• Revenue Growth: Second quarter sales increased by 1% year-over-year, driven by a 6% volume growth.

• Adjusted EBITDA: $207 million, a 2% increase from the prior year.

• Adjusted Earnings Per Share (EPS): $0.69, $0.10 higher than the previous year.

• Price Impact: Prices decreased by 3%, with over half of the decline due to pricing adjustments to diamide partners.

• FX Impact: A mild headwind of 1% on revenue growth.

• Regional Performance: Strongest growth in EMEA; slight revenue increase in Latin America; 5% sales decline in North America; decrease in Asia due to India.

• Interest Expense: $61 million, down over $2 million compared to the prior year.

• Effective Tax Rate: 14% for the second quarter.

• Free Cash Flow: $40 million in the second quarter, $241 million lower than the prior year period.

• Debt Levels: Gross debt approximately $4.2 billion; net debt approximately $3.7 billion.

• Leverage Ratios: Gross debt to EBITDA at 4.8 times; net debt to EBITDA at 4.3 times.

• Full Year Guidance: Revenue excluding India expected to be down 2%; adjusted EBITDA expected to be 1% higher; adjusted EPS expected to be flat at the midpoint.

• Warning! GuruFocus has detected 7 Warning Signs with FMC.

Release Date: July 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• FMC Corp (NYSE:FMC) achieved second quarter results at the higher end of expectations, with EBITDA and EPS slightly exceeding guidance.

• The company reported a 6% volume growth in sales, indicating strong demand for its products.

• FMC Corp (NYSE:FMC) has successfully normalized product levels in distribution channels, setting a solid foundation for future growth.

• The company has received registration for fluindapyr herbicide containing Isoflex active in Great Britain, with sales anticipated to begin in August.

• FMC Corp (NYSE:FMC) is implementing a new direct sales route in Brazil, targeting large corn and soybean growers, which is expected to show results starting in the third quarter.

Negative Points

• FMC Corp (NYSE:FMC) faced a 3% decline in pricing during the second quarter, partly due to pricing adjustments with diamide partners.

• The company is experiencing ongoing challenges in India, including a fragmented distribution channel and intense generic competition.

• FMC Corp (NYSE:FMC) has decided to divest its commercial business in India due to limited EBITDA generation and substantial working capital requirements.

• The company anticipates a mid-single-digit price decline and flat to low single-digit FX headwinds for the full year, impacting revenue.

• Free cash flow for the second quarter was significantly lower than the prior year, primarily due to the absence of a significant inventory reduction seen previously.

Q & A Highlights

Q: Pierre, you mentioned this quarter as an inflection point. Can you elaborate on the growth expectations for 2026 and 2027, and remind us of the 2027 targets? A: Our targets for 2026 and 2027 remain unchanged, aiming for an EBITDA of $1.2 billion in 2027. Growth will be driven by our growth portfolio, including branded Cyazypyr and new active ingredients like fluindapyr and Isoflex. We also expect Rynaxypyr to contribute positively due to lower manufacturing costs and a more competitive strategy against generics.

Q: Can you break down the cost savings for Q2 and what to expect in the second half? A: The cost savings in Q2 were primarily driven by lower raw material costs, improved fixed cost absorption, and restructuring actions. These factors will continue to contribute to cost tailwinds in Q3 and Q4, with Q3 seeing a stronger impact due to better fixed cost absorption.

Q: Regarding the India business divestment, can you provide details on its financial impact and the sale process? A: We have not officially started marketing the India business, but preparations are underway. In H2 2024, India contributed $140 million in sales, and we forecast $70 million for H2 2025. The divestment will allow us to focus on a business-to-business model in India, supplying products with FMC-owned registrations and favorable manufacturing costs.

Q: How is the order book shaping up for Brazil, and what is the current farmer economic situation there? A: We have secured 35% to 40% of the orders needed for the second half in Brazil, which is higher than in previous years. Farmer economics are stable, with strong corn harvests and expected planting for the next season. Margins are tighter but not affecting planting decisions.

Q: What is the expected impact of the new direct sales program in Brazil, and how long will the diamide partner pricing headwinds last? A: The new direct sales program in Brazil is expected to show results in Q3, with growth continuing in subsequent years. The significant pricing adjustments with diamide partners have mostly occurred, and future adjustments will be minor, leading to more stable pricing.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.