FMC Corporation delivers first quarter earnings at higher end of guidance range, maintains full-year outlook

First Quarter 2024 Highlights

• Revenue of $918 million, down 32 percent versus Q1 2023 and down 31 percent organically¹

• Consolidated GAAP net loss of $3 million, down 102 percent versus Q1 2023

• Adjusted EBITDA of $161 million, down 56 percent versus Q1 2023

• Consolidated GAAP loss of $0.02 per diluted share, down 101 percent versus Q1 2023

• Adjusted earnings per diluted share of $0.36, down 80 percent versus Q1 2023

• GAAP cash from operations of negative $143 million, an improvement of $708 million versus Q1 2023

• Free cash flow of negative $188 million, an improvement of $727 million versus Q1 2023

• Strong contribution from new product introductions (NPI³)

Full-Year Outlook²

• Maintains revenue outlook of $4.50 billion to $4.70 billion, reflecting 2.5 percent growth at the midpoint versus 2023  

• Maintains adjusted EBITDA outlook of $900 million to $1.05 billion, essentially flat at the midpoint versus 2023    

• Adjusted earnings per diluted share outlook unchanged at $3.23 to $4.41, an increase of 1 percent at the midpoint versus 2023

• Restructuring continues, and company maintains target of $50 million to $75 million of adjusted EBITDA net benefit

• Free cash flow outlook of $400 million to $600 million is unchanged

FMC Corporation (NYSE:FMC)  reported first quarter 2024 revenue of $918 million, down 32 percent versus first quarter 2023, and down 31 percent organically. On a GAAP basis, the company reported a loss of $0.02 per diluted share in the first quarter, a decrease of 101 percent versus first quarter 2023. First quarter adjusted earnings were $0.36 per diluted share, down 80 percent versus first quarter 2023 and $0.04 higher than the midpoint of guidance.

"Free cash flow improved significantly, and we delivered adjusted EBITDA at the high end of our guidance range during the first quarter,″ said Mark Douglas, FMC president and chief executive officer. ″As expected, sales continued to be impacted by inventory management actions by customers in all regions. Our results benefited from our restructuring actions and the continued resilient sales of our new products, particularly in Latin America.″

First quarter revenue was driven by 27 percent decline in volume due to ongoing channel destocking in all regions.  Price was lower by 4 percent and foreign currency was a headwind of 1 percent.

North America sales declined 48 percent, almost entirely due to volume against a record-breaking prior-year period. Fungicide sales out-performed the portfolio with growth from new products Xyway^® and Adastrio^® fungicides. In Latin America, revenue declined 20 percent (down 22 percent excluding FX) due to a price decline in the mid-teens as well as lower volumes. Branded diamides and new products both reported higher sales versus prior year, aided by recently launched Premio^® Star insecticide and Onsuva^® fungicide. Asia sales declined 29 percent (down 28 percent organically), primarily from lower volumes in China due to poor weather.  Actions to reduce channel inventory in India progressed despite dry conditions that reduced the consumption of crop protection products. Price in the region was down in the high-single digits.  Sales in EMEA declined 20 percent (down 17 percent organically) due to lower volumes including registration removals and rationalization of some lower-margin products.  Price in the region was up by low-single digits.  Plant Health revenue was down 14 percent in the quarter (down 12 percent organically), mainly driven by volume in Europe as customers delayed purchases and managed overall inventory to lower levels.

FMC first quarter adjusted EBITDA was $161 million, a decrease of 56 percent from the prior-year period driven by lower volume and, to a lesser degree, price headwinds. Costs were a tailwind with strong contribution from restructuring actions.

On a GAAP basis, cash from operations was negative $143 million, an increase of $708 million versus 2023 due primarily to working capital release from lower inventory as well as lower accounts receivable.

Outlook²

The company is forecasting full-year 2024 revenue to be in the range of $4.50 billion to $4.70 billion, unchanged since the last guidance and representing an increase of 2.5 percent at the midpoint versus 2023. FMC is maintaining its full-year adjusted EBITDA guidance of $900 million to $1.05 billion, flat versus 2023, including the benefit of cost restructuring actions. The 2024 adjusted earnings outlook is unchanged at $3.23 to $4.41 per diluted share, representing a year-over-year increase of 1 percent at the midpoint. The company is maintaining its full-year free cash flow guidance in the range of $400 million to $600 million, representing over $1 billion in year-over-year improvement at the midpoint.

Second quarter revenue is expected to be in the range of $1.00 billion to $1.15 billion, an increase of 6 percent at the midpoint compared to second quarter 2023. Volume growth is expected in all regions outside of Asia, with new products a strong contributor to growth. Price is expected to be a mid-single digit headwind. Adjusted EBITDA is forecasted to be in the range of $170 million to $210 million, essentially flat to prior-year period as higher volumes and cost benefits from restructuring are offset by gross margin headwinds. FMC expects adjusted earnings per diluted share to be in the range of $0.43 to $0.72 in the second quarter, which represents a 15 percent increase at the midpoint versus second quarter 2023.

The midpoint of first-half guidance implies a 23 percent increase in second-half sales, a 46 percent increase in second-half adjusted EBITDA and a 91 percent increase in second-half EPS compared to the same period last year. Growth in second half results is expected to come from improving market conditions as the year progresses, higher year-over-year sales of new products and restructuring benefits. COGS headwinds are forecasted in the second half of the year primarily due to lower fixed cost absorption.

^ EPS estimates assume 125.5 million diluted shares for full year and 125.5 million diluted shares for Q2.

"Our second quarter revenue outlook includes volume growth for the first time since global destocking began in the second quarter of 2023,″ said Douglas. ″We expect the market to continue to improve as we progress through the year and transition to more normal conditions in 2025. The combination of steady on-the-ground application, demand for our innovative and differentiated portfolio and a more efficient cost structure places FMC in a strong position as the market recovers.″

Supplemental Information

The company will post supplemental information on the web at https://investors.fmc.com, including its webcast slides for tomorrow's earnings call, definitions of non-GAAP terms and reconciliations of non-GAAP figures to the nearest available GAAP term.

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1. Organic revenue growth (non-GAAP) excludes the impact of foreign currency changes.

2. Although we provide forecasts for adjusted earnings per share, adjusted EBITDA, and free cash flow (non-GAAP financial measures), we are not able to forecast the most directly comparable measures calculated and presented in accordance with GAAP. Certain elements of the composition of the GAAP amounts are not predictable, making it impractical for us to forecast. Such elements include, but are not limited to, restructuring, acquisition charges, and discontinued operations. As a result, no GAAP outlook is provided.

3. NPI (New Product Introductions) launched in the last five years