawdown that we’re seeing through the supply chain. Obviously, the numbers are quite incredible. Where would you have guessed a year ago or so that those levels were, and is it really just a function of sort of twin effect of, they overstocked a bit during the supply chain challenges, and then we’ve gotten the interest rate shock, which has sort of swung the pendulum 100% in the other direction. I’m just trying to understand how the channel was managing to hold, what incentivized them to hold all this inventory this whole time?
Mark Douglas: Yes, I think, listen, I think that your LATAM premise is absolutely right. In 2021 and 2022, clearly there was a lot of uncertainty around supply. There was a lot of price increases. I think the thing that caught the industry out is that growers around the world were holding inventory, and I don’t think that was factored into people’s calculations. That has obviously been much more than anybody thought, and that’s one of the big catalysts that we saw starting to unwind in Q2. And here we are today. So I think it’s not only, don’t just focus on distribution and retail, the grower component here was much bigger than I think anybody thought.
Operator: Our next question comes from Arun Viswanathan of RBC.
Arun Viswanathan: Great, thanks for taking my question and good morning. So I guess you’ve addressed a lot of the issues around the Diamides franchise, but just so we’re completely clear, two questions around this. So it sounded like the EBITDA contributions of the Diamides is relatively high, north of 40% of company EBITDA, or maybe around $500 million to $600 million annually. Are you saying that you don’t necessarily see risk to that? Generally speaking, you would maintain that level of contribution, EBITDA contribution from that franchise. And if you do see any deterioration that the new product growth and maybe some of the other stools you’ve added, such as biologicals would fill that gap so there really isn’t really any risk to losing large chunks of profitability within the company?
Mark Douglas: Yes, absolutely. We don’t see that at all. November the 16th, I’m going to paint the picture for you as how we grow over the next 36 months and what we look like 10 years out. You’ll see that there are a number of components that aid that growth. We are absolutely committed to continue to grow the value of the diamonds in terms of its contribution to the company. Now you will see there are other parts that we’re introducing that are growing much faster than the Diamides. So don’t think of FMC as being a Diamides story. Yes, the Diamides are incredibly important to us. It’s a fantastic franchise. Anybody would give their right arm to have this franchise. What we’re telling you is we have other things that are actually growing faster and will become more important to the company over the next 3 to 10 years.
So I think that’s the story that people are missing. You’re assuming we’re going to drop EBITDA in Diamides. That is not the case. EBITDA is going to grow with the Diamides. You also have the additive of all the new products and the new platforms that we’re building. That’s the total story and I think that’s getting missed today.
