Welcome to the Fourth Quarter 2015 Earnings Release Conference Call for FMC Corporation. [Operator Instructions]. I will now turn the conference over to Mr. Brian Angeli, Vice President, Investor Relations for FMC Corporation. Mr. Angeli, you may begin.

Thank you. And good morning, everyone. Welcome to FMC Corporation's fourth quarter earnings call. Joining me today is Pierre Brondeau, President, Chief Executive Officer and Chairman; and Paul Graves, Executive Vice President and Chief Financial Officer. Pierre will begin the call with a review of FMC's fourth quarter and full-year performance and then discuss the outlook for 2016. Paul will provide an overview of select financial results. As we have done for each of the past two quarters, we have published a slide presentation that accompanies our results. This slide presentation, along with our earnings release and 2016 outlook statement, is available on our website. The prepared remarks from today's discussion will be made available at the conclusion of the call. After the prepared remarks, we will be joined by Mark Douglas, President FMC Agricultural Solutions; Eric Norris, President FMC Health and Nutrition; and Tom Schneberger, Vice President and Global Business Director, FMC Lithium, to address your questions. Before we begin, let me remind you that today's discussion will include forward-looking statements that are subject to various risks and uncertainties concerning specific factors, including, but not limited to, those factors identified in our release and in our filings with the Securities and Exchange Commission. Information presents our best judgment based on today's information. Actual results may vary based on these risks and uncertainties. Today's discussion will focus on adjusted earnings for all income statement and EPS references and pro forma revenue and segment earnings for FMC Agricultural Solutions. A reconciliation and definition of these terms, as well as other non-GAAP financial terms to which we may refer during today's conference call, are provided on our website. I will now turn the call over to Pierre.

Thank you, Brian. Good morning, everyone. 2015 marked the completion of FMC's transformation to a technology-driven specialty company with leading market positions across agriculture, nutrition, pharmaceutical and specialty Lithium applications. In Ag Solutions, the acquisition of Cheminova strengthened our technology pipeline, brought great regional balance, broadened our market access and expanded our portfolio. The integration of Cheminova continues to go well. Our success to date reinforces our confidence in achieving the run rate cost savings of $140 million to $160 million by the middle of 2017. The acquisition and integration of Cheminova, combined with the actions we have taken to restructure ag solutions operations in Brazil, have positioned FMC to better address current market conditions. In Health and Nutrition, we focused on driving higher margins by capturing high-value commercial opportunities across our portfolio and by implementation of manufacturing excellence program and process technology improvements. And in Lithium, we continued to execute on a strategy of growing FMC's differentiated downstream specialty business to take advantage of favorable and market demand. 2015, however, was also a year marked by significant foreign exchange headwinds and difficult conditions across the global agricultural market. We took decisive actions throughout the year to address these challenges, accelerating the integration of Cheminova, restructuring our Ag Solutions operations in Brazil, exercising discipline on pricing and aggressively controlling costs across the Company. As we enter 2016, we remain focused on the continued execution of a strategy to drive improved performance. Despite challenging macroeconomic and ag market conditions, we believe the actions we have taken will enable FMC to deliver higher earnings growth across each of our business in 2016. I will provide further details regarding our 2016 outlook shortly. But, first, I will review our fourth quarter and full-year 2015 performance. Starting with FMC's full-year results on slide 1.…

Thanks, Pierre. Let me start with the income statement. Our corporate expense line represents those centrally-held expenses that are not charged back to the businesses. 2015 came in lower than 2014 for the full year, as we saw various items such as insurance expenses, pension charges, year-end LIFO adjustments to inventory and those incidental FX-related expenses all coming in below last year. We do not expect these to repeat in 2016 leading to our guidance for the corporate expense line of $70 million to $80 million. Looking at the tax rate, our full-year rate benefited from two drivers, relative to our previous expectations. First, various legislative items passed at the end of the year primarily related to R&D deductions, resulted in a reduction in our overall rate. Second, the geographic mix of our earnings changed away from the U.S. and Brazil and towards Europe and Asia. Since the latter regions typically have lower tax rates than the U.S. and Brazil, our overall tax rate benefited. Together these two items lowered our full-year 2015 tax rate by approximately 300 basis points. Looking forward, we expect our adjusted tax rates to be in the 24% to 26% range. I would like to spend a few moments on slide 10 revisiting the impact of the strengthening U.S. dollar on our business during the year. As Pierre has already described, our 2015 performance faced a significant challenge from the impact of the strengthening dollar in our earnings. Across all of FMC and before any pricing actions, the strengthening of the U.S. dollar would have reduced our 2014 operating earnings by approximately $310 million. Of this reduction, approximately $293 million would have directly impacted agricultural solutions. On slide 10 you can see the drivers of this hit to the Ag Solutions segment earnings. The cumulative…

Thank you, Paul. Despite the ag industry uncertainty, we believe that our 2016 plan is very achievable. It relies more on things we control than on expectations of positive external events. We expect to deliver earnings growth in all businesses in 2016 and will continue to position FMC firmly on the path of growth by leveraging the Company's unique business model that has defined our success. FMC remains a technology-driven Company with low-cost asset life operation, a unique high return on the model for active ingredients innovation and strong regional formulation capabilities. I want to thank you for your attention and I will now turn the call back to the operator for questions.

[Operator Instructions]. Your first question comes from the line of Frank Mitsch from Wells Fargo Securities.

Your view, stepping back a second, obviously you guys working hard on the ag side, but we're dealing with these macro pressures that we continue to hear more and more about and obviously the inventory situation is a bit worse. So if you think about over the next couple of years, how ultimately do you think the cycle plays out and what needs to happen for things to really start to improve from a macro standpoint?

Yes. From a cycle standpoint, I have to say that we're highly focused right now on 2016. And the way we look at it today, as I said in my prepared remarks, is that we have a situation which is a little bit easier and more balanced in Europe and Asia and for that matter in Latin America outside of Brazil, but we have certainly still significant inventory level in Brazil and in North America. Actually, North America for us is as much of a concern as Brazil is. So we're highly focused on executing our strategy in a market we believe will be down mid single to high single digits in 2016. There is still the possibility of a cycle turn in 2017, but you have to see how 2016 will go. It is highly dependent upon how the industry behave, making sure that we don't oversell, don't push sell and there is a normal weather and pest pressure. That is going to be very critical. Any additional negative weather from an ag industry standpoint or no pest pressure would lead to resulting less [indiscernible] inventory. So 2016 will be a difficult year and as we go into 2016, we should be able to see if 2017 remain the year where you will have a turn of the cycle. Mark, I don't know if you have any additional comments?

No. I think the only thing I would add is we're keeping a close watch on stock-to-use ratios which shows very clearly where supply and demand is. We're seeing some change in key crops for us such as sugar cane, as sugar prices go up, as supply is reduced in the last few years. Those are the type of things we look for to sense any changes in our key markets, but I think everything else you said, Pierre, is very valid.

Okay. From an FMC standpoint, obviously dealing with this, you guys have done a great job with the price increases and getting ahead of offsetting the pressures you're feeling. You alluded to more this year. Could you help me understand the timing of it? And ultimately is 70% of our recovery the right number to think about or does it go higher or lower from here?

Well, I think when we look at 2016, as we said, we're going to pretty much cover with price increase the FX impact for two reasons. First of all, because we expect the FX impact to be less than in 2016 than it was in 2015. Remember, the biggest problem in 2015 was the high volatility and rapid devaluation of the real in the third quarter. That was unprecedented, more than actually the overall devaluation of the real. So we're not expecting that situation. In a less impact situation from currency, the price increase we need going into 2016 is less than the last year because a big part is a recovery of currency issues from price increase which are already in place. So I would say we're entering 2016 with about 60% of the price actions already in place to recover the currency impact and the rest is to happen during the year.

Your next question comes from the line of Mike Sison with KeyBanc.

Pierre, I was wondering if you could -- there was a time when you thought, for 2016, maybe [indiscernible] earnings for ag could be in the mid-$600 million and clearly a lot has changed since then. Foreign currency has taken a big hit. But if you could bridge the gap or maybe talk about $400 million 2016 and where the opportunity is, what's the earnings power of Ag Solutions over time?

See, I don't think from a business strength standpoint anything has changed for FMC. I believe we remain one of the lowest cost manufacturer of active ingredients and maybe the most flexible one with our asset-like model. We believe our technology strategy is even better today than it used to be and our formulation strength has not changed. So it is right now the earnings potential of FMC Ag Solutions has not changed. The problem is we're in a situation where demand is very low, decisions from the growers are pushed to the last minute and in currency situation which has been, as you can see, the biggest problem. So 2016 is going to be focused for us on earnings growth. There isn't much we can do around volume demand. We're also going to be highly, highly disciplined. We're not -- I can tell you one thing, we have not done that in 2015 and we're going to stick with that strategy in 2016, we're not going to run after market share. We're working our way from low-profit sales and we're increasing price to recover the currency impact. That should position us, as soon as the cycle turn, to a very strong performance. So to expect the business going into the mid- to high-teens growth as soon as the market turn around, I have no doubt about it. The model is still intact. Right now it is inventory and I would say our worries are mostly placed in North America and Brazil.

And then your forecast for 2016 looks for volumes to be down, a couple percent, the minus 50 there in terms of the impact for earnings -- oh, maybe that's an earnings impact. But it does sound like if the markets are down mid to high single digits, you're going to do better than that. And just wanted to get a better understanding why or why you feel that your volumes will be better than the market being down as it is?

No. I think if you look at our overall performance from the business from a revenue standpoint, we're going to be about in line with the market if you remove the impact of third-party sales. So really, think about our business from a volume standpoint, we're going to be in line with the markets. So if it's a mid to high single-digit, call it a 7%, pure volume driven by market demand, that's where we're forecasting a\our performance. Now, our decline in sales are going to be higher because we're -- and I'm talking volume here, okay -- because we're working away still from third party -- the run rate at which we close 2015 is leading to a number which is higher than 2015 because we started this process during the year. And I think it's about an incremental $100 million of third-party sales. We're working our way in 2016 which make our performance from a revenue standpoint a bit worse than market. So two things, we market from a demand standpoint. For us third-party sales, $100 million, work our way. Where we're going to outperform the market, as we show in one of the slide, I think it's slide 9, the one where we have the earnings driver, is because of the work we've done around integration, around the cost and also two drivers of growth which are synergies from Cheminova and also the new product introduction. Let me finish. Let me maybe be more precise in the quantification. If you think about our sales, we're going to be declining, just look at about three big buckets. Sales driven by market decline about $150 million to $200 million. That's the market demand. Think about third party, we're working our way with no profit implication about $100 million and think about growth which would be coming from synergies and new technology, from $50 million to $100 million. Those are the three big bucket of our revenue drivers in 2016.

We'll now go to your next question which is from the line of Chris Parkinson with Credit Suisse.

Can you give us a quick update on anything incremental on your potential across Europe, specifically on the back of Cheminova? You mentioned some nice data points in fungicides, but how are you thinking about your now integrated aggregated portfolio? And then also, just in the near term, quick question, do you believe the mild winter will benefit insecticide sales during the first half? Thank you.

Talking about Europe, we talked a lot about the direct market access and where the growth is going to come from. We're already seeing that, as Pierre alluded to in the earlier part of this call. We're seeing now our -- primarily our herbicides from FMC getting pushed through the Cheminova pipeline. So we've gone direct in the UK now and we're also expanding into Spain. So we're seeing that geographic growth for herbicides that we wanted. Obviously we're introduced new fungicides across the region. So everything we thought of in Europe is coming true. The country managers, the sales force from Cheminova have embraced the portfolio from FMC and are now gearing up to put those products into the marketplace. So from my perspective, Europe is exactly where we thought it would be and, obviously, is going to be growth for us going forward. To the second part of your question on the insecticides, obviously we've had, especially in North America, probably three years of extremely low pest pressures across the U.S.. One could say that a warm winter would allow the pests to come back, but, frankly, we don't know. We're not forecasting a strong pest season. We tend to forecast an average season and see where that takes us, but we'll know more about that as we get into the end of Q1 and Q2, we'll get a better feel for that.

And then just also very quickly in Argentina, is most of the potential here for your herbicide portfolio? And do you have any kind of new or preliminary plans or initiatives for southern [indiscernible] in particular? And if so, how are you balancing that long term potential with FX credit volatility, length of terms, et cetera? Thank you.

Argentina has been a good market for us despite some difficult conditions in getting import licenses. Our predominant market down there is preherbicides for soy. We're a market leader. With the Cheminova acquisition, we bring along more fungicides and insecticides that we can put through the channel. We're actually doing a couple of things to expand our presence in Argentina at the moment. First of all, is the consolidation of our market access with Cheminova. And then secondly, we're looking at expanding our supply chain in Argentina to more reflect what we do around the rest of the world in terms of toll manufacturing. We're actually going to be importing more active ingredients and formulating in country. That helps us two ways. First of all, it allows us to formulate products for Argentina on the ground, gives us more flexibility. And, secondly, it helps with our cost base which is in local currency. So we do see Argentina growing. It has been a good market for us over the last couple of years and we think our portfolio is ideally suited to where they're going. We're seeing weed-resistant acres continue to increase just like we do in the U.S.. So I'm very bullish on Argentina.

Your next question comes from Daniel Jester with Citi.

Maybe just another one on pricing in Ag Solutions. I think you talked about the linkage between the real and the U.S. dollar in Brazil and your ability to get pricing. But can you talk about how that is evolving in other parts of the world which has had other FX challenges? And, specifically, are you seeing the competition also raise prices as aggressively as you or do you think there's a risk that you're getting maybe a little ahead of the market, given how challenging the macro conditions are?

I think the ability to increase price is very different in places like Brazil where the local pricing in real is indexed to a dollar currency and there is a mechanism, usually which is in place now. It always ends up being a negotiation. And I believe, yes, we have been the most aggressive at increasing price because we believe our portfolio can afford that and also believe that today predicting the profitability of the business is critical, especially when the cycle will turn because the cycle will turn and we believe we will be in a much stronger position that time. It is more difficult to increase pricing in location like Europe or even Asia where there is no indexation on the currency on the dollar because there is purely a supply/demand and negotiations. So I would say most of our pricing recovery comes from Brazil rather than other region. And, yes, you are correct, I don't think we're ahead of the market because, as you can see, we only partially recovered the currency negative impact with price increase, but, yes, we were -- and we believe it's the right strategy -- the most aggressive on that front.

And then maybe just quickly on Lithium, you talked about $15 million of incremental growth in profit next year from price mix, lower manufacturing. There's a lot of moving parts in the Lithium story today and certainly given the environment in Argentina, so maybe just a little bit more color on what's driving that profit outlook? And then also any change in your willingness to do incremental investments in your Lithium capabilities in Argentina, given what's happened politically over the last couple of months? Thanks.

Sure. So the $15 million of earnings increase we're forecasting is driven by multiple factors. First of all, you know that we've been working very hard at fixing our operational issues and I think we're there. Most of our plant -- there are issue somewhere, but most of our plant are operating much better than they used to. And also the currency, the peso in Argentina, has been helping us from a cost standpoint and is going to be a tailwind in 2016. Additionally, there is the price and mix. We have a very strong product line and technology for ethiomydroxide. We're one of the critical and leading supplier and that market is increased in a tight supply situation which allow us to right price the product. So all in all, pricing, mix, better operation and currency will be the driver in 2016. Around capacity, I think capacity decisions will be in line with our strategy. First of all, we're working very hard at debottle making our plants, especially lithiumhydroxide, to make sure we can supply our customers with the growth they need. From a capital investment standpoint, we believe our key competitors today have made decisions to increase lithium carbonates in a significant way, so we do not believe volume of lithium carbonate from FMC will be required to serve the market. There will be plenty of products and we will be able to have supply agreements on lithium carbonate from other companies. So we do not believe -- even with an improving situation in Argentina, we do not believe we need, going into 2017, to increase capacity in lithium carbonate -- keep [indiscernible] the plant. Where we're looking at capital spending to improve our sales is in the downstream specialty business in mosten [ph] lithium hydroxide. This is where most of the capital spending will go in the next two or three years.

Your next question comes from the line of Brian Maguire with Goldman Sachs.

Pierre, I was hoping you could comment on some of the consolidation that's been happening in the space lately. We've seen two pretty large deals announced in the last, call it, three or four months. Just kind of wondering competitively, if you see that having any positive or negative impact on you or if consolidation could support a better pricing or competitively do you see the guys around you getting a little bit stronger?

Sure. Let me talk about the two deals. First of all, the one is Dow and DuPont. The consolidation of these two companies together will certainly create a very strong company with a very solid seed and chemicals portfolio, but honestly, this is two years away. You first need to have the time to get the approval from Dow and DuPont to merge as a single company. And once that is done, they need to do integration and then from integration they need to break up the company as they said into three companies and merge together the two ag business. So I believe it's an interesting decision which creates a very good company, but their impact on the market or the competitive landscape is still a couple of years away, so not a short term concern for us. The SYNGENTA Cheminova -- [indiscernible] ChemChina, sorry, the SYNGENTA ChemChina, my view is that it doesn't change much to the competitive landscape because if I understand well, through what I've read and what I've heard, SYNGENTA will be operating as a stand-alone company and instead of being a publicly-traded company, they will have a single shareowner which is ChemChina. So earnest ChemChina has a very fundamental push, a very fundamentally different strategy which, I don't think so, into SYNGENTA, we would be facing the same type of competition that we've been facing in the past. So my point of view at this stage, it's pretty much no change to the landscape for the next couple of years and we'll see what will happen two years down the road.

One more if I could, just on the cadence of the ag guidance through the year. I think, historically, 1Q has been the strongest quarter for per segment earnings and I know Cheminova changes the profile a little bit, but the outlook for 2016 looks like it'll be one of the -- or at least a below-average quarter if not the weakest quarter through the year. Just kind of wondering if you could help us understand why things will pick up sequentially from kind of a weaker 1Q and what needs to happen for that to play out?

Our belief is this year is going to be a bit different from what we've seen in the past for a very specific reason. As I said in the prepared remarks, we believe that North America market has maybe a higher level of inventory than it used to have in the previous years and consequently the decisions to purchase or fear the growers or distributory inventory, are going to be made at the last minute. So we're going to have sales in North America much more spread over a Q1, Q2 and Q3 period than we used to have where people would really buy very strongly in advance in the fourth quarter. So the fact that we have a different profile in the first half of the year is purely due to North America and North America being an important region for us from an earnings standpoint. That's why it's spread in a more balanced way the earnings over the year. It is more that than the Cheminova impact. I remind you that Cheminova is very small. It's very small in North America.

Your next question is from Brett Wong with Piper Jaffray.

Just wondering, you talked about this elevated inventory that you're expecting through 2016. Can you just talk about what's going to improve that as we look out over the next couple of years?

Yes. I think what we're looking at is the demand, the demand does not vary in our field in an enormous way. I think what will be resolving the issue is there is growth in demand, 2% or 3% every year, usually to resolve the end-market demand. And then start to use ratio should be decreasing in the next two years. We should start to show an increase in the commodity prices, together with the fact that today all of the ag chem companies, as you've seen in their performance, are selling less. So if you look, there is much more product on the ground, product which are put on the ground and product which are sold by the chemical industry into the market and that differential is what is decreasing the level of inventory. You just need strong weather or strong pest pressure combined with more product on the ground than the industry is selling and you could see a turn in 2017. But we're not operating under the assumption that it will be any turn in 2016. I think that's where we're focused and we're not assuming anything.

Just a quick one, in Brazil, wondering if the early dry conditions impacted any fungicide application in the early part of the season?

Yes, obviously dry conditions do not help fungicide use. We've seen a lot of variable conditions in Brazil. Fungicides for us is a smaller part of our portfolio, so we've not really been impacted that much. But you've got to balance that with other parts of Brazil have been very wet. So you're going to get good pressure there. So I'm not so sure that fungicides will be off a significant amount in Brazil.

Your next question is from Don Carson with Susquehanna Financial.

This is [indiscernible] on for Don. Thanks for taking the question. Just wanted to ask about your outlook of the impact of the extended approval on authority volumes? And as a follow-5up, the impact of Intacta on Brazilian soil insecticide volumes in 2015 and your outlook in 2016 as Intacta acreage doubles. Thank you.

Taking the first one, obviously extent is an important platform. We don't expect much impact in 2016, obviously given where we're, but we do see that as a growth aspect for us in 2017 and 2018 and going into 2019. So it's something we've invested a lot of time and effort in. We're a market leader in the preherbicide section in North America, so, yes, we do see that as a positive for us going forward. With Intacta, Intacta has had a lot of success in Brazil, obviously affects certain types of insecticides and not others. I think we've all been affected by lower spray amounts in Brazil. I expect that to continue. But we're seeing different types of pest pressure coming into Brazil. Certainly the piercing pests such as stink bugs, we're seeing much more activity in that area. So you've got a different mix going on in insecticides, but overall Intacta has definitely reduced the amount of sprays.

Your next question is from Steve Byrne with Bank of America Merrill Lynch.

This is Ian for Steve Byrne. Thanks for taking my question. Just following up on some of the inventory issues, how much did FMC sell into North America in this fourth quarter? And what is the logic behind that if inventory levels are high?

We don't break up the sales by quarter by region, but the inventory, we believe, North America actually has been less talked about from an inventory level compared to Brazil because Brazil was -- had an overwhelming impact because it was combining high inventory level and currencies. So when you put those two together, you have the dramatic situation from a business performance we've heard about. Obviously North America doesn't have the piece which is the currency impact, so we've thought less about it, but we've come quickly to realize that purely from an inventory standpoint, about the same phenomenon we have seen in Brazil is happening in North America. Commodity prices being low, growers were very cautious in term of planting decisions and purchasing decision, as their colleague were in Brazil. The crop protection industry kept on selling product and there was a point where there was more product going into the channel than product going on the ground and that creates, as in Brazil, a very elevated situation. Additionally insect pressure was not great in the previous year which has been creating even more of a problem. So all of that has been compiling the situation which, for us from an inventory and supply-chain standpoint, is very close to what we see in Brazil less the currency effect.

Okay. And then just one follow-up on the Cheminova synergies from sales, moving some of that FMC product through Cheminova's distribution, is that because FMC already has existing registrations in all these countries? And what is the outlook for further growth as we move forward in time either from active ingredients or for the registrations?

Yes. I mean, a lot of the countries where Cheminova have market access that we didn't, predominantly in Europe and parts of Asia, we actually had registrations already, so it allows us to move forward pretty quickly. That's the reason we got synergies in 2015 to be pretty quickly off the bat. And in 2016 as well. So from a registration standpoint we think we're well-placed. And then you ally that to the fact that our innovation platform is still obviously delivering on our formulation capabilities, we probably have somewhere close to 60 products we're launching around the world in 2016. Obviously you don't get a tremendous amount of revenue in the first year of a launch of a formulated product, but it goes to show that what we're doing on a formulation standpoint is continuing through these times in the ag space. We believe that innovation is going to be super critical for us as we go forward, so you see the growth not only from the synergies of FMC and Cheminova coming together, but the launch of new products as well into the marketplace.

Your next question is from Dimitry Silversteyn with Longbow Research.

Most of my questions have been answered, but I have just a couple of follow-ups. First of all, what sort of debt level do you expect to have by the end of 2016? In other words, you talked about cash generation, how much of that is going to be deployed toward debt reduction?

I think we've been pretty clear where we want to get our leverage down to which is the mid 2 to 3 times range. We're not there right now. So until we get to that point, whether that's through expansion EBITDA or pay down in debt, you should assume surplus cash is going to be deployed in that direction.

Okay. So what about the free cash that calculates for you for the year, I'm safe in assuming that it's going to go towards debt paid out?

Today that's the safest assumption to make, yes.

And then looking at the first quarter guidance for the ag business, it looks like at the midpoint it's basically flat year over year versus last year, despite the fact that you're going to have Cheminova profitability that you didn't have last year. So is the offset to the acquisition benefit and the cost savings you are realizing from that, the deterioration of North America market, is that going to be really that bad in the first quarter? Is that basically the takeaway?

Yes. I think it's the right way to look at it. I might not call that a deterioration, but the lack of improvement of the ag market in North America and maybe a pushing of the decision to [indiscernible] in the third quarter. But that's the right way to look at it which is the overall spread of business over three quarters and the lack of growth -- not growth, we believe the business will be down in North America year on year are raising the benefit from the Cheminova first quarter.

Okay, Pierre. Maybe I can say this differently and see if it still makes sense. The sales that you typically get over the first couple of quarters of the year in North America and the European markets, you would expect those sales to basically occur over a three quarter period, but in terms of aggregate, you're not looking for a significantly down demand year in 2016 versus 2015? It's just that it's -- demand is going to be spread over three quarters versus two?

If you look at -- yes, part of your statement is correct, there is more of a spread over three quarters, that is correct. There is also, as I said, a market we expect to be down in North America. So we're expecting the market in North America to be down 5% to 10%, that would be a range. The two biggest down markets, that will be Brazil and North America. So you combine a spread of disune in [indiscernible] over three quarters together with a down market in North America, not in Europe, in North America of mid-single digit, that is what create the situation.

Okay. And if I can look forward to the second quarter, I know you guys can't provide guidance for it, but if I remember correctly, most of Cheminova's European sales are set up to take place in April and maybe early May which you sort of missed when you completed the acquisition later in May in 2015, so we would expect to see more of a step-up, if you will, in profitability of the business in a year-over-year basis in the second quarter than we've seen in the first?

I think about the North America European business more balanced over three quarters than it is over the second quarter. So right now we don't want to go into starting to guide through 2Q Q3 because it start to be a very difficult exercise, especially when you're in the ag business. But I think we'll have more of the [indiscernible] of the sales over three quarters than we had in the past.

Your next question is from Laurence Alexander with Jefferies.

This is Dan Rizzo on for Laurence. Just a question on omega 3s. Are you seeing any signs of pricing in 2016 as part of the turn or is it going to be somewhat until 2015 where you're subject to overcapacity and just some pricing pressures?

What we're seeing in Omega 3 is a mix effect. We do expect to see in our mix in the nutraceutical market and improvement in products we're launching that are launched at a higher price. If you look at the core of the market, though, the middle part of -- when we talk about concentrations, the middle to low part of the concentration, we don't expect to see improvement and that market still remains an oversupplied market where demand is not growing rapidly. And so we see a similar set of pricing competitive dynamics in that part of the market in 2016 as we did in 2015.

I think on the last call, maybe I'm wrong, but you said that potentially you could see strategically exiting the omega-3 market, but it wasn't the right time. Is that kind of still the same outlook or same thought process?

Here is what we believe. Our market strategy of participating into the pharmacy goal and nutraceutical market, has not changed. We're still going after all of these market high concentration and mid concentration product. What we're doing today is focusing more on supplying those market from one of the asset we have, rather than the high concentration [indiscernible] asset which we do not believe is an asset which is necessary today for us to participate in the pharmacical market. So it is not a change in the market we intend to participate in, but it's a change in our manufacturing strategy to serve those markets.

Your last question comes from the line of Rosemarie Morbelli with Gabelli and Company.

I have a couple of small ones. First of all, do you anticipate that the announcement of the addition capacity on the lithium carbonate will have a negative impact on overall pricing as those big plants come on stream?

Not in 2016. I think pricing will be [indiscernible] for lithium carbonate in 2016 as most of the capacity increase already called for from a demand standpoint. Will there be some pricing pressure in 2017? We'll have to see what the demand is. But if it is a question -- and I cannot answer that right now, but if it is a question on pricing, it's a 2017 question.

And then are you successful in getting your receivables in Brazil? Are the farmers paying you in a timely -- well, not a timely fashion, they don't, but in the way you would expect or the fact that you have done so much restructuring is creating the opportunity for someone to just not pay?

Rosemarie, it's Paul. I would answer as follows, the restructuring is not a factor in this. The way we restructure and what we restructured was done very carefully, so it does not at all impact on our ability to collect. The factors that are driving our ability to collect are really driven more by market conditions and I don't necessarily just mean ag market conditions, but as much the financing market conditions down in Brazil where we're seeing a continued cautiousness on the part of the Brazilian grower to hold on to his liquid resources. A lack of confidence that financing will be there for them as they head into the next growing season is essentially across the board creating challenges to collection. Compounding on top of that, of course, as we've discussed, is the fact that the most leverage you have is when the grower has to buy new product. When you have pest pressures down and when you have excess inventory in the channel, it just makes that collection process even more difficult for us. I would say 2015 unfolded very much in the way we described. I think we talked at length about it being a multi-year program to reduce the receivables balance in Brazil and 2015 played out really exactly as we had expected. The next couple of quarters will be the next key benchmarks for it as we look at a collection in the first half of the year and for us, at least, heading through the back end of 2016 is the first time we'll be able to show real measurable progress down there in Brazil.

How much do you think you can reduce your receivables from Brazil in 2016 versus how much did you reduce it in 2015?

We will certainly reduce it more in 2016 than we did in 2015. We did reduce it in Brazil in 2015, but not by a huge amount. So we definitely expect to make more progress on that in 2016.

And one last one, if I may. Could you talk about the protein demand in China? Are you seeing that improving or the decline when the price of milk and whey was really high has not recovered yet.

We continue to see in China a dairy market that's fairly on a demand -- on a growth basis flat to down. We saw a big swing in our sales last year due to a correction in inventories for our colloidal products into that market and to some of the plant-based beverages such as peanut milk. That's worked its way off and the underlying demand is coming through, but that demand is fairly flat. We saw a modest growth ourselves. The overall market, however, is flat to down.

That's all the time we have for the call today. I want to thank everyone for joining us. I'll be available to address any additional questions you may have. Thank you. Have a good day.