FMC Corporation (NYSE:FMC) Q4 2024 Earnings Call Transcript

FMC Corporation (NYSE:FMC) Q4 2024 Earnings Call Transcript February 4, 2025

FMC Corporation beats earnings expectations. Reported EPS is $1.79, expectations were $1.65.

Operator: Good afternoon, and welcome to the Fourth Quarter 2024 Earnings Call for FMC Corporation. This event is being recorded and all participants are in listen-only mode. [Operator Instructions] After today’s prepared remarks, there will be an opportunity to ask questions. [Operator Instructions] And I would now like to turn the conference over to Mr. Curt Brooks, Director of Investor Relations for FMC Corporation. Please go ahead.

Curt Brooks: Thanks. Good afternoon, and welcome to FMC Corporation’s Fourth Quarter Earnings Call. Joining me today are Pierre Brondeau, Chairman and Chief Executive Officer; Andrew Sandifer, Executive Vice President and Chief Financial Officer; and Ronaldo Pereira, President. Pierre will review our fourth quarter performance, provide an outlook for first quarter and full year 2025 performance, and share our 2027 financial targets. Andrew will provide an overview of select financial results, followed by a strategy update from Ronaldo. After our prepared remarks, we will take questions. Our earnings release and today’s slide presentation are available on our 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 upon these risks and uncertainties. Today’s discussion and the supporting materials will include references to adjusted EPS, adjusted EBITDA, free cash flow, and organic revenue growth, all of which are non-GAAP financial measures. Please note that as used in today’s discussion, earnings means adjusted earnings and EBITDA means adjusted EBITDA.

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. I’ll now turn the call over to Pierre.

Pierre Brondeau: Thank you, Curt, and good afternoon, everyone. When I returned as CEO, we started the process to improve the market visibility and deliver a more predictable performance for FMC. Equally important, we also focused the organization on defining and implementing a diamized growth strategy and accelerating the introductions of fluindapyr and Isoflex active, all while increasing our cost-cutting targets. We are making good headways here and delivered two strong quarters with earnings above our guidance. The work we have done has also led to a new way of thinking about the portfolio with products being considered as either part of our core portfolio or growth portfolio. Framing the products, as you can see on slide three, in this way, we’ll shape a lot our commentary on today’s call.

Our efforts to improve market visibility and deliver more predictable performance have progressed. However, after eight months in a row, I have modified my view of what needs to be done for FMC to fully benefit from the market upturn when it happens and the quality of the portfolio. The company needs a stronger reset than what I thought initially. We learned a lot in the fourth quarter and it has become clear that we need to take more aggressive actions to reposition FMC. Above all, we need to significantly lower FMC inventory in the channel much beyond what we were expecting. We also need to give a higher priority to the implementation of a newly developed strategy for Rynaxypyr and Cyazypyr, including accelerating the implementation of the manufacturing cost-reduction efforts.

These actions will have pronounced negative impact on 2025 performance — financial performance beyond what we anticipated. Additionally, we will need to provide additional resources to strengthen the commercial development of new active ingredients or AIs, which is critical to 2025 revenue and beyond. It also became clear to us that beyond inventory level, we missed the impact of an evolving distribution channel in LATAM, which will require us to invest to expand a sales organization to explore new routes to market in that region. We will go into more detail on this topic later in the presentation. 2025 is a pivotal year. Let me give some more details about the actions we are undertaking. It is highly feasible to have all of this in place in the next few months.

We will greatly benefit from these actions starting in 2026, but it will penalize our short-term financial performance. First, we are committed to decreasing the level of FMC products in the channel. We will make certain that our products move from the channel to the ground faster than our sales to the channel. This will be a high priority for the company. Critically, this means the volume growth we are forecasting will be heavily driven by new routes to market, and new products where channel inventory is not an issue. Second, this quarter we are completing the first phase of significant manufacturing cost-reduction of Rynaxypyr and Cyazypyr. These cost reductions are critical to delivering a future growth plan. But as I mentioned earlier, it will create some year-on-year negative comparison in revenue in 2025.

It is important to remember that Rynaxypyr and Cyazypyr sales have two critical components, which are managed separately. They are branded diamide products that are sold directly to the market by FMC. In 2024, this was about 75% of diamide sales. Then there are partner sales, which are solo molecules sold to competitors. A number of the most significant contracts are based on cost-plus pricing. A significant manufacturing cost decrease will impact the sales value to our partners as product prices will decrease with manufacturing cost reductions. In 2025, we expect branded Cyazypyr sales sales to continue to grow. However, we are forecasting overall Rynaxypyr sales to be down as a key partner sales are impacted by a — our cost-plus contracts and as we position our branded product lines for a new market strategy.

In addition, we continue to see generic versions of Rynaxypyr sold in India and China as well as generic offering now in countries such as Argentina, Turkiye, Mexico, Pakistan, and Peru. The presence of this generic is not unexpected, but negatively impacts price and initially some volume. Third, we are preparing our diamide product lines for the next phase of their evolution. We view FMC’s product as two parts: a core portfolio and a growth portfolio. The core portfolio includes products for which the base molecules used to develop new formulations are already or about to be without patent data protection. The growth portfolio, by contrast includes product, for which the base molecules are data or IP protected. Cyazypyr, the four new active ingredients, fluindapyr, Isoflex, Dodhylex, and rimisoxafen and plant health portfolio constitute a growth portfolio.

Rynaxypyr is a part of the core portfolio along with the rates of our legacy products. As we’ll explain later, the market for Rynaxypyr will transform in the next few years, expanding to new markets and offering strong growth opportunities. The other diamide product, Cyazypyr is a differentiated product with longer patent and data protection, stronger performance, and a more complex manufacturing process. Cyazypyr also offers opportunities to develop higher-performing formulation. Today, no generic companies are selling this molecule in any major market. Fourth, as we have delivered savings well beyond the restructuring target, we are investing in the expansion of the sales organization to support the growth of our new active ingredients and to begin to develop new routes to market we have not explored, especially in LATAM and EMEA.

As we’ll discuss further in a moment, LATAM Q4 sales were disappointing. In addition to the channel inventory situation, we believe a shifting market structure is also impacting sales. The distribution channel in Brazil has gone through a strong wave of consolidation. Territories that were well-covered and served are not performing as well anymore. This is one of the reasons we have decided to explore new routes to market, including a more direct approach to large growers. That will require increased investments, which will be reflecting in our selling cost this year. This is a critical part of our strategy as it generates growth without impacting our efforts to lower FMC channel inventory. With these four steps in place, we believe we are well-positioned for growth in 2026 and 2027.

And we have strong confidence in our products. FMC, like all technology-based ag companies, has an evolving product portfolio. Our strategy is to drive commercialization of innovative growth platforms while maximizing the value of our order of patent core product through formulations and nature. We view our core and growth portfolio as well-balanced with a core portfolio able to grow at or slightly above the market, while the growth portfolio is expected to grow significantly above market. Sales in the core portfolio will be driven by market demand, new formulation developments, and new routes to market. As you will hear later, Rynaxypyr has high single-digit growth potential after the planned 2025 correction with the market growing exponentially.

In the growth portfolio, the four new AIs have excellent sales potential. The market introduction of the first two molecules fluindapyr and Isoflex is progressing as planned with sales approaching $130 million in 2024. The other two molecules, Dodhylex, and rimisoxafen have at least an equivalent peak sales potential, but have later introduction dates. In addition and most importantly, all four of these new products allow us to penetrate large market we don’t participate in today. The combined sales of these four molecules at maturity is expected to be substantially larger than the total diamides portfolio today and potentially beyond the $2 billion we previously announced as we find more applications for these products. Regarding plant health, we expect the platform to grow at an annual rate in the mid-20% range out to 2027 with growth rate potentially exceeding that in later years as pheromones scale up.

The actions we take in 2025 will allow our portfolio to deliver substantial growth in 2026 and 2027. I want to shift now and provide more details on our fourth quarter, which are detailed in slides four through six. Q4 revenue of $1.22 billion were below our guidance range. Revenue grew 7% versus 2023 and 9% excluding sales from the divestiture of the Global Specialty Solutions or GSS business in November 2024. The sales increase was heavily attributed to volume gains in our growth portfolio. Sale of these products accounted for over 75% of the growth. That includes sales at year and new AIs, as well as the Plant Health business, which grew 33%, mainly from Biological. Lower pricing of 3% was slightly better than we expected, but an FX headwind of 5% was higher than the low-single-digit we had forecasted.

LATAM sales were the most disappointing as high competition led to prices, and terms that we were unwilling to meet, which in addition to credit risks led us to pass on some sales. As we were confident that we would meet our EBITDA and EPS targets, we have the flexibility to walk away from unattractive sales opportunities. Additionally, we saw lower-than-expected demand across most regions as customers lowered the amount of inventory they are willing to hold versus historical level. While we did anticipate customers would hold less inventory in an environment of higher interest rate, lower commodity prices, and the perception of secure supply, we were not expecting behavior to change to such a degree. Given the above assumptions and the current high levels of FMC product in the channel, we now believe we have elevated channel inventories in some countries in LATAM, including Brazil, Asia, including India, as well as Canada and Eastern Europe.

We reported fourth quarter EBITDA of $339 million, which was 33% higher than last year and $3 million higher than our guidance mid-point. Lower pricing and FX headwinds were more than offset by higher volumes as well as favorable costs, including continued contribution from a restructuring program. Input costs were favorable due to lower raw material cost with much lower unabsorbed fixed cost than we recorded in previous quarters. The reduced cost coupled with sales growth led to a strong EBITDA margin of 27.7%, an all-time Q4 high. Slide 7 shows the return of full-year 20 — the results of full-year 2024. Sales declined 5% as higher volume, mainly in the second half of the year was more than offset by lower pricing and FX headwinds. Although EBITDA declined 8%, we posted EBITDA margin of 21%, which was only a slight decline versus prior year despite the drop in sales.

Part of this was due to the strong cost including $165 million of cost benefits from our restructuring actions. Looking at 2025, we can see our full year expectations on slide eight. We are expecting full-year sales of $4.15 billion to $4.35 billion, which is flat to prior year at the midpoint and up 3% excluding approximately $110 million of lost sales from the GSS sale. We are forecasting moderate gains in volume driven by a — our growth portfolio as well as the expansion of our customer base. This volume growth is forecasted to be partially offset by deliberate actions we are taking to reduce channel inventory in many countries. Pricing is expected to be down low-to mid-single digits with the vast majority of the pricing headwinds due to our diamide partners.

As we discussed earlier, those contract adjustments will have the most impact in the first half of the year due to the timing of those sales. We are forecasting FX to be a low-to mid-single digits headwinds for the year as the U.S. dollar is projected to remain strong. Despite these challenges to sell, we expect to deliver higher EBITDA versus the prior year with an expected range of $870 million to $950 million, which is up 1% at the mid-point. Excluding the GSS impact, the mid-point of guidance is up about 4%. We expect COGS to be favorable $175 million to $200 million due to lower raw materials, favorable fixed-cost absorption, and restructuring benefit. Offsetting these benefits are expected to be lower price, a $65 million to $75 million FX headwind and investment in sales organization.

Adjusted earnings per share is expected to be between $3.26 and $3.70, which is flat at the midpoint to prior year. As shown in our Q1 guidance on slide nine, we expect a low quarter — a low first-quarter as we aggressively start the correction process early in the year. Sales are expected to be $750 million and $800 million, a decline of 16% against prior year, due to negative price FX and volume. Excluding an estimated $24 million of loss, GSS sales, the decline is 13% at the mid-point. We expect lower volume for two reasons. One is excess levels of FMC inventory in the channel in many countries, which is amplified by customer prioritizing much lower than historical inventory level. The other is specific to the United States. In the second half of 2024, our distribution customers in the United States replenished their depleted inventory in advance of the growing season.

Normally, retailers and growers would start pulling that volume through during Q1. However, this year, due to initiatives to keep inventory low and cautious purchasing from commodity from low-commodity prices, we are making the assumption that pull-through by retailers and growers will occur more evenly over the three quarter season than in prior years. This is expected to delay reorders from distributors, and will result in weaker volume in Q1. While this creates a significant challenge for our Q1 outlook, we want to make sure we are setting expectations that reflect our belief over how the U.S. market could behave this year, which is much different than our historical view of this market. We expect Q1 price to be lower in the mid-to-high-single-digits with over two-thirds of this due to the price adjustments for diamide partner contracts.

FX is also expected to be a mid-single-digit headwind. Similar to a full-year expectation, we are forecasting continued expansion of our growth portfolio in the quarter. We are guiding Q1 EBITDA at $105 million to $125 million, which is a decline of 28% at the mid-point. Lower pricing and FX headwinds are expected to be partially offset by reduced COGS, including lower raw material and favorable fixed-cost absorption. Adjusted EPS is expected to be between $0.05 and $0.15. I’ll now turn the call over to Andrew to cover some financial items and how this guidance impacts our balance sheet.

Andrew Sandifer: Thanks, Pierre. Before I get into the normal review of key financial results, let me start this afternoon with an update on our restructuring program on slide 10. When we initially announced our restructuring program in late 2023, we targeted delivering $50 million to $75 million of net savings in the 2024 P&L with $150 million in run-rate savings by the end of 2025, both measured against the 2023 baseline. As we progress through 2024, we identified a number of areas where we could move more aggressively to reduce our cost structure, raising our targets at our second-quarter earnings call and again on our third-quarter call to $125 million to $150 million in 2024 net savings and more than $225 million in run-rate savings by the end of 2025.

While there were many factors that contributed to these increased targets, the biggest factor was a major revamping of sourcing for raw materials for our diamide products. I’m pleased to report that we exceeded our increased targets, finishing 2024 with net savings delivered in the P&L of $165 million, largely in operating expenses, but with savings, and cost-of-goods-sold as well. We also now have a clear line-of-sight to run-rate savings of more than $250 million by the end of 2025 with a very significant contribution from lower-cost of goods. Our restructuring program has impacted every part of the company, resulting in fundamental changes in our operating model, including how we are organized, where we operate, and the way we work. While we do have some remaining in-flight projects to finish delivering the full savings run-rate in 2025, we’ve incorporated the expected year-on-year benefits of our restructuring actions in our outlook for 2025.

As such, we consider our restructuring program to be essentially complete and we will ensure delivery of the remaining savings through our normal management of delivery of our guidance. Moving next to some key income statement items. FX was a 5% headwind to revenue growth in the fourth quarter, primarily stemming from the Brazilian real. For full-year 2024, FX was a 2% headwind at revenue with the Brazilian real and the Turkish lira the largest contributors, followed by smaller headwinds across a number of Asian currencies. For 2025, we anticipate a low to-mid-single-digit headwind in revenue from FX with the Brazilian real, the Turkish lira, and the euro being the most significant drivers. Unlike 2024, we anticipate a meaningful EBITDA headwind from FX in 2025, and the range of $65 million to $75 million.

2024 EBITDA benefited from the timing of currency movements during the year that created favorability against the hedges we had in place. In 2025, we continue our normal systematic approach to hedging, but with the strengthening of the dollar that happened in late 2024, and into 2025, and with the current forward curves, we do not expect to see a repeat of the favorability we saw in 2024. Rather, we expect to see a more normal relationship between FX impacts at revenue and EBITDA with our hedging program dampening, but not eliminating the impact on EBITDA and negative FX movements. Interest expense for the fourth quarter was $51.8 million, down nearly $5 million compared to the prior year period, driven by lower debt balances, and lower interest rates.

For full year 2025, we expect interest expense to be in the range of $210 million to $230 million, down roughly $15 million year-on-year at the mid-point, reflecting the benefit of debt reduction in 2024 and modestly lower interest rates in 2025. We ended 2024 with a lower-than-expected effective tax rate on adjusted earnings of 10.9%. The mix of earnings by jurisdiction shifted meaningfully versus our expectations in the fourth quarter with substantially less profit attributed to high-tax jurisdictions like Brazil. The fourth-quarter effective tax rate of 7.9% reflects the true-up to the full-year rate relative to the 14% rate that have been accrued through the third quarter. With the impacts of lower effective tax rate for 2024, adjusted earnings per share for Q4 were up $0.72 or 67% versus the prior year period, a significantly higher increase seen at EBITDA.

The biggest driver of increased earnings per share remains increased EBITDA, representing $0.59 of the $0.72 increase in EPS year-over-year, while lower tax contributed $0.11. For 2025, we anticipate that our effective tax rate should be in the range of 13% to 15% with approximately 3 percentage point increase at the mid-point, driven by the expected mix of profit by jurisdiction. Moving next to the balance sheet and leverage on slide 11. Gross debt at December 31st was approximately $3.4 billion, down nearly $600 million versus the prior year. Debt reduction came both from the proceeds from the sale of our GSS business, which closed on November 1st, as well as from discretionary cash flow. Cash-on-hand increased $55 million to $357 million, resulting in net debt of approximately $3 billion.

Gross debt to trailing 12-month EBITDA was 3.7 times at year end, while net debt to EBITDA was 3.3 times. Relative to our covenant, which measures leverage with a number of adjustments to both the numerator and denominator, leverage was 3.7 times as compared to a covenant of 5.0 times. As we announced a short while ago, we recently amended the leverage covenant of our credit agreement to provide additional headroom, and duration of covenant relief given our outlook for 2025 through 2027. We expect to end 2025 with leverage metrics essentially flat to 2024 and then to show improving metrics with rapidly accelerating EBITDA growth in 2026 and 2027. This is coupled with disciplined cash management, including continuing to direct all discretionary free cash flow to debt reduction.

We remain committed to returning our leverage to levels consistent with our targeted BBB/Baa2 long-term credit ratings. While this will take a bit longer than we previously hoped, we are confident we’re on the right path to get our leverage metrics back in line as our business more fully recovers. Moving on to free cash flow in slides 12 and 13. Free cash flow for full-year 2024 was $614 million, an increase of more than $1.1 billion versus the prior year. The year-on-year increase was driven by a $1.04 billion improvement in cash from operations, which benefited particularly from improved payables, and inventory despite over $100 million of cash restructuring spending. Capital additions and other investing activities were down substantially as we constrained spending to only the most critical projects.

Cash flow from discontinued operations improved in part due to a one-time insurance element. For 2025, we expect free cash flow of $200 million to $400 million, a decrease of $314 million at the mid-point. Cash from operations is the key driver of the decrease with normalization of working capital after the pronounced correction in 2024. Capital additions are also expected to be up somewhat, but with continued focus on only the most essential projects, including capacity expansion to support new products. Cash flow from discontinued operations is also up slightly, but in line with our multi-year average. Free cash flow conversion from adjusted earnings is expected to be approximately 69% at the mid-point. With that, I’ll hand the call over to Ronaldo.

Ronaldo Pereira: Thanks, Andrew. I want to start off by providing an update on our diamide strategy, which is supported by slides 14 through 21. As we look ahead, it’s clear that our commercial strategy is evolving, driven primarily by the upcoming patent expirations, particularly for Rynaxypyr. While this presents challenges, we see it as an opportunity to transform, compete, and advance in new ways. Like other products that transition to the post-patent phase of life, when we look back at the makeup of our diamides business years from now, it will look much different than it does today. Over the past several quarters, we have spoken to the broad strategy for these products as they shift to their post-patent lifecycle. At a high level, the strategy that we’ve communicated, which you can see on slide 15, is that we will continue to offer the basic solo formulations under the trusted FMC brand names at lower price points to compete with generics entry in the market.

At the same time, we will offer high-value versions of diamides via new often patented formulations and mixtures. This evening, I’ll share in more detail how we’re enacting to this strategy, and share how we see the next few years unfolding for this product class. Going forward, you will hear us start talking about the two distinct products, Rynaxypyr and Cyazypyr, rather than just simply referring to them as the lead diamides as we’ve done in the past. Both products are very potent tools for growers to control insects. But as you can see in slide 16, there are some key differences between the two products. Rynaxypyr has a more limited spectrum, but that spectrum is focused on controlling lepidoptera insects or caterpillars, which is the most valuable addressable market at nearly $5 billion.

Cyazypyr, on the other hand, has a much broader scope in terms of types of insects it can control. Our Rynaxypyr sales have outpaced Cyazypyr with roughly a 70-30 split. This is partly due to Rynaxypyr’s larger market-share for caterpillar control and also has been by our own design due to its somewhat simpler manufacturing process and lower cost profile. The market for Chlorantraniliprole or CTPR, which is a chemical name for the active ingredient behind Rynaxypyr will undergo a series of changes over the next few years and our strategy reflects that. As Rynaxypyr enters the next phase of its product life, it has been included in the core portfolio along with the other legacy products that are off-patent, like Sulfentrazone. All composition-of-matter patents have expired for Rynaxypyr and by the end of 2025, almost all process patents will also have expired.

We expect generics to enter all major markets with Rynaxypyr with solo formulations of CTPR by the end of 2026. As we mentioned earlier, we are already observing generic CTPR sales in some countries today. As generics enter the market, we will continue to offer solo formulations at lower price points under the trusted FMC brand to compete with the new market entrants. Based on the latest data from international shipments, we believe we are competitive on costs with lower price generics offering the solo molecule, thanks to our recent restructuring actions, which have significantly lowered our cost of sales. Lower pricing for the solo formulation will coincide with a significant expansion of acres treated with CTPR. Slide 17 and 18 illustrate how this is likely to occur.

Slide 17 shows the global foliar insecticide market, which is about $22 billion at the farm gate. Diamides as a class of chemistry are estimated to be about 9% or a little under $2 billion of that overall market with FMC’s branded diamides making up about 55% of that share. The remaining 45% is made up of FMC partner sales, generic CTPR, and competitor products within the diamide classes that is not — that are not Rynaxypyr or Cyazypyr. As you can see that the — you can see that the majority of diamide offerings are on the higher end of the treatment per acre price curve with prices ranging from $20 to over $40 per acre. There are almost no diamide products offered below $10 and FMC’s diamides are virtually non-existent in this space. When generics first enter the market, we expect growers, who are solely driven by price to be their key customers, which should be less impactful to FMC.

The entrance of generics will certainly create competitive pressure against some existing FMC products, but as slide 18 shows with our lower manufacturing costs and technology roadmap, there will be substantial opportunities Rynaxypyr and Cyazypyr to take share across all points of the price curve from other insecticides such as Neonicotinoids and organophosphates. The more favorable environmental profile of both Rynaxypyr and Cyazypyr versus these other insecticide classes would further aid market expansion. As seen on slide 18, we expect that the diamide market will grow from $2 billion up to an estimated $5 billion over time. As volume expands, we will continue to differentiate our Rynaxypyr products from other CTPR offerings with new formulations and mixers.

These new products, which are listed on slide 19, will deliver additional attributes. This innovation can be in the form of adding a second mode of action to combat potential resistance or adding a mixed partner to broaden the spectrum of control, while expanding the addressable market. Rynaxypyr is expected to continue to show sales growth, although not at the high levels we observed when the product was earlier in its life cycle. Following the 2025 correction year, we expect overall Rynaxypyr to report a growth rate in the high single digits. On slide 20, you can see the upcoming products in our Rynaxypyr pipeline. Many of these products — these new products will offer additional value to growers. This can be in the form of reduced labor for application by offering rice growers a much lighter weight tablet formulation or it can be through new mixtures with pheromones and insecticide from other groups that combat resistance and it strengthens performance in existing segments.

Finally, we plan to introduce seed treatment products, which is an unexplored segment of the market for our branded offerings, as well as a mixture with a Bionematicide. While the core portfolio grows at or above the market, we expect Cyazypyr and the rest of our growth portfolio to grow at multiples of the market. For Cyazypyr, we have process patents in place in major markets through 2025, with Brazil not expiring until the middle of 2026. In addition to the process patents, we also have a key formulation patent for Cyazypyr through 2027 in key markets, and data protection in place in major regions such as Brazil, the U.S., and Europe. Depending on the country, this can extend the protection granted to the regional molecule. Data protection creates an additional and costly hurdle for generics to register products even after process patents have expired.

Slide 21, shows some of the products in our Cyazypyr pipeline, including mixtures with insecticides from other groups that will broaden the spectrum of control as well as slow down resistance. Our high-load formulations are not only easier to handle for growers, they also improve our cost position. To serve growers in the fruits and vegetables space, we’ll be offering a fruit flight bait that is a unique and sustainable solution that leaves no residues and has no restrictions for export. Compared to Rynaxypyr, Cyazypyr has a more complex and more expensive manufacturing process. These factors may cause fewer generics to enter the market compared to Rynaxypyr. Cyazypyr has a broader spectrum of pests it can strongly control, including whitefly, fruit fly, leaf miner, and Psyllid.

Given the broader spectrum and our reduced manufacturing costs, we believe we have a sizable opportunity to expand the market for this product. Similar to Rynaxypyr, we are actively promoting and developing new formulations and mixtures to position ourselves well when all patent protection has expired and generics enter the market. Following the 2025 production year, we expect sales of Cyazypyr to grow in the low-to-mid-teens. The most exciting parts of the growth portfolio are the new AIs that we’re launching and expanding over the next few years. We have mentioned before our high expectations for the contributions of these molecules and we’ve not shared more details about what these expectations are and what supports them. Let me start with the two products already in commercialization.

The first one is fluindapyr. It is one of the newest active ingredients of the SDHI fungicides, a class of very active products with a strong commercial success. Together, SDHI fungicides represent 15% of the global fungicides market with around $3 billion in combined sales in 2023. SDHI fungicides are known for being very effective when used to prevent crop disease. This is also the case for fluindapyr, however, what sets it apart from the other active ingredients is the especially broad-spectrum of control that covers many diseases of economic importance, such as Asian soybean rust, corn tar spot, coffee rust, and damping off in young cotton plants. Fluindapyr also protects crops for an extended period lowering the need to respray. These technical attributes are enough to support our confidence in the success of Fluindapyr.

But there is another aspect that is equally important. Fluindapyr has given us access to some large market segments that we haven’t — have never served before. In aggregate, we believe that its addressable market exceeds $2 billion. Soybean rust in Brazil alone is a $3.5 billion market, just to mention one example. In many of these market segments, fluindapyr will be the first technology that we will sell. Going into these new segment segments with a product that is patent-protected, technically-differentiated and biologically strong, we open access to sales of other FMC products. As shown on slide 22, fluindapyr is already registered in Brazil, Argentina, the United States, and Paraguay with some other important countries pending registration in the next three years.

Sales are expected to be more than $150 million in 2025, exceeding $300 million by 2027. The second product is Isoflex Active, a herbicide based on bixlozone that offers a new mode of action in cereals such as wheat and barley. It’s most effective at controlling difficult grasses as well as some key broad leaf weeds. We have been selling this product in Australia with strong results. With recently approved registrations, it has expanded to Brazil, Argentina, India, and the UK. European Union registrations have been submitted and we expect to begin selling there during 2027. Given the size of cereals market in the EU, Isoflex sales in those countries will provide a substantial boost to the product’s global sales. We estimate that the addressable market for cereals in Europe to be about $5 billion.

Isoflex sales are expected to be about $100 million in 2025 with sales approaching $250 million by 2027. We expect sales to continue strong growth beyond 2027 as the product becomes more widely used. Our third product is Dodhylex, the first herbicide to be introduced in the market with a new mode of action in over 30 years. In our Q2 call, we described it as a patented rice herbicide. I want to correct that statement. Dodhylex is a novel patented and versatile herbicide. While its development in rice is more advanced, our confidence that it will be sold on other crops in the future keeps growing every day, suffice to say that it can be safely applied on several broad-leaf crops such as soybean, sunflower and others. And we believe there are meaningful opportunities to expand the product to these crops beyond 2027.

But for today’s discussion, let’s just stay with rice. There are 165 million hectares of rice planted globally. To put this in perspective, this is 25% more land than soybeans and not so far from corn. Because of cultural reasons, the vast majority of the countries currently have strict regulations that prevent the introduction of genetically modified rice varieties. As a result, decades of weed control with herbicides with similar modes of action have led to a substantial increase in weed resistance, probably more so than in any other major crop. Although it’s hard to estimate the size of global rice area infested with resistant weeds, in U.S. alone, some Universities estimated that resistant weeds are present in more than half of all the rice fields.

Weeds like barnyard grass and sprangletop are present in virtually every rice field. And in many of them, they have become resistant to existing herbicides. Differently from other crops, there are many agronomic variations on how rice is planted from country to country. Direct seeded versus transplanted, variety types, irrigated versus rainfed, different irrigation methods, et cetera. Today, all these variables result in limitations on which herbicides can be used. A product that can be safely used on transplanted rice can be harmful to the crop when used on direct seeded fields. Dodhylex is highly safe on rice plants independently of the agronomic practices. Once we launch it, almost all the rice growers will be able to use it without being forced to choose between their herbicides, and their preferred agronomic practices.

High versatility, strong performance on resistant weeds, unparalleled crop safety on a crop that is planted in all continents, and potential to expand even further in traditional crops. These are the key reasons behind our high expectations on Dodhylex commercial performance in the next few years. Looking forward into the future, we continue to believe that our new active ingredients can achieve or surpass $2 billion in revenue at maturity. Beyond our new synthetic pipeline, our plant health business is expected to grow at a rate in the mid 20% range out to 2027, led by biologicals with a smaller contribution from pheromones. We still believe there is an excellent opportunity for outsized growth for pheromones, but meaningful growth is not likely to occur until after 2027.

In summary, there is enormous potential for expanded sales from our growth portfolio when you consider the new active ingredients and the potential for Cyazypyr to broaden its market reach. In addition, we also have a growing portfolio of biological products, including pheromones that are positioned to provide even further growth. With our core portfolio providing a solid foundation for sales and earnings in a market that is in the midst of recovery, the differentiated nature of our growth portfolio puts us in a strong position to outgrow the market over the coming years. Pierre will now discuss specifically what our expectations are for the next three years and provide some closing remarks. Thank you.

Pierre Brondeau: Thank you, Ronaldo. Our 2027 targets are laid out on slide 23. We are focusing here on the growth of the company post-2025, which we believe will act as a correction year to reposition our portfolio. The growth rates post-2025 are more representative of the future growth of FMC. The sales of our core portfolio from ’24 to ’27 are expected to grow at 2% per year. Following the 2025 correction year, we expect total Rynaxypyr growth in the high-single-digit. The rest of the core portfolio is forecasted to grow at the market rate of about 3% every year. Our growth portfolio is expected to grow at an annual rate of about 24% from ’24 to ’27. Following the ’25 correction year, Cyazypyr growth is projected to be in the low to mid-teens with growth of both branded and partner sales.

The new active ingredients are expected to reach $600 million by 2027. The growth will mostly come in from fluindapyr and Isoflex with a small contribution of Dodhylex based on the launch calendar. The plant health growth rate is expected to be in the mid-20% range with a potentially high-growth pheromones product expected to meaningfully accelerate growth of plant health after 2027. From ’24 to ’27, the growth portfolio contribution to total company sales is expected to grow from 19% of total company to 30%. Looking beyond 2027, the ramp-up of Dodhylex and the addition of new products such as expanded biological offerings, the pheromones, and the new dual-mode of action herbicide rimisoxafen will all contribute to further growth for the company.

Combining the core and growth portfolio leads to expected 2027 sales of about $5.2 billion. EBITDA is expected to be about $1.2 billion, equating to a 23% EBITDA margin, which is at the higher end of our industry. This is a revenue annual growth of 7% from ’24 to ’27 with EBITDA growth at 10%. From ’25 to ’27, revenue grows at an annual rate of 11% with EBITDA growing at 15% rate. We are highly confident in the growth path of the company. This confidence comes from the already strong performance of our growth portfolio. I believe FMC has the strongest pipeline in its history. But we are also conscious that taking full advantage of it requires a repositioning of the company in 2025. That is why we will realign our inventory level, implement the newly developed diamide strategy, and invest in our sales organization to support a growth portfolio and develop new routes to market.

We can now open the line for questions.

Operator: We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Vincent Andrews with Morgan Stanley. You may proceed.

Q&A Session

Vincent Andrews: Thank you and good afternoon, everyone. Pierre, could you help us understand how you expect Rynaxypyr from 2026 and beyond to evolve. You’re talking about high-single-digit sales growth, but could you maybe help us think about the shape of volume and price over the coming years? And within that, could you let us know your view of price gaps and how you expect to manage them as the generics proliferate? Thank you very much.

Pierre Brondeau: Sure. From a pricing standpoint, we believe we are in place right now, where we can compete with generics at the price we understand at the — at the price which are being practiced by generic companies as reported in the latest import data we have. So, there are two aspects of it. There is the aspect of the market where we will sell a solo molecule. And there, we will have to make a decision of how deep we go into this market to go further into hectares, which are lower-cost — using lower-cost product and to decide where we go and how much of this market we decide to take versus today where we do not have any of this market. So that’s what a lower manufacturing cost and new pricing will allow us to do to expand the market we will reach in term of hectares by going after different type of pesticides.

Then there is the high-end, as you’ve seen on the slide presented by Ronaldo, we are actively working on new mixtures of products, which are increasing the efficacy of the product, fighting the resistance, and those products will allow us to differentiate ourselves from the solo molecule, which will have a way less efficacy and do that at a price premium. And finally, we’re going to be developing products, which will be beneficial from a cost standpoint for us and growers, we talk about high concentration and pallets. So it’s a mixture of moving products in two directions. One is to the higher-end with the high-level formulation, which are significantly increasing the efficacy of the product together with having the capability to expand to lower-end market because we will have a much lower price allowing us to go into those markets.

Operator: The next question comes from Josh Spector with UBS. You may proceed.

Josh Spector: Yes, hi. I had a question on your volume guidance for 2025. So, a lot of the prepared remarks talk about weakness at the end of the year, more channel inventory you’re dealing with in first quarter, and that’s clear in your 1Q guidance. But if our math is correct, it looks like you’re expecting volume growth of something like high single digits for 2025 as a year. Previously, you talked about that as 5%, something in that range. So it just seems really odd to us that you’re increasing confidence in volumes when the near-term outlook looks a lot worse than you previously anticipated. So can you help us out there, please?

Pierre Brondeau: Yes, absolutely. It’s a very appropriate question. We are — one of the very key decisions we’ve made is to lower the inventory of FMC products in the channel. So all of the core products we have or the product part of the core portfolio, we’re going to make sure that we are selling more on the ground than we are selling into the channel. Initially, when we gave some directional numbers, we talked about a volume growth in the 6% range. Today, we are at a higher number. But it is a strategy we have developed during the fourth quarter when we understood better the market we were facing. If you think about when we talked about 6%, we are thinking more out of a general growth of the demand from the market, which would have recovered.

Here we are excluding that part of the growth. And if you think about the range of growth, it is something like $250 million to $350 million. That’s the kind of range we talk about today in terms of volume growth, 75% of that is coming from a growth portfolio and it is coming from — mostly from the new molecules, the new AIs and also from the biological product. The rest is coming, and the vast majority of the remaining growth is coming from the plant health portfolio. So there is very little growth in the $250 million to $350 million growth, which is coming from the core portfolio. So it’s a very different profile. It’s a very different approach. There is a downside to it, let’s face it, it requires investment in the first quarter to develop a new sales organization to go after the growth in the new routes, which is more direct sales to large growers, but it’s a very different growth profile than what we’re expecting and where we intend to grow, the 250 to 350 do-not-touch places where we have high inventory level.

Andrew Sandifer: If I may add to that, Pierre, Josh, we are investing in expanding and exploring new routes to market. The combination of new products and new customers, that is really where the growth comes from. It is not from traditional products and traditional customers. As we just stated that our focus there is actually to decrease the existing inventory. So, it’s new products to new customers driving the volume growth.

Operator: The next question comes from Chris Parkinson with Wolfe Research. You may proceed.

Chris Parkinson: Hey guys. I was just hoping you could help me triangulate a few things. It just seems like the 1Q guide is the vast majority of the delta of what the Street was increasingly kind of factoring in for your ’25 guidance. And we all understand there’s a lot going on with Brazilian credit and increasing competition not only across the big six, but also generics within the Americas, wholesale-retail holding less inventory. But just can you help us just given even Latin-America is a smaller portion of the first calendar quarter, just what’s your confidence 2Q onwards that you’re doing everything in FMC’s power to ensure that you can ultimately hit that annual guide, if not exceed it once all the dust settles? Thank you.

Pierre Brondeau: I think Chris, I would say the first quarter number are showing that we are taking very significant market approach to a lower level of FMC products in the channel. So certainly our numbers for the first quarter are showing that we’re going to have a very, very prudent approach to the market with a high focus on preparing the following quarters. The second-half of the year will also benefit a lot of the new products, the new route to market for the new product, because lots of the registration except the U.S. are coming from countries in Latin-America where you will have the growing season and the new routes-to-market with the new growers we are targeting are also in Latin-America. So the two actions, structuring our sales for growth in the second half plus the actions we are taking in the first half of the year should make us successful to deliver what we are planning in the second half of the year. Do you want to add something, Andrew?

Andrew Sandifer: Yes. Chris, I’d just add as well just that as Pierre commented, we do have some major timing shifts in the U.S. business happening this year as well that calls for some shift of sales we would normally expect to make in Q1 to happen later in the year. So, I think that’s a part of this low Q1 and stronger Q2 through Q4 that you’re pointing to in your question. It is that combination of both the back-end weighted new product growth that Pierre mentioned, the actions we’re taking earlier in the year, broadly speaking to reduce channel inventories. And then finally, the bit of the change in sequence during the year of sales in the U.S. market with later replenishment by growers and retailers pulling from distribution.

Operator: The next question comes from the line of Richard Garchitorena with Wells Fargo. You may proceed.

Richard Garchitorena: Great. Thanks. Good afternoon, everybody. I just wanted to touch on the pricing outlook. And it looks like in the fourth quarter, you saw pricing decline across basically most of the segments — most of the regions with the exception of EMEA. In terms of the outlook, you talked about cost-plus contract adjustments. Was that in any specific region? How is pricing currently in Latin-America, which has been the weakest, I guess that you had been seeing? And then when you look at the 2027 revenue guide, is expectations that these contracts are reset in ’25, and then they’re going to be flat to potentially higher as we move forward over the next couple of years? Thank you.

Pierre Brondeau: So, to answer your last question about the contract, there is for some of the very critical contracts, an indexation of the pricing to customers to a manufacturing cost. The biggest jump in terms of lowering our manufacturing cost is taking place now from ’24 to ’25. After ’25, we’re going to have incremental evolution of our cost, which will go lower and beyond where we will be in ’25, but not at all to the same extent. So there will be less of an impact of the price adjustment to the technical sales in ’26 and ’27 versus ’25 as most of the hit will be taken in 2025. From a pricing standpoint, I think the guidance we are giving and Andrew, correct me if I’m wrong, but I think the guidance we’re giving for 2025 is 3% with about two-thirds of that coming from those manufacturing contract or those sales contract to our partners.

Now, Q4, — about Q4 and the 3% decline, which was slightly better than what we were expecting. And that’s related to the comment I made initially, we had good line of sight in the fourth quarter to deliver the EBITDA and the EPS. We decided to walk away from sales when there was too much of a demand for price or term. We did not want to get into a situation where we would be competing at any cost to go as high as we could on the selling front, and just rather stayed below the number we gave as our expectation from a price decrease knowing that we could deliver earnings without doing it.

Operator: The next question is from Arun Viswanathan with RBC. You may proceed.

Arun Viswanathan: Great, thanks for taking my question, understanding that you guys have done a lot of work to get inside the channel a little bit more, it sounds like you will be continuing to increase your visibility there. But maybe you can just highlight, Pierre, some of the some of the learnings that you have found there. It sounds like that was an area of particular interest, but now you’re also shifting your strategy as well, and further solidifying the growth versus core strategy. But what else are you doing on the inventory side to get a better handle on the channel? And will all of those issues, you know be mainly addressed through your Q1 actions? Thanks.

Pierre Brondeau: Yes, thank you. I would say that most of our inventory actions are going to take place in the first half. I think that’s — that it will take more than one quarter. We’re going to be very aggressive in the first quarter, we will carry that on the second quarter. I think, there are two issues I did not personally appreciate in the first couple of months I was here. I focused a lot on the overall inventory, but there is clearly some places for different reasons where we would have higher than the average inventory level, higher FMC inventory level. So we have now identified and it’s a country per country set of action, and it’s going to be India, it’s going to be Brazil, it’s Eastern Europe, it’s Asian. So we have a series of six or seven countries where we went in-depth to tackle the inventory issue.

And the way we truly realized that was going through studying the selling process and why things were not happening the way we were expecting. There is also the fact we spent a lot of time talking to our customers that we are dealing with a moving target. Inventory target at the end of the season, we believe is not the same today as it was in the past. I think people are — I mean, there is some region, I’ll give you an example, there is some regions where people were comfortable ending the season in the 30%, 35% range of a full-year or full-season inventory at the end of the season. Most people now are targeting the 20%, 25% range. So, it’s a moving target. So we have to deal with those two issues, the moving target in terms of what our customers want plus the identified places, maybe six or seven countries, but including some large countries like India and Brazil, where there is specifically high level of FMC inventory.

Operator: The next question comes from Ben Theurer with Barclays. You may proceed.

Ben Theurer: Yes, good afternoon and thanks for taking my question. Just wanted to kind of get a little bit more of the — like medium-term picture. And as you think about the rollout and the cadence for ’25 then into ’26, obviously, with the backdrop of what you’ve just guided for Q1. So if things move the way you suspect right now, and as you would have to anticipate maybe a little bit of that step-in between versus what is this year’s outlook and the ’27 path to it, how should we think about the cadence into 2026, just given the rollout of products and your ability to gain back some market-share and to gain some — back some customers that seem to be lost for now.

Pierre Brondeau: Yes, I think the — it is not — if I look at the three-year plan, it’s not a back — back-end-loaded three-year plan excuse me, you will see significant improvement of the numbers starting in 2026. The new products, you’ve seen the numbers shown by Ronaldo going to $600 million. It’s going to be a pretty evenly growth you’re going to see over the three-year period. The new routes-to-market, we hope to be ready to have that in place in the second quarter to start to be very active in the third quarter and be even more implanted in 2026. So certainly there is an acceleration of the growth from ’26 to ’27, but you will — there will be a significant step-up coming from a correction year. By ’26, we will benefit from a market growth of the core business and the full growth of our growth business. So it is not a back-end type of three-year plan.

Operator: The next question is from the line of Steve Byrne with Bank of America. You may proceed.

Steve Byrne: Yes, thank you. For Rynaxypyr volumes in 2025, what are you expecting the percent decline to be? And what was the change in your outlook for the global market versus your prior expectations? Was this primarily due to just greater-than-expected capacity expansions in China? Is that what was the primary change? And if so, why do you think you could get back to high single digit growth in 2026?

Pierre Brondeau: Yes. I think we want to be careful in not talking about specific percentage for products. In next year, we do expect Rynaxypyr to be down both branded Rynaxypyr and Rynaxypyr sold to our partners. We do expect Cyazypyr sales, branded Cyazypyr sales to be up. Going forward, I think, first, the different thinking we have about the Rynaxypyr business is twofold. First, we believe that we can expand with a new manufacturing cost. The market we can address with Rynaxypyr as a solo molecule formulation. Like I talked about, we talked about Dodhylex or we talked about the high concentration or the mixtures — with mixture partners. So we do believe that we can expand the number of acres where we can be competitive, and we can also improve the efficacy of this product, allowing us to go to market, which will be beneficial from a usage standpoint to growers.

So, we do believe to play in a much larger market starting this year and mostly in 2026 than we’ve done before without moving away from staying in the high-end with specific formulation, which are giving benefits to growers. To your questions around the change in the landscape, what I believe is, like it is very often the case, when you have a patent protection, which is a composition of matter, that is very solid across the world. When you have a patent protection, which is process-based, not all jurisdiction or countries do have the same attitude towards those patents. And I believe that with India and China starting to sell products, even if we are taking legal actions, and even if there is a high probability, we will win those legal actions, there is no injunction.

Competitors are not stopped by court and that gave the example and the courage to those companies to expand that behavior into other countries, and that’s why we saw them coming into Argentina, for example, into Turkiye. So I think there is an expansion when you are just one year away from the end of your process patent protection where people are less worried about the legal action we could be taking and it’s happening — it’s happening maybe faster than what we’re expecting.

Operator: The next question comes from the line of Frank Mitsch with Fermium Research. You may proceed.

Frank Mitsch: Thank you and good afternoon. I want to come back to the price question. Pierre, you indicated that two-thirds of the price decline you’re anticipating to come from the manufacturing contracts with your diamide partners. So if you could talk a little bit about the other third where you’re seeing the price declines in that area. But coming back to the diamide partners, am I to understand that as you improve your manufacturing process, that you are giving that back to the diamide partners. So as you spend money to improve your manufacturing for the restructuring costs, et cetera, that is flowing through in a lower -price to the diamide partners. I mean, I certainly can understand if raw-material costs come down and so forth that, that would flow-through to your partners.

But I was just struck that it sounded like it was also if you’re making improvements and spending money to do so that you’re giving some of that up. So any color there would be very helpful. Thank you.

Pierre Brondeau: Absolutely. So yes, the contract we have with those diamide partners are the fact that — and once again, it’s not all of them. There is some of our diamide partners where we have a very different cost structure. But important diamide partners to have what we call a cost-plus, which is not the exact terminology that’s a fact we — the way we called it, but the pricing is indexed on our manufacturing cost. And it is a commercial decision we have taken. You know, we knew that over time, those partners would have the choice between working with us, and working with people who potentially would come with price, which would be more competitive. So, when you say mid-term, long-term contract with those partners, they’re willing to stay with you, but they also have to be sure that their source of product will remain competitive.

So in some cases, there is no cost plus contract, but then what you end up doing is having a commercial negotiation every year or every other year when the contract has to be renewed with some other partners, we do have longer-term contracts. And one of the benefits they get is they give us longer-term contract and we give us a guarantee that we will optimize the price even if we are the one spending money to lower the cost. It’s just a commercial practice. We have to secure some large contracts with important partners over a longer period of time. Regarding the — regarding the remaining the one-third of the price decrease, it is actually, we believe some of the normal market competitiveness, which will still exist for the time being until the market has completely recovered.

And the fact that in Asia, we still are in a very, very competitive situation where the — and especially India, where the channel is very full. So I would say, it’s not as simple as two-thirds technical — what we call technical product sales to a partner and one-third of Asia, but it’s not far from being the truth.

Operator: Next question comes from Mike Harrison with Seaport Research Partners. You may proceed.

Mike Harrison: Hi, good evening. I was hoping, Ronaldo, given your experience in Latin America, maybe you can give us a little bit more detail on the changes that you’re seeing in the Latin America distribution channel, I know that your restructuring plan included some rightsizing of the organization in Brazil. And now it sounds like you’re seeing a need to invest in new routes to markets or different ways to access that market. So can you help us understand what has changed in the market and also what has changed about your approach to the market in Latin America and your organization? Thank you.

Andrew Sandifer: Sure, Michael. A few years ago, the retail distribution system went through a consolidation, a wave of consolidation. And some of the consolidators started acquiring some retailers that were family-owned businesses, very traditional and small — covering small territories. And these platforms became large and very diverse in terms of geographic expansion, and also the making of their, I’ll call, network for the lack of better name. What we have seen is that the market-share that some of those original businesses had with our products is not the same that we are seeing with the consolidators today. Because the market is evolving, the compliance need is different, the credit requirements are different. And as a result of that, there are more and more growers going directly to companies or we could put in reverse as well more and more companies going direct to growers, and approaching them directly and establishing that direct relationship between manufacturers and large growers.

You may ask well and why didn’t you follow that wave before or you adjusted before? And the answer is actually pretty simple. To go — I’m talking about soybean and corn and to go and approach growers directly, you need a technology that is specifically important to those growers. We now have it. I talked about fluindapyr and I talked about that product being a key tool in controlling Asia’s soybean rust. There are new — renewed brands and versions of our diamides. We are now approaching those growers with some new technology to show them. So the difference between where we were before optimizing and now that we’re making investments is; one, when we rightsized it the organization, we rightsized it to the total size of the market. Now the type of investments that we’re making, the people that are joining the company are people that are more skilled on soybean and corn, segments that we didn’t serve before, and especially approaching directly growers not focusing 100% on retailers.

In other words, though the skills are not the same, and the fact that we let go people before and now we are adding, it’s not the same type of people, it’s just different skills, different networks and different connections that are required to implement this new stage of the strategy. But I do want to stress, we can only do that now because we have the right technologies to do so.

Operator: The last question comes from Kevin McCarthy with VRP. You may proceed.

Kevin McCarthy: Yes, thank you and good evening. Pierre, if I look at slide number eight, you’re guiding to adjusted EBITDA that’s either side of flat, and that is the case, notwithstanding what looks to be $175 million to $200 million of favorability on COGS. I think you have additional restructuring benefits flowing through as well? So my question would be, can you speak to some of the headwinds that would cause the flat EBITDA? I do see the foreign exchange that you quantified, or perhaps you could speak to the level of the incremental investments that you’re making in SG&A to go direct in Latin America and other cost headwinds that would complete the bridge, so to speak.

Pierre Brondeau: Sure. I think I would say there are multiple ways to look at it, but there are three key headwinds. One is price with what we explained around the price we have to give back to our — to some of our partners on diamide. So, price is overall $130 million, I think in the range of $130 million of headwind. And secondly, we do have FX, which is much beyond what we would have thought a few months ago in the range of about $70 million. And we believe we’re going to be investing in the first quarter about $25 million to create a new sales organization. So, you have here about $200 million to $250 million of headwind for the three main ones. Andrew, have I missed any or those are the three biggest ones?

Andrew Sandifer: Yes, that’s the biggest one. And obviously, we did forgo about $25 million in the profit we’ve made in the GSS business in the prior year that obviously we won’t have this year finish out the…

Pierre Brondeau: That’s a full thing.

Andrew Sandifer: Smaller piece.

Pierre Brondeau: So those together go beyond $250 million.

Operator: Yes. This concludes the FMC Corporation conference call. Thank you for attending. You may now disconnect.