Slide 1
FMC
Increasing Shareholder Value
Slide 2
FMC
Disclaimer
Statements in this presentation that are forward-looking statements are subject
to various risks and uncertainties concerning specific factors. Such
information contained herein represents management's best judgment as of the
date hereof based on information currently available.
Slide 3
FMC
Presentation Contents
. Introduction
. Spin-off of FMC Technologies
. Review of FMC Businesses
. FMC Technologies
- Energy System
- Food & Transportation Systems
. FMC Chemicals
- Agricultural Products
- Specialty Chemicals
- Industrial Chemicals
Slide 4
FMC
Introduction
- ------------
In 2000 FMC achieved its announced financial goals:
. 10% earnings growth
. Increasing ROI towards a target of 15% in 2001.
Slide 5
FMC
Introduction
- ------------
2000 Sales and Profit by Segment
- --------------------------------
[PIE CHART] [PIE CHART]
Sales Operating Profit
- ----- ----------------
Ag. Products Ag. Products
$665M $88M
Specialty Chem. Specialty Chem.
$489M $92M
Food & Trans. Systems Food & Trans. Systems
$839M $69M
Industrial Chem. Industrial Chem.
$906M $115M
Energy Systems Energy Systems
$1.03B $72M
FMC Sales $3.9B FMC Operating Profit $436M
Slide 6
FMC
Introduction
- ------------
Earnings per share grew to an all-time high of $6.72, 11% higher than 1999
Despite:
. $ .85 /share higher energy costs than 1999
. $ .24 /share unfavorable foreign exchange rates compared to 1999
. Slowing economy
. Delayed energy systems orders
EPS from continuing operations excluding one-time gains and losses
Slide 7
FMC
Introduction
- ------------
Historical Earnings Growth
[BAR GRAPH]
Compounded annual growth rate 23.5%
1993 1.53
1994 2.94
1995 4.01
1996 4.28
1997 4.13
1998 5.30
1999 6.03
2000 6.72
EPS from continuing operations excluding one-time gains and losses
Slide 8
FMC
Introduction
- ------------
We also made significant progress towards our ROI target
[BAR GRAPH]
Total ROI*
20.0%
15.0%
14.1%
13.7%
13.0%
12.5%
12.1%
11.3% 10.5%
10.0%
9.6%
5.0%
0.0%
1993 1994 1995 1996 1997 1998 1999 2000
Based on income from continuing operations excluding one-time gains and losses
Slide 9
FMC
Introduction
- ------------
But our share price continued to lag our industry peers and demonstrated
performance
2/28/00 P/E*
-------------------------
Chemical Company Peers 13.4
Energy Service Company Peers 39.2
FMC 8.0
*trailing twelve months' operating earnings
Slide 10
FMC
Spin-off of FMC Technologies
- ----------------------------
[ORGANIZATION CHART]
FMC
FMC
Industrial Chemicals
Specialty Chemicals
Agricultural Products
FMC Technologies
Energy Systems
Food & Transportation Systems
Slide 11
FMC
Spin-off of FMC Technologies
- ----------------------------
. The spin-off will provide:
-------------------------
. Increased Management Focus
. Increased Customer and Market Focus
. Ability to adopt capital structures aligned with each businesses'
industry peers
. Development of an acquisition currency for machinery to grow
. Ability to reward employees with equity compensation tied to businesses
Slide 12
FMC
Spin-off of FMC Technologies
- ----------------------------
. Spin-off will include:
----------------------
- IPO of up to 20% of FMC Technologies
- Anticipated distribution of remaining shares to existing FMC shareholders
. Each company will focus on:
---------------------------
- Achieving/maintaining an investment grade rating
- Investing in high ROI businesses
- Consistent earnings and growth
Slide 13
FMC
Spin-off of FMC Technologies
- ----------------------------
. IPO Proceeds will be used to pay down debt
------------------------------------------
. Debt allocation will
--------------------
- Result in investment grade ratings
- Ensure financial flexibility
- Be consistent with industry peers
. Liabilities
-----------
- Generally with businesses that created liability
- Most discontinued business liabilities will remain with chemical
businesses
Slide 14
FMC
Spin-off of FMC Technologies
- ----------------------------
October 2000 Split-off Announcement
February 2001 Initial Form S-1 filed with SEC
Second Quarter 2001 FMC Technologies IPO
Late 2001 Tax free distribution of remaining FMC Technologies
shares to FMC shareholders
Slide 15
FMC
Spin-off of FMC Technologies
- ----------------------------
Prospects for 2001
- ------------------
. Anticipated even with last year due to
--------------------------------------
- Slow first half (first quarter of 2001 off 50% from 2000)
. Higher energy costs
. Other chemical businesses roughly flat
. Somewhat lower machinery results
- Second half recovery
. Recovery in Energy Systems
. Lower Phosphorus costs from new PPA plant
. Anticipate one-time charges associated with business and corporate
------------------------------------------------------------------
restructuring and FAS 133 implementation
----------------------------------------
Slide 16
FMC
Presentation Contents
- ---------------------
. Review of FMC Businesses
. FMC Technologies
- Energy Systems
- Food & Transportation Systems
. FMC Chemicals
- Agricultural Products
- Specialty Chemicals
- Industrial Chemicals
Slide 17
FMC
ENERGY SYSTEMS
- --------------
Highlights
- ----------
- -Multi-year subsea
agreements formed
with Norsk Hydro,
Agip, Shell USA,
StatOil & BP Amoco
- -Sales & backlog
down in 2000 as
oil industry
consolidation
results in delayed
orders
[BAR AND LINE GRAPH]
1994 1995 1996 1997 1998 1999 2000
Sales ($ millions) $460 $769 $949 $1,144 $1,321 $1,129 $1,037
% EBITDA Margin 6.5% 5.4% 7.0% 9.9% 9.9% 11.3% 9.9%
[Customer logos: Phillips 66, Unocal, Shell, ExxonMobil, Elf, BP Amoco, Conoco,
Statoil]
Slide 18
FMC
ENERGY SYSTEMS - Industry Outlook
- ---------------------------------
Oil Prices & E&P Spending*
[LINE GRAPH APPEARS HERE]
1992 1993 1994 1995 1996 1997 1998 1999 2000
% E&P Spending % Change 1.0% 1.0% 4.4% 7.8% 19.6% 19.3% 5.2% -9.4% 18.6%
% Oil Price % Change -4.2% -10.0% -7.0% 7.0% 19.6% -6.2% -30.0% 12.5% 73.6%
* Salomon Smith Barney Survey, 2000
Worldwide Deepwater E&P Expenditures**
[GRAPH APPEARS HERE]
Dollars in millions
Asia Pacific North Sea Brazil Gulf of Mexico W. Africa
1995 $ 245 $2,299 $ 317 $ 534 $ 0
1996 $ 333 $ 772 $ 813 $1,431 $ 0
1997 $ 305 $2,593 $1,888 $1,219 $ 237
1998 $ 120 $3,016 $1,939 $1,046 $ 41
1999 $ 742 $4,617 $2,999 $2,688 $ 713
2000 $ 0 $4,194 $3,014 $1,628 $1,317
2001 $ 977 $2,513 $3,475 $2,639 $1,884
2002 $ 668 $2,754 $4,803 $3,110 $3,079
2003 $1,928 $3,727 $5,081 $4,360 $4,838
2004 $2,589 $3,062 $5,338 $4,912 $5,486
** Douglas-Westwood Ltd., FMC Technologies
Slide 19
FMC
FOOD & TRANSPORTATION SYSTEMS
- -----------------------------
Highlights
- ----------
FoodTech
- Earnings in 2000
up slightly due
to strong after-
market performances
and cost saving
measures overcoming
impact of Euro
Airport Products
- Successful entry
into defense
market with Air
Force NGSL award
[BAR AND LINE GRAPH]
1994 1995 1996 1997 1998 1999 2000
Sales ($ millions) $ 515 $ 585 $ 739 $ 890 $ 868 $ 826 $ 839
% EBITDA Margin 7.6% 9.1% 9.1% 10.4% 11.4% 11.1% 11.6%
[Customer logos: Nestle, StarKist, Unilever, United, British Airways, DHL
Worldwide Express, Swissair, KLM Royal Dutch Airlines, Fed Ex]
Slide 20
FMC
AGRICULTURAL PRODUCTS
- ---------------------
Highlights
- ----------
2001 - continued
improvement
- Continued label
expansions on
insecticides and
herbicides
- Continued cost
reductions
- Issues
surrounding
genetically
modified crops
should benefit
FMC
[BAR AND LINE GRAPH]
1994 1995 1996 1997 1998 1999 2000
Sales ($ millions) $517 $590 $650 $638 $648 $632 $665
% EBITDA Margin 19.0% 19.8% 17.7% 10.0% 15.9% 13.5% 17.1%
[Photograph of FMC agricultural products: Furadan, Pounce, Capture, Aim, Ammo,
Fury, Brigade, etc.]
Slide 21
FMC
SPECIALTY PRODUCTS
- ------------------
Highlights
- ----------
2000 Results
- Sales lower from
PAD divestiture
- Profits up from
successful
Pronova
integration
- Lithium sales &
profits up, but
market remains
difficult
2001 Forecast
- BioPolymer sales
and profits up
on continued
synergies from
Pronova and
ongoing cost
cost reductions
- Lithium profits
up on higher
sales and lower
costs
[BAR AND LINE GRAPH]
1994 1995 1996 1997 1998 1999 2000
Sales ($ millions) $ 544 $ 588 $ 602 $ 605 $ 598 $ 565 $ 489
% EBITDA Margin 20.1% 18.1% 17.1% 19.3% 18.9% 19.0% 26.2%
[Customer logos: Lilly, Hoechst, Merck, GlaxoWellcome, Pfizer, Rhone-Poulenc,
Warner Lambert, Novartis, Johnson & Johnson]
Slide 22
FMC
INDUSTRIAL CHEMICALS
- --------------------
Highlights
- ----------
Soda Ash:
- 2001 volumes flat
as strengthening
exports offset
impact of new entrant
- Energy surcharge
results still
uncertain
Hydrogen Peroxide:
- Higher prices &
volumes
- Reduction in
cost base
Phosphorus:
- Lower sales as
Astaris JV began
in 2Q 2000
- Significant power
cost impact in
'01 & '02
- New low cost PPA
plant start-up
2Q'01
Overview
- '00 and '01
sales & profits
adversely
impacted by
lower Euro &
increased
energy costs
[BAR AND LINE GRAPH]
1994 1995 1996 1997 1998 1999 2000
Sales ($ millions) $1,027 $1,137 $1,201 $1,173 $1,138 $1,141 $ 906
% EBITDA Margin 18.2% 20.1% 22.8% 19.5% 16.9% 18.0% 20.2%
Note: FASB's EITF (Emerging Issues Task Force) required restatement of sales
and cost of sales to increase both by shipping costs. Sales have been restated
for 1999-98; estimated impact shown for 1994-1997.
[Customer logos: The Gillette Company, Dow, Colgate-Palmolive Company, Procter
& Gamble, Rohm & Haas, BASF, Fort James Corporation]
Slide 23
FMC
INDUSTRIAL CHEMICALS PORTFOLIO
- ------------------------------
Key Products & Markets (By Sales)
- ---------------------------------
[PIE CHART] [PIE CHART]
Products Markets
- -------- -------
Phosphorus Detergent
33% 27%
Active Oxidants Pulp and Paper
5% 11%
Alkali Chemical
40% 29%
Peroxygen Food
15% 10%
Other Glass
7% 17%
All Other
6%
Notes:
Phosphorus includes FMC share of Astaris
Slide 24
FMC
Summary
- -------
. IPO of FMC Technologies in second quarter
. Spin-off of FMC Technologies before end of year
. 2001 should be a good year - roughly equal to last year