President and Chief Executive Officer at FMC
Thank you, Zack, and good morning, everyone. FMC's strong growth continued in the third quarter with a robust start to the Latin American season as well as solid pricing actions across all regions driving our results. New products gained momentum in the quarter, growing 26% year-over-year. As expected, Q3 saw highest year-over-year cost inflation for 2022.
Looking to Q4, we are seeing sequentially lower inflation across the supply chain. With this in mind, we expect a strong finish to the year and remain confident in our ability to deliver our fourth quarter and full year forecast.
Our Q3 results are detailed on Slides three, four and five. Revenue was up 19% organically, EBITDA down 11% and EPS down 14%. As expected, these declines in the quarter were driven by the highest cost inflation this year, which more than offset the good start to the Latin American season and average global price increases of 7%.
Adjusted earnings were $1.23 per diluted share in the quarter, $0.13 above the midpoint of our guidance range, with the vast majority of the outperformance driven by higher EBITDA. We delivered double-digit year-over-year growth across the portfolio, including 23% growth in herbicides, 19% in fungicides and 10% in insecticides.
Third quarter sales were $1.38 billion, led by volume growth in Latin America and North America as well as price increases across all regions.
In North America, sales increased 21% year-over-year. Fungicides grew rapidly in the quarter, especially on corn in the Midwest. Overall performance in the Midwest across corn, soybeans and other crops more than offset lower diamide sales in the West due to drought conditions.
In Latin America, sales increased 35% year-over-year, led by Brazil and Argentina. With the backdrop of strong commodity prices and increasing acres, grower confidence in the region is high. Our results were driven by a robust start to the new season, with strong selective herbicide and insecticide sales, price increases and expanding market access.
FMC has been investing in expanding market access by adding commercial resources and developing new broader relationships with large cooperatives and distributors. These investments are focused on key row crops, such as soybean and corn and we are starting to realize the results benefit from these increased sales. As an example, byfenterin-based insecticides, including those used to control sting boats in soybeans with the largest growth driver in the region for the quarter.
We also successfully launched on Suva, our Fluindapyr-based fungicide for soybeans and peanuts in Argentina and Paraguay during the quarter. This is the second new molecule from FMC's pipeline following the successful introduction of Isoflex herbicide in Australia last year.
Turning to EMEA. Third quarter sales were down 12% versus prior year, and we're up 1% organically. In addition to strong pricing, results were driven by increased demand for diamides on fruit and vegetables and herbicides on cereals and oilseed. FX was a significant headwind in the quarter. FMC's decision to exit the Russian market, the first major crop protection companies to do so earlier this year had an approximately $8 million negative impact on EBITDA in the quarter.
And finally, Asia was down 6% versus the third quarter last year and up 2% organically. Pricing gains were more than offset by FX headwinds. Floods in Pakistan and erratic weather in India and other countries impacted performance in the quarter. However, demand remains strong for new products based on diamides and other chemistries, and FMC continues to make significant progress in improving our market access in geographies where we are underrepresented, such as Indonesia, Vietnam and Thailand.
Investments to expand market access have not been limited to Latin America and Asia. We have also invested in market expansions in the US, Turkey and several other countries. This is an important element of our growth strategy and includes scaling up of FMC's technical service organization, expanding our sales force, pursuing new collaborations with distribution partners and other steps that are beginning to deliver market share gains. These initiatives become even more important as we continue to introduce novel technologies that require close engagement with growers.
Overall, adjusted EBITDA for the third quarter was $261 million, a decrease of 11% compared to the prior year period, but $6 million above the high end of our guidance range, primarily due to somewhat lower cost inflation than we previously anticipated. As forecasted, cost and FX headwinds more than offset price increases and volume gains. Average price increases of 7% contributed $85 million in the quarter. We are seeing initial signs of decelerating inflation, and we are confident that cost headwinds in '22 have peaked in the third quarter. FX was a $25 million EBITDA headwind in the quarter due to weakening of several currencies around the world.
Moving to slide six and FMC's full year 2022 and fourth quarter earnings outlook. With continued strength in market demand and the success of pricing actions to help offset cost increases and FX headwinds, we are raising full year 2022 revenue to a range of $5.6 billion to $5.8 billion, representing an increase of 13% at the midpoint versus 2021.
Sales growth was driven by volume and price in all regions, partially offset by foreign currency impacts. We are narrowing the full year adjusted EBITDA range to $1.37 billion to $1.43 billion, representing 7% year-over-year growth at the midpoint and reflecting the confidence in our order book and supply availability.
The range for 2022 adjusted earnings per share is narrowed as well and is now expected to be $7.10 to $7.60 per diluted share, representing an increase of 7% year-over-year at the midpoint. Consistent with past practice, we do not factor in any benefit from potential share repurchases in our EPS guidance.
Guidance for Q4 implies year-over-year sales growth of 8% at the midpoint compared to the prior year period. Pricing momentum and volume growth are expected to more than offset FX headwinds in the quarter. We have good visibility into demand for the quarter with strong order books for both the Brazilian and US markets. Cost increases are forecasted to be lower in Q4 compared to Q3. The combination of sales growth and lower cost headwinds is anticipated to result in EBITDA growth of 15% at the midpoint with EPS up 9% at the midpoint year-over-year.
Moving now to the updated drivers of 2022 EBITDA outcomes on slide seven. Market growth is expected to remain in the mid- to high single-digit range, and we are seeing cost inflation beginning to decelerate. We are successfully mitigating the impact of lost sales from our decision to exit Russia and have good visibility into supply to fulfill fourth quarter demand. Full year price increases of mid- to high single digit and strong volume growth are expected to more than offset cost and FX headwinds, keeping the midpoint of our guidance unchanged at $1.4 billion.
I'll now turn the call over to Andrew.