FMC Corporation
Q2 2015 Earnings Call Transcript

Published: 6 Aug 2015

[Operator:]

Good morning, ladies and gentlemen, and welcome to the Second Quarter 2015 Earnings Release Conference Call for FMC Corporation. Phone lines will be placed on listen-only mode throughout the conference. After the speakers' presentation, there will be a question-and-answer period. I will now turn the conference call to Mr. Brian Angeli – excuse me, Vice President, Investor Relations for FMC Corporation. Mr. Angeli, please go ahead.

[Brian P. Angeli:]

Thank you, and good morning, everyone. Welcome to FMC Corporation's second quarter earnings call. With me today is Pierre Brondeau, President, Chief Executive Officer and Chairman, who will review our second quarter performance and business segment results, including an update on the integration of Cheminova, and discuss our outlook for the second half of 2015. Also, with me is Paul Graves, Executive Vice President and Chief Financial Officer, who will give an overview of select financial results. After the prepared remarks, we will be joined by Mark Douglas, President, FMC Agricultural Solutions; Eric Norris, Vice President and Global Business Director, FMC Health & Nutrition; and Tom Schneberger, Vice President and Global Business Director , FMC Lithium, to address your questions. Before we begin, let me remind you that today's discussion will include forward-looking statements that are subject to various risks and uncertainties concerning specific factors, including, but not limited to, those factors identified in our release and in our filings with the Securities and Exchange Commission. Information presented represents our best judgment based on today's information. Actual results may vary based upon these risks and uncertainties. Today's discussion will focus on adjusted earnings for all income statement and EPS references and pro forma, revenue and segment earnings for FMC Agricultural Solutions. A reconciliation and definition of these terms, as well as other non-GAAP financial terms to which we may refer during today's conference call, are provided on our website. Our 2015 Outlook Statement, which provides guidance for the full year and third quarter of 2015, can also be found on our website. I will now turn the call over to Pierre.

[Pierre R. Brondeau:]

Thank you, Brian, and good morning, everyone. In my comments, I will refer to the Q2 2015 earnings presentation posted on the FMC Investor Relations website. We have not used slides for previous earnings calls, but we have taken this approach today in order to help explain our results more clearly as we transition through 2015. I will refer to each slide by slide number as I go. The second quarter of 2015 was perhaps the most significant quarter in the long history of FMC Corporation. We completed the sale of the Alkali business with Tronox and closed the acquisition of Cheminova. These transactions marked the completion of the transformation of FMC's portfolio to one focused on the Ag, Health and Nutrition markets. Following the close of the Cheminova transaction, we moved quickly to integrate Cheminova into FMC Ag Solutions. During this quarter, we took multiple actions that will drive strong future performance of FMC and allow us to deliver target synergies of $120 million ahead of 2015 (sic) [2017] (3

[Paul W. Graves:]

Thanks, Pierre, and good morning, everyone. So today, I'm going to focus on two main items

[Pierre R. Brondeau:]

Thank you, Paul. To conclude, we are very pleased with the performance how the remainder of the year is shaping up. Our results from the second quarter were in line with our expectation. But for the unexpected temporary increase in interest expense in the quarter, our results would have been at the top of our guidance range. As for Ag Solutions business, we are highly focused on controlling what we can control. We are in a down cycle with currency challenges. We are actually more concerned about currency fluctuations than we are with the market, which is still in line with our views as stated at our Investor Day in May. The cycle will turn around, as it always does, and FMC will be ready with a strong portfolio and a proven business model. In the meantime, we are very confident that our strategy is staring to pay off. Our focus is to deliver earnings growth via the synergies from Cheminova, including revenue synergies and stringent cost control, regardless of where we are in the Ag cycle; and this starting in the second half of 2015. The integration of Cheminova is progressing faster than expected. Combined with our FMC portfolio and operated under the FMC business model, we will demonstrate in the coming quarters the potential of the new Ag Solutions business. We're also very confident that our earnings growth will accelerate rapidly into 2016. Our Health and Nutrition portfolio continues to demonstrate its qualities, specifically, its resilient earnings profile. The cost control and manufacturing excellence programs undertaken in 2015, combined with our technical strength and strong portfolio, will also see higher earnings growth as we enter 2016. The Lithium business strategy, to focus on downstream specialty product, is now in place and the business continues to operate well. I am very pleased with the progress we're making in our efforts to reduce capital invested in the business through tighter control of capital spending, multiple efforts focused on reducing our working capital and very tight cost control. With the business environment that we are operating in today, it is extremely important that we continue to prioritize cash flow and capital discipline in all areas. I will now turn the call over to the operator for questions.

[Operator:]

And we'll go to the line of John McNulty from Credit Suisse. Please go ahead. Matthew Freedman - Credit Suisse Securities (USA) LLC (Broker) Good morning. This is Matt Freedman on for John McNulty. I was wondering if you could please provide us some color on Ag Chem inventories in Brazil. What are the biggest overruns either by crop or type?

[Mark A. Douglas:]

Hi, this is Mark. The inventory situation in Brazil is pretty significant, as we've talked about since the end of last year. The inventory balances that we see in the channels are pretty much spread across nearly all segments. In Pierre's comments, he talked about the impact on insecticides with channel inventories. We see, also, significant channel inventories in herbicides and fungicides. Obviously, cotton is one area that we're exposed to and we see channel inventories there; we also see in soy and in corn. So in summary, for us, channel inventories are pretty widespread. Obviously, we're entering into the growing season and those channel inventories are weighing on growers' decisions of when to buy, which we've commented already, but it's pretty widespread right now. Matthew Freedman - Credit Suisse Securities (USA) LLC (Broker) Thanks. That's helpful. How big was the rationalization of third-party sales on the top-line? You indicated it was $15 million of earnings.

[Mark A. Douglas:]

Yeah, obviously, through third-party sales we make less margin. So it's less than you would normally see in terms of revenue, but in the $50 million – $30 million to $50 million range overall.

[Pierre R. Brondeau:]

No. I think it's a much higher number.

[Mark A. Douglas:]

That's the third-party, but that does not include Consagro – the Consagro entity.

[Pierre R. Brondeau:]

Oh, yeah. Not including Consagro. Correct, Mark.

[Mark A. Douglas:]

Yeah. Matthew Freedman - Credit Suisse Securities (USA) LLC (Broker) Got you. And then, lastly, if there was consolidation in the Ag market, would you say FMC is more likely a buyer or a seller of assets?

[Pierre R. Brondeau:]

In term of – you know, if you look at M&A, we've made our move. We have acquired Cheminova. We are integrating Cheminova. We believe that with that strategic move we now have a very solid geographical balance and very solid portfolio. So we are not a seller and we are not a buyer. We are very pleased with where we are right now and this is the way we intend to operate our business. Matthew Freedman - Credit Suisse Securities (USA) LLC (Broker) Thank you.

[Operator:]

Our next question is from the line of Frank Mitsch with Wells Fargo Securities. Please go ahead.

[Frank J. Mitsch:]

My assumption is that if you were a seller of Ag, you're basically a seller of the company because that's what you guys are. You've done a great job of focusing the company there. Of course, we are – we've hit a little bit of an air pocket here on the Ag side, given the commentary. But, Pierre, I wanted to just take a moment and – the guidance for 2015 of $510 million to $550 million, at Investor Day you outlined, I think it was, $635 million to $685 million, which would be a 25% increase for 2016. Is it still feasible that you'd be able to increase your Ag earnings by 25% at the midpoint for next year?

[Pierre R. Brondeau:]

Yes, Frank. If you look at – first to your comment, yes, selling Ag would mean selling FMC, and we are not selling FMC. That's a true comment. Regarding the earnings for 2016, if you look at the speed at which we are increasing our synergies and the way they will impact 2016 with a full year benefit, I think the targets we have ahead of us for 2016, at this stage, are unchanged. We are not banking on any change in the Ag cycle for next year. We believe and we are still at the same place, our vision for – our view for the Ag market has not changed since Investor Day, which is it's going to be a rough second half of 2015. And 2016, we'll look at it as a bit similar as 2015

[Frank J. Mitsch:]

All right, terrific. That's very helpful. And clearly, with the acceleration of the synergies or the benefits on the Cheminova integration, that would be a positive now that you've owned the property for several months here. What about on the other side of the ledger? Have there been any – what other sort of positive surprises have you found in – or perhaps negative surprises have you found with the transaction?

[Pierre R. Brondeau:]

I think Cheminova is all we expected. It's really the company we wanted to buy. What I would say is that the biggest surprise is the easiness in which we are capable of integrating the two companies. And that's why we are seeing the revenue synergies and cost synergies coming that fast. The culture are matching, and there is no pushback from one company to the other. So when you look at places, Latin America, Brazil, Europe, we are operating truly as a single company, and that's why we are seeing this acceleration of synergies. There is no big issue we've uncovered. Actually there is none. So far it's as good, if not better, than what we were expecting.

[Frank J. Mitsch:]

Thank you. That's helpful (44

[Pierre R. Brondeau:]

Thanks, Frank.

[Operator:]

And your next question is from Mike Sison with KeyBanc. Please go ahead.

[Michael J. Sison:]

Hi, guys.

[Pierre R. Brondeau:]

Hi, Mike.

[Michael J. Sison:]

When you think about the second half, just curious if you can – third quarter is going to be difficult for Ag, and then you have a big fourth quarter. I know Brazil tends to be stronger, but just could you frame up maybe what needs to happen to sort of hit that really strong fourth quarter for Ag Solutions?

[Pierre R. Brondeau:]

Sure. Yes. Thanks for the question, because it's really an important second half for us because we've – the way we've been preparing the second half with the acceleration of synergies in the second quarter, I think it's when things start to come together. I know the numbers look big, but there is a solid logic behind those numbers. So if you think about year-on-year, what we've said is second half of 2015 will be about 40% up versus second half of 2014. Think about it that way. It's about $100 million of EBIT increase. Two big buckets

[Michael J. Sison:]

Okay. Great. And then, 2015 obviously a difficult year. What are your initial thoughts on – obviously, you're going to get a lot of integration and savings in 2016, but how would you help us think about how Ag Solutions could do in 2016; maybe is there a couple of scenarios, depending on what crop protection globally could potentially do as a market?

[Pierre R. Brondeau:]

Yes. It's – as I said in my closing comments, we are very, very highly focused on controlling what we can control. So our assumption today and the plans as we have defined – actually, if you look at the way we are looking at the market today, we are still exactly at the same place as we were at Investor Day in May. We see a very tough back end of 2015, and we see no improvement in 2016. Now, looking at what is in the channels, all indication we have is we should start to see products being flushed out of the channel by the beginning of 2017. That's what we're expecting to see the cycle ending. Under that, the focus will be on revenue synergies, cost synergies and cost control. And the numbers, the one Frank mentioned are the one we still believe we could achieve. Today, where we are, we believe our view of the markets is correct. That's what we're expecting. I can tell you that where we have the highest level of uncertainty, and there isn't much we can do about it, is around currency. I mean, the real is depreciating at incredible speed. We believe the euro has stabilized. Still very hard to know what's going to happen with the – in Argentina and what will happen with their currency. It could be positive. So, that's where we have the highest uncertainty. So right now, the scenario we have is about the same as the one we were outlining in Investor Day, potentially with harder currency situation which could be balanced by faster synergies coming into 2016.

[Michael J. Sison:]

Okay. So in short, that sort of the range of the growth that you thought in 2016 you can get versus 2015 is still generally in the cards?

[Pierre R. Brondeau:]

Correct. We have no reason to change.

[Michael J. Sison:]

Great. Thank you.

[Pierre R. Brondeau:]

Thank you.

[Operator:]

Our next question is from Dmitry Silversteyn with Longbow Research. Please go ahead.

[Dmitry Silversteyn:]

Good morning, guys.

[Pierre R. Brondeau:]

Hey, Dmitry.

[Dmitry Silversteyn:]

Most of my questions have been answered, but – excuse me, just a couple of follow-ups, if I can. Can you repeat your CapEx guidance for the year? I'm sorry, I missed it.

[Paul W. Graves:]

Sure; and it's in the outlook sheet. It's $150 million to $175 million for the full year.

[Dmitry Silversteyn:]

Okay. That's a significant reduction off of the rates you've been running at. Is that a sustainable level going forward or is this just one year, given that Cheminova is bringing a lot of capacity that you can do something with?

[Pierre R. Brondeau:]

Yeah. I think it's very sustainable. That's our target. That is the number we are looking at going forward. Remember, today one of the big CapEx user was Health and Nutrition, and that business is very well capitalized for the years to come. So it will be Ag growth, and I can't wait to have to increased capacity for the Ag business, and Lithium, if we decide to increase capacity in lithium hydroxide; so much more focused capital spending. So $150 million to $170 (sic) [$175] (50

[Paul W. Graves:]

Just bear in mind as well, Dmitry, that if you think about historical numbers, you're probably remembering numbers that had Alkali in there, too.

[Dmitry Silversteyn:]

Yeah, you're right. So, then, you got about $100 million a year relief of CapEx from selling the Alkali business. Okay. The decline in Lithium operating profit sequentially, what – I mean, looking back, it doesn't seem to be a seasonal pattern to it. So what drove the sequential decline in operating profitability of Lithium?

[Pierre R. Brondeau:]

You know, it's always – and I hate to get into those discussions because I hate when a leader of this business explained to me that way, but it's just the way accounting works. When you have – when you operate in Argentina, there is always operational difficulties and permits, and the way you focus your standard cost is very hard to do because you don't always have the permit or the surprise you have on the cost endpoint. The problem is you always get those negative impact in the time when the products are sold. So you capitalize your variances. So some of the earnings decrease you see are mostly linked to issues operating in Argentina which are due to previous quarters.

[Dmitry Silversteyn:]

Got you.

[Pierre R. Brondeau:]

It's just the way the GAAP accounting works.

[Dmitry Silversteyn:]

Okay. All right. Thank you, Pierre. That's all the questions I had. Thank you.

[Pierre R. Brondeau:]

All right. Thank you, Dmitry.

[Operator:]

And next, we go to Laurence Alexander with Jefferies. Please go ahead.

[Laurence Alexander:]

Good morning.

[Pierre R. Brondeau:]

Good morning.

[Laurence Alexander:]

I guess, two quick ones. First, can you – as you look at the market environment in Brazil, how severe would things need to get to change your working capital strategy?

[Paul W. Graves:]

I'm sorry. How 'what' would things need to get?

[Laurence Alexander:]

I guess, what flexibility do you have to change your working capital strategy if conditions – assuming that the tough conditions do spill over into 2016, what is your thinking about managing working capital days down there?

[Paul W. Graves:]

It's a great question. We've done, as you can imagine, an enormous amount of work and spend a lot of time focused on this. We – the whole industry operates on exactly the same terms. It is extremely difficult for any one of us down there, in my view, to individually change the terms on which we do business without having a significant and serious impact on the commercial operations down there. The most important factor that we're really focused on today is ensuring that we think very carefully about who we extend credit to, which products economically make sense to be sold on those terms. And that does change rapidly when you have interest rates of 15% and a real depreciating rapidly. And also thinking about credit risk, we think very carefully about credit risk, as you can imagine. And so, I don't think you will see a fundamental change in the terms of business, but I think discipline around who we sell to and when we sell to them is really the biggest tool that we have, and we've been very disciplined around that in the first half of the year. I think we'll continue to be disciplined, and our outlook assumes that discipline continues through the rest of the year.

[Laurence Alexander:]

And then, secondly, can you give an update on your thinking around the biologicals partnership with Chr. Hansen, field trial data, what sort of products testing you're going to be doing next year? Any sort of updates that you have there?

[Mark A. Douglas:]

Yeah, Laurence, this is Mark. The alliance is going very well indeed. As we talked about at our Investor Day in May, we have seven really large projects that we're working on. The first of those projects is due to be launched at the end of this year and it's for North America, and it is a bio-stimulant that we will be using with some of our synthetic in-soil insecticides. Trials have gone very well. And that product will be coming to market on target. Following that, we have some seed treatments coming in in the 2016 timeframe, and then high value bio-fungicides, mainly for the fruit and veg and specialty niche crop markets. And then, following that are the more difficult areas, the bio-nematicides and the bio-insecticides, and they'll come through in the 2018 timeframe. But the collaboration goes very well; it's exactly what we thought it would be. We have a pipeline of products and, obviously, that pipeline is growing. So right now, we feel very confident about our BioSolutions platform.

[Laurence Alexander:]

Thank you.

[Operator:]

Our next question is from Peter Butler with Glen Hill Investments. Please go ahead.

[Peter E. Butler:]

Hi. Good morning, good morning.

[Pierre R. Brondeau:]

Good morning, Peter.

[Peter E. Butler:]

Regarding your very important Ag program, there is a company called Origin Agritech in China who is talking about starting to sell corn seed technology, GMO technology, globally, outside of China, and it claims to have better and cheaper technology than Monsanto. Would something like this be of interest as a way to get into the GMO business, say, in a country like Brazil?

[Pierre R. Brondeau:]

Peter, I think we are an Ag chemical company. That's what we do and that's what we do best. We believe it would be highly distractive for us and, truthfully, very expensive to try to be a competitor in the seed business. There is formidable companies in the seed business, like a Monsanto. We are very good at what we do and they are very good at what they do. So I think we're going to stay where we belong, which is really the Ag chemical segment.

[Peter E. Butler:]

How are you feeling about you're research productivity? Have there been any new developments? Are there any vibes coming from the laboratory on new stuff that you haven't talked about?

[Pierre R. Brondeau:]

I'm going ask Mark to give you more detail, but from where I sit we are confirming everything we talked about in term of platforms at Investor Day.

[Mark A. Douglas:]

Yeah, Peter, this is Mark. Peter, I just talked about the BioSolutions platform that continues to grow, and you know at Investor Day I talked about the nine active ingredients we have in the pipeline. They are all on track. They're due – the first ones come in in 2015 and it goes all the way through into the early part of the next decade. We're not stopping there. We have a number of leads that we're following up in areas where we think we have gaps that we'll need to fill as we go into the next decade. But right now I can tell you that I really believe that the platform and the pipeline we have in Ag right now is probably the best we've had in a number of decades, and it will bear fruit as we go through into the end of this decade, early next decade.

[Peter E. Butler:]

Sounds good, thanks.

[Operator:]

Our next question is from Brian Maguire with Goldman Sachs. Please go ahead.

[Brian P. Maguire:]

Hey, good morning and thanks for taking my questions today. Thanks again, also, for the slides. I think that helps separate out what was a pretty noisy quarter. But I was struck on slide two by the amount of the FX hit to the Ag segment and I can't recall FX being a major driver of the earnings, one way or the other, in the past. So just wondering if there has been a – and I realize currencies have moved a lot in the last year, but just wondering if there's been a change in the hedging policy or if there is some impact of hedges in here? And maybe on the flipside, would the impact have been any worse if you hadn't done some hedging activity or – I guess just trying to disaggregate the number there from what it would have been without any hedging activity?

[Paul W. Graves:]

Sure, no, if you think about it, Brian, there's two factors to bear in mind. We can only hedge at the prevailing rate, and the prevailing rate itself has moved year-on-year. And so, ultimately, without price movements on our real price list, we're always going to have that headwind simply because the forward rates as well as the spot rates are significantly different. So our hedging policy has not changed; the extent to which we hedge has not changed. The cost of that hedging has increased. So a significant portion in the quarter, I think it's about $4 million, increased year-on-year of hedging costs as a result of the real. A second factor is bringing in Cheminova. Cheminova has a big European business, and so we have a big euro exposure compared to last year that we historically would not have had. So we wouldn't have suffered in quite the same way, because our European business was so much smaller. They also have a sensible sized Brazilian business, so it's magnified the impact of those two. So, it's really those factors. It is really, though, the extent of the exposure to those two major currencies has increased and those two currencies have depreciated significantly, as you know.

[Pierre R. Brondeau:]

Brian, the – it's unprecedented. I mean, it had an impact in the past, but, as Paul said, with hedging we're able to be more predictable. But when you have a 40% change over the real during a period of 12 month, and I think 20% for the euro, the speed at which it was impacting our results is never happened in the last five or 10 years. And then, consequently, the hedging cost is also becoming much higher. So it's just the magnitude of the problem which has changed with us being bigger and bigger in Latin America and Brazil.

[Paul W. Graves:]

And just to give you just another data point, when we had our Investor Day in May, the forward rate for the real against the dollar was sort of 3.30-ish, and the most estimates about a 3.30, 3.35 end of year rate. We hit 3.47 yesterday. So it's moving in a way that's incredibly rapid and incredibly unpredictable.

[Brian P. Maguire:]

Okay, I think that explains it very well. Paul, I was wondering if you could also comment on any change in collection behavior you are seeing from your customers in Brazil as they come under some pressure either from the currency or weak Ag markets. Do you see any change in your ability to collect on receivables down there? Thanks.

[Paul W. Graves:]

It's an interesting dynamic down there. One of the beneficiaries of the depreciation of the real is essentially the Brazilian farmer because as the real depreciates, his real profitability is going up significantly. Unfortunately, he is getting paid too wait. He is getting paid to wait with selling his dollar currency commodities, and he is also getting paid to wait because of the pace of the depreciation. So, we are not having any real meaningful change in credit profile of our customer base. It remains an important core competence of ours to get out there and collect what is owed to us. Those conversations are no more easy today largely because of the inherent preference of a Brazilian farmer to not pay until he absolutely has to. So it's difficult. It's difficult to collect, but not because of credit reasons, but largely because it's just a battle to get out there and persuade the growers to pay us what they owe us. And that's true for everybody.

[Brian P. Maguire:]

Okay. Thanks very much.

[Operator:]

Our last question will be from the line of Rosemarie Morbelli with Gabelli & Company. Please go ahead.

[Rosemarie J. Morbelli:]

Thank you. Good morning, everyone. Pierre, I was wondering if you could talk to us about the omega-3. You have this new plant in the UK. The game plan was to go after pharma application as opposed to food application, but it doesn't look as though anything much is happening. Could you give us a feel for what is going on and what you expect in 2016, for example?

[Pierre R. Brondeau:]

Sure. I think omega-3 – I have to admit that our acquisition we did faced two significant problem. There was a slowdown in the market, whether it's pharmaceutical or nutraceutical, mostly nutraceutical, because of some comments – article which are public even if they were based on junk science, but it had a very big impact on the market; and the fact that it is a market when we came in there were three suppliers, and by now we have about 11 suppliers of omega-3; so a very strong over-capacity. So we are fighting two fronts right now. One front is price, as any market facing over-capacity would face; and a market where demand, even if it's coming back a bit, is still not back to historical level. Our focus for us, as you said, has never been the food industry, but I would say the big difference, even what you're seeing, it's more in pharma. I mean, our real focus is to penetrate strongly the high-end nutraceutical market. So the two markets where we should be playing are pharmaceutical and high-end nutraceutical. We are making some progress, but needless to say that it is not at the level that we were expecting when we made that acquisition. So right now we're focusing on multiple front

[Rosemarie J. Morbelli:]

Is that an area in which you need to be in order to gain customers, for example, by offering omega-3 as well as your other products, or you can dispose of it?

[Pierre R. Brondeau:]

We could dispose of it without impacting – it's more like – if you think about it, we believe that we could penetrate the omega-3 market faster than others by using our relationship with nutraceutical companies and pharmaceutical – it is the case. I have to say that the larger product offering to a customer base we have is – our customers are happy we're in omega-3. We aren't as happy because the price is not where we would like it to be and the opportunities are not as strong as what we would like to be. So from a strategic standpoint, could we be out? Yes, we could be out. Is it time for us to get out? No, it is not time. I think we still have opportunities to participate in this market and see a return on our investment, but more challenging than what we were expecting. So we're going to keep on driving that business as well as we can through 2016.

[Rosemarie J. Morbelli:]

That's very helpful. Thank you. And I was wondering if you could bring us up to date on the new MCC plant in Asia, and is it ready to offer products to your pharmaceutical customers or not, yet?

[Pierre R. Brondeau:]

So MCC, as you heard in the script, it is becoming very tight. The growth has been strong. Health and Nutrition is looking at a strong back end of the year and on both side, which is the pharmaceutical part and the beverage food application for colloidal MCC. So we are at a place now that we have made – actually, we made that decision yesterday to go ahead. We're starting the plant. We are expecting the plant to open up in 2016 and we also have confirmed the decision we're very well advanced on the engineering side to do the pharmaceutical lines. So the plant will start up in 2016; if not, we're going to be too tight in capacity. I think we're going to get close next year to 95% capacity utilization. So, we're going to start up the plants in both MCC food and pharmaceutical.

[Rosemarie J. Morbelli:]

Okay. Thank you very much.

[Pierre R. Brondeau:]

Thank you.

[Pierre R. Brondeau:]

So, I think I'll close the session. Thank you very much to all of you for joining and, as I said before, very critical second half for us where things are going to come together. So, talk to you again very soon. Thanks a lot.

[Operator:]

Ladies and gentlemen, this concludes the FMC Corporation second quarter 2015 earnings release conference call. We thank you for your participation. You may now disconnect.