富美實 (FMC) 2015 Q1 法說會逐字稿

Good morning, and welcome to FMC's 2015 Investor Day. Thank you for joining us this morning, whether in person here in New York, or online through our webcast. Today we will report on our first-quarter 2015 results and share with you our long-term growth plan for the Company.

Before we start, let me cover a few administrative items. First, as we do at every meeting at FMC, we will start with a quick safety discussion. For those of us in person, there are two sets of exit doors -- to your right, and one to your left behind the stage. Outside each door is a set of stairs leading down to the street level. In the event an alarm sounds, please listen for an announcement from the Hotel's Safety team.

If instructed to evacuate the room, please proceed to the exit nearest you and down the stairs. Hotel staff will direct you to the appropriate location to either shelter in place or exit the facility. If you need assistance at any time during the event, please ask any FMC staff member. You can identify FMC staff by the red dot on the upper right corner of their name badge.

As you can see, we have a full agenda today. First, Pierre Brondeau, President, CEO and Chairman, will open with a review of FMC's first-quarter results. Pierre will then provide an overview of our long-term growth strategy. Following Pierre will be a review of our three business segments. Mark Douglas, President of Agricultural Solutions, will kick off the segment reviews.

After a short break, we will resume the presentation with Tom Schneberger, Vice President and Global Business Director for Lithium. Eric Norris, Vice President and Global Business Director for Health and Nutrition, will conclude the segment reviews. After lunch, Paul Graves, Executive Vice President and CFO, will review our 2015 guidance and provide additional details regarding FMC's near-term and long-term financial targets.

We will end the day with a Q&A session with all five of our speakers, where you have an opportunity to ask questions about both the first quarter and our long-term strategy. We expect to finish today by approximately 2:30.

Finally, before we begin, let me first 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 in filings with the Securities and Exchange Commission. Information presented represents our best judgment based on today's information. Actual results may vary based upon these risks and uncertainty.

Second, today's discussion will focus on adjusted earnings for all income statement and EPS references. A reconciliation and definition of these terms, as well as other non-GAAP financial terms that we may refer to during today's discussion, are provided on our website.

Again, I want to welcome you and thank you for joining us today. I will now turn the meeting over to Pierre Brondeau, President, CEO and Chairman of FMC Corporation.

Good morning, and thank you for joining us today. We have two important areas to discuss over the next few hours. First, the current performance of our Company and the state of the agricultural chemicals industry. Next, we will spend most of today discussing FMC's long-term growth strategy called Vision 2020.

Let me start with our first-quarter results, including the results of Cheminova in its final quarter as an independent company. I will also update you on our expectation for the remainder of 2015.

Before I discuss the quarter, let me briefly comment on two significant transactions. We successfully completed the sale of the Alkalai Chemicals business to Tronox, the transaction that was announced in February and closed on April 1. As a result, we moved Alkalai to Discontinued Operations in the first quarter. A final statement, including prior periods, has been recast to exclude all financial contribution to the alkali business.

Although we will discuss Cheminova's first-quarter results, please remember that FMC reported Q1 results do not include contribution from Cheminova. Our future quarter results will include Cheminova in our Ag Solutions segment, and our future comments about this segment will compare prior years on a pro forma basis.

As you know, the first three months of 2015 were characterized by extremely volatile foreign exchange movements, a high degree of uncertainty in global agricultural market, and crop-specific headwinds in the Brazil crop protection market. As we discussed in our last earnings call, we expected the soft end market and flagged some of the issues in Brazil. However, headwinds from the current -- from the foreign currency were a much bigger factor in the reported results for ag than we had previously predicted.

Against this backdrop, we delivered $0.62 of adjusted EPS in the first quarter, a decline compared to last year of 21%. Movement in currencies reduced our performance by about $0.11 per share compared to last year, which represents two-thirds of the decline. FMC generated $659 million in revenue, a 13% decrease over the same quarter last year. FX movements accounted for approximately 1/3 of the decline, mainly in ag and Health and Nutrition.

Weaker ag markets, the decision to exit businesses, which were selling low-margin third-party products within Ag Solutions, and lower volume in lithium, accounted for the remainder. Adjusted operating profit was $123 million, a 23% decrease compared to last year, with currency volatilities accounting for nearly half of the decline.

First-quarter sales in Agricultural Solutions decreased 16% compared to last year to $392 million. Segment's earnings were down 32% over last year to $81 million. We continue to operate in weak markets with delayed decisions, high inventory levels, and the channel and continuity stocking by both distributors and growers.

FMC performed well and ahead of the broader market in all regions with the notable exception of Brazil. Focusing first on Brazil. The combination of weak insect pressure, customer destocking, and pricing pressure mostly due to currency movements, resulted in lower-than-expected performance across the market as a whole.

In aggregate, the Brazilian ag-chem market declined 20% year-on-year, a decline that would've been even greater if not for some unusual late month demand for certain fungicides. Our sales organization maintained its discipline in this unusual market, choosing not to pursue business that would've required less price discounts for longer than market standard terms.

Additional factors impacting our results in Brazil were the decision to exit the distribution channel, which was a reseller of generic product and the continued process of reducing sales of lower margin third-party product. These decisions represented two-thirds of the sales decline over the 2014 period. In North America, cold weather resulted in lower-than-expected pest pressure, and reduced demand for insold insecticide.

With planted acres of corn also expected to decrease, this resulted in reduced year-on-year demand. Countering this, demand for our [30] brands of herbicide remained very strong, driven by increased planting soy acreage and continued increase in the number of those acres experiencing glyphosate-resistance issues.

Europe had an excellent start to the season in the first quarter, as favorable market -- as favorable weather allowed for early applications. While we are pleased with this high demand, it has a larger impact on Cheminova's direct sales business than on FMC's smaller distributor business. I will review Cheminova's first-quarter performance in more detail shortly.

In Asia, local currency weaknesses, mostly in Indonesia and Australia, served as a headwind against increasing volume specialty in China. Health and Nutrition reported $211 million in revenue and $51 million in operating earnings, which was largely in line with (inaudible). Revenue was 7% below last year, driven largely by the weaker euro, but also impacted by a 40-day unplanned downtime in our alginate lines in Norway. This is a continuing challenge from the fourth quarter.

As mentioned on the last call, severe weather in the Northeast prevented us from harvesting seaweed as scheduled. This is a product line which is in strong demand and currently sold out. We were able to hold operational earnings flat to last year as a European-based manufacturing asset, we are more competitive due to a weaker euro. Improved product mix across several of our nutrition and functional health categories, have increased operating profit margin.

This year operations continued to perform well, but our cost structure remains challenged due to the Argentine peso cost, inflation combined with a lack of equivalent devaluation of the peso. Revenue of $56 million was $8 million less than the first quarter last year, largely due to lower volume of externally sourced lithium carbonate available for sale and reduced demand in butol lithium. We saw higher hydroxide prices during the quarter as a result of tight market conditions, which, when combined with cost discipline, resulted in segment's operating profit of $6 million, just $1 million below last year.

Turning to other financial highlights. Our adjusted tax rate was again impacted by currency. The effective tax rate in the quarter was 22%, as several discrete items related to currency movement provided a benefit against our underlying rates, which remain in the 26% to 27% range. In the quarter, cash flow from continued operations before cash flow related to the Cheminova acquisition were negative $31 million. This was $75 million better than the same quarter last year, as we benefited from improved inventory management across the Company and a solid collections performance in ag. With capital spending also lower than last year, we saw cash flow from continuing operations $85 million better than last year, despite $40 million less operating profit.

Turning now to Cheminova's performance. As you may be aware, the terms of our agreement with ARIGA was that we took economic ownership of Cheminova when we signed the purchase agreement. Therefore, we were pleased to report that Cheminova's first-quarter performance expressed in Danish kroner was very strong, with global sales up 7%. The Company benefited from good conditions in Europe, further supported by the successful integration of a new cereal herbicide.

In Brazil, Cheminova also saw gain in products such as fungicide and in crops such as coffee and corn. Operating earnings were up 35%, driven by sales gains in fungicide and herbicide. Margins also improved as a result of product mix and cost control. The Cheminova acquisition was driven in part by our desire to increase our direct access in Europe and to strengthen our brittle business with a broader product portfolio and market exit. Cheminova's performance as an independent company reaffirms our view about the quality of this strong business.

Now let me review FMC's outlook for 2015. We will explain further today what that means for performance in 2016 and beyond. 2015 will be an important transition year for FMC. We will only benefit from part of Cheminova's 2015 earnings, and we will only see part of the synergies in our reported earnings this year. Furthermore, the final quarter of earnings from alkali are excluded from earnings from continuing operations.

We are also continuing to transition our ag business away from the resale of third-party product. Brazil will remain a difficult and somewhat unpredictable market, and our visibility into the key fourth-quarter remains lower than in previous years.

Overall, we expect the market to be down as much as 10% over 2014. EMEA will be a strong market. However, the bulk of the 2015 season is already behind us. North America will likely be a market that declines in the mid-single-digit percent with soy being stronger than corn. To a large extent, weather conditions will determine if we have a meaningful post-emergent season.

Asia will be a relative bright spot. Strong performance from China and Southeast Asia are expected.

Regarding the integration of Cheminova, we expect to make significant progress to deliver $19 million in cost synergy and an incremental $30 million of EBIT from revenue synergies. During 2015, we expect to see about 20% to 25% of the total synergies in our financial results for the year, largely toward the latter part of the year. As expected, Q2 will be the most challenging quarter for the Company, as our ag business transitions to the new portfolio.

The financial performance of our legacy FMC business will be negatively impacted by multiple factors. We will continue to operate under difficult market conditions. With the Cheminova acquisition, we are transitioning from a distributor to a direct sales model in Europe. One consequence of this change is a push of our sales from 2015 into the early part of 2016 to serve the 2016 season.

There is no sales loss; it is just a different timing. Cheminova will contribute two months of sales, but a temporarily lower margin as the negative impact of per-shares accounting will not be offset yet by cost synergies.

Finally, FX will continue to be a headwind. Consequently, we expect revenues for ag to be up in the 20% range with earnings down in the high-single to low-double-digits percent. Following a challenging first half, we expect to deliver a strong second half of the year as we start to realize cost synergies and benefit from a new structure and portfolio. We expect to end the full year with revenues up in the 25% range, and earnings up in the high-single to low-double-digit percent.

In Health and Nutrition, we expect to see more favorable end market conditions, especially in pharmaceutical applications. We see flat market on nutrition products in Asia, but expect to see volume growth with our texture and stability solutions in Europe and North America. In this pipe, 10 additional days of downtime in our Norway facility in Q2, we are seeing improved yields and efficiency gains through our manufacturing excellence efforts. In light of this, we are confident that we will make up for the unplanned outages in our alginate line.

Accounting for all these factors, we expect Health and Nutrition reported revenues will be flat to 2014, largely due to the negative impact of currency, mainly the euro. However, our cost position in Europe, and our restructuring and manufacturing excellence programs, will allow us to deliver mid-single-digit earnings growth over last year, representing the 11th consecutive year of increasing earnings.

For the second quarter, we expect revenues to be flat to currency effect with -- due to currency effect, with segment earnings also flat to last year. In lithium, we continue to expect full-year operating earnings between $15 million and $25 million, with revenue flat versus 2015. For the second quarter, we expect revenue to be flat to last year, with segment earnings in the low-single-digit-million-dollars as a result of higher seasonal manufacturing costs, continued high inflation in Argentina, and unfavorable currency movement.

We are encouraged by the favorable hydroxide pricing environment. However, the challenges of operating in Argentina remain a headwind to our performance.

As you will hear throughout the day, our business has been well-invested in recent years. Furthermore, our current portfolio is less capital-intensive than in previous years. In 2015, we will expect to significantly reduce our capital investment, with total spending close to underlying depreciation levels in a range between $150 million and $175 million.

We are excited about our future and our earnings growth potential over the coming 18 months and beyond. This is what we will spend the rest of the day addressing. You will hear more about how we have transformed FMC into a stronger, more focused company, where we are headed in the next several years, and the role each of our businesses will play in driving profitable growth.

Given all of these factors, we expect second quarter adjusted EPS in the range of $0.64 to $0.74, and full-year adjusted EPS in the range of $3.10 to $3.40. This outlook includes eight-month contribution from Cheminova, which will be 55% to 60% of Cheminova's full-year results, considering the seasonal waiting through the start of the year for its business, and including an $0.11 non-cash charge related to purchase price accounting in the Cheminova transaction.

(video playing)

As you saw in that video, we have been actively managing our portfolio to optimize the performance of FMC. It has been a deliberate process. Our goal has remained constant over these years to focus on faster-growing, higher-return opportunities. Although we had originally planned to separate the Company in our final state in creating a highly focused FMC, many approaches in the summer to acquire Cheminova and sell outright chemicals was a far more attractive option. It was an option that will achieve our objectives, accelerate our transformation, and will result in a stronger company with more growth opportunities.

Let me walk you through the changes that have taken place at FMC during the past five years. We've made careful choices about where we want to compete and where we believe there are sustainable, attractive growth trends. These choices have led us to focus on agriculture, Health and Nutrition markets. We've exceeded or sold several products and businesses.

We have strengthened our underlying assets with additional technologies and product lines through acquisition, joint venture and licensing agreement. We now have the right elements in place for a transformation.

Our portfolio consists of businesses with industry-leading market position, strong margin and attractive long-term growth opportunities. We have a core set of strategic principles that are consistent across all of our businesses. They center on market access and customer intimacy, innovation, and operational excellence. Our strong customer relationships have been a source of continued advantage, and will remain a vital part of our strategy.

Innovation is critical to our success. We actively invest in technology to enhance our acquisitions, and to reinforce our competitive differentiation. Market access and innovation are bolstered by our third strategic principle, operational excellence.

Over the past two to three years, we focused mostly on improving our alkali operations. Clearly, these efforts were rewarded with the excellent value we realized in the alkali sale. Today, we are deploying operational improvements across FMC's remaining businesses, especially in our Health and Nutrition manufacturing network. We will not pursue any M&A activities during the next few years, whether large-scale or bolt-on, nor do we expect to pursue any large-scale M&A through the full Vision 2020 period.

Over the next several years, organic opportunities will provide the right growth characteristics to increase FMC's value and to reward shareholders. The Company today is very different compared to when I arrived in 2009. Today's portfolio is stronger and more focused. We will deliver strong organic earnings growth through market growth, a broader market access, new product introduction, synergies and operational excellence.

We invested well in our several last years and are now positioned to reap the benefits. Going forward, our business will focus on utilizing and maintaining the quality and capacity we developed, which will require limited new capital investment. As a result, capital spending will be close to depreciation and amortization. Return on invested capital will remain in the mid-teens. Strong business performance and lower capital requirements will allow us to reduce debt and maintain our investment-grade credit rating. It will also put us in a position to return cash to shareholders at a pace faster than the previous five years.

Let me take a few minutes to walk you through each of the markets that influence our businesses, starting with longer-term ag drivers. Over time and beyond the short-term cycles, growers will look for multicore technologies that can help them maximize productivity. Growers will use every tool available -- GMO seed, specialized equipment, fertilizers, biological products, genetic crop protection.

On this slide is a key set of metrics that we review every quarter. It shows annual global production consumption and stocked-to-use ratios for the major crops. All commodity markets are above the norm in terms of stock-to-use ratio, but at different degrees.

With the exception of sugarcane, we have not yet seen the curves reversing. This is why we expect 2015 to be down mid-single-digit and possibly more. We see 2016 as still flat, and the recovery starting in 2017. We believe this is consistent with previous cycles, excluding other factors like weather, which could eventually change the dynamics.

The crop protection chemicals market, which is where we participate, grew at an average rate of 6% between 2005 and 2014. While there was cyclicality over that period, the underlying growth remained positive for nearly all of those years, except 2006 and 2009. As we said last quarter, we believe that 2015 will be down 5% to last year.

Looking at 2016, in the absence of a catalyst like weather, PESTLE breadth, or commodity surprise shortages, we expect a flat to slightly better market growth in the low-single-digits. After that time, we expect stocked-to-use to decline and stimulate additional production.

The industry for FMC could experience fluctuation from quarter to quarter. That's a possibility in any given year. But the underlying trends will continue to remain positive over the next decade. It is easy to lose sight of this big picture when many of today's headlines tend to be negative. Mark will tell you that market access, innovation and crop exposure are very important in the crop protection industry.

On this slide, you can see our combined portfolio across regions, technologies and crop segment. With the addition of Cheminova, we now have greater diversification across all three of those categories. We are excited by the near-term revenue opportunities from our acquisition, but we are equally energized by the additional active ingredients portfolio that broadens our innovation pipeline.

You will hear about integration and synergies throughout the day from both Mark and Paul. In total, we will deliver about $90 million in cost synergies. By the end of this year, we expect to be at a run rate of $50 million, and by the fourth quarter of 2016, the run rate will increase to $18 million. Cost synergies are obviously an important part of our integration, but we believe that revenue synergies are real and strong.

In less than two years, we expect to generate revenue synergies of about $150 million, which will provide $30 million of additional operating earnings. These revenue synergies were identified during the pre-close period. Since the close, new synergies are already surfacing and opening the door to more growth opportunities that we have not yet qualified. Synergies will allow us to outperform the overall ag market, and demonstrate the benefit of combining FMC and Cheminova.

Turning to Health and Nutrition, this business serves the food, pharmaceutical and nutraceutical end markets. While these markets tend to grow at a pace similar to global GDP, the area where our functional ingredients participate grew at a pace up to two times that rate. That steady pace leads to a stable high-margin business with exciting long-term prospects.

FMC has the leading portfolio of naturally-derived ingredients serving the food, pharmaceutical and nutraceutical markets. In the pharmaceutical industry, we are considered the gold standard for excellence. Our market reputation and our incumbent advantage have allowed us to set the Company's standards for quality, service and reliability.

In the food industry, we have one of the broadest portfolios of naturally-derived products, providing application solutions for today's planned size, low-calorie, low-fat, high-protein, and of using natural product. Following a period of strong capital deployment acquisition, we have a well-capitalized business with a robust portfolio that can grow organically with minimum capital spending. For the next two years, we will leverage our manufacturing excellence program to ensure FMC is the lower cost producer in the industry.

The lithium market has a strong growth profile, driven primarily by energy storage applications and electric vehicle penetration. We estimate that demand for lithium will continue to increase about 10% per year through the end of the decade, taking the total market size from $1.4 billion to $2.5 billion by 2020. Much of this growth will be in carbonate, hydroxide, butyllithium, and high purity metals -- three major brand producers took by this market, including FMC.

There are also several Asia-based and German producers. We view operating at full capacity in Argentina for several years. However, other industry participants are expected to increase carbonate supply. Given the challenges of operating in Argentina, and FMC's strategy to focus on specialty lithium products, we will rely on external carbonate sources to supplement our carbonate production and downstream specialty product. Capital will be dedicated towards specialty product growth such as lithium hydroxide.

As you know, this is a small business for FMC, but it has strong earnings growth potential. We have strong margins and growth opportunity in our specialty products, namely lithium hydroxide, butyllithium, and high purity battery metals. We have the right asset base to serve our specialty product customers. And we believe that if we optimally source additional carbonate capacities, it will diversify our resource and raw material base, allowing us to mitigate some of the volatility associated with our Argentine operation.

We expect strong growth in lithium hydroxide, driven by pure electric vehicle. Our advantage technology positions us as the leading supplier to this market. We'll continue to strengthen and invest capital in our hydroxide technologies at the product and application level.

Now let me now bring it all together and share our vision in terms of expected financial performance over the next several years. 2015 is a transition year to improve our foundation and set the stage for FMC's next phase of growth. We are a more focused, stronger company, poised to deliver strong performance to 2016 -- 2020 period.

Throughout the day, you will hear how our business will contribute to this performance through innovation, market growth, synergies and operational excellence. Let me remind you of our transformation drivers over the last five years.

As you can see, we delivered strong revenue and earnings growth in the 2009 to 2014 period. This period was delivered by -- this performance was delivered by improving on our Agricultural Solutions business by leveraging our decentralized asset-like model and investing in technology, broadening our Health and Nutrition portfolio, and investing in capacity; driving the strong manufacturing excellence program in alkali and expanding our solution mining production; growing specialty application in our former peroxygens business, and shutting down unprofitable businesses.

That strategy served us well during my first five years at FMC, but our portfolio was reaching its growth limit by 2014. This season has to be made that we are the gatekeepers of the growth trajectory. At that time, all the businesses in the portfolio were financially healthy, and we did not have the opportunity to further improve profitability by shutting down part of the portfolio.

We had optimized the alkali business and future growth would have required significant capital investment. This was inconsistent with our objective to run an asset-light growth company, one that requires low capital spending.

Our Ag Solutions business required broader access to market from a regional and cost standpoint. And we also needed a broader technology base. If we wanted to continue our growth strategy, we believe the time had come to focus our portfolio on ag, Health and Nutrition.

Two options were possible - separating the Company, or combining and acquiring acquisition and divestiture. The new FMC is a stronger, more focused company, asset-light, with low capital spending needs, generating strong cash. Over the next five years, we have a clear set of drivers.

2009 to 2014 was a period of strong growth. But during that time, we also built a great platform to launch the new FMC. Today, our Company is perfectly positioned to begin another five-year split of above-market growth. We have the right businesses, the right technology, and the right operating structure to deliver industry-leading financial performance.

Over the next five years, we expect to deliver results that are even better than what FMC delivered over the 2009-2014 period. Assuming our markets perform as I described earlier, we will expect revenue to reach a range of $5.8 billion to $6.8 billion in 2020 at an annual growth rate of 7% to 11% from the midpoint of our 2016 revenue estimate. This performance is stronger than our 2009-2014 period, and demonstrates the growth potential of our new portfolio despite two years of forecasted slow growth in the ag market.

2016 will be the first full year of operations with our new portfolio. Next year's results will be driven by strong performance in Ag Solutions versus 2015, while the power of our new portfolio, new market access, and revenue synergies will deliver mid to high-teen percent growth over the 2015 transitional year. By 2020, we expect to deliver EBIT of between $1.25 billion and $1.45 billion, an annual growth rate of 11% to 15% from our midpoint of our 2016 EBIT estimate.

For 2016, and during the 2016-2020 period, each business will deliver EBIT growth stronger than revenue growth. Ag Solutions will benefit from the cost synergies which will bolster our revenue growth. Health and Nutrition will benefit from manufacturing excellence program and the strategic deployment of its asset. And lithium will deliver strong earnings growth by focusing on and investing on the specialty part of its business.

The 2009-2014 period was focused on our portfolio transformation. Today, our Company has a growth portfolio with high-margin businesses and low capital requirements. 2016-2020 will be a period of strong cash generation, as we will not undertake any M&A. We will have the opportunity to return significant cash to shareholders while appropriately managing our debt level.

In his remarks after lunch, Paul Graves will discuss cash generation and deployment, as well as key facts on EPS. I would like at this point to introduce Mark Douglas, who will discuss our Ag Solutions business. Thank you.

Good morning. Today, I'm going to talk about FMC's largest business segment, Agricultural Solutions. As you know, this is a business with an incredible story. It's a global business with a unique asset-light manufacturing model, an approach to innovation that's focused on unique formulations and exceptional market access in some of the largest growing regions of the world.

For the last decade, we have been one of the fastest growing crop protection companies in the industry. For the next 50 minutes, I want to focus on our future, not on the past. We're going to dig into Agricultural Solutions, take a look at what's going on in the industry, and what we see over the next five years.

Of course we're going to spend a lot of time talking about our acquisition of Cheminova, which we closed a few weeks ago, and how this exciting addition to FMC expands our global footprint, increases our market access, strengthens our product portfolio, and bolsters our pipeline of new active ingredients. I will also provide a few details about the Cheminova integration, which, of course, is now well underway.

And finally, we will conclude on our financial performance -- what we are forecasting this year, how we see 2016 playing out in light of revenue and cost synergies, and our longer-term view of 2017 and beyond.

Over the past five years, we've expanded our market access positions across parts of Latin America and Asia. We've gained market share on certain row crops, such as corn and soybean. We've acquired access to numerous new technologies and products, and established our most robust innovation pipeline in a generation. During this period of rapid growth, we maintained our agile asset-light supply chain.

As our business grew, our geographic presence shifted towards the Americas, with a focus on a fast-growing segment, especially soybeans. We maintained important positions in niche crops segments by delivering rapid customer-driven innovation in markets like sugarcane, fruits, vegetables and sunflowers. This translated into 16% compounded annual growth revenues and 12% in earnings.

Today with the acquisition of Cheminova, we are building on that success by developing and broadening our synthetic active ingredient chemistries and new biological solutions, continuing to expand our crop focus, and enhancing our geographic balance, all while maintaining a predominantly variable cost manufacturing and supply chain. Cheminova brings many advantages to FMC, both in the short and longer-term. Of course, most notably are the many benefits of becoming a larger, more diverse ag chem business.

We have developed a comprehensive integration plan, and assembled a strong team that fully combine these businesses that will deliver financial and strategic benefits for years to come. Market access and innovation have been among the most important core priorities for FMC Ag Solutions, and that certainly will not change as we go forward.

Market access and innovation are central to our growth and profitability. Throughout this discussion, I will review how our broader portfolio, expanded reach, and greater innovation opportunities will deliver sustainable, longer-term earnings growth.

We are often asked how we are able to deliver high returns on capital and run an asset-light model. Our success depends on doing many things right, but there are three core priorities that we simply must do exceedingly well. Pierre talked about the strategic principles that define a focused, stronger FMC Corporation.

Firstly, market access and customer intimacy. Secondly, innovation; and finally, operational excellence. These are the same strategic principles that define the future of Agricultural Solutions at FMC.

Beginning at the top, we invest in market access, not only where it makes sense today, but also where we see emerging new opportunities. We have defined what it means to be close to customers, to really understand the growers' challenges, and feed that intelligence into our development process to create the right solutions. This is where market access has been a strength for FMC.

Today, you will hear me reference this term often, because as I said, it is so core to our success. In the middle of this is graphic innovation. Obviously, this term means different things to different people, but to us, it's about a deep understanding of customer needs, and using that intelligence to develop differentiated products and technologies, providing unique solutions.

As you know, a few years ago -- but many years ago -- FMC chose to exit high-risk, highly-expensive active ingredients for basic research, a decision that, for us, has proven to be quite wise. But this does not mean we are not innovative. We made a conscious decision to earlier-stage R&D to our innovation model. And today, we have a robust pipeline of new biological and synthetic active ingredients -- 16 scheduled to be launched over the next seven years.

We have procured from highly innovative partners around the world. We believe we have one of the most talented formulation research organizations in the industry that formulates those active ingredients into differentiated high-feed protected product. Later in my presentation, I will highlight a few examples of what our team is working on.

And finally, the third strategic principle is operational excellence -- the foundation of our asset-light strategy. For more than a decade, we have perfected how to run a successful and flexible asset-light manufacturing network at the lowest possible cost. We continue to assess, to test, to pilot, and drive improvements in this model. It's a critical area of competitive advantage for us. We will integrate Cheminova's manufacturing organization into this model over the next few years.

As you heard Pierre describe, the crop protection chemical industry grew at an average rate of 6% over the last decade. While there are peaks and troughs throughout that period, on the whole, the underlying trends remain positive. As we consider past trends and leading indicators, we expect the next several years will perform in a similar fashion -- a healthy mid-single-digit growth rate trending upwards through 2020. But obviously, some fluctuation is inevitable.

We do believe 2015 will continue to be a challenging year, as commodity pricing weighs on growers' planting and spending intentions, and channel destocking continues to play out. But as we look out to 2017, we see a return to more normal market performance levels, a stock-to-use ratios balance, and commodity pricing starts to recover. Our acquisition of Cheminova and the integration work we are putting into place is positioning us extremely well to take advantage of the next crop protection chemical growth cycle that we expect will accelerate from 2017 onwards.

Although we operate our business on a global scale, our strategy is truly executed at the regional level. And these regions each have their own market and economic dynamics. For example, with stable total acreage in North America, much of the annual crop protection chemical change is related to shifts between corn and soybean acres, an increase in resistant pests, and, of course, variable weather patterns.

In Latin America, the Brazilian market saw a 12% increase in agronomic land from 2009 to 2014. This increase took place predominantly in Brazil's Mato Grosso state, as partial land was converted into the world's second-largest soybean-growing region. This conversion, along with the natural high past intensity associated with tropical climate conditions, requires more crop protection products per acre versus other growing regions.

Most industry experts believe that we will see a slower forecasted rate of crop protection chemicals growth in Brazil during the next five years. In other parts of Latin America, we expect to see continued acreage expansion and a proliferation of wheat-resistant soybean acres in Argentina, as well as fast adoption of new technologies. We also expect additional acres of niche fruit and vegetable crops in Mexico, Ecuador, Chile and Columbia.

Europe is a market with stable acreage and non-GMO crops that require traditional history to enhance more sustain yield. Much of the growth in Europe has been the result of herbicide and fungicide used in cereal market.

And finally, the Asian market, which is a very large collection of fragmented and distinct crops and geographies. Growth over the last five years was driven by continued adoption and expansion of new technologies. And just think about this. 40% of the world's vegetable crops are now grown in Asia -- an important region for global food production and crop protection technologies.

Moving next to how the Cheminova acquisition affects our technology expansion around the world. From a regional perspective, you can see how our technology positions are enhanced and broadened throughout the world. In Europe, this stronger portfolio is important in a tight regulatory environment where incumbents have advantages with already registered and more sustainable chemistries.

In particular, we are excited about our European herbicide portfolio, which becomes much stronger and broader with Cheminova. This is a very important -- this is very important in some of the large European markets such as cereals. In Latin America, we gained a great portfolio of complementary insecticides, herbicides and fungicide technologies.

With high pest pressure in these tropical and subtropical regions, we believe these expanded offerings help us provide more solutions to address a broader set of customer needs. For example, Cheminova has exceptional fungicides that address Brazilian soybean rust, and in herbicides, Cheminova's Rapsode will complement FMC's strong product lineup.

In the future, we expect to launch in Brazil a new active ingredient, athoxomid, a highly effective wheat-resistant management herbicide. In Asia-Pacific, a stronger insecticide and herbicide portfolio is strategically important to combat the high pest pressures, which continue to evolve and develop under tropical conditions. Our expanded technology portfolio is critical, allowing us to leverage enhanced market access across regions in new and more pronounced ways than in the past.

On this chart, you can see the crop segments where Cheminova complement FMC. Looking at the upper right quadrant, you will see a significant increase in European markets driven by cereals, as well as trees, fruits and vegetables. As I mentioned earlier, the key for this market is to have the right herbicide portfolio and a direct access in the leading producing country.

Naturally, this is one of the major benefits of acquiring a strong European-based crop protection company. With Cheminova, we have added to our growing position in soybeans in Latin America with important fungicide and insecticide technologies. Cheminova supplements our offerings in cotton, also a key market for us, and we diversify our participation into growing crop segments like coffee and citrus fruits.

This diversification is more pronounced in Asia, where our combined portfolio has emerging positions in smaller crop segment such as Plantation. In addition, Cheminova has strengthened our position in our core Asian crops, including rice, cereals, and fruits and vegetable.

We have a more diversified product mix, especially across insecticides and fungicides. Our new micronutrient portfolio complements our existing plant health business, bringing potential opportunities across all key crop segments and countries in Asia and throughout the world.

Selling crop protection chemistries requires different approaches, depending on which country you operate in. There really are no right or wrong parts to market. But at FMC, we go to market in a manner that customers and growers most value. And we are very flexible in our approach. We have different market access structures around the world. In some countries, like the US, all sales go through a distributor and retail network, whereas in places like Pakistan, we sell direct and straight to the growers.

Historically, FMC had limited markets with that direct market out there. But, over the last five years, we have invested in key countries in Latin America and Asia to expand our positions, reach more growers, and therefore fuel our growth. For example, in Brazil, our historic strength in the central and northern parts of the country will be complemented by Cheminova's access to co-ops in the southern part.

In Asia, we view the market as a collection of local markets, which means that market access is a key success factor. Cheminova enhances our market access in major countries such as India and Australia. Of course, Cheminova has further enhanced our positions in Europe, the second-largest ag market in the world. This is especially important in Germany, the UK, France, Italy, and Spain, where the markets require crop protection chemicals as important tools to ensure better productivity and higher yields.

To illustrate the power of this combined portfolio, let me discuss two examples that show how well our new product portfolio will meet grower needs. I do appreciate that this is a busy slide, so let me take a minute to walk you through it.

At the top, our picture illustrates the various growth stages of a soybean plant, from initial planting starting on the left, through to maturity. Below the picture are the various growth stages and the typical percent of spend on crop protection products for each growing cycle. The rest of the slide shows the FMC and Cheminova herbicides, insecticides and fungicide that are used throughout the entire life of a soybean plant.

FMC's products are in red, and Cheminova's in blue. As you can see, our new combined portfolio expands our coverage throughout the growing season as well as provides different modes of action to manage different types of pests, weeds and diseases. This broader and deeper portfolio provides new and different technologies used as part of a growers' spray rotation program. This is why you see overlapping product during the different periods of the growth cycle.

Early applications on the left are herbicides to control weeds that compete during early plant development. Insect control is also extremely important at planting and throughout the growing cycle. As an example, our rugby insecticide, originally used in cotton, provides a barrier of self-control against soil-born insects.

Once the plant has emerged, controlling the pervasive disease spectrum is extremely important to ensure a high yield. We now have a broader set of fungicide offerings from Cheminova to meet this critical need.

In this example, we are looking at European wheat, where there's been an even bigger benefit across our product offering from points of application. First, you can clearly see that Cheminova already had a strong portfolio to address the market, especially in fungicide. With our combined portfolio, we have added additional insecticides with different modes of action.

Additionally, we now have a broader product offering that is applied during the early stages of wheat growth where most of the crop chemicals are used. Of course, these are just a few examples of how the combined FMC Cheminova portfolio, along with new active ingredients, will deliver additional opportunities for growth.

We are now a stronger ag-chem company with a broader portfolio. with access to more crop segments, and a stronger presence in key European and Asian markets, as well as an even stronger presence in the critical Latin American region. The acquisition enhances our portfolio with new and complementary technologies.

For example, Cheminova brings a new micronutrients business, an area at FMC we have been considering for some time. We think micronutrients have tremendous potential, as growers seek new ways to improve yields and productivity. Cheminova also brings improved formulation expertise, expanded positions in key crops, and deeper regulatory capabilities. We also benefit from a more robust innovation pipeline of differentiated products and greater operational efficiencies.

This transaction also provide significant earnings growth opportunities, which we will deliver through a combination of revenue and cost synergies. As we integrate Cheminova, we are expecting at least $120 million of cost and revenue synergies by the end of 2017. Of the $120 million, in synergies targeted, approximately 75% or $90 million will come from cost reduction, meaning not just headcount reductions, but also procurement savings and other supply chain and operational savings.

Embedded in the $90 million of cost reductions is approximately $35 million of near-term procurement savings. These are changes that we can make that do not require changing our current registration. We see a further $65 million in procurement savings that would occur after the 2017 timeframe, and are generally more complex in terms of requiring adjustments to our registration. This can typically take anything from four to five years.

The majority of the cost savings are obviously related to the headcount reduction. Through our integration and planning work, we have identified more than 500 positions that will be eliminated. We expect the vast majority of these reductions to take place by the end of this year.

Our overall manufacturing strategy will remain asset-light with predominantly variable costs. Cheminova's four formulation plants complements our regional supply chain strategies, and provides capacity and capability in Europe and Asia.

The addition of active ingredient manufacturing in Denmark and India does not substantially change our overall model. The Ron Londe site in Denmark is a critical source of the active ingredients that are used in products around the world. However, as is the case with many of our active ingredients, we always assess dual sourcing options. And this will be no different with the Denmark and India site.

Located and securing dual source options is a very long process, taking up to five years, mainly due to registration. In the meantime, we will continue to pursue cost reduction programs at the legacy Cheminova plants. This is a standard practice at all FMC sites. We will implement a hybrid manufacturing model, a combination of company-owned assets, and our toll network to manufacture all of our active ingredients.

In fact, the Pinole site in India adds a low-cost option that we had been considering as part of our future network development. Tolling active ingredients is core to our strategy, and will remain so as we go forward. We expect that our larger network will be consolidated and streamlined over time. However, to be clear, we still expect to supply in excess of 90% of our active ingredients via toll manufacturers, not just through third parties.

We expect net revenue synergies in excess of $150 million by the end of 2017, contributing upwards of $30 million of additional EBIT. We'll capitalize on existing market access positions and generate incremental volume from our existing product portfolios. For example, in North America, we will sell Cheminova fungicides through the FMC network, taking advantage of our extensive customer relationships with the major distributors.

The Cheminova direct market access in Germany, Spain, Italy and the UK, will bring additional margin on FMC products in 2016, followed by France in 2017. In Brazil, we will take advantage of Cheminova's product range to gain market share in numerous crops, as well as use Cheminova's traditionally strong market access, and its large distributor and co-op network in the south of the country. In Asia, we expect that the combined portfolio will help our position in high-value fruits and vegetables throughout the region as well as utilize broad market access in India and Australia.

So switching gears a little bit, I'd now like to turn our attention to the important aspect of innovation. Addressing a growers' technology needs is a dynamical process with many variables to consider. A lot of these, for example, ease of application. How is a product applied? How quickly can it be used? What are its mixing protocols? What are its dose rates and efficacy against the given pests? What about the different modes of actions where pests, and both insects and weeds, have become resistant?

And, of course, what's the cost and use for the farmer? We also have to consider softer chemistries with strong sustainability profiles, an area the industry is focusing on more every year.

The takeaway here is that while the ultimate goal is to help growers efficiently and safely improve yields, the road to get there has many twists and turns. We take all of these factors into account when we invest in new active ingredients and platforms.

Let me expand on that by showing you a few differentiators around how we can innovate at a much lower cost to find new active ingredients. While our other major crop protection chemical companies take a classical approach to discovery with large internal R&D groups, we realized in the mid-2000's that this was an expensive proposition, and one that would be difficult to replicate and remain competitive for FMC. And frankly, we did not have the scale to invest in multiple active ingredients at the same time.

We decided on a different path, by focusing on being the best at regional development and partnering with others on later-stage active ingredient development. FMC's development projects are typically shorter-term, about two to five years, and are executed regionally. We have patented formulations, platforms, and offer differentiated go-to-market value propositions for our products, formulation and application technique.

This shorter-term approach has derisked our technology portfolio. We are working on chemistries that have already passed numerous R&D and investment hurdles, so they are much more advanced and developed with higher probabilities of success compared to products that have a high risk profile in early-stage research.

To deepen and expand our pipeline, about two years ago, our innovation model evolved from one that was exclusively focused on later-stage active ingredient development to one that also includes earlier-stage development. Through our many partnerships and relationships, we have greater access to these important earlier-stage active ingredients. Today, through our alliances, partnerships and acquisitions, FMC Ag Solutions has a robust pipeline of nine synthetic active ingredients that are in various stages of development.

This is FMC's largest pipeline in many years, and more active ingredients than would have been in our innovation model if we had not evolved. I'm going to talk about a few of those active ingredients shortly.

But before I move on, I also want to highlight an important section on this chart. At the bottom, you will see our biological pipeline represented on a shorter timeline -- less than three years. In late 2012, we recognized the opportunity that the emerging biological market could provide. This is an exciting new area of active ingredient research that is faster and less expensive than traditional synthetic chemistry.

Through our global strategic alliance with Christine Henderson, we are capitalizing on the increasing demand for sustainable biological product. I'll talk more on this subject a little later.

We are well-positioned to provide new solutions through our multilayered innovation approach. Since roughly 2005, we have focused most of our resources on development activities. And as I said earlier, these are short-term products at the later stages of development. They take between two to four years from idea generation to commercialization, and require fairly minimal investment. Customer collaboration is the real key to success under this research model.

These strong relationships allow us to quickly identify emerging pest pressures and then develop the right technologies, patented formulations, and special delivery systems to address them. These solutions target specific regional needs and are created in FMC's regional formulation centers under the direction of our global R&D organization.

The other layer of our model is earlier-stage research activities. We've introduced this over the last few years, engaging our central R&D organization to focus on early-stage research for new active ingredients, new biologicals, and new seed treatment platform. Commercialization takes longer, especially with new active ingredients, but the returns and margins are higher.

We have a great portfolio of many new products. I'm going to highlight just a few in our development and research initiatives. I'll start with our patented formulation platforms, a key part of our regional short-term development strategy.

We have a strong track record of demonstrating that with the right technology, we've had great success in opening up new opportunities, ensuring lifecycle management of older active ingredients, and enhancing the regulatory profile of our products.

One example is Clomazone in Europe, where our patented micro encapsulation technology has played a key role in volatility control. Micro encapsulation allows greater application flexibility and better weed control without impacting nearby plants. It also helps ensure protection of our products from low-cost generics that are unable to meet the performance advantages of our technology.

Our formulation technologies have opened up new markets. For example, we've introduced a new foam applied delivery system recently launched in North America. 3RIVE 3D is a revolutionary technology that helps plant -- farmers plant all day, daytime reduce water, and ensure the seed is protected at plant with a unique patented 3-D foam application.

We are extending this platform approach beyond our competitors in synthetic chemistry to our new biological business. Years of formulation know-how are helping to accelerate our growing biologicals pipeline. Let's just take a moment and take a look at some of the examples of these types of technologies.

Our Clomazone formulation is a classic example of how we apply FMC technology to create a differentiated highly effective solution for growers. Clomazone is a multi-$100 million molecule for FMC, and is the only active ingredient with a particular mode of action in the European market. Our unique patented microencapsulation system allows us to protect our position and work with regulatory authorities to expand the use of this important herbicide.

In fact, advantages in our technology have been recognized by European regulators, especially in Germany. They've granted FMC a significantly reduced buffer zone versus other competitors in this marketplace. Our technology controls the effects of drift and subsequent off-target impact of Clomazone. How we encapsulate Clomazone is proprietary, but suffice to say that while many of our competitors have tried, none have been able to match our product's performance.

3RIVE 3D is another example of our strong platform approach. In this case, a new foam applied delivery system that uses low-water volumes to deliver crop protection products infero requiring fewer refills that saves time, water, fuel and labor. This patent-pending FMC innovation seamlessly integrates formulation technology, application expertise, and active ingredients, to increase the number of acres planted in a single day.

Capture 3RIVE 3D, based on our successful Capture LFR insecticide, is the first formulation designed exclusively for this new delivery system. It's being trialed on farms this year in North America with full-scale launch in 2016.

The market potential for naturally derived products is clearly growing, as the industry looks for new modes of action and softer chemistries. We believe the market size will be approximately $4 billion by the end of this decade. In our biosolutions business, launched in late 2013, we have built an end-to-end biological crop protection platform through several world-class collaborations and alliances.

For example, we've brought together Chr. Hansen's significant biological capabilities and fermentation expertise, TAEB's extensive library of microorganisms and product pipeline, and FMC's core strengths in formulation science, registrations, field development and marketing. This discovery and development model enables us to introduce novel products through our global market access.

During its first two years, our biosolutions business will have launched five new products as a result of our key alliances. They are listed on this slide in the order of launch year. And it shows the targeted crops and regions for each of these technologies.

With our partner Chr. Hansen, we expect to accelerate and expand the pace of commercialization over the next two to three years. We do anticipate strong demand for biological solutions, driven by public perception and increased regulatory pressures for softer chemistries, increasing resistance to current modes of action, and the desire for improved environmental profile.

Through our Chr. Hansen alliance, we are pursuing a strategic approach to biological research, using what we call Smart Selection process that filters the best strains for target production concepts early on in the process. We conduct profiling and greenhouse tests to further refine top-string candidates for field testing. Only the best strains move forward to full-scale field trials.

And as you can see on this slide, we have seven strains in active development that we expect to launch in the next 36 months, ranging from high-value biostimulants, biopesticides, and seed treatment applications for fruits, vegetables and a variety of low crops. We've been able to get to this point quickly, and our future pipeline of new products is supported by our 2013 acquisition of CAB, and its significant library of microorganisms.

Turning now to synthetic chemistry. As I've mentioned earlier, we focus research on AI's that are further along in their development. Early discovery research on new molecules is expensive and highly risky. Contrast this with FMC's derisked pipeline of active ingredients, each with a defined proof of concept that has already cleared many investment hurdles. When it comes to our synthetic active ingredients, we manage innovation to provide a balance of short and longer-term projects.

And as you can see on this chart, we have a number of platforms or products in our pipeline that will launch over the next two to seven years. When we evaluate potential AI investments, we take a strategic global approach. We look at our crop and geographic exposure, the type of test pressures growers have to face, and the most sustainable chemistry options to meet these needs.

With Cheminova, we enhanced our six pipeline molecules with three new AI's, bringing (technical difficulty) our total to nine new AI's expected to launch between 2017 and 2022. The stronger pipeline ensures tremendous growth opportunities with incremental revenues in excess of $1.5 billion at risk-adjusted peak sales. It also bolsters our regional development activities after their initial launch.

Let me give you a few examples of new products from our AI pipeline and the strong performance we are currently seeing in trials. Fluindapyr is a new fungicide active ingredient that treats an aggressive disease called (technical difficulty) Puccinia in wheat. And as you can see on these photographs, it also treats soybean rust in Brazil and a variety of diseases in cereals, rice and grapes around the world.

In testing, it has outperformed the competitive mix and demonstrated yield increases on par with the best industry products. We believe this product will be an important technology used in rotation to control resistance issues and will offer exceptional disease control throughout the growing season.

This next set of pictures shows you why we think this technology has so much potential. These are excellent results obtained in field trials last year on Asian soybean rust in Brazil. Bottom right is the untreated control with significant damage and yield loss. The bottom left shows control for one of the leading competitive standards. You will note that it requires a mixture of two different products at higher dose rates.

Now look at the test slots with our product. In the top two pictures, you can clearly see that even as a solo formulation, at a much lower dose level, Fluindapyr has provided excellent control. This lower dosage is a significant competitive advantage for FMC. I can tell you our R&D and commercial teams are very excited about the opportunities this new molecule will bring to our portfolio.

Turning to another template in our pipeline, a few months ago, we announced acquisition of a broadleaf herbicide active ingredient from Kumiai, one of our Japanese partners. This is a new novel broadleaf herbicide in crop and preplanned burn-down segment. This is only the second molecule in its class to be demonstrated as safe on key European cereals.

It provides superior broadleaf control against key resistant weeds, performs better than competitive products at lower use rates, and will provide a new spectrum that's critical to resistance management. I know I've only highlighted a few of our exciting molecules here today. and we do have many more proprietary new AI's in that developer list, each bringing something new to growers in the key segments and geographies we target.

So switching gears a little bit and looking at revenue growth from 2016 to 2020. When comparing our expected growth rates with the crop protection market I discussed earlier, you can see that we expect to continue to outpace the market with a compound annual growth rate in the range of 7% to 11%. We see our growth coming from a number of major areas. General market growth will add over $850 million in revenue. And as we said, this growth will be slower in the 2015-2016 timeframe, and will accelerate in 2017 and throughout the rest of the decade.

Cheminova synergies is the second contributor. As previously commented, this acquisition will generate significant revenue synergies beyond the already discussed $150 million by 2017, as we leverage our direct market access model in key countries, and we start to sell a broader portfolio to new and existing customers. This, in turn, will allow us to gain exposure to the broader crop spectrum I talked about earlier.

And finally, as our innovation pipeline that accelerates growth with new products in biologicals, seed treatments, micronutrients and synthetic chemistries. These will contribute revenue growth through both short-term development as well as a new suite of AI's towards the end of our Vision 2020 plan horizon.

Although we anticipate growing at 7% to 11%, this is a lower growth rate than in the previous plan period from 2009 to 2014, which, for us, averaged 16%. Frankly, we do not see this slower growth as necessarily a bad thing. So why are we planning on lower growth?

Firstly, underlying market growth is expected to be lower. We do not expect a significant spike in commodity prices as we experienced in the 2010, 2011 and 2012 time period. That spike accelerated crop protection chemical usage as growers wanted to maximize yields and take advantage of high crop prices.

Secondly, it's simply the law of large numbers. At the beginning of 2009, we were growing up a much smaller base, about $1 billion. Today, we start from a base of over $3 billion of revenue.

Next is our product mix. We've taken the strategic decision to reduce the number and type of third-party products that we sell, especially in Brazil. This reduces revenue growth, but improves our gross margins and improves our working capital. Post-Cheminova, we will have a greater exposure in the more stable higher-margin but slower-growing Europe and North American markets.

From an earnings perspective, delivering topline growth is critical, but equally important is our ability to quickly and to successfully integrate Cheminova. We will increase earnings by $120 million as a result of the integration.

Also impacting earnings will be the change in geographic mix. As you have seen, Europe will become a significantly larger part of our portfolio, and with that comes higher margins along with our new direct market access. In working capital, we are planning on seeing leverage as we change our geographic mix to be more exposed to Europe and less to Brazil, as well as managing our new combined portfolio.

As you can imagine, the ag team and myself are thrilled to have the opportunity to build the next successful chapter in FMC's Agricultural Solutions. The numerous activities we have underway to integrate Cheminova are the building blocks for our future. We will exploit our greater market access, our broader crop exposure, our proven asset-light manufacturing model, and last but not least, the deepest innovation pipeline we've had in decades -- all to ensure our business not only continues to outpace the market in terms of growth, but does so in a manner that enhances margins and improves cash flow.

Our new business is a major world player in the crop protection industry. And I hope you also took away from this presentation that we are very much technology and research-based that is prepared to invest in technology over the years to come. We intend to bring these technology investments to market by our thousands of customers around the world. We will help improve their yields and value to their own businesses and enterprises, and do so safely and sustainably.

It is a very exciting time to be involved in FMC's Ag Solutions. We have tremendous opportunities ahead of us, and we really, all as a team, look forward to delivering on the vision I presented here.

With that, I want to thank you for your time and attention over the last 45 minutes. And I very much look forward to answering your questions after lunch.

I will now turn the floor back over to Brian Angeli.

Thank you, Mark. One point to note for those in the room. On slides 34 and 35 of Mark's presentation, the color coding in the legend is reversed. The blue bar portion of the chart represents FMC; the green portion of the chart represents Cheminova.

Any questions, do let us know. We'll post a revised version of those slides on the website as well.

At this point, we will take a short 15-minute break, and we will resume the presentations at 11 o'clock. Thank you.

(conference break)

Okay, welcome back. We will now resume our segment review with Tom Schneberger, Vice President and Global Business Director for FMC's lithium business.

Thank you Brian. Good morning. I'm pleased to be here today to discuss our lithium business. Lithium is FMC's smallest segment but one that has strong growth potential. In 2014, FMC generated $257 million in revenue and $27 million in operating income. With an overall market share of 18%, FMC is a leading supplier of lithium products. Our manufacturing and technical capabilities have built strong and defensible positions in key markets such as the rapidly growing energy storage segment, which now comprises about 30% of our revenue, primarily in Asia.

Our manufacturing footprint starts with fine-based production for lithium carbonate and lithium chloride at the Salar del Hombre Muerto in Argentina. All of our other lithium derived products are manufactured outside of Argentina through a network of four additional manufacturing locations -- Bessemer City, North Carolina, Bromborough UK, Patancheru, India and Zhangjiagang, China.

Today, I will outline several high-value market segments where we'll leverage the strength of our manufacturing capabilities to grow earnings. I'll also review the costs associated with our operation in Argentina. And finally, I'll provide an outlook for this business.

Lithium as an industry is primarily a global market with diverse end-use application. In 2014, the global market for lithium products was about 150,000 metric tons on a lithium carbonate equivalent, or LCE, basis, and approximately $1.4 billion in revenue.

The market for lithium grew about 7% in 2014 and growth is expected to continue at over 10% annually through 2020. This is driven in large part by energy storage demand.

As you can see, the lithium market is made up of both industrial and specialty products. In general, customers typically purchase industrial products on a cost basis. Specialty products, which require further manufacturing and often technical support, serves to meet additional needs that are critical to our customers' success.

Specialty lithium products make up less than one-third of market demand on a volume basis, yet they generate nearly 60% of global revenue, capturing a higher value per LCE versus industrial products. FMC's manufacturing process knowledge, technical service capabilities, and geographic footprint position us well to serve these higher value segments, and our strategy is to focus on meeting the increasing demand for these products.

The left of this slide highlights three specific product lines where FMC is the premier supplier. We hold strong market positions in these products, which are essential for some of the fastest-growing and most profitable lithium applications in today's market.

As you can see on the right of this slide, energy storage applications have grown rapidly and we expect a compound annual growth rate of over 20% through 2020. These applications include consumer-electronics, electric vehicles, and the just emerging grid storage segment.

While a portion of energy storage demand can be met with lithium carbonate, electric vehicles that offer more power and longer range will require lithium hydroxide to support the best battery technology. The use of butyllithium is expected to grow at a rate slightly higher than GDP due to increased polymer used in rapidly developing economies and the production of fuel-efficient tires.

Finally, the production of lithium aluminum alloys is quickly increasing in the United States and Europe as aircraft weight is reduced to increase fuel efficiency. Forecasted growth is based on the light weighting of aircraft that's already taking place but it's possible that these alloys can be adopted by other types of manufacturing as well.

FMC is well-positioned to reliably meet customers' needs. With an ability to consistently produce high-quality product and support their safe and effective use, we are a supply-chain partner that is valued by our customer.

Let's take a closer look at each of these specialty product markets. In lithium hydroxide, we continue to see growth from conventional applications such as greases and lubricants. This market represents a stable and high margin opportunity that FMC has historically focused on and will continue to share.

More recently, energy storage applications have contributed to higher growth in hydroxide consumption. In 2014, FMC supplied well over half of the lithium hydroxide that went into electric vehicle batteries globally. FMC built this position over the years due to our high-quality products, our understanding of battery applications, and close customer relationships. We started in the early 1990s collaborating with a customer on the first lithium-ion battery. As the largest hydroxide producer, our primary focus will remain on the energy storage segment as applications for lithium ion batteries increase.

Battery technology and transportation is a particular area of focus. Numerous auto manufacturers are adding pure electric vehicles, or EVs, to their fleet. Our 2020 forecast only assumes a 1% pure EV penetration rate. However, we expect the higher energy density required by these batteries will drive battery grade lithium hydroxide demand beyond current production capacity.

Capacity expansions by established producers have not kept pace with the rapid upturn in demand. This situation has led to tight supply of lithium hydroxide in 2014 and created an increasing price environment. As demand continues to grow, this market will need additional capacity. Currently, we are increasing throughput from existing assets. However, we will invest in additional capacity as the market demands it.

Another major specialty product is butyllithium. Butyllithium is used for chemical synthesis in the production of various polymers. Market growth for butyllithium is relatively stable with few or no known substitutes. Demand growth will be driven by increasing use of synthetic rubber-based materials in developing economies. Additionally, new tire technology that reduces friction and increases fuel efficiency will drive growth in butyllithium demand. In aggregate, we expect the $200 million butyllithium market to near global GDP as stronger growth for polymers in Asia and fuel-efficient tire production in Europe more than offset our modest expectations for chemical synthesis demand. Unlike the markets for most lithium products, butyllithium is sold regionally due to the technical challenges of safely manufacturing, transporting, and storing these products.

FMC operates four world-class organolithium facilities at the highest level of industry standards with regard to safety. Our manufacturing packaging capabilities at each location allow our customers to hold minimal inventory. This makes FMC a valued supply-chain partner to global customers with production on multiple continents.

FMC is the leader in global butyllithium supply and remains committed to this segment. With low-cost production, the highest level of technical service and adequate capacity to support the market's growth, FMC is well-positioned to grow its worldwide butyllithium sales.

Our final focus segment is high purity lithium metal which is typically used to produce primary batteries but is increasingly becoming an important material for the manufacture of lightweight, highly durable alloys. These new lithium aluminum alloys reduce weight and improve corrosion resistance, which will lead to about a 10% improvement in aircraft fuel efficiency. Although the market for high purity metals is still under $100 million, demand for these alloys is expected to grow at 30% annually through 2020. FMC is currently the only Western producer of high purity metal. This is a position that lets us grow profitably with our customer. With an ability to incrementally expand production, we expect to more than double sales into this segment by 2020.

Now that I've outlined our commercial focus on the three key specialty product lines, I'll review the cost pressures that we are experiencing in Argentina. In Argentina, we produce the majority of our lithium carbonate and lithium chloride that gets further processed into our other product lines. As a reminder, we produce all of our lithium hydroxide, butyllithium and high purity metals outside of Argentina.

Given our supply position in Argentina, we are exposed to the high level of inflation that has existed there over the last seven years. On the left of this slide, you can see that Argentina has experienced significant inflation in the cost of goods, but there's been substantially less currency devaluation versus the US dollar. This has resulted in a doubling of local cost in Argentina on a dollar basis.

On the right of the slide, you see that brine producers continue to have a cost advantage over spodumene producers. However, since 2011, Argentine inflation has outpaced devaluation by 36% and since the end of 2007 by 89%. This has increased our manufacturing costs more than some of the other brine producers.

Since 2007, a 49% increase in our cash costs can be attributed to the currency strength relative to inflation. Despite these inflationary pressures, and as a result of our manufacturing efficiency efforts, we remain cost advantage compared to spodumene producers.

While our fundamental operating performance continues to improve, high inflation combined with unpredictability of peso devaluation led to volatility in our earnings. As it's become inherently difficult to operate in Argentina, we continue to expect pressure on our results.

As we progress, there are several factors that can improve our outlook for cost in Argentina -- peso devaluation, slower inflation, productivity improvement and cost control. While many predict a significant peso devaluation following the 2015 presidential election in Argentina, this as well as the level of inflation is beyond FMC's control. Therefore, we will focus on mitigating costs with targeted productivity improvement and cost reduction efforts.

With respect to our cost initiatives, in Argentina, we will continue to benefit from past investments. As a result, our production has increased about 30% since 2012. In addition, we'll begin to reduce our energy cost during the second half of this year as the new natural gas pipeline goes into operation. At this point, we'll optimize production in Argentina without investing capital beyond maintenance requirements. And over the next 12 months, we will get a better understanding of the costs to operate in Argentina over the medium term. In the meantime, FMC will look to a long-term sourcing strategy for carbonate in order to diversify the supply that feeds our specialty product manufacturing. We expect over 50,000 metric tons of carbonate production will come online between now and the end of 2016, an increase of 30% compared to today. Our plan is to preferentially select external supply sources to supplement and diversify our sources of carbonate.

The balance of our cost improvement focus will be to maximize production and optimize cost for producing our specialty product, which we discussed earlier. With a focus fully on maintaining a low unit cost of production and increased earnings stability, we will be able to competitively produce throughout our product lines and successfully grow in our target market.

To recap our strategy, our overarching focus will be to leverage FMC's strong position in the specialty product market and increase that portion of our sales mix. We will continue our strong technical collaboration with customers, such as those in the energy storage segment, to improve lithium battery technology. And we'll optimize operations while diversifying our sources of carbonate.

Let me now share our financial outlook and highlight a few of the key drivers. In the near term, we expect annual revenue growth in the mid-single digits percent as we implement our strategy to increase specialty product sales. This modest revenue growth is a result of reducing carbonate sales to manufacture more specialty product and improve our operating margins to the midteens percent by 2017. Beyond 2017, this increased focus of capital and resources on our specialty product line will allow us to accelerate growth and profitability. We expect to further increase margins and improve our overall capital employed in this business.

While the operating results of our lithium business continue to improve, the significant impact of Argentine inflation and currency adjustments will cause volatility from period the period in the near term. However, as supply in the carbonate market increases, we will supplement our own production with alternate sourcing. This sourcing strategy will allow us to decrease the level of volatility in earnings as we grow.

At the same time, we retain the opportunity to benefit if operations in Argentina improve. FMC's strong brand and competitive advantage in an attractive market positions us to grow with improving margin.

Thank you. I look forward to answering your questions during the Q&A this afternoon. I would now like to introduce my colleague, Eric Norris, Vice President and Global Business Director for FMC Health and Nutrition.

Thank you and good morning everyone. I am pleased to be here today to talk about our growth story in Health and Nutrition. This is an exciting business within FMC that provides leading pharmaceutical, food, and nutraceutical customers around the world with high-value naturally derived ingredients.

For the next 30 minutes or so, I'll walk you through the three distinct markets we serve, the products we offer and the value we provide our customers. I'll discuss our growth strategy and summarize our plans to drive higher operating performance and consistent long-term growth across our portfolio.

Let me first begin with an overview of FMC Health and Nutrition, or simply H&N for short. In 2014, H&N delivered revenue of $188 million and EBIT -- excuse me, revenue of $828 million and EBIT of $188 million, representing our 10th consecutive year of record earnings.

This business has a track record of delivering consistent, steady volume gains and high-margin with low customer turnover because of its long-earned incumbent position with customers. We've been a supplier of choice with some of the leading food and pharmaceutical companies for over half a century with a unique naturally derived product line. When you layer in our differentiated applications know-how, it adds up to a market leader and a trusted partner with customers worldwide.

We participate in the three key markets -- nutritional ingredients, health excipients, and functional health ingredients serving the processed foods, pharmaceutical and nutraceutical markets. Nutritional ingredients is our largest segment with about half of our sales. Health excipients is up 40% of our revenues. The third is functional health ingredients, our newest business line with the fastest growth potential. We launched this business line primarily as a result of our 2013 acquisition of Epax omega-3 concentrate -- or omega-3 oil concentrate.

In the center pie chart, you'll see that our product line is concentrated in our market-leading biopolymers of colloidal MCC, or microcrystalline cellulose, MCC binders and cleanly derived carrageenan and alginate. The other category here includes our natural colors and omega-3 products. I'll describe each of these lines in greater detail shortly.

On the right is a regional sales breakdown. Two-thirds are in Western markets, not surprising given that many of our products are used in modern medicines and processed convenience or indulgent foods common in the West. However, growth is accelerating in rapidly developing economies where we see new opportunities with a rising middle class that wants more convenient foods and the health benefits from nutraceuticals and pharmaceuticals. Hence, we expect our sales mix to continue shifting towards rapidly developing economies, RDEs, over the coming five years.

With an incumbent position as a leading global biopolymer producer combined with well-positioned acquisitions and colors in omega-3, we are a leading ingredient franchise to the nutritional ingredient, health excipient, and functional health ingredient market. We serve markets that have attractive, steadily growing consumption patterns, and our product lines are well-positioned across these markets.

In nutritional ingredients, we provide texture, structure, stability and natural color to processed food. Texture and stabilizers include colloidal MCC and a range of other hydrocolloids such as carrageenan and alginate. We are leader in each of these products.

In natural colors and omega-3s, we are a smaller player but have a significant growth potential. Then in health excipients markets, our MCC products are the inert ingredients used in tablets that provide binding or encapsulation properties. FMC's Avicel brand excipients is regarded as the industry gold standard for binding dry tablet drugs. It can be found in roughly half of the prescriptions written each year for such tablets in Western markets.

Additionally, we have a portfolio of novel disintegrates for dry tablets, a range of highly innovative softgel capsule technologies producing carrageenan and alginate and a platform for natural colors used in tablets.

Then in functional health ingredients, our Epax brand is the recognized leader in innovative, high-quality omega-3 concentrates for the nutraceutical market. For many years now, our pharmaceutical grade alginate technology has been the market-leading technology for anti-reflux.

Although we operate in three distinct markets, our success and growth of each business line is predicated on three strategic priorities. First is to leverage our incumbency position to become or remain a first intent supplier. As I mentioned earlier, the majority of our customer relationships span into years and in some cases decades. The trust and partnership we have built with customers in each of our markets is a real competitive advantage leading to the preferred or first intent supply position. I'll provide a few examples shortly.

The second priority is innovation. This is particularly relevant for our food and nutraceutical customers where the consumers' constant desire for new and improved products drives a never-ending need for innovation.

Our R&D organization is disproportionately focused on the D side of R&D. We work hand-in-hand with customers to develop differentiated formulations that deliver specific functionality, for example imparting a better mouth feel in low-fat ice cream or keeping protein properly suspended in a sports drink.

As I walk you through our three markets, I'll talk about the critical role innovation plays in each and how it contributes to our growth.

Operational excellence is our third priority. As Pierre said earlier, health and nutrition is a well invested business. And as we discussed at a recent earnings call, we are well into a restructuring program to optimize our footprint and improve operations. We expect these important initiatives will contribute to enhanced margins in the next 12 months, provide appropriate capacity growth with minimal capital investment and significantly improve our return.

Our first key market is also the largest, nutritional ingredients. This is a $22 billion global market spanning texturants, functional ingredients and colors. Growth is steady at 4% to 6% a year. To a large extent, this market is driven by a constant stream of what I will call food fads in highly developed regions like the US. And in Europe, this market is also driven by the continuing shift of large populations in Asia and South America to more urban and mobile lifestyle.

Texturants and texturant applications know-how are essential to providing enhanced mouth feel and stability in processed and convenient food. As noted in this chart, we play broadly across texturant product lines, affording us the opportunity to approach customer needs with a range of single texturant ingredients or a combination of ingredients in order to optimize performance and costs. To enhance our innovation value to customers, we are increasingly insourcing texturants from third parties, such as starches, gums, or emulsifiers, and blending them with our product to provide even broader solutions to our customers. Market growth across all texturant products is also in the 4% to 6% range.

Colors are another key component to deliver appealing processing convenience foods to the market. Natural colors are gaining share versus artificial or synthetic colors due to strong preferences which are most pronounced in North America and Europe. Overall growth is close to 10% per annum. We have a small business in natural colors built through two acquisitions, and we expect to expand our share through innovation and geographic expansion.

We also have an emerging position in nutraceuticals by our omega-3 platform, which we are beginning to build, are leveraging our texturant and colors market presence.

Our three strategic priorities I earlier referenced manifest themselves to different degrees in each of our markets. In nutritional ingredients, while providing quality, service and reliability, or QSR for short, to our customers is important, as is efficient manufacturing, our success in this market is mostly based on providing innovative solutions on a customer-by-customer basis. This is an FMC core competency. While our competitors can show up with an equivalent product once a brand is established at a food company, they often lack the know-how to help companies launch a new brand or modify existing brands to improve mouth feel, physical stability, color or cost. As the customers' brand matures, we are able to deploy this core competency to reformulate their brand through a lower cost in use without comprising our margin. We believe this will be an essential strategy in the next five years to sustain our EBIT margins within nutritional ingredients. Even more importantly, we are using this core competency to help our customers develop new brands. Many of our customers are asking us to go beyond single ingredients or basic ingredient blend and bring them new processed food concepts. We have several such projects underway for our customers in the beverage, dairy and bakery markets that will drive new sales of nearly $100 million by 2020. To help guide these innovation efforts, we are implementing a broad program aimed at consumer trend analysis and deployment of a sensory panel to more deeply understand customer taste preferences. Let me provide an example.

This table shows that the number of claims representing consumer trends in processed and convenience foods continues to increase each year. Customers look to remove things like meat and dairy protein, or fat and sugars, as you see highlighted in these text boxes here. When they do this, the structure, texture, and flavor of their product can be impacted significantly. It may even alter the consumers' perception and preference for their brand.

We are uniquely positioned with both our products and technical expertise to replace the component structure and texture, ensuring that consumers will experience the same full mouth feel sensation in the new, the no fat, vegetarian, gluten-free, sugar-free versions of their products.

We are also then applying sensory panels to taste test food categories and then characterize them by attribute. The result is a data-backed understanding of which attribute drive consumer liking. We have the know-how to control these attributes through ingredients and complex formulation.

Our customers know the difference between a subject matter expert with deep technical expertise like FMC versus a mere supplier of basic ingredients. We have the market knowledge and technical skill to make a less appealing SKU more appealing, maintain appeal with a better cost structure and develop a new SKU to fill a gap in a brand's portfolio.

Turning now to health excipient, we play in a $5 billion market spanning tablets, capsules and oral liquids. Oral dose form of drug delivery remains the preferred mechanism for existing and new pharmaceutical assets. Tablets by far are the preferred form due to their cost-effectiveness and track record for efficacy. The market for tablets is growing at rates of close to 4% across a range of drugs, produced both by innovators and generic producers. Excipients' key attributes include binding of the active ingredient and then disintegrating upon ingestion.

Capsules, the next category here, both soft gel and hard capsules, are growing faster with rates in excess of 6%. Drivers here include the development of oil-based actives such as omega-3s and actives which may be sensitive to tablet compression or generally difficult to formulate. Gelatin is the dominant material for softgel capsules. But producers like FMC are making steady inroads with vegetarian-based products, some of which also have performance benefit versus gelatin.

Finally, oral liquid is a smaller dose form with lower overall levels of growth. This dose form targets patients with difficulties taking tablets or capsules but for pharmaceutical actives that are difficult to formulate in more traditional tablet or capsule form. We serve this market with our hydrocolloid products that are used as a suspension agent.

In health excipients, our success is mostly in sustaining our first intensifier position by elevating all aspects of the customer experience, including product quality, batch-to-batch consistency, response time, regulatory support and customer service. Our advantage relative to our competition is our incumbent position. The scale of our global network, which dwarfs our next nearest competitors, and the depth of our relationships both at pharmaceutical innovators and generic pharmaceutical producers alike.

Later, I'll describe details of our overall QSR and cost reduction plans, both of which will be essential strategies to sustain our share and margins in the increasingly competitive dry tablet market.

Innovation, while smaller, part of our health excipient story is focused on soft capsules where we expect double-digit growth rates per year through 2020 as the technology gains share at the expense of gelatin. When you add it all up, we expect to grow at the higher end of the overall health excipients market, or approximately 5% a year.

Sustaining share in dry tablets is based upon a solid generic strategy. Today, generics represent nearly 80% of all prescriptions written worldwide. Branded pharmaceutical companies are facing a major patent slip as products continue to go generic. And the years 2012 and 2015, as noted here, are the years with the greatest number of generic events. There are approximately 80 branded tablets or products in dry tablet form using MCC that are expected to go generic over the next 10 years. A significant proportion of those will be made in India over the coming years.

Now, switching costs are high in the markets we serve, particularly in this one, in the pharmaceutical market. When a pharmaceutical product shifts from patent to off patent, generic producers look to minimize risk and simplify their regulatory process by continuing to use our products, the same that was used in the patented innovative formula. That said, we recognize that to continue to sustain our first in 10 relationships, we must continually invest in QSR to keep Avicel as the industry's binder of choice. Today, we are very well positioned as a first in ten supplier with the major generic names in India and remain well-positioned with global innovators. You can see here they have a pipeline of 76 tablets and FDA Phase III and IV trials are anticipated to launch in the next six years.

Finally, in functional health ingredients, we participate in a $2.5 billion heart health market with our omega-3 concentrates, and in the $500 million NPV product market with our API grade alginate product. These markets, which include prescription pharmaceuticals, over-the-counter and nutraceutical products, grow at rates 4% 6% a year in the case of anti-reflux, and 6% to 10% in the case of heart health.

Recent growth in omega-3 nutraceutical markets has been challenged by negative press in the US regarding its health benefits as well as a new regulatory regime in China which has slowed the launch of new higher concentration nutraceuticals. But increased industry education is turning the tide on the misleading and unfounded bad press in omega-3s here in the US whereas in China we expect the market development to be largely a timing related issue.

The pharmaceutical side of these markets is dynamic. Key trends playing out include the emergence of large nutraceutical analogues to omega-3 having similar or identical therapeutic benefits as the pharmaceutical prescription benchmark known as Lovaza, as well as a wave of generic competition unfolding in both the omega-3 and anti-reflux markets.

In functional health ingredients, our success will be well-balanced across all three strategic priorities. We will develop products with strong health claims while continuing to drive our improved cost position and sustain our reputation as a quality leader for continuous improvement in QSR.

We expect new products in functional health ingredients to grow in the midteen percent rates through 2020, the highest growth rates within H&N. In the next few years, those products will include very high concentration of omega-3 for the nutraceutical market and a range of omega-3 pharmaceutical products targeting the generic Lovaza space.

Longer-term, we leverage our supply chain in naturally dry ingredients to take advantage of growing demand for products that can demonstrate health claim. Markets we are addressing and developing concepts for right now include weight management and immune function area.

So, as you've seen, we participate in these three markets, each with varying degrees of emphasis on our three strategic principles -- nutritional ingredients, where a deep understanding of consumer preferences drives our agenda; health excipients, where regulatory expertise and QSR make all the difference; and functional health ingredients where QSR, new innovations and manufacturing excellence are all very important to winning in that market.

But despite these differences, there are common strategic denominators that run across the business, core enterprise value initiatives, if you will, that are crucial to sustain our leadership. The first one is of course robust QSR competency that transcends our organization and is essential to being a first intent supplier.

Second is an R&D footprint close to all our customers. This is important, given the type of collaborations we need to have with customers in formulating new products, the key to delivering innovative solution.

The third is a comprehensive operational excellence program in order to provide the lowest cost capacity, the most reliable operations to meet demand growth while delivering strong returns to shareholders. In the next few slides, I'll dive into each of these three elements.

First is strengthening our QSR competency. Over the years, FMC has had incumbency advantage across our major markets. This has resulted in the leading share we have and has been the foundation of our first intent supplier position for years.

Going forward, our goal must be to sustain first intent position. That goal must take into consideration a more level competitive playing field. Investing in QSR is an essential differentiating element of this strategy and will support mid-20s% EBIT margins for the entire H&N portfolio through 2020.

What are we doing? We are upgrading our global quality organization and elevating it to a more strategic incentive component of our senior leadership. We are building our existing competencies in GMP and quality control, regulatory compliance and customer service, as well as introducing new competencies in quality assurance for pharmaceutical actives, global FDA knowledge and root cause methodology. This is an important space that rewards high-quality service and reliability. We will set a standard for customer satisfaction well above what industry leaders, including ourselves, have been able to consistently deliver for the food, pharmaceutical, and nutraceutical markets in the past.

Next is broadening our global innovation capacity. Global reach is an essential part of driving growth and executing our strategy across each of these markets. Here you can see, in 2010, our global sales and R&D network was largely focused on North America and Europe with the beginnings of a presence in Asia. This reflected a sales profile that was largely driven by developed markets and predominantly composed of biopolymers.

Five years later, we have significantly expanded our ability to serve customers in a rapidly developing economy while building our body of know-how with new capabilities in pectin, natural colors and omega-3. Either by acquisition or internally driven expansion, we've expanded our network of regional innovation centers by adding labs in Moscow, Istanbul, Singapore, Bangalore, Santiago and Sao Paulo. These centers help us leverage the expertise of local talent who are well acquainted with regional market trends and regulatory requirements. To deliver innovative solutions and achieve each of the growth targets I earlier described in our three markets, it's all about a close relationship with customers around the world, particularly in rapidly developing economies.

And last, but certainly not least, operational excellence. With our acquisitions and capital expenditures in the past few years, we have a well-capitalized asset basis for organic growth going forward. Over the coming years, as a result of our operational excellence initiatives, this plan we have will deliver increased usable capacity, result in reduced capital needs, increase our margins and enhance our return on capital.

We expect to deliver a sustainable 200 basis point improvement in our EBIT margins by 2017 through a three-part plan which is well underway. The first step of this plan is to build flexibility and efficiency by consolidating facilities, adding capabilities at our existing plants such as incorporating through-grade capability at our Thailand pharmaceutical plant, and deploying a more asset light operating model to some of our smaller markets.

The second step is to leverage the ongoing manufacturing excellence program, commonly known as lean manufacturing, across our major plant.

The third step of the plan is to drive process engineering improvement, focused largely on yield gains at existing plants running at or near capacity.

Having walked you through our strategic priorities and their role in strengthening our leadership as a trusted partner to global customers, let me now summarize the financial expectations for health and nutrition. You should expect that we will grow at an attractive mid-single-digit percent rate on the top line year after year. We will leverage our naturally derived portfolio and leading market position as an incumbent, and our constant focus on customer relationships and deep know-how will ensure that we maintain our long-standing preferred supplier status. This will lead our innovation applications and activities and sustain a healthy pipeline of new product opportunities that will improve R&A. All of this is supported by operational excellence, optimizing our manufacturing and cost structure throughout the business. As I just mentioned, we will deliver approximately 200 basis points improvement to our operating margin after 2016 when our operational programs begin to pay back.

Segment earnings, compound annual growth rate will be in the high single digits. In addition, our focus on inventory reduction and rigor within our supply chain will drive working capital down to the low 40s% to high 30s% on a percent of revenue basis. This, when coupled with our operating leverage, will drive return on capital for the health and nutrition business to the midteens level. This is an exciting business with strong positions in key markets, incredible technology, deep industry know-how, and long-standing relationships with industry leaders, in many cases with strong incumbency positions. We are executing on the right growth plans for H&N to maintain and expand our success.

I appreciate your interest today and attention. With that, I will now turn the podium back to Brian Angeli.

Thank you, Eric. I'd like to thank everyone for their attention this morning. We are now going to take a break for lunch. For those in New York, please proceed out the doors to the right and turn right and the Metropolitan ballroom is actually right behind the wall behind you. Lunch will be out and then we will resume our discussions in about 45 minutes, so we'll start again at 12:30. Thank you.

(lunch break)

Welcome back to FMC's 2015 Investor Day. This afternoon, we will cover our financial outlook, followed by a Q&A session. To get us started, I am pleased to introduce Paul Graves, Executive Vice President and CFO.

Thanks, everybody. I'm sorry you get me after lunch. You get an English accent and somebody who speaks too fast and I have a cold. So, I will try and paste it appropriately.

But for your attention today, I know we have provided a lot for you all to think about and I will try not to repeat too much what you have already heard, but I will instead focus on some additional important areas that surround our vision, in particular how we see the financial performance of FMC between now and 2020.

But before I dive into the 2016 to 2020 period, let me remind you of our outlook for 2015, which Pierre covered at the start of today. I don't intend to cover this again, but of course we will be happy to take questions on this guidance later after I finish.

So, since many of the factors driving our 2015 performance are somewhat transitory in nature, let me provide a bridge of our revenues and segment earnings from 2014 to 2016, which is the baseline year for our growth assumptions that I will discuss next.

Let's start with ag solutions. Looking at revenues and starting from 2014's performance of just under $2.2 billion, first the acquired Cheminova business, including revenue synergies, will contribute approximately $1.1 billion to $1.3 billion in revenues to FMC.

Next, we expect to continue to gain market share, particularly in soybean applications, which will add between $100 million and $200 million of revenues. Now offsetting this, we expect our decision to exit certain third-party distribution channels in Brazil and the cumulative impact of currency movements to reduce our revenues by between $100 million and $200 million.

So taken together, we expect segment revenues to increase by between $1 billion and $1.3 billion, or 45% to 60%, compared to 2014.

Now moving onto earnings, 2014's segment earnings were just under $500 million. Looking at the contribution from Cheminova before the impact of the non-cash purchase price accounting deductions, which you see to the right of the bridge there, but after the benefit of synergies realized in 2015, you can see that we expect Cheminova to contribute an effective operating margin of approximately 15% in 2015.

Now this is a number we expect to climb by a couple more percentage points in each of 2017 and 2018 as additional synergies and efficiencies are achieved.

We expect the benefits of market-share gain to offset the impact of exiting third-party distribution channels, foreign exchange, and general cost inflation, and we expect purchase price accounting amortization to be approximately a $25 million hit to segment earnings on a full-year basis. We therefore expect ag solutions earnings to be roughly 25% to 35% higher in 2016 than 2014.

Next, health and nutrition. We expect modest revenue growth in the 2% to 6% range, with high volumes, especially in MCC and alginate, combined with new product launches, particularly in omega 3 and colors, and positive pricing trends offset the impact of currencies, largely the lower euro, and the ongoing rationalization of lower-margin product offerings.

For segment earnings, we expect to see the benefits of our operational improvement program start to deliver higher margins throughout our network, leading to growth of segment earnings in the 10% to 15% range, with segment operating margin increasing by between 150 and 250 basis points in 2015 compared with 2014.

Now lithium, looking into 2016 and without making any predictions regarding the peso or the rate of devaluation, we expect segment revenues to be flat over the period, with higher pricing in our downstream businesses, most notably hydroxide, offsetting lower available volumes primarily in carbonates. Segment operating margins will climb into the low double-digits percent, but some of the pricing tailwinds are offset by cost inflation and continued negative currency effect in Argentina.

Finally, let me roll that up into a consolidated view of FMC at the adjusted EPS level. Level-set on the starting point, 2014 adjusted EPS after moving alkali to discontinued operations was $3.26 per share. Now to be clear, the midpoint of our 2015 guidance range, which is $3.25, is not directly comparable with this 2014 EPS. Recall that our 2015 guidance is reduced by approximately $0.11 per share of non-cash charges related to just over eight months of purchase price accounting amortization.

Put a different way, our 2015 guidance, excluding these purchase accounting charges, is closer to $3.21 to $3.51.

Now back to the bridge. The increase in earnings in each of our segments, which I set out on the previous slide, will contribute between $0.95 and $1.35 per share to adjusted EPS before the additional amortization.

The cumulative impact of higher interest expense, driven by higher debt levels, higher corporate expenses largely due to cost inflation, and a slightly higher tax rate reflecting the fact that the reported rate in 2014 benefited from certain one-off items, together create a headwind of between $0.20 and $0.27 per share.

Now on the tax items, so there's no confusion, we're not projecting an increase in our underlying tax rate. The underlying rate we see in 2015 is consistent with the underlying rate, adjusted for the exclusion of alkali, that we saw in 2014. We're simply accounting for certain tax benefits we saw in 2014 that we cannot predict will recur in 2015.

So taking all these items into account, we currently expect a 2016 adjusted EPS before purchase accounting in the range of $3.95 to $4.45, which is directly comparable with the 2014 adjusted EPS of $3.26. The midpoint of this range represents a 29% increase over this two-year period and this translates into a reported adjusted EPS of $3.80 to $4.30 per share.

I will now move onto the Vision 2020 period, covering 2015 to 2020. Let me start by restating some of the points that Pierre made earlier today. As you can see, between 2009 and 2014 on average we grew revenue, EBIT, and adjusted EPS by 7%, 11%, and 14% per year, respectively.

The increasing growth rate as you move down the income statement reflects the cumulative impact of the operating leverage we saw in our businesses; the benefits of the initiatives of One FMC programs; the centralized previously-distributed functions, such as procurement, engineering, human resources, and finance; and of course at the EPS level, the favorable impact of share repurchases.

Our Vision projects growth in revenue, EBIT, and EPS at the midpoint of our forecast ranges of 9%, 13%, and 15%, respectively.

Let me walk you through the factors that support these growth rates. First of all, and most importantly, changes to our portfolio. In 2009 to 2014, our portfolio was much more heavily weighted towards the stable but lower growth health and nutrition portfolio and the cyclical but low to zero growth alkali business.

Furthermore, our revenue and EBIT suffered the drag of the divestment or business exit that we completed during that period.

Our portfolio is now far more heavily weighted towards ag solutions, which, as Mark described earlier, grew at a much faster rate than the rest of our portfolio over that period. Even taking into account the cyclically favorable market conditions for ag over that period, as well as the challenge of growing rapidly from the larger revenue base we have today, FMC's overall portfolio now has a higher underlying growth potential.

Second, we have the benefit in the next two years of synergies from our Cheminova acquisition. In the first three years, we expect the cost and revenue synergies to more than double the reported operating profit we acquired with Cheminova. This creates a meaningful increase in our revenue and especially operating profit over the Vision period.

And finally, we expect the operating leverage within our businesses, combined with the continued implementation of our One FMC program, will continue to deliver higher overall margins over the coming years.

In the 2010 to 2014 period, our EPS growth certainly benefited from the share repurchases we undertook in that period. However, to be consistent with our historical practices, we do not include any share repurchases in our future EPS models.

I will talk a little more about our expectations for generating cash and our planned approach for deploying that cash, but obviously any decisions we make in the future to repurchase shares during the Vision period would act as a tailwind to our EPS growth.

Let me now turn to the subject of cash generation and our intended use of that cash. In the 2010 to 2014 period, we converted approximately 4% of our revenue into cash available for redeployment, after all expenses and investments other than M&A. Over the next five years, FMC expects this average rate of conversion to approximately double and this is explained by multiple factors.

First, FMC invested significant capital in operating assets in the last five years, much higher than our depreciation charges, which created a drag on our cash conversion rate. In the five years spanning 2010 to 2014, our total capital expenditure, excluding spending on an environmental remediation project related to discontinued operation, was approximately $1 billion, during which time our average annual revenue was a little over $3.5 billion.

The bulk of this went into our lithium, alkali, and health and nutrition businesses, and you heard Eric and Tom talk today about the capital discipline we will exercise in those businesses in the next five years as they benefit from the significant capital that we've invested recently, and, of course, alkali is no longer part of our portfolio.

Although Cheminova requires a little more maintenance capital expenditure than under FMC's ag model, it is not expected to be a significant consumer of cash flow on capital projects, as the assets are well invested on a sufficient scale for FMC's needs in the foreseeable future.

As a result, we expect capital spending in the next five years to be in the range of $800 million to $1 billion, during which time our average annual revenues will be over $5 billion.

Second, our ag business grew quickly in Brazil over the last five years, a region that has by far the highest working capital requirements in our industry. With Cheminova added to our portfolio, we expect growth to be more balanced across regions in the future. And while we are not, unfortunately, predicting major improvements in the industrywide terms of business in Brazil in the coming years, we do believe that a combination of working capital focused actions across our entire Company, plus the change in regional mix within ag, will mean that the increasing rate of demand for working capital as a percentage of sales that we saw in the last few years will not repeat.

I will touch on working capital in a little more detail in a moment.

Now offsetting this, we are not predicting the same favorable interest rate environment. We expect our cash taxes to be closer to the income taxes in our income statement, as we no longer have the benefit of various tax losses we utilized in the early part of the decade, and we expect our discontinued spending, which is primarily on environmental remediation and asbestos, to continue at current levels.

Let me give a few more details on our assumptions with regard to working capital, which is a major focus for FMC. Our businesses have some characteristics that result in overall working capital demand that is significantly higher than for many other businesses. For example, our health and nutrition segment uses raw materials that, due to their natural sources, cannot always be readily procured, creating a need to carry minimum inventory levels of some products.

We see a similar effect in our lithium business, due to the inventory of brine that sits in our concentration ponds.

And most importantly, our ag solutions business continues to have a significant demand for working capital in the form of both inventory, given the long customer order lead times in our industry, and especially receivables, given industry practices for offering crop terms to customers throughout Latin America.

We have initiated a number of programs focused on improving our performance in all of these areas and we have started to see the benefits of them in all of our businesses, as you can see from our first-quarter cash flow results. Specifically in our ag business, we have commenced a program in Brazil where we are reviewing the terms of trade with all of our customers, focusing on those customers for whom offering market terms may not be appropriate. This may be for multiple reasons, such as their credit risk, the profitability of the product we sell to them, or the scale of their business with us.

A specific example of this is the business in Brazil that we elected to exit in Q1, which was selling largely low-margin third-party product to smaller customers on terms that were similar to those offered to our larger customers of our own technically differentiated products. We will increasingly look to migrate all of our lower-margin or third-party sales in Brazil to shorter terms.

In health and nutrition, our manufacturing excellence programs include a focus on operating with lower levels of inventory, particularly work in progress and slow-moving items and on SKU rationalization. We have already seen significant benefits of this program in our health and nutrition inventory levels.

Across all of FMC, we have initiated a program to review all procurement terms, particularly where the purchases are focused on servicing our ag business in Brazil. We will work to match as closely as possible the terms our suppliers offer to us to the terms we are offering to our customers.

While this program is at an early stage, we expect that our average supplier payment terms will increase as a result of this process.

Now from a credit quality perspective, we are very focused on maintaining our extremely low customer default rates, which are currently running at similar rates to history, in the very low single-digit percent of receivables.

With the recent devaluation of the real against the dollar being at least as large as the decrease in the price of soybean, corn, and cotton, and with most economic forecasters expecting further real devaluation through 2015 and into 2016, growers of these crops in Brazil remain as profitable in local currency today as they have been in the last two years. Combined with the strong commitment of the Brazilian government to provide access to financing for growers, we are confident that we have no greater risk of default amongst our customers today than in the recent past.

However, we understand the environment can change quickly in this market and we will continue to pay very close attention to credit quality.

So summarizing these points, you can see that we expect to generate from operating activities alone cash available for redeployment of $1.5 billion to $2.2 billion, equivalent to $11 to $18 per share. Together with growth in earnings, we expect to rapidly strengthen our balance sheet, increasing our flexibility to use our balance sheet to support the needs of our businesses, while also using it to benefit shareholders.

We will look to balance continued access to capital, made possible by our strong investment-grade credit rating, with appropriate rewards to shareholders. We are committed to maintaining financial policies and metrics that are consistent with a strong investment-grade credit rating, including a short-term A2/P2 rating. We will continue to seek to finance our operations with a mix of bonds, bank facilities, and commercial paper, balancing financing costs with appropriate liquidity, while limiting refinancing risk.

However, it is important that we also have an efficient balance sheet, and as we grow our earnings and cash flow, we want to make sure that we are operating with an appropriate amount of leverage. In the short term, we're very focused on reducing our absolute level of debt to return quickly to metrics that are appropriate for our strong investment-grade credit rating. But once we reach those levels, we expect to target maintaining them into the future. This creates the potential for additional absolute borrowing levels while maintaining these leverage metrics.

You have heard PSA previously that we will not undertake any M&A in the next three years as we focus on delivering the benefits from the recent acquisitions we have made. We do not expect any other capital demands over and above the levels I have already described.

Taking all of these factors together, this creates the possibility of a further $8 to $10 per share of cash available for return to shareholders.

By now, I have covered a lot of information today and I have jumped across businesses, across regions, time frames, and different financial items, but hopefully you have a better appreciation of what our vision represents financially, and, of course, I would be happy to take questions on any of this during the Q&A session.

So with that, I would like to bring Brian back up onto the stage.

That concludes the prepared remarks. We're going to begin with a Q&A session. I'm just going to ask Pierre, Mark, Paul, Eric, and Tom to join me on stage.

We have two runners in the room, one between each of the aisles with a microphone, so as you have a question, please raise your hand. Someone will come by with a microphone. I will call on you. Please direct your question to the team up here on the stage and they will respond accordingly.

Before we take the first question from the audience, Pierre, you wanted to make one comment before we begin the Q&A session.

Thank you, Brian. First, once again, thank you to all of you for coming here today. I'm feeling very good where we are. It feels like day one of the new FMC, certainly a Company, if I look at the last five years, which is a much simpler, a much stronger portfolio to manage.

So next two years, we know the markets, especially ag, are going to be a bit on the slow side, but we can have the future in our hands with the integration of Cheminova and the revenue opportunities. By the time those two years are over, the markets will be a tailwind, so if you think about that from now and first, I think it is a very positive outlook.

I wanted to take a minute because I know you all have lots of opportunities to ask questions, but I think we received one question about 30 or 40 times at each break. I might as well address that question right away.

The comment was made about no M&A and why would we be so strong about no M&A when there could be opportunities. The example which was stated to me the most during the breaks and lunch was if Monsanto and Syngenta would come together, and if there would be antitrust issues between those two companies and if Monsanto or Syngenta would have to divest any product or technology, why wouldn't you take a look at that?

We would absolutely take a look at product or technology which could be available to us at the right price. When I say no M&A, I do not want to do anything of a large scale and I do not want us to acquire company, structure, people. We need to have a very high focus on the integration of Cheminova as an organization.

So when we talk about M&A, very often we talk about acquiring companies, getting into a joint-venture merger. We will not -- we will not do that, but certainly opportunistically if consolidation industry allow us to put our hands at the right price on technologies or product without having with that coming any infrastructure, we would look at it.

That comment also apply to our health and nutrition business. So I thought I would bring that clarity before we get into Q&A because I believe it would have for you guys in the room have asked that to me during break. Brian, we can go over the process.

Kevin McCarthy, Bank of America Merrill Lynch. Two questions on ag, if I may. First, regarding your first-quarter results, legacy FMC sales earnings declined whereas Cheminova enjoyed nice increases on both counts. Can you help us make sense of those divergent trends and talk about how much of that is perhaps geographic mix and FX versus any other factors that may be at work?

And the second question I had related to your exit from third-party products that you highlighted. If I look at the bridge that was provided, it would imply that you had operating margins of 20% there. Is that really correct? And if so, why exit those businesses? Thanks.

I will give you a quick answer and I will ask Mark to comment deeper. I will answer your two questions at the same time because they are very closely linked.

Let me start with the back end of your question. Certainly if the third-party sales would be 20% margins sale for generic or third-party product, we would not exit those sales.

If you look at the chart which Paul presented, there is two elements in that number. It is FX, then third-party sales impact. The negative EBIT is almost exclusively coming from FX. If you look on the revenue front, that is a different situation where the sales are coming, but those sales generally are sales which are causing the high single-digit, low double-digit margins with terms which are very much in line with the terms of our most technical product.

The performance of FMC Brazil, I will let Mark give all the detail, but a big part of the reasons for which Brazil was down and maybe lower growth than the market is because that decision was made to exit those sales. Years ago, I don't know when it was, maybe 2006, 2007, we started to have a company -- it is when the generic industry still to be a really high-growth, high-potential industry. We believed we needed to participate, understand, and have some sort of a safety net by operating a generic company with a division market, which was not called FMC Corp. It had a different name, but it was a 100% owned subsidiary of FMC.

That company, as the generic model started to show less promise, started to decrease in financial benefit for us from an earnings standpoint, but certainly kept on penalizing more and more our balance sheet.

You know, when you get to a point where you make a big acquisition like we did, when the market is slowing down, we believe it is the right time to clean up the situation. That's when we decided to shut down that company, as well as other third-party generic product we are selling through the channel to get out of that -- to get out a more technical, more differentiated product.

Maybe, Mark, if you can address the performance of Cheminova versus FMC as a whole.

So Kevin, when you see what Cheminova's performance was versus ours in terms of just pure revenue, plus 7% versus minus 16%, there's a fundamental difference in terms of the geographic balance of those sales.

And frankly, one of the reasons why we wished to acquire Cheminova was their European strength. And 40% of their total EBIT for the year comes in the first few months of the year, given the European exposure.

So, A, the European market has been very good this year. There was a good early season, good weather pattern. And, B, Cheminova introduced a new cereal herbicide that has been accepted very well by the marketplace, so they saw that increasing growth.

If you look at us, obviously a very small part, 6%, 7% of our original FMC portfolio, is Europe. Europe has been a good quarter for us in the first quarter, but the vast majority of our business in Q1 has been Latin America and North America. Obviously in Latin America, Brazil has experienced a lot of difficulties.

And just a little fact for you that we measure market growth from a panel that is produced by KPMG down in Brazil where all producers put in their numbers and then you get a consolidated number out. Put this in perspective for you, in January and February the Brazilian market was down over 50%. That is just an unbelievable number that has not been seen for a long time.

March rebounded. I think Pierre said earlier fungicide sales in March were high in Brazil, but even taking that into account, that whole Brazilian market was down some 20% in the first quarter. Obviously, our exposure in Brazil is rather large and therefore we have been involved in that market decrease as well, as well as stopping a lot of the third-party sales.

So you can see how the two balance out -- geographic mix, new product introductions in Europe versus the market in Brazil.

Kevin, if I may, let me use your question also to potentially clarify something I have heard over the month and give some numbers.

You know, one of the thing we have been told is you guys bought a company. Why did you buy a company which is more of a generic type company with Cheminova?

Cheminova is a company which has more than half of its portfolio under patent or data protection. It is a company a few years ago which has part undertaken the same type of transformation FMC took in the 2005, 2006, 2007 period, creating a short cycle time research model, more asset light type of business, and we bought the company at the time where things were coming together, starting to walk away from glyphosate sales, generic products, like we are doing today, starting to see their new technology like Mark talked about in Europe, gaining market share.

This company is going to join the FMC portfolio at a time when really they are, so we are starting to realize the benefit of the transformation.

If you look at their margin quarter after quarter over the last few years, their margin in 2014 were in the high single digits. If you look at their EBIT margin in the first quarter of 2014, 11.5%, 11.7%. If you look at their EBIT margin, the numbers we showed before, in the first quarter of 2015 for 14.7%.

So, clearly, it is a company where you can see margin moving up very much in line with some of the best [differentiated] companies. So we acquired a company at a time when the transformation was starting to pay off, and needless to say that when we saw the first-quarter results, we were pretty excited because it was confirming what we did.

Since we've owned the company and had the possibility to grow well into what was familiar for us to look at, there has been absolutely no negative surprises. And I think Mark, if anything, you can comment on the revenue side. We are starting to see a lot of interest from customers creating for us potential for revenue synergies which are very interesting.

Yes, I think from a revenue synergy standpoint, we have believed for a long time that Cheminova didn't have the critical mass, especially in North America, to have access to the big six distribution companies, where the vast majority of crop protection chemicals are sold.

We have great relationships with those companies. We have many years of experience with them. We have a growing portfolio, and we have already had indications that a lot of those customers have actually slowed down their purchase of Cheminova products through Q4 and Q1, waiting for FMC to have access to that portfolio so we can join in with our parent portfolio and drive growth.

So we have a lot of anecdotal information that North America will be good for it.

In addition, certainly in Europe, in talking with the European team, Spain is a good example why Cheminova has really superb market access and FMC has never had great access through the distribution company that we worked with. Spanish customers are now coming to Cheminova and saying, what does the overall portfolio look like? How do I get access to it? What products can I use?

So in both North America and in Europe, we are seeing the fact that the growth synergies are really there and are real, and we look forward to delivering those as we go into this year, but more importantly into the 2016 season.

Don Carson, Susquehanna. Pierre, I just wanted to follow up on your generic comment. As I look at glyphosate in OP, it is about 25% -- 20%, 25% of Cheminova. What do you assume happens to those sales going forward? Are you going to de-emphasize those businesses and actually have them decline in absolute dollars?

Then, Mark, just a follow-up for you. We're seeing a lot of competition in the weed resistance space with dicamba Xtend coming out, 2,4-D, Enlist. What impact does that have on your sulfentrazone going forward and can you just comment the whole weed resistance opportunity?

To date, I always -- [correct me] the same numbers, that sales of glyphosate for Cheminova are less than $100 million, [I do believe]?

Yes.

So, it is less than 10% of the total sales of the Company.

What do I expect to see those sales? Certainly, we will not push; we will not grow the sales. We will retain those sales in places where it is critical more as a service to customers who want to alleviate the number of suppliers. But I'm expecting if it is today 10% of the portfolio in term of revenues, I would expect that to definitely decrease as a percentage of the total portfolio and most likely over time to decrease [in that food barrier].

Yes, I will tackle the sulfentrazone question. I think most people in the space know that certainly in North America and in Argentina, the spread of weed resistance, glyphosate weed resistance, one of the most effective and in fact the market-share leader is our Authority brand with sulfentrazone.

Obviously, there are new technologies coming into the marketplace, Monsanto, Dow, and others introducing new products that have different tolerances. Dicamba, as you just mentioned, is one of them.

We do expect the pre market -- the pre-herbicide market will continue to grow. We noticed that both Dow and Monsanto are still suggesting the use of pre-herbicides with their latest technologies. Obviously, the products [are] close to sulfentrazone, which is our molecule.

We also anticipate that weed-resistant acres will continue to grow and nobody should be fooled by the fact that everybody thinks that it's just glyphosate resistant. There are currently eight weeds resistant to dicamba and 2,4-D. So we know already that there are resistant weeds out there. The growers will need specialized products. Sulfentrazone is the market leader, so although the rate usage may change in some acres going through 2016 as new technology comes into play, we really do believe that marketplace will continue to grow in the US.

In Argentina, for sure weed resistance is growing. The sulfentrazone molecule with the Authority brand continues, and now we're seeing in Brazil in soy the increase of weed-resistant acres there. We're introducing sulfentrazone as the market leader for pre-herbicide.

So we continue to see the sulfentrazone franchise grow. It is one of our biggest molecules in our portfolio, and it has been incredibly successful and will continue to be so.

Valerie Cecchini, Group Investors Canada. I have three questions, first one for Paul. Could you reiterate for us your commitment to dividend growth? You talk about share buybacks, but what about dividend growth in the near term and longer term? And maybe reiterate the order in terms of capital deployment. We know your M&A has started to [cut] back and dividend growth.

Second question for Mark, you talk about your relationship with customers and you're a critical part of that and the [genta] has been spending the last few years building that so-called [weed] at some cost, but they're getting there. What if they start pushing the bundling of seed and crop protections? How at risk are you of losing that final touch and (technical difficulty) local reach.

And a question maybe for Pierre, you talk a lot about return on invested capital. We across -- made a commitment to improve the return on invested capital across divisions. Why not linking management compensation to that metric instead of just having an adjusted profit metric?

I'll go first with the dividend question. Our dividend today is about $88 million a year.

We made a commitment to grow our dividend in line with our earnings growth, and you saw that our EPS growth of the Vision is 13% to 17%, so 15% in the middle. We would expect as we deliver that earnings growth to increase the dividend at the same rate over time.

And in terms of priorities, clearly we are not going to flex the dividend. When it goes up, we are not going to take it back down again. With regard to surplus over and above that, we will form a view as to whether share repurchase or special dividends or something else is the right way to return that cash to shareholders.

On the question of bundling, bundling does occur in the marketplace. I wouldn't say, though, that it is accelerating at any great rate.

Some customers are happy to bundle; some are not. Some people do not want to buy their seeds and chemicals from the same company. It requires different skill sets as well. Selling chemicals is a technical sale. Selling seeds is also a technical sale, but in a different way.

So it's not always that you have the right competencies at the right place to be able to sell to the customer. We have competed in this marketplace for decades. Bundling has occurred whether it be with GMO seeds, natural seeds, with chemicals. It will continue to be that way.

I think the most important thing is that you have the market access with different parts of the value chain, so whether it's distribution, retail growers, or whether it's direct with the growers, you have to have your own portfolio that is valuable.

A classic example is in North America. With six big distribution companies, having the right breadth of portfolio allows you to bundle your own products and gain share. We're adding Cheminova into that mix as well, so for us, that's a very big positive.

You have to have the technologies that people want. Sulfentrazone is a great example of a lead molecule that can open many of the distribution doors for you. It is something that is wanted; it is needed. Therefore, we can bring our products in on the back of sulfentrazone. That's the plan we have.

We are very close to our customers and we compete every day with the other big six suppliers. It's been like that for a long time and it will continue to be so.

To answer the question around the compensation of the executives, there is always multiple metrics we could use to pay our executives and get them focused on the right things.

So this year, going into your direction, not exactly by compensating base and return capital, but we have changed. We are going, all of us, to be compensated. We all have a base. We will have an annual bonus. The annual bonus will be based on, if you run a business, on the EBIT from this business and the cash flow from the business. If you are in a corporate position, and for that I would be -- like for myself, we're going to be compensated on the annual bonus based on earnings after tax and cash flow, also.

And we will have the curve where in one part of the bonus fulcrum will come on the cash and one part will come on the earnings, the reason being that if you optimize your earnings and if you optimize your cash flow generation, it will have a direct impact on your return capital.

The third one will be on the long-term incentive. This one, we have kept a compensation which is based on total shareholder return.

So we have modified it this year to put much more emphasis in the short term on controlling capital spending, as well as cash flow generation and managing the balance sheet.

John Roberts, UBS, here. In the ag sector, does the weaker currencies create any upward pressure on local pricing or is the market not global enough and the competitors too global that currency and local pricing [consistently] connect?

Obviously, given local prices in places like Brazil, multinationals like FMC and others, we are constantly -- we sell about 60% of our portfolio in US dollars, about 40% in local currency, so we have a healthy mix.

Pricing is continually being changed. We are changing pricing in the environment down in Brazil frequently more than once a week, given where currency rates are going. It is actually a critical element of our ability to move price to keep track with what's going on with the exchange rate.

It does create tensions in the marketplace, for sure, but it is something that we've had to manage over many years and many different countries, Argentina being the same. Parts of Asia have experienced similar issues.

So for us, managing that currency risk and balancing for local pricing, it is always there, but we do have a good balance between local and US dollar-denominated revenue.

(technical difficulty) in Argentina, if currency (technical difficulty) up in dollars more, is there a point at which the change of control issue of your contract there is not encumbering anymore? Make it easier to separate?

So our overall strategy, and it is difficult to talk in a public forum about an agreement and change of control, but let me tell you the overall way we look at our business today in lithium.

There is a discrepancy to us between the currency and the inflation, which is always creating an enormous pressure on our costs, together with the fact that for an American company, it is not easy to operate in Argentina. It leads to operational difficulties around getting permits, around being able to make the appropriate changes, around cost and prices coming at us by surprise.

So our overall strategy that Tom talked to you about today, think about the fact that the way we're going to be operating our business will be -- we will be operating a downstream business, a specialty business with a very hard focus on hydroxide, butyllithium, metal, and we will de-emphasize our dependence on fast-produced carbonate and chloride in Argentina.

What does it mean? It means that we will be operating those assets as well as we can, but within the context of what those assets are doing today. Any growth we will develop into the downstream products or the specialty products will be done by buying on the external market the carbonate we need.

So we're expecting little by little the carbonate part of our business and the manufacturing in Argentina to become a smaller and smaller percentage of the overall performance of the business.

Could it lead us at some point to make a more drastic decision? It is possible. We look into that, but not in the short term, not in the short term. But certainly over time, we are going to be disassociating ourself more and more from the carbonate part of the business.

Sandy Klugman, Vertical Research Partners. Two-part question on ag. So what contributes to your confidence that global stock use will return to more normalized levels by 2017?

And then, as a follow-up on biologicals, you have some near-term commercializations coming out of the pipeline. How meaningful do you expect the earnings contribution to be and how would you assess the longer-term market potential for the category?

So on the view of the marketplace moving forward through today versus 2020, stock to use ratios have been climbing, as we showed. We do think they're going to come back down. Overall, demand is continuing to increase at 3% to 4% a year, depending on the type of crop. That will start to eat into some of the stock to use areas.

Obviously, our biggest concern is soybeans. Traditionally, soybeans have had a stock to use ratio of about 23%. Today, they are pretty close to 30% or maybe slightly above 30%, so I think there is probably more risk on soybeans certainly going forward.

Of course, nobody is factoring in a significant weather event. We have had two years of almost perfect growing conditions in the northern hemisphere and southern hemisphere and the Americas, which has boosted yields, has boosted crop size. That just will not continue. The law of averages says that you have a significant weather event every six months, but we have gone two years now without that, so something will give at some point.

As Pierre said and I said, there is always volatility. We just don't know quite when that is going to occur.

So we do believe with underlying demand and then the impact of events at some point down the line over the next three to four years, property use will gradually get back into more of a normal mode and therefore we will see the market continue to move forward.

On biologicals, you saw the list, starting right now with products that have been introduced. These products are new products. It is new technology. It takes a different type of sale. We do expect that the products we are introducing are smaller in nature, tens of millions of dollars of EBIT rather than hundreds of millions of dollars of EBIT. But once the adoption starts and we start to put them through our normal market access channel, we see that growing certainly through the rest of this decade.

Market size today for all types of biologicals is in the $1.5 billion to $2 billion globally. We expect that to be somewhere in the four -- as I said, $4 billion to $4.5 billion range by 2020 and then accelerating through the next decade.

So you could say even at a $1.5 billion to $2 billion market size today, it is still pretty embryonic technology, especially the types of microbes that we are growing and developing. It is new. It is not at the scale of synthetics right now, but we are very, very hopeful on the work we are putting in that those products will grow as we go through this decade.

Thank you. Jim Sheehan here from SunTrust Robinson Humphrey. And my first question is on the crop protection market. Your assumption there that you can grow twice the rate of the underlying market, I was just wondering if you could elaborate on that. What gives you the confidence that could be sustained? Did Cheminova grow at that rate in the past, or is it based on the synergies that you think you can achieve that?

And the second question is on your corn insecticide franchise, Capture. Have you started to see any trading down to generic products in that market? Thank you.

Okay, I'll take the first bit. On the overall growth between now and 2020, there's really three major buckets of growth. First of all is the market itself. As we said, we expect it to grow mid-single digits. That's the organic market growth itself.

On top of that, we have synergy growth from the acquisition. And then on top of that, we have the new product introduction and the new active ingredients that come at the end of the decade allied to the biologicals and the seed treatment platforms.

So if you take those three areas, that's why we feel we can get to the range we talked about in terms of revenue. So it's really market growth. Then on top of that is the synergy growth, and then on top of that is the new technology growth.

The second part regarding Capture LFR, one of the toughest markets right now in North America is the insecticide market for soil insecticide. We have brought down our volumes over the last couple of years as farmers have looked to cut back on spend and weather patterns have also created a scenario where we see less pest pressure. I think, Pierre, you referred to that in your presentation.

We've not necessarily seen trading down, but what we have seen is some growers forgoing the use of soil insecticides as corn prices dropped below 4 -- in the 3.5 to 4 range. We think we've stabilized now. We are still a market leader. But that market has taken a hit over the last couple of years.

Brian Maguire from Goldman Sachs. I've got two questions; one for Paul and one for Tom. Paul, just on the receivables balance, do you have an idea about how much of that is on trade terms and whether your receivables balances exposed to changes in crop prices or FX? How that kind of flows through? And related to that, how do you expect the kind of reining in of the receivables, the impact of growth rate versus the industry for ag?

And then just for Tom, on the lithium business going forward, it sounds like you're going to be a virgin buyer of carbonate. Just curious how you see the prices of lithium carbonate changing going forward and how that will impact your strategy. Thanks.

Okay. So on the receivables, I think, as you know, by far the biggest driver of receivables in our business is Brazil. And Brazil is -- today as you look at our receivables balance, our terms -- and we know this from multiple data points -- our terms are consistent with the market as a whole. We've offered the same terms. It tends to be driven by crop -- corn being the longest, sugar cane being the shortest.

We -- as Mark said, we sell partly in dollars and partly in local currency. And once we make the sale, the price is fixed and we hedge the local currency exposure. And one of the biggest headwinds we have in FX is the cost of that hedging over long periods of time.

So we are not -- once we've made the sale, we are not at risk of the terms changing, we are not at risk of the FX moving against us on the historical sale.

I think as we look forward, it is without a doubt important for us to start to factor into our pricing the cost of hedging as we look forward. And one of the programs that we have in place, which without a doubt is going to impact our forecast and our revenues and Brazil, is that we may decide that some of the sales when you really look at them are just not economical at today's hedging costs. Not on the terms that they're being made.

And that's a really important process for our business to go through down in Brazil. To go through that process of really understanding which sales makes sense because it is not free to extend credit in Brazil, and government and the federal rates 13.5%, so we're hedging back into US dollars.

So I think we're going to have the industry as a whole is going to be looking long and hard I think about their practice down in Brazil.

Now, as I said, none of our numbers assume that there's a fundamental change in that over the next few years. I hope we're wrong. I'm hope there is an improvement in terms that are offered down there. We'll certainly be trying to take the lead and push for that. But how much success we have is to be determined.

I just add, Brian, that I do think it will slow down the growth, and I said that in my presentation. We will forgo sales. It's that balance between earnings and cash flow. And we are already taking those steps now. And it's difficult when you've got a motivated sales group who are used to growing. That's their job; that's what we pay them for. But they have to have, as Paul said, the different lenses on the total financial package and what it's really costing them.

It's a different discipline. We put it in place rigorously now. But I do believe that will slow our growth rate in Brazil, but that's okay.

And on carbonate, I think that Pierre showed in his initial slides the overall industry utilization on name plate capacity basis. And utilization numbers are fairly low. So what's been happening is right now you've got a tight carbonate market, so the pricing is a little bit bullish. But what ultimately happens is it starts to pull some more of that nameplate capacity back out.

We have historically been buying volumes of carbonate, not as much on a long-term strategy as we will be embarking on. But we can buy reasonable amounts already, and we're going to be an increasingly large purchaser as we go forward.

So as you have 50,000 metric tons of carbonate coming on by 2016, and at least close to 40 of that will be coming becoming through from the lower-cost brine producers. We expect that we're going to be able to definitely buy at a discount to the cost of the marginal producers by a reasonable amount.

I think, Tom, we can say that we've -- we have already -- we are already in the process in exiting that strategy, and we've already started an agreement to buy on the markets from a brine-based producer, a significant amount of lithium carbonate.

So we already see the opportunities with newcomers for capacity increase, and we already are in the execution phase with pricing which are starting to trend down.

Rosemarie Morbelli, Gabelli. Just following up on this particular point, can you buy the lithium carbonate at a similar margin than what you are producing in Argentina or better, given the environment? So that will be one question.

And then I was wondering on the health and nutrition, the 4% to 6% top-line growth somehow sounds more given the increase in the middle class in Asia, the new products coming on stream from consumers on the Western world.

And lastly, just making sure that we are comparing or I am comparing things on an apples-to-apples basis. When you look at the growth rates for Cheminova, didn't you say that that was in Danish krone? And then for the growth rates to be more similar to legacy FMC, you should translate it into dollars? Thank you.

On the carbonate question, on the cash cost curve that we showed, there was a light-green portion to that cash cost curve. And that reflects the volatility that we've been experiencing depending on the timing of how much inflation is taking place in Argentina and the timing of devaluation.

And really, especially with the inventory in our ponds and when that devaluation takes place has an interesting impact on our own production cost in that period. So I think that we can definitely purchase, and we have been purchasing at a discount to market. How that compares to our own production cost will vary depending on the timing and devaluation event. And part of the overall objective is to reduce the overall volatility in our earnings as we grow.

So health and nutrition -- 4% to 6% growth. As Pierre indicated in his remarks, the historical growth has been about 2X GDP. Now, if you look by in market, what we do is look at the market itself it serves. So in the case of nutritional ingredients, that's largely processed foods. That market has historically grown at about 5% a year. Certainly less so in North America and Europe and at a greater rate than that in Asia but or South America but on a blended basis about in that range.

Pharmaceutical products tend to grow a little less than that. And as I mentioned the function of health ingredients, they can be -- because of some trends or penetration or secular trend in any one of those can be fairly high as much as 7%.

As I also said, our rate therefore will probably be in certain markets on the high side of that range in any one year. But, again, we are anchored by those end-market dynamics and how the markets we serve are growing.

On the question of growth, you're absolutely right. Their 7% was in Danish krone. Where we see the differences even if you take into account FX rates, they still had better growth performance than us because of Europe. But where you really see it is in profitability given that they have such a high cost base as well in euros and krone, whereas we don't. So their margins look much stronger in Europe than ours do. But you are absolutely right, the 7% was in krone.

Mike Sison, KeyBanc. I've got 30 questions -- no, I'm joking. (laughter) Just two questions. Conceptually, when you go back to September and you thought Cheminova would be around $145 million EBIT, plus synergy $35 million equals $180 million. Clearly, you're not going to get that because you closed it later. But are you sort of within that range, up or down? And then same thing for 2016; you initially thought $160 million plus $110 million synergy (inaudible) $270 million. Again, we think about your guidance now, you conceptually are there.

And then the follow-up here, I think you said in the first quarter you gained share in ag or at least in some areas. Hard to tell with the results being down. Can you maybe give us a little bit more of a feel of where and how that flushed through? Thank you.

Yes, so to go into the numbers, the numbers you are talking about for Cheminova, which would be their EBIT contribution to the business, you are in the range. That has not changed since the day we did the acquisition. Certainly for this year, they will be less of an impact because we're going to lose -- I think we're going to get about 55% of what they would've done. But then for 2016, your number becomes correct less the accounting aspect of purchase accounting which comes as a deduction Paul talked about.

The synergies, you're a bit off because the $120 million of synergies will be at that run rate by the end of 2016. But I think the number actually impacting synergies in 2016 on average about $60 million (multiple speakers). It's about a $60 million contribution.

The run rate is $120 million by the end of 2017.

So it's going to take us to go to 2017 to see close to the full number knowing that.

If you look for -- and I'll give you an example this year, we're going to execute a lot on the headcount aspect of the synergies. Maybe by the end of the year, 60% of the headcount.

A bit more than that, yes.

More than that. But nevertheless on the 2015, it will be only a little because everything is going to be done in the second half of the year.

Mike, your second part of your question on Pierre's comments on where the shares were. I would say North America, we have definitely gained share again with the pre-herbicides and the Authority brand's self-interest on, definitely seen that.

I would also say, despite my earlier comment on Capture LFR and the soil insecticides that whole market is down, we believe we've taken a greater market share in that segment overall. So North America has been a very good start to the year for us.

Latin America, we have to talk about Brazil. But of growing importance to us given our direct market access and products into the market is the rest of Latin America. So what we call Latin America South -- so Argentina, Chile, Peru, Colombia, Ecuador -- all those markets have been growing well for us. And Argentina is a very strong market for FMC with once again the Authority brand on soy.

I would also say the fruit and veg market in Latin America is doing well as we are applying different insecticides and different fungicides now. And then Latin America North, which for us is essentially Central America and Mexico, Mexico is growing really well with new product introductions into the fruit and vegetable market. So if you look at the whole of Latin America outside of Brazil, very good and to their season down in Latin America. Or one more China, sorry.

One more, China. We introduced new herbicides into the wheat market in China. It's been great for us so far. So good growth there as well.

Frank Mitsch with Wells Fargo. You know, Brian, I think Alisha would've called on me before now. (laughter) The question for Tom, a question for Pierre. Tom, I think you mentioned that you guys have 50% or so of market share in lithium into the battery market. Of course, Tesla is talking about a mega facility that would be built out there.

Is that something that -- first off, when do you think something like that might get built, actually come online? Is that something that we might see a step change in FMC's lithium sales into the battery market? Because I'd assume you might cut back in some other applications and go towards the higher-value one. So that would be question one.

And secondly, Pierre, on the M&A question, you were very adamant that this is what we're looking at in terms of portfolio, no bolt-ons, no big, big add-ons.

Let's take a look at the other side. Talk about the linkages between the ag business and the health and nutrition business. To you feel confident that in 2020, we'll still be looking at that as part of the FMC portfolio?

Thanks for the question. So on the lithium into the battery market, just to be clear, that was electric vehicle batteries, that statistic. And it's really it's a matter of the battery chemistry. Tesla has decided to go forward with the best battery chemistries right now available and we are the lion's share of that space.

The giga factory is on track. They are targeting 2017 for that but all reports have been that that's ahead of schedule. So we are obviously closely monitoring that and from the physical infrastructure, you can see that that would be ahead of schedule.

The nice thing about that as they look to fill it up and we had some discussions over lunch on it is that a portion of the grid storage space that they are now also targeting, that portion that is targeted more toward the utilities will also require the higher power and same type of battery chemistry that our products are advantaged in.

So it's quite a bit of growth to keep up with but we expect to be able to keep a premier position in that growth.

And then Frank just to complement your comments made by Tom, we will absolutely keep on growing and protecting the very large market share we have today in electric vehicle then potentially what would translate into being a critical supplier to the giga factory. So if we do capital spending today in the lithium business, it will be -- if the markets support that, it will be in the lithium market side. As I said before, we don't tend to increase capacity in carbonate and spend money but we could -- we have in the plan right now spending in capital.

And if you look at some of the charts, Tom showed there was a jump in 2017. That is when potentially our new lithium hydroxide plant would come on stream.

And one further clarification on that, in the butyl lithium space, we've got plenty of assets to ramp up with that growth. We don't need capital expansion there.

And the question around health and nutrition, absolutely. Today we have a portfolio which we believe holds together it's both businesses health and nutrition and agricultural businesses our business close to the customers formulation, technology gives us critical mass, same type of margin. Same type of business approach. Quite a few synergies from a human talent standpoint. So we do not believe that the Company would benefit today from either selling that business or breaking up the Company. I think we've made a lot of changes.

We truly like where we are. We have the right size to build this $6 billion Company. We -- Paul is handed me the charts where I have my chart for the revenues. But our intent is clearly to keep this portfolio together.

Chris Parrell, Bloomberg Intelligence. Thank you for taking my question. Pierre, do you see any opportunities in health and nutrition for an additional bolt-on product line set of ingredients there to round out the portfolio? With the ongoing restructuring -- why now with the restructuring and health and nutrition? What's changed in the business to prompt that? And could you do a bolt-on with all of that activity process improvement going on in health and nutrition?

I'll ask Eric to add to my answer. We believe it's going to take a good three years us to really get the full potential of the portfolio yet. We have a lot of new technology, new opportunities, recurring significant technology development. So I don't know what it would take for us to take on a bolt-on which would be so attractive that we couldn't refuse. We don't see it, we don't know it, and clearly we have a lot of work to do to get the full potential of what we have.

As you can see on the chart from Eric towards the end of the decade, we are growing more in the high single digits than this average 4% to 6% because we're getting the benefits. The restructuring of the -- and we call it restructuring but it's a restructuring, it's process technology and its redeployment of a strategy redeployment of assets. That's what we are doing in this business. We have been idling capacity. We know that understanding exactly for FMC example, what part is going to grow more?

The pharmaceutical, the food, those are all the same products. Some plant. Like for example, we made the decision lately in Thailand looking at the growth of our FMC pharmaceutical to our other pharmaceutical line to what is supposed to be only a food product. So that's what we are looking (inaudible) we are producing all of these products we have in this portfolio. We are almost producing them everywhere around the world.

They are qualified the customers. So undertaking a decision where what you sell in Asia, you produce in Asia; what you sell in Europe, you produce in Europe. Rationalizing the capacity. Those are very important steps to be taken now that we have a very stable portfolio.

We also are undertaking much more process technology work. You know, it's been most of those plants, especially the one using seaweed as a raw material, has been kind of a black box. We haven't done as much science and engineering as we should have done.

We are uncovering right now significant -- and I'll let Eric give more detail -- yield improvement in our Augustine plant. If you look, that's a plant where we lost 40 days of production. We're going to get it back by the end of the year back to a normal year of production. All of that by the work we're doing around yield improvement.

So all of those things are what we are doing -- if you think about first part of the decade was let's create this portfolio and bring capacity where we have capacity. Since then, the markets have grown differently than what we're expecting and we've got to realign all of that.

I'll take the last point that Pierre referenced first which, just to build on that -- that's a plant that's running at capacity. Otherwise it wouldn't have had the impact in the quarter results that we had. What we are effectively doing by bringing science to that plant is when it's all said and done bringing in double-digit increases to that plant.

It, again, adds to the point I made at the end of my presentation that between the fact that we have capacity that we have either built or acquired and process technology we brought to debottleneck plants that might be near capacity, we are able to run without really adding -- spending above depreciation levels and improving returns.

And then to step back and talk about growth and acquisitions. Again, I'll underscore what Pierre said. We have acquired a lot of product lines, a lot of businesses over the past couple of years.

But the size of our organization, that's a lot to absorb, and we see a lot of opportunities with it, more importantly. Be it the omega-3 or colors there, we have a lot more opportunity to go after and can make a lot more out of those businesses and have a lot of our development resources, our sales resources focused on those.

When it comes to nutritional ingredients, there are no -- that would be a potential area. You can see how the size of that market, you might speculate and say, wow, there must be a bolt-on there somewhere. As Pierre said, there's nothing that's obvious. On the other hand, what we are doing is doing a lot more of other people's ingredients in combination with ours. May that lead at some point in the future to a future idea? Perhaps. But there is no such idea today on the table. Our focus is on the products we have.

John McNulty, Credit Suisse. Three questions. First one, with regard to the investment in earlier-stage active ingredients, it seems like a slightly different research need in terms of R&D than maybe what you've been accustomed to in the past.

So can you walk us through the investment that you have had to make there and get us comfortable that you've got the process and platform in place to really grow out that business?

Yes, you're right, John. It is different. But as I said, it's more of an evolution rather than a resolution in terms of how we approach those early-stage active ingredients.

I think primarily the first thing is you have to have the right level of relationship with the partner company that you're working with. And I'll use Kumiai as an example because it's been a very successful relationship for us and I'm sure will be into the future. What you have to have is a process where you're getting access to the pipeline of active ingredients at the very earliest stages you can and then have strong connectivity between the central research groups of both companies.

So we fly people over to Japan. Japanese fly people back over to Philadelphia. And we have strong process management around the stage-gate process for those early-stage products. Allied to that is the fact that you also have to bring in strategic marketing to understand what is the potential of these products.

Your research partner might not necessarily have the same market depth that you have from a global perspective. So we ally the commercial side and the strong R&D piece very early on. So we have stage gates where we will sit down and say from a technology perspective, we're walking through these hurdles, but we're also doing the same thing in parallel from a commercial standpoint.

We've had to reengineer that because we didn't have it before. But it's working very well, and the Kumiai is one example of that of the new product that's coming to that very early stage of research.

And then the second question, with regard to Cheminova, it sounds like you have had a bunch of expectations for business to get better on the mix. And it certainly seems to be showing up in the first-quarter results where you had a 300-basis-point improvement in the margin. But is that a good baseline where we should be thinking about 15 and then adding synergies onto that where there's some one-offs in that [14 7] that you did in the margin? Like how should we be thinking about what the right baseline is?

I think the danger is that very much like us that European business is their most profitable business. So if you take the first quarter of the margins you see and you extrapolate that for the full year, you're probably going to be a little bit overblown if you're running that through your model. I would come off that by 100 to 200 basis points just to be on the safe side. Because the mix is very different Q1 going through Q2, Q3, and Q4 from their perspective.

The 300-basis-point improvement is real. But the 14.7% or 15% EBIT is on the high side because the first part of the year. So, yes, we are seeing the improvement of the magnitude of what you talk about. But the end point is overstated versus an average margin for the Company. So is it more of a 13% today? It would be more the range we would base the synergies on.

And then just the last question, it looks like we may be on the edge of some pretty significant consolidation in the industry. I guess can you walk us through how you would think about the opportunities and the risks around such types of -- such types of consolidation in the industry?

It's hard to comment, and we don't want to comment too much because, frankly, I'll bet you that you guys know more about what's going on than we do because you know that's a deeper level than we do.

Like you, we've been watching the Monsanto and Syngenta situation. How do I analyze that? It is proof that this world is telling us that GMO seed and ag chemicals are here to both support the ag market. There was a time when we thought GMO would take the market by storm and you would not see chemicals anymore. I think both businesses have a future in this industry.

We are looking, of course, at this Monsanto and Syngenta and (inaudible) developing because for us it could be opportunities should there be antitrust issues to look at proprietary technology. But that's all we know; we don't know more.

All I could repeat is we believe, and we have believed for a while and we have said for a while, it is an industry which is prone to consolidation. Size matters in the ag world. It's a research-intensive industry where channel-two markets are very important. So it's an industry which we said for years should see consolidation. We policy pay the consolidation by acquiring Cheminova. It is not a surprise to see that the Monsanto and Syngenta discussions are going on. Beyond that, what will happen? I think we don't know more than you guys do.

In the front.

Thank you. I thought this investor day was very well put together, and I appreciate the comments in the presentation.

A couple of questions. I believe I read in the 10-K that we're planning on spending $65 million in environmental remediation in 2015. Could you comment on what that's for and if we'll see that going forward in the years ahead as well?

And the second question is about share buybacks. If you run the math on the capital return numbers per share that you outlined, Paul, and you sort of model a buyback of that magnitude with the current share price, you really get earnings-per-share numbers that are kind of silly.

So I guess my question is why wouldn't you consider an acceleration on a share buyback given that your stock is so low at this point?

So let me deal with the remediation spend. The remediation spend, FMC was gifted in its original spinoff back in 2000/2001. A very large number of the legacy sites around -- not in the US. Unrelated to our business today; in many cases, related to businesses that the old FMC was only in the 60s and 70s and exited them. Many of those do have programs in place that either manage or remediate those sites.

The spending this year is a little higher. We have several projects that will come up, and it's very lumpy spending. In some cases, we have insurance that we can claim back afterwards and others we don't. In some cases, we will go through a few years of spending and then nothing.

Where in a couple of our sites today, we don't expect in aggregate that the spending on environmental remediation to be meaningfully different to how it has been in the past. But it will be lumpy; it does jump around, unfortunately. I think these are commitments and legacy obligations of ours that are not going away anytime soon. So many of them and it's so complex, that you should assume that that spending at a historical level, which is not quite at $65 million historically, will continue in the future.

In terms of the share repurchase, you do get silly numbers if you repurchase at today's share price. We would be repurchasing 35%, 40% of the Company, so you can imagine. We probably would move the share price if we spent that much today.

You know, the real more important question is how do we think about the share repurchase of the timing. There is no doubt that it is important for our business to have a strong investment-grade credit rating. And we've seen that. We see that with Cheminova that did not have a strong credit rating. And we've seen their terms of business and their trade in places like Brazil. And how by being able unable to extend their balance sheet to support their business that the only thing they can do is use price as a competitive tool.

So it's more than just financing your business. It's about the fact that you aren't viable without a strong balance sheet to support your operations. We also believe we know the ag business has cyclical tendencies to it, and we need to be able to maintain our ability to continue to invest where it matters, especially in technology and innovation. And operating with a high degree of leverage on our balance sheet is not the right business model for an innovation-based ag business. Perhaps you can get away with that if you're more on the generic side spending less of your revenue on innovation.

So you put all those pieces together, accelerating, doing an accelerated share repurchase today really isn't consistent with our commitment to financial policies and metrics in line with a strong investment-grade credit rating. Having said that, we are a mid-strong BBB, BBB+. It's a perfectly acceptable credit rating for us. Our credit metrics very quickly, very quickly fall back to ones that are consistent with that rating.

And so I don't think we're thinking years before we start share repurchases. It's a much shorter time frame than that. I'm not sure that even an accelerated share repurchase today makes a lot of sense when you think about how quickly we get back to our target metrics anyway.

Pierre raised the specter, which we thought quite a bit about, too, of reduced demand for CPCs given the advances in the seed technology. I don't recall looking at page 20, a graph that gives us a sense of your portfolio in ag byproduct. And it would be helpful if you could talk a bit about the ways in which particular crops -- in particular geographies, for example Brazilian soybean. Changes in technology are impacting your sales outlook. And perhaps extend to other key markets beyond Brazil where we can expect changes in seed technology and perhaps other technologies as impacting your outlook. Thank you.

That's a huge subject to tackle in a forum like this. I think taking it from one side to say there are new stacks of trades. There are new trades that are coming in. Let's take an obvious one that perhaps you were obliquely referring to which is Intecta in Brazil.

If you have an insecticide portfolio that is heavily weighted towards sucking pests' early-stage development, then Intecta is going to hit your product line for sure. We just by chance happen to have an insecticide range on soy that's more piercing past the later-stage development.

So to some degree Intecta will have an impact on our business but to a lesser amount. That's the type of thing you're talking about when you think about the impact of GMO and trades.

Second one would be the question I had earlier about extend and enlists technologies in North America, how that impacts the pre-herbicides. How it could potentially impact the post herbicides. I just think it's such a complicated subject that even trying to get it on one slide because there's so many variables in each country.

The other aspect to it is, yes, you can introduce an Intecta into Brazil for soy, but it's surprising how fast the resistance grows, which then creates opportunity for newer chemistries for older chemistries with different modes of action. So we see it as a constant cycle of ebbs and flows in terms of how GMO and chemicals interact together. Opportunity on one hand, takeaway of the market on another, and it's constantly moving.

So it really is a very difficult subject to tackle. But there are opportunities, and we see them growing all the time as resistance for either insects, disease, or weeds grows.

I think one thing have to -- I'm sure you know that, but any plan we make, any sales plan, one year, three years or five years, we are always taking into account what is happening at the level of the GMO seed and how it would impact our business. So when our team in Brazil makes a plan, they know there is potential Intecta coming at that time doing this and decreasing but there is an opportunity. So it's ever done blindly versus the GMO market. We always take that into consideration. Sometime it could be surprised because there is a new technology coming faster than we would have known. But it's always part of the process before casting (technical difficulty).

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The question if you didn't hear it was what is the impact of Intecta year on year 2015 to 2016, and then what's the impact of extend and enlists in North America for the soy segment. I would say in Intecta, we have a 4% market share on soy -- all chemistries -- insecticides, herbicides and fungicides. Our exposure on insecticides whilst large is not going to be impacted that greatly by Intecta.

We will see some acres disappear but one of the nice things about resistance is you take away the primary pest, the secondary pests comes along. We have products that can address the secondary pests. So once again, we may have some pyrethroid chemistries that get impacted but we have other chemistries that can take their place.

With enlist and extend in the US, as I said earlier, we do expect to see potential rate decreases for some of the pre-herbicides, but that will be offset by increased acreage of weed-resistant acres. So pretty much a balance going into 2016. Of course, it will depend on how many soy acres get planted in 2016 versus 2015 as well.

I think we've got time for a couple of more questions, so appreciate the questions thus far. I thought there was one in the back.

Aleksey Yefremov, Nomura. A question on your portfolio of active ingredients in the ag chemicals. What is the average age of your active ingredients portfolio, and how has it been changing over the last three to five years, and how do you think it will change over the next five to seven with the nine ingredients that you have in the pipeline? Thank you.

So with regards to our active ingredient portfolio, it goes all the way back to Carbafuran, which might actually be older than me. I know that's hard to believe. Carbafuran, very old chemistry; superbly effective insecticide in sugar cane and rice. All the way through to sulfentrazone, clomazone that are in the 15-year-old period just coming off their patents.

If you look at that, that's not unusual for a portfolio. The trick is how do you extend the life of those active ingredients by smart formulation by use of other active ingredients, which is what I talked about earlier.

How do you measure that? If you go back six, seven years and looked at the percentage of revenue that comes from new product introductions -- so what we class as products introduced over the last five years, five or six years ago it was down in the low 20% of revenue in products introduced over the last five years.

Today, it's in the 26% to 27% range. The intent with the portfolio that you saw in the pipeline that you see is that by the end of this decade we are north of 30%. So we're refreshing the portfolio all the time with the new active ingredients.

And listen, you can see by the launch dates when we stopped active ingredient discovery, went to our later development model, you can see there's been a gap in terms of pipeline. We are now rebuilt that pipeline and of course we have a lot of products coming at the same time. It won't be like that in the future. It will be much more measured and much more staggered, which will help the overall portfolio. But you should think of a number north of 30% in terms of new products introduced as a percent of revenue.

Follow-up, if I may. You gave us sales numbers for reactive ingredients pipeline. How do you think about margins there? And how do you think about sharing those sales with your R&D partners?

A lot of the structure that we have with the R&D partners, we've invested capital upfront. So there are very few of those deals that you see on that list, whether it's a profit-sharing or a licensee. They are pretty much all paid up in that sense; so we've already put the capital in.

Margins, certainly you know the legacy FMC margins in the 23% to 25% range. These new active ingredients will be at the high end of that range.

Well, thank you. I think with that we'll conclude the Q&A session. Appreciate the time today. I'm just going to turn the floor over to Pierre for some closing comments.

All right. Well, first, great turnout. Great meeting, thank you for all of your questions. I think we spent an hour and 15 minutes on questions. So thanks a lot for all of those questions.

We are entering a period of, for us, I have to say, more simplicity, allowing us easier execution because of the Company we have. So we believe what we've shown you today is a plan which we could deliver and which will allow also a longer line of what Paul talked about in terms of cash generation to reward all of our shareholders appropriately while maintaining the right balance sheet.

We'll execute. It's execution time for us as of now; this is day one. So thanks for coming, and I'm sure we'll see each other soon. Thank you. (multiple speakers)

Thank you.