Ladies and gentlemen, thank you for joining us and welcome to the second quarter 2026 earnings call for FMC Corporation. This event is being recorded and all participants are currently in a listen only mode. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star 1 again. Should you experience difficulties during today's call, please signal a conference specialist by pressing star 0. I will now hand the conference over to Mr. Kurt Brooks, Director of Investor Relations for FMC Corporation. Please go ahead.

Good morning, and welcome to FMC Corporation's 2026 second quarter earnings call. Today's prepared remarks will be provided by Pierre Brondeau, Chairman, Chief Executive Officer, and President, and Andrew Sandefur, Executive Vice President and Chief Financial Officer. After prepared comments, we will take questions. Our earnings release and today's slide presentation are available on the FMC Investor Relations website, and the prepared remarks from today's discussion will be made available after the call. Let me remind you that today's presentation and discussion will include forward-looking statements that are subject to various risks and uncertainties concerning specific factors, including but not limited to those factors identified in our earnings release and in our filings with the Securities and Exchange Commission. Information presented represents our best judgment based on today's understanding. Actual results may vary based on these risks and uncertainties. Today's discussion and the supporting materials will include references to adjusted EPS, adjusted EBITDA, free cash flow, organic revenue growth, and revenue excluding India, all of which are non-GAAP financial measures. Please note that as used in today's discussion, earnings means adjusted earnings, EBITDA means adjusted EBITDA, and sales reversed to sales excluding India. A reconciliation and definition of these terms as well as other non-GAAP financial terms to which you may refer during today's conference call are provided on our website. With that, I will now turn the call over to Pierre.

Thank you, Kurt, and good morning, everyone. In the second quarter, we continued to execute against our priorities. We delivered EBITDA above our guidance, generated meaningful free cash flow, and advanced several initiatives that strengthen a balance sheet. Sales were below our expectation as a challenging operating environment, including geopolitical uncertainty, unsavorable weather, and low insect pressure created additional pressure on both volume and price. Growers and channel partners remain focused on managing costs and working capital, which resulted in cautious purchase pattern across many markets. Against this backdrop, we continued to make progress on our four operational peers, reducing debt, improving the competitiveness of a core portfolio, managing the post pattern transition for an exit peer, and growing new active ingredients. These pillars remain the foundation of the company's plan to improve earnings and cash generation while positioning FMC for future growth and the expanding contribution of its innovation pipeline. With the equity investment from Thessendale Group marking the conclusion of the strategic review, we now have clarity on the path forward and are focused on execution. We made substantial progress during the quarter, particularly in strengthening a balance sheet through these reductions. Over the past several months, we announced the key components of a plan to generate $1 billion of proceeds to pay down debts. These include signing a definitive agreement for the sale of her India commercial business for $252 million, closing on the licensing agreement for Remy Soxha fund with Corteva and an upfront payment of $200 million, entering into a framework agreement for a Newark Delaware hardware property for $114 million, reaching an agreement with Thessendele Group for a $400 million minority equity investment, as well as progressing on several smaller asset sales. Together, these actions are expected to significantly strengthen a balance sheet and liquidity position. Combined with a successful $1.2 billion secured bond offering we completed in May, they will provide greater financial flexibility as we continue to execute our strategy. Andrew will discuss the impact on our balance sheet and cash flow in more detail shortly. With debt reduction well underway, our attention remains on the operational actions that will improve business performance over time. Turning to our second pillar, improving the competitiveness of our core portfolio. Over the past year, we have focused on simplifying how we operate, improving the efficiency of manufacturing and supply chain network and reducing structural costs across the business. These actions are intended to strengthen a competitive position and better align our cost structure with the markets we serve. As previously announced, our objective is to exit active ingredients and formulation production assets that are no longer cost competitive and transition production toward to lower cost sources. While this work remains underway, we are increasingly confident in the value it will deliver. In addition, we have made meaningful progress in realigning our supply chain and are beginning to see benefits from those efforts. Moving to a third pillar, we remain focused on executing a post-patent strategy for Renexa We continue to see strong demand for differentiated formulations and measure. Sales of these products grew more than 35% year-over-year during the second quarter. We also remain focused on volume growth outpacing lower pricing as the market evolves. Despite increased generic competition, branded diamide sales, excluding India, were essentially flat year-over-year. Over time, we expect branded diamine to grow in revenue as pricing stabilizers, and we continue to take market share from all the classes of insecticides. We are already seeing encouraging signs of volume growth. In the second quarter, we saw very strong gains in hectares treated in key countries like Brazil, where product-on-the-ground usage is up over 40%. These results reinforce our confidence in our post-patent strategy. Our fourth pillar remains on track with our expectations. During the quarter, we continued to advance registration and commercialization efforts around the world, including securing registration of Isoflex Active in the EU, with launches expected to begin in 27. As we have discussed previously, the pace of growth of new technology is influenced not only by customer adoption, but also by the timing of regulatory approvals and registrations, which are outside of our control. We continue to see external validation of the value of our innovation pipeline. The licensing agreement for RIMIS-Oxafen with Corteva represents the third significant licensing agreement involving one of our proprietary active ingredients, following agreements of Isoflex Active with Bayer and Fluenda Pier with Corteva. Turning to our second quarter results on slide 4, 5, and 6 provide detail of our performance. The operating environment for crop chemicals remains challenging. Growers are faced with a difficult situation of low prices for many crops combined with higher costs for inputs such as fertilizers and fuel driven by the uncertain geopolitical environments. We are seeing growers respond to these margin pressures by carefully managing costs and reducing discretionary spending wherever possible. For crop protection chemicals, that can mean trading down to generic or reducing the number of applications. In addition, data from a proprietary ARC farm intelligent insect monitoring platform provides unique visibility into field conditions and indicates lower insect pressure so far this year. With our current portfolio weighted more toward insecticide, this is especially relevant to FMC. We expect that over the next few years, the introduction and expansion of our new active ingredients will shift FMC to a more balanced portfolio with less reliance on insecticides and a stronger position in herbicides and fungicides. Our second quarter revenue of $841 million, excluding India, was 1% lower than the low end of our gallant range. As we forecasted, there were reduced orders from diamide partners, as well as expected registration losses in the NBA. However, we encountered additional volume headwinds in North America, a strained margin drove careful purchasing behavior for growers of non-specialty crops. Excessive hit in the MEA also led to lower-than-expected demand. We saw strong volume growth in new Renexapir formulations, particularly in Brazil and North New actives showed good growth, but we do not expect the bulk of the year-on-year increase to occur until the fourth quarter when flu and lapier in LATAM and North America, as well as isoflakes in Australia, will be in higher demand. Second quarter pricing was down slightly more than their mid-single-digit expectation due to greater than expected pressure on core legacy products. Similar to prior quarters, there was more pronounced pricing pressure in LATAM and to a lesser degree, Asia. New active ingredients and sales up here delivered solid growth during the quarter, contributing to higher sales from a growth portfolio. Turning to slide 6, we reported second quarter EBITDA of $153 million, which was 2% above the high end over a guidance range, driven by greater than expected cost favorability. This was primarily driven by spend discipline in non-manufacturing areas and a few favorable quarter-specific items. Adjusted earnings per share of $0.26 was 62% lower than prior due to the reduction in EBITDA and higher interest expense. The result was at the high end of a guidance range driven by EBITDA. Shifting to a forward guidance, our updated financial outlooks are on slide seven through Starting with slide 7, full-year sales are now expected to be $3.5 billion to $3.7 billion, a decline of 7% at the midpoint. We have updated a full-year outlook to reflect the more challenging market conditions we've seen so far this year. We now expect more pricing pressure and less volume growth of core legacy products than our prior forecast. Volume is now expected to be in line with prior year, as sales of new active ingredients and increased direct sales to grow in Brazil, offset reduced diamide partner orders. Price is expected to decline mid-to-high single-digit, consistent with what we observed in the first half. The removal of India is a 2% headwind, and FX is expected to be a low single-digit tailwind. adjusted ebda is now expected to be between 620 million dollars and 680 million dollars the 23 percent decline at the midpoint reflects lower price and fx headwinds partially offset by favorable cost. Adjusted EPS is expected to be between $1.19 and $1.49, with the 55% decline at the midpoint reflecting both lower EBITDA and higher interest expense. Given the uncertainty around the duration of the conflict in Iran and potential U.S. trade actions, we continue to assume that the Iran-related cost pressures and tariff-related benefits largely offset each other. Turning to slide eight, we expect third quarter sales between $840 million and $900 million. We expect the market conditions that we observed in the second quarter to persist in the third quarter. The majority of the 9% midpoint sales decline is due to price, which is expected to be a mid to high single digit headwind. Volume is expected to be lower, mainly driven by North America distributors, managing inventory by shifting orders from Q3 to Q4. In Brazil, we're continuing a strategy to offer our sales to distributors to favor co-ops and direct sales. These decisions negatively impact Q3 sales and favor Q4 sales. It reflects our intent to continue to stabilize the performance and predictability of Brazil's sales as we enter Q4 in 2027. We expect overall growth portfolio sales to increase in the quarter, driven by solid performance from new active ingredients. Third quarter EBLAB is expected to be between $120 million and $140 million. This represents a 45% decline at the midpoint, driven mainly by lower price with volume and effects acting as secondary headwinds. Adjusted EPS is expected to be $0.05 and $0.30, a decline of 90% at the midpoint, driven by lower EBITDA and higher interest. Slide 9 provides our outlook for the fourth quarter, which we expect will represent a return to year-over-year growth. Sales are expected. to be between $1.06 billion and $1.2 billion, an increase of 4% at the midpoint. We are not expecting major changes to market conditions, and as such, we are forecasting a price decrease similar to the first three quarters in the mid to high single digit. We are expecting strong volume growth, but it is not based on the assumption of sharp improvement in regional markets. About half of the volume growth is expected to come from increased sales in Brazil, driven by new products and a more established sales force, which has now been in place for over a year. The remaining half of fourth-quarter growth is expected to come from new products, as well as the shift in order timing by North America distributors from Q3 to Q4. Fourth-quarter EBITDA is expected to be between $275 million and $315 million, representing 5% growth at the midpoint. Lower price and FX headwind are expected to be more than offset by favorable cost and higher volume. We are expecting strong cost favorability due to cost mitigation actions, including lower raw materials. Adjusted EPS is expected to be between $1.09 and $1.33. This represents a 1% increase at the midpoint as higher EBITDA more than upsets elevated interest expense. I will now turn the call over to Andrew.

Thanks, Pierre. I'll start this morning with free cash flow in slide 10. Pre-cash flow in the second quarter was $357 million, $318 million higher than the prior year period. Included in free cash flow this quarter is the $200 million prepayment from Corteva as part of the licensing agreement from Remisoxifen that was finalized in June. This payment is reflected in the change in other operating assets and liabilities net line on our cash flow statement and as a long-term advanced payment liability on our balance sheet. As a result, it does not impact working capital. While the specific structure of the remissoxin licensing agreement may not recur, we expect licensing and collaboration agreements to remain a part of our business model and an important contributor to operating cash flow over time. We intend to pursue additional opportunities to license molecules from our portfolio and to enter collaborations that allow us to share the cost of developing earlier stage active ingredients. The reality is that our pipeline contains more high quality active ingredients than we can fund and develop in a timely manner on our own. As a result, partnerships such as our licensing agreements with Corteva for Remisoxifen and Fluendipir and with Bayer for Isoflex Active, as well as future co-development arrangements, are becoming an increasingly important part of our operating model. These collaborations help accelerate the development and commercialization of new technologies while also providing a meaningful source of operating cash generation. Beyond the prepayment from Corteva, free cash flow in the second quarter also benefited from lower receivables overall with strong collections in Asia including India and in EMEA as well as lower cash taxes. We are updating our 2026 free cash flow outlook to reflect both the updated EBITDA outlook and the Corteva prepayment. We now expect free cash flow to be in the range of 75 to $225 million, or $150 million at the midpoint. Our free cash flow guidance also includes approximately $170 million in expected cash spending on restructuring, driven largely by the significant reshaping of our manufacturing and supply network that is underway. Free cash flow excluding restructuring would be approximately $320 million in 2026 at the guidance midpoint. While we do expect to have meaningful continued cash spending on restructuring in 2027, this should dramatically reduce in 2028 and beyond, greatly improving our free cash flow generation. Moving next to the balance sheet and leverage. The second quarter was a particularly active quarter on the financing front. In mid-April, we amended our existing revolving credit facility. In May, we completed a $1.2 billion senior secured bond offering. We were pleased with the strong demand for the offering. Significant oversubscription allowed us to meaningfully increase the size and reduce the rate of the offering from launch. Proceeds from the bond offering were used to redeem the $500 million in senior notes that were due to mature in October, as well as to reduce borrowings under our revolver. We ended the second quarter with gross debt of approximately $4.3 billion, down $250 million from the prior quarter end. Cash on hand increased $86 million to $477 million, resulting in net debt of approximately $3.8 billion, down $339 million from the prior quarter end. Net debt to trailing 12-month EBITDA was 5.1 times. As we described on the April call, the most recent amendment to our revolving credit agreement included changes to our current leverage metrics. The maximum total leverage ratio is not measured formally for the second or third quarters under the terms of the amendment, but would have been approximately 5.6 times. The maximum total leverage covenant will be reinstated in the fourth quarter at 6.75 times through December 31, 2027. Secure debt to trailing 12-month EBITDA was 1.66 times, as compared to a covenant limit of 3.5 times. Minimum interest coverage ratio was 2.78 times as compared to a covenant minimum of 2.0 times. Looking now to year-end debt levels, based on our free cash flow guidance, together with proceeds from the India Sale, Delaware Site Sale Leaseback, and the Descender Low Equity Investment, and after reflecting dividends, financing fees, and transaction costs, We expect to end 2026 with net debt of approximately $2.6 billion. At the midpoint of our EBITDA guidance, this would suggest year-end 2026 net debt to trailing 12-month EBITDA of roughly four times. While this is still meaningfully higher than where we would like to be long-term, we believe F&C will be well-positioned to further improve leverage metrics as we return to EBITDA growth in 2027 and maintain a relentless focus on driving free cash flow from the business. As a result of the financing actions completed in the quarter, we have substantial available liquidity. Borrowings under our revolving credit facility were $250.5 million at June 30th. With letters of credit backed by the revolver of $188.6 million, we had more than $1.56 billion of borrowing capacity available under our revolver at quarter end. We are comfortably in compliance with our covenant metrics. Our next bond maturity is three years away, with $500 million in notes due in October, 2029. We feel confident that all of the financing and strategic actions we are taking this year are greatly strengthening the financial foundation of the company. Lastly, moving to the income statement. Second quarter sales benefited from a 2% currency tailwind, primarily coming from strengthening of the Brazilian RIAI. Looking ahead, we expect FX to move from being a tailwind in the first half to being relatively neutral in the second half, resulting in a low single-digit FX impact on revenue for the full year. Second quarter interest expense of $71.3 million was up $10 million, with the impact of financing activity in the quarter partially offset by interest income and lower foreign interest expense. We now expect full-year 2026 interest expense to be in the range of $275 to $285 million, up approximately $40 million versus the prior year at the midpoint due to the impacts of the recent financing activity, partially offset by lower foreign interest expense. We continue to expect depreciation and amortization for full year 2026 to be between $160 and $170 million. The effective tax rate on adjusted earnings in the second quarter was 17%, in line with our expected full year effective tax rate of 16 to 18%. And with that, I'll hand the call back to Pierre.

Thank you, Andrew. to close the 2026 market environment will continue to be challenging we are using these challenging conditions to improve the performance of some critical countries by repositioning their business we are strengthening fmc's financial foundation advancing the actions tied to operational peers and maintaining a clear focus on execution. The work underway will allow a core business to become competitive again, while a new technology portfolio becomes a larger part of the company. The work underway in 2026 will position FMC to return to growth as early as 27 and beyond. With that, we are happy to take your questions.

We will now begin the question and answer session. Please limit yourself to one question. Should you have additional questions, you can re-enter the queue. To ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Duffy Fisher with Goldman Sachs. Duffy, your line is open. Please go ahead.

Yeah, good morning, guys. First question is just around the ramp from your Q3 midpoint to your Q4 midpoint, you know, kind of $165 million of improvement. Can you walk through sequentially what those buckets are? What are the big drivers? You know, because, again, margin goes from like 15 percent in Q3 to, you know, over 25 percent in Q4 and give some qualitative indication. Just, you know, how certain are you of those buckets? You know, do you have orders in hand? Is it based on just kind of historic norm repeating itself? You know, just try to help us get comfortable with that big ramp up from Q3 to Q4.

Yeah, thanks, Stuffy. Let me go from, try to go from Q3 to Q4. Three big drivers on the positive front. First, the non-diamide core. And that includes the growth, of course, in direct sales in Brazil. We're expecting this to be about $150 million. The new active ingredients, we believe with the number we still are forecasting, it's going to be from Q3 to Q4 about $70 million. And then you have others, including Brandon Renexapir, especially in Latin America, in the range of $40 million. So when you go from Q3 to Q4, those three buckets, less technical sales. As you know, we have less buy from partners for diamides. we get to a number which is an increase in the range of $260 million. Now, the non-diamide core I talk about, it's largely driven by the normal seasonality. Usually, you see, and historically, you see an increase from Q3 to Q4 of about 15%. And that is, in addition, it's a bit higher this time because we do are increasing our sales, direct sales in Brazil. And as you've heard in the script, we have a shift in North America of sales from Q3 to Q4. The second largest driver is the new active ingredients, and that is going to be mostly fluent up here in North America and isoflakes in Australia and diamage and plant health are the rest. So that's roughly the bridge from Q3 to Q4, which go from seasonality to specific actions we are taking, like direct sales or new active ingredients.

Your next question comes from the line of Edlin Rodriguez with Mizuho Securities. Please go ahead.

Thank you. Good morning, everyone. Pierre, I kind of wanted to ask you something about more medium and longer term. Clearly, 2026 is a transition year. As you navigate the changes in action you are undertaking to improve the portfolio, it seems like it's a process where things can get worse before they get better, but in the end, you will come out stronger. The question is, with the things you can control, like when do you think we will start to see the benefits of the work you are doing? Essentially, like how does the patient get better going forward?

Yes, thank you. Listen, I believe at this stage, and that's a discussion we're having here often and often, as we look at it, we have all the reasons in the world to believe that 2026 is the truth. We believe the worst is behind us with the loss of IP protection on Renexapeer, and for Renexapeer, all signs are pointing to us being able to protect Renexapeer earnings in 27. Now, so if you assume that, I'm looking at four critical things, which will be starting to make 2027 the first growth year. First, let's talk about our biggest issue in 2026. This is a $2.1 billion non-diamide core business, and that business is down this year or should be down when we close the year by about 5%. With all the work we're doing on a global manufacturing footprint, we should be competitive again and back to growth as soon as next year. Now, if we only assume to get back to an annual growth of 1% or 2%, which would be below market, so it's fairly modest, if you compare to being down 5% this year, this is an incremental sales of about $120 million to $150 million. errors. So that's the first bucket, just linked to the work we do on a manufacturing footprint. On bucket number two, it's our new active ingredients. The growth should be accelerating to a minimum of 50 to 70 percent as we are gaining more and more registration. If you look at the expected size of our new active ingredient, that would be in 27 versus 26, an additional $150 to $200 million. Branded sales appear, steady as she goes, should continue its mid-single-digit growth. It's an additional $20 million. virus. Last point, and this one I have not quantified. You know, we keep on shifting more and more of our sales business in Brazil toward co-ops and direct sales. This also should represent a growth, but we are not quantifying it yet because, as you know, we are controlling our sales toward the more traditional distribution network. So we need to balance the growth in co-ops and direct sales versus the decrease in the more traditional network. That's more of a budget exercise, not yet capable of controlling that. On the negative front, we'll still have will still have some negative impacts of diamage sales to partners, but it will be getting smaller and smaller, and this segment is getting smaller, and most of the cost decrease for Renexapir has taken place. So if you look at that, without quantifying the last bucket around Brazil, this is natural growth of 300 to 350 million dollars in 27 versus 2026 and that should keep on improving as we grow as the new active ingredients will be getting more and more traction so as you say the patient should get better quickly we believe 27 all indicate implications are pointing toward a return to growth next year.

Your next question comes from the line of Frank Mitch with Fermium Research. Frank, your line is open. Please go ahead.

Thank you and good morning. Hey, Pierre, I wanted to drill on slide five the breakdown by the regions. North America came down fairly significantly. And, you know, you mentioned, you know, a competitive market. in North America. I was wondering if you could expand upon that, where specifically and how sustainable is that competitive market, you know, and how we should think about that in the future. Thank you.

Yeah, thanks, Frank. You're absolutely right. North America was down. It is the negative news of the quarter for us. And there is multiple drivers. They all went the wrong way. First and above all, it's a volume story. As you know, in North America, we are very strong in specialty crops with our insecticide business. Rice production was at the lowest level since 1987. That's a big market for us, very low insect pressure. So we lost a lot of sales in specialty crops. Raw crops is less of a market for us, but still important. And it is absolutely certain that low margin at the growers' level high uncertainty. This is translating into growers managing their cost as much as possible. You see some trading from more branded products to generic product, and in some cases, skipping applications. So, yes, Q2 was, from a volume standpoint, a negative, a very negative quarter. There is something to a less extent, but we have a license on a product, Nervy side, which is called Pyroxyl Sulfone, and the company which owns this license, it's only a license we have for North America, lost their IP protection. So that product became more of a generic product. And we lost sales in that, not sales, but we lost on pricing a lot and also on volume on these products. So I would say by far the number one driver in North America, in addition to some pricing, but the number one driver for the reason I just listed, our volume.

Your next question comes from the line of Chris Parkinson with Wolf Research. Chris, your line is open. Please go ahead.

Great. Thank you so much. Pierre, we take a step back and we look at the intermediate to longer term growth in diamides. Perhaps could you just update us on, you know, what you think the overall growth rate is, including all new entrants in terms of, like, the transitory period that we're currently in? You know, which other insecticide classifications we're stealing share from? Is it organic phosphates, carbamates, neonics? And just how you think about the overall TAM there, because it seems like the market trajectory is still growth and that there's just basically competitive behaviors in the beginning of that process. So if you could just hit on the highlights there from your own perspective, it would be greatly appreciated.

Thanks, Chris. Yes, I'm going to speak carefully here because we have a strategy in place for an exit peer. And as I said before, the big test will be in Q3, Q4, when we're going to have the major market with the entrance of new generics in Latin America and North America. So we're not yet there. And I'm talking about Q1 and Q2 indicators on much lower market. I would say that the number one sign of success we are looking at in a strategy is the mix of a portfolio as we were expecting is shifting toward the high-end product. We are growing very fast on the new mixtures we have, especially the bifanthrine and Renexapir mixture, as well as the high concentration products. So 35% growth in that sector. That's what we're expecting. We commend the premium for those products. So that's a first positive. We are seeing some signs that the market is growing, and we've seen that in Brazil where we are gaining toward lower-end insecticide. But that is at the very beginning of the process. I think the big test is going to take place in the second half of the year. But we do have some signal we've seen in Brazil. Product on the ground, again, some of those insecticide has been strong in the first half of the year. But again, on small volume. So indicators are good that the strategy with the lower cost we have reached and the strategy to move to our higher hand. Certainly, we are not expecting at the earnings level, Renexapir in the long term to be a contributor to earnings growth for the company. But I would say that all indicators are pointing between the mixed change and what we see at this stage of volume gain on the lower-end effective side towards stabilizing earnings, certainly in 2027. That's all I can say today in terms of what we're able to verify on the market.

Your next question comes from the line of Joel Jackson with BMO Capital Markets. Joel, your line is open. Please go ahead.

Good morning, Pierre and team. Pierre, when you did all the actions over the last bunch of months, you were aggressive, you did a lot of things. It seemed like you thought you could do kind of hold earnings around $700 million EBITDA with the free cash flow around that. You've come down a little bit lower this year, leverage a little bit higher than maybe what you would have thought. What other actions do you feel that you should wait for 2027, see if you get the rebound you've been talking about earlier in this call, or are there other things you want to do? Might you consider cutting the dividends, doing things to protect the balance sheet some more in this 2026 being a bit lower than thought?

I'm going to let Andrew talk about cash flow and what we do in terms of additional actions we are planning for next year. I'm only going to answer the last point you've made around dividend. As you know, our dividends are small. It is certainly a topic we will have with the board and continue to have with the board. It's a $50 million cost annually. But no decision, absolutely no decision has been taken at this stage in terms of the dividend. But Andrew, if you want to add anything.

I think, look, Joel, on the free cash flow side, obviously we updated the free cash flow guidance with the change in EBITDA guidance and with the Remusoxib and licensing deal. There are more moving parts in that. And just to touch on that briefly as I address your question, from a cash from operations perspective, net-net, we moved the guidance midpoint up $85 million. Now, that's about $200 million from the Remy Soxman deal. So, obviously, some headwinds hitting against that, certainly the biggest being the lower EBITDA expectation. We also have some higher restructuring spending as we're accelerating some of our actions to improve our manufacturing network. we do see a little less improvement in working capital this year because of the sales shift from q3 to q4 and there's a few other minor drags as well from a capex perspective with accelerating some of those movements on our manufacturing footprint we were able to reduce the expected capex for the year by about 40 million dollars our outlook for discontinued operations is unchanged we did highlight you know we'll be pulling out certain charges that are related to transactions that flow through the restructuring line, we'll pull that out from free cash flow under divestiture expenses. And the net of those changes is really just, on a like-for-like basis, a $50 million reduction in the free cash flow for the year. I do think, again, from a working capital perspective, back to part of your question here, we do expect a release from working capital this year in part from liquidation of receivables in our NDA business, but in part from the rest of our business. But we have more work to do on improving working capital as we continue to get into a better rhythm with our production cadence, as we continue to drive a more aggressive collection of receivables and improving overall credit quality of the portfolio. So, I think you'll see this year some good improvement in inventory reduction as we get through the year, more work to do on receivables and payables as we go into 2027.

I think, Joel, let me deal a little bit on what Andrew just said, because it's one of the very critical parts of our balance sheet. You will see this year it's something we fully control. It's inventory and we do have strong expectation that we're going to make some very significant progress on the inventory situation. We are monitoring that very closely and all indicators are pointing towards strong progress. The place where we have work to do, we are starting it this year, it's going to be very important next year, is on receivable. And it's very much part of the strategy we have in Brazil and we've talked about the move toward customers which have more certainty of paying less low-moving, And better terms like co-ops and direct sales that some of the, I would call, consolidated distribution network, which is becoming much more uncertain. So it's one area of focus, maybe not as much progress this year as we would like, but certainly we are making that a very high priority. we should see very strong improvement as we are changing a mix of customer, especially in Latin America and Brazil next year.

Your next question comes from the line of Patrick Cunningham with Citi. Patrick, please go ahead.

Hi, good morning. Just a couple of questions on the cost side. I think you mentioned at the top of the call some quarter-specific items that benefit the cost. I guess first, you know, what were those? Were those some classes pulled forward? And then can you sort of quantify, you know, what the headwinds, you know, tailwinds might be for the second half?

Sure, Patrick and Andrew, I'll take this one. Look, in Q2, comment we made relative to guidance, we had, you know, some improved cost favorability and non-manufacturing items. Some of that's SG&A and R&D. And some of it, quite honestly, is just some smaller items that, you know, generally we wouldn't talk about. But, you know, we had a couple things that were positive in the quarter and they contributed. I'll give you a simple example. We annually review our achievement reserve, which is essentially think of uncashed checks and other other kind of liabilities. And we found that we were over accrued based on what was actually due to an outstanding. So there are a few minor little favorable things like that. But when they add up, they were they were an adverse guidance in terms of our cost position. I think we look at costs for the remainder of the year. You know, we do have a bit of two different stories with the quarters. In the third quarter, we really don't have much of a cost tailwind. You'll remember that that's a really tough quarter comp versus the prior year. We had a very strong cost tailwind in the prior year period in Q3, much of which was one-time favorability from increased cost volume absorption in Q3 of 25. So, Q3 is the flattest cost quarter, whereas we had pretty significant cost favorability in Q4. And that really is, you know, driven by lower purchase price of raw materials year on year. So, it is a little bit of a split pattern between the two quarters. It does amplify with the weaker sales in Q3, the headwinds in Q3, and helps amplify the strengths in Q4. So, I think, again, everybody should expect Q3, flattest costs, Q4, pretty strong tail one for cost.

Your next question comes from the line of Arun Vishwanathan with RBC Capital Markets. Your line is open. Please go ahead. Arun, a reminder to unmute yourself locally. Thanks. Thanks.

Yeah. So I guess my question is just, as you look forward, maybe you can just provide an update on where you stand in the restructuring effort. So Obviously, you talked about the new product's growth, but maybe on the diamides and siazapir, do you think the pressure has stopped there, and are you guys holding gross margin kind of stable? And then as you look into fiscal 27, do you expect to continue growth on that front? What could you provide as far as kind of where you are in some of these restructuring efforts?

I think for – I mean, we really have to separate when we talk about diamide, Renexapir, and Sayosapir. Sayosapir is data protected. There is no generic in the major countries today. It's a difficult product to make. we are anticipating the 28-29 period when we will lose data protection to avoid to be taken by surprise like we did in Renex Appear with preparing in advance formulation and having a defense strategy. So that is a 28-29 problem. For Renex Appear, we continue the strategy as we have defined so far. So far, it is proving to work. I would say the positive or good surprise for me is that we keep on finding ways to lower our manufacturing costs, which is giving us a couple of things. It's protecting our growth margin, and it's positioning the product better to gain market share over the lower and insecticide. So a total focus between the volume and the cost is when we get into 27 and beyond before Renexa peer to protect the earnings contribution of the product to the P&L of the company. And I would say that right now, all indicators are going that way. As I said, it will not be viewed as a growth product, but the cost restructuring keeps on going positively. It's going to position us very competitively versus the quality generics, giving us a lot of flexibility to act and giving us a premium on the high-end product, which we are growing very fast. Sales Appear is a different story. It is still a very profitable product, which is growing in the mid-single digits, and for which we are preparing the 28 post data protection situation.

Your next question comes from the line of Ben Tyer with Barclays. Your line is open. Please go ahead.

Yeah, good morning, and thanks for taking my question. A lot being touched upon already, but I just wanted to kind of like maybe go back and understand a little bit what your expectation is in terms of like just profit improvement as we move into 27, 28, the ramp with the new active ingredients and still some of the headwinds you've alluded to, Pierre, earlier as it relates to the form of dynamites, et cetera. So how should we think about that? I remember earlier in the year you've talked about something like mid-teens EBITDA growth into 27-28. Do you think that can still hold based on also the fact that we have a lower starting base or how should we think about the growth algorithm as we move into 27-28? Thank you.

I think 27 diamide. I'm going to talk of Renex Appear because, as I said again, sales appear in 2017. We are expecting revenues and earnings growth in 2027. Renex Appear, I believe, will be at least the earnings contribution of of 2026. Number one driver, and this one is very important, and that's the one I'm the most confident in, because it is really happening right now, is the contribution of the high-end diamide mix and product. A portfolio mix is changing very much toward those product. We actually have and are expecting very soon a registration which will impact 27. It's going to impact 26 in Brazil, which is a blend of Renexapir and DoxyCarb, which is a very important product to address resistance. That's going to be a source of growth significant for us next year. What is to be proven? I have to be clear on this one. It's a Q3, Q4 story for us to be checked is how fast and how much we can penetrate the lower end market of the run, except we are using a low manufacturing cost with a single. Indications are good, but I don't want to declare victory yet until I've seen it in Q3, Q4 in North America and Brazil. So, really, I am not seeing, as you remember at the beginning of the Q&A, I gave a bridge into 27. I believe that Ronex Appear will not handicap performance in 2027.

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