FMC Corporation announces third quarter results and confirms full-year outlook

Third quarter results significantly impacted by lower sales in Latin America, channel destocking in all regions

Third Quarter 2023 Highlights

• Revenue of $982 million, a decrease of 29 percent versus Q3 2022 and down 29 percent organically¹

• Consolidated GAAP net loss of $4 million, down 103 percent versus Q3 2022

• Adjusted EBITDA of $175 million, down 33 percent versus Q3 2022

• Consolidated GAAP loss of $0.03 per diluted share, down 103 percent versus Q3 2022

• Adjusted earnings per diluted share of $0.44, down 64 percent versus Q3 2022

Full-Year Outlook²

• Revenue of $4.48 billion to $4.72 billion, reflecting 21 percent decline at the midpoint versus 2022  

• Adjusted EBITDA of $0.97 billion to $1.03 billion, reflecting 29 percent decline at the midpoint versus 2022    

• Lowers adjusted earnings per diluted share outlook to $3.57 to $4.13, reflecting 48 percent decrease at the midpoint versus 2022

• Reduces free cash flow outlook to a range of negative $860 million to negative $640 million

FMC Corporation (NYSE:FMC) today reported third quarter 2023 revenue of $982 million, a decrease of 29 percent versus third quarter 2022 and down 29 percent organically. On a GAAP basis, the company reported a net loss of $0.03 per diluted share in the third quarter, down 103 percent versus third quarter 2022. Adjusted earnings were $0.44 per diluted share, a decrease of 64 percent versus third quarter 2022.

"Our results were significantly below the prior year driven by volume headwinds from a continuation of channel destocking behavior that began in the prior quarter.  Destocking was much worse than anticipated in Brazil. Despite this, on-the-ground application remains steady as growers continue to protect their crops," said Mark Douglas, FMC president and chief executive officer.  "Branded diamides and our new products outperformed the overall portfolio, which illustrates robustness for differentiated and higher value products even in challenging environments."

Revenue in the quarter was driven by a 26 percent decline in volume. Price increases in North America, EMEA and Asia were more than offset by price decreases in Latin America. FX impacts were neutral to revenue.  While overall sales were down 29 percent, sales of products launched in the last five years were up 4 percent year-over-year, with growth in all regions.

Sales in all regions declined versus the prior-year period as partners, the distribution channel and growers continued to reduce inventory levels. In North America, revenue was down 34 percent year-over-year (down 34 percent organically). EMEA revenue declined 1 percent (down 4 percent organically) compared to third quarter 2022, as higher pricing and FX tailwinds mostly offset lower volumes. Sales in Asia declined 28 percent (down 23 percent organically) as continued destocking across the region negatively impacted volumes. The region reported 16 percent growth in products launched in the last five years. In Latin America, revenue was down 33 percent (down 36 percent organically) year-over-year driven mainly by lower volumes primarily due to severe destocking in Brazil and, to a lesser extent, drought conditions in Argentina.  Globally, Plant Health revenue was down 20 percent (down 17 percent organically) versus prior year driven by similar, but less severe channel destocking dynamics. 

Third quarter adjusted EBITDA was $175 million, a decrease of 33 percent from the prior-year period as lower sales more than offset favorable costs, mostly from inputs. Operating expenses were slightly favorable to prior year due to increased cost discipline.

Full-Year 2023 Outlook²

Consistent with the company's release on October 23, FMC is forecasting full-year 2023 revenue to be in the range of $4.48 billion to $4.72 billion, reflecting a 21 percent decline at the midpoint versus 2022. Full-year adjusted EBITDA is expected to be in the range of $0.97 billion to $1.03 billion, representing 29 percent decline year-over-year at the midpoint. The forecast for the 2023 adjusted earnings range is lowered to $3.57 to $4.13 per diluted share, representing a year-over-year decrease of 48 percent at the midpoint. The company is lowering full-year free cash flow guidance to a range of negative $860 million to negative $640 million due to the reduction in expected second half EBITDA and the impacts to working capital from higher inventory and lower payables.  

Fourth Quarter Outlook²

Fourth quarter revenue is expected to be in the range of $1.14 billion to $1.38 billion, a 22 percent decrease at the midpoint compared to fourth quarter 2022. Adjusted EBITDA is forecasted to be in the range of $246 million to $306 million, representing a 36 percent decrease at the midpoint versus fourth quarter 2022. FMC now expects adjusted earnings per diluted share to be in the range of $0.89 to $1.38 in the fourth quarter, which represents a decline of 52 percent at the midpoint versus fourth quarter 2022.

"The global crop protection market remains challenged with severe destocking across the channel impacting volume growth this year. In this environment, we are implementing a company-wide restructuring program to right-size our cost base. At the same time, we are continuing to invest in the development and launch of new products, which are growing and driving market share gains," said Douglas.

^Adjusted EPS estimates assume 125.7 million diluted shares for Q4 and full year.

*Percentages are calculated using whole numbers. Minor differences may exist due to rounding.

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 most directly comparable GAAP term.

About FMC

FMC Corporation is a global agricultural sciences company dedicated to helping growers produce food, feed, fiber and fuel for an expanding world population while adapting to a changing environment. FMC’s innovative crop protection solutions – including biologicals, crop nutrition, digital and precision agriculture – enable growers, crop advisers and turf and pest management professionals to address their toughest challenges economically while protecting the environment. With approximately 6,600 employees at more than 100 sites worldwide, FMC is committed to discovering new herbicide, insecticide and fungicide active ingredients, product formulations and pioneering technologies that are consistently better for the planet. Visit fmc.com to learn more and follow us on LinkedIn^®. 

Statement under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995:  FMC and its representatives may from time to time make written or oral statements that are “forward-looking” and provide other than historical information, including statements contained in this press release, in FMC’s other filings with the SEC, and in presentations, reports or letters to FMC stockholders.

In some cases, FMC has identified these forward-looking statements by such words or phrases as “outlook”, "will likely result," "is confident that," "expect," "expects," "should," "could," "may," "will continue to," "believe," "believes," "anticipates," "predicts," "forecasts," "estimates," "projects," "potential," "intends" or similar expressions identifying "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including the negative of those words or phrases. Such forward-looking statements are based on our current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. The forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. These statements are qualified by reference to the risk factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K"), the section captioned "Forward-Looking Information" in Part II of the 2022 Form 10-K and to similar risk factors and cautionary statements in all other reports and forms filed with the Securities and Exchange Commission ("SEC"). Moreover, investors are cautioned to interpret many of these factors as being impacted as a result of the residual adverse impacts of COVID and governmental, business, and societal responses to COVID.  We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.  Forward-looking statements are qualified in their entirety by the above cautionary statement.

We specifically decline to undertake any obligation, and specifically disclaims any duty, to publicly update or revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may be required by law.

This press release contains certain “non-GAAP financial terms” which are defined on our website www.fmc.com/investors. Such terms include adjusted EBITDA, adjusted earnings, free cash flow and organic revenue growth. In addition, we have also provided on our website reconciliations of non-GAAP terms to the most directly comparable 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.

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