Mark A. Douglas
President and Chief Executive Officer at FMC
Thank you, Zach, and good morning, everyone. Despite being one of the most challenging operating environments that we can remember, FMC delivered strong financial performance in the quarter. As previously indicated, we set Q4 up to be a very strong quarter by taking deliberate actions earlier in the year. In Q4, we grew our revenue by 23%, EBITDA by 30% and EPS by 52%, and importantly, expanded our EBITDA margins by approximately 150 basis points, while confronting continued cost pressures, supply disruptions and emerging currency headwinds.
North America and Latin America contributed significantly to our growth in the quarter, not only regaining lost sales from the prior-year period, but also driving above market growth with volume and price. New product launches, continued growth of our biologicals platform and strong pricing gains contributed to the expanded profitability in the quarter. Acreage increase in key geographies and robust soft commodity prices created a positive backdrop for gains. Rising input costs, inconsistent raw material availability, increasing logistics expenses, long lead times for ocean freight, labor cost inflation and re-surge in currency headwinds are some of the key challenges we faced in 2021 and we are prepared to navigate them again in 2022. Building on the positive sentiments in the ag market, we expect to drive growth this year through a combination of volume expansion and strong price increases across all regions.
Turning to Q4 results on Slide 3. We reported $1.41 billion in fourth quarter revenue, which reflects a 23% increase on a reported basis and 25% organic growth. This increase was driven by strong volume growth and pricing gains across all regions as well as double-digit revenue gain in the U.S., Brazil, Argentina, Mexico, France, Russia, Germany, India, Australia and Indonesia. Growth was broad-based across all of our product categories, led by herbicides. Insecticides and the plant health business both grew more than 15%.
Adjusted company EBITDA was $377 million, an increase of 30% compared to the prior year period. Company EBITDA margins were 26.7%, up approximately 150 basis points year-over-year despite steep headwinds in the quarter from cost inflation. This margin expansion was driven by mix improvement and strong pricing gains in all regions, especially North America and Latin America. Adjusted earnings were $2.16 per diluted share in the quarter, an increase of 52% versus Q4 2020. The year-over-year gain was primarily driven by an increase in EBITDA, while a lower than projected tax rate as well as share repurchases also contributed to the results.
Moving now to Slide 4. North America posted an all-time record quarter for the region with 80% revenue growth versus the fourth quarter of 2020. Adjusting for lost sales in the prior year period, the region still grew over 30%, driven by strength in selected herbicides, higher prices, new product launches and continued market expansion of Rynaxypyr and Cyazypyr. Our U.S. business has made great progress in revitalizing its portfolio with more than 20% of the quarter sales coming from products that were launched in the last five years.
Revenue in Latin America increased 30% year-over-year, driven by volume and price increases. Growth in the region was led by strong performance in Brazil, Argentina and Mexico. Brazil experienced robust market conditions with acreage increasing for several crops, especially soy, cotton and corn. We grew our business in these key crops, driven by Talisman and Hero insecticides distinct but controlled. We also saw strong growth in specialty crops, mainly coffee and fruit and vegetables. And finally in Latin America, diamides, herbicides, fungicides and plant health each grew at least 25% or more in the quarter.
In EMEA, our branded business grew 9% driven by diamide and herbicide volumes as well as price increases, partially offset by the weakening of the euro. Growth was driven by our diamide brands such as Coragen for corn and top fruit applications as well as herbicides for use on cereals, potatoes and sugar beet. Overall, EMEA sales decreased 8% year-over-year and 7% organically due to the shift of diamide global partner sales in the quarter from EMEA to Asia. In Asia, revenues down 3% compared to the fourth quarter of 2020, primarily due to weather challenges in a number of countries, most notably, China.
Australia grew more than 40% in the quarter driven by the continued momentum of our launches, including Vantacor insect control based on Rynaxypyr and Overwatch herbicide based on our Isoflex active. Agronomic conditions remain positive in the country and a strong start to the summer cropping season resulted in very good demand for our diamides for rice and cotton application. India, a key pillar of our Asian business, delivered greater than 10% year-over-year revenue growth, driven by demand for our portfolio in rice and pulses in the South and then sugarcane in the North.
Turning to Slide 5, EBITDA in the fourth quarter was up 30% driven by volume and price increases in all regions. Let me remind you that FMC's definition of the volume driver includes quantity growth, mix improvement and the financial benefit from new launches. Volume was up $184 million in the quarter, driven by selected herbicides in the U.S., insecticides for fruit and vegetables in Mexico and insecticide sales for corn and soy applications in Brazil. Price is up $47 million with pricing actions in all regions. The biggest pricing gains were from the U.S. and Latin American countries hit mid single-digit increases. We expect similar pricing actions in other geographies as we approach the new seasons. Raw material, logistics and packaging costs remain elevated, contributing to the $112 million in cost headwinds. FX was a $32 million negative factor in the quarter, primarily in Latin America.
Moving to full year results on Slide 6. We reported $5.05 billion in revenue, which reflects a 9% increase on a reported basis and 8% organic growth. Approximately $400 million in sales came from products launched in the last five years. Adjusted EBITDA was $1.324 billion, an increase of 6% compared to 2020, even with over $118 million in cost headwinds. We continue to deliver industry-leading EBITDA margins of 26.2%. 2021 adjusted earnings were $6.93 per diluted share, an increase of 12% versus 2020. This increase was driven primarily by the EBITDA increase as well as lower interest expense, improved tax rate and a lower share count offset partially by higher D&A. As Andrew will detail in his remarks, we delivered record cash flow of $713 million in 2021, an increase of 31% over the prior year period and our cash conversion of 80% for the year was also an all-time record. I have mentioned the excellent growth of our plant health business a number of times. So, before moving onto 2021 and Q1 earnings outlook, let me quickly share more details on this business, which includes FMC's biologicals platform.
Moving to Slide 7, FMC's Plant Health business is approximately $220 million of revenue today and consist of our biologicals, crop nutrition and seed treatment technologies. Biologicals can be used to improve nutrient uptake, while providing insect control, disease protection and improving yields. At the same time, these technologies generally have reduced residue and more favorable environmental profiles when compared to synthetic alternative. These characteristics make the plant health business an integral part of FMC's commitment to sustainable innovation. Regulatory pressures around the world, resistance management challenges as well as evolving food chain requirements are some of the factors driving double-digit market growth for biologicals.
FMC's Plant Health business has demonstrated margin accretive growth at approximately 1.5 time to market over the last five years. We entered the biological space in 2013 with a small acquisition and a strategic alliance with Kristina Hermanson. In 2016, we established the headquarters for plant health at our European Innovation Center in Denmark and most recently entered into a collaboration with Novozymes, to research, co-develop and commercialize enzyme-based crop protection products. We've also made early investments in emerging technologies such as pheromones with BioPhero and peptides with Micropep through FMC Ventures. We utilize a tailored business model for plant health with a dedicated R&D center in Copenhagen, specialized contract manufacturers and an integrated downstream commercial organization that leverages our synthetic crop protection market access throughout the world. All four regions are actively growing the FMC biologicals portfolio with Asia and Latin America that making up two-thirds of the current business. Our plant health business is targeting a goal of $500 million in sales by 2025, driven by our internal pipeline, external partnerships as well as the strategic M&A.
Moving to Slide 8 and FMC's growth outlook. We are projecting 7% top line growth in 2022 with gains across all four regions, leveraging the full breadth of our synthetic and biological portfolios as well as price increases. New product growth is anticipated to accelerate in 2022 with approximately $600 million in sales coming from products launched in the last five years. This would represent more than 11% of our total projected sales as well as a 50% increase from the category versus 2021. Our North American business will drive the growth of recently launched products such as Xyway fungicide for corn and Vantacor insect control targeting one pest in the range of crops, including soy, corn and cotton. Biologicals and other plant health products are expected to grow double-digit due to new registrations.
We currently announced in-season price increases in the U.S. and expect pricing momentum to help offset cost headwinds. In Latin America, we expect growth across the whole region, driven by a range of insecticides including diamides as well as selective herbicides and biologicals. We anticipate acreage to remain supportive in our key crops of soy, corn, cotton, sugarcane as well as specialty crops. Significant market expansion opportunities still exist for Colombia, Peru, Paraguay and other Latin American countries in which we remain underrepresented. Our diamide product line is particularly suitable for specialty crops in these countries. Pricing will be a key lever in the region to help offset cost and FX headwinds.
We are also launching Onsuva fungicide based on our based on Fluindapyr active in Argentina and Paraguay this year. Onsuva is an innovated broad spectrum fungicide targeting in diseases in soy and peanut crops. Our Asia business is expected to grow across several countries driven by diamides, new products and biologicals. India will continue to be an important market for our diamides as well as the broader portfolio, especially in sugarcane, rice and specialty crops, such as pulses. Australia is expected to continue its growth trajectory with recent launches including Overwatch herbicide which targets annual regress in select broadleaf weeds on cereals and canola and new registrations in Asia will drive double-digit growth for our plant health products. We expect to continue expanding market access in countries such as India, Indonesia, Philippines, Vietnam and Malaysia. And FX volatility will be important to watch, especially in India and Pakistan.
Finally, the EMEA business is projecting volume growth across the region led by Spain, Germany, the U.K. and Middle East and African countries. Cyazypyr brands such as Benevia, Verimark, and Exirel will continue growing volumes on vegetable, top fruit and citrus. Rynaxypyr brands such as Coragen are projected to grow in cotton and corn. Herbicides including Spotlight Plus which is used for desiccation in potatoes are expected to grow in the U.K. and other countries in the region. Biologicals and other plant health products will also maintain their growth trajectory. In terms of new launches, we are introducing a herbicide for gross weed control in wheat and barley in new countries in the region. Registration losses will be a headwind, similar to the magnitude of previous years and FX volatility is projected to be a headwind with the euro, Turkish lira and other currencies weakened against the U.S. dollar.
Turning to Slide 9 and FMC's cost outlook. With respect to the cost of goods sold, we continue to see elevated cost across our supply chain. Higher input costs are driven by inflationary pressures as well as the lack of availability. Logistics remain tight with ocean, air and ground transportation costs at elevated levels. Packaging costs also remained high and availability remains tight. However, we are seeing initial signs of price elevation. Overall, we expect supply chain related challenges to persist through 2022. We have better visibility into cost for the first half of the year and we'll have a clearer view of the second half once you move through the second quarter. Increased SG&A investments are anticipated to be driven by commercial expansion activities, especially in support of recently launched products and market access opportunities as well as labor cost inflation. R&D spend will grow as we continue to advance our discovery and development pipelines. Overall, SG&A and R&D spend will be maintained in line with historical ratios and managed closely.
Turning to Slide 10 and the review of our full year 2022 and Q1 financial outlook. We expect full year revenue in the range of $5.25 billion to $5.5 billion, representing 7% growth at the midpoint compared to 2021. Adjusted EBITDA is forecasted to be in the range of $1.32 billion to $1.48 billion, reflecting 6% year-over-year growth at the midpoint. We expect adjusted earnings of $6.80 to $8.10 per diluted share, representing an 8% increase at the midpoint. This assumes a share count of approximately 127 million and does not factor in the benefit of any potential share repurchases in the year. Looking at the first quarter, we forecast revenue to be in the range of $1.22 billion to $1.34 billion, representing 7% growth at the midpoint compared to the first quarter 2021. Adjusted EBITDA is forecasted to be in the range of $300 million to $350 million, representing a 6% increase at the midpoint versus the prior year period. We expect adjusted earnings per diluted share to be in the range of $1.50 to $1.90, representing an increase of 11% at the midpoint versus Q1 2021 and assuming a share count of approximately 127 million.
Moving to Slide 11. I want to highlight some of the potential factors that could drive our results end of the guidance range. At the midpoint of our adjusted EBITDA guidance, we are assuming input costs remain elevated and any further inflation is mitigated. The cost inflation becomes more severe and kind of mitigated through further price increases or internal efficiencies in the calendar year our results were trending towards the lower end of the guidance. Alternatively, realizing mid to high single-digit price increases and/or easing of FX headwinds will drive our results towards the high end of the range. Weather events and supply disruptions in variables, which would also influence the final outcome.
Turning to Slide 12 and full year revenue and EBITDA drivers. Again in 2022 strong volume expansion and price increases across all regions will drive revenue growth. FX volatility is expected to be a negative factor in our outlook. Our EBITDA guidance reflects the benefits of high incremental margin volumes and price increases, partially offset by cost and FX headwinds.
Moving to Slide 13 and the Q1 drivers. On the revenue line, volume growth is expected to continue especially in North America and Latin America where momentum is strong. As noted earlier, we've already announced that in-season price increases in the U.S. Price increases in all regions will be an important driver for the quarter. We're anticipating FX headwinds principally from European currencies. Regarding EBITDA drivers, long supply chains in ag chem industry provide us some visibility into costs and so far inflationary pressures have not subsided and remain at elevated levels. The higher costs driven by raw materials that we saw in the second half of 2021 will continue in the quarter as well as growing FX headwinds that will partially offset the EBITDA benefit from high margin volumes and price increases. Overall, we are forecasting year-over-year EBITDA growth of 6% in the quarter.
I'll now turn the call over to Andrew.