FMC (FMC) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue fell 23% to $4.487B and adjusted EBITDA fell 30% to $978M, primarily on lower volume from channel and grower destocking.

• Q4 revenue declined 29% amid destocking across regions; Brazil drought added pressure in Latin America, while differentiated products remained resilient.

• 2024 is a transition year, with expected growth weighted to new products and improving demand in H2; 2026 financial projections remain unchanged.

Financial highlights

• Q4 revenue was $1.146B, down 29%; adjusted EBITDA was $254.1M, down 41%, and adjusted EPS was $1.07, down 55%.

• Q4 GAAP net income rose to $1.096B from $280M and diluted EPS to $8.77 from $2.17, primarily on one-time tax benefits.

• FY adjusted EPS fell 49% to $3.78; GAAP net income rose 78% to $1.321B and diluted EPS increased 81% to $10.53.

• FY 2023 gross margin was $1.83B, versus $2.33B in 2022; adjusted EBITDA margin was 21.8%, down 240 bps YoY.

• New product introductions generated record FY sales of $590M, 13% of revenue; NPI represented 14% of Q4 sales.

Outlook and guidance

• FY 2024 revenue guidance is $4.50B–$4.70B, up 2.5% at midpoint; adjusted EBITDA is $900M–$1.05B, flat at midpoint, and adjusted EPS is $3.23–$4.41, up 1% at midpoint.

• FY 2024 free cash flow guidance is $400M–$600M, with greater than 100% cash conversion at midpoint; restructuring is expected to contribute $50M–$75M of adjusted EBITDA benefit.

• Q1 2024 guidance: revenue $925M–$1.075B, down 26% at midpoint; adjusted EBITDA $135M–$165M, down 59%; adjusted EPS $0.21–$0.43, down 82%.

• New products are expected to add ~$200M of revenue, mostly in H2; H1 headwinds include destocking, higher inventory costs and modest pricing pressure, with H2 tailwinds from new products and savings.

• 2026 goals include $5.5B–$6.0B revenue and $1.3B–$1.5B adjusted EBITDA.