Exhibit 99.1
Exhibit 99.1
FMC Corporation
Boston Road Trip
September 9, 2004
William G. Walter Chairman, President and CEO
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 of the Company may differ materially from those contained in the forward-looking statements.
Additional information concerning factors that may cause results to differ materially from those in the forward-looking statements is contained in the Company’s periodic reports filed under the Securities Exchange Act of 1934, as amended.
The Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.
Use of Non-GAAP Terms
These slides contain certain “non-GAAP financial terms” which are defined below and on FMC’s Investor Relations web site (http://ir.fmc.com) in the Glossary of Financial Terms section. In addition, in the Conference Calls and Presentations section of the web site, we have provided reconciliations of non-GAAP terms to the closest GAAP term. Lastly, these slides contain references to segment financial items which are presented in detail in Note 19 of FMC’s 2003 Form 10-K.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the sum of Income (loss) from continuing operations before income taxes and cumulative effect of change in accounting principle and Depreciation and Amortization.
EBITDA Margin is the quotient of EBITDA (defined above) and Revenue.
ROIC (Return on Invested Capital) is the sum of Earnings from continuing operations before restructuring and other charges (gains) and after-tax Interest expense divided by the sum of Short-term debt, Current portion of long-term debt, Long-term debt and Total shareholders’ equity.
FMC Corporation
Diversified chemical company with leading market positions in industrial, consumer and agricultural markets globally
($ million, LTM 6/30/04)
FMC
Sales: $2,017.4 EBITDA: $329.2 Margin: 16.3%
Industrial Chemicals
Sales: $793.1 EBITDA: $96.6 Margin: 12.2%
Specialty Chemicals
Sales: $526.4 EBITDA: $132.4 Margin: 25.2%
Agricultural Products
Sales: $703.3 EBITDA: $145.5 Margin: 20.7%
FMC Strengths
Leading market positions
Global presence
Diversified business mix and high-quality customer base Diversified and integrated cost structure Focused R&D and strong applications expertise Proven management with extensive industry experience
Industrial Chemicals Overview
2003 Consolidated Sales: $770.6 million
Foret 34%
Alkali (Soda ash) 47%
Peroxygens 19%
Asia 6%
Europe/Middle East/Africa 35%
North America 51%
South America 8%
Excludes phosphorus chemicals sales at Astaris JV of $384.5 million, largely in North America
#1 North American manufacturer of soda ash and peroxygens Backward integration into natural resources Low-cost, proprietary production technology
Industrial Chemicals Financial Performance
Millions $250 $200 $150 $100 $50 $0 $208 $194 $177
$133 $130
$94
25% 20% 15% 10% 5% 0%
Margin
19998 1999 2000 2001 2002 2003 2004
EBITDA Capital Spending EBITDA Margin (%)
Industry over-expansion during the late 1990’s
Declining demand, price erosion and capacity reductions 2000-2002 2003 price improvement in peroxygens offset by continued erosion in phosphorus chemicals
Sold-out Domestic Soda Ash Industry
All producers have supported a $15/ton price increase for 2005
U.S. Bulk
Soda Ash Price Index (1990 = 1.0)
1.2 1.1 1 0.9 0.8
Last Peak
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004F
85 90 95 100
Effective Capacity Utilization (%, U.S.)
Price Index Effective Capacity Util.
Improving Soda Ash Export Market
Chinese have curbed expansions and begun to increase prices
Growth of the Chinese soda ash market
Demand of 11 million metric tons growing about 8-10 percent per year
Excess supply of 2 million metric tons is being readily absorbed
Domestic Chinese pricing is at or below many producers’ costs
There are 47 soda ash producers, the majority of which are small
With market pricing near the cost of less efficient producers, some have shut down; others have postponed capacity increases
Higher costs are limiting Chinese soda ash production
Salt, a key ingredient in synthetic production, is in short supply
Energy costs, particularly coke, have escalated substantially
The VAT drawback for exported soda ash has decreased
Ocean freight for soda ash exports has risen significantly
Chinese exporters recently raised price by $10/metric ton
Rising Domestic Hydrogen Peroxide Prices
All major U.S. producers have supported a 5¢/lb price increase
Hydrogen Peroxide Price Index (1994=1.0)
1.2 1.1 1 0.9 0.8 0.7 0.6
Last Peak
100 95 90 85 80 75 70
Effective Capacity Utilization (%, North America)
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004F
Price Index Effective Capacity Util.
Industrial Chemicals Improvement in Europe
Steady recovery across nearly all of Foret’s product lines
After a strong 2003, peroxygens expected to continue to grow
Hydrogen peroxide demand growth of 4% per year driven by strength of Scandinavian pulp industry
Peroxide price increase of 8% in 2003; another 5% expected during 2004
Phosphorus chemicals in a slow recovery driven by capacity reduction
Rhodia’s shutdown of Rouen STPP facility has improved industry capacity utilization
Foret has recovered STPP volume that was lost in 2002
Price recovery is beginning
Turnaround In Domestic Phosphorus
Significant restructuring at Astaris
Plant closures and product line transitions are completed
Annualized savings of $40 million are in place (a $20 million benefit to FMC’s operating profit)
North American market dynamics are improving
Astaris capacity reductions have tightened domestic supply
Strong euro has reduced import pressures from Europe
Chinese P4 supply has greatly subsided due to energy constraints
Broad-based price increases of 4-7 percent are expected to have favorable impact on 2005 contracts
De-leveraging and refinancing Astaris
$36 million of keepwells paid during Q2 2004
Astaris is now debt free
Possible refinancing of Astaris in late 2004 or early 2005
Specialty Chemicals Overview
2003 Consolidated Sales: $515.8 million
Lithium 29%
BioPolymer 71%
Asia 15%
North America 41%
Europe/Middle East/Africa 36%
South America 8%
BioPolymer:Adds structure, texture and stability to food
Acts as a binder & disintegrant for dry tablet drugs
Market leader in every product line
Lithium: One of two global, integrated manufacturers
Focus on specialty products—pharmaceuticals and energy storage devices
Specialty Chemicals Financial Performance
Millions $140
$120
$100 $80 $60 $40
$20
$0 $132 $127 $122 $115 $116 $110
30% 25% 20% 15% 10% 5% 0%
Margin
1998 1999 2000 2001 2002 2003 2004
EBITDA Capital Spending EBITDA Margin (%)
Exit of lower margin process additives division in 1999 BioPolymer acquisition of alginates product line in 1999 Exit of commodity grade lithium market 2000-2002 Steady 4-6% growth in BioPolymer franchises 1998-2003
BioPolymer: the Core of Specialty’s Growth
FMC Market Share:
MCC
FMC
Carrageenan
FMC
Alginates
FMC
Market Size (M): $235 $335 $185
Share Position: # 1 # 1 # 2
Market Growth: 4-6% 3-5% 3-5%
Pharmaceutical demand driven by strong growth of prescription drugs Food demand driven by dynamic health and convenience food trends FMC has disproportionate share with industry innovators
Lithium: Repositioned for Growth
Solid growth in polymer markets of 4-6%
Key products: lithium metals, butyllithium, specialty organometallics
Uses: polymer synthesis and initiation
27% of FMC Lithium sales
Strong growth in pharmaceutical synthesis of 7-9%
Key products: lithium metals, butyllithium, specialty organometallics
Uses: synthesis of pharmaceutical active ingredients
25% of FMC Lithium sales
Significant growth in energy storage of over 10%
Key products: lithium inorganics, lithium metal, lithium cobalt oxide
Uses: primary and secondary batteries
17% of FMC Lithium sales
Agricultural Products Overview
2003 Consolidated Sales: $640.1 million
Herbicides 24%
Insecticides 76%
Asia 15%
Europe/Middle East/Africa 17%
North America 36%
South America 32%
Proprietary, branded insecticides and herbicides
Key crops: cotton, corn, rice, cereals, fruits and vegetables
FMC differentiated by:
Focused innovation (R&D is ~10% of sales)
Cost reduction strategies
The depth and breadth of partnerships and alliances
Agricultural Products Financial Performance
Millions $120
$100
$80
$60
$40
$20
$0 $114 $111 $106 $101 $99 $87
20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%
Margin
1998 1999 2000 2001 2002 2003 2004
EBITDA Capital Spending EBITDA Margin (%)
Depressed crop market 1998-2002
Peak in FMC’s row crop herbicide participation in 2000 Refocusing in key crops, regions and chemistries in 2002
Growth in 2003 driven by new labels, better mix and cost reduction
Positive Outlook for Ag Products
Driven by robust crop markets and our focused strategy
Improving global farm economy
Rising global crop prices
Significant cost savings from productivity initiatives
Manufacturing initiatives continue to produce savings
Global supply chain redesign implemented
Success of market access strategies (alliances) in key markets
Focused product development
Label expansions in both crop and specialty markets
Novel ISK chemistry targeting sucking pests to launch 2005
Access to two new and complementary chemistries under negotiation
Longer-term Growth in Insecticides
A robust pipeline of insecticide-active chemistries is expected to result in 2-4 new active ingredients in the next 10 years
FMC R&D Evolution
1990 1995 2000 2005
Insecticides Herbicides Nematicides
Fungicides
Plant Growth Regulators
Insecticides
PPO Platform (Herbicides)
Insecticides
Use of advanced technologies
2000 2001 2002 2003 2004 10
Field-Level Insecticide Chemistries
Summary: Great Businesses
Great businesses, each generating EBITDA of over $100 million
Industrial Chemicals earnings that are $50 million below normal and $100 below peak
Steady growth in Specialty Chemicals and Ag Products
Low capital expenditure requirements
Improving free cash flow
Improving Cash Flow
$ millions
Cash Flow Components 2004 2005 2006 2007
EBITDA* $368 ————Increasing—————
Pre-Tax Interest** 84 ————Decreasing————
Capital Expenditures 90 ———Relatively Flat———
Cash Taxes 15 ———Relatively Flat———
Legacy Environmental 25 ———Relatively Flat———
Phosphorus-Related:
Pocatello 35 <10 <10 <10
Keepwells 36 — — —
* Calculated using mid-point of earnings per share guidance before restructuring and other charges provided on July 28, 2004. See reconciliation under “Conference Calls” at http://ir.fmc.com. ** Includes $82 million of GAAP interest expense and $2 million of affiliate interest expense.
Strategic Objectives
Unlocking value and creating a faster growing FMC
Realize the operating leverage inherent within FMC
Double-digit growth in earnings before restructuring and other charges
Industrial Chemicals recovery to add earnings of over $1 per share
Create greater financial flexibility
Reduce net debt to $600 million by the end of 2006
Regain an investment grade credit rating
Focus the portfolio on higher growth businesses
Manage Specialty Chemicals and Agricultural Products for growth
Manage Industrial Chemicals for cash
Divest any business that cannot sustain our cost of capital
Improve ROIC to 12 percent minimum by 2006
FMC Corporation
