FMC Q4 Earnings Call Highlights

Key Points

• Strategic review: FMC's board has launched a formal review of strategic options — including a potential sale of the company — while separately pursuing the sale of its India commercial business and has retained financial and legal advisors.
• 2026 plan and guidance: Management aims to pay down more than $1 billion of debt through asset sales and licensing, and guided 2026 revenue of $3.6–$3.8 billion with adjusted EBITDA of $670–$730 million, warning of a weak Q1 (adj. EBITDA $45–$50M) due to tariffs and manufacturing headwinds.
• Q4 cash flow and leverage improvement: Q4 free cash flow was $623 million, cutting net debt to about $3.5 billion (4.1x EBITDA), and FMC expects roughly a half-turn reduction in net leverage by end-2026 if its debt paydown plan is executed.

FMC NYSE: FMC used its fourth-quarter 2025 earnings call to outline a dual-track plan for 2026: execute operational priorities aimed at improving competitiveness and reducing leverage, while simultaneously launching a formal strategic review that could include a potential sale of the company.

Strategic review launched alongside 2026 operating plan

Chairman, CEO and President Pierre Brondeau said the board has authorized the company to explore “strategic options, including but not limited to a potential sale of the company.” He described the review as preliminary and said FMC has retained financial and legal advisors. Management emphasized that the strategic review is separate from the ongoing process to sell FMC’s India commercial business.

In response to analyst questions, Brondeau said the company had not initiated the review due to inbound interest, but rather after discussions with the board about whether shareholder value could be improved under different ownership or with greater financial flexibility. He also said FMC is primarily focused on two paths: executing its base plan (including asset sales and licensing) and a potential full-company sale, while remaining open to other ideas if they emerge.

2026 priorities: debt reduction, portfolio competitiveness, and post-patent Rynaxypyr strategy

Management highlighted four operational priorities for 2026:

• Strengthen the balance sheet: FMC is targeting more than $1 billion of debt paydown through asset sales and licensing agreements. Brondeau said the sale of the India commercial business is progressing, with binding bids expected in the second quarter. He also said the company is in active licensing discussions that could include upfront payments.
• Improve competitiveness of the off-patent core portfolio: FMC’s goal is to lower the cost of non-diamide products to better compete with generics. Brondeau said 2025 sales for core products excluding Rynaxypyr were approximately $2.2 billion, with nearly $1 billion produced in high-cost facilities. FMC expects to reduce manufacturing costs for these products by at least 35% by 2027. Management cautioned the transition is complex, requiring re-registrations and inventory buildup, and said reduced flexibility in manufacturing mix is expected to be a sales headwind in 2026 and is reflected in guidance.
• Manage a post-patent Rynaxypyr environment: FMC said 2025 Rynaxypyr sales were just over $800 million and in line with expectations. Beginning in 2026, generic chlorantraniliprole (CTPR) offerings will be available in all markets as patents expire. Management said resistance is likely to increase as generics broaden; Brondeau cited resistance issues in rice crops in China and Japan. FMC plans to lean on advanced formulations and mixtures designed to combat resistance, while lowering prices on more basic formulations to increase volume and gain share across insecticide classes. Management said branded Rynaxypyr earnings are expected to be in line with the prior year in 2026, with higher volume and lower cost offsetting lower price.
• Grow new active ingredients: FMC said sales from four new molecules increased to about $200 million in 2025 from roughly $130–$200 million in 2024, driven largely by fluindapyr and Isoflex. Dodhylex generated modest 2025 sales due to emergency registrations in two countries. Management said new active ingredient sales rose 54% in 2025 but fell short of a $250 million target, mainly due to lower-than-expected Isoflex registration in Great Britain.

Guidance: sales decline expected in 2026, with Q1 margin pressured

For full-year 2026, FMC guided for:

• Revenue of $3.6 billion to $3.8 billion, down 5% at the midpoint versus 2025.
• Adjusted EBITDA of $670 million to $730 million.

Management said price is expected to be a mid-single-digit headwind for the year, driven by Rynaxypyr and consistent with its post-patent strategy. The removal of India is expected to be a 2% full-year headwind that only affects the first half. Excluding India, FMC expects volumes to be modestly higher, driven by new active ingredients and branded Rynaxypyr.

On the EBITDA bridge, management pointed to headwinds in the legacy portfolio tied to competitiveness, an overall decline in Rynaxypyr driven by partner sales, and a tariff headwind expected to total $20 million, nearly all hitting in the first quarter. Offsetting factors include contribution from the growth portfolio, particularly new active ingredients.

For the first quarter of 2026, FMC guided for sales of $725 million to $775 million, down 5% year-over-year, with an additional 5% headwind from India. Adjusted EBITDA is expected at $45 million to $50 million, down 58% from the prior year, with an EBITDA margin around 7%. Management attributed the unusually low Q1 margin to lower sales absorbing relatively flat fixed costs, plus first-quarter-specific costs, including the recording of almost all tariff charges in Q1 and unfavorable manufacturing costs that are expected to turn favorable later in the year.

Q4 results: revenue missed guidance, cash flow improved on working capital release

CFO Andrew Sandifer said the company continued to face “challenging market conditions,” including intense generic competition and weaker grower margins that affected purchase timing and product mix. In the fourth quarter, FMC reported:

• Sales of $1.08 billion, down 11% year-over-year (down 5% like-for-like excluding India).
• Price down 6%, driven by lower Rynaxypyr and strong competition, particularly in Latin America.
• Volume down 1% due to high competitive pressure.
• Adjusted EBITDA of $280 million, down 17% year-over-year (down 8% like-for-like excluding India).
• Adjusted EPS of $1.20, down 33%, reflecting lower EBITDA and higher interest.

Sandifer also highlighted a sharp improvement in fourth-quarter cash generation, driven by working capital, particularly receivables. GAAP cash from operations was $657 million in Q4, up $230 million year-over-year, resulting in free cash flow of $623 million for the quarter.

For the full year 2025, FMC reported cash from operations of negative $6 million, including $103 million of cash restructuring spending, and free cash flow of negative $165 million.

FMC ended 2025 with net debt of approximately $3.5 billion, down more than $550 million from the third quarter due to Q4 free cash flow. Net debt to trailing 12-month EBITDA was 4.1x at year-end, while covenant leverage was 4.6x. Sandifer noted the covenant limit is 6.0x through the third quarter of 2026 before stepping down to 5.5x at year-end.

For 2026, FMC expects free cash flow between negative $65 million and positive $65 million (break-even at the midpoint), including $130 million of restructuring spending. Despite lower EBITDA, management said it expects about a half-turn reduction in net leverage by the end of 2026 if the debt paydown plan is executed.

On debt maturities, Sandifer said FMC has $500 million of bonds maturing in October and intends to refinance in advance, with the option to use revolver capacity as a fallback. He said the company recently amended its revolving credit facility in early December to provide higher covenant flexibility while it works through 2026 seasonality and restructuring actions.

Looking beyond 2026, management reiterated confidence in its growth portfolio—Cyazypyr, plant health, and new active ingredients—and said the primary underperformance has been concentrated in the off-patent core portfolio due to manufacturing cost competitiveness. Brondeau said FMC expects to enter 2027 with a stronger balance sheet and more competitive portfolio, and management reiterated its expectation of mid-teens EBITDA growth in both 2027 and 2028 based on growth portfolio momentum and improvements in core competitiveness.

About FMC NYSE: FMC

FMC Corporation is a global agricultural sciences company specializing in the development, manufacture and marketing of crop protection products. Its portfolio includes herbicides, insecticides, fungicides and plant nutrition solutions designed to enhance crop yield, quality and sustainability. In addition to core crop protection, FMC delivers solutions for turf management and pest control in urban and industrial environments.

Founded in 1883 as the Bean Spray Pump Company and later known as Food Machinery Corporation, the business adopted the FMC name in 1948 and has since evolved through strategic acquisitions and divestitures.

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