FMC agchem sales down 16% in Q1 2015

Date:05-12-2015

Sales of FMC Agricultural Solutions posted a decrease of 16% versus the prior-year quarter to $392.4 million in the first quarter of 2015.  First-quarter segment earnings were $81.8 million, down 32% year-on-year. In the quarter, slow demand due to lower insect pressures and higher-than-normal channel inventories in Brazil, volatile exchange rates, and the decision to exit a distribution channel in Brazil responsible for third-party product sales negatively impacted results.

FMC’s Agricultural Products sales results ($ million)
Q1 ended Mar. 31	Q1 2015	Q1 2014	Change%
Sales	392.4	466.9	-16.0
Income from continuing operations before income taxes	81.8	120.1	-31.9

Pierre Brondeau, president, CEO and chairman, stated: "The first three months of 2015 were characterized by extremely volatile foreign exchange movements, a high degree of uncertainty in global agricultural markets and crop specific headwinds in the Brazil crop protection markets.  In the quarter, currency movements reduced our revenues by approximately 4 percent and reduced our consolidated adjusted earnings per share by 11 cents.

"On February 3, 2015, we signed an agreement to sell Alkali Chemicals for $1.64 billion, resulting in discontinued operations treatment of Alkali Chemicals for the first quarter.  The sale was completed on April 1, 2015. We also closed the Cheminova acquisition on April 21, 2015; however, this timing meant that Cheminova's strong first quarter performance was not included in our first quarter earnings. 

"The closing of these two transactions completes the key steps to transform our portfolio into one focused on agriculture, health and nutrition.  Looking forward into 2016 and beyond, we expect to see stronger average annual rates of growth in revenues, adjusted operating earnings and adjusted earnings per share than we delivered between 2009 and 2014, with stronger cash generation.  Underlying market growth, expanded market access, new technology introductions, operational excellence and near-term synergies from the Cheminova acquisition, plus stronger free cash flow and lower capital intensity, all will contribute to this financial performance between 2016 and 2020.  We are excited about the prospects for the transformed FMC portfolio in the coming years."

Outlook

Global crop protection markets are expected to be down by mid-single digit percent in 2015. The macroeconomic environment remains uncertain, mainly in light of current expectations of currency movements, interest rates, agricultural commodity prices and oil prices.  FMC expects that earnings contributions from the Cheminova acquisition, including early synergy gains, the continued spread of weed resistance in North America and Latin America, and market share gains are expected to increase full-year segment earnings by high-single-digit to low-double-digit percent in 2015.