FMC Corporation reports fourth quarter results in-line with pre-release and 2021 guidance reflects strong growth

Date:02-11-2021

FMC Corporation (NYSE:FMC) Tuesday reported fourth quarter 2020 results that were in-line with the company's updated outlook from January 19, 2021. Fourth quarter revenue was approximately $1.15 billion, a decrease of 4 percent versus fourth quarter 2019. Excluding the impact of foreign currencies, sales grew 2 percent organically year over year.

Mark Douglas, FMC president and CEO said: "While our fourth quarter performance was impacted heavily by external factors, some of which are expected to persist into the first quarter of 2021, we posted solid full-year 2020 results and grew the business in a very challenging economic environment."

The revenue decrease was driven by a 5 percent FX headwind and a 3 percent volume decrease, partially offset by a 4 percent increase in pricing. Strong volume growth in EMEA and Asia was more than offset by weakness in North America and Latin America. Sales in EMEA increased 45 percent year over year, due to a particularly strong quarter for their diamide insecticides and cereal herbicides in addition to significant pre-ordering in the UK in advance of Brexit. In Asia, revenue increased 11 percent year over year, driven by broad volume growth in India, China, Japan and Australia. In North America, sales decreased 34 percent year over year. The majority of this decline was due to supply chain disruptions, including COVID-related factors associated with logistics and a U.S.-based tolling partner. The remainder of the decrease was due to reduced volume in lower-value pre-emergent herbicides. Latin America sales decreased 9 percent year over year but grew 4 percent excluding significant FX headwinds. In addition to the headwind from foreign currency, Brazil sales were lower than forecasted due to severe drought that delayed the start of the season and persisted throughout the fourth quarter, resulting in fewer application days. In Argentina, substantial product inventory located in bonded warehouses was not released by customs officials in a timely manner.

For the full year, FMC reported revenue of $4.64 billion, an increase of 1 percent compared to 2019. Excluding the impact of foreign exchange, year-over-year sales grew 7 percent organically¹.

2021 Outlook²

The company is forecasting full-year 2021 revenue to be in the range of $4.9 billion to $5.1 billion, driven by growth in all regions and representing an 8 percent increase at the midpoint versus 2020. The revenue growth will be driven primarily by volume, with price increases expected to more than offset FX headwinds. Full-year adjusted EBITDA is expected to be in the range of $1.32 billion to $1.42 billion, representing 10 percent year-over-year growth at the midpoint.

"Looking ahead at 2021, we see an improved ag macro environment, and we expect to deliver strong revenue and earnings growth, once again driven by the strength of our portfolio and our balanced geographic and crop exposure. Our projected 2021 growth rates keep us firmly on track to deliver our 5-year growth targets of 5 to 7 percent revenue and 7 to 9 percent adjusted EBITDA compounded annual growth for 2018 through 2023," said Douglas.

First Quarter 2021 Outlook²

First quarter revenue is expected to be in the range of $1.13 billion to $1.20 billion, representing a 7 percent decrease at the midpoint compared to first quarter 2020, and a 5 percent decline excluding foreign currency headwinds. This decline is driven by a cotton acreage reduction in Brazil, the timing of Brexit-related sales in Q4 2020 and continued portfolio changes related to discontinued registrations in EMEA. Adjusted EBITDA is forecast to be in the range of $290 million to $320 million, representing a 15 percent decrease at the midpoint versus Q1 2020.

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.