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Second Quarter 2021 Highlights
Revenue of $1.2 billion, an increase of 8 percent versus Q2 2020 and up 4 percent organically1
Consolidated GAAP net income of $203 million, up 10 percent versus Q2 2020
Adjusted EBITDA of $347 million, up 2 percent versus Q2 2020
Consolidated GAAP earnings of $1.56 per diluted share, up 11 percent versus Q2 2020
Consolidated adjusted earnings per diluted share of $1.81, up 5 percent versus Q2 2020
Share repurchases of $25 million
Full-Year Outlook2
Maintains revenue forecast in the range of $4.9 to $5.1 billion, reflecting 8 percent growth at the midpoint versus 2020
Lowers adjusted EBITDA forecast to a range of $1.29 to $1.35 billion, reflecting 6 percent growth at the midpoint versus 2020, driven by accelerating costs
Updates 2021 adjusted earnings forecast to a range of $6.54 to $6.94 per diluted share, reflecting 9 percent growth at the midpoint versus 2020, excluding any impact from future share repurchases
Updates free cash flow forecast to a range of $480 to $570 million, reflecting a 4 percent decline at the midpoint versus 2020
Expects to repurchase $350 to $450 million of FMC shares in 2021
On August 3, FMC Corporation (NYSE: FMC) reported second quarter 2021 revenue of $1.2 billion, an increase of 8 percent versus second quarter 2020. Excluding a tailwind from foreign currencies, revenue increased 4 percent organically. On a GAAP basis, the company reported earnings of $1.56 per diluted share in the second quarter, an increase of 11 percent versus second quarter 2020. Second quarter adjusted earnings were $1.81 per diluted share, an increase of 5 percent versus second quarter 2020.
"FMC's second quarter financial results were driven by robust volume growth in all regions outside of EMEA, reflecting the strength of our underlying business, especially the significant contribution of new product launches," said Mark Douglas, FMC president and chief executive officer.
The second quarter revenue growth was driven by a 4 percent volume increase and a 4 percent FX tailwind. In Latin America, revenue increased 15 percent (up 12 percent organically), driven by strong insecticide and fungicide demand buoyed by favorable commodity prices and a slight benefit from FX. Asia grew revenue 20 percent (up 13 percent organically) driven by the strength of our insecticide portfolio, particularly for India and Australia, and FX tailwinds. Sales in EMEA grew 3 percent (down 3 percent organically) driven by demand for our diamides and herbicides and FX tailwinds, offset largely by unfavorable weather early in the quarter and discontinued registrations. In North America, sales decreased 7 percent (down 8 percent organically), reflecting the year-over-year impact of a shift in volume demand by geography from our global diamide partnerships. Excluding revenue from the global partnerships, the region grew more than 20 percent.
FMC second quarter adjusted EBITDA was $347 million, an increase of 2 percent from the prior-year period. This increase was driven primarily by volume gains, largely offset by accelerating increases in costs of goods sold.
2021 Outlook2
The company continues to forecast full-year 2021 revenue to be in the range of $4.9 billion to $5.1 billion, driven by growth in Asia, Latin America and North America, representing an 8 percent increase at the midpoint versus 2020. The revenue growth will be driven primarily by volume, as well as price increases and a modest FX tailwind. Full-year adjusted EBITDA is expected to be in the range of $1.29 billion to $1.35 billion, representing a 6 percent year-over-year growth at the midpoint. This is a reduction of $50 million EBITDA at the midpoint versus our previous forecast due to the continued increase of raw materials, packaging, and logistics costs, which more than offset the increased volume outlook for the year. 2021 adjusted earnings are now expected to be in the range of $6.54 to $6.94 per diluted share, representing a year-over-year increase of 9 percent at the midpoint. This is a decrease of 31 cents at the midpoint versus prior guidance, reflecting the lower EBITDA guidance.
Full-year earnings growth drivers include strong volume growth led by Asia, Latin America and North America. Full-year free cash flow is expected to be $480 to $570 million, and the company expects to repurchase $350 to $450 million of FMC shares in 2021, including the $100 million of shares repurchased in the first half of the year. Both forecasts are reduced $50 million from prior guidance due to the lower EBITDA forecast.
Third and Fourth Quarter Outlook2
Third quarter revenue is expected to be in the range of $1.13 billion to $1.22 billion, representing a 8 percent increase at the midpoint compared to third quarter 2020, and organic growth of 7 percent excluding foreign currency tailwinds. Adjusted EBITDA is forecasted to be in the range of $262 million to $288 million, representing a 5 percent increase at the midpoint versus Q3 2020. FMC expects adjusted earnings per diluted share to be in the range of $1.23 to $1.39 in the third quarter, which is an increase of 7 percent at the midpoint versus Q3 2020.
Fourth quarter revenue is expected to be in the range of $1.33 billion to $1.44 billion, representing a 20 percent increase at the midpoint compared to fourth quarter 2020, with no FX impact expected. Adjusted EBITDA is forecasted to be in the range of $374 million to $408 million, representing a 35 percent increase at the midpoint versus Q4 2020. FMC expects adjusted earnings per diluted share to be in the range of $1.96 to $2.20 in the fourth quarter, which represents growth of 46 percent at the midpoint versus Q4 2020.
"We are experiencing significant headwinds from escalating costs of raw materials, freight, packaging as well as lingering impacts from supply chain disruptions, which we expect to continue throughout the remainder of the year. However, strong volume growth driven by new products and solid market fundamentals will allow us to continue growing revenue and earnings well ahead of last year and the market in 2021," said Douglas.
Supplemental Information
The company will post supplemental information on the web at https://investors.fmc.com, including its webcast slides for tomorrow's earnings call, definitions of non-GAAP terms and reconciliations of non-GAAP figures to the nearest available GAAP term.
Organic revenue growth (non-GAAP) excludes the impact of foreign currency changes.
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.
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