FMC : Presentation PDF

Q2 2020 Earnings Presentation

August 5, 2020

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements made in this presentation are forward-looking statements. In some cases, you can identify these statements by such words or phrases as "will likely result," "is confident that," "expect," "expects," "should," "could," "may," "will continue to," "believe," "believes," "anticipates," "predicts," "forecasts," "estimates," "projects," "potential," "intends" or similar expressions identifying "forward-looking statements" within the

meaning of the Private Securities Litigation Reform Act of 1995, including the negative of those words and phrases. Such forward-looking statements are based on management's current views and assumptions regarding future events, future business conditions and the outlook for the company based on currently available information. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. Currently, one of the most significant factors is the potential adverse effect of the current COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of FMC, which is substantially influenced by the potential adverse

effect of the pandemic on FMC's customers and suppliers and the global economy and financial markets. The extent to which COVID-19 impacts us will depend on future

developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Additional factors include, among other things, the risk factors and other cautionary statements included within FMC's 2019 Form 10-K and FMC's Form 10-Q for the quarter ended June 30, 2020, as well as other SEC filings and public communications. Moreover, investors are cautioned to interpret many of these factors as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. FMC cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Forward-looking statements are qualified in their entirety by the above cautionary statement. FMC undertakes no obligation, and specifically disclaims any duty, to update or revise any forward-looking statements to reflect events or circumstances arising after the date on which they were made, except as otherwise required by law.

Non-GAAP Financial Terms

These slides contain certain "non-GAAP financial terms". Such non-GAAP financial terms include adjusted EBITDA, adjusted EPS, adjusted tax rate, adjusted cash from operations, free cash flow ("FCF") and organic revenue growth. Definitions of these terms, as well as a reconciliation to the most directly comparable financial measure calculated and presented in accordance with GAAP, are provided on our website investors.fmc.com. Although we provide forecasts for these non-GAAP financial measures, we are not able to forecast the most directly comparable measures calculated and presented in accordance with GAAP. Certain elements of the composition of the GAAP amounts are not predictable, making it impractical for us to forecast. Such elements include, but are not limited to restructuring, acquisition charges, and discontinued operations and related cash activity. As a result, no GAAP outlook is provided.

2

FMC Reported Financial Results

			Q2 2019	Q2 2020	'20 vs. '19
Revenue			$1,206	$1,155	-4%
GAAP Net Income	$176	$185	5%
% Revenue			14.6%	16.0%
GAAP EPS			$1.32	$1.41	7%
Adj. EBITDA	1		$338	$341	1%
% Revenue			28.0%	29.5%
Adjusted EPS	1	$1.66	$1.72	4%

Note: Amounts in millions of USD, except EPS

(1) Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this

3 presentation.

Q2 Highlights

3% organic revenue growth1, excluding a 7% FX headwind

Adj. EBITDA1 margins increased 150 bps, driven by cost reductions and price increases

Adj. EPS1 vs. Guidance*

Q2 '20 Adj. EPS vs.	+6 cents**
Guidance
EBITDA	+6 cents
D&A	-1 cent
Interest Expense	-0.5 cent
Non-contr. Interest	+0.5 cent
Share Count	+0.5 cent

• Midpoint of guidance issued May 5, 2020
• Factors do not sum to 6 cents, due to rounding

Q2 2020 Revenue Down 4% due to

7% FX Headwind, Up 3% Organically1

Regional Revenue Bridge

Note: Amounts in millions of USD

Q2 2020 Revenue Drivers

Total: -4% Volume Price F/X

Organic1: +3% +2% +1% -7%

4

Latin America

• Q2 '20 Revenue: $261 mil.
  (+2% YOY, +24% ex-FX)
• Argentina grew fastest in region, with herbicides on wheat & soybean especially strong
• Double-digitorganic growth in Brazil, driven by demand from sugarcane growers

North America

• Q2 '20 Revenue: $312 mil.
  (-6% YOY)
• Double-digitgrowth in Canada, driven by herbicides
• Strong second year for Lucento® fungicide launch
• Pro-activechannel inventory drawdowns of Authority® herbicides

Asia

• Q2 '20 Revenue: $317 mil.
  (+2% YOY, +8% ex-FX)
• Herbicides in India strong in soybeans, corn and rice
• Double-digitgrowth in Pakistan, helped by Rynaxypyr® insect control
• Australia market recovery continues on good weather

EMEA

• Q2 '20 Revenue: $265 mil.
  (-13% YOY, -10%ex-FX)
• Very difficult market conditions due to hot, dry weather
• Registration cancellations and product rationalizations were a headwind
• Cyazypyr® insect control taking share on specialty crops

(1) Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.

Q2 2020 Adj. EBITDA1 Increased 1%

Q2 2020 Adj. EBITDA Bridge	Q2 2020 Adj. EBITDA Drivers

EBITDA $3 million above a strong Q2 2019, mainly driven by cost reductions and price increases

Significant FX headwinds, both

YOY and relative to guidance

Larger cost reductions, relative to guidance, as COVID-19 related measures took full effect

Note: Amounts in millions of USD

5 (1) Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.

H1 2020 Adj. EBITDA1 Increased 2%

H1 2020 Adj. EBITDA Bridge

Note: Amounts in millions of USD

H1 2020 Adj. EBITDA Drivers

Balanced contributions from volume, price and cost reductions

Price + cost savings coverage of FX headwinds 75% for H1 2020

H1 2020 Revenue Drivers

Total: 0%	Volume	Price	F/X
Organic1: +6%	+4%	+2%	-6%

6 (1) Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.

2020 Cash Flow Outlook

($ in millions)					Q2 '19	Q2 '20	3	YTD '19	4	YTD '20	4	% Chg.	3	2020 Outlook	% Chg. vs.
					% Chg.				2019
Adjusted Cash from Operations	1	$89	$278	211%	($174)		($9)		95%		$700	-	$900	26%
Capital Additions and Other			($16)	($19)	23%	($36)		($44)		20%		($100)	-	($150)	-15%
Investing Activities
Legacy and Transformation	2		($52)	($54)	4%	($69)		($114)		65%		($175)	-	($225)	9%
FCF (before dividends,				$22	$205	830%	($279)		($167)		40%		$425	-	$525	57%
repurchases and M&A)	1
Adjusted Earnings	1				$220	$224	2%	$450		$464		3%		$820	-	$870	5%
FCF Conversion														56%

Q2 '20 Cash Drivers

Adj. cash from operations up from prior year due to strong collections, improved payables and lower cash taxes

Capital additions up slightly but proceeding per plan

Legacy and transformation spend up slightly, with higher legacy spend largely offset by reduction in transformation

2020 Outlook

Cap Ex: Maintaining full-year outlook

Legacy and Transformation: On track to complete SAP program by year end

Anticipate restarting share repurchases in the fourth quarter

	(1)	Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.
	(2)	Legacy Liabilities include liabilities from discontinued operations, net of legacy liabilities from continuing operations that are already captured in Adjusted Cash from Operations.
		Transformation costs include SAP implementation, DuPont Integration and Livent Separation.
7	(3)	These percentages are calculated using the amounts shown in the Financial Schedules that accompany our earnings release.
	(4)	YTD is through June 30 of each year.

FCF Growth Projections and

Seasonality Trends

FCF1 Growth

FCF1 by Half-Year Increments

	FCF	18%	38%	56%
	Conv.
	Note: Amounts in millions of USD				Note: Amounts in millions of USD
	Strong growth in both FCF dollars and		Similar FCF seasonality in each year
	conversion percentage

(1) Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.

8 * Midpoint of 2020 FCF guidance is $475M, which implies $642M in H2 2020. ^ Recast 2018 excludes the former Lithium segment.

FY 2020 and Q3/Q4 Earnings Outlook

FY 2020

Q3 2020

Q4 2020

$6.28 - $6.62

$1.03 - $1.17

$1.71 - $1.91

Adjusted EPS

+6% YOY at midpoint

+17% YOY at midpoint

+3% YOY at midpoint (3)

Ranges (1,2)

WADSO: ~131 million

WADSO: ~131 million

WADSO: ~131 million

Revenue: $4.68 - $4.82 bil.

Rev.: $1.045 - $1.105 bil.

Revenue: $1.23 - $1.31 bil.

Revenue

Adj. EBITDA: $1.265 -

Adj. EBITDA: $233 - $257

Adj. EBITDA: $335 - $371

&

$1.325 billion

million

million

Adjusted

Revenue +3% YOY at

Revenue +6% YOY at

Revenue +6% YOY at

EBITDA (1)

midpoint (+9% organic)

midpoint (+12% organic)

midpoint (+11% organic)

Ranges

Adj. EBITDA growth of

Adj. EBITDA +12% YOY at

Adj. EBITDA +10% YOY at

+6% YOY at midpoint

midpoint

midpoint

(1) Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.

9 (2) Outlook for EPS and weighted average diluted shares outstanding (WADSO) does not include the impact of any 2020 share repurchases.

1. Q4 2019 adjusted EPS benefited from a large tax adjustment.

Projected FY 2020 Adj. EBITDA1 and

Revenue Drivers (YOY)

FY 2020 Adj. EBITDA Bridge	FY 2020 Adj. EBITDA Drivers
		Volume growth driven by Latin
		America and Asia
		Price coverage of FX headwinds
		>75% for FY 2020
		Strong cost controls put in place
		at the onset of COVID-19
		pandemic

May Guide: +100	+160	(26)	(170)	1,285		FY 2020 Revenue Drivers
						Total: +3%	Volume	Price	F/X
Note: Amounts in millions of USD					Organic1: +9%	+5%	+4%	-6%

* Midpoint of guidance

10 (1) Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.

Projected Q3/Q4 2020 Adj. EBITDA1

and Revenue Drivers (YOY)

Q3 2020 Adj. EBITDA Bridge		Q4 2020 Adj. EBITDA Bridge

Note: Amounts in millions of USD * Midpoint of guidance

Note: Amounts in millions of USD * Midpoint of guidance

Q3 2020 Revenue Drivers			Q4 2020 Revenue Drivers
Total: +6%	Volume	Price	F/X		Total: +6%	Volume	Price	F/X
Organic1: +12%	+6%	+6%	-6%		Organic1: +11%	+5%	+6%	-5%

11

(1) Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.

Appendix - Other Financial Items

Interest Expense	$150 - $160 million
Adjusted Tax Rate (1)	12.5 - 14.5 percent
Non-Controlling Interest	$3 - $5 million
Full-Year Weighted Avg. Diluted	~131 million
Shares Outstanding (WADSO) (2)
Depreciation & Amortization	$155 - $165 million
Free Cash Flow (1)	$425 - $525 million
Capital Additions and Other	$100 - $150 million
Investing Activities

12	(1)	Denotes non-GAAP financial term. Refer to non-GAAP financial terms at the beginning of this presentation.
(2)	Outlook for weighted average diluted shares outstanding (WADSO) does not include the impact of any 2020 share repurchases.

Appendix - Regional Growth

	FMC Q2
	Sales
NA	$312
LatAm	$261
EMEA	$265
Asia	$317
Total	$1,155

Note: Amounts in millions of USD

13

% Chg	% (ex-FX)
-6%	-6%
2%	24%
-13%	-10%
2%	8%
-4%	3%

FMC H1	% Chg	% (ex-FX)
Sales
$640	-2%	-2%
$520	12%	30%
$681	-5%	-2%
$565	0%	4%
$2,405	0%	6%