Fmc Corporation · NYSE:FMC
Fmc — Investor Day (December 2012)
106 slides from Fmc's investor day presentation, Dec 11, 2012
Slide 1: Vision 2015: The Right Chemistry
VISION 2015 THE RIGHT CHEMISTRY
Slide 2: Welcome
Welcome Andrew Sandifer Vice President, Strategic Development and Investor Relations
Slide 3: Event Safety
Event Safety 3 EXIT EXIT You can identify FMC staff by the color of their badge (green with a red corner). X You are here.
Slide 4: Today's Agenda
Today’s Agenda 4 12:55 – 1:00 p.m. Welcome Andrew Sandifer Vice President, Strategic Development and Investor Relations 1:00 – 1:30 p.m. Delivering Vision 2015 Pierre Brondeau President, Chief Executive Officer and Chairman 1:30 – 2:00 p.m. Agricultural Products Group Mark Douglas President, Agricul
Slide 5: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Statement • 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 of the Company may differ materially from those c
Slide 6: Vision 2015
VISION 2015 THE RIGHT CHEMISTRY
Slide 7: Delivering Vision 2015
Delivering Vision 2015 Pierre Brondeau President, Chief Executive Officer and Chairman
Slide 8: Established Bold Vision For FMC In 2010
8 Established Bold Vision For FMC In 2010
Slide 9: Strong Starting Point For Vision 2015
Strong Starting Point For Vision 2015 9 Proven record of superior financial performance Business portfolio well positioned, with high margins and return on invested capital Strong financial position: liquid balance sheet and substantial free cash flow Track record of creating significant shareholder
Slide 10: Executing In A More Dynamic Environment
Executing In A More Dynamic Environment • Macroeconomic backdrop remains uncertain • Greater Organic Reinvestment opportunities • More balanced centralized/decentralized organization − Without losing accountability in our businesses • New leaders … with big shoes to fill 10
Slide 11: FMC's Portfolio: The Foundation Of Success
FMC’s Portfolio: The Foundation Of Success 11 11 Diverse end markets with low correlation to economic cycles Fast Growing, High Return Businesses Growth biased towards Rapidly Developing Economies (RDEs) Low energy requirements and exposure to petrochemicals Diversified raw material profile Business
Slide 12: Our Vision For FMC In 2015
Our Vision For FMC In 2015 12 P R E M I U M T S R P E R F O R M A N C E Strong cash generation with disciplined cash deployment Significantly greater earnings stability Sustained mid-teens or higher return on invested capital Sales of $5B+ and EBIT of $1.2B+
Slide 13: On Track To Reach 2015 Sales Of $5.0B+
0 1,000 2,000 3,000 4,000 5,000 2009A 2010A 2011A 2012F 2013 2014 2015 Target 13 On Track To Reach 2015 Sales Of $5.0B+ Sales ($ millions) (1) 13 Performance Versus Target 2009 – 2015 Target CAGR 11% 2009 – 2012F CAGR 13% Results Sales up by more than $1B since launch of plan (2) (1) Excludes revenu
Slide 14: On Track To Deliver $1.2B+ EBIT In 2015
0 200 400 600 800 1,000 1,200 1,400 2009A 2010A 2011A 2012F 2013 2014 2015 Target 14 On Track To Deliver $1.2B+ EBIT In 2015 14 (1) EBIT ($ millions) Performance Versus Target 2009 – 2015 Target CAGR 17% 2009 – 2012F CAGR 15% Results EBIT up more than 50% since 2009 (1) At midpoint of guidance range
Slide 15: Return On Capital Is High And Well Above Target
15 Return On Capital Is High And Well Above Target - 0.5 1.0 1.5 2.0 2.5 0% 5% 10% 15% 20% 25% 2009A 2010A 2011A 2012F 2013 2014 2015 ROIC Invested Capital RO A IC A v e ra ge In v e s ted C a pita l $ B 15 Key Factors • Expanding total company margins — EBIT Margin up ~ 120 bps, 2009 – 2012 • Disci
Slide 16: Creating A Stronger, More Stable FMC
Creating A Stronger, More Stable FMC 16 One FMC Portfolio Evolution Rapidly Developing Economies Technology/ Product Line Expansion Higher Earnings Sustained Less Volatile
Slide 17: Disciplined Cash Deployment
Disciplined Cash Deployment • Prioritized investment in growing our businesses • $570 million cash returned to shareholders • Other uses, principally legacy liabilities, a smaller portion than in past 17 17 More Than $1.5B Cash Deployed 2010 – 2012F Cash to Shareholders ~35% Other ~5% Organic Reinve
Slide 18: Executing Vision 2015
Executing Vision 2015 What You Will Hear Today • On track to meet or exceed our goals for 2015 • Doing exactly what we said we would do • Committed to balanced cash deployment • Planting the seeds for the next phase of growth 18 18
Slide 19: Vision 2015
VISION 2015 THE RIGHT CHEMISTRY
Slide 20: Agricultural Products Update
Agricultural Products Update Mark Douglas President, FMC Agricultural Products Group
Slide 21: Agricultural Products Group At A Glance
Agricultural Products Group At A Glance Group Overview • An agile, innovative, customer-focused and highly profitable business − 2012F Sales of ~$1.8B and EBIT of ~$435M(1) • Global in scope, with particular strength in the Americas • Sustainable competitive advantage driven by unique business model
Slide 22: Well Ahead Of 2015 Target Pace (Sales)
0 500 1,000 1,500 2,000 2,500 2009A 2010A 2011A 2012F 2013 2014 2015 Target 22 Well Ahead Of 2015 Target Pace 22 Sales ($ millions) (1) A G R I C U L T U R A L P R O D U C T S G R O U P (1) At midpoint of guidance range provided 10/29/12 Performance Versus Target 2009 – 2015 Target CAGR 14% 2009 – 2
Slide 23: Well Ahead Of 2015 Target Pace (EBIT)
0 100 200 300 400 500 600 700 2009A 2010A 2011A 2012F 2013 2014 2015 Target 23 Well Ahead Of 2015 Target Pace 23 EBIT ($ millions) A G R I C U L T U R A L P R O D U C T S G R O U P (1) (1) At midpoint of guidance range provided 10/29/12 Performance Versus Target 2009 – 2015 Target CAGR 13% 2009 – 20
Slide 24: Sustained High Sales And EBIT Growth
Sustained High Sales And EBIT Growth 24 (1) At midpoint of guidance range provided 10/29/12 24 Sales Growth 2002 – 2012F A G R I C U L T U R A L P R O D U C T S G R O U P - 250 500 750 1,000 1,250 1,500 1,750 2,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 20112012 F - 100 200 300 400 500 2002 20
Slide 25: Delivering High Margins
Delivering High Margins 0% 5% 10% 15% 20% 25% 25 Crop Protection Chemicals 2011 EBIT Margin 25 A G R I C U L T U R A L P R O D U C T S G R O U P (1) At midpoint of guidance range provided 10/29/12 (2) Data for DOW Ag. Sciences is EBITDA margin (1) (2)
Slide 26: Three Factors Influencing Our Success
Three Factors Influencing Our Success 26 A G R I C U L T U R A L P R O D U C T S G R O U P • Food, Fiber, Feed, Fuel • Population growth and urbanization • Agricultural land expansion • Commodity prices External Environment • Low, cost variable manufacturing • Aggregating innovation • Decentralized
Slide 27: Key Elements of Our Unique Business Model
Key Elements of Our Unique Business Model 27 A G R I C U L T U R A L P R O D U C T S G R O U P Low-cost, variable manufacturing network Active ingredient innovation driven by aggregating technologies Disciplined focus on niche crops and technically-advantaged products for row crops Decentralized R&D
Slide 28: Scalable, Variable, Low Cost Manufacturing
Scalable, Variable, Low Cost Manufacturing • Access to complimentary capabilities of partners • Long-term, multi-product relationships • >90% variable cost • Globally competitive unit costs • Asset light • Local formulation manufacturing • Strongly linked with local and global regulatory expertise 2
Slide 29: Innovation Approach Aggregates Technologies
Innovation Approach Aggregates Technologies Across Multiple Sources 29 A G R I C U L T U R A L P R O D U C T S G R O U P New Products Regulatory Formulation
Slide 30: External Growth Has Focused On Technology
External Growth Has Focused On Technology 30 30 Product Line / Technology Acquisitions • Fluthiacet-methyl (2010) • Pyroxasulfone (2010) • Iprodione (2011) • Prochloraz (2011) • GAT Microencapsulation AG (2012) Development & Commercialization • Chr Hansen (2011) • Marrone BioInnovations (2011) • Isa
Slide 31: Launched New Products In 2012
Launched 30 New Products In 2012 31 A G R I C U L T U R A L P R O D U C T S G R O U P Sportak?
Slide 32: Generating A Steady Stream Of New Products
Generating A Steady Stream Of New Products 32 A G R I C U L T U R A L P R O D U C T S G R O U P 2012 2013 2014 2015 ~100+ New Products 35% of Sales from new products Growing pool of Active Ingredients
Slide 33: Customer-Centric Approach And Direct Market Access
Growth Through A Customer-Centric Approach And Targeted Direct Market Access • Customer networks around the world that create important relationships • Direct market access in Argentina, Australia, Brazil, Canada, China, Colombia, India, Indonesia, Mexico, Pakistan, Thailand 33 A G R I C U L T U R A
Slide 34: Focus on Niche Crops And Pockets Of Technical Differentiation
11 – 15 % Each Fruits and Vegetables Rice Cotton Soybean Sugarcane Focus on Niche Crops And Pockets Of Technical Differentiation In Row Crops 34 FMC Mix By Crop A G R I C U L T U R A L P R O D U C T S G R O U P 6 – 10 % Each Potato Sunflower Wheat 2 - 5% Each Corn Turf/Home & Garden Oilseeds
Slide 35: Continued Double-Digit Sales And EBIT Growth
Continued Double-Digit Sales And EBIT Growth Stronger 2015 Performance Than Initial Targets 35 (1) At midpoint of guidance range provided 10/29/12 - 500 1,000 1,500 2,000 2,500 3,000 2009 2012F Updated 2015 2009 – 2012 CAGR ~20% 0 100 200 300 400 500 600 700 800 2009 2012F Updated 2015 While EBIT to
Slide 36: Vision 2015
VISION 2015 THE RIGHT CHEMISTRY
Slide 37: Specialty Chemicals Update
Specialty Chemicals Update Michael Wilson President, FMC Specialty Chemicals Group
Slide 38: Specialty Chemicals Group At A Glance
Specialty Chemicals Group At A Glance 38 (1) At midpoint of guidance range provided 10/29/12 S P E C I A L T Y C H E M I C A L S G R O U P Group Overview • A global leader in functional chemistries focused on serving Food, Pharmaceutical and Energy Storage and other specialty markets with 2012F Sale
Slide 39: Segment Sales Growing Below Target Pace
0 200 400 600 800 1,000 1,200 1,400 1,600 2009A 2010A 2011A 2012F 2013 2014 2015 Target Sales Trend ($ millions) 39 Segment Sales Growing Below Target Pace 39 (1) At midpoint of guidance range provided 10/29/12 (1) S P E C I A L T Y C H E M I C A L S G R O U P Performance Versus Target 2009 – 2015 T
Slide 40: Segment EBIT Trailing 2015 Target Pace
0 50 100 150 200 250 300 350 400 2009A 2010A 2011A 2012F 2013 2014 2015 Target EBIT Trend ($ millions) (1) 40 Segment EBIT Trailing 2015 Target Pace 40 (1) At midpoint of guidance range provided 10/29/12 S P E C I A L T Y C H E M I C A L S G R O U P Performance Versus Target 2009 – 2015 Target CAGR
Slide 41: FMC BioPolymer At A Glance
FMC BioPolymer At A Glance 41 S P E C I A L T Y C H E M I C A L S G R O U P Business Overview • Texturants and natural colors for food applications − Leadership positions in seaweed and cellulose specialties − Emerging positions in natural colors and pectin − Low cost, premium supplier • Tablet bind
Slide 42: FMC BioPolymer's All-Natural Product Line
• Suspension properties • Binding/disintegration • Imparts thickening • Freeze/thaw stability • Imparts heat stability • Creamy mouthfeel • Emulsion/foam stability • Imparts gel structure • Viscosifier • Binds water • Suspension properties • Modifies texture • Ice crystal control • Dairy protein rea
Slide 43: Significant Progress On Strategic Imperatives
Significant Progress On Strategic Imperatives 43 43 S P E C I A L T Y C H E M I C A L S G R O U P Strengthen Core • MCC Capacity Expansions – Cork, Ireland, Q4 2011 – Newark, DE, Q4 2012 • Alginates Capacity Expansion – Haugesund, Norway, Q1 2012 Extend Reach (RDEs) • Singapore Food Lab, Q3 2011 • C
Slide 44: Building A New Platform In Natural Colors
Building A New Platform In Natural Colors Rapidly Growing Market • Size: ~$1.3B (2016), ~12% CAGR (2011-16) • Growth rate 3X that of processed Food & Beverages overall • Conversion from synthetic colors a key factor Growth Driven By Key Trends • Consumer perceptions of synthetic colors • Rising GDP
Slide 45: Pectin Complements Existing Product Lines
Pectin Complements Existing Product Lines Growing Market • Size: ~$1.0 B (2017), ~8% CAGR (2012-17) Fit With Existing Products • Pectin is the most widely used specialty hydrocolloid • Unique functionality in low pH applications opens new segments to leverage core competencies in texture and new nat
Slide 46: BioPolymer: Delivering Results
BioPolymer: Delivering Results • Continues to deliver solid, steady sales and EBIT growth • Will deliver 8th consecutive year of record earnings this year • Making excellent progress delivering against strategic imperatives − Capacity expansions − New labs − Thailand MCC plant − Natural Colors and P
Slide 47: FMC Lithium At A Glance
FMC Lithium At A Glance 47 S P E C I A L T Y C H E M I C A L S G R O U P Business Overview • #2 producer in world on a revenue basis • Market leader in key segments − #1 supplier of lithium hydroxide, lithium chloride, specialty lithium salts − A leader in downstream lithium metal products and organ
Slide 48: Global Lithium Network With Key Resource In Argentina
Global Lithium Network With Key Resource In Argentina Argentina Lithium Extraction • FMC operations are located in a region of the Andes Mountains called the “Lithium Triangle” • Lithium rich brine is extracted via wells from sub-surface salt lakes called salars • FMC’s salar is located at over 4,00
Slide 49: Anticipate Healthy Demand Growth
Anticipate Healthy Demand Growth • Continue to have a relatively conservative outlook on demand growth − Now forecasting demand in metric tons of lithium carbonate equivalents (LCE) to grow 9% annually through 2020 • Energy applications continue to drive growth − Consumer electronics: ~9% CAGR − Tra
Slide 50: Capacity Additions To Keep Industry Utilization Low
Capacity Additions To Keep Industry Utilization Low 50 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0 50 100 150 200 250 300 350 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 L C E (k M T ) Total Demand Total Capacity Capacity Utilization • From 2011 to 2017, demand expected to grow by nearly 70K
Slide 51: Uncertainty Leads Us To Defer Next Capacity Expansion
Uncertainty Leads Us To Defer Next Capacity Expansion 51 S P E C I A L T Y C H E M I C A L S G R O U P Situation FMC Actions Argentina inflation and exchange rates are working against us in the near- term Increased uncertainty about the timing, magnitude of penetration, and mix of electric vehicles
Slide 52: Lithium: Moving Forward
Lithium: Moving Forward • Mix enhancement and cost reduction will drive profit improvement through 2015 − Modest opportunities to increase capacity beyond the current 30% expansion through debottlenecking and other efforts • Electric vehicle inflection point provides “option” on future growth beyond
Slide 53: Specialty Chemicals Imperatives To Deliver Vision 2015
Specialty Chemicals Imperatives To Deliver Vision 2015 • Lithium: focus on mix and cost optimization − Continue working options for mid- and longer-term expansion of supply − Maintain focus on energy storage market, especially EV’s • BioPolymer: sustain profitability while accelerating growth − Capt
Slide 54: Expect Steady Sales And Accelerating EBIT Growth
- 200 400 600 800 1,000 1,200 1,400 2009 2012F Current 2015 Expectation 0 50 100 150 200 250 300 2009 2012F Current 2015 Expectation While EBIT To Grow ~10% CAGR ’09 – ‘15 Sales Anticipated to Grow ~7% CAGR ’09 – ‘15 Expect Steady Sales And Accelerating EBIT Growth 2015 Below Initial Targets 54 2009
Slide 55: Vision 2015
VISION 2015 THE RIGHT CHEMISTRY
Slide 56: Industrial Chemicals Update
Industrial Chemicals Update Ed Flynn President, FMC Industrial Chemicals Group
Slide 57: Industrial Chemicals Group At A Glance
Industrial Chemicals Group At A Glance 57 57 I N D U S T R I A L C H E M I C A L S G R O U P Group Overview • A diverse group focused on inorganic chemicals such as soda ash, hydrogen peroxide, and specialty alkali / peroxygen products − 2012F Sales of ~$1.1B and EBIT of ~$170M(1) • Strong cash gene
Slide 58: Segment Sales Ahead Of Target Pace
0 200 400 600 800 1,000 1,200 1,400 2009A 2010A 2011A 2012F 2013 2014 2015 Target Sales Trend ($ millions) 58 Segment Sales Ahead Of Target Pace 58 (2) (1) (1) I N D U S T R I A L C H E M I C A L S G R O U P (1) Excludes revenues of Phosphates business exited at end of 2010 (2) At midpoint of guidan
Slide 59: Segment EBIT Ahead Of Target Pace
0 50 100 150 200 250 300 2009A 2010A 2011A 2012F 2013 2014 2015 Target EBIT Trend ($ millions) 59 Segment EBIT Ahead Of Target Pace 59 (1) I N D U S T R I A L C H E M I C A L S G R O U P (1) At midpoint of guidance range provided 10/29/12 Performance Versus Target 2009 – 2015 Target CAGR 20% 2009 –
Slide 60: Alkali Chemicals At A Glance
Alkali Chemicals At A Glance Soda Ash Sodium Sesquicarbonate Sodium Bicarbonate Caustic Soda Milled Trona 60 I N D U S T R I A L C H E M I C A L S G R O U P Business Overview • Alkali Chemical Division produces natural soda ash used by manufacturers in glass, chemical processing and detergent indust
Slide 61: Routes To Market For Alkali Products
Routes To Market For Alkali Products Domestic, 50% Exports - LatAm, 25% Exports - Asia, 15% Exports - Other, 10% Direct soda ash sales to: • United States • Canada • Western Europe • South Africa All other non-soda ash Alkali products globally are sold direct by FMC Primary route to markets outside
Slide 62: Basis For Global Competition Is Delivered Cost
Basis For Global Competition Is Delivered Cost 62 US & China account for 82% of global soda ash trade 0.7 0.9 1.6 0 1 2 3 4 5 6 7 8 Other1 Turkey China US 1.7 5.3 Total Exports 7.0 18% 82% Global Soda Ash Exports (MT/Year) I N D U S T R I A L C H E M I C A L S G R O U P FMC’s Position • World’s larg
Slide 63: US Producers Have Structural Cost Advantage
US Producers Have Structural Cost Advantage 63 Source: IHS Chemical, USGS, Wyoming Mining Association, ANSAC, FMC estimates 0 50 100 150 200 250 Transportation Total Cash Cost US Cost Basis Transportation Variable Cash Cost China Cost Basis Mexico Other Latin America Asia ex China Mideast & Africa D
Slide 64: Peroxygens At A Glance
Hydrogen Peroxide Textiles 3% Environmental 11% Electronics 9% Personal Care 4% Food 7% Distributors 8% Peroxygens At A Glance 64 Persulfates Other 4% Polymer 46% Printed Circuit Board 6% Environ- mental 10% Personal Care 4% Energy 30% Peracetic Acid Other 3% Food Safety 80% Energy 15% 64 I N D U S
Slide 65: Peroxygens Focused On Developing Specialty Applications
Peroxygens Focused On Developing Specialty Applications Pulp Personal Care Polymer 0% 5% 10% Market / Application Growth Rate Specialty • Sold on Attributes • Efficacious • Sustainable • Intellectual Property Electronics Aseptic Packaging Energy Mining Proteins Disinfection Hard Surface Fruit & Veg
Slide 66: FMC Environmental Solutions Division Launched
FMC Environmental Solutions Division Launched • In 2010 announced plans to build a new business platform focused on environmental challenges in air, soil and water • Since 2010 we have: − Acquired RheinPerChemie GmBH − Acquired Adventus Intellectual Property Inc. − Created NatronX joint venture with
Slide 67: FMC Environmental Solutions Markets
FMC Environmental Solutions Markets 67 I N D U S T R I A L C H E M I C A L S G R O U P Air Pollution Control Site Remediation Water Treatment • Soda ash and alkali solutions for wet scrubbing applications • Low cost trona-based products and PerNOxide™ technology • NatronX Technologies joint venture
Slide 68: Shifting Non-Alkali Mix Towards Specialties
Shifting Non-Alkali Mix Towards Specialties 68 Note: Includes sales of Peroxygens and Environmental Solutions Divisions Commodity Specialty 68 15% 85% 30% 70% 50% 50% 2007 2011 2015 I N D U S T R I A L C H E M I C A L S G R O U P
Slide 69: Industrial Chemicals Imperatives To Deliver Vision 2015
Industrial Chemicals Imperatives To Deliver Vision 2015 • Maintain market and cost leadership in Soda Ash − Take advantage of debottlenecking / throughput improvement − Next phase expansion at Granger will not impact Vision 2015 revenues • Maximize our Global Peroxygens franchise − Continue to shift
Slide 70: Expectations For 2015 Largely Unchanged
0 50 100 150 200 250 300 2009 2012F Current 2015 Expectation $ m illio n Sales Anticipated to Grow ~7% CAGR ’09 – ‘15 - 200 400 600 800 1,000 1,200 1,400 1,600 2009 2012F Current 2015 Expectation (1) $ m illio n Expectations For 2015 Largely Unchanged Consistent With Initial Targets 70 (1) At midpoi
Slide 71: Vision 2015
VISION 2015 THE RIGHT CHEMISTRY
Slide 72: One FMC
One FMC Pierre Brondeau President, Chief Executive Officer and Chairman
Slide 73: Evolving Our Model Acting as "One FMC"
Evolving Our Model 73 73 Acting as “One FMC” Starting Point Future State • Highly decentralized, all but corporate governance functions embedded in businesses, even at the cost of duplication • Strong accountability in business units • Intense cost focus • Missed opportunities to leverage resources,
Slide 74: Two Key Examples of "One FMC"
Two Key Examples of “One FMC” 74 Procurement • Deliver best in class, cost-efficient services via technology-driven procurement • Drive from a center-led, global sourcing & procurement organizational structure Operations • Upgrade Safety culture and performance • Improve capital project and portfoli
Slide 75: Procurement: Strong Progress
Procurement: Strong Progress 75 Roll-out Evolve Operating Model Process & Technology Deployment 2010 2011 2012 2013 2014 2015 • Center led Global Organization – Integrated with Business • Launched Strategic Sourcing – Early wins identified, captured and ahead of plan • Single, scalable ‘source-to-pa
Slide 76: Higher Capital Investment Requires Upgrades
Higher Capital Investment Requires Upgrades 76 0 50 100 150 200 250 300 350 400 2010 2011 2012 2013 2014 2015 Organic Reinvestment Trend ($ millions) Upgrading Capital Investment Processes and Capabilities • Integrated Capital Project Portfolio Management process and system • Formal, stage-gate driv
Slide 77: Operations: Driving Manufacturing Excellence
Operations: Driving Manufacturing Excellence 77 • Clarify responsibilities at all levels • Establish agreed objectives • Enhance organizational effectiveness Processes People • Coach, not just train, our people • Transfer best working practices • Focus on decisions and problem-solving Systems • Meas
Slide 78: Manufacturing Excellence: Site-by-Site Approach
Manufacturing Excellence A Well Defined, Site-by-Site Approach 78 • Determine performance gap • Agree to improvement targets and financial benefits • Design implementation project Achieve Sustainable Performance Improvement Project Launch Preparation Analysis and Project Design 4-6 weeks 9-12 months
Slide 79: Promising Manufacturing Excellence Beta Test
• Piloting in one of our Green River, WY operations • Scope − Safety − Throughput − Efficiency • Goal − At least 10% capacity increase • Pilot ~50% complete − Positive interim results − Proof of concept – ready to begin rolling out to other sites / operations Promising Manufacturing Excellence Beta
Slide 80: Implementation Begins In Earnest In 2013
Implementation Begins In Earnest In 2013 • EBIT neutral at each site in its first year • Implementing in waves across all major FMC sites in 2013, 2014 and 2015 − Benefits from first wave begin to show in 2014 − Second wave benefits impact in 2015 • Believe we can deliver at least 5% cost reduction
Slide 81: Vision 2015
VISION 2015 THE RIGHT CHEMISTRY
Slide 82: Financial Strength and Policies
Financial Strength and Policies Paul Graves Executive Vice President and Chief Financial Officer
Slide 83: Delivering Vision 2015 Yields ~$4B In Cash To Deploy
Delivering Vision 2015 Yields ~$4B In Cash To Deploy 83 Borrowing capacity $3B+ ~$4B ~$1B Cumulative Cash Flow from Operations 2010 - 2015 Cumulative Cash for Deployment 2010 - 2015 Organic Reinvestment Cash to Shareholders External Growth Other
Slide 84: Maintaining Strong Credit Metrics
Maintaining Strong Credit Metrics 84 Note: dashed lines indicate credit metric values FMC believes to be generally consistent with a BBB+ or Baa1 credit rating 0 0.5 1 1.5 2 2.5 2010 2011 2012F 2013 2014 2015 Leverage BBB+ / Baa1 0 5 10 15 20 25 2010 2011 2012F 2013 2014 2015 Interest Coverage BBB+
Slide 85: Organic Reinvestment ~$350M / Year Through 2015
0 50 100 150 200 250 300 350 400 2010 2011 2012 2013 2014 2015 Maintenance Growth Investment Trend ($ millions) Key Drivers • Organic growth requires continued reinvestment • Maintenance CapEx at ~0.7X D&A for plan horizon • Growth investment(1) at ~1.2X D&A for next 3 years 85 Organic Reinvestment
Slide 86: How External Growth Fits With Vision 2015
How External Growth Fits With Vision 2015 86 86 Approach • Proactive, aligned with clear strategic intent in selected spaces • Large scale, complex, or transformational acquisitions not anticipated • Balanced evaluation metrics – Situation-specific IRR > risk-adjusted hurdle rate EPS accretion t
Slide 87: External Growth Transactions By Group
Agricultural Products Specialty Chemicals Industrial Chemicals •Acquired fluthiacet-methyl and pyroxasulfone from Kumiai (2010) • Formed Ruralco JV in Argentina (2011) • Purchased iprodione and prochloraz from Bayer (2011) • Development and distribution agreements with Chr Hansen and Marrone BioInno
Slide 88: External Growth Investments Expected To Contribute To 2015 Results
External Growth Investments Expected To Make Meaningful Contribution to 2015 Results 88 2015 Sales 2015 EBIT ~$425M ~$125M ~$325M Deployed To Date Across 18 Transactions
Slide 89: External Growth Areas Of Focus Going Forward
External Growth Areas Of Focus Going Forward 89 While pipeline is rich, we do not believe we will deploy more than $1B in External Growth over the Vision 2015 horizon, substantially less than originally contemplated Agricultural Products Specialty Chemicals Industrial Chemicals • Acquire new product
Slide 90: Strong Return Of Cash To Shareholders
445 126 1,000 0 200 400 600 800 1,000 1,200 Plan to date 2010-2015 commitment Buybacks Dividends 135 165 145 36 41 48 0 50 100 150 200 250 2010 2011 2012 Buybacks Dividends 90 Strong Return Of Cash To Shareholders Cash Return to Date Biased to Buybacks Ahead of Pace to Return $1B 90 57% of Goal
Slide 91: Will Deliver At Least $1B To Shareholders Over Plan
Will Deliver At Least $1B To Shareholders Over Plan 91 91 Dividends • Increasing our dividend by 50% • Intend to continue raising dividends each year Expect dividends of ~$75M in 2013 and growing broadly in line with earnings growth thereafter Share Repurchases • Continue cash return via dividends a
Slide 92: Cash Deployment Now More Heavily Weighted To Organic Growth
Cash Deployment Now More Heavily Weighted To Organic Growth And Cash To Shareholders 92 (1) Other includes Legacy Liabilities, Minority Interest Payments, and other uses of cash 92 Organic Reinvestment 39% External Growth 26% Repurchases 19% Dividends 9% Other 7% Organic Reinvestment 24% External Gr
Slide 93: Reinforcing Sound Financial Policies
Reinforcing Sound Financial Policies • Maintain credit metrics consistent with strong investment grade rating • Greater emphasis on Organic Reinvestment − Organic Reinvestment / D&A > 2 on average for 2013 - 2015 • Maintain disciplined External Growth approach − Clear fit with stated strategies − La
Slide 94: Looking Ahead to 2015 and Beyond
Looking Ahead to 2015 and Beyond Pierre Brondeau President, Chief Executive Officer and Chairman
Slide 95: Steady Sales Growth
Steady Sales Growth 95 20% 7% 8% 16% 8% 7% $2.7B $3.8B $5.5B+ 2009-12 CAGR 13% 2012-15 CAGR 14% 2009A(1) 2012F(2) 2015 Current Expectation Industrial Chemicals Specialty Chemicals Agricultural Products Expect to exceed $5B 2015 Sales target by 10% or more (1) Excludes revenues of Phosphates business
Slide 96: Double-Digit EBIT Growth
Double-Digit EBIT Growth 15% 7% 23% 16% 12% 14% 2009A 2012F(1) $467M $710M ~$1,200M Industrial Chemicals Specialty Chemicals Agricultural Products Corporate 2009-12 CAGR 15% 2012-15 CAGR 18% 96 Expect to meet or exceed $1.2B 2015 EBIT target (1) At midpoint of guidance range provided 10/29/12 2015 C
Slide 97: Margin Expansion Expected
15% 16% 17% 18% 19% 20% 21% 22% Margin Expansion Expected 17.5% 18.7% ~21% 97 EBIT Margin Trend Expect ~350 bps EBIT margin expansion (1) At midpoint of guidance range provided 10/29/12 2009A 2012F(1) 2015 Current Expectation
Slide 98: Delivering $1.2B+ EBIT Implies Robust EPS Growth
Delivering $1.2B+ EBIT Implies Robust EPS Growth $2.08 $2.47 $2.99 $- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 2009A 2010A 2011A 2012F 2013 2014 2015 $5.75 – $6.25 Adjusted EPS Trend (1) $3.42 – $3.52 Anticipate 2013 EPS up ~mid-teens vs. 2012F 98 2012F – 2015 CAGR 18 – 22% 2009 – 2012F CAGR 18% (1
Slide 99: Strong Foundation for 2015 and Beyond
One FMC Portfolio Evolution Rapidly Developing Economies Technology/ Product Line Expansion Strong Foundation for 2015 and Beyond 99 Strong Investment Grade Balance Sheet Provides Stability and Flexibility Sustained Premium Performance Double-Digit Top and Bottom Line Growth
Slide 100: Our Vision For FMC In 2015
Our Vision For FMC In 2015 100 P R E M I U M T S R P E R F O R M A N C E Strong cash generation with disciplined cash deployment Significantly greater earnings stability Sustained mid-teens or higher return on invested capital Sales of $5B+ and EBIT of $1.2B+
Slide 101: FMC will continue to deliver premium performance
FMC will continue to deliver premium performance – through 2015 and beyond 101 101
Slide 102: Vision 2015
VISION 2015 THE RIGHT CHEMISTRY
Slide 103: Andrew Sandifer, Investor Relations
Andrew Sandifer Vice President, Strategic Development and Investor Relations
Slide 104: Innovation Hall
INNOVATION HALL Win an iPad or e-Reader MC | investor Day 2012 VISION2015
Slide 105: Panel & Q&A
PANEL & • Pierre Brondeau • Paul Graves • Mark Douglas • Michael Wilson • Ed Flynn
Slide 106: Vision 2015: The Right Chemistry
VISION 2015 THE RIGHT CHEMISTRY