FMC Corp (FMC) Unveils Plan for Sustainable Profitable Growth
FMC Corporation FMC recently held its Investor Day on Nov 16 at its corporate headquarters in Philadelphia. During the event, the company unveiled its new strategic growth plan, outlined three-year financial goals and shared longer-term financial aspirations through 2033. FMC provided a preliminary outlook for 2024, discussed cost savings targets and highlighted key factors contributing to sustained profitable growth.
The core of FMC's strategic plan revolves around three primary ambitions. The company seeks to enhance its relationship with growers by delivering timely and precise guidance on the right products and technologies. Secondly, it aims for superior growth and returns. Thirdly, the company places significant emphasis on maintaining leadership in safety, sustainability and innovation. The strategic plan encompasses eight imperatives, including fortifying grower relationships, expanding the Plant Health business, accelerating R&D pipeline development and increasing operational efficiency.
FMC underscored the importance of executing initiatives that provide valuable tools to growers while achieving growth in revenues and profit. The spotlight during the Investor Day was on the development and commercial launch of new products. The company highlighted novel patented formulations and mixtures, including industry-leading diamides, as pivotal drivers of revenue growth. FMC outlined plans to grow its biologicals platform to nearly $2 billion in revenues by 2033.
FMC Corporation Price and Consensus
FMC Corporation price-consensus-chart | FMC Corporation Quote
The company also outlined its mid-term financial goals and long-term aspirations, detailing expectations for leverage levels. It foresees substantial cash generation in 2024, driven by improved earnings and the release of working capital. Over the next 18-24 months, a significant increase in free cash flow is anticipated, resulting in a return to more standard leverage levels, with a newly targeted average net leverage of around two times adjusted EBITDA. The company provided a preliminary outlook for 2024, projecting revenues in the range of $4.65 billion to $4.85 billion, adjusted EBITDA between $1.025 billion and $1.125 billion and a free cash flow conversion surpassing 100%.
FMC initiated three-year rolling financial goals, projecting revenues for 2026 to be between $5.5 billion and $6 billion, with adjusted EBITDA ranging from $1.3-$1.5 billion. The company announced a strategic review of non-core assets, including the potential sale of FMC's non-crop product line, Global Specialty Solutions. Looking ahead, the 10-year revenue aspiration includes around $2 billion from the Plant Health business and an additional $2 billion from four new active ingredients in the R&D pipeline.
FMC’s shares have lost 57.8% in the past year against a 12.2% fall of the industry.
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Zacks Rank & Key Picks
FMC currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Basic Materials space are Axalta Coating Systems Ltd. AXTA, sporting a Zacks Rank #1 (Strong Buy), and The Andersons Inc. ANDE and Alamos Gold Inc. AGI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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