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FMC CORP (FMC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $1.22B, up 7% YoY but below the company’s Q4 revenue guidance range; adjusted EBITDA was $339M (+33% YoY) and came in $3M above the guidance midpoint, with adjusted EPS of $1.79 near the top of the guided range .
  • Growth was driven by volume (+15%) and the “growth portfolio” (Cyazypyr, new AIs, Plant Health), partly offset by FX (-5%) and lower price (-3%); EBITDA margin reached 27.7%, an all‑time Q4 high, on cost tailwinds and restructuring benefits .
  • FY25 outlook guides flat revenue ($4.15–$4.35B), adjusted EBITDA of $870–$950M (up ~1% at midpoint), adjusted EPS of $3.26–$3.70 (flat at midpoint), and FCF $200–$400M; Q1’25 is a deliberate “reset” with revenue $750–$800M, adjusted EBITDA $105–$125M, and adjusted EPS $0.05–$0.15 as FMC aggressively reduces channel inventory and absorbs price/FX headwinds .
  • Management flagged three headwinds bridging FY25 EBITDA to flat: price headwinds (~$130M) largely from cost‑plus partner contracts, FX ($65–$75M), and ~$25M sales‑organization investments to pursue new routes to market in LatAm and EMEA, partly offset by $175–$200M COGS tailwinds from raw material deflation and restructuring .

What Went Well and What Went Wrong

  • What Went Well

    • “We delivered solid sales and strong year-on-year adjusted EBITDA growth in the quarter... over seventy‑five percent of our sales growth came from our growth portfolio... adjusted EBITDA above our guidance midpoint” (Pierre Brondeau) .
    • Plant Health revenue grew 33% YoY; new AIs fluindapyr and Isoflex saw strong demand, with products launched in the last five years up 24% .
    • FY24 FCF of $614M and CFO of $737M improved by ~$1.14B and ~$1.04B YoY respectively, driven by payables rebuild and inventory reduction .

  • What Went Wrong

    • Revenue was below the Q4 guidance range due to higher‑than‑expected FX headwinds (Brazilian Real) and a sharper shift by customers to hold lower inventory than historical norms; LatAm pricing/credit competition led FMC to walk away from certain sales .
    • GAAP net loss of $16M in Q4 (vs. a large tax‑benefit‑driven profit in Q4’23) as prior‑year one‑time Swiss tax incentives distorted YoY comparability; Q4’24 saw higher valuation allowances on Swiss benefits .
    • FY25 will absorb deliberate price resets on cost‑plus diamide partner contracts and mid‑single‑digit FX headwinds, delaying earnings acceleration to 2H25/2026 despite $175–$200M COGS tailwinds .

Financial Results

  • Core metrics vs prior year and prior quarter
MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$1.146 $1.065 $1.224
Adjusted EBITDA ($USD Millions)$254.1 $201.4 $338.9
GAAP Diluted EPS ($)$8.77 $0.52 ($0.13)
Adjusted Diluted EPS ($)$1.07 $0.69 $1.79
  • Revenue drivers (Q4 2024)
DriverQ4 2024 YoY
Volume+15%
Price−3%
FX−5%
Organic revenue change+12%
  • Regional/portfolio highlights (Q4 2024 YoY)
Region/PortfolioQ4 2024 YoY Change
North America+23%
Latin America−10% (but +2% ex-FX)
Asia+10% (+13% ex-FX)
EMEA+18% (+21% ex-FX)
Plant Health+33%
  • Cash flow and leverage
KPIQ4 2023Q4 2024
CFO ($USD Millions)$317.9 $427.9
Free Cash Flow ($USD Millions)$265.7 $388.8
Leverage (Year-end 2024)Value
Gross debt to TTM EBITDA3.7x
Net debt to TTM EBITDA3.3x
Gross debt ($B) / Cash ($B)$3.4 / $0.36

Guidance Changes

  • Q4 2024 guidance vs actual
MetricPeriodPrevious GuidanceActualChange
RevenueQ4 2024$1.30–$1.41B $1.224B Lower (missed range)
Adjusted EBITDAQ4 2024$321–$351M $338.9M Maintained; above midpoint
Adjusted EPSQ4 2024$1.47–$1.83 $1.79 Within; near high end
  • FY25 and Q1’25 current outlook
MetricPeriodPrevious GuidanceCurrent GuidanceNotes
RevenueFY 2025N/A$4.15–$4.35B Flat YoY midpoint; +3% ex-GSS
Adjusted EBITDAFY 2025N/A$870–$950M +1% YoY midpoint; +4% ex-GSS
Adjusted EPSFY 2025N/A$3.26–$3.70 Flat midpoint
Free Cash FlowFY 2025N/A$200–$400M Down vs $614M FY24 midpoint
COGS TailwindsFY 2025N/A$175–$200M Raw materials, absorption, restructuring
FX Headwind (EBITDA)FY 2025N/A$65–$75M Strengthening USD
Interest ExpenseFY 2025N/A$210–$230M Down ~$15M YoY midpoint
Effective Tax Rate (Adj)FY 2025N/A13–15% Up vs 10.9% FY24
RevenueQ1 2025N/A$750–$800M −16% YoY midpoint
Adjusted EBITDAQ1 2025N/A$105–$125M −28% YoY midpoint
Adjusted EPSQ1 2025N/A$0.05–$0.15 −72% YoY midpoint
  • Dividend: $0.58 per share declared Dec 13, 2024; payable Jan 16, 2025 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Channel inventory disciplineOne-time incentives to help push high-cost inventory, recovery slower than expected; India channel elevated into 2025 NA/Europe normalizing; LatAm improving by Q2’25; Asia challenging until 2026 Customers holding significantly less inventory than historical; aggressive 1H25 correction across India, Brazil, Eastern Europe, Canada Ongoing correction; FMC intensifying actions early 2025
Diamide strategy & genericsPatents/process/data protection; mixture/solo enhanced formulations to extend lifecycle; no “revenue cliff” Cyazypyr strength; Rynaxypyr under pressure in Asia; illegal generics in India/China; cost roadmap in place Cost-plus contracts lower partner pricing; Rynaxypyr down in 2025; high single-digit growth expected post-2025; Cyazypyr to grow low‑mid teens post-2025 Reset in 2025 then growth
New AIs commercializationFluindapyr, Isoflex launched; Dodhylex, Rimisoxafen and pheromones pipeline New product sales key to H2/Q4 growth (Onsuva, Isoflex, diamide formulations) Fluindapyr expected $150M in 2025, >$300M by 2027; Isoflex $100M in 2025, ~$250M by 2027; Dodhylex later; pheromones mid‑20% Plant Health growth Strong ramp through 2027
FXLow single-digit headwind on revenue; SG&A offsets in 2H Low single-digit revenue headwind; SG&A benefit in Q4 FY25 EBITDA headwind $65–$75M; Brazilian Real, TRY, EUR the main drivers Headwinds intensifying
Restructuring & COGSFY24 net savings $75–$100M; run-rate >$150M by 2025 Raised targets; expecting $125–$150M net in 2024; run-rate >$225M in 2025 Delivered $165M net savings in 2024; run-rate >$250M by 2025; COGS tailwinds $175–$200M in 2025 Outperformance continuing
LatAm routes to marketN/APricing actions; Brazil/Argentina challenges; bankruptcy of a large distributor Invest ~$25M to expand direct-to-grower and new routes; address consolidated distribution landscape Strategic pivot underway
Tax/incentivesSwiss IP transfer created ~$300M net tax benefit YTD; structural advantage Lower effective tax rate guided in FY24; covenant leverage step-down by YE FY24 adjusted ETR 10.9%; FY25 adjusted ETR 13–15%; OECD GLOBE guidance may affect Swiss credits (under evaluation) ETR rising; policy uncertainty
Free cash flow & leverageFY24 FCF guided $400–$500M; leverage expected ~4x covenant by YE FY24 FCF maintained; leverage ~4x at YE with GSS proceeds FY24 FCF $614M; 2025 FCF $200–$400M; gross/net leverage 3.7x/3.3x; covenant amended for headroom Normalization in 2025; debt reduction focus

Management Commentary

  • “We delivered solid sales and strong year-on-year adjusted EBITDA growth... over seventy-five percent of our sales growth came from our growth portfolio... continued cost discipline... above our guidance midpoint” — Pierre Brondeau .
  • “2025 is a pivotal year... We will significantly lower FMC inventory in the channel... complete significant manufacturing cost reductions of Rynaxypyr and Cyazypyr... invest in expanding the sales organization to pursue new routes to market, especially in LatAm and EMEA” — Pierre Brondeau .
  • “We exceeded our increased restructuring targets, finishing 2024 net savings of $165 million... clear line of sight to run rate savings of more than $250 million by the end of 2025... FX EBITDA headwind of $65–$75 million in 2025” — Andrew Sandifer .
  • “Cyazypyr and the rest of our growth portfolio [new AIs, Plant Health] will grow at multiples of the market... fluindapyr sales >$150M in 2025; Isoflex ~$100M in 2025; Dodhylex to expand in rice post-2026” — Ronaldo Pereira .

Q&A Highlights

  • Volume growth vs inventory reset: Management expects FY25 volume growth predominantly from growth portfolio (new products and new customers), while deliberately reducing core portfolio sell-in to shrink channel inventories; this requires near-term sales org investments (~$25M) .
  • Pricing: About two‑thirds of 2025 price decline stems from cost‑plus partner contract adjustments; remaining one‑third from market competitiveness, notably in Asia; the largest price reset occurs in 2025, with smaller effects in 2026–2027 .
  • Rynaxypyr trajectory: Expect decline in 2025 (branded and partner) amid generics and cost‑plus repricing; high single-digit growth resumes from 2026 via enhanced formulations and mixtures broadening addressable markets .
  • LatAm distribution: Consolidation has shifted buying patterns; FMC will pursue direct-to-grower routes enabled by fluindapyr/diamide innovations, requiring different skills and networks than prior retail‑centric approach .
  • Cadence: Low Q1’25 (reset) with stronger 2H as new products and new routes scale; U.S. pull‑through expected more evenly across the season, delaying typical Q1 reorder cadence .

Estimates Context

  • Wall Street consensus estimates from S&P Global could not be retrieved at this time due to provider rate limit. As a result, comparisons are made against company guidance rather than consensus for Q4 2024 and FY25/Q1’25. If needed, we can refresh SPGI consensus when access is restored [GetEstimates error].

Key Takeaways for Investors

  • Q4 quality was high despite a top-line shortfall: EBITDA and adjusted EPS exceeded/matched guidance drivers on cost tailwinds and growth portfolio strength; margin hit an all‑time Q4 high at 27.7% .
  • Near-term caution: Q1’25 will be weak by design as FMC accelerates channel inventory normalization and absorbs cost‑plus repricing and FX headwinds; expect a back‑half recovery as new products and routes to market scale .
  • Structural cost progress: Restructuring exceeded targets (FY24 net $165M), with FY25 run‑rate savings >$250M and $175–$200M COGS tailwinds supporting earnings resilience amid pricing/FX headwinds .
  • Diamide reset then rebuild: 2025 price/volume pressure (especially Rynaxypyr) should transition to resumed growth from 2026 via enhanced solo and mixture formulations and broader market penetration; Cyazypyr’s IP/data protection and complex manufacturing underpin multi‑year growth .
  • New AIs are the growth engine: Fluindapyr and Isoflex ramp in 2025–2027 with sizable addressable markets; Dodhylex and pheromones extend optionality in later years, underpinning the 2027 targets ($5.2B revenue, ~$1.2B EBITDA, ~23% margin) .
  • Balance sheet and FCF: FY24 FCF strength resets lower in 2025 as working capital normalizes; leverage covenants amended for headroom through the reset, with discretionary FCF directed to debt reduction .
  • Watch FX and LatAm execution: FX headwinds ($65–$75M) and the LatAm route‑to‑market shift are key swing factors for FY25 delivery; management is reallocating resources to direct-to-grower strategies anchored by differentiated technologies .