Third quarter results significantly impacted by lower sales in Latin America, channel destocking in all regions
Third Quarter 2023 Highlights
Revenue of $982 million, a decrease of 29 percent versus Q3 2022 and down 29 percent organically1
Consolidated GAAP net loss of $4 million, down 103 percent versus Q3 2022
Adjusted EBITDA of $175 million, down 33 percent versus Q3 2022
Consolidated GAAP loss of $0.03 per diluted share, down 103 percent versus Q3 2022
Adjusted earnings per diluted share of $0.44, down 64 percent versus Q3 2022
Full-Year Outlook2
Revenue of $4.48 billion to $4.72 billion, reflecting 21 percent decline at the midpoint versus 2022
Adjusted EBITDA of $0.97 billion to $1.03 billion, reflecting 29 percent decline at the midpoint versus 2022
Lowers adjusted earnings per diluted share outlook to $3.57 to $4.13, reflecting 48 percent decrease at the midpoint versus 2022
Reduces free cash flow outlook to a range of negative $860 million to negative $640 million
31 October 2023, US: FMC Corporation (NYSE:FMC) today reported third quarter 2023 revenue of $982 million, a decrease of 29 percent versus third quarter 2022 and down 29 percent organically. On a GAAP basis, the company reported a net loss of $0.03 per diluted share in the third quarter, down 103 percent versus third quarter 2022. Adjusted earnings were $0.44 per diluted share, a decrease of 64 percent versus third quarter 2022.
Third Quarter Adjusted EPS versus Prior-Year Quarter
-79 cents
Adjusted EBITDA
-59 cents
Interest Expense
-15 cents
Depreciation & Amortization
-3 cents
Minority Interest
-2 cents
Taxes
-1 cent
Share Count
+1 cent
“Our results were significantly below the prior year driven by volume headwinds from a continuation of channel destocking behavior that began in the prior quarter. Destocking was much worse than anticipated in Brazil. Despite this, on-the-ground application remains steady as growers continue to protect their crops,” said Mark Douglas, FMC president and chief executive officer. “Branded diamides and our new products outperformed the overall portfolio, which illustrates robustness for differentiated and higher value products even in challenging environments.”
Revenue in the quarter was driven by a 26 percent decline in volume. Price increases in North America, EMEA and Asia were more than offset by price decreases in Latin America. FX impacts were neutral to revenue. While overall sales were down 29 percent, sales of products launched in the last five years were up 4 percent year-over-year, with growth in all regions.
Sales in all regions declined versus the prior-year period as partners, the distribution channel and growers continued to reduce inventory levels. In North America, revenue was down 34 percent year-over-year (down 34 percent organically). EMEA revenue declined 1 percent (down 4 percent organically) compared to third quarter 2022, as higher pricing and FX tailwinds mostly offset lower volumes. Sales in Asia declined 28 percent (down 23 percent organically) as continued destocking across the region negatively impacted volumes. The region reported 16 percent growth in products launched in the last five years. In Latin America, revenue was down 33 percent (down 36 percent organically) year-over-year driven mainly by lower volumes primarily due to severe destocking in Brazil and, to a lesser extent, drought conditions in Argentina. Globally, Plant Health revenue was down 20 percent (down 17 percent organically) versus prior year driven by similar, but less severe channel destocking dynamics.
FMC Revenue
Q3 2023
Total Revenue Change (GAAP)
(29%)
Less FX Impact
0%
Organic1 Revenue Change (Non-GAAP)
(29%)
Third quarter adjusted EBITDA was $175 million, a decrease of 33 percent from the prior-year period as lower sales more than offset favorable costs, mostly from inputs. Operating expenses were slightly favorable to prior year due to increased cost discipline.
Full-Year 2023 Outlook2
Consistent with the company’s release on October 23, FMC is forecasting full-year 2023 revenue to be in the range of $4.48 billion to $4.72 billion, reflecting a 21 percent decline at the midpoint versus 2022. Full-year adjusted EBITDA is expected to be in the range of $0.97 billion to $1.03 billion, representing 29 percent decline year-over-year at the midpoint. The forecast for the 2023 adjusted earnings range is lowered to $3.57 to $4.13 per diluted share, representing a year-over-year decrease of 48 percent at the midpoint. The company is lowering full-year free cash flow guidance to a range of negative $860 million to negative $640 million due to the reduction in expected second half EBITDA and the impacts to working capital from higher inventory and lower payables.
Fourth Quarter Outlook2
Fourth quarter revenue is expected to be in the range of $1.14 billion to $1.38 billion, a 22 percent decrease at the midpoint compared to fourth quarter 2022. Adjusted EBITDA is forecasted to be in the range of $246 million to $306 million, representing a 36 percent decrease at the midpoint versus fourth quarter 2022. FMC now expects adjusted earnings per diluted share to be in the range of $0.89 to $1.38 in the fourth quarter, which represents a decline of 52 percent at the midpoint versus fourth quarter 2022.
“The global crop protection market remains challenged with severe destocking across the channel impacting volume growth this year. In this environment, we are implementing a company-wide restructuring program to right-size our cost base. At the same time, we are continuing to invest in the development and launch of new products, which are growing and driving market share gains,” said Douglas.
Full Year 2023 Outlook2
Q4 2023 Outlook2
Revenue
$4.48 to $4.72 billion
$1.14 to $1.38 billion
Growth at midpoint vs. 2022*
-21%
-22%
Adjusted EBITDA
$0.97 to $1.03 billion
$246 to 306 million
Growth at midpoint vs. 2022*
-29%
-36%
Adjusted EPS^
$3.57 to $4.13
$0.89 to $1.38
Growth at midpoint vs. 2022*
-48%
-52%
^Adjusted EPS estimates assume 125.7 million diluted shares for Q4 and full year.
*Percentages are calculated using whole numbers. Minor differences may exist due to rounding.
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 most directly comparable GAAP term.
