FMC's Q3 2025: Contradictions Emerge on Free Cash Flow, India Business Valuation, and Rynaxypyr Strategy

Date of Call: October 30, 2025

Financials Results

• Revenue: Q3 GAAP net sales $542M, down 49% YOY (majority due to India held‑for‑sale adjustments); Q3 revenue excluding India $961M, down 4% like‑for‑like (2% price decline, 2% volume growth); updated full‑year revenue guidance $3.92B–$4.02B.
• EPS: Q3 adjusted EPS $0.89, up 30% YOY; Q4 adjusted EPS guidance $1.14–$1.36 (~30% decline at midpoint vs prior year); full‑year adjusted EPS guidance $2.92–$3.14.
• Operating Margin: Adjusted EBITDA margin ~25%; adjusted EBITDA $236M (up 17% YOY as‑reported, up 23% like‑for‑like ex‑India); Q4 adjusted EBITDA guidance $265M–$305M (down 16% at midpoint as‑reported, down 7% like‑for‑like).

Guidance:

• Q4 revenue (ex‑India) $1.12B–$1.22B (~2% increase at midpoint LFL)
• Q4 price headwind mid‑to‑high single digits; FX low‑single digit tailwind
• Q4 adjusted EBITDA $265M–$305M (down vs prior year at midpoint)
• Q4 adjusted EPS $1.14–$1.36 (midpoint ~30% decline)
• Full‑year revenue $3.92B–$4.02B; adj. EBITDA $830M–$870M; adj. EPS $2.92–$3.14
• Free cash flow guidance negative $200M to $0; India contribution included only in H1

Business Commentary:

* Sales Performance and Challenges: - FMC Corporation reported GAAP net sales of $542 million for Q3, which was 49% lower than the prior year. Excluding India, revenue was $961 million, down 4% year-on-year. - The decline was attributed to significant one-time actions taken in India to position the business for sale and pricing pressure from generics, particularly impacting Latin America where sales lagged prior year by 8%.

• Pricing Dynamics and Market Conditions:
• FMC's adjusted EBITDA was $236 million, with an EBITDA margin of approximately 25%. Despite a 17% increase on an as-reported basis, the company faced a 6% price decline due to adjustments in certain cost-plus contracts and intensified competition.

• The market landscape in Latin America was more challenging due to low liquidity leading to constrained credit for customers in Brazil and Argentina and pressure from generics, which are becoming more active due to favorable registration environments.

• India Business Sale and Financial Impact:

• The India held-for-sale business resulted in negative revenue of $419 million and a $510 million impairment charge, bringing the net assets to $450 million.

• The process aims to support the sale of the India commercial business, with strong interest and a high volume of inbound inquiries from both local and international companies.

• Cost Management and Strategic Adjustments:

• FMC is accelerating cost actions similar to those taken with Rynaxypyr to maintain competitiveness in a less differentiated product portfolio.
• The company is initiating a strategic review of its manufacturing footprint to exit high-cost locations and transition to lower-cost sources, aiming to complete this by the end of 2026.

Sentiment Analysis:

Overall Tone: Neutral

• Management acknowledged underperformance: "sales this quarter were below our expectation" citing "constrained credit" in Brazil/Argentina and "pricing pressure from generics." They took one‑time India actions ("negative revenue of $419M"; ~$510M charges) but emphasized cost actions and confidence in the growth pipeline and target of $250M new actives.

Q&A:

• Question from Patrick Fischer (Goldman Sachs): On the free cash flow guide, what's driving the roughly $400M downgrade versus last quarter—working capital vs one‑time items—and will collections reverse next year?
  Response: Collections/working capital are the primary driver—lower sales, fewer cash sales and longer payment terms; India exit and related cash friction and restructuring/tariff costs also contributed; some catch‑up expected in early 2026 but uncertainty remains.

• Question from Benjamin Theurer (Barclays): What do you expect the sale price for the India business to be and what is the level/type of buyer interest?
  Response: India written down to $450M fair value; buyer interest is very high—mostly local companies plus some international sponsors—and the sale process is proceeding well.

• Question from Matthew DeYoe (BofA): Do you remain committed to an investment‑grade rating and is equity issuance to protect IG on the table?
  Response: Focused on actions to restore IG—issued subordinated hybrid debt, cut dividend >85% and will direct free cash to debt repayment; agencies engaged, equity issuance not presented as immediate plan.

• Question from Jeffrey Zekauskas (JPMorgan): Will Corteva splitting seeds and crop chemicals make them easier or harder to compete with?
  Response: Unclear; management doesn't expect major change in competitive intensity but it could create opportunities to sell into Corteva's seed channels if their crop‑chemical offerings become less captive.

• Question from Edlain Rodriguez (Mizuho): How much of current weakness is FMC‑specific versus industrywide, and when will you have clarity on the portfolio?
  Response: Much is industry‑wide: soft demand and rising generics; FMC‑specific issues include manufacturing cost competitiveness and Rynaxypyr dynamics; clearer outcomes expected as 2026–2027 restructuring and growth products ramp.

• Question from Laurence Alexander (Jefferies): How much of the portfolio will be reassessed for production cost moves and will diamide pricing/reset change?
  Response: Will retain core assets (Rynaxypyr, Cyazypyr, four new actives and two large low‑cost‑produced molecules); most other products are candidates for relocation or alternative sourcing; diamide strategy remains unchanged today.

• Question from Joel Jackson (BMO Capital Markets): Given the changes, are you considering structural alternatives—M&A, partnerships, partnerships vs sell?
  Response: Management has a clear multi‑year path to 2028 focused on organic growth and manufacturing reconfiguration; partnerships will increase (examples exist), and while M&A/other scenarios are considered, priority is transformation and protecting the growth portfolio.

• Question from Patrick Cunningham (Citigroup): What cost reduction initiatives are planned in Asia after the India sale, and could you exit other countries?
  Response: India is an isolated sale case; Asia will be resized—reducing R&D, marketing, sales and administrative footprint to match a smaller commercial scale rather than exiting additional countries.

• Question from Christopher Parkinson (Wolfe Research): Would you monetize or partner pipeline R&D assets to alleviate near‑term pressure?
  Response: Open to partnerships for pipeline assets, but will not sell active ingredients closest to commercialization; partnership structures that retain participation in growth are being considered.

• Question from Aleksey Yefremov (KeyBanc): Is the goal of keeping Rynaxypyr earnings flat next year still viable?
  Response: Yes—strategy to protect earnings remains valid; early implementation shows flat sales, higher volumes and lower price; will adapt as generics penetration unfolds in 2026.

• Question from Vincent Andrews (Morgan Stanley): For the $2.3B non‑India receivables, what proportion is consumed by growers vs still in the supply chain and at risk?
  Response: Cannot fully decompose today; seasonally 40–50% of receivables are in Latin America with modest uptick in short‑duration past dues (30–60 days) tied to cotton monetization; management is closely monitoring receivables.

• Question from Joshua Spector (UBS): For Q4 cash from operations, is the ~$700M uplift all working capital collections and do inventory actions impact Q4 EBITDA or 2026 carryover?
  Response: Q4 seasonality typically delivers that cash via working capital collections, but visibility is affected by terms and mix; company expects slightly higher year‑end inventory due to lower sales, which will affect first‑half 2026 production and working‑capital build.

Contradiction Point 1

Free Cash Flow Guidance

It involves a significant reduction in free cash flow guidance, which impacts investor expectations and financial planning.

好的，我现在需要处理用户的这个请求。用户希望我作为专业的金融文章作者，总结并精简来自美股上市公司财报电话会议的问答环节的问题。用户特别强调要简洁、精准，去掉装饰词，同时保持原意，并且符合美式英语的习惯。输出只能是简化后的问题，且必须以问号结尾。首先，我需要仔细阅读用户提供的原始问题：“On the free cash flow guide, at the midpoint, you're down $400 million versus what you expected last quarter.” 我的任务是缩短这句话，同时保留所有关键信息。首先，分解句子结构。原句的主干是“you're down $400 million versus what you expected last quarter”，而“On the free cash flow guide, at the midpoint”是背景信息。接下来，我需要确定哪些词可以删减或替换。例如，“On the free cash flow guide”可以简化为“Free cash flow guidance”。“at the midpoint”可以保留，但可能需要调整位置。然后，“you're down”可以换成更正式的表达，比如“reduced by”或者“down by”。“versus what you expected last quarter”可以简化为“vs. last quarter's guidance”或者“compared to last quarter's guidance”。然后，考虑美式英语的习惯用法。通常会使用“vs.”而不是“versus”，并且在金融语境中，guidance是常用术语。所以可能的简化是：“How much is free cash flow guidance reduced by at the midpoint vs. last quarter?” 但需要检查是否准确。原句中的“down $400 million”指的是比预期低了4亿美元，所以正确的表达应该是“reduced by $400 million”或者“down by $400 million”。不过用户提供的例子中，用户可能希望省略具体的数字，只保留问题的结构。但原问题中的数字是必须保留的，因为问题本身在问具体数额的差异。可能更好的简化是：“How much is free cash flow guidance reduced by at the midpoint versus last quarter?” 但原句中的“down $400 million”是具体的数值，所以可能需要保留。例如：“Free cash flow guidance at the midpoint is down $400 million vs. last quarter. What is the reason?” 但用户要求的是简化问题，而不是解释原因。所以可能需要调整结构，把问题转化为询问差异的原因或确认差异的数额。但原问题实际上是在陈述一个事实，然后可能隐含着提问，比如“这是为什么？”或者“这对未来有什么影响？”。但根据用户提供的例子，用户可能希望保持问题的结构，即直接询问差异的情况。例如，原问题可能是在问“为什么自由现金流指引的中位数比上季度预期低了4亿美元？”或者“自由现金流指引的中位数下降了4亿美元，这是否准确？”不过用户提供的原始问题更像是一个陈述句，可能需要转换为疑问句。例如：“Is the free cash flow guidance at the midpoint down $400 million compared to last quarter's expectations?” 或者“How much is the free cash flow guidance reduced at the midpoint versus last quarter?”需要确保在简化过程中保留所有关键元素：free cash flow guidance, midpoint, down $400 million, versus last quarter. 去掉冗余的词，比如“you're”可以省略，因为问题是在询问差异，而不是陈述事实。因此，最终的简化问题可能是：“How much is free cash flow guidance reduced at the midpoint versus last quarter?” 或者更直接地：“Free cash flow guidance at the midpoint is down $400 million vs. last quarter. What is the reason?” 但根据用户的要求，可能只需要陈述问题，不需要问原因，所以可能更简洁的是：“How much is free cash flow guidance reduced at the midpoint versus last quarter?” 但原句中的具体数字是$400 million，所以是否需要保留？或者用户的问题是否在问这个差异本身？可能原问题是在陈述差异，并询问原因，但用户提供的原始问题可能更倾向于直接询问差异的数额。例如，用户的问题可能是：“自由现金流指引的中位数比上季度预期低了多少？” 但原句中的数字是具体的，所以可能需要调整。但用户可能希望问题保持简洁，所以可能简化为：“How much is free cash flow guidance reduced at the midpoint versus last quarter?” 不包含具体数字，因为原问题中的数字是结果，而问题本身是在询问这个差异的金额。不过原问题中已经给出了差异是$400 million，所以可能用户的问题是在确认这个差异，或者询问原因。但根据用户提供的例子，正确的简化应该是：“Free cash flow guidance at the midpoint is down $400 million versus last quarter. What is the reason?” 但用户可能希望更简洁，不包含问原因，而是直接询问 - Patrick Fischer(Goldman Sachs)

2025Q3: We're seeing fewer cash sales due to liquidity constraints, and there's competitive pressure pushing for longer terms. Some cash spending is higher due to India exit preparations, higher tariffs, restructuring, and additional cash interest expense. - Andrew Sandifer(CFO)

What drives your $200M–$400M free cash flow range? - Kevin William McCarthy(VRP)

2025Q2: We are committed to maintaining an investment-grade ratings profile. Our focus on cash management is paying off, as we are reiterating our full year free cash flow guidance of $500 million to $700 million. - Andrew Sandifer(CFO)

Contradiction Point 2

India Business and Strategic Value

It highlights differing perspectives on the strategic value and potential outcomes of the India business divestiture, which has significant implications for the company's growth strategy.

Can you provide an indication of the expected sale price for the India business and additional details on buyer interest? - Benjamin Theurer(Barclays Bank PLC)

2025Q3: The estimated value of the India business is now about $450 million, including substantial value for brands and existing infrastructure. - Pierre Brondeau(CEO)

Could you share India's 2024 sales and EBITDA figures and discuss its commercial business marketing strategy? - Frank Joseph Mitsch(Fermium Research)

2025Q2: India sales were $140 million in H2 2024 and were forecast to be $70 million in H2 2025. - Pierre Brondeau(CEO)

Contradiction Point 3

free cash flow and financial outlook

It involves changes in financial forecasts, specifically regarding free cash flow expectations, which are critical indicators for investors.

What are the key factors driving the $400 million decline in free cash flow guidance at the midpoint compared to last quarter's expectations? - Patrick Fischer(Goldman Sachs)

2025Q3: The change from last guidance to current guidance on free cash flow for '25 is primarily due to a $60 million reduction in full-year EBITDA guidance. Lower sales in Q3 and Q4 mean less will be collected. - Andrew Sandifer(CFO)

How much of the reduced free cash flow guidance ($1.2B–$1.4B) is structural versus attributable to the India business closure, and what other one-time costs are included? - Derekává (Derrick) Sung(Morgan Stanley)

2025Q1: As you know, our free cash flow guidance for 2025 reflects the closure of our India operation and additional restructuring costs. Despite these significant headwinds, we are committed to maintaining our current investment-grade credit rating by executing against our strategic imperatives and managing our balance sheet. And we expect to deliver full-year 2025 free cash flow of between $1.2 billion to $1.4 billion. - Andrew Sandifer(CFO)

Contradiction Point 4

India Business Sale and Strategic Decisions

It involves strategic decisions and financial forecasts related to the sale of the India business, which impacts the company's global footprint and financial outlook.

What is your expected sale price for the India business and what is the current buyer interest? - Benjamin Theurer(Barclays Bank PLC)

2025Q3: The estimated value of the India business is now about $450 million, including substantial value for brands and existing infrastructure. Interest level is high, with inbound requests exceeding expectations from both local companies and international entities. The sale process is proceeding well. - Pierre Brondeau(CEO)

The initial estimate for the India business was $500 million, but the current range is now $380 million to $475 million. Can you explain why the range has expanded and what this implies for the India business’s valuation? - Jeff Zekauskas(JPMorgan)

2025Q1: We have now received 11 binding offers for the India business, up from 8 as of late February. These offers range from $380 million to $475 million, reflecting the strategic value of the India business, including brands and operations. The sale process is proceeding as expected with a focus on maximizing the value of the transaction for FMC's shareholders. - Andrew Sandifer(CFO)

Contradiction Point 5

Rynaxypyr Market Strategy

It touches upon the company's strategic approach to managing Rynaxypyr volumes and pricing, which is crucial for competitive positioning.

好的，我现在需要处理用户的这个请求。用户希望我作为专业的金融文章作者，总结并精简来自美股上市公司财报电话会议的问答环节的问题。首先，我得仔细阅读用户提供的示例，确保理解他们的需求。用户给出的示例问题是：“Given the shifting environment, what are your latest thoughts on keeping Rynaxypyr earnings flat next year?” 需要将其简化，同时保持原意，符合美式英语习惯，并且只输出问题，保留问号。首先，分析原问题的结构。原问题中，“Given the shifting environment”是背景，但用户可能希望去除冗长的装饰词，只保留核心内容。主干是“what are your latest thoughts on keeping Rynaxypyr earnings flat next year?”。这里的关键点是关于Rynaxypyr的收入是否保持平稳，以及最新的看法。接下来，考虑如何简化。“Given the shifting environment”可以省略，因为用户要求去除多余装饰词。然后，“latest thoughts”可以简化为“expectations”或者“plans”，但“thoughts”在这里可能更合适，因为这是询问公司的想法。而“keeping earnings flat”可以简化为“maintaining flat earnings”或者“keeping earnings flat”，但用户示例中的简化是“keeping Rynaxypyr earnings flat”，所以可能需要保持“keeping”不变。检查是否符合美式英语习惯。原问题中的“Rynaxypyr”可能是一个产品名或品牌，需要保留。另外，确保问题结构正确，以问号结尾。现在，用户提供的示例简化后的问题是：“What are your expectations for Rynaxypyr earnings next year?”。这里将“latest thoughts on keeping... flat”转换为“expectations for...”，同时去掉了背景部分。但原问题中的“flat”在简化后的版本中被省略了，这可能改变了原意。用户的问题原本是询问是否保持收入不变，而简化后的问题只是询问预期，没有提到“flat”。因此，可能需要调整，确保“flat”被保留。例如：“What are your expectations for maintaining flat Rynaxypyr earnings next year?” 但用户示例中的简化没有“maintaining”，所以可能需要更简洁。或者，可能用户示例中的简化是正确的，因为“expectations for...”已经隐含了是否保持不变的意思，但可能不够明确。需要再仔细检查用户的要求：在不改变原意的基础上精简。原问题的核心是关于Rynaxypyr的收入是否保持平稳，所以简化后的版本应该保留“flat”这个词。因此，正确的简化可能是：“What are your expectations for Rynaxypyr earnings next year?” 但可能缺少“flat”信息，导致不够准确。或者，是否可以将“keeping... flat”简化为“flat earnings”，例如：“What are your expectations for Rynaxypyr's flat earnings next year?” 但这样可能不太自然，因为“flat earnings”作为名词可能不太常见，通常会用动词形式。或许更好的方式是：“What are your expectations for Rynaxypyr earnings next year?” 并假设用户的问题隐含了是否保持不变，但原问题明确提到了“keeping... flat”。因此，可能需要保留“flat”一词，比如：“What are your expectations for keeping Rynaxypyr earnings flat next year?” 但这样可能没有简化，反而更长。用户提供的示例简化为：“What are your expectations for Rynaxypyr earnings next year?” 但原问题中的“flat”被省略了，这可能改变原意。因此，可能存在错误。或者，用户可能认为“expectations”已经包含了是否保持不变的意思，所以可以省略“flat”。但严格来说，原问题中的“flat”是关键信息，不能省略。因此，正确的简化应该是：“What are your expectations for Rynaxypyr earnings next year?” 但可能不够准确。或者，是否应该保留“flat”？比如：“What are your expectations for maintaining flat Rynaxypyr earnings next year?” 但这样可能更长，但更准确。需要权衡用户的要求：简洁且不改变原意。原问题询问的是“keeping earnings flat”，即是否保持收入不变。简化后的版本需要保留这个核心意思。因此，正确的简化可能是：“What are your expectations for Rynaxypyr earnings next year?” 但可能不够明确，因为没有提到“flat”。或者，可能用户允许在简化中省略某些细节，只要核心意思保留。例如，原问题中的“flat”可能可以被隐含在“expectations”中，即公司是否预期收入会保持不变。但严格来说，原问题中的“keeping... flat”是明确的，所以简化时应该保留这一点。因此，正确的简化可能是：“What are your expectations for keeping Ryn - Aleksey Yefremov(KeyBanc Capital Markets)

2025Q3: Our strategy remains valid, with sales flat, volumes up, and price down. - Pierre Brondeau(CEO)

How will Rynaxypyr's volume and pricing evolve beyond 2026, and how will you address price gaps with generic competition? - Vincent Andrews(Morgan Stanley)

2024Q4: We believe we can compete effectively with generics at current prices. - Pierre Brondeau(CEO)