FMC Corporation (FMC) Q1 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for joining us, and welcome to the First Quarter 2026 Earnings Call for FMC Corporation. This event is being recorded. [Operator Instructions] I will now hand the conference over to Mr. Curt Brooks, Director of Investor Relations for FMC Corporation. Please go ahead.

Good morning, and welcome to FMC Corporation's 2026 First Quarter Earnings Call. Today's prepared remarks will be provided by Pierre Brondeau, Chairman, Chief Executive Officer and President; and Andrew Sandifer, Executive Vice President and Chief Financial Officer. After prepared comments, we will take questions. Our earnings release and today's slide presentation are available on the FMC Investor Relations website, and the prepared remarks from today's discussion will be made available after the call. Let me remind you that today's presentation and 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 earnings release and in our filings with the Securities and Exchange Commission. Information presented represents our best judgment based on today's understanding. Actual results may vary based on these risks and uncertainties. Today's discussion and the supporting materials will include references to adjusted EPS, adjusted EBITDA, free cash flow, organic revenue growth and revenue, excluding India, all of which are non-GAAP financial measures. Please note that as used in today's discussion, CTPR means Chlorantraniliprole, earnings means adjusted earnings, EBITDA means adjusted EBITDA and sales refers to sales excluding India. 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. With that, I will now turn the call over to Pierre.

Thank you, Curt, and good morning, everyone. During the first quarter, we delivered results that exceeded the midpoint of our guidance range. In addition, we made good progress on our 2026 operational priorities, which are listed on Slide 3. These are strengthening the balance sheet through targeted debt reduction of approximately $1 billion, improving the competitiveness of our core portfolio, managing the post-patent transition for Rynaxypyr and supporting sales growth of new active ingredients, including Isoflex active, fluindapyr and Dodhylex active. I will start by providing an update on the progress of these 4 operational priorities, beginning with the debt reduction. We are continuing to target approximately $1 billion of debt paydown during 2026. The sale of our India commercial business continues to progress very well. We are in late stages with several potential buyers and expect to sign a definitive agreement in May. In addition, we are in advanced discussion with multiple potential partners regarding licensing of one of our new active ingredients, which we expect will include an upfront payment. We anticipate concluding talks in the coming weeks. The remainder of the debt paydown is expected to come from proceeds from the sale of noncore assets, including potential sales of noncore businesses and/or molecules as well as multiple sizable real estate opportunities, some of which are in advanced negotiations. Next, FMC continues to take decisive action to optimize our manufacturing cost structure and rebuild the competitiveness of a non-diamide core portfolio in a market increasingly impacted by low-cost generic competitors. We intend to shift production from high-cost plants to lower-cost sources in Asia. We expect this transition will be completed by Q1 2027 and that will result in a more competitive core portfolio. Additionally, in advance of the sale of our India commercial business, we have already completed the restructuring in Asia to account for the reduced size of the business. We continue to look for opportunities to further optimize our cost structure across the company in 2026. Regarding Rynaxypyr, we continue to advance our post-patent strategy with a clear focus, driving sales growth while keeping overall branded earnings that flat. Our strategy is progressing, and we are seeing early signals that give us confidence. For example, we are observing positive reaction to a price repositioning with strong volume growth for high load formulations and differentiated mixtures. In addition, we are already seeing some small early share gains from other classes of insecticides. On the earnings side, ongoing cost improvements are supporting margin that are in line with our expectations. We continue to pursue additional opportunities for cost reduction, which will further improve the competitiveness of the Rynaxypyr business. We are still in the early stage of a post-patent Rynaxypyr market and believe that some customers are adopting a wait-and-see approach as they gauge the availability and efficacy of CTPR generic offerings. Our strategy will pay out over the coming quarters as we implement our plan. And finally, regarding our new active ingredients, we are seeing solid growth. Sales of these products doubled year-over-year in the first quarter, highlighting the increasing demand from growers. The growth of this product is expected to build momentum, driven in part by new launches and additional registration. For example, we recently received regulatory approval for Isoflex active in the EU. This is a significant achievement as it is the first new herbicide approved in the EU since 2019. We expect product launches to begin in 2027, giving us new or expanded access to more than 55 million planted hectares of cereals, corn, oseedrape and potato in the EU. In addition, many of our customers have requested preregistration exemptions to use Isoflex in Italy, Germany, France and Spain this year. If granted, this will represent upside to outlook for the second half. We continue to concentrate on these 4 operational priorities as the basis for improved results. In parallel, the Board authorized evaluation of strategic alternatives announced in February 2026 is progressing and multiple options are being evaluated. Turning to our first quarter results. Slide 4, 5 and 6 provide details on our performance. First quarter crop protection market conditions were mostly in line with our expectations. Challenging margins and stressed liquidity for customers and growers led to cautious purchasing in most countries. Lower grower margins also increased the willingness to use generic products or skip some preventative applications. As expected, the regions with more pronounced competitive pressure were LatAm and Asia, where generics are more [indiscernible]. First quarter sales of $762 million were $12 million above the midpoint of the guidance, driven by better-than-expected FX and volume. While sales were 4% lower than prior year, sales were up 1% on a like-for-like basis after excluding India from both current and prior year periods. Sales made under the FMC brand grew 6% on a like-for-like basis and included strong volume growth in EMEA and North America in herbicides and Cyazypyr. This was mostly offset by lower sales to diamide partners. These partners accounted for nearly half of our overall price decline of 6%. The remaining drivers of lower price were branded Rynaxypyr price, repositioning to support our post-patent strategy and a competitive market for our legacy core products. Volume grew 2% and FX was a 5% tailwind. The growth portfolio significantly outperformed the core portfolio due to higher sales of branded salzypyr, new active ingredients and plant health. First quarter EBITDA of $72 million was $17 million higher than the high end of our guidance range with FX, cost and volume all favorable to expectations. Adjusted loss per share of $0.23 was $0.15 better than the guidance midpoint due to higher EBITDA. Looking ahead to Q2, our financial outlook is listed on Slide 7. We expect second quarter revenue to be between $850 million and $900 million. The 17% decline at the midpoint is almost entirely due to lower sales to diamide partners and the removal of India. Excluding these 2 factors, our results would be similar to prior year as branded volume growth in most regions and the low single-digit FX tailwind are offset by lower branded pricing due to competitive market in our core products as well as the brand Rynaxypyr pricing action. Adjusted EBITDA is expected to be $130 million to $150 million, down 32% at the midpoint to prior year. Lower sales are driving the decline, partially offset by favorable costs. Adjusted earnings per share is expected to be between $0.16 and $0.26. This represents a decline of 70% at the midpoint to prior year due mainly to lower EBITDA and higher interest expense. Turning to Slide 8. Our full year 2026 financial guidance ranges are unchanged from our last call. Sales of $3.6 billion to $3.8 billion represents a decline of 5% at the midpoint as a mid-single-digit price decline and the removal of India sales are partially offset by volume growth, including strong contribution from new products. EBITDA is expected to be $670 million to $730 million. At the midpoint, this is a 17% decline, mostly in the first half as lower price and FX headwind are partially offset by lower cost and volume growth. Adjusted EPS is expected to be $1.63 to $1.89, which is a 41% decline at the midpoint, mostly due to lower EBITDA and higher interest expense. We are maintaining our full year guidance despite the increased uncertainty related to tariffs and the conflict in Iran. We are beginning to see higher energy, transportation and petrochemical costs flow through to product costs. At the same time, current tariffs are lower, and there is potential to recover previously paid tariffs. At this stage, it remains difficult to forecast product costs or the magnitude and timing of future tariff impact of recoveries given the uncertainty around the duration of the conflict in Iran and potential additional U.S. trade actions. As a result, we are currently assuming that the Iran-related cost pressure and tariff-related benefits largely offset each other. We expect to provide an updated outlook at our next earnings call as we gain greater clarity on how these factors may affect full year results. Slide 9 provides our implied second half guidance using our first quarter results and our second quarter outlook. At the midpoint, we are expecting sales and EBITDA to be largely consistent with last year's second half. Sales, excluding India, are expected to be up 1% at the midpoint versus last year, with volume growth outpacing a mid-single-digit price decline and a minor FX headwind. EBITDA is expected to decline 6% at the midpoint as lower price and minor FX headwinds are partially offset by volume growth and lower costs. Adjusted EPS is expected to be down 15% due to lower EBITDA, higher tax and higher interest expense. Turning to Slide 10. I'll walk through the key factors bridging second half 2025 EBITDA to 2026, and why we are confident in our expectations for the second half. We expect volume contribution to EBITDA to grow with roughly 2/3, driven by new active ingredients, particularly in LatAm and EMEA. We anticipate a mid-single-digit price decline, which is consistent across the full year. An FX headwind is expected to be mostly offset by cost favorability. Our expectation for the second half volume growth are reinforced by positive signals we are seeing in LatAm. At the end of April, we already have orders representing 32% of our H2 direct sales in Brazil, which validates our confidence in the second half outlook. By the end of June, we are expecting orders representing about half of second half direct sales. We have a higher percentage of commitment on a higher sales number versus last year, reflecting the impact of the new direct sales organization put in place in 2025, which is now in full action. The positive signals we are seeing in LatAm, combined with the demand for new active ingredients, give us confidence in achieving our second half targets. By the end of Q2, we also expect to have more clarity on a review of strategic options as well as debt paydown progress. We anticipate communicating these updates at the next earnings call. I will now turn the call over to Andrew.

Thanks, Pierre. I'll start this morning with a few income statement items. First quarter sales benefited from a 5% currency tailwind, primarily coming from strengthening of the euro and the Brazilian real. As we progress through 2026, we expect FX to move from being a tailwind in the first half to being a minor headwind in the second half, resulting in an FX impact on revenue for the full year that is roughly neutral. First quarter interest expense of $64.8 million was up $14.7 million. This increase is driven by 2 factors: the higher rate on the subordinated debt we issued last May and higher short-term domestic borrowing costs. We continue to expect full year 2026 interest expense to be in the range of $255 million to $275 million, up approximately $25 million versus the prior year at the midpoint due to higher borrowing costs of our senior and subordinated notes following the redemption of the notes maturing in October of '26. We continue to expect depreciation and amortization for full year 2026 to be between $160 million and $170 million. The effective tax rate on adjusted earnings in Q1 was 17%, in line with our expected full year effective tax rate of 16% to 18%. Moving next to the balance sheet and leverage. We ended the first quarter with gross debt of approximately $4.5 billion, up $459 million from year-end. Cash on hand decreased $194 million to $391 million, resulting in net debt of approximately $4.1 billion, up $652 million from year-end, consistent with our normal seasonal working capital build. Gross debt to trailing 12-month EBITDA was 5.7x at quarter end, while net debt to EBITDA was 5.2x. We've continued to work with our bank group to further evolve our revolving credit facility to be more in line with our current credit ratings. On April 16, a further amendment to the revolver became effective. This amendment transitions the revolver to being fully secured, moving away from the springing collateral concept included in the prior amendment. The amended agreement maintains the current capacity of $2 billion and the current maturity of June 2028. We added a collateral package to secure revolver lenders worth approximately $6 billion through direct liens and up to approximately $9 billion, including subsidiary guarantees and pledges of stock of subsidiaries. As a result, we are substantially over collateralized. With the latest amendment, we now have 2 maximum leverage covenants. The first is maximum allowable total leverage, which considers all of FMC's outstanding debt. This total leverage covenant will not be measured until December 31, 2026, when it will be reinstated at 6.75x through December 31, 2027. The second is the newly added secured leverage covenant, which limits the amount of secured borrowing allowable to 3.5x trailing 12-month EBITDA over the life of the credit agreement. On March 31, our secured leverage would have been about 1.3x, well below the new covenant. To be clear, while the maximum total leverage covenant was technically waived for the first quarter, we were in compliance with the previous covenant. Total leverage was 5.67x at March 31 as compared to the prior total leverage covenant limit of 6.0x. We are appreciative of the 100% support from our bank group for these changes. We intend to go to market this quarter with a secured high-yield bond offering to redeem $500 million of notes that mature in October, market conditions from renting. Should market conditions turn unfavorable, we have more than adequate available liquidity to redeem the maturing notes if necessary. As we move through the rest of 2026, we will use all proceeds from asset disposals, licensing agreements, real estate opportunities, et cetera, to pay down debt. Moving on to free cash flow on Slide 11. Free cash flow in the first quarter was negative $628 million, $32 million lower than the prior year period. Lower EBITDA drove a decline in cash from operations year-over-year, which was only partially offset by lower capital spending. We continue to expect free cash flow for 2026 to be in the range of negative $65 million to positive $65 million or breakeven at the midpoint. This includes approximately $150 million in restructuring cash spending. Compared to the prior year, lower EBITDA, higher restructuring spending, higher cash interest expense and modestly higher capital expense are expected to be offset by improved working capital performance in the ongoing business, the liquidation of India working capital and lower cash taxes. With that, I'll hand the call back to Pierre.

Thank you, Andrew. I'll close by simply saying that we remain focused on improving the business and results through the 4 operational priorities. I am happy with the progress we have made so far, and I expect that starting 2027, we will see more meaningful benefits reflected in our sales, earnings and balance sheet. Based on the actions we are taking, I believe the first half will represent an earnings trough for the business with higher sequential earnings in the second half of this year, followed by improved full year results in '27 and 2028. With that, we are happy to take your questions.

[Operator Instructions] Your first question comes from the line of Mike Sison with Wells Fargo.

Good start to the year. Pierre, you gave good detail on your second half outlook. Where do you think the biggest challenges are going to be to sort of hit that? Obviously, Brazil is going to be the biggest part of that. And then I'm just curious, it sounded like you were more confident in racking up orders for the second half. Maybe a little bit more color on the new sales organization and why those orders are coming in maybe better than last year?

Yes. Thanks, Mike. Let me try to do one thing because I think that maybe the most -- the best way to explain H2 is to tell why we do expect such a ramp-up coming from H1 and what are the very key drivers. So I'm going to try to put that into a few buckets and tell you why we are confident. I'm going to take -- if you think about it, our forecast in H2 at the midpoint is about $425 million of sales improvement in H2 versus H1. So I'm going to try to take the 3 main buckets allowing us to have the expectation of this $425 million increase. The first one is the non-diamide core. We are expecting $150 million to $200 million of improvement. And the main driver is direct sales in Brazil. As I said in our prepared comments, we already have a very significant number of orders in hand. By the middle of the year, we should have half of the orders required to deliver our H2 number in Brazil. And that is because the new sales organization is now in fully [indiscernible]. Remember last year, we made that decision that organization was ready to act by April, May. But as you can see with the numbers we are giving of the orders we have in hand, we missed a big part of the season, not this year, and our orders in hand are already much higher than last year on a much bigger target number. Number two, of the improvement, about $50 million to $80 million is Rynaxypyr. Number one driver, and we see that every year, there is nothing new to it. It's always the same sequence. There is significantly less partner headwind in the second half than what we see in the first half. We also have a stronger branded performance in the second half. And the last one, the third one, maybe the most important is our new active ingredients, which are accounting for about $175 million to $200 million, mostly LatAm, North America, but also remember, the cereal season in EMEA in Great Britain, where we sell Isoflex is in the third quarter. So non-diamide, $150 million to $200 million, Rynaxypyr, mostly with the less headwind from partners, $50 million to $80 million and new AI is about $175 million to $200 million. On the AI is very consistent with what we are seeing in the first quarter in terms of demand. Now that gives you a range of $375 million to $480 million for a guidance of $425 million. Puts and takes, obviously, will not be everything at the low end or at the high end. And we do have growth expected in [indiscernible] Plant Health. So that gives us a comfortable range versus a targeted number. If I would do the H2 to H2 '25, '26, that's a very simple story. That's what we had in the prepared remarks. Basically, direct sales are the driver with new active ingredients, and that's offset by FX and price. So Mike, that's about the -- as precisely as I can do of a bridge with much higher level of confidence in each of those 3 buckets with what we are seeing right now.

Your next question comes from the line of Duffy Fischer with Goldman Sachs.

So a question on Rynaxypyr and in particular, the partner sales. I think you've talked about that being $200 million in revenue, which for the company would, let's say, be 5% or 6% of total sales. But last year in Q1, your price was down 9%. You called out partner sales as being half of that. You also called out this Q1 partner sales being half of your price decline of 6%. So it seems like collectively, on a 2-year stack, that's been like 7% of total company sales price down on something that's like only 6% or 7% of the company's sales. So the math doesn't triangulate for me at least. So can you talk about how big was that partner sales at the peak? How big is it on the run rate today? And roughly how much is the price fallen for partner sales in particular?

Yes. I'm trying to reconcile those numbers, especially using '25 to '26, that's the easiest comparison. First, in '25 versus '24, remember, that's where we had the highest price drop because that is the time when we had the highest cost reduction in the manufacturing of Rynaxypyr. So we are still seeing an impact as we continue to lower price, but less in '26 than it was in '25. We do expect to keep on reducing cost in '27. So you will also see price down on partner sales, but it will be even less than it is this year. From a size standpoint, maybe to summarize, if you remember what we said last year, our total Rynaxypyr of sales were about $800 million. And that was made of $600 million of branded sales and about $200 million of partner sales. If we look at 2026, we are forecasting $700 million of Rynaxypyr sales. That will be $600 million of branded Rynaxypyr, flat number versus '25, but partner sales decreasing to a number lower than $100 million. So as you can see, partner sales because of price and also volume are going to be accounting in '26 for less than half of what it was last year. We believe that is a trend we're going to keep on seeing. At this point, the partner sales, $100 million going down next year is going to be a very small part of our company. And regarding the brand sales, I think we believe that earnings for this year will be similar to prior year on similar sales. And that's what we are seeing right now is, in fact, as we were expecting, the volume gain, the improved mix, as I said in the prepared comments, a significant move toward high-end mixtures and high load with the new pricing, lower pricing, the cost reduction compensate for the lower price. So flat branded sales at $600 million, flat earnings for branded Rynaxypyr is the target for this year. Partner sales going from $200 million to $100 million.

Your next question comes from the line of Josh Spector with UBS.

I'm curious if you could talk a little bit about your views around input costs and what that means, particularly out of Asia broadly for your second half and fourth quarter? Is that something that you're going to have to get additional pricing for to offset this year? Or is that more of a 2027 event? And I'm honestly not sure that if generic prices are going up and maybe supply is more constrained, is that a risk or an opportunity for you in the second half?

Thanks, Josh. Listen, we we talked a lot about that when we are doing the forecast for the second half. And we felt we do not have enough information on the future impact on inputs for our business. I mean we all know the situation for fertilizers or for crop protection. Today, we are seeing some impact of the Iran war. We have impact at the level of the transportation, distribution, delays plus cost. There is higher energy cost in some of our plants, especially in India. And we are seeing some of the raw material price increase. But at this stage, we've put a number in a forecast, but left it not at a significant level. It's very hard. If the war stop in the next few weeks, we believe the impact on us will be fairly minor. If it lasts for a long time, then that's going to be another story, but we do not have enough information. So at this stage, we're looking at the impact being pretty muted. We see some impact, but nothing major. We're going to have to be watching very, very carefully how it's evolving depending upon the length of the conflict. Regarding generics, there is 2 aspects. One is the information we are getting the data we are given and what we see on the market. What we see on the market is pricing from generic leveling off. We do not have this pricing spiral down that we've seen over the last 2 years. So it seems like we are at a time at the market level where we are seeing a stable situation. Now information we have would tend to prove that there could be or there should be a price increase in the second half. We have not factored that in our H2 forecast because it's not reached the market yet. For example, I'm sure you've seen the announcement on Rynaxypyr moving from the low 20s to $47 to $50 a kilogram. Those are information which have not yet reached the market. We have not seen a significant jump, but all indication on exports and local pricing is that they are moving up. So to answer your question, we have not factored anything in the forecast, neither in terms of opportunity due to pricing of generics or significant impact of the war.

Your next question comes from the line of Vincent Andrews with Morgan Stanley.

Pierre, you mentioned potential other assets for sale. You spoke about real estate. Is there anything else within the FMC portfolio, I don't know, plant health, just to throw something out there. What else are you thinking of monetizing? And can you give us an order of magnitude of roughly what you think potential proceeds could be? And if you could give us a little description of some of the noncore real estate or other types of assets, so just we can have an understanding of what you're looking at?

Yes. I'm going to give you as much detail as I can because, of course, negotiations being ongoing. They are confidential as much the request of the people with whom we are negotiating than for us. But basically, where we are today on the target of $1 billion. Number one is, as I said, is India. We are expecting to close on the India deal in the month of May. We are very, very dense. There is not that many issues remaining with the -- we have a few players still in the race, but we are weeks, maybe days away from signing an agreement. That's number one. Regarding the licensing of an active ingredient, we are in negotiation with multiple parties. We also -- it's a matter of weeks before we make a decision which partner to go with. The negotiations are ongoing. Then there is some -- we've been establishing a list of molecules, which are noncore for us, but which are of significant interest to some companies either because of the market they serve or because they have a specific strength in some crops where we do not play. So we have a few of those, which are right now -- a few molecules, which are right now in negotiation. And finally, we do have a few negotiations which are going on and some are quite advanced on real estate deal, which would be sale and leaseback of sites we have where, first of all, we do not need to own them. Second of all, it's easier to lease back. And third of all, they are much bigger than what we would need. If I put all of these together, and I'm only listing the things which are in active negotiation and well advanced, we have about line of sight to $700 million, about 70% of our target. That's what is currently in a very active negotiation.

Your next question comes from the line of Mike Harrison with Seaport Research Partners.

I was hoping here that you could talk a little bit more about what you're seeing with Rynaxypyr taking share from other classes of insecticides? I know that's the strategy that you guys put in place by trying to reduce costs and take the price lower to make it more competitive. But maybe just give a little more detail on which specific classes you're seeing some share gains from, and if that gives you confidence that you're going to see further traction with that strategy?

Yes. You will understand I'm going to be a little bit discrete around which specific class of insecticide because that would be talking directly the competitors who are leading those leaders in those different type of insecticide. But yes, we have seen that. Actually the only place where we are seeing concrete results right now of the extension of sales into different type of insecticides for Q1 is in North America. Indications we have is with what our sales force right now with the new pricing is targeting is a strong level of confidence that this is going to work. But North America was the place where we saw that the most in the first quarter. Now it's early stage, lots of players are taking a wait-and-see attitude. So the real proof of how well our Rynaxypyr strategy is working will be in Q3 and Q4. But yes, we have actual sales we have taken from other class of insecticides. The other thing which is going very well and maybe a bit better than we're expecting is the mix. With the new pricing we have for Rynaxypyr, we are seeing more and more of the growers moving toward the high-end part of our portfolio. Those are the high load and those are the advanced mixture. Now, it's always the same. It's Q1. It's not the biggest quarter for Rynaxypyr. It's an early stage, but I would say that the percentage of sales and the new mix for advanced technology is higher than we're expecting, which is very positive for us because it's despite the lower price, still a place where we have a solid price premium. I'd say, in the first quarter, about half of the sales move toward the high-end part of the portfolio.

Your next question comes from the line of Chris Parkinson with Wolfe Research.

Pierre, I'd really like to dive a little bit more into some of the new products, which haven't necessarily been the greatest focus, but seem to be progressing pretty well. Beginning with Isoflex with the new registration and the kind of the tangible market opportunity, can you just kind of give a framework on how you're thinking about the initial opportunity as well as kind of the longer-term opportunity there? And then understanding that Brazil is obviously challenging for pretty much everybody at the end of last season, what's the update of Rynaxypyr in terms of like -- in terms of how your order book that you've been referencing the progress there, how does fit into that as well?

Listen, Isoflex, Isoflex is going to be a very critical product, obviously, in Latin America, but it's going to be a very, very critical product in Europe. We believe that in not too long, that's what our team in Europe would say Isoflex will be very quickly bigger than Rynaxypyr and Cyazypyr together. Where are we on Isoflex, and that's a process which is a bit more complicated in Europe is, first, you need to obtain the registration of the active in the EU, which we just got a few weeks ago. So that's a very important step because only when you have that step, you can start to get registration for the product you would sell in each of the countries, the formulation you would sell in each of the countries. Great Britain is different. We obtained the registration for the formulation last year, and that's going to be the bulk of our sales in 2026. Now that being said, the product is working so well. We're going to have 100% of reorder and growth in Great Britain for this product. And our customers in multiple countries are asking for exemption to be able to use the product. So we don't know if that's going to happen or not. But all in all, going very well, confirming the performance of the product and the target numbers we've been giving so far are being confirmed. There is no showstopper here. fluindapyr, same thing. fluindapyr is growing fast. The only limitation to growth of fluindapyr, including in Brazil is the registration process. We do have 19 right now pending registration, which, as we get them, it allows the product to grow. It's a part of the direct sales. Also, it's one of the driver for the success of direct sales in Brazil. So as I said, Rynaxypyr, we're going to have to see and wait on Q3, Q4. We have a good level of confidence. Fluindapyr, a new product, the level of confidence is higher. I mean that's -- the demand is very strong, so there is no issue here, only the speed at which we are getting the registration.

Your next question comes from the line of Jeff Zekauskas with JPMorgan.

In the first quarter, your prices on average were down 6%. If you exclude diamides, what would prices have done? And secondly, in the first quarter, were Cyazypyr prices up or down or flat?

Jeff, it's Andrew. I'll take that one. Look in first quarter for the non-diamide products, prices were down in the low single digits percent on that sales. We saw significant price reductions in branded Rynaxypyr and the partner Rynaxypyr business. But across the non-diamide core portfolio, which is the bulk of the rest of it, it's in the low single digits. It was a very good quarter in terms of repositioning. Volume, not great. We'll keep working that. But I think as we continue to improve competitiveness of those costs, you'll start to see improvement there for the non-diamide core portfolio. For Cyazypyr, prices were relatively flat, but we did see good volume growth, particularly in Europe. So it's been -- it was a good quarter for Cyazypyr.

Your next question comes from the line of Joel Jackson with BMO Capital Markets.

Just following up on the partnering -- the licensing deal you're trying to do for the One AI with the upfront payment. If I heard correctly, it's One AI that you're looking at getting something close. I imagine you're looking at all of your new AIs. Could you maybe -- if that's correct, can you maybe elaborate a little bit on why one particular AI seems more likely with partners wanting to license it? Or is there something else happening? Or just talk about that dynamic, please?

Yes. It is -- I'm going to give by answering that if you think about it more information maybe than I should. But actually, there is 2 different ways to think about licensing. When a product has full registration, you license the product or mixtures, but it's not a broad licensing of the molecule. For example, we take a product like Rynaxypyr -- sorry, fluindapyr. Fluindapyr is a product for which we have the active being registered and then people can develop formulations and get registration for formulation. So for this kind of product, you go with multiple licensing as you see opportunities. So for example, fluindapyr, we licensed part of the product to Bayer and to Corteva, Corteva last year and Bayer 2 years ago. So it's a very different approach. When you have the most advanced technology for which one of your partner is very interested, it's a broader licensing, which is done because you don't have yet the registration. This work still needs to be done. So it's a full access to the molecule, but it's a very different type of approach because the product is not yet at a point of being commercial. So that's why if you think about our product, there is 3 products for which we have a significant number or start to have some registration and one which is still away from commercialization and registration. It doesn't mean -- by no means does it say that we will not be licensing the other products, but it will most often be licensing without upfront payment and the royalty is being paid as the product is being sold.

Your next question comes from the line of Laurence Alexander with Jefferies.

Just on the new product pipeline approvals, what do you need to see in the back half of this year to know that 2027 is on track? Which ones are still pending that you think are particularly important?

I don't have the list on top of my mind. We have a road map with all of the registrations, which need to happen for '27. As I said -- and the number is 19. We have the exact road map. We know exactly where they are for the product. I could not go through the -- each of the country right now, but there is no place where we see specific delay, which would concern us in terms of 2027 target.

Yes. I'll just build on that, Pierre. I think when you look at fluindapyr, a lot of that growth will be growth with existing registrations in existing countries. As we've said, we've gotten pretty much all the registrations for the active ingredient fluindapyr by country that we were targeting. So there's a lot more introduction of new formulations and just penetration of those countries to drive growth from '27 to '26 with fluindapyr. With Isoflex, it's really getting the product -- formulated product registrations in the EU. As Pierre commented earlier, we are seeing formal requests from growers in multiple European countries to try to get exemptions to use those products in advance of getting them fully registered. But certainly, in '27, we would hope to have full product registrations for all of the IsoPlex-based products for particularly EU 27 countries, and that's a big driver of growth. The only really other place where there's big growth in the new active ingredients, we do expect a little bit more growth from Dodhylex. We do anticipate a few new registrations for Dodhylex in 2027. It's not nearly on the same scale of year-on-year growth as the growth from fluindapyr and Isoflex. So I think as we look to '27, it's really a continuation of the trend of fluindapyr and Isoflex that will drive new active ingredient growth with a little extra spice thrown into the mix from first early introductions of Dodhylex in a few other countries.

And as Andrew said, I mean, if you think about fluindapyr, it's going to be mostly in North America and Latin America, and that's where we're getting -- we should be obtaining new formulation registration. Isoflex, we have the EU. It's all of the major country where we should get early in 2027, the registration for Isoflex. And Dodhylex, its registration in Asia. That's what we -- for Dodhylex, I would say 90% of the market is in Asia. So that's where we are expecting and watching the new registration.

Your next question comes from the line of Matthew Dale with Bank of America.

I am very far from being a tariff lawyer or anything like that, but is there any possibility that you get refunds that we're seeing kind of along the lines of some of these other companies that have been reporting that an opportunity set? And then you said you're seeing some positive signs on mix improvement in Rynaxypyr in 1Q. I'm assuming the hope is that continues in 2Q, in the second half? And ultimately, the point is it will be a bigger book of business in 2H. What drives the variance around the success of that 2H? Is it the same mix shift? Is there a risk that the price premium you have on the lower end doesn't hold up in Brazil? Like how do we gauge the upside, downside of what this 2H might look like for Rynaxypyr?

Yes. Okay. Let me start with the tariffs and then I'll go to Rynaxypyr, Tariffs, I'm not a tariff lawyer either. There is 2 type of tariffs which we have paid. There is tariffs which have been what's called...

Liquidated.

Liquidated, which means tariffs which have been through the process of being paid, collected and transferred to different place of usage and they are out of the customer. For this, there is no process in place to even file to recover them. It does not mean that we will not recover them. But right now, there is not a defined process. The other tariffs, the one which have not been liquidated, which have been collected by custom, but which have not been gone through the process of being dispatched and are still there, there is a process in place by which you can apply. Applying doesn't mean you get it, but you can apply for it. Those seem to have a higher probability to be collected faster than the other. Ultimately, all of them should be -- with a court decision should be recoverable. One category seem to be faster than the other, but frankly, we do not know. We do not know. It's still something we are watching very closely. We're working with the lawyers who are giving us their input. As I say, one category is very likely. One is don't know if a process will be put in place. Regarding Rynaxypyr, I think when it's Brazil or North America in H2, all the strategy to be fully successful, I think the #1 criteria is how we are going to be performing in growing the percentage of sales on the high-end part -- which is higher the high concentration or the niches and positioning them at the right price to still be competitive. The reason for that is because Rynaxypyr has been on the market for a while, there is resistance very much in in China starting to be significant in Latin America. Those formulations very often help positioning the product and address the resistance issue or the efficacy issue. So I'd say a significant part of our strategy and maybe in H2, more important than the gain of volume against generic with a single is that piece, succeeding in growing as much as we can the high-end part of our portfolio, which we are selling at a premium. It is what happened beyond expectation in Q1, but of course, on a lower volume than what we will see in Q3 and Q4. Also because the patent just run out at the end of '25. generics are starting to be active in some countries like Brazil, North America, but let's face it, they will be more active in Q3, Q4 than they were in Q1. So the real test is in the second half of the year.

This concludes the FMC Corporation earnings call. Thank you for attending. You may now disconnect.