FMC Corporation (FMC) Earnings Call Transcript & Summary

Good morning, good afternoon, and welcome to day 1 of the Exane BNP Paribas European CEO Conference. It's a pleasure to have you with us today for today's fireside chat with FMC Corp. [Operator Instructions] I'm now delighted to hand over to Laurent Favre, head of the chemicals team at Exane BNP Paribas, who will present today's session. Over to you, Laurent.

Thank you, Paul. And good afternoon, good morning, everybody. It's a pleasure to be hosting FMC. From FMC, we have Mark Douglas, who is now CEO officially at the start of June. Mark, good morning. I can see it's quite sunny out there in Chile.

It is indeed, for a change.

And we also have Mike Wherley who heads up the IRS at FMC. So guys, thanks a lot for taking the time.

And I guess we're going to jump straight to Q&A. I will be asking some of my questions first. [Operator Instructions] But maybe just to start with, Mark, so we spent already quite a bit today talking to companies who are talking about the magnitude of the decline in their businesses for the second quarter for this year. You guys came out with a strong Q1. You guided full year organic growth at 8% and I think EBITDA growth at about 5%, including FX headwinds. Can you maybe, just to start with, talk about how much of that strength and that growth is FMC-specific? And how much of that is the crop protection market for which you are one of the global leaders?

Well thank you, Laurent. Good to join everybody today. Listen, let's start off by saying something that I think is fundamental to the space we're in and the fact that FMC, as you said, is a market leader. We have demand. Unlike many, many industries, our customers, i.e., you and me, are eating. And as we go through the cycles of planting and harvesting around the world, that demand is still there. So fundamentally, the market is as robust as we thought it would be. Now when I say robust, overall growth rates in the 0% to 2% range for the full year. That's kind of how we view the world. The ag space, from a crop protection standpoint, has been looking like that for the last few years. And frankly, we think it's going to be in that range going forward. When I think about where FMC's position is, we're slightly different to some of the other major players in the marketplace in the sense of we are a pure chemistry company, both synthetic chemistry and biologicals. So for us to grow in the rates you just indicated from our forecast and our guidance, it really is about the application of those technologies in different crops and different geographies around the world. So our growth rate is exceeding the market. We've seen that for the last 2 to 3 years. We expect that to continue. Our long-range plan that was put together at the end of 2018 taking us through 2023 has a top line growth of 5% to 7% and EBITDA growth of 7% to 9% and an EPS growth in the 9% to 11% range. So we're very confident that given our market exposure, the fact that roughly 25% of our business is in each region of the world, so therefore, we have a very good geographic balance. Strength of our portfolio, and equally as important, the strength of the pipeline that is coming, will allow us to continue to outpace the market in that 5% to 7% range.

And I guess, Mark, if we try to separate the discussion into what's happening now for the next several years and then the outer-years. If we look at this year, for instance, I think you guys talked about a flat market overall. Within that, I guess, how do you think about COVID impacts? And to what extent has that been impacted already when you look at the North Hemisphere season for instance?

Yes. I think from our perspective, the COVID impact at this point has really been what we would call supply chain dislocations, logistics issues. We saw that in February when the virus first appeared in China. Roughly about 60% of our total raw materials and intermediates are manufactured by ourselves or our toll partners in China. So we felt that pretty quickly in terms of moving intermediates between locations in China, which happens quite a lot for us. Getting across provinces, roads being shut, that type of dislocation occurred. We then moved to Europe as we went through the March and April time frame and saw similar elements, not necessarily from a manufacturing standpoint, more from a warehousing and moving across country borders until the government started to put the green lanes in place which allowed agricultural products to move as an essential industry. We really haven't seen those types of dislocations in the U.S. And here we are in the early spring, planting is occurring rapidly now. We haven't seen any of those issues. So it'd been very different. I would say the next spot that we are really focused on is Brazil. I think we would all recognize that, unfortunately, today, Brazil is probably the epicenter of COVID in the world. Now it so happens that it's a quiet period in Brazil right now. We're finishing the harvest, getting ready to prepare the fields for planting in September. So there's no real impact as such. However, I think the watchout for us and many in the ag industry is going to be what happens to labor when it comes to the planting season? Will the growers have the right amount of labor? Will they be healthy, et cetera, et cetera? I think that's something that we feel is potentially one of the next impacts that we have to watch for. From a demand perspective, we haven't seen those significant dislocations to the food chain affecting vast pieces of agriculture. There are pockets where, obviously, with restaurants being closed, fast food retail somewhat depressed, there are certain crops that face some demand challenges. But it's such a fragmented industry. There are other crops that then come and replace them. So overall, it's been more supply chain and logistics than it has anything else.

And I guess when you talk about those impacts, some people are saying that both corn and bioethanol -- well, actually, bioethanol and corn in North America, bioethanol and sugarcane in Lat Am are going to provide some, I guess, overhang effects into 2021. Do you have early thoughts on those topics?

Well, let's take them separately. Corn is not a major crop for FMC. About 9% of our revenue comes from corn around the world. And a little known fact, only 1% of our revenue comes from corn in the U.S. So it's not particularly a crop. Obviously, we watch it because it is one of the leading soft indicators, but it is not something that drives our portfolio or drives our revenue. For sure, listen, ethanol demand is down a significant amount. That is obviously going to bear on planting intentions for next season if that situation is the same next spring. It might not be, of course. So I think you've got to watch carefully how things evolve. The trade war also has an impact on the soft commodities, especially soy. So there's something there. On the other side of it, if you're not going to plant corn and you're a row crop farmer, the chances are you would plant soy. Well, soy is not exactly devoid of issues either. So I think time will tell in that space of how corn and soy play out going into the next season in the U.S. In Brazil, with the sugarcane, yes, same sort of scenario. Obviously, ethanol is depressed as the population has less movement. But what's interesting for the major sugar mills in Brazil is they really derive their revenue from 3 areas: obviously, raw sugar; ethanol; and cogeneration of power. Ethanol may be down, but because of the weakness of the BRL, their sugar is actually quite profitable on the global market. So on one hand, ethanol is reduced, but sugar looks better for them from an export perspective. So we haven't seen our sugarcane business decline at all in this season as we've gone through this year. In fact, we saw it strengthen in Q1 as many of the growers are looking for ways to improve yield from the acres that they have. And there are certain characteristics of some of the products that we sell into that marketplace that allow them to get higher yield. So like any commodity, there are always ups and downs. But there are some interesting nuances below the headlines that you see that actually drive, from our perspective, some of the interesting revenue opportunities in those spaces.

We had -- Mark, we had, I guess, a very early season in the U.S. this year and in Europe as well, I think, but that was more related to the COVID issues with farmers trying to get ahead of potential issues. I'm not asking for specific comments on Q2, but I was wondering, conceptually, if you could talk about what you've seen in the marketplace on, I guess, that dynamics around prebuy versus actual genuine demand as we go through now Q2.

Yes. It's interesting. I did watch and listen to the comments made about the industry. But I can tell you, from an FMC perspective, we really didn't see a lot of -- a lot of prebuy in Q1. What we sold was essentially used in Q1 and getting ready for the season in the U.S. or the season in Europe. So it's going to be an interesting dynamic, how it plays out. I think the markets themselves are pretty much where we thought they would be at this point. I would say the only element that I see that is probably different is how dry it's been in Northern Europe. Obviously, that is -- you live it and you're seeing it. It's going to have an impact on the market as we go forward. So that's probably the piece that we didn't see at the beginning of the season. The U.S. -- actually, it's been a wet spring in many parts of the U.S., but the weather conditions in the Midwest are very good. It's very warm. So we expect the season to continue well. Jumping around the globe, going over to Asia. In India, monsoons getting ready, pretty good, no real issues. I would say in Indonesia, it's a little dry, but we'll see how that develops. Australia, obviously, very good. For the last 3 years, they've had horrific drought. But in the East, you've now got rain, and rain is expected in the West. So a very good condition in Australia. And then as I've said earlier, Brazil is in the quiet period, so there's not a lot of activity there right now. Obviously, longer-range forecast suggests that the weather will be good for planting in September in Brazil. So that's kind of how we see the world right now.

And so you've had, I guess, double-digit organic growth over the past couple of years; this year, guiding to high single digit. When we think about the next few years, can you maybe walk us through the shape of the expected growth in terms of diamide franchise on one side, but also perhaps some of the product launches that you're going to add in the next few years? And then I've got a couple of more questions on diamides.

Okay. Yes, I would be shocked if you didn't.

I'll try to find new ones. I'll try to find new ones, I promise.

Good. Excellent. So listen, when we put the 5-year plan together at the end of 2018, we put together a growth profile for the company that had a 5% to 7% top line growth; a 7% to 9% EBITDA growth; and roughly a 9% to 11% EPS growth, depending on how our cost structure changes and also on our stock buyback program. We're very much on track. As you said, the first 2 years of that plan were right in the middle of our ranges where we should be. Now having a broad portfolio like we do, we see different elements growing at different rates. The comment you just made about the diamides growing at sort of low double digit, high single digit, depending on the year, that's going to continue for the next few years for certain. There are parts of the legacy portfolio that are also growing in those mid-single digits. And then there are parts growing in the 1% to 2% range, depending on what those types of products are. What we expect to see is those diamides continue out past 2023 with growth rates in that, I would say, mid- to high single digits, depending on the year and the application of when new registrations and new labels become available. It'll also depend on the third-party relationships that we've developed that we've talked about, where we will be supplying products and are supplying products to a number of our competitors, both on a global and regional scale, where they will be looking to buy from us ahead of patent expiration. And then after patent expiration, they will continue to buy their requirements from FMC. So that will also play out into that growth profile, mainly because they're looking at markets that we're not in or formulations that we do not produce. So in actual fact, you're actually expanding the market with more players as you look at different crops, different geographies with different types of technology. The second piece of the question is really the portfolio of our R&D activities that are now coming on stream. I think a lot of people know or for those of you that don't know, when we acquired the DuPont assets in November of '17, FMC had a very strong what was called development pipeline. These are products that are getting close to commercialization. We did not have a strong or any what would be called discovery pipeline because we were not in R&D discovery. That's where DuPont had their real strength. You bulk those 2 pipelines together, you have a very long pipeline from products that are about to be launched all the way through to products that are just being discovered. That's important because in this space, it takes roughly 10 to 12 years, very much like the pharma industry in actual fact, from discovery to commercialization, plus about $260 million in today's money to get that product to life. So you really need a robust pipeline that is nicely flowing from discovery to development. We have 2 products that are launching in 2021: Isoflex, a grass herbicide for cereals with initial launch in Australia; and Fluindapyr, which is a fungicide that has multipurpose use in specialty crops and some row crops, which also launches in 2021. Those 2 products together have a combined, we believe, roughly $800 million to $900 million of peak sales. So they're not small molecules either, and they're the first 2 out of the pipeline. In '24, '25 and '26, we have 3 other herbicides that will be coming to life. And then in '27, '28 and '29, we have 2 insecticides and 2 fungicides coming. Our plan -- our really long-range plan over the next 15 to 20 years is to have one new active ingredient coming out of development into commercialization every year. Now that is a lot of ask for a marketing and commercial organization because that -- those active ingredients will then be formulated into myriads of products around the world. But what it does tell you is from a product life cycle perspective, we have some tremendous opportunities to change the profile of the portfolio as we look at more sustainable, softer, more targeted chemistries. That's what excites me the most. It's not the quality of the business today, which is a high-quality business, but it is our ability to keep that momentum going for the really long haul.

So I guess taking those 3 parts and doing a few tiny slices. On the diamide side, you spoke about the commercial partnerships. I think you've talked about 4 global agreements and several regional agreements. Should we assume that those 4 global agreements as, basically, all the ones you're trying to target? Or in other words, should we now assume that you have good visibility and line of sight on that side of the diamide franchise for the next 10 years?

Yes. I think so. I think -- listen, there are some that are still under negotiation, so I can't comment on them. We'll see how they play out. But so far, so good. I mean we're very willing to supply these products. And obviously, people, they want access to them. So there is a deal to be reached. It just depends on -- the devil is in the details. But generally speaking, yes, I think we have a pretty good line of sight. I think the piece that we have probably the less sight of is the 41 local agreements that we have with smaller companies around the world. Some of those are going to be a little more tricky to forecast. We can put a placeholder in. Some will be better than we think. Some will be less good. But overall, I think we have a general view that says, we know what our capacity needs are going to be. We know roughly where that demand is going to be long term. And we know pretty well the types of formulations, the types of activities we're going to be undertaking.

And I guess this type of agreement comes with nondisclosures and for a certain extent, it's very difficult to follow and track. Can you perhaps let us know from a bottom line profitability standpoint, given that presumably you have lower SG&A attached to those sales, should we assume a difference in profitability between formulations that you sell directly to the growers and, I guess, the ingredients you sell to formulators and your competitors?

No. Actually, the way it works, you will see a difference in obviously the top line because the pricing will be different, obviously, because the third party needs to sell at a profitability point that's acceptable to them. But when we look at from an EBITDA margin perspective, it's not dilutive at all. And we have a number of those agreements that are already running. And the EBITDA of the company that you see today, in the 27% range, includes those agreements. So it's not as if we're going to see a wave of very low EBITDA coming through. We're not. We know exactly how those contracts are structured. We know how that falls to the bottom line for us, and we know what their value is. And you're seeing it today.

And you mentioned those 2 new ingredients, Fluindapyr and Isoflex. I mean those are 2 of, I guess, your biggest launches for the next 10 years. You initially had a target on 2030 from new molecules. I understand that. Unfortunately, we cannot meet next week for your R&D update, but I was wondering if you could, I guess, talk about qualitatively about some of the big moving pieces in those numbers for 2030. Has anything happened that makes you less confident on getting that target and vice versa?

No. I don't think anything has made me less confident. If anything, when I look at the numbers that we put out there in the $1.8 billion to $2 billion range by 2030 for the portfolio and the pipeline that we see today, I still think that number is perhaps a little conservative. We'll be going back through that cycle of looking at our long-term pipeline. We do that on an annual basis to understand exactly how the pipeline has moved. I don't think that number is going to come down. From what I see, and especially with things like Fluindapyr and Isoflex, I see the volumes and the value going up. So when we do finally get together to be able to present the pipeline at our research facilities, I think you're going to see a number that, in my opinion, should be bigger than that. Now remember, that's not peak sales either. That is just sales in 2030. Some of those products that have been launched in '26, '27, '28 and '29, they won't reach peak sales until mid-30s, maybe even the 40s. So there is a long ramp here, and 2030 is just a data point in time.

We have a question from the audience about spinosyns. So I guess the other fairly new molecule in insecticides, Corteva spinosyns. So the question is -- sorry, I was framing it for everybody. A question for you: It seems that Corteva is making a big push there on spinosyns. Do you see headwinds? Or how do you think about the threat, I guess, on pricing from this market share war?

Well interesting enough, I don't see it as a market share war. We never have. When you consider the size of the spinosyns versus the size of the diamides, we believe there is more than enough market space for both of these products to continue to grow. And then in fact, you've got to think of it -- we have the biggest insecticides in the world, and we only have 10% of the market. So it's a highly fragmented market. We have about $1.6 billion of revenue from the diamides today. The market itself is in the $15 billion to $16 billion range. So I don't necessarily see the Spinosads as my competition. In fact, we also look at Spinosads as a partner because for many applications, you want to rotate insecticides. Because if you don't, you will create resistance, and therefore, you will have issues. So there are many accounts that we have around the world, where they will buy both Spinosads and the diamides. There are many markets in the world where the Spinosad simply don't work just like the diamide. So I've never considered it. I know some others have considered it a battle between Corteva and FMC on these types of technologies. I just simply don't see it that way. And listen, when you took a business that was $1.1 billion when you bought it in November '17 and by early 2020 it's $1.6 billion, you know what, that's a great business to be in.

I guess, Mark, maybe you could argue that it could be that the previous owner of the business didn't do a very good job on diamides, just the way the previous owner of spinosyns didn't do a great job either. So from that -- go ahead.

I wouldn't necessarily say that because different companies have different strategies. And sometimes, those strategies play out in a different way. The way we view these products, we had a more expansive view of them, it does not mean to say that the previous owners didn't have a view that was applicable to their particular strategy and how those products fitted in their overall portfolio. So for me, it was just a different view of the world and where we wanted to go with those products.

I see. When you talked about Isoflex, which is an, I guess, herbicide, we've -- over the past few days, we've heard a lot about Dicamba, which is another type of herbicide. Can you maybe talk about -- I guess a 2-part question. One is on your current herbicide sales, is there an issue with farmers? Or is there an opportunity or an issue if farmers switch away from Dicamba? That's the first one. And the second one, I guess, on Isoflex, would that be -- could it become then a bigger opportunity if farmers have to shift the way how they think about herbicides?

Yes. Listen, on the Dicamba side, FMC does not participate in the large broadcast herbicides. So Dicamba, 2,4-D, glyphosate, that's not a business that we're in. It's very large volumes, generally lower margins. And frankly, it's not a part of the space we want to be in. Now having said that, obviously, there are changes -- potential changes in the regulatory environment that are changing the use of those types of products. Weeds will still be there. So you are going to need more specialist herbicides, which is where we reside. A lot of our business in the U.S., on soy, is pre-emergent herbicides. The corn business that I talked about is really post-emergent, which is the more specialized post-emergent types of products. I don't think with 2,4-D and Dicamba, whatever happens to those molecules, I don't think there's a tremendous uplift for FMC. I think there'll be opportunities, but they won't be of the scale that would change the profile of the company, in my opinion. We'll see how that plays out. With Isoflex, different type of product. Again, large but more specialized in nature, very much focused on cereals, very much focused on grass weeds. So I don't think -- once again, we may see some opportunities there. I mean one of the interesting facts in this industry is, it's not until you get deep into the marketplace and start applying your products and understanding how they perform under different agronomic conditions, whether it be climatic or soil conditions, test conditions, that you truly get to understand the real capability of those products and what you might do with them. We may find some -- there are some elements with Isoflex with -- formulated with other herbicides that give them more utility. We'll see. But that will be an upside to our current view of the world.

Excellent. Next, I guess, tranche of questions would be around free cash flow, cash flow generation, et cetera. And so I guess first question for you is, can you talk about the ERP, SAP progress and how you think about the upside to cash conversion in the next 18 months?

Yes. Sure. So with SAP, we're deep into a 3.5-year process of completely revamping our ERP platform. We made 2 major acquisitions in the last 5 years: one of Cheminova, one of the DuPont assets and the legacy FMC piece of that. We have numerous different ERP platforms that really need to be replaced, and we've -- we're putting in place SAP S/4HANA, the new cloud-based SAP. Every single piece of the company will be on that. I think we'll be one of the first SAP S/4HANA in the chemical industry. It's going very well. We have 5 releases. We released #4 in February, which was the business that we bought from DuPont, and release #5, the final release, will be in November. So next year, 2021, will be the first year we're operating on one ERP system for the first time in probably 2 decades, I would think. To your question about the value, well first of all, there was roughly $20 million of value this year related to the fact that we were paying DuPont for a transition service agreement for the assets that we acquired. They basically had a stand-alone clone of SAP that we would support. With our release in February, that went away, so you had a $20 million positive in terms of value. On top of that, we're spending somewhere between $100 million and $125 million a year on actually implementing this transformation. That should go away in November. So you should see that $100 million to $125 million come as a benefit to FMC next year from a cash perspective. I think the other interesting aspect of the value is we've said that we believe that if you take the $20 million of TSA savings, there's probably another $40 million to $60 million of cost reduction in the company as we look to reengineer many of the functions because of the fact that we don't have multiple systems. That process is underway today in terms of planning. So you should see in 2021 another uptick in terms of lower cost that will then get to a full run rate in 2022. So TSA plus other savings are in that $60 million to $80 million range, and I think it will be more in the upper end of that range than the lower end.

And I guess related to that question from the audience, do you have any news on the buyback program which you suspended earlier this year?

Yes. Listen, I think most people who follow the company will understand why we did what we did. I mean we went to talk to our banking group about changing the covenants of the company, given that we were looking at a step-down in Q2. And then we decided that we would, just in an abundance of caution, go and raise the covenant levels. Liquidity is everything in these times for any company, and we just wanted to be very clear that -- send a signal actually to everybody that liquidity was not an issue for the company. As part of that work that we did, we also looked at our stock buyback program, which has been pretty robust. Since the end of '18, we've delivered some $600 million of buybacks on a regular cadence. We made the decision to hold for the rest of the year. I would say, once we get into the third quarter, if things are playing out as we expected, I would like to think, given our cash flow profile and our conversion rates, we should be back buying in the fourth quarter. Now having said that, if something else changes, then obviously, what -- we'll push the can down the road for maybe another quarter. But our intent is to get back to that regular cadence of buying stock every quarter.

Have you seen -- talking about, I guess, liquidity, have you seen any issues on payment terms with our customers? Or any particular issue, I guess, because it's always an issue.

Yes. It can be. You know what, generally speaking, no. We've had a few pockets where we've helped people out. I think in any long-term relationship, there are times where somebody will want to push their payment from 1 quarter into the next. And you know what, you go through that process with them. There is always some upside somewhere else. But generally speaking, no, we have not seen that. Now are we keeping a close watch on this? Very much so because despite the fact that we talked about, the COVID-19 impact has really been logistics issues. The other element of that is, are there going to be issues with getting labor into certain parts of the world for harvesting or planting. If that occurs, you know what, maybe there'll be some issues. But so far, we haven't seen that at all.

Good. Mark, can we move on to sustainability and, I guess, ESG in a broader sense? You are part of an industry which somehow has spent years being perceived as part of the solution to a lot of issues in a way, and then now it seems to be at the core of a lot of problems. Can you maybe talk about how you would describe this to your friends and family if they were asking you what is the industry doing on sustainability? And in particular, at FMC, do you think about it as an opportunity or as a threat?

I see it very much as an opportunity. As a new CEO following on a very successful CEO, one of the things I've talked about is the fact that I believe, with a company like FMC, which is purely focused on chemistry, whether it's synthetic or biological, the notion of sustainability is something that I see as so core to the company because it is going to be our right to practice. I do believe that fundamentally, we are here feeding the world. We are improving yield, and we're doing it all over the world on many different crops. That's what we do. We remove pests. Now I think as you go forward, what you're going to see is the spend on sustainable chemistry with a company like FMC will continue to increase. What do I mean by that? We have a target that says 100% of our R&D spend will only be spent on products that we can bring to life that are more sustainable than the products that are out there in the marketplace today. So you're going to constantly evolve that portfolio, not just from a pure technological perspective but from a sustainability perspective as well. Now I'll add to that from an ESG perspective are all the elements going backwards in terms of water usage, energy usage, waste, all the what I'll call the operational elements of an ESG element. That's very important. Don't get me wrong. It also makes good economic sense if you can reduce your waste and energy consumption and water consumption. So they go hand in hand. I think the other piece is really your business practices and how you think about the company from a societal perspective. So what are we doing about diversity and inclusion in our company? We spent a lot of time and effort moving the needle on women in the workforce, women in management, executives. Now with what is going on in the world today, everybody should be asking the question, "Well, what are the opportunities for minorities in various parts of the world and especially here in the U.S.?" That's another element of that ESG strategy that plays into sustainability. So I have a great passion for it. The executive team here has, too. They are asking me to put in place more what I would call weight behind sustainability in the company. That should be the lens at which we look through our investment profile internally, whether it's human capital, capital for [ steel ] in the ground, R&D capital or whether it's new technologies that we're looking at from an outside-in perspective. All those pieces should be viewed through the sustainability lens.

And when you see the preliminary discussions in Europe around the Green Deal, for instance, which at some point in time, talks about the targeted reduction in crop protection chemicals by about 50%, do you see this as -- the cost of doing business in Europe, do you see that as just a lack of, I guess, science versus emotions and a need for you guys to do a better job at explaining what the industry is about? Or do you also think that this is just the fact that the existing industry has got a lot of old products that need to be replaced?

Yes. Listen, it's a great discussion topic. We could take a lot longer than the time.

I know. I know. And I can see that. We've got 4 minutes left.

No. But it's -- but listen, here's my view. I don't think 50% is necessarily a practical number. I don't know whether it's 40%, 60%. I don't know what it is, but there has to be a dialogue. You can't just come out and say, "We're going to cut pesticide use by 50%." Well, what are the true impacts of doing that? There are already cases today in Europe where products have been removed, and pests are prevalent with products on the marketplace that cannot control those pests. Oilseed rape is a very good example in Europe, where there is a particular type of beetle that cannot be removed. That decreases yield. It also impacts, obviously, the cash flow and profitability of the growers. So I think you have to be practical. There is an industry here that is not a non-for-profit industry. It is a for-profit industry, and it feeds the world. So I think there's a dialogue that has to go on between our part of the industry, the growers, and governments around what is practically possible. I would agree with you, I don't think this industry has really got the message of science across. I believe there's a lot of decisions today based upon emotion and not science. There are 800-plus million people go to bed every evening hungry. If we don't produce the food, that number will grow. Now people might not like to hear that part of the discussion, but it is part of the discussion. So we do have to increase food security. We do have to increase productivity as the world's population grows. That's a basic fact. Now can we do more with better chemistry, softer chemistry, chemistry that has less impact on targeted organisms? Yes. And that's where the real leaders are going. And my last point on this, Laurent, is really, I see this as an opportunity. I see the technological players using this to accelerate our growth with new products, more targeted products, and removing older chemistries that are more what I would call broad in nature. I think going more targeted, very specific, that's how the technological players will win. And for us, we see that as an advantage.

And when you see your portfolio right now of those billions of sales, when you try to think hard about what of the sales that will probably not exist in 2030, how much of your portfolio would you say that is? Is it 5%? Is it 10%?

Well, roughly today -- it depends on the year, and it depends on how we manage our portfolio. But I would guess about 150 basis points is removed every year through loss of registrations, proactive removal of products. And that continues on and on and on. We removed at the end of '19 a product called carbofuran, which was the basis of FMC's agricultural business. It's gone. We don't sell it anymore. That's a proactive decision. There are better chemistries that we have in our portfolio. We'll go and sell those. Get rid of the old one. So I think that 1.5% per year is probably not a bad number in terms of headwind to overall revenue that you're overcoming because you're viewing your portfolio with a sustainable lens.

Excellent. But I think we are running out of time, Mark. I think that we are running out of questions, too. So on that high note, I would like to thank you very much for taking the time this morning to be with us. I think you have more meetings today. And to everybody on the line, I would like to thank you for spending time on chemical -- on the chemical track this morning or this afternoon. And the next contract will be Univar, the largest distributor of chemical products in the U.S., the second largest in Europe. And with that, thank you very much

Thank you.