FMC Corporation reports Q2 2024 revenue of $1.04 billion, up 2 percent versus Q2 2023

Second Quarter 2024 Highlights

• Revenue of $1.04 billion, up 2 percent versus Q2 2023 and up 4 percent organically¹

• Consolidated GAAP net income of $295 million

• Adjusted EBITDA of $202 million, up 8 percent versus Q2 2023

• Consolidated GAAP income of $2.35 per diluted share

• Adjusted earnings per diluted share of $0.63, up 26 percent versus Q2 2023

• GAAP cash from operations of $292 million, an increase of $161 million versus Q2 2023

• Free cash flow of $280 million, an improvement of $187 million versus Q2 2023

Full-Year Outlook²

• Updates revenue outlook to range of $4.30 billion to $4.50 billion, reflecting a 2 percent decline at the midpoint versus 2023  

• Reduces adjusted EBITDA range to $880 million to $940 million, a decline of 7 percent at the midpoint versus 2023    

• Lowers adjusted earnings per diluted share outlook to a range of $3.02 to $3.64, a decline of 12 percent at the midpoint versus 2023

• Increases restructuring benefit target to a range of $75 million to $100 million of adjusted EBITDA net benefit

• Updates free cash flow range to $400 million to $500 million

FMC Corporation (NYSE:FMC) reported second quarter 2024 revenue of $1.04 billion, up 2 percent versus second quarter 2023, and up 4 percent organically. On a GAAP basis, the company reported income of $2.35 per diluted share in the second quarter, an increase of 879 percent versus the second quarter of 2023 due to additional benefits related to tax incentives granted to the company’s Swiss subsidiaries in late 2023. Second quarter adjusted earnings were $0.63 per diluted share, up 26 percent versus second quarter 2023.

"Demand improved during the second quarter, resulting in a pronounced increase in our sales volumes, most notably within the United States and Brazil, despite customers continuing to actively manage inventory,″ said Pierre Brondeau, FMC chairman and chief executive officer. ″Higher sales, as well as cost benefits from our ongoing restructuring, led to adjusted EBITDA toward the high end of our guidance range."

Second quarter revenue growth was driven by a 14 percent increase in volume versus the prior year period when global destocking was first observed. Volume growth was partially offset by 10 percent lower price and a foreign currency headwind of 2 percent. Lower price was driven by competitive pressure as demand returned and one-time incentives to customers to help them lower the cost of inventory in the channel. 

North America sales increased 24 percent due to higher volume, mainly in herbicides. Sales of new products introduced (NPI³) in the last five years grew strongly including contributions from new diamide insecticide formulations and fluindapyr-based fungicides. In Latin America, revenue grew 14 percent (up 15 percent, excluding FX) due to higher volumes, almost entirely in Brazil. Volume growth was partially offset by lower price and an FX headwind. Branded diamides and NPI³ both delivered strong growth in the region. Asia sales declined by 28 percent (down 24 percent, excluding FX) due to lower volumes, primarily in India, from ongoing channel destocking and lower price. Sales in EMEA declined 3 percent (flat to the prior year, excluding FX). The region’s revenue grew in the low-teens percent, excluding sales made to diamide partners, driven by higher volume. Plant Health revenue was flat to the prior year with growth in biologicals.

The company's second quarter adjusted EBITDA was $202 million, an increase of 8 percent from the prior-year period. Higher sales volume as well as cost benefits from restructuring actions more than offset lower pricing and COGS headwinds due to sales of higher-cost inventory from prior year.

On a GAAP basis, cash from operations was $292 million, an increase of $161 million versus 2023, due to improvement in working capital and higher earnings. Higher cash from operations resulted in free cash flow of $280 million in the quarter. As of June 30, year-to-date free cash flow of $93 million is approximately $915 million higher than prior year.  

Full Year 2024 Outlook²

The company has updated its full-year 2024 revenue outlook to be in the range of $4.30 billion to $4.50 billion, representing a decrease of 2 percent at the midpoint versus 2023. Versus the prior year, mid-single digit volume growth is expected to be more than offset by price and FX. The revised revenue guidance is 4 percent lower at the midpoint versus prior guidance to reflect lower first half sales and delayed demand recovery.

The company has reduced full-year adjusted EBITDA guidance to a range of $880 million and $940 million, a 7 percent decline at the midpoint versus both prior year and prior guidance, due to the lower revenue outlook. Benefits from restructuring are now expected to contribute $75 million to $100 million, net of inflation, to full-year adjusted EBITDA, an increase of $25 million at the midpoint from the prior expectation. The revised 2024 adjusted earnings outlook is now $3.02 to $3.64 per diluted share, representing a year-over-year decrease of 12 percent at the midpoint due primarily to lower earnings. The company is also adjusting its full-year free cash flow guidance to a range of $400 million to $500 million primarily to account for lower expected adjusted EBITDA.

Second Half 2024 Outlook²

Sales in the second half of 2024 are expected to be in the range of $2.34 billion to $2.54 billion, a 15 percent increase at the midpoint versus prior year.  Higher volume from strong growth of new products and improving market conditions are expected to more than offset low-single digit pricing pressure and FX headwinds. Despite lower price on a year-on-year basis, pricing levels are expected to be similar to the second quarter. Adjusted EBITDA in the second half is forecasted to be $518 million to $578 million, representing growth of 28 percent at the midpoint versus the second half of 2023.

Third quarter revenue is expected to be in the range of $1.00 billion to $1.09 billion, an increase of 6 percent at the midpoint compared to the third quarter of 2023, driven by volume growth. Price is expected to be a low-single digit headwind versus prior year. Adjusted EBITDA is forecasted to be in the range of $165 million to $195 million, an increase of 3 percent versus the prior-year period as volume recovery more than offsets unfavorable costs and lower price. Estimated COGS headwinds are forecasted at approximately $40 million and are mainly due to unabsorbed fixed costs related to reduced manufacturing activity in the second half of 2023. This is expected to more than offset the cost benefits from restructuring actions and lead to overall unfavorable costs for the period.  FMC expects adjusted earnings per diluted share to be in the range of $0.39 to $0.67 in the third quarter, which represents a 20 percent increase at the midpoint versus the third quarter of 2023.

Fourth quarter revenue is expected to be in the range of $1.34 billion to $1.45 billion, an increase of 22 percent at the midpoint compared to the fourth quarter 2023, with volume growth from products launched in the last five years as well continued demand improvement. Price is expected to be lower by low-single digits versus the prior year. Adjusted EBITDA is forecasted to be in the range of $353 million to $383 million, an increase of 45 percent at the midpoint versus the prior-year period due to higher volume and restructuring benefits. Costs overall are a modest tailwind in the quarter. FMC expects adjusted earnings per diluted share to be in the range of $1.64 to $1.96, which represents a 68 percent increase at the midpoint versus fourth quarter 2023.

^ EPS estimates assume 125.3 million diluted shares for full year, Q3 and Q4. EPS totals may not sum due to rounding.

″Based on our performance in the second quarter and the current orders-in-hand for the second half, it is clear that demand is recovering, although slower than originally anticipated," said Brondeau. ″We expect demand to increase as the year progresses even as customers maintain a careful approach of managing inventory. Our revised guidance reflects more modest market improvement with our differentiated product portfolio and restructuring actions driving earnings growth and placing us in a strong position for 2025.″

Supplemental Information

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

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