FMC Corporation delivers record fourth quarter results, guides strong growth for 2022

FMC Corporation (NYSE:FMC) reported record fourth quarter 2021 results with revenue of $1.41 billion, an increase of 23 percent versus fourth quarter 2020, driven by strong demand and pricing actions. Excluding the impact of foreign exchange, year-over-year sales grew 25 percent organically. On a GAAP basis, the company reported earnings of $1.52 per diluted share in the fourth quarter, compared to $0.38 per diluted share in the fourth quarter 2020. Adjusted earnings were $2.16 per diluted share, an increase of 52 percent versus fourth quarter 2020, and 16 cents above the midpoint of guidance.

"Our financial performance reflects the strength of our synthetic and biological portfolios, a healthy demand environment as well as accelerating price increases. Revenue growth was particularly robust in North America and Latin America," said Mark Douglas, FMC president and chief executive officer. "FMC delivered results above the mid-point of our guidance in spite of elevated input costs, FX headwinds and challenges with raw material availability impacting the company and the broader industry."

Fourth quarter revenue growth was driven by 21 percent contribution from volume and 4 percent contribution from price with a 2 percent currency headwind. FMC achieved higher pricing in all regions, with the highest benefit in the quarter coming from North America and Latin America. North America grew substantially with revenue increasing 81 percent versus fourth quarter 2020. Growth was driven by a combination of strong selective herbicide volumes, higher prices, new products and continued market expansion of Rynaxypyr^® and Cyazypyr^® active ingredients. Similarly, revenue in Latin America grew 30 percent year-over-year driven by robust demand in corn and soybeans, price increases and accelerating sales of biologicals, partially offset by weakening of the Brazilian real. In Asia, revenue was down 3 percent compared to fourth quarter 2020, primarily due to weather challenges in several countries, including China. This offset solid growth in Australia and India, as well as broad-based pricing actions in the region. In Australia, successful new product introductions, supported by good agronomic conditions and rising commodity prices, led to strong volume demand. India had solid growth across the portfolio in rice, pulses and sugarcane. In EMEA, revenue decreased 8 percent versus fourth quarter 2020, reflecting year-over-year impact of a shift in global diamide partner volumes across regions. Excluding revenue from the global partnerships, the region grew 9 percent driven by diamide and cereal herbicide volumes as well as price increases partially offset by weakening of the euro and other European currencies. FMC's Plant Health business delivered 19 percent year-over-year growth in the quarter driven by continued market expansion as well as price increases in Latin America and Asia.

For the full year, FMC reported revenue of $5.05 billion, an increase of 9 percent compared to 2020.  Excluding the impact of foreign exchange, year-over-year sales grew 8 percent organically.  On a GAAP basis, the company reported full-year earnings of $734 million, or $5.70 per diluted share, which represent year-over-year increases of 33 percent and 35 percent, respectively.  Full-year adjusted earnings were $6.93 per diluted share, an increase of 12 percent compared to the prior year.

On a GAAP basis, cash flow from operations was $899 million, an increase of 22 percent versus 2020. Free cash flow in 2021 was $713 million, an increase of 31 percent versus 2020. This was above the guidance range primarily due to significantly higher-than-expected advance payments in North America and better-than-expected collections in all regions.

Full Year 2022 Outlook

The company is forecasting full-year 2022 revenue to be in the range of $5.25 billion to $5.55 billion, an increase of 7 percent at the midpoint versus 2021 driven by volume and price growth in all regions partially offset by currency headwinds. Full-year adjusted EBITDA is expected to be in the range of $1.32 billion to $1.48 billion, representing 6 percent year-over-year growth at the midpoint. 2022 adjusted earnings per share are expected to be in the range of $6.80 to $8.10, representing a year-over-year increase of 8 percent at the midpoint, excluding any impact from potential 2022 share repurchases and assuming weighted average diluted shares outstanding (WADSO) of approximately 127 million. Full-year free cash flow is expected to be $515 million to $735 million.

"Looking ahead to 2022, we anticipate strong commodity prices will continue to drive demand for our differentiated product portfolio. We expect raw material, logistics and packaging input costs to remain at elevated levels and potentially inflate further. FX volatility is a growing challenge in some of the countries where we operate. FMC will continue to strive to mitigate these headwinds through volume growth, strong pricing actions and proactive cost discipline," said Douglas.

First Quarter 2022 Outlook

First quarter 2022 revenue is expected to be in the range of $1.22 billion to $1.34 billion, representing a 7 percent increase at the midpoint compared to first quarter 2021. Adjusted EBITDA is forecast to be in the range of $300 million to $350 million, representing a 6 percent increase at the midpoint versus first quarter 2021.  FMC expects adjusted earnings per diluted share to be in the range of $1.50 to $1.90 in the first quarter, an increase of 11 percent at the midpoint.