Health & Nutrition Stays Strong for FMC in Q4 Results
05 Feb 2015 --- FMC Corporation has reported a disappointing decline in revenues of 3% over Q4 2014, largely due to its Brazilian agriculture business. Health and Nutrition earnings increased by 9%. Full year revenues were up by 4% over 2013.
Pierre Brondeau, FMC president, CEO and chairman, said: "In 2014, the agriculture industry began experiencing a slowdown, particularly in Brazil. Given our leading position in Brazil, this significantly impacted our results. Looking forward to 2015, multiple factors suggest that the crop protection market globally will be, at best, flat to 2014. However, the benefits of Cheminova, especially a more balanced geographic exposure and the ability to realize cost and revenue synergy benefits, will allow FMC to grow segment earnings in Agricultural Solutions between 15 and 30 percent.
"In Health and Nutrition, while we are pleased with the performance in 2014, we believe there are opportunities for improvement by focusing on operational efficiency. Our Manufacturing Excellence programs have demonstrated significant benefits in both Alkali and Lithium, and will be implemented in this segment during 2015,” he said.
Fourth-quarter segment revenue for FMC Health and Nutrition was $191.8 million, an increase of 1 percent versus the prior-year quarter. For the full year, segment revenue was $828.2 million, an increase of 9 percent over 2013. Segment earnings of $44.2 million were 9 percent higher than the prior-year quarter. Full-year segment earnings were $187.9 million, an increase of 11 percent. Revenue increases in the quarter were driven by demand in health markets globally and in North American nutrition markets, but were partially offset by the rapid devaluation of the Euro against the dollar, continued softness in the Chinese beverage markets and reduced demand for nutraceutical omega-3 products. During the quarter, an initiative to improve operational efficiencies was launched that will result in restructuring charges in 2014 and 2015.
Marshall Fong, Global Marketing Director, FMC Health & Nutrition, told FoodIngredientsFirst: "From an R&D perspective, the most exciting things that are coming through our pipeline include investments in immunity and appetite satiation. We are helping to support customers interested in this area, while also making products taste good
"We have made a number of acquisitions over the past few years. I think that what you will see from us in the short term is probably a greater focus on internal capabilities and building out our consumer insights and developing this into downstream capabilities. There are no acquisitions expected in the short term," he said.
When asked about a rumoured takeover of FMC by DuPont, Fong said, "I like what we are doing at FMC, so I try not to get distracted by rumours out there."
Brondeau concluded: "2015 is an important year for FMC. In the first part of the year, we will complete the steps we have previously announced in order to position FMC for the future. After we close on the Cheminova and Alkali transactions, we will be in a position to provide additional insights into 2015 and our performance expectations for the next few years."
Last year FMC announced that it was to split the corporation into two separate companies, FMC Agriculture and Health & Nutrition and FMC Minerals, whilst there are strong rumours that DuPont is looking to buy the company in 2015.
FMC Corp shares closed 0.98% down yesterday.
