Oct 30, 2026 earnings call — Commercial pricing actions to reduce channel inventory
Company took commercial actions that resulted in a third quarter EBITDA impact of $672 million.
Revenue $0.1B (est $0.5B) · EPS $-4.41 (est $0.07) · Next-quarter revenue outlook $1.0B–$1.1B
Key quotes
"First, we are transitioning the North America business model to a framework that brings the upfront price closer to the expected net price."
"We took charges of $639 million against revenue and $672 million against EBITDA, stemming from the commercial actions that Pierre described a few moments ago."
"Based on our preliminary planning, we currently see 2027 adjusted EBITDA of at least $650 million and as much as $730 million."
Analyst Q&A 8
2027 cash flow and customer credits
Q (Vincent Andrews · Morgan Stanley): He asked how cash flow will look in 2027, whether customer prepays will be similar to last year, and whether the $175 million customer adjustment will reduce cash collections in 2027 or be a write-down.
A: They said 2026 free cash flow guidance assumes flat prepays versus 2025. They would not give formal free cash flow guidance for 2027 yet, but said EBITDA growth and lower restructuring will matter, and the $175 million will be done by credit notes or pricing credits that likely create a 4- to 6-quarter cash headwind but not a 100% long-term cash loss.
"Our free cash flow guidance for 2026 assumes flat prepays to the prior year." — Andrew Sandifer (CFO)
Timing of $175M and $500M cash effects
Q (Salvator Tiano · KeyBanc): He asked how much of the $175 million will hit cash in 2026 versus the next quarters, and how the $500 million impact is split over this year and next.
A: They said the $500 million change has no impact to 2026 cash flow because the large rebates for the crop year are already in the 2026 cash outlook and payments are timed across the crop season. They added that some credit notes may be issued in November and December but that the amount of 2026 cash leakage from the $175 million is not large.
"On the $500 million, there is no impact to '26 cash flow." — Andrew Sandifer (CFO)
Overhead costs and R&D spending
Q (Matthew DeYoe · BofA): He asked how FMC will address higher SG&A as a percent of sales and whether R&D spending can continue at current levels.
A: They said SG&A rose as a percent because sales fell, while SG&A dollars stayed roughly flat after past cost cuts. They intend to keep SG&A flat (absorbing inflation), focus on returning to top-line growth in 2027-28, and aim to keep R&D spending where it is but may use more partnerships for future R&D.
"We certainly intend to maintain flat SG&A spends, which means absorbing inflation going forward." — Pierre Brondeau (CEO·CHAIR)
$500M charge accounting and split
Q (Patrick Fischer · Goldman Sachs): He asked the split between the pricing-model change and gross-price adjustment in the $500 million, and how the charge flowed through Q3 P&L, balance sheet, and cash flow.
A: They said the $500 million split was about 60-40 between pricing-structure mechanics and gross-to-net price on historic inventory. The charge mostly reduced accrued rebates, then trade receivables, with minor adjustments to advanced payments and current liabilities; Q3 had no cash impact because these were noncash charges, and future cash effects relate to credit notes and channel inventory adjustments.
"Certainly, the $500 million charge in the quarter, that split, about 60-40, between the change in the pricing structure, the mechanics itself versus the change in the gross to net price on historic inventory." — Andrew Sandifer (CFO)
India divestiture proceeds and FX plan
Q (Kevin McCarthy · Vertical Research Partners): He asked whether FMC still expects to extract $200 million of working capital beyond the transaction value and what FX assumptions are in guidance after Brazil’s election volatility.
A: They updated the India held-for-sale carrying value to a fair value of $260 million as of September 30 and said gross proceeds are about $250 million with roughly $130 million expected to be collected this year (about $115 million collected year-to-date), keeping the overall transaction value near prior expectations and on track for a December 1 close. On Brazil, they said the election reversed recent BRL strength, they planned at pre-run-up levels, and they do not see a specific Q4 headwind from BRL with current rates factored into 2027 planning.
"Look, currently, we're updating our carrying value for the India held-for-sale business to a fair value of $260 million at the September 30 print date." — Andrew Sandifer (CFO)
2027 pricing vs variable costs and margins
Q (Laurent Favre · BNP Paribas): He asked how FMC is modeling price versus variable cost for 2027 and whether Middle East disruptions will raise variable costs so pricing needs to be higher.
A: They said they expect the core business to grow low single digits in 2027, with limited raw-material inflation impact and not yet full benefit from new manufacturing. They expect mid-teens growth in the growth platform (driven by new actives like fluindapyr), and much lower costs from cleaned channel inventory, fewer returns and rework, and fewer credit notes; they applied these to aim for 18%-19% EBITDA in their 2027 range.
"We believe our core business should be back to growth even at a low level, because we will not yet be benefiting for the full year from the manufacturing cost." — Pierre Brondeau (CEO·CHAIR)
Is growth driven by price, volume, or both?
Q (Laurence Alexander · Jefferies): He asked whether 'back to growth' means both volume and price will be net positive in 2027-28 or volumes positive while net price is negative.
A: They said they expect price times volume to be net positive in 2027 and even more positive in 2028 when the new manufacturing footprint has a full-year effect.
"So the first one, we're expecting that the price volume will be a net positive for us and even greater in '28, where we will have a full year impact of the new manufacturing footprint." — Pierre Brondeau (CEO·CHAIR)
Buckets behind $400M free cash flow hit
Q (Lucas Beaumont · UBS): He asked for a breakdown of why the free cash flow outlook was cut by $400 million and how much is due to lower EBITDA versus other items.
A: They said the main driver is lower EBITDA: about $17 million underperformance in Q3 plus a $75 million Q4 reduction, totaling nearly $100 million of EBITDA shortfall. They also cited lower collections from weaker Q3 sales, lower gross collections in Q4 because of pricing, estimated Q4 credit notes, and noted rebates should be cash-neutral over the crop cycle; Pierre added that using some of the $175 million could signal faster customer agreements and higher near-term revenue.
"So it's nearly $100 million reduction in the EBITDA outlook for the full year on an underlying basis." — Andrew Sandifer (CFO)