2025-2026 EBITDA Targets
Q: How will you catch up to meet your 2025-2026 EBITDA targets?
A: Despite lowering our 2024 guidance due to finishing 2023 lower than expected, we remain confident in achieving our $1.2 to $1.5 billion EBITDA targets for 2025 and 2026. " Temporary headwinds like high-cost inventory will dissipate, especially the biggest impact in Q1, lessening in Q2 and disappearing in the second half. " We anticipate benefits from our restructuring plan, aiming for a $150 million run rate by end of 2025. " Additionally, with the market expected to return to normal growth rates, we believe we'll catch up through a combination of new product introductions, improved mix, and operational efficiencies. "

New Product Growth
Q: What's driving growth from new products in 2024?
A: New product introductions are a significant growth driver, contributing about $200 million in new growth for 2024. " Approximately $100 million of this comes from products launched within the year, which aligns with our historical performance. " These products are spread across all regions, led by Asia, and are expected to deliver above-average margins, improving our mix as we progress through the year. "

Pricing Pressures by Region
Q: How are pricing headwinds affecting you in different regions?
A: We anticipate a moderate pricing headwind in 2024, primarily in Latin America, especially in Q1, due to competitive pressures. " EMEA and North America are managing price well, with expectations of stabilizing prices as we lap previous increases. " For Q1, the pricing headwind is less than the 5% experienced in Q4. "

Inventory Impact on Margins
Q: How is high-cost inventory affecting your margins?
A: Carryover of higher-cost inventory from last year impacts Q1 margins significantly, with diminishing effects in Q2, and dissipating in the second half. " " We're intentionally drawing down inventories, and as we enter Q2, we expect to ramp up manufacturing activities, improving fixed cost absorption and margins. " " This realignment will position us favorably for margin improvement in the latter part of the year. "

Working Capital and Cash Flow
Q: What are your expectations for working capital and cash flow in 2024?
A: Working capital, particularly accounts payable and inventory, are major drivers of cash release in 2024. " " Unlike previous years, we expect a more limited working capital build in Q1 due to sufficient inventory levels. " This shift will help us deleverage quickly, aiming to end the year with covenant leverage below 3.5x, assuming proceeds from the GSS divestiture. "

Diamides Business and Partners
Q: What's the outlook for your diamides business, including your partners?
A: Our branded diamides business continues strong, with successful product launches like Premio Star in Brazil. " However, our partners are drawing down inventories, which they began in 2023, and we expect further declines in 2024. " While we don't have detailed visibility into their sales, as we supply them with active ingredients, we anticipate this inventory drawdown to end eventually, which will normalize the business. " "

2024 Price-Cost Balance
Q: How do you view the price-cost balance for 2024?
A: We are managing price carefully and are determined not to chase volume at the expense of margins. " Our margins are approximately 22%, aligning with industry highs. " We expect cost to be a strong tailwind as input costs turn favorable through the year, offsetting any pricing headwinds. " The net price-cost relationship for the year is positive. "

Channel Inventories in India
Q: How are high channel inventories in India affecting you?
A: High channel inventories in India, due to three years of bad monsoons and low pest pressure, remain a challenge. " Working through this excess inventory will take all of 2024 and possibly into 2025, depending on weather patterns. " We expect to discuss this issue throughout the year as it continues to impact the market. "

Raw Material Cost Tailwinds
Q: What benefits do you expect from raw material cost deflation?
A: While we're not quantifying the exact benefit, we are purchasing materials at or below the cost of what we have in inventory. " As we work through the higher-cost inventory, we anticipate raw material costs to become a tailwind, improving our cost position as we progress through the year. "

Supply Chain Visibility
Q: What have you learned from measures to increase channel inventory visibility?
A: We have gained insights into how distributors manage their inventories, noting that they are reducing inventory levels. " In regions like the U.S., inventory at the grower and retailer levels is at or even below normal levels, which may positively influence demand as the season progresses. "