FMC Corporation delivers solid second quarter 2022 results, raises full-year revenue guidance

Second Quarter 2022 Highlights

• Revenue of $1.45 billion, an increase of 17 percent versus Q2 2021 and up 21 percent organically¹

• Consolidated GAAP net income of $131 million, down 35 percent versus Q2 2021

• Adjusted EBITDA of $360 million, up 3 percent versus Q2 2021

• Consolidated GAAP earnings of $1.06 per diluted share, down 32 percent versus Q2 2021

• Adjusted earnings per diluted share of $1.93, up 7 percent versus Q2 2021

Full-Year Outlook²

• Raises revenue outlook to a range of $5.5 to $5.7 billion, reflecting 11 percent growth at the midpoint versus 2021

• Narrows adjusted EBITDA outlook to a range of $1.36 to $1.44 billion, reflecting 6 percent growth at the midpoint versus 2021

• Narrows adjusted earnings per diluted share outlook to a range of $7.00 to $7.70, reflecting 6 percent growth at the midpoint versus 2021, excluding any impact from potential 2022 share repurchases

• Narrows free cash flow outlook to a range of $565 to $685 million
  

FMC Corporation (NYSE: FMC) reported second quarter 2022 revenue of $1.45 billion, an increase of 17 percent versus second quarter 2021, driven by strong market demand and pricing. Excluding the impact of foreign currencies, organic revenue grew 21 percent year-over-year. On a GAAP basis, the company reported earnings of $1.06 per diluted share in the second quarter. This compares to GAAP earnings of $1.56 per diluted share in the second quarter of 2021. The impact of FMC's exit from Russia was $0.60 per diluted share in the quarter. Second quarter adjusted earnings were $1.93 per diluted share, an increase of 7 percent versus second quarter 2021.

"FMC's first half performance reflects our ability to price for the value we offer as well as robust demand for our innovative products worldwide. The company's performance was further supported by our operational agility and focus on execution in a dynamic global environment," said Mark Douglas, FMC president and chief executive officer.

FMC revenue growth in the second quarter was driven by a 14 percent contribution from volume and a 7 percent contribution from price, offset partially by a 4 percent currency headwind.

Sales in North America grew 26 percent versus the second quarter of 2021. Demand for both herbicides and insecticides grew double-digits. In Canada, high insect pressure supported the successful launch of Coragen^® MaX, an insecticide powered by Rynaxypyr^® active. Latin America sales grew 42 percent organically, and 44 percent including FX, year-over-year in the quarter, driven by volume gains and significant price increases across soy, corn, cotton and sugarcane. Brazil led growth in the region with strong sales of diamides and biologicals. In Asia, revenue was up 4 percent organically versus the prior year period. Including FX, Asia was down 1 percent. Demand for Benevia^® insecticide grew in India for application on fruits and vegetables. In Australia, Overwatch^® herbicide continued to outperform competing products in cereals. Sales in EMEA grew 15 percent organically and 3 percent including FX.  Aside from strong pricing, results were driven by increased demand for Exirel^® insecticide and Verimark^® insecticide, as well as selective herbicides. Plant Health continued its growth momentum with revenue growing 20 percent in the quarter compared to previous year, led by biologicals which grew nearly 40 percent year-over-year.

Second quarter adjusted EBITDA was $360 million, an increase of 3 percent from the prior-year period. Volume benefits and pricing gains across all regions more than offset significant cost and currency headwinds in the quarter.

Full Year 2022 Outlook²

FMC's solid performance in the first half supports continued confidence in strong revenue and adjusted EBITDA growth for the full year which is reflected in a narrower updated guidance range. Full-year 2022 revenue is now forecasted to be in the range of $5.5 billion to $5.7 billion, representing an increase of 11 percent at the midpoint versus 2021 driven by volume and price growth in all regions partially offset by foreign currency impact in EMEA and Asia. Full-year adjusted EBITDA range has been narrowed and is now expected to be $1.36 billion to $1.44 billion, representing 6 percent year-over-year growth at the midpoint. The company expects the highest cost increases of the year in the third quarter with continued, but lower, cost inflation in the fourth quarter. The company's decision to cease operations and business in Russia will also be a headwind. The range for 2022 adjusted earnings per share is narrowed and it is now expected to be $7.00 to $7.70 per diluted share, representing an increase of 6 percent year-over-year at the midpoint. Interest expense is now expected to be $135 million to $155 million. Adjusted earnings per share excludes any impact from potential 2022 share repurchases and assumes weighted average diluted shares outstanding (WADSO) of approximately 127 million. Full-year free cash flow is expected to be $565 million to $685 million.

Second Half Outlook²

Sales in the second half of 2022 are expected to be in the range of $2.70 billion to $2.90 billion, representing 7 percent growth at the midpoint compared to the same period last year. Adjusted EBITDA is forecasted to be $646 million to $726 million, representing 2 percent growth at the midpoint versus a very strong second half 2021.

Third quarter revenue is expected to be in the range of $1.31 billion to $1.39 billion, representing a 13 percent increase at the midpoint compared to third quarter 2021. Adjusted EBITDA will be impacted by the highest cost increases this year as cost of materials purchased earlier in the year flow through the P&L. Adjusted EBITDA is forecasted to be in the range of $235 million to $255 million, representing a 16 percent decrease at the midpoint versus third quarter 2021. FMC expects adjusted earnings per diluted share to be in the range of $1.00 to $1.20 in the third quarter, a decrease of 23 percent at the midpoint versus third quarter 2021.

Fourth quarter revenue is expected to be in the range of $1.39 billion to $1.51 billion, a 2 percent increase at the midpoint compared to a very strong fourth quarter 2021. Adjusted EBITDA in the fourth quarter is expected to benefit as price and volume growth continues while cost increases begin to ease. Adjusted EBITDA is forecasted to be in the range of $411 million to $471 million, representing a 17 percent increase at the midpoint versus fourth quarter 2021. FMC expects adjusted earnings per diluted share to be in the range of $2.18 to $2.70 in the fourth quarter, which represents growth of 13 percent at the midpoint versus fourth quarter 2021.

"We continue to benefit from a robust market backdrop and customer demand for our innovative products and solutions. Strong pricing and demand through the second half of the year are expected to more than offset cost inflation and currency headwinds," said Douglas.

^Adjusted EPS estimates assume 127 million diluted shares for full year and 127 million diluted shares for Q3. Outlook for Adjusted EPS and WADSO does not include the impact of any share repurchases that may take place in 2022.

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

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.