- Q2 Performance - Sales rose 1% year-over-year, driven by 6% volume growth, with EBITDA at $207 million and EPS at $0.69, both exceeding guidance.
- India Divestiture - The commercial business in India is being divested to reduce risk, improve cash flow, and free up resources for growth areas.
- Full-Year Guidance - Excluding India, revenue is expected to decline 2%, with adjusted EBITDA up 1% and adjusted EPS flat compared to the prior year.
- Growth Portfolio - The growth portfolio, including Cyazypyr and fluindapyr, is expected to drive double-digit growth in 2025, with a 9% increase in the second half.
- Debt and Leverage - Gross debt-to-EBITDA was 4.8x, with net debt-to-EBITDA at 4.3x, and the company expects leverage to improve to approximately 3.7x by year-end.
Segment Performance and Guidance
The company is divesting its commercial business in India, expecting to quickly regain commercial momentum via a business-to-business model. The decision will enable faster resolution of challenges, reduce risk and volatility, free up cash for debt repayment, and allow resources to be deployed to other growth areas. Full-year guidance, excluding India, is for revenue to be down 2%, with adjusted EBITDA 1% higher and adjusted EPS flat to the prior year. The company expects Q3 revenue, excluding India, to be down 1%, with adjusted EBITDA up 14%, and Q4 revenue, excluding India, to be 5% higher, with adjusted EBITDA 4% higher.
Growth Portfolio and New Products
The company's growth portfolio, including branded Cyazypyr and active ingredients fluindapyr and Isoflex, is expected to drive double-digit growth in 2025. The company is adding Dodhylex, which was introduced this month, and its plant health business, Biologicals. The growth portfolio, excluding Rynaxypyr, is expected to grow by 9% in the second half of 2025 versus the same period in 2024, with $190 million of growth, driven by fluindapyr and Isoflex.
Valuation and Financials
At the current price, FMC Corporation trades at a P/E Ratio of 49.23, a P/B Ratio of 1.1, and an EV/EBITDA of 10.53. The stock offers a Dividend Yield of 5.94%. With a Net Debt / EBITDA of 4.56, the company's leverage is slightly high, but it continues to expect covenant leverage to return to approximately 3.7x by year-end. Free cash flow in the second quarter was $40 million, and the company expects full-year free cash flow of $200 million to $400 million.
Outlook and Risks
The company expects its pricing function to stabilize and potentially turn positive in the first half of 2026, driven by stabilization of Rynaxypyr dynamics and diamide partner agreement renegotiations. With a strong growth portfolio and new products, the company is well-positioned for long-term growth. However, risks include competition from generics, fluctuations in raw material costs, and challenges in the Indian business. According to the company's management, "The decision to show India as a discontinued operation was made to provide visibility into the company's future operations."