Fmc Corporation · NYSE:FMC
Fmc — Investor Presentation (November 2005)
25 slides from Fmc's investor presentation, Nov 22, 2005
Slide 1: Disclaimer
Disclaimer Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 • These slides and the accompanying presentation contain “forward- looking statements” that represent management’s best judgment as of the date hereof based on information currently available. Actual results
Slide 2: FMC Corporation
FMC Sales: $2,141.7 EBITDA: $420.5 EBITDA Margin: 19.6% Industrial Chemicals Sales*: $866.7 EBITDA: $150.5 EBITDA Margin: 17.4% Agricultural Products Sales*: $728.8 EBITDA: $160.4 EBITDA Margin: 22.0% Specialty Chemicals Sales*: $549.6 EBITDA: $140.0 EBITDA Margin: 25.5% FMC Corporation Diversified
Slide 3: Disciplined Approach to Unlocking Value
Realizing the inherent operating leverage within FMC - Sustained earnings growth >10% per year (1) - Industrial Chemicals recovery in mid-cycle - Continued growth in Specialty Chemicals and Agricultural Products Creating greater financial flexibility - Reduce net debt to ~ $420 million by the end of
Slide 4: Multi-Year Recovery
Multi-Year Recovery * Earnings before restructuring and other income and charges per diluted share. ** 2005E EPS calculated using midpoint of outlook issued by FMC on November 3, 2005. On track to deliver sustained multi-year recovery in Sales and EPS $3.20 $4.82 $3.10 $2.55 $1.90 $4.25E 1,000 1,200
Slide 5: Leading Market Positions
Leading Market Positions (1) Based on 2004 consolidated sales (2) Shared Industrial Chemicals #1 in N.A. Soda Ash #1 in N.A. Hydrogen Peroxide #1 in N.A. Persulfates #1 Globally Carrageenan #1 Globally Carbofuran #2 in N.A. Pyrethroids Agricultural Products #2 Globally Alginates Specialty Chemicals
Slide 6: Diversified Customers and End Markets
Non-Cyclical 81% Cyclical 19% Diversified Customers and End Markets Greater than 80% of sales to non-cyclical end markets Long term relationships with blue chip customers No single customer represents more than 5% of sales Top 10 customers in total represent approximately 15% of sales 2004 Consolida
Slide 7: Diversified and Integrated Cost Structure
Diversified and Integrated Cost Structure Low cost sourcing of raw materials – Backward integration: soda ash, lithium – Global sourcing of renewable resources: wood pulp, seaweed Low reliance on purchased raw materials – Total raw materials represent approximately 25% of cost of sales – No single r
Slide 8: Significant Free Cash Flow
(1) Assumes midpoint of FMC outlook of $4.25 per diluted share issued 8/3/05, million shares outstanding, 25% tax rate, $58 million pre-tax interest and $135 million D&A. (2) Includes legacy environmental spending and Pocatello remediation spending. (3) Includes gain on sale of San Jose, CA property
Slide 9: Agricultural Products
Insecticides 73% North America 35% Latin America 36% Asia 13% Europe/ Middle East/Africa 16% Herbicides 25% Fungicides 2% Agricultural Products Strong niche positions in the Americas, Europe and Asia Proprietary, branded insecticides and herbicides FMC differentiated by: – Focused strategy in select
Slide 10: Agricultural Products Financial Performance
Agricultural Products Financial Performance $114 $101 $99 $111 $148 $160 LTM 9/30/05 EBITDA Capital Spending EBITDA Margin 2005 earnings growth of 5% expected, reflecting higher sales and lower manufacturing costs partially offset by lower bifenthrin pricing and higher raw materials costs.
Slide 11: Agricultural Products' Focus
Agricultural Products’ Focus Creating competitive advantage through innovation – Investing 10% of sales in R&D – In-licensing products & technologies that complement segment strategies Driving near-term sales growth – Label expansions and new formulations in crop and non-crop segments – In-licensed
Slide 12: Industrial Chemicals Overview
Asia 7% Alkali (Soda ash) 46% Peroxygens 19% Foret 35% Latin America 8% North America 50% Europe/Middle East/Africa 35% Asia 7% Industrial Chemicals Overview #1 North American manufacturer of soda ash and peroxygens Backward integration into natural resources Low cost, proprietary production technol
Slide 13: Industrial Chemicals Financial Performance
Industrial Chemicals Financial Performance Earnings growth of 45% expected in 2005 driven by higher selling prices, partially offset by higher energy, raw material and transportation costs $151 $124 $130 $133 $94 LTM 9/30/05 0% 5% 10% 15% 20% EBITDA Capital Spending EBITDA Margin
Slide 14: Industrial Chemicals' Focus
Industrial Chemicals’ Focus Near-term sales growth – Higher selling prices for soda ash – Incremental soda ash capacity addition at Granger – US and European peroxides producers have announced price increases Margin expansion - Working to offset rising energy, raw material and transportation costs -
Slide 15: Soda Ash Demand
Export Glass Container Chemicals Soda Ash Demand Flat Glass Detergents Other North American Soda Ash Shipments • Demand Drivers: – GDP – Cost advantage of natural soda ash versus synthetic soda ash – Industrialization rates in key export markets
Slide 16: Sold-out U.S. Soda Ash Industry
Sold-out U.S. Soda Ash Industry 0.8 0.9 1.1 1.2 85% 90% 95% 100% 2005 Contract Renewals Price Index Effective Capacity Util. 2005 domestic price increase is the most significant since 1996
Slide 17: Tight North American Hydrogen Peroxide Market
Tight North American Hydrogen Peroxide Market 0.6 0.7 0.8 0.9 1.1 1.2 Price Index Effective Capacity Util. 2005 to represent the third consecutive year of rising prices
Slide 18: Growth Franchises in Specialty Chemicals
BioPolymer 72% Lithium 28% Latin America 8% North America 41% Europe/Middle East/Africa 36% Asia 15% • One of two global, integrated manufacturers • Focus on specialty products – pharmaceuticals and energy storage devices Lithium: • Adds structure, texture and stability to food • Acts as a binder &
Slide 19: Specialty Chemicals Financial Performance
Specialty Chemicals Financial Performance $122 $116 $140 $129 $132 LTM 9/30/05 20% 22% 24% 26% 28% 30% EBITDA Capital Spending EBITDA Margin 2005 earnings growth expected to be approximately 15%, driven by increased selling prices and productivity improvement
Slide 20: Specialty Chemicals Focus
Specialty Chemicals Focus Growing existing core business – Maintaining key positions with category leading customers – Shifting resources toward faster growing segments – Expanding presence in rapidly growing emerging markets Commercializing new technology platforms Managing maturing segments for im
Slide 21: FMC in Summary
FMC in Summary Great businesses, each with EBITDA of at least $140 million Earnings leverage in Industrial Chemicals Good growth in Specialty Chemicals and Ag Products Strong financial position – Robust and growing EBITDA – Balance sheet de-leveraging – Low capex requirements – Substantial decline i
Slide 22: Non-GAAP Financial Terms
Non-GAAP Financial Terms These slides contain certain “non-GAAP financial terms” which are defined below. In addition, we have provided reconciliations of non-GAAP terms to the closest GAAP term in the appendix of this presentation. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortizat
Slide 23: Segment Financial Terms
Segment Financial Terms These slides contain references to segment financial items which are presented in detail in Note 18 of FMC’s 2004 Form 10-K. Some of the segment financial terms are “non-GAAP financial terms” and are defined below. In addition, we have provided reconciliations of non-GAAP ter
Slide 24: EBITDA Reconciliation: LTM 9/30/05
Reconciliation of LTM 9/301/2005 consolidated income from continuing operations before income taxes (a GAAP measure) to LTM 9/30/2005 EBITDA (a Non-GAAP measure) (Unaudited, in $ millions) LTM 9/30/2005 Income (loss) from continuing operations before income taxes $133.3 Add: Restructuring and other
Slide 25: Segment EBITDA Reconciliation
Reconciliation of LTM 9/30/05 segment operating profit (a GAAP measure) to LTM 9/30/05 EBITDA (a Non-GAAP measure) (Unaudited, in millions) Industrial Specialty Agricultural Segment Chemicals Chemicals Products LTM 9/30/05 segment operating profit (GAAP) $82.6 $106.9 $128.3 Add: Depreciation and amo