FMC (FMC) Q4 2022 earnings summary

Executive summary

• FY22 revenue reached $5.802B, up 15% reported and 18% excluding FX; adjusted EBITDA rose 7% to $1.407B and adjusted EPS increased 8% to $7.41.

• Performance reflected strong volume and pricing, especially in North America and Latin America, despite inflation, currency headwinds, weather challenges and the Russia exit.

Financial highlights

• Revenue increased $757.1M to $5,802.3M; volume contributed ~11% and pricing ~7%, partly offset by a ~3% FX headwind.

• Gross margin rose 8% to $2,326.8M, while gross margin rate fell to 40% from 43% amid input-cost inflation and FX headwinds.

• Net income was $741.5M versus $737.1M; attributable net income was $736.5M versus $739.6M, as higher costs, interest, taxes and discontinued-operation losses offset revenue gains.

• Adjusted after-tax earnings from continuing operations increased ~6% to $938.4M; adjusted EBITDA increased 7% to $1,406.8M.

• Operating cash flow from continuing operations was $660.0M versus $898.6M; free cash flow was $514.2M versus $713.3M.

Outlook and guidance

• FY23 revenue guidance is $6.08B–$6.22B, approximately 6% higher at the midpoint; new launches and market access are expected to support volume, with mid-single-digit pricing and moderate FX headwinds.

• FY23 adjusted EBITDA guidance is $1.48B–$1.56B, up 8% at midpoint; adjusted EPS is $7.20–$8.00, up ~3% at midpoint, with higher interest and tax rates weighing on EPS.

• FY23 free cash flow guidance is $530M–$720M; adjusted cash from operations is expected at $800M–$920M, with higher cash interest and taxes partly offsetting earnings growth and slower working-capital growth.

• Input-cost inflation was decelerating; costs were expected to remain a 2023 headwind but potentially become a YoY tailwind in H2.