FMC Considers Sale as Debt and Margins Press

Date of Call: Feb 5, 2026

Financials Results

• Revenue: $1.08B in Q4, down 11% YOY or 5% on a like-for-like basis excluding India
• EPS: $1.20 adjusted EPS in Q4, down 33% YOY
• Operating Margin: EBITDA margin in Q1 expected to be around 7%, abnormally low due to lower sales and unique cost headwinds

Guidance:

• FY 2026 sales expected to be $3.6B-$3.8B, down 5% YOY at the midpoint.
• FY 2026 adjusted EBITDA expected to be $670M-$730M.
• Q1 2026 sales guidance $725M-$775M, 5% lower YOY.
• Q1 2026 adjusted EBITDA expected $45M-$50M, 58% lower YOY.
• Expect mid-teens EBITDA growth in 2027 and 2028.
• New active ingredient sales expected between $300M-$400M in 2026.

Business Commentary:

Strategic Review and Potential Sale:

• FMC Corporation announced that its Board of Directors has authorized exploring strategic options, including a potential sale of the company.
• The strategic review is at a preliminary stage, with the company retaining financial and legal advisers to assist with the process.
• This decision is aimed at maximizing shareholder value and strengthening the balance sheet, with a focus on executing operational priorities in 2026.

Debt Reduction and Asset Sales:

• FMC is targeting to pay down over $1 billion of debt through asset sales and licensing agreements in 2026.
• The sale of the India commercial business is expected to progress with binding bids anticipated in the second quarter.
• This strategy is part of an effort to stabilize the company's financial position and improve its competitive portfolio.

Rynaxypyr Post-Patent Strategy:

• FMC's Rynaxypyr sales were just over $800 million in 2025, with plans to lower prices and increase volume to maintain earnings in 2026.
• The strategy involves capturing market share from all classes of insecticides as generic offerings increase.
• The company plans to focus on advanced formulations and mixtures to combat pest resistance, particularly in regions like China and Japan.

Growth of New Active Ingredients:

• Sales of FMC's four new active ingredients increased from approximately $130 million in 2024 to approximately $200 million in 2025.
• The company expects 2026 sales to be between $300 million and $400 million, driven by strong demand for fluindypyr and Isoflex.
• The growth is attributed to the new active ingredients offering novel modes of action and expanding market penetration.

Challenges in Core Portfolio Competitiveness:

• FMC reported that $1 billion of its product sales come from high-cost facilities, making them less competitive against generics.
• The company plans to lower manufacturing costs by at least 35% by 2027 to improve competitiveness.
• This cost reduction is necessary to stabilize sales and improve margins in the core portfolio, which is expected to be a significant challenge in 2026.

Sentiment Analysis:

Overall Tone: Neutral

• Management acknowledges significant challenges, including a competitive core portfolio and Rynaxypyr partner sales headwinds, but expresses confidence in the growth portfolio and stated plan to position the company for long-term success. The tone is measured, focusing on executing priorities while exploring strategic options.

Q&A:

• Question from Lucas Beaumont (UBS Investment Bank): Can you break down the relative contributions from different product groups in 2026 EBITDA, including Rynaxypyr, Cyazypyr, new products, biologicals, and legacy core?
  Response: Management does not break out profitability by product line but notes the core portfolio (non-Rynaxypyr) is a big contributor. Branded Rynaxypyr earnings are expected flat YOY, with partner sales declining. Growth portfolio (new actives, Cyazypyr, Plant Health) will see increasing contribution.

• Question from Lucas Beaumont (UBS Investment Bank): What are the drivers for mid-teens EBITDA growth in 2027-2028 given the 2026 base and confidence in that target?
  Response: Growth will come from continuation of the stable growth portfolio and improvements in the core portfolio's manufacturing cost competitiveness, with Rynaxypyr partner cost impact diminishing.

• Question from Aleksey Yefremov (KeyBanc Capital Markets Inc.): Regarding the strategic review to sell the entire company, have there been any discussions or inbound interest prompting this?
  Response: The strategic review is a proactive process initiated by the Board to explore options for shareholder value, separate from the base plan, which includes asset sales and licensing.

• Question from Harris Fein (Wolfe Research, LLC): What is the thought process behind the timing of the strategic review and how are you weighing a full sale vs. asset/licensing deals?
  Response: The base plan is focused on reducing debt and improving the business. The strategic review for a full sale is a parallel path to potentially enhance shareholder return and company performance, with processes for both being pursued separately.

• Question from Vincent Andrews (Morgan Stanley): Is the company considering a partial sale (e.g., specific assets or product lines) rather than a full sale, and are there structural limitations?
  Response: Multiple options are possible, but the highest probability paths are the base plan (asset sales, licensing) and a full sale. Other permutations are not currently the focus.

• Question from Joel Jackson (BMO Capital Markets): Can you reconcile 2026 guidance across product buckets, specifically Rynaxypyr, core non-Rynaxypyr, Cyazypyr, and Plant Health?
  Response: Rynaxypyr branded earnings flat YOY; partner sales down. Core portfolio revenue expected slightly down. Growth portfolio (new actives, Cyazypyr, Plant Health) all expected to grow in 2026.

• Question from Edlain Rodriguez (Mizuho Securities USA LLC): How confident are you in understanding the challenges and having a clear path to fix them?
  Response: Confidence is high because the main issue is the core portfolio's manufacturing cost, which is being addressed with a clear plan, while the rest of the portfolio is performing as expected.

• Question from Frank Mitsch (Fermium Research, LLC): Given 2026 appears to be a bottom, why initiate a strategic review now rather than waiting for restructuring to take effect?
  Response: The base plan will lead to growth in 2027, but the strategic review is a parallel path to explore potential for better performance under different ownership, as the Board considers all options for shareholder value.

• Question from Matt Hatter (Vertical Research Partners): What is the plan for upcoming debt maturities and covenant obligations?
  Response: Intent to refinance the $500M bond maturity in October in H1 2026. Focus on reducing $1B debt through asset sales and licensing. Covenants renegotiated to 6x, with careful working capital management to stay compliant.

• Question from Michael Harrison (Seaport Research Partners): What drove the $50M shortfall in new product sales in 2025, and what factors will drive 2026 within the $300M-$400M range?
  Response: The shortfall was mainly due to Isoflex registration delay in the UK and lower direct sales in Brazil. The 2026 range depends largely on registration timing and speed, especially for Isoflex.

• Question from Salvator Tiano (BofA Securities): Can you clarify the large EBITDA decline in Rynaxypyr partner sales and the confidence in flat branded Rynaxypyr earnings despite price cuts and competition?
  Response: Partner sales decline due to lower volume and price. Branded Rynaxypyr earnings remain flat due to a mix shift to advanced formulations (higher price), volume gains, and significant cost reductions offsetting price decreases.

Contradiction Point 1

Strategic Review's Purpose and Timing

The timing and motivation for the strategic review conflict with the base operational plan.

What prompted the strategic review and potential sale of the entire company? - Aleksey Yefremov (KeyBanc Capital Markets Inc.)

2025Q4: The strategic review was not prompted by specific inbound inquiries. It was a decision by the Board to pursue a formal process to evaluate options that could maximize shareholder value. - [Pierre Brondeau](CEO)

Are you open to exploring monetizing partnerships or strategic collaborations to address current challenges? - Christopher Parkinson (Wolfe Research, LLC)

2025Q3: The company considers partnerships for its pipeline molecules... but excludes selling these core molecules outright. - [Pierre Brondeau](CEO)

Contradiction Point 2

Outlook for New Active Ingredient Sales

Guidance for new active sales timing and certainty appears inconsistent.

What factors contributed to the $50 million shortfall in new active ingredient sales versus expectations, and what drives the 2026 forecast range of $300–$400 million? - Michael Harrison (Seaport Research Partners)

2025Q4: The 2026 range is wide and driven largely by registration timing, especially for Isoflex and potential emergency exceptions requested by customers. - [Pierre Brondeau](CEO)

Is FMC's current structure optimal for growth through acquisitions or partnerships? - Joel Jackson (BMO Capital Markets)

2025Q3: The company has a clear path forward, with heavy lifting planned for 2026, aiming to be back in a strong position by 2028 with a significant growth portfolio. - [Pierre Brondeau](CEO)

Contradiction Point 3

Rynaxypyr Branded EBITDA and Pricing Outlook for 2026

Contradiction on whether branded Rynaxypyr pricing will decrease in 2026.

Why is the EBITDA decline for Rynaxypyr partner sales significantly larger than revenue, and what factors support confidence in flat branded earnings and volumes despite price cuts and competition? - Salvator Tiano (BofA Securities)

2025Q4: For branded Rynaxypyr, flat earnings result from a mix shift to higher-priced advanced formulations... 50% of sales expected to be advanced formulations which do not see price decreases. - [Andrew Sandifer](CFO) and [Pierre Brondeau](CEO)

Given Rynaxypyr dynamics and diamide partner renegotiations, will the company's pricing function stabilize and turn positive by H1 2026? - Kevin William McCarthy (Vertical Research Partners)

2025Q2: Branded Rynaxypyr pricing in Q2 was relatively flat; the main pricing headwinds are from partner contracts. - [Andrew Sandifer](CFO)

Contradiction Point 4

2027 Financial Target and EBITDA Growth Drivers

Contradiction on the specific 2027 EBITDA target and the primary drivers for achieving it.

What drives mid-teens EBITDA growth in 2027-2028, and what supports this outlook? - Lucas Beaumont (UBS Investment Bank)

2025Q2: For branded Rynaxypyr, pricing is still expected to decrease in 2026 due to lifted patent protections. - [Pierre Brondeau](CEO)

What are the expectations for volume and pricing as the growth phase begins in 2026, and what are the 2027 targets? - Richard Garchitorena (Wells Fargo)

2025Q4: The mid-teens EBITDA growth for 2027/2028 is expected to be driven by the continuation of strong growth from the growth portfolio... The impact from the Rynaxypyr partner contracts will also diminish in 2027. - [Pierre Brondeau](CEO)

Contradiction Point 5

Confidence in Core Portfolio Turnaround

Contradiction in expressing confidence in solving legacy core portfolio issues.

How confident are you in understanding the company's challenges and having a solution path, considering past volatility? - Edlain Rodriguez (Mizuho Securities USA LLC)

2025Q2: The 2026-2027 targets remain unchanged, aiming for an EBITDA of $1.2 billion in 2027. Growth will be driven by the growth portfolio... and, for Rynaxypyr, a strategy with lower manufacturing costs and reduced generic supply is expected to enable year-on-year growth in 2026 and 2027. - [Pierre R. Brondeau](CEO)

What were the key takeaways from Pierre Brondeau's Q1 results and strategic progress review? - N/A

2025Q4: Performance as expected except legacy core... Confidence comes from the fact that the rest of the portfolio... is in great shape and performing as planned, and the core portfolio issue is one specific, solvable problem. - [Pierre Brondeau](CEO)