FMC Corporation (FMC) Earnings Call Transcript & Summary

[Audio Gap] the audience, thank you very much. Welcome to all [Audio Gap] [ lastly as I check off ] today. It is my great pleasure to welcome Mark Douglas, CEO of FMC Corp, for our Global Agricultural Forum. Mark is accompanied by Zack Zaki, Head of Investor Relations. My name, you will know it by now, but in any case, it's Christian Faitz. I'm co-head of the chemical research at Kepler Cheuvreux, and also responsible for the agriculture companies within the chemical sector. Mark, with that, a warm welcome.

Thank you. It's good to be here.

Good to have you here. Mark, you are a true veteran of the chemical industry and has been in key roles during several key transforming events. Being CEO of FMC since I believe 2020, where do you see FMC positioned amongst its peers at this point?

Yes. Thanks, Christian. Well, we are a slightly different company in the sense of how you think about crop protection and the whole ag input. First of all, we are 1 of only 5 R&D companies. So we have total capabilities all the way from discovery through development to commercialization. But I think what makes us somewhat unique out of those top 5 companies is we don't have seeds. So we are purely focused on synthetic and biological discovery. And that makes us unique in the -- certainly in the sense of -- we don't care whose seeds somebody uses, but we will bring you the latest technology to go with those seeds. And I think that's an advantage for us. I think when you look at the world today, growers are certainly looking for technology to improve yields, improve productivity. They are looking for products that are more sustainable, and products that are, I guess, more friendly to the environment if you want to put it that way, and that means a lot of different things to a lot of different people. But I do believe if you are focused on that chemistry aspect, you will end up with more new modes of action. You'll end up with more sustainable products. And at the end of the day, that will benefit the growers around the world. So that's kind of how we think of ourselves in terms of how we're positioned. I would say, from a geographic perspective, we're very well balanced around the world. We have roughly 25% of our revenue from each of the 4 major regions of the world. We have a portfolio that is certainly strong in insecticides, well balanced on herbicides. Perhaps the only area that I would like to see more activity from us is on fungicides, where I think we can do more. And certainly, in our pipeline, we have new fungicides. And then the world of biologicals, we already have a $100 million biological business today, which is growing rapidly. And we are investing, and we have a basic research unit out in Copenhagen, purely dedicated towards biological research. So you put all those together, we're a very, very interesting company.

Perfect. Thanks, Mark. As you just alluded to, a big step for FMC's transformation into 1 of the key innovators in the agrichemical space was the acquisition of DuPont insecticides and herbicide portfolio plus their pipeline in 2017. In your view, what is the key difference between FMC today and generic FMC? Is it really -- is that innovation part paying well off for you?

Yes. Very much so, Christian. The acquisition of the DuPont assets that we bought back in November '17, really transformed the company. We already had a pretty good portfolio, but we lacked discovery. That is fundamental when you think about the longevity of a company in producing sustainable products. So it truly did transform the company. It did it in another way as well. When we acquired Cheminova back in 2015, we actually acquired pretty major manufacturing in India and in Europe, in Denmark. The DuPont acquisition then gave us more active ingredient manufacturing in the U.S., in Puerto Rico and some more in China. That also changed the way we view the world. FMC used to be known as an asset-light company in terms of how much dependence we had on China. We've changed that a lot since 2015. Back in 2015, we probably had about 90% of our active ingredients, intermediates and fine chemicals came out of China. Today, that is 45% and continues to decline and will be less than 40% in the next few years. That's advantageous because it gives you that broader supply base from which to work from. But yes, without a doubt, the DuPont acquisition that we made was transformational for FMC.

Excellent. Thank you. Now as a reminder to the audience, you will see your little chat box at the bottom of your screen. And you can pose questions, which I will ask for you, to Mark and Zach. Now Mark, can you share with us some highlights of your new innovations now that you do have a nice interesting innovative portfolio? What are you bringing to the market? I'm thinking about your new SDHI fungicide, what is it -- Fluindapyr, I believe? How has the launch been? And also how are first sales of Isoflex, your new grass weed herbicide doing?

So the pipeline is, as we said, coming to life. It was 1 of the advantages of buying the assets we bought, we get both development and discovery from both companies. So we have this continuous stream of new products. And that's really started this year. We launched, as you just said, Overwatch, which is a grass cereal herbicide, complete new space for FMC. We launched it in Australia. The launch went far, far better than we thought it would in terms of the revenue that we generated, the market exposure that we got and the performance of the product. That product gets launched in Argentina this upcoming season, and then in different countries around the world as we move on from there. Has peak sales of about $400 million to $600 million. And frankly, with what we've seen out of Australia, we expect it to be at the higher end of that range, not the lower end of that range. As you just said, next up is Fluindapyr, SDHI fungicide, very good product, was launched in a couple of small countries this year, but really starts to gather steam in '22 when we launch in Asia and then follow other parts of the world in the years after that. Another big molecule in that $300 million to $400 million range, very excited about that because, as I just said, we're underweight fungicides in our portfolio. So this is the first launch of a brand-new product for us in fungicides. So very interested to see how that goes. Actually, after that comes 1 of the next big products for us, which is, again, another brand-new product, a rice herbicide, new mode of action. As you can imagine, that's going to be very large in Asia, given the scale of that market out there. That product will get launched in 2024 and then '25, '26 in other Asian countries. Again, another $300 million to $400 million molecule for FMC. And then after that, we have a couple of herbicides and a brand new insecticide coming in '25, '26, '27. We always planned when we bought the assets to have 1 brand new active ingredient coming out of the pipeline every year. It doesn't sound a lot, but it actually is a lot in terms of how you have to go to market, you have to launch the product. We're not quite there yet, but we're getting very close to 1 brand new active a year. If you think about today, FMC is just north of $5 billion in revenue. We have about $430 million of sales this year that come from products that have been launched since 2018. And we have $140 million of products that were launched this year. So you can see that pipeline is starting to add incremental value to the portfolio. And I would add that along with that comes margin expansion as you look at the portfolio mix.

Excellent. Thanks, Mark. I believe you also are doing very well on diamides. So I guess it's the insecticide Rynaxypyr. My understanding is that it's very effective and addresses, for example, neonicotinoid resistance. Is that right? And what's the journey for diamide?

Yes. So the diamides, they are roughly $2 billion in size this year, growing nicely high single digits. They don't replace everything that neonicotinoids do. They tend to be more targeted on Lepidoptera -- caterpillars to most people. There's 2 products in the range, Rynaxypyr and Cyazypyr. Cyazypyr was launched after Rynaxypyr and is in its growth phase -- probably more growth, should I say, than Rynaxypyr today. Look, the way we think about this, we've been very deliberate in how we've grown the products. We really accelerated the growth when we acquired those molecules. Focused heavily on specialty crops around the world. Asia is our biggest market. About half of our diamide sales are spread throughout the whole of Asia on specialty crops. We see that continuing. Market access is very important to us. We have a number of agreements in place with other major players who are either buying active ingredient from us ahead of patent expiration, or they are buying formulations from us. What's good about this? It continues to expand the market. We continue to sell product and the diamides continue to take share from older chemistries such neonicotinoids or some of the organophosphates and others. So we do see this runway as being very positive going forward over the next decade. We know these products are very, very good. They're very efficacious and from an environmental perspective, we like the fact that they're very targeted in nature.

Okay. Excellent. Great. Now let's stay with innovation. With the Farm to Fork strategy being passed in the parliament in Europe, can you please elaborate on your microbial offering? And what is the main thing holding you back, if anything is holding you back, on the microbial side?

Yes. So the biological side of the house is, we see an important growing business. We invested in 2013 in acquisition of some microbiological assets in terms of libraries and capabilities. When we bought Cheminova in 2015, we decided that we would set up our biological research in Copenhagen. So we have full research capabilities there. As I said, today, sales are about $100 million in size and growing high double digits, rapidly growing. I think the limiting factor is twofold. Number one, market access and education. These products behave differently. You need to educate not only ourselves, our own sales force and tech service, but distribution, retail and growers. That is gathering steam, and we are seeing that growth accelerate. And then the other piece is pure get the registrations for these products in the various countries where they will be sold. Now registration for biologicals, thank goodness, is a little quicker than synthetic chemistry. But it does take time. So we've been applying for registrations for the last few years. And now we're starting to see the sales in countries such as Korea, in Japan and other parts of Asia as we accelerate the pipeline development. We have plans for that business to be a $500 million business by just after mid-decade. So it is growing rapidly. The good news is the pipeline is strong and those new products are coming to market quickly.

Okay. Excellent. Now let's switch gears and let's talk about the current situation and your visibility on things like demand. We are in the middle of the campaign for the upcoming Northern Hemisphere season in 2022. How do you see demand going into 2022 at this point?

Yes. Listen, I think I'm going to repeat very much what I said in our earnings call at the beginning of November, just a couple of weeks ago. I mean, the market is playing out as we expected. Latin America, planting is going very well. I know Southern Hemisphere, but it is a big part of how we end the year and walk into the next calendar cycle. I would say, very robust in the U.S. as we expected, and we talked about what we expect to see there. Good planting intentions, weather good, getting ahead of the season. So everything is pretty much on track, as we talked about. Europe, it's a little early, but intention looks good in Europe, I have to say, a lot of a lot of movement in Q4, which you would expect. Asia is a bit more balanced between Northern and Southern Hemispheres. But again, as we expected, I think the backdrop is positive. When you look at where soft commodity prices are today, I would say they're off their peaks, but they're much higher than the average over the last 5 years. So there's good intention there. I think, obviously, cost increases, price increases from producers -- but more importantly, availability is also weighing on the industry in terms of how viewers grow their ability to make sure they've got the product in place for when they need it. I think that's something that you'll hear more of as we go into both the U.S. season and the European season early next year. That will be a theme that I would pick up on.

Okay. Great. So we just mentioned cost increases. Over the past 30 years that I have been either working for or following the agrochemicals industry, costs never really were an issue. I mean, at the end of the day, you are -- FMC and your peers are a true specialty chemical producer, you are selling a solution to the customer and the customer is willing to pay for the solution. In the agrochemical case, obviously, you pay an insurance premium to make sure the crop goes healthily through the season. But I mean, for this year, they are all -- the certain costs are an issue: raw material costs, energy costs and logistic costs are biting into profitability with you and your peers. How does FMC cope with that? And will we see significant price increases in the next season to compensate for higher costs?

Yes, you're right, Christian. Generally speaking, we do move price on an annual basis, usually very small about to deal with inflation, et cetera, around the world. But I think what you've seen this year is twofold. Number 1 is the order of magnitude of cost increases, depending on how your portfolio plays, has been more significant than in any other year, allied to the fact that we have significant supply disruptions from a manufacturing standpoint. So it's not just a raw material perspective. You see in the press today, maritime freight around the world is really challenged and expensive. Trucking costs in the U.S. and availability are high as -- and increasing in Europe. And then from a commodity standpoint, a lot of the packaging costs that we face based upon propylene and ethylene also increased dramatically as well as capacity and availability. So you put all those together, you're in a different environment. And specialty chemicals do tend to move prices at a slower rate than commodities. You saw commodities move very quickly. We tend to move slower. Why? Because we're value-based. The good news with that is pricing tends to be more stickier on the other side of this curve. So we're very cognizant. We sell on value, but we have cost pressures that we have to deal with today. We're dealing with that by putting our prices up. We have significant price increases in the U.S. and parts of Brazil and Argentina and Mexico as we go into the season right now. We also have price increases that have been announced in Europe as we get ready for sales into Q1, and we've increased prices in parts of Asia. We'll see where that gets us. But already, we know our Q4 prices were higher than Q3. That's very positive. We have that in our bridge for our earnings. We see that as a positive. And we'll see that continue next year. It will not abate; they will continue. And if raw materials and availability continues to stay high, we'll move price again.

Excellent. Great. So as a reminder to the audience, you can post your own questions in the chat box. I will ask them for you. There's already quite a few which I'm sorting through. One question was also any pre-buying ahead of the cost inflation we just talked about? So do you see customers actually already going for products for which they only need in several months or so -- and then at the end of the day, FMC might have an inventory issue?

Yes. Listen, I don't think when you look at our Q3 results, we had a top line growth rate of 10%, 9% organically. That is not out of order for a company like FMC. We're being very careful watching this phenomenon. It would not surprise me if there is not some of that going on. But you also have to remember, from an availability standpoint, we're challenged from an availability standpoint. It's not easy today to get everything you need to sell. So it's not as if we have so much more material we could deliver a whole season right now if we wanted to. We simply can't do that. So we may well see a lot of orders coming as we go through Q4 into Q1. It doesn't mean to say that we will deliver all those orders in that time frame. It may well be that they will be delivered closer to the season. I think the question is a very good one. It's certainly something that we're watching out for. But right now, we don't see abnormal demand in terms of volume that are going to be sold so far ahead.

Okay. Excellent. Now there's a follow-up question on the biologicals question I posed earlier. Are your biological solutions in the pipeline complementary to your current portfolio? Or are they substituting existing, let's say, classical agrochemical products?

Yes. I would say, in certain cases, there is definitely cannibalization. And the way we're thinking about biologicals is in 2 different streams. Number 1 is pure biologicals. So using a microbe, having it express metabolites that are -- have pesticidal activity and then applying those into different markets, some we're in today, some we're not in today. If you think about FMC, we have what an 8%, 9% market share. There's a lot of market out there for us to go at, but it's not cannibalistic. I would say the second piece, which is equally as interesting, is pretty sophisticated formulations of synthetic chemistry plus biologicals. What does that give you? Well, 2 main aspects: one, biologicals tend to have a different mode of action. So you can use these products to break resistance in spray programs. And number two, you lower the amount of synthetic compound in the formulation by using biologicals. They're not necessarily cannibalistic. They can be additive to the portfolio. But frankly, I've always seen biologicals as a growth aspect to the company. I do not see them as just simply replacing synthetic chemistries. I see them as opening up new markets for us. And we see that in the specialty crop side of our business today is where we sell most of those biologicals, and we expect that to continue.

Okay. Excellent. Then there is another question on your non-seed activities, so to speak. You made your comments earlier on the seed industry. Still, I'm going to pose that question for the person who asked that question. You don't have a prominent position in seeds while most of your top 5 peers have done significant efforts. So you are the only 1 of the top 5 who are not in seeds. Do you feel comfortable with that? And do you think because of not having an integrated seeds business, you do have truly a unique position and offering.

Yes, I do. And I can tell you that because I actually talk to my customers on a regular basis about what are we doing. And a lot of customers around the world value technology more than having to buy seeds and chemicals from the same company. And look, let's be clear, the big seeds company don't only sell their chemicals to their seeds customers. They sell their chemicals to other people as well. So it's not as if you have a marketplace that is combined seeds and chemical sales everywhere. It is simply not the case. The vast majority of the business is done on an independent basis. And this is where [ agile ] -- we have 1 of the best pipelines in the world, and we're bringing really superb, sustainable chemistry to the marketplace. That's valuable to a lot of growers around the world. And frankly, many of our customers that we talk to, they don't want their hands tied by buying the same seeds from the same chemicals producer. They want optionality. That's what FMC brings. And look, our growth rates show that. We're growing as fast as anybody else in the marketplace with chemicals and not chemicals and seeds.

Excellent. That's good to know. And yes, good that you are 1 of the alternatives non seeds providers of agrochemicals. Now there's another question coming in from the audience on your pricing structure. The understanding of the person posting the question is that you have prices out once a season. So once costs come up during the season, obviously, there's not much you can do other than adjusting these costs -- is that a correct observation?

Yes, generally speaking, around the world, prices are set at the beginning of the season and then last through the season. Now there have been cases in the past, and we did it this year in the U.S. We raised prices mid-season. It's not normal. But frankly, under the conditions that we're operating in, they're not normal either. So make no mistake, if we get into the first quarter and we see that costs continue to accelerate, we will raise prices mid-season, whether it's in Europe, the U.S., Brazil, Argentina, wherever it is in the world, if the cost inflation pressures persist, we will be looking to raise prices, whether it's mid-season or not.

Would you believe there is continued inflation going into 2022? Or do you think it's kind of plateauing as we speak?

I do see cost inflation continuing. It's not changing. It's going to be interesting to see what happens in the second half of 2022. Back in August, when we talked about this from our earnings call, I kind of had the view that we might see some moderation in the second half of the year given some of the signs we were seeing. Frankly, since then, I'm less optimistic about that. So we're going to take a wait-and-see approach as we go through the first half of the year. But as I said, make no mistake, we will raise prices if those costs remain inflated.

Excellent. Now let's talk about regions. There is 1 question coming in on the regional side. And the question here is Africa so far is kind of a neglected continent. And I remember myself quite a few agricultural companies, including chemical companies, have talked about Africa as being a huge opportunity since years. And not much has happened. Where do we see Africa as a growth region and where do you see FMC's position in Africa as a potential growth region?

Yes. I mean, listen, I think you're right. It's been talked about for decades, and it's still not here. But if you look at the fundamentals, it's very interesting what is going to happen in Africa. I mean, first of all, you have infrastructure and political issues that you have to deal with -- but think about the world's population change that's coming. The world reaches peak population in 2050, and then there are a lot of changes in the next 50 years after that. I believe by 2100 Nigeria will be the second most populous country on earth. That tells you that in the very long haul, which is way past many of us on this call right now, there is going to be opportunity. There is opportunity today by bringing newer technologies to many African countries. There is also the Mid East as well, which is a very interesting opportunity and growing opportunity. We are certainly looking at what should we be doing in Africa more than we are doing today. Now you obviously have to prioritize return. We have a lot of growth opportunities in the company that we're funding. We can't do them all. But Africa is certainly on that radar screen. But I do, Christian, believe that it is a longer time scale than many of the other opportunities that us and other companies are looking at.

Okay. That's good to know. And then recently, there's another question on Asia. I mean where do you see the biggest growth in Asia? Is it India? Is it China? Any other country/region in Asia, you can think of offering growth opportunities for you?

Yes. I mean, listen, Asia is 1 of our fastest-growing regions. And depending on the quarter, it can be the fastest-growing region. India is our third largest country. And we have a very good position there. I would say, if I think of India from a growth perspective, number 1 is India. We have tremendous opportunities with the current portfolio and the pipeline to continue our market access. And we have been investing in more salespeople in India to grow that business. I would say second to that for us comes Southeast Asia. So Indonesia, Philippines, Thailand, Vietnam, they are all countries where our portfolio, think of it as rice and specialty crops -- perfect combination, not only for our current portfolio, but for the future portfolio from a pipeline perspective. China is obviously a very interesting market. It's highly fragmented. We do have growth there, but I don't see that growth in China as anywhere close to what we see in Southeast Asia and India.

That's great to know. Now another recent question just popping in. And again, as a reminder, also to the general audience, you can post your questions in the chat box, you should see at the bottom of your screen. Brexit -- has Brexit brought a change in regulation in the European continent? Has it got any change in sales structures for FMC now that Great Britain is outside of the European Union and also in terms of demand?

Yes, fundamentally, at this point, none of the above. So in other words, demand remains healthy. Portfolio does very well. We have good cereal herbicides. It's an important market in the U.K. Obviously, we got new fungicides that are coming, Fluindapyr being an example. But I don't think there's been any structural change in terms of demand. From a regulatory perspective, obviously, with the U.K. going off in its own direction, they will have to decide what sort of regulatory regime will play out in the U.K. Will they mirror Europe? Will they do something different? I would say that's to be determined at this point. But certainly, we're talking to the regulatory authorities there as we do on a regular basis regarding registrations, et cetera. I would say that would be the 1 thing I would watch as the U.K. moves forward from an agricultural perspective, what's the regulatory regime that gets put in place. But it's not there yet.

Okay. Interesting. Now a question on -- let's switch gears again to -- let's go to digitalization in agriculture. You have various digital tools, I believe, including Arc in your offering. Do you see digital precision ag more as a marketing tool and obviously cost of sales? Or do you think at some point, these tools can be a real commercial offering?

Yes, it's a very big subject. Here's how we see the whole world of digital ag, precision ag. Fundamentally, if you're not meeting a need at the grower level, you're not going to be successful. And that's true of any good technology. You have to meet the need. It might be an unmet need at this point. It might be a subconscious need, but there has to be something there. So we're approaching this as we do most things, with a high degree of focus. We're really not going to build an ecosystem. We're not going to be all things to all people. For us, that just does not work. Arc Farm Intelligence is the first ever predictive model for predicting insect pressure. Why does that work? Because growers want to know when is the most optimal time to spray. What should I be spraying and when? And if you can predict that, and that's what our model does with patented algorithms testing in the field -- if you can predict that, you're lowering that cost and you're doing it in a more sustainable manner. Now that's value to a grower. Will we charge for it? I don't think so. Because the reason I see this is it's doing 1 of 2 things. It's either allowing me to defend my current business and help the grower or it's allowing me to open up new markets that we were not previously in and add growth. I see these as new selling tools as much as I do see them as what is being called Precision Agriculture. I think they add tremendous value. And I think the growers will continue to adopt as long as there is an unmet need and you keep these tools simple. The more complicated they are, the harder they are to get adoption. It's no different to you or me using our smartphone or whatever we're using. If it's simple, you get utility. It's the same thing with precision agriculture.

Okay. That's interesting, and I would probably share your view. Indeed, I mean, I personally see a huge wave of consolidation for digital offerings at some point. I mean, after all, no matter where you are in the agricultural value chain, everybody is trying to have a digital offering, even potash producers -- and I'm talking about pure potash producers, not the Nutriens of this world. Now that you've shared this view that there's going to be a huge wave of consolidation -- probably my personal take is, at some point, the wholesalers of this world, BayWa in Germany, the Nutrien agri stores, will be the true rightful owners of digital ag.

Yes, I -- we share a very similar view. That's why we've not gone full bore to create an ecosystem. I'm not so sure that, that ecosystem resides at our point in the value chain. The people that are closest to the farm gate that have a breadth of portfolio that can meet all the needs of a grower, that's where the ecosystem should reside. So I'm very happy for FMC to link into other people's ecosystems. We'll provide some very, very unique tools that will allow the grower to optimize their productivity and value. But I'm not so sure it's where we should be as a company. We've got many things to invest in. That's not necessarily investment good for our shareholders -- is an ecosystem. Develop the tools that help the grower that help distribution and retail move through that value chain. That's a better model for us.

Okay. Excellent. Now there's a question from the audience coming in. And again, as a reminder, use the chat box to post questions, and I will ask them for you. Question here is from an investor in terms of sales, how much is generic product you're selling? And how much are innovative products, patent-protected products?

Yes. So it's somewhat of a difficult question to answer because we all view what is innovation and what are generics differently. The way we look at our portfolio, what we call third-party products -- so these are products that somebody else produces, we will buy and resell as part of an overall portfolio because it's requested of growers. That is something like 10% of our portfolio. The rest is either patented or has other attributes that make it differentiated in the marketplace. So it's quite a high number. It's reflected in our EBITDA margins. Our EBITDA margins are in the 27% range. I think we're the most profitable crop protection company by a long way. So it shows that the type of portfolio that we have can command that value. But we really don't focus on that, what we call third party. It's only there as a service element for our customers.

Okay. Okay. Great. Now, ESG obviously becoming a bigger and bigger topic, rightfully so. But there seems to be a current belief that pesticides, so your products, Bayer's products or [ Taylor's ] products. Also in combination with GMO seeds, obviously, it's something with a rather negative connotation. My personal view is that modern agriculture is actually more a part of the solution than being part of a problem to feed indeed 8 billion people probably on this planet. And you just mentioned it yourself, Mark, you see population growth peaking by 2050, probably at this famous 10 billion number. So what is your view on where modern agriculture and certainly modern agricultural chemistry can aid and be part of that solution rather than being part of a problem?

Yes, listen, Christian, obviously, from where I sit, we see ourselves as part of a solution, not as part of a problem. I think it's very important you recognize that the productivity of the world is driven by the technological advancements that we and our -- other companies are making, whether it be in seeds, whether it be in crop protection. We need to continue to improve yields. It's as simple as that. And you are not going to do that without technology. I think what is going to be very interesting in the EU is the impact assessment of the Farm to Fork policy that's been put in place. That impact assessment is going to tell you very clearly that you will really need all these new technologies or else you don't have enough land. You simply cannot produce today what you need to produce to feed the world. It's many decades since many countries have ever talked about food security. Well, if you take away these technologies, many more countries would be talking about food security and food access. It's not debatable. They are facts, there are very clear delineations between what you can do with chemistry and what you can do without chemistry. So we see ourselves as a company that will provide those solutions in the most sustainable way possible. That may mean biologicals. It may mean very targeted synthetic chemistry at very low dose rates. Some of the things we're focused on from a discovery perspective is how do you produce products at such low dose rates that they are effective, yet don't affect biodiversity as an example. And there are many ways to think about this. So I really do see ourselves and our industry as part of the solution, not part of the problem.

Okay. Great. Thank you. Now maybe again sticking with -- you just mentioned the EU Farm to Fork Strategy. We touched on it before, but it does call for a significant reduction also of agrochemical input. So where do we see that going, will that impact your sales? Or in fact, my personal view again, the agrochemicals industry over the past several decades has done the utmost to reduce active ingredient content -- and where do you see FMC contributing to that and meeting the goal of significantly reducing agrochemical input?

So Christian, I see it very much as a follow-on from the discussion we just had. The EU continues to deregister many, many products. At the end of the day, the grower still needs to use something. I mean, think of it this way, let's be clear, the EU banned neonicotinoids, a class of insecticides. What does the -- what are many countries going to do? Offer derogations because there are no products to meet the pest needs and the crops are getting wiped out. That's not sustainable. You have to have a proper conversation around what the growers really need. Now for me, I actually see it as an opportunity for FMC. When you think about the strength of our pipeline, there is going to be a group of companies that are offering highly sustainable technologies at low dose rates. Those companies are going to win. The pool of need is still there in Europe, but the best, most sustainable products are going to win. So if the older chemistries are getting removed, the newer chemistries should be able to replace them. I see that as an opportunity. But the debate has to be undertaken around that whole impact of where that strategy is going. I think the targets by 2030 have now been put out there as aspirational. I think reality is biting. I think that the EU is starting to take a look at those impact assessments and say, what are we actually saying here? Is it sustainable? And that debate will continue, and we'll certainly be part of that debate.

And again, it comes back to the notion, will we be able to probably feed the world -- 8 billion people? Obviously, out of a European also North American point of view, we are in a very comfortable position. But more than 200 million people -- 800 million people actually, I believe, are living through daily undernourishment.

Yes.

Question from the audience. Will second and third generation GMO make agrochemicals partly avoidable? And how does FMC address that challenge?

So listen, the GMO advancements have been significant over many decades, and yet the usage of chemicals continues to increase. Mother nature is very good at building resistance, and it comes very quickly. We've seen that in Brazil. We've seen that in the U.S., whether it's weeds or insects. Growers will use those GMO technologies to the full advancement. You are always going to need supplemental chemicals to fight pests. It's very interesting in Brazil. When INTACTA came along, the first real big GMO investment in Brazil, it took away a lot of the Lepidoptera pests, which are caterpillars. What came in place? Stink bugs. You need chemistry. So you can see this is a -- it's a constant battle with mother nature, how to protect the crops. I think the best combination is the latest traits with the best most targeted synthetic or organic biological chemistries. There is always going to be a need for the chemistry.

Okay. Great. Perfect. Now we are -- we have a couple of minutes left. Again, I hope to invite the audience to those questions. But also would like to know, Mark and also Zack, what is the FMC journey from here? What should investors really take away from the meeting as key points. I guess we touched a lot on the key points. But where would you believe, for example, FMC being positioned in the next 5 to 10 years as kind of a longer-term view?

So first of all, we're not going to change our strategy of being focused on chemistry. You will see no seeds from FMC. I can assure you of that. We do consider that a very good strategy. It's playing out well. I think -- and you heard me talk about the pipeline -- we have, if not the most vibrant pipeline, certainly 1 of them in the industry. And that will serve us well through this decade and into the next decade, given what we know today. I think what you will also see us do is some of the things we've been putting in place over the last 18 months, which is improved market access in many parts of the world. We have 8% to 9% market share. It basically means there's 90% of the world's market out there that we don't have yet. Our intent is to go and get some of that market using our technology, but we need market access to do that. That means, in some cases, like we do in Pakistan, we offer the full suite of opportunities. We have our own retail stores in Pakistan. In other countries, it means putting more sales and tech service people on the ground, such as India, Indonesia. In parts of Brazil, where we need to expand our presence with co-ops, that's what we're investing in. So I think you'll see us continue to expand our technology base. You'll see us to continue to expand our precision applications and our market access. And that will continue this growth algorithm that we have in terms of top line through EBITDA. It's a very successful company. It has so many opportunities ahead of it. It's -- frankly, it's a very exciting time to be at FMC.

Great. Perfect. Now Mark and Zach, this was a very insightful discussion. Thank you very much for all the ideas you gave us for the FMC investment case. I wish you all the best for the future. This, I believe, concludes our fireside chat sessions. We continue to have meetings. So I wish everyone a good end of the conference. Thank you very much from my side, from Kepler Cheuvreux and Macquarie's side.

Thank you.

Thank you.