FMC Corporation delivers very strong third quarter results and raises 2020 guidance

Third Quarter 2020 Highlights

- Revenue of $1.08 billion, up 7 percent versus Q3 2019, up 15 percent organically¹

- Consolidated GAAP net income of $112 million, up 25 percent versus Q3 2019

- Adjusted EBITDA of $263 million, up 20 percent versus Q3 2019

- Consolidated GAAP earnings of $0.85 per diluted share, up 23 percent versus Q3 2019

- Consolidated adjusted earnings per diluted share of $1.22, up 30 percent versus Q3 2019

Full-Year Outlook Highlights²

- Revenue outlook range of $4.72 to $4.78 billion, reflecting 3 percent growth at the midpoint versus 2019 and 9 percent organic growth¹

- Raising adjusted EBITDA outlook to a range of $1.295 to $1.315 billion, reflecting 7 percent growth at the midpoint versus 2019

- Raising adjusted earnings guidance to a range of $6.45 to $6.57 per diluted share, reflecting 7 percent growth at the midpoint versus 2019

- Raising free cash flow guidance to a range of $475 to $525 million, reflecting 66 percent growth at midpoint versus 2019

FMC Corporation (NYSE: FMC) Monday reported third quarter 2020 revenue of approximately $1.08 billion, an increase of 7 percent versus third quarter 2019. Excluding the impact of foreign currencies, organic sales grew 15 percent year over year. On a GAAP basis, the company reported earnings of $0.85 per diluted share in the third quarter, an increase of 23 percent versus third quarter 2019. Adjusted earnings were $1.22 per diluted share, an increase of 30 percent versus third quarter 2019, and 12 cents above the midpoint of guidance.

Mark Douglas, FMC president and CEO said: "FMC's third quarter performance is a testament to our geographic balance, the strength in demand for our technology portfolio and the continued cost reductions to weather the global pandemic. Given robust demand in the third quarter and continuing strong execution, we are raising our 2020 outlook."

The revenue increase was driven by 12 percent contribution from volume and 3 percent from pricing gains, offset by an 8 percent headwind from foreign currencies. In Asia, revenue increased 16 percent year over year, and 19 percent excluding FX. Volume growth in India, Australia, Pakistan and Indonesia was partially offset by FX headwinds. Latin America sales grew 1 percent year over year, and 18 percent excluding FX headwinds. Pricing helped offset some of the FX headwinds, while the underlying volume gains came from strong insecticide sales in Brazil for soybeans and specialty crops. In North America, sales increased 8 percent year over year, driven primarily by strong herbicide and fungicide sales. Sales in EMEA increased 10 percent year over year, due to a particularly strong quarter for insecticides and cereal herbicides. There was no impact from foreign exchange in EMEA in the quarter.

2020 Outlook²

The company is forecasting full-year 2020 revenue to be in the range of $4.72 billion to $4.78 billion, representing an increase of 3 percent at the midpoint versus 2019. Organic growth is expected to be 9 percent. Full-year adjusted EBITDA is now expected to be in the range of $1.295 billion to $1.315 billion, representing 7 percent year-over-year growth at the midpoint and an increase of $10 million versus prior guidance. 2020 adjusted earnings are now expected to be in the range of $6.45 to $6.57 per diluted share, representing a year-over-year increase of 7 percent at the midpoint and 6 cents higher than prior forecast. Full-year earnings growth drivers include significant volume gains in Latin America and Asia, global pricing and continued cost discipline. The company expects full-year free cash flow to be $475 to $525 million, representing a 66 percent increase year-over-year and $25 million higher than prior guidance at the midpoint.

Fourth Quarter Outlook²

Fourth quarter revenue is expected to be in the range of $1.23 billion to $1.29 billion, representing a 5 percent increase at the midpoint compared to fourth quarter 2019, and organic growth of 10 percent excluding foreign currency headwinds. Adjusted EBITDA is forecasted to be in the range of $335 million to $355 million, representing an 8 percent increase at the midpoint versus Q4 2019. FMC expects adjusted earnings per diluted share to be in the range of $1.70 to $1.82 in the fourth quarter, which at the midpoint would be equal to Q4 2019 due to a large positive tax adjustment in the prior year period. The company expects to deploy approximately $170 million of cash in the quarter. This includes paying $57 million in dividends on October 15, closing the previously announced Fluindapyr acquisition for $65 million in early October, and $50 million in planned share repurchases, which restarted in October.

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

² Although we provide forecasts for adjusted earnings per share and adjusted EBITDA (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.