Good morning and welcome to the First Quarter 2021 Earnings Call for FMC Corporation. This event is being recorded and all participants are in listen-only mode. [Operator Instructions] After today’s prepared remarks, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Mr. Michael Wherley, Director of Investor Relations for FMC Corporation. Please go ahead.

Thank you and good morning, everyone. Welcome to FMC Corporation’s first quarter earnings call. Joining me today are Mark Douglas, President and Chief Executive Officer; and Andrew Sandifer, Executive Vice President and Chief Financial Officer. Mark will review our first quarter results and provide our outlook for 2021 and the second quarter. Andrew will provide an overview of select financial items. Following their prepared remarks, we will take questions. Our earnings release and today’s slide presentation are available on our 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 upon these risks and uncertainties. Today’s discussion and the supporting materials will include references to adjusted EPS, adjusted EBITDA, adjusted cash from operations, free cash flow, and organic revenue growth. All of which are non-GAAP financial measures. Please note that as used in today’s discussion, earnings means adjusted earnings and EBITDA means adjusted EBITDA. A reconciliation and definition of these terms, as well as other non-GAAP financial terms to which we may refer during today’s conference call are provided on our website. With that, I will now turn the call over to Mark.

Thank you, Michael, and good morning, everyone. Our first quarter results were in-line with our guidance and expectations. Revenue and earnings were down, as forecasted, though earnings were modestly above the midpoint of our guidance. We continue to expect a good second quarter and a strong full year. We had two important product launches in the quarter; Overwatch herbicide based on our Isoflex active in Australia and Xyway fungicide in the U.S. Isoflex is one of 11 new active ingredients we plan to launch this decade. Both launches have exceeded our expectations and have delivered approximately $50 million of Q1 sales. In March, we announced an important agreement with UPL to toll manufacture Rynaxypyr insect control in India and to distribute products based on the active ingredient in select markets. In the future, FMC will supply Rynaxypyr active to UPL for use in product formulations developed and marketed by UPL around the world. This agreement is the next step in growing our important diamide franchise and accelerating FMC’s long-term plans to expand the franchise in diverse geographies and crops with differentiated formulations. It also reaffirms the strength of our patent portfolio that protects our diamide franchise, far beyond just the composition of matter patents. We returned over $135 million to shareholders in the quarter through our recently increased dividend and share repurchases. Our guidance for Q2 indicates an expected return to mid-single-digit growth on the topline, with slightly lower earnings growth because of higher costs compared to Q2 2020. These higher costs are principally related to increases in raw materials and logistics. Additionally, we will be spending more on SG&A and R&D compared to the abnormally low spend in Q2 2020. I’d like to take a moment to provide a COVID-19 update on our business. All our manufacturing facilities and…

Thanks Mark. Let me start this morning with a few highlights from the income statement. FX was a modest tailwind for revenue growth in Q1, at 1% versus our expectations of a 2% headwind, as the U.S. dollar weakened against many currencies with the notable exception of the Brazilian Real. Interest expense for the first quarter was $32.4 million, down $8.4 million from the prior year period, with the benefit of lower LIBOR rates as well as lower foreign debt and lower term loan balances, partially offset by higher average commercial paper balances. We continue to anticipate interest expense between $130 and $140 million for the full year. Our effective tax rate on adjusted earnings for the first quarter was 13.5% as anticipated, and in line with our continued expectation for a full year tax rate between 12.5 and 14.5%. Moving next to the balance sheet and liquidity, gross debt at quarter end was $3.6 billion, up over $300 million from the prior quarter with the expected seasonal build of working capital. Gross debt to trailing twelve month EBITDA was 3.0 times at the end of the first quarter, while net debt to EBITDA was 2.7 times. Both metrics were above our targeted full year average leverage levels due to the seasonality of working capital. We expect this will improve throughout the year and we will return to target levels by year-end. Moving on to slide 10 and cash flow and cash deployment. Free cash flow for the first quarter was negative $354 million. Adjusted cash from operations was similar to the prior year period, with improved working capital offset by changes in non-working capital items and lower EBITDA. Capital additions were somewhat higher as we ramped up spending following deferral of projects last year due to COVID. Legacy and transformation spending was substantially better, with the completion of our SAP program. We continue to expect to generate full year free cash flow within a range of $530 million to $620 million, with the vast majority of this cash flow coming in the second half of the year. We returned $137 million to shareholders in the quarter via $62 million in dividends and $75 million of share repurchases, buying back 696 thousand shares in the quarter at an average price of $107.73 per share. We continue to anticipate paying dividends approaching $250 million and repurchasing $400 to $500 million of FMC shares this year. And with that, I will hand the call back to Mark.

Thank you, Andrew. Our Q1 financial performance was in line with our expectations. We are now focused on delivering against our full year forecast. COVID-19 continues to be a factor to watch, and we are closely monitoring raw material and supply chain costs. We remain confident in our full year forecast that builds upon the new technologies and improved market access that are driving our growth. The market demand for our most recent product launches is important, as it confirms the strength and value that our innovative R&D pipeline delivers to growers. We expect this momentum to continue to accelerate over the coming years with launches of new active ingredients and products as well as outcomes from technology partnerships we have established in the past year. Finally, we remain committed to our cash deployment plan. We are on track to deliver more than $700 million to shareholders this year, building on our trend since 2018 of improving cash generation and returning excess cash to shareholders. I will now turn the call back to the operator for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Adam Samuelson from Goldman Sachs. Please go ahead.

Yes, thanks. Good morning everyone. So, I was hoping to maybe dig in a little bit on price and cost, and you made some modest adjustments to the full year outlook that kind of netted to unchanged. But I'm trying to think about kind of what you're seeing maybe on a gross level in each of those buckets. It seems like both raw material inflation has been accelerating pretty meaningfully. Logistics is a challenge for many across the industry, and some of your peers do seem to be taking some more aggressive price action than what's implied in your guidance. And so I'm trying to just reconcile all those pieces and think about how that leads to you competitive position this year and there's either more pricing opportunity or carryover cost inflation into next year, just thinking of all the different moving pieces.

Yes, Adam thank you. I'll start off, and then I'll let Andrew talk a little bit more about some of the cost actions and items that we got on the agenda in front of us. Listen, you're right. I mean, supply chain costs and raw material costs, and it's not just the cost element. It's actually availability that is causing some of that inflation that we're seeing. We are raising prices, and we have raised price last year. We're raising price this year. Most of it will come in the second half because of the way it's falling, although we did raise price in North America in Q1, and we didn't get as much price as we thought we would get in Latin America. We were very clear that we were focused on drawing down inventory, and we've very successfully done that. We continue to do that as we enter Q2, but I feel very good where the inventory levels are. That is boding well for our ability to move price in the second half. And as you just alluded to, the industry itself is moving because, certainly, FMC is not the only one facing these pressures, everybody is. So Andrew, do you want to talk a little bit about some of the cost elements and how it's flowing through the P&L?

Sure, certainly. Thanks. Adam, as you noted, it's a modest adjustment in terms of what net hits the EBITDA bridge for cost and increased to $100 million headwind for cost on a full year versus $90 million when we gave initial guidance in February. The increase in raw materials and logistic costs is substantially more than that $10 million. We are taking additional cost control actions across all of our spending, whether it be in plant level spending in COGS or in SG&A and R&D, really continuing the strong discipline we've had throughout the pandemic to partially offset some of that increase in raw materials and logistics inflation. So certainly, the underlying increase in raw material and logistics cost is much more than the $10 million. But again, we'll be taking some very aggressive actions to continue maintaining cost discipline to offset that. Net-net, we look at that $100 million increase year-over-year, and directionally speaking, about $40 million to $50 million of that is really raw material and logistics cost increases. Another $30 million to $40 million of it is a return to more normal R&D spending levels. Some variability there based on how we do the exact execution of certain project expenses in that range. And the remainder is increases in SG&A against an artificially low 2020 when we run very extreme controls throughout the COVID pandemic.

Thank you. The next question comes from Laurent Favre from Exane BNP. Please go ahead.

Yes, good morning all. Mark, I've got a question on the UPL agreement and what it means for the earnings trajectory. I think back when you did the Technology Day, you refrained from talking about financial performance post 2023. I was wondering now, with this agreement and all the other agreements you've been able to do over the years, are you feeling more confident that you can avoid an earnings pressure from the diamide patent cliff after 2023? Thank you.

Yes. Thanks Laurent. Yes, fundamentally, I mean, we made a statement in February that in -- probably in the August call, we're going to do a deep dive. The August call is when we generally deep dive on one aspect of the business. We are going to do another deep dive on the diamides and the impact of all the programs we've put in place, whether it's defense from a legal perspective, where we've been very successful over the last year in litigating against people who are thinking about or trying to move around our patents in India and China to the whole third-party relationships. And I'm sure I'm going to get a question, so I'll head it off. On the third-party relationships, we have five global relationships now, UPL being the latest one. And we have 41, 42 now local relationships. We have 12 more that we're in discussions with that will probably be put in place sometime this year. So, we continue that expansion. And in August, we'll talk about the scale of this, how we see it growing. It's obviously very successful because we've been working on this since 2017 when we acquired the assets. It's been put in place. It's been driven regionally and globally. So, we'll put in place a program where we'll show you how big it is, how it's growing. The bottom-line, I do believe that in 2023, we will probably be at the very high end, if not above the high end of our expectations for diamides.

Thank you. The next question comes from Mark Connelly from Stephens. Please go ahead.

Thanks. Mark as you launch these new products and they become an increasingly important part of the growth over the next couple of years, I was hoping you could give a sense of how well those launches are performing against your expectations, whether you see a need to adjust your go-to-market strategy or what you're learning. And along with that, can you tell us more about the market access initiatives? Because some of those countries that you listed are pretty challenging places for U.S. companies to do business, but really attractive CP markets.

Yes. Thanks Mark. Listen, it's a very good question, one that we've been working on a lot over the last couple of years, which is obviously the new technologies, the new products. Let me give you some numbers to sort of put this in perspective for you. I just said that $400 million of this year's revenue growth is coming from products that we've introduced since 2018. We usually take a five-year look at this, but 2017 was a very strange year for us because we made a major acquisition, so we've kind of set in the clock at 2018. Of that $400 million, $180 million is growth that are coming from products that were launched in 2018. So, it's real growth this year year-on-year. Of the $180 million, $100 million is coming from products that were launched this year, such as Vantacor, such as Xyway, such as Overwatch. So, you can see that, think about it, this year, we're projecting an 8% growth rate. 4%, so almost half of that overall growth is coming from new products, and that's exactly the trajectory we want to see. And we expect that to continue as these major launches start to gather steam. So, the products we've launched this year will obviously add to next year and continue for five years under this metric. I think it's a very important aspect that people are overlooking. I mean, we obviously focus on the diamides, and they continue to grow very well for us, will in the future as we bring on more partners. But you've got to remember, we're introducing brand-new products into spaces that we've never participated before, for instance, Xyway. It is a systemic fungicide for corn in the U.S. We've never had a fungicide for corn in the U.S. It's…

Super helpful. Thank you.

The next question comes from John Roberts from UBS. Please go ahead.

Thanks. Mark, you indicated that you didn't think COVID in India and Brazil would affect customers there, but you had a supplier issue in the fourth quarter related to COVID. And India is a huge active producer, and they've got actually a large global producer there as well. Do you think there'll be production issues that will be disruptive to the industry that might affect maybe the next quarter?

Yes. John I'm not so sure it's the next quarter. It's been there for a while. I just alluded to the fact that it's not just the cost. It is availability. These things come and go as places get hit. We've not had our own facilities go down, but our procurement and supply chain groups are working hard behind the scenes to source alternate raw materials where somebody goes down because of a COVID impact. So, they're there. They're very real. It's not just India. China has also had issues, not necessarily related to COVID, but other areas of manufacturing. So yes, it's something that we're very focused on. The supply chain groups and procurement groups work closely together. It's not something that you can predict, so the key is to make sure that your demand forecasts are as solid as they possibly can be so that you can procure forward as much as possible. And don't forget, our supply chains are long in nature. From the moment an active ingredient is manufactured to it getting through to a distributor or to a retailer and to a grower, that's a six to eight-month supply chain. So, it is a very, very complex area that takes a lot of managing.

Thank you.

Thank you. The next question comes from Frank Mitsch from Fermium Research. Please go ahead.

Hey, good morning folks. Mark, I'm trying to understand a little bit of arithmetic with respect to the shift in the diamide third-party partner, shifting from buying out of North America to Latin America. I believe you said that North American sales were down 8% year-over-year. However, if that shift had not occurred, it would have been up double digits. So, then the expectation is that Latin America would have seen that sort of level of increase. Obviously, you were doing some pruning in your inventories there and so forth. But what was the net impact in Latin America or maybe it's a seasonal shift. Can you enlighten us a little bit there?

Yes, it's about $30 million, Frank. You can do the math. The numbers are out there. I might as well say what it is. It's about a $30 million swing from North America to Latin America. It occurs in the quarter. It's recognized in the quarter, so it's not something that changes any other part of the year. And listen, it's something I'm going to talk a lot more about as we go forward in August. As our diamide business gets much bigger and our third-party relationships get bigger, we don't control that demand. So it is going to move on us at times, and this is just one example. It doesn't mean to say that the overall company has lost any business. In fact, it's all good growth. It's just moved from one region to another because our third-party companies procure at different points in different regions. So, it's really as simple as that. It's not complicated at all.

Got you. So, just to be clear, so the Latin American revenues of $203 million would have been $170 million, absent this shift.

Yes. Give or take, yes.

Thank you.

The next question comes from Steve Byrne from Bank of America. Please go ahead.

Hi Mark. Your competitor yesterday highlighted a couple of insecticides that they have withdrawn production. I don't know whether that has any opportunity benefit for you on your insecticide platform. And maybe a more general comment about your outlook for new product development. When you look at regulators around the world that are discontinuing registrations, is there a particular vertical that looks like there could become an increasing void in active ingredients? And has your pipeline reflect that longer-term opportunity, perhaps more so with your biologicals?

Yes. Thanks Steve. With regards to the first part of the question, yes, there are some opportunities for us to replace the product that's being removed. Diamides would potentially take some of that market share. It all depends at what price point and what particular crop that is on. But yes, the team is looking at what upside there is there. I think from a general regulatory perspective, whether it's a fungicide, a herbicide or insecticide, they're all under regulatory scrutiny as they always have been. We just did a recent study where we looked at the insecticide overall market. So, when we think about the classes of chemistry that are out there, I do think there are -- some of the older chemistries that are going to come under pressure, and that's going to give great opportunity for things like the diamides, especially diamides and mixtures for different pests, and that's where I think we're going to see significant growth with some of our competitors in terms of how we're supplying product to the partners and how they will grow. So, I'm not really focused on whether it's a herbicide or its insecticide. We know the regulatory environment is getting more stringent. And as I've said before, for a basic R&D producer, that's not necessarily a bad thing because with a robust pipeline like we have, we're bringing the latest technologies to marketplace, which, generally speaking, because of the environmental regulations that we have today, our better chemistries, they're more targeted, they are softer in nature, that leads itself to the second part, which is the biologicals. And our biological program is really heavily focused around fungicides. Secondary is the insecticide area. We don't really have anything yet in the herbicide space. But we do see that growth in our biologicals business. That biological business is now just north of $100 million in revenue. It is growing in the very high double digits, and its EBITDA margins are strong. And we have good products coming in, in the near future from the pipeline. So, you will see us talk more and invest more in the biological space going forward.

Thank you.

The next question comes from Mike Harrison from Seaport Global Securities. Please go ahead.

Hi, good morning. You mentioned that Europe was the only region where you were increasing your expectations or your market outlook. My understanding is there is a drought going on in France. How much exposure do you have in France? Maybe talk about your expectations for the weather impact in Q2 and the rest of the year in broader EMEA as a region. Thanks.

Yes, Mike, the reason we increased it is mainly because of FX. It's just a U.S. dollar translation. You're absolutely right. It's not necessarily a drought. It's been very cold in Northern Europe. The season is probably delayed about three weeks, maybe even a month, and that's a lot at the beginning of the season. We're watching it very carefully. The South doesn't tend to be so impacted, so the whole specialty crop area through Spain, Italy, all the way across Greece and into Turkey. But certainly, France and Germany, we're watching very closely at this point, U.K. as well. It is -- it's not what we predicted, so it's something that we saw last year, actually. The drought occurred at the same time last year. It's just part of the climate change that we're seeing in the very short term, that the weather patterns are moving on it. The good news is in our European business, we do have a very diversified portfolio, and we have been growing in many of the smaller countries. I've mentioned Romania before. I've mentioned Greece. I've mentioned Turkey, which is becoming a much bigger market for us. So, I think having that distributed model across many countries helps. But yes, it is delayed and it's something we're watching.

Thank you. The next question comes from Joel Jackson from BMO Capital. Please go ahead.

Hi, good morning. We're seeing a lot of food -- we see a lot of food and food ingredient companies start to explore the idea around sustainability and farming and look at whether they'll start grading the grain ingredients across that they buy and the sustainability practices that those firms follow and maybe even down the road, and we're early, paying lower or higher premiums to the pricing they pay. Can you talk about -- are you having some discussions now as a crop into producer about some of the different crop protection products and other things that you offer and how that might factor into sustainability scores of farmers and play into this whole nascent dynamic?

Yes. Thanks Joel. Well, listen, the food chain is something that, obviously, we pay close attention to. Our global marketing group and our sustainability group have various relationships throughout that food chain. I would say in the future, we've talked many times about our sustainability index that we use for our research programs. I think a tool such as that as we go forward is going to be important to show the environmental impact that we have on the food chain in terms of the types of products we're selling, whether it be from a water usage, in manufacture or residual levels in use, those are all important elements. They're not necessarily, at this point in time, driving forces for revenue, but I wouldn't disagree with you that they won't become more important discussions as we go forward. And for us, we're happy to have that conversation. Because of the strength of the pipeline and the way we're developing those products, we believe there are advantages to have those discussions around the most efficacious products that have the lowest residues and especially in the biological space because that's where I can see biologicals playing a very important role.

Thank you. The next question comes from Michael Piken from Cleveland Research. Please go ahead.

Yes. Good morning. I know that you've kind of held your guidance for kind of low single-digit percentage volume growth. And yet, we're looking at crop economics for a lot of row crop farmers and other farmers around the world getting a lot stronger. At what point do you think we might see the trajectory of the growth rate for the industry go up? And what factors need to come into play for the industry to maybe grow at a faster rate over the next couple of years? Thanks.

Yes. Thanks Mike. Yes, we are projecting that growth rate in the low to mid-single-digits. That's higher than we've projected over the last few years, and we were reasonably spot-on with our projections in terms of flat markets over the last couple of years. I obviously think that over the longer haul, if commodity prices stay where they are, then, yes, we should fundamentally see some uplift in the marketplace going forward. I think, this year, obviously, it's come, and we see -- I think the supply chain side and the raw material side is what's weighing on our view of the world. I think growers, as you say, are obviously in a much better place. I'm more concerned about ability to supply products that are needed at certain times in the marketplace. I think if prices stay like this into the next year and we start to get through the COVID crisis, and that manufacturing frees up and supply chains free up a little more, logistics become freer, then, yes, I think maybe next year, we might see FMC giving you a guidance that's slightly higher than where we are today.

Thank you. The next question comes from Aleksey Yefremov from KeyBanc. Please go ahead.

Thank you. Good morning everyone. Mark, you mentioned that supply constraints -- supply chain constraint is something that lowers industry growth this year. Do you think it follows that maybe the market is somewhat undersupplied versus demand and that could impact growth in 2022 positively?

No, I don't fundamentally think so. I think the supply chains will be writing themselves as we go through this year, so I'm not concerned about significant supply constraints across the broad industry. Do I think there'll be pockets of constraints? Yes, more than likely. But that's what we have today, and we're working through it. So, I would hope that next year, it becomes a little easier on the supply chain and procurement groups for all the companies involved.

Thank you. The next question comes from Kevin McCarthy from Vertical Research Partners. Please go ahead.

Good morning. Mark, I was wondering if you could comment on inventory levels in Brazil as well as the expected price inflection that you anticipate for the back half of the year and your degree of confidence in moving prices higher in that market. And then secondly, on Brazil, how much more volume might you anticipate with soybeans in the teens versus single-digits? If you look at history, is there any sort of rule of thumb or experience on that cross-price elasticity?

Yes. Thanks Kevin. Listen, on the inventory side, I can certainly tell you from FMC's perspective, we're in very good shape with all the activities that we've put in place. So I think the industry is generally getting better as well. We'll see as we exit Q2 and think about Q3 and Q4 as we enter the 2021, 2022 season. But yes, from FMC, we're in very good shape. Very happy with what the team's done. I know it's been painful for everybody involved, but it was the right thing to do. From a growth -- from our perspective, our market share on soy is reasonably low in Brazil. So when I talk about the second half of the year, and I said expectations in the U.S. and Brazil not only from a weak Q4 that we had, but generally speaking, from good crop fundamentals, soy is somewhere where we're growing. We're growing on insecticides for stink bug control and that's not with diamide. That's with other insecticides in our portfolio. A couple other brands that I mentioned here on Talisman, they are major growth products for us. So, I do believe, and fundamentally, I think most people would agree, that with higher crop prices, many growers are willing to invest in the best technologies to protect those crops. And that's one of the premises we're taking forward as we think about soy in the next season coming up in 2021, 2022. I also think that there is an opportunity on fungicides. We're gaining access to a new fungicide in Brazil that will be used on soybeans. That will help us as we gain a more broader footprint there. And then the third piece around Brazil is sheer market access. We're inking some deals as we speak, getting ready for the next season going forward with major distributors where we're increasing our market access to those distributors to sell the product. So, a backdrop to your question is, do we think we can do more with higher crop prices in soy in Brazil? The answer is yes, and it is one of those drivers for our strong second half.

Thank you.

Thank you. The next question comes from Vincent Andrews from Morgan Stanley. Please go ahead.

Thank you. Good morning everyone. Mark, wondering if we could talk a little bit about in North America what you're seeing in the horseshoe with specialty crops against fourth quarter and 1Q to sort of how you're expecting that to develop over the balance of the year.

Yes, we are seeing it developing well, actually, and our growth has been very good, especially with the diamides and some of the new fungicide applications that we put in there. I think a watch out that I would say and the team has made this local to me is labor constraints, especially in the California areas, getting people into the fields, into the packing stations. It's something we're watching. It's not been a disruptor yet, but we're always trying to look around the corner. But fundamental growth is good. I have to say that, generally speaking, with the specialty crops and fruit and vegetables around the world, we have seen a very good growth, especially in Asia. Many of the countries in Asia are improving their inputs into many of the specialty crops, whether it's chilies or pulses in India. Mexico is doing well, a lot of exports from Mexico, so the Mexican specialty crop business is doing well. And I'm expanding a little bit outside of North America and the horseshoe, but the reality is the markets are intertwined in terms of demand. So, generally speaking, yes, very good, but one watch out would be labor in the U.S.

Thank you. The next question comes from Laurence Alexander from Jefferies. Please go ahead.

Hi guys. This is Dan Rizzo on for Laurence. Thanks for taking my question. So, could you just provide more color on the labor shortage that we're hearing about from others is affecting you guys and to what extent?

Yes, it's not really affecting us; it's more at the grower level. Many of the crops are picked by hand. The packaging stations that are on the farms are heavily labor-intensive. In many cases, it's just the case of getting the labor into the facilities. COVID, obviously, had a major impact on that. Hopefully, we're coming towards the end of that, but it is something that we're very cognizant of and are watching.

Thank you. The final question comes from Arun Viswanathan from RBC Capital Markets. Please go ahead.

Great. Thanks for taking my questions. I'm just curious on Brazil and Latin America. You called out some challenges in cotton. How do you see that market kind of evolving over the next couple of quarters? Is it really dependent on kind of a full reopening and better textile environment? We're kind of hearing that that's already going on. And then also, maybe you can also comment on some of the customs issues you face in Argentina, if those are fully resolved or not. Thanks.

Yes, I'll take the last piece first. Yes, the issues in Argentina, as I said at the last call, we were changing some of our supply chain manufacturing, formulating routes. Those are in place. So, yes, that's behind us at this point. When it comes to cotton, two things are happening. First of all, we're thinking forward to the 2021, 2022 season. We're already seeing raised prices for the next season, and that's something that we're driving, gives us a lot of confidence as to the previous question on price in Latin America. So, not only are prices moving, but more importantly, hectares are increasing. 2020 to 2021 cotton hectares in Brazil were down about 15%, maybe a little bit more. We're actually seeing that rebound now on the back of better cotton prices, lower stock to use ratios around the world and, frankly, more people buying clothes as we come out of the pandemic and the demand for cotton going up. So, this year has been a tough year for us on cotton, hence, the Q1 that we've had. But we're very, very confident that as we go into Q4 and Q1 later this year and 2022 that we'll see that rebound. And the signs are already there for us.

Thank you. That is all the time that we have for the call today. Have a good day.

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