FMC Corp Sets Livent Spin Off Date

Third Quarter Highlights

  • Consolidated revenue of $1.0 billion, up 60 percent versus Q3 ’17
  • Consolidated GAAP earnings of $0.54 per diluted share, up 32 percent versus Q3 ’17
  • Consolidated adjusted earnings per diluted share of $0.98, up 40 percent versus Q3 ’17
  • Agricultural Solutions segment revenue of $924 million, up 5 percent versus Q3 ’17, on a pro forma basis
  • Agricultural Solutions segment EBITDA of $216 million, up 57 percent versus Q3 ’17
  • Lithium segment revenue of $112 million, up 19 percent versus Q3 ’17
  • Lithium segment EBITDA of $49 million, up 21 percent versus Q3 ’17

Outlook & Company Updates

  • Excluding $0.07 impact from Livent standalone costs ($0.03) and non-controlling interest ($0.04), FMC maintains its previous 2018 adjusted earnings per share of $6.05 at the midpoint of the range. Including the impacts from Livent IPO, 2018 adjusted earnings are expected to be in the range of $5.93 to $6.03 per diluted share, up 121 percent at the midpoint versus 20171,2
  • Company announces program to repurchase $200 million of FMC shares by year end
  • Company announces plan to spin remaining Livent stake on March 1, 2019

FMC Corporation (NYSE: FMC) today reported third quarter 2018 revenue of approximately $1.0 billion, an increase of 60 percent year-over-year.  On a GAAP basis, the company reported earnings of $0.54 per diluted share in the third quarter, or $73 million, which is 32 percent higher than the GAAP earnings of $0.41 per diluted share, or $55 million, in the third quarter of 2017.  Third quarter adjusted earnings were $0.98 per diluted share, an increase of 40 percent year-over-year, and 6 centsabove the midpoint of prior guidance.  Segment results drove the majority of the outperformance, supplemented by a lower tax rate.  This was partially offset by higher corporate and other costs, largely driven by one-time foreign currency impacts on inter-company fund movements.

Third Quarter Adjusted EPS Versus Guidance (midpoint) 6 cents
Ag Solutions 7 cents
Lithium 1 cent
Lower tax rate 3 cents
Corporate & other expense (5 cents)

Pierre Brondeau, FMC CEO and chairman said: “FMC delivered another very strong quarter.  In Ag Solutions, we executed our commercial strategy particularly well in Brazil, where we implemented significant price increases to largely offset FX headwinds.  In Lithium, we had another strong operating quarter, and we also successfully completed the IPO of Livent Corporation on October 11, which sets us on a clear path to create two independent, pure-play companies.”

FMC also announced it is launching a $200 million share repurchase program under its existing share repurchase authorization, to be completed by the end of 2018.

Andrew Sandifer, FMC EVP and CFO said: “FMC has reduced debt by nearly $600 million this year, including $300 million in the third quarter and an additional $150 million in October.  With leverage levels now in line with our long-term targets, we feel it is an appropriate time to resume returning excess cash to shareholders.”

FMC further announced that it intends to spin off its approximately 85 percent stake in Livent Corporation to FMC shareholders, in the form of a pro-rata distribution of Livent shares, on March 1, 2019.  The planned separation is expected to be tax-free to FMC shareholders.  Further details will be announced closer to the actual distribution.  FMC Lithium will remain a reporting segment of FMC in the fourth quarter of 2018 but will be reported as discontinued operations when FMC reports first quarter results next year.

FMC Agricultural Solutions

FMC Agricultural Solutions reported third quarter revenue of approximately $924 million, an increase of 67 percent year-over-year due to the strength of the DuPontacquisition.  On a pro forma basis, revenue increased 5 percent, with particularly strong demand and higher prices in Brazil.  Segment earnings before interest, tax, depreciation and amortization (EBITDA) of $216 million increased 57 percent year-over-year and were $11 million above the midpoint of the prior guidance range.  In the important Brazil market, higher prices and hedging were able to offset 100 percent of the FX impact on earnings in the quarter.

Full-year 2018 revenue for Agricultural Solutions is still forecasted to be in the range of $4.2 billion to $4.26 billion.  At the midpoint, this implies 10 percent year-over-year growth on a pro forma basis.  Full-year segment EBITDA is expected to be in the range of $1.195 billion to $1.215 billion, which is an increase of $5 million at the midpoint versus prior guidance.  In the fourth quarter, the company is expecting 12 percent year-over-year growth on a pro forma basis, driven by Brazil and Europe; segment revenue is forecasted to be in the range of $1.015 billion to $1.075 billion, and segment EBITDA is expected to be in the range of $280 million to $300 million.

FMC Lithium / Livent

FMC Lithium, known as Livent following its October IPO, reported third quarter segment revenue of $112 million, an increase of 19 percent versus the prior-year quarter.  Segment EBITDA increased 21 percent year-over-year to $49 million in the quarter.  Excluding $1.7 million in Livent standalone costs in Q3, most of which was duplicative personnel, EBITDA would have been $50 million.

Segment revenue for the full year of 2018 is still expected to be in the range of $440 million to $450 million, an increase of 28 percent at the midpoint compared to 2017.  The outlook for full-year segment EBITDA is a range of $193 million to $197 million, which includes a $5 million headwind from Livent standalone costs.  Excluding the standalone costs, this EBITDA forecast is in-line with prior guidance and it represents an increase of 37 percent at the midpoint compared to the prior year.

2018 Outlook1,2

Excluding $0.07 negative impact from Livent standalone costs (-$0.03) and non-controlling interest (-$0.04), FMC maintains its previous 2018 adjusted earnings per share of $6.05 at the midpoint of the range.  Including the impacts from Livent, 2018 adjusted earnings are expected to be in the range of $5.93 to $6.03 per diluted share, up 121 percent at the midpoint versus 2017.  FMC expects adjusted earnings per share to be in the range of $1.33 to $1.43 in the fourth quarter.

Supplemental Information

The company will post supplemental information on the web at www.fmc.com, including its 2018 Outlook Statement, definitions of non-GAAP terms and reconciliations of non-GAAP figures to the nearest available GAAP term.

About FMC

FMC Corporation provides solutions to growers around the world with a portfolio of proprietary crop protection products and a robust pipeline fueled by innovative discovery and development capabilities in crop protection, plant health and professional pest and turf maintenance solutions. In October 2018, FMC conducted an initial public offering of its Lithium business.  The new company, Livent Corporation, is approximately 85 percent owned by FMC and is expected to be spun off on March 1, 2019.  FMC employs approximately 7,300 employees (including through Livent) around the globe. To learn more, please visit www.fmc.com.


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