FMC (US:FMC)2025-07-31 20:17Part I - FINANCIAL INFORMATION Presents FMC Corporation's unaudited consolidated financial information for Q2 and H1 2025, detailing statements and notes Item 1. Financial Statements Presents FMC Corporation's unaudited consolidated financial statements for Q2 and H1 2025, detailing income, balance sheet, and cash flow changes Consolidated Statements of Income (Loss) Details FMC Corporation's unaudited consolidated income and loss for Q2 and H1 2025, highlighting revenue and net income changes Consolidated Statements of Income (Loss) Highlights (in Millions, Except Per Share Data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,050.5 | $1,038.4 | $1,841.9 | $1,956.4 | | Gross Margin | $406.3 | $398.1 | $723.0 | $737.8 | | Income (loss) from continuing operations | $44.4 | $298.0 | $35.8 | $307.4 | | Net income (loss) attributable to FMC stockholders | $66.7 | $295.1 | $51.2 | $292.4 | | Diluted EPS from continuing operations | $0.34 | $2.37 | $0.28 | $2.45 | | Diluted EPS (Net) | $0.53 | $2.35 | $0.41 | $2.33 | - Revenue for Q2 2025 slightly increased to $1,050.5 million from $1,038.4 million in Q2 20249 - Net income attributable to FMC stockholders saw a sharp decline to $66.7 million from $295.1 million in the prior-year quarter, largely due to a significant tax benefit recorded in Q2 20249 Consolidated Balance Sheets Presents FMC Corporation's unaudited consolidated balance sheets as of June 30, 2025, and December 31, 2024, showing asset and liability changes Consolidated Balance Sheet Highlights (in Millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $5,467.3 | $4,958.3 | | Cash and cash equivalents | $438.2 | $357.3 | | Inventories | $1,395.7 | $1,201.6 | | Total assets | $12,297.1 | $11,653.3 | | Total current liabilities | $3,573.1 | $3,019.2 | | Short-term debt and current portion of long-term debt | $893.3 | $337.4 | | Long-term debt, less current portion | $3,270.0 | $3,027.9 | | Total FMC stockholders' equity | $4,397.0 | $4,487.5 | - Total assets increased to $12.3 billion as of June 30, 2025, from $11.7 billion at year-end 2024, driven by increases in trade receivables and inventories15 - Total debt (short-term and long-term) rose to approximately $4.16 billion from $3.37 billion over the same period15 Consolidated Statements of Cash Flows Outlines FMC Corporation's unaudited consolidated cash flow activities for H1 2025 and 2024, detailing operating, investing, and financing changes Consolidated Statements of Cash Flows Highlights (in Millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided (required) by operating activities | $(508.8) | $130.4 | | Continuing Operations | $(479.1) | $149.3 | | Discontinued Operations | $(29.7) | $(18.9) | | Net cash provided (required) by investing activities | $(51.4) | $(39.6) | | Net cash provided (required) by financing activities | $628.7 | $84.7 | | Increase (decrease) in cash and cash equivalents | $80.9 | $169.1 | - For the first six months of 2025, cash used by operating activities was $479.1 million, a significant shift from the $149.3 million provided by operating activities in the same period of 202417 - This was primarily due to changes in operating assets and liabilities, including a $453.8 million decrease related to advance payments from customers17 - Financing activities provided $628.7 million in cash, mainly from a $750.0 million issuance of long-term debt and a $548.7 million increase in short-term debt, partially offset by a $500.1 million repayment of long-term debt21 Notes to Consolidated Financial Statements Provides detailed explanatory notes to the unaudited consolidated financial statements, covering significant events and disclosures - In July 2025, the Board approved a plan to divest the Company's commercial business in India38 - The sale is expected to conclude within twelve months, and the related assets will be classified as held for sale starting in Q3 202538 Revenue by Region (in Millions) | Region | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | North America | $320.9 | $338.8 | $507.3 | $597.9 | | Latin America | $310.4 | $307.2 | $517.2 | $495.2 | | EMEA | $260.4 | $201.2 | $533.2 | $508.0 | | Asia | $158.8 | $191.2 | $284.2 | $355.3 | - Restructuring charges under "Project Focus" for the six months ended June 30, 2025, totaled $26.7 million, including severance, professional services, and accelerated depreciation8385 - On May 27, 2025, the company issued $750 million of 8.45% Subordinated Notes due 2055 and used the proceeds to redeem $500 million of senior notes due 2026 and for general corporate purposes102 - The effective tax rate for the six months ended June 30, 2025 was 43.8%, compared to -12,196.0% for the same period in 2024150261 - The significant variance is primarily due to a net tax benefit of approximately $300 million recorded in Q2 2024 related to the establishment of a global technology and innovation center in Switzerland150261 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 and H1 2025 financial results, covering revenue, regional performance, India divestiture, updated outlook, and liquidity Overview and 2025 Outlook Provides an overview of Q2 2025 performance and updated full-year 2025 financial guidance, including the India business divestiture impact - Q2 2025 revenue increased by 1% YoY to $1,050.5 million, driven by volume growth as customers reached target channel inventory levels216 - This was partially offset by price declines, over half of which were from adjustments on "cost-plus" diamide contracts216 - Net income attributable to FMC stockholders fell to $66.7 million in Q2 2025 from $295.1 million in Q2 2024, primarily because the prior-year period included a net tax benefit of approximately $300 million related to a new global technology center in Switzerland216 - The company plans to divest its commercial business in India and will continue to participate in the market through a supply agreement215 - The sale is expected to close within twelve months215 Updated 2025 Full-Year Guidance | Metric | Guidance Range | Change vs. 2024 (Midpoint) | | :--- | :--- | :--- | | Revenue (ex-India) | $4.08B - $4.28B | -2% | | Adjusted EBITDA | $870M - $950M | +1% | | Adjusted EPS | $3.26 - $3.70 | Flat | Results of Operations Analyzes the company's operational performance for Q2 2025, detailing revenue by region, gross margin, operating expenses, and Adjusted EBITDA - Q2 2025 revenue performance by region: EMEA grew 29%, Latin America grew 1%, North America decreased 5%, and Asia decreased 17% (driven by destocking in India)236237 - Q2 2025 gross margin increased by $8.2 million to $406.3 million, with the margin percentage rising to 39% from 38% YoY, driven by cost improvements that offset lower pricing and unfavorable currency effects241 - Q2 2025 SG&A expenses increased 7% to $176.8 million due to investments in new products and an expanded sales force in Brazil243 - R&D expenses decreased 13% to $66.4 million due to project timing and cost controls244 - Q2 2025 Adjusted EBITDA increased 2% to $206.5 million, as favorable costs (contributing +34%) were largely offset by price declines (-18%) and foreign exchange headwinds (-11%)272 Liquidity and Capital Resources Discusses the company's financial liquidity, capital structure, debt levels, operating cash flow, and projected capital expenditures for 2025 - Total debt increased to $4.16 billion at June 30, 2025, from $3.37 billion at year-end 2024, following the issuance of $750 million in Subordinated Notes and an increase in commercial paper borrowings277278 - Cash used by operating activities for the first six months of 2025 was $479.1 million, a reversal from $149.3 million cash provided in the prior year283289 - This was driven by changes in working capital, particularly advance payments from customers, inventories, and trade receivables283289 - The company projects 2025 free cash flow to be between $200 million and $400 million, a decrease from 2024 due to the expected normalization of working capital305 - Projected 2025 capital expenditures are expected to be between $105 million and $115 million, mainly for investments in new products311 Derivative Financial Instruments and Market Risks Details the company's exposure to market risks, including interest rate and foreign currency fluctuations, and its use of derivative financial instruments - The company's debt portfolio at June 30, 2025, consists of 81% fixed-rate debt and 19% variable-rate debt327 - A one percentage point change in interest rates would impact gross interest expense by approximately $4.0 million for the six months ended June 30, 2025, based on the variable-rate debt portfolio328 - Primary foreign currency exposures are against the Euro, Chinese yuan, Brazilian real, Mexican peso, and Argentine peso321323 - The net financial instrument position shifted from a $34.1 million net asset at year-end 2024 to a $49.3 million net liability at June 30, 2025321323 Item 3. Quantitative and Qualitative Disclosures About Market Risk Refers to the detailed discussion of market risks within Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" - The company directs readers to the market risk disclosures within the MD&A section for information on its exposure to commodity prices, interest rates, and foreign currency exchange rates330 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective in providing reasonable assurance of timely and accurate reporting331 - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect internal controls332 Part II - OTHER INFORMATION Presents other required information, including legal proceedings, risk factors, equity security sales, and exhibits Item 1. Legal Proceedings Refers to Notes 11 and 18 of the consolidated financial statements for updates on legal proceedings previously disclosed - For information on legal proceedings, the report refers to the disclosures in Note 11 (Environmental Obligations) and Note 18 (Guarantees, Commitments, and Contingencies) of the financial statements335 Item 1A. Risk Factors States no new risk factors and directs readers to the risk factors discussed in the 2024 Annual Report on Form 10-K and other SEC filings - The company advises that readers should consider the risk factors discussed in its 2024 Annual Report on Form 10-K and other SEC filings, indicating no material changes to its risk profile during the quarter336 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports on equity security purchases for Q2 2025, noting no repurchases under the $1 billion program due to credit agreement restrictions - Due to a credit agreement amendment in February 2025, the company will not repurchase shares under its publicly announced program until December 31, 2027, except for those related to equity compensation plans341 - No shares were repurchased under the publicly announced program during the six months ended June 30, 2025338341 - The remaining authorization under the program is $825 million338341 Item 5. Other Information Discloses an executive officer terminated a 2024 Rule 10b5-1 trading plan and adopted a new plan on May 19, 2025 - On May 19, 2025, Jacqueline Scanlan, EVP and Chief Human Resources Officer, adopted a new Rule 10b5-1 trading plan for the sale of up to 8,300 shares, after terminating a previous plan342344 Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including indentures for new subordinated notes and CEO/CFO certifications - Exhibits filed include the Subordinated Indenture for the 8.450% Notes due 2055 and required certifications from the CEO and CFO347 Signatures Contains the required signatures of authorized officers, certifying the accuracy and completeness of the Form 10-Q filing