BASEL, Switzerland, Feb. 5 /PRNewswire-FirstCall/ -- Sustained cash
generation, positioned for further growth -- Sales $11 billion, up
1 percent at constant exchange rates -- EBITDA(2) margin maintained
at 21.6 percent: Seeds margin 9.5 percent -- Earnings per share(3)
$15.76, 3 percent lower -- Earnings per share $14.62 after
restructuring and impairment, unchanged -- Free cash flow $580
million -- 2010 cash return around $750 million: maintained
dividend, share repurchase Reported Financial Highlights Excluding
Restructuring, Impairment 2009 2008 Actual 2009 2008 Actual CER(1)
$m $m % $m $m % % Sales 10,992 11,624 -5 10,992 11,624 -5 +1 Crop
Protection 8,491 9,231 -8 8,491 9,231 -8 -2 Seeds 2,564 2,442 +5
2,564 2,442 +5 +13 Net Income(4) 1,371 1,385 -1 1,478 1,540 -4 -
Earnings per share $14.62 $14.63 - $15.76 $16.26 -3 - Mike Mack,
Chief Executive Officer, said: "In 2009 Syngenta achieved earnings
close to the record level of 2008 in the face of considerable
challenges including negative currency movements and higher raw
material costs. This achievement reflects our discipline in
pricing, made possible by the proven value of our products to
growers, and strong growth in Seeds accompanied by a significant
improvement in profitability. It also reflects our ability to
restrain costs in a difficult environment and to continue
generating substantial free cash flow. Our active management of
risk in Latin America and Eastern Europe also contributed to the
ongoing strength of our balance sheet, and placed us in a good
position to benefit from the upturn in these regions which began
towards year end. In the emerging markets of Asia Pacific, growth
continued throughout the year as growers continued to invest in
yield improvement. "Strong growth in sales of new Crop Protection
products and accelerating returns in Seeds attest to the success of
Syngenta's sustained investment in R&D. We also continued to
make targeted acquisitions. Around the world we are focusing on the
longer term expansion of our business, for which the fundamental
drivers of population growth and evolving diets remain unchanged."
Financial Performance 2009 Sales $11 billion Sales at constant
exchange rates (CER) increased by one percent. Reported sales were
five percent lower owing to the strength of the dollar in the first
half of the year. Crop Protection sales* were two percent lower
(CER); Seeds sales increased by 13 percent (CER). EBITDA margin
21.6 percent EBITDA increased by nine percent (CER) to $2.4
billion. Price increases offset higher raw material costs and Seeds
profitability increased significantly as a result of portfolio
improvements. Currency movements The impact of currencies on
reported sales was particularly marked in the first half, following
the substantial devaluation of emerging market currencies against
the dollar towards the end of 2008. The impact of these
devaluations on operating income was partly offset by price
increases. The weakening of the dollar against all currencies in
the second half resulted in a positive currency effect on fourth
quarter sales. Earnings per share $15.76 Earnings per share
excluding restructuring and impairment were three percent lower
owing to the adverse currency movements. Including restructuring
and impairment, earnings per share were unchanged at $14.62.
Business Highlights Crop Protection Crop Protection sales excluding
Professional Products were one percent lower (CER) compared with a
record 2008. This demonstrates the resilience of the business in
the face of lower crop prices, a shorter northern hemisphere season
and weather conditions that were unfavorable for our business.
Performance was underpinned by price increases made possible by the
significant value which our products offer to growers. Our
discipline on price was accompanied by an estimated gain in market
share, a clear testimony to the strength of our portfolio. In
Europe, Africa & the Middle East the year was characterized by
a late start to the season and subsequent low disease pressure. In
addition, sales in Eastern Europe were restricted for most of the
year by rigorous risk management, although the operating
environment improved towards the year end. NAFTA was also affected
by a late season and low pest pressure, offset by a strong
performance in cereal and soybean herbicides. In Latin America,
risk management and drought in the south of the region reduced
first half sales; improved economic conditions, as well as higher
commodity prices, contributed to a rebound in the second half. In
Asia-Pacific, demand was sustained throughout the year,
particularly in the emerging markets, where growers continued to
invest in order to improve yield. In Selective herbicides, growth
in cereals and soybean compensated for lower corn sales. Sales of
Non-selective herbicides declined owing to a significant price
reduction in glyphosate in the second half of the year. Fungicides
were unchanged despite lower pest pressure in the northern
hemisphere: sales in the second half registered double digit
growth, as Syngenta reinforced its leading market position in a
larger Latin American market. Insecticides sales were slightly
lower because of lower insect infestation in the Americas; in Asia
Pacific sales showed good growth. Seed Care also performed
particularly well in Asia Pacific, with new registrations and an
ongoing move towards higher value seed. Professional Products sales
were lower owing to the impact of the economic environment on the
golf and horticulture markets. New Products: Sales of new products
(defined as those launched since 2006) increased by 32 percent to
reach $308 million. The cereal herbicide AXIAL® continued to grow
in the key Canadian wheat market, where sales were up by more than
50 percent. The fungicide REVUS® doubled sales in its main region
Europe and showed significant growth in all other regions.
Following its 2008 launch in Indonesia, the insecticide DURIVO® was
rolled out in a number of Asian markets with notable success in
China. Sales of AVICTA® are set to expand with a launch in 2010 on
corn. Overall the peak sales potential of new products exceeds $1.3
billion. R&D pipeline: Our Crop Protection pipeline has
combined peak sales potential of over $2 billion. In 2010 we will
make the initial launches of INVINSA(TM), a unique product for crop
stress protection in field crops, and of isopyrazam, a broad
spectrum cereal fungicide. The late development pipeline also
includes sedaxane, a seed treatment fungicide; bicyclopyrone, a
corn and sugar cane herbicide; and an insecticide cyantraniliprole.
EBITDA of $2.24 billion represented a margin of 26.4 percent (2008:
26.6 percent). At constant exchange rates EBITDA was three percent
higher with a margin of 27.8 percent. The underlying improvement in
profitability reflected the benefit of price increases in
offsetting both higher raw material costs and emerging market
currency devaluations. Seeds Seeds sales were 13 percent higher at
constant exchange rates with growth in all product lines. Price
increases across the portfolio reflected value capture from new
technology as well as the ability to pass on higher raw material
costs. Corn & Soybean: Syngenta has a broad geographic presence
in corn, with sales evenly distributed between US and non-US
markets. In 2009, sales expanded in all regions with the exception
of Latin America, where acreage was lower. In the USA, our
AGRISURE® 3000 GT proprietary triple stack seed accounted for 25
percent of the portfolio compared with 11 percent in 2008, and the
proportion is expected to exceed 50 percent in 2010. Further
advances in portfolio quality will be achieved through stepping up
the combination of our proprietary traits with top performing
germplasm. In soybean, solid underlying sales growth for the full
year reflected price discipline and the quality of our germplasm.
In our third year in the Brazilian market, we achieved a market
share of 10 percent. Sales of Corn & Soybean in the USA
benefited from a fourth quarter change in sales terms in line with
industry standards. Diverse Field Crops: In Eastern Europe, a key
area for sunflower and sugar beet, we managed risk carefully and
saw an improvement in credit conditions in the course of the year.
The scope of our sunflower germplasm has been further expanded
through the acquisition of Monsanto's sunflower business, which
also builds on our significant emerging market investments. Sales
of glyphosate tolerant sugar beet in the USA again showed good
growth. Vegetables: Sales continued their record of strong growth
with a focus on high value crops. We established a significant
position in the US lettuce market with the acquisition of Synergene
Seed & Technology, Inc. and Pybas Vegetable Seed Co., Inc.
which bring a broad range of proprietary germplasm combined with
strong breeding and production capabilities. Flowers growth
reflected the consolidation of Goldsmith Seeds, Inc. and Yoder; the
underlying business was affected by the impact of the economic
downturn on the horticulture market. R&D pipeline: Our global
corn pipeline has peak sales potential of over $2 billion. The near
term pipeline includes Agrisure Viptera(TM) (MIR 162) for broad
lepidoptera control and Enogen(TM) for improved productivity and
sustainability in the manufacture of ethanol from corn. Both traits
are awaiting final USDA approval. MIR 162 received full approval
from the Brazilian authorities in November, along with the double
stack Bt11xGA21. The double stack was also approved in Argentina in
December. In April, Syngenta and Dow AgroSciences announced an
agreement to cross-license their respective corn traits for
commercialization within their branded seed businesses. The
agreement will allow Syngenta, from 2011, to offer its US customers
multiple modes of action targeting refuge reduction and improved
efficiency. EBITDA of $244 million represented a margin of 9.5
percent (2008: 5.5 percent). At constant exchange rates EBITDA
increased by 128 percent with a margin of 11.2 percent. The
improvement reflects the transformation of our corn offer in the
USA and the further development of our high margin vegetables
business. Seeds is firmly on track to achieve the targeted EBITDA
margin of 15 percent in 2011. Net financial expense Net financial
expense of $122 million was below the 2008 level of $169 million
owing to the non-recurrence of fourth quarter exchange rate losses
in 2008. Interest cover remains high at 15 times. Taxation Further
tax optimization including some non-recurring benefits resulted in
an underlying tax rate of 17 percent (2008: 19 percent). A tax rate
in the low to mid-twenties is expected over the medium term. Cash
flow Free cash flow was $580 million and demonstrated the strongly
cash generative nature of Syngenta's business. Fixed capital
expenditure of $652 million was above previous levels and included
investment in capacity expansion for two major Crop Protection
products. Acquisition spend totaled $188 million. Average trade
working capital as a percentage of sales increased to 42 percent
from an exceptionally low level of 37 percent in 2008 with an
increase in inventories as a result of a reduced northern
hemisphere season. Balance sheet The ratio of net debt to equity
was 25 percent. The profile of borrowings was enhanced through the
issue of a euro 500 million Eurobond in June. Return on invested
capital at 24 percent again exceeded the 20 percent target.
Dividend and share repurchase In the light of continuing strong
free cash flow generation, the company proposes to pay a maintained
dividend of CHF 6.00 per share and plans a share repurchase in
2010. The total cash return will be around $750 million. Outlook
Mike Mack, Chief Executive Officer, said: "Improved conditions in
emerging markets are contributing to a more positive outlook for
2010 and lead us to expect volume growth starting in the second
quarter. In Crop Protection we will build on our innovation and
strong market positions in a more competitive environment; in
Seeds, we expect further expansion of sales and profitability. The
benefit of lower raw material costs and favorable currency
movements should offset increased growth investments and a higher
tax rate, enabling us to grow full year earnings per share. We also
expect substantial free cash flow. We are proposing to pay a
maintained dividend for 2009 and also plan a share repurchase,
representing a total cash return of around $750 million." Crop
Protection For a definition of constant exchange rates, see
Appendix A in full English version. Full Year Growth 4th Quarter
Growth Product line 2009 2008 Actual CER 2009 2008 Actual CER $m $m
% % $m $m % % Selective Herbicides 2,221 2,412 - 8 - 334 349 - 4
-10 Non-selective Herbicides 1,141 1,329 -14 - 8 180 228 -21 -24
Fungicides 2,442 2,620 - 7 - 632 517 +22 +18 Insecticides 1,312
1,423 - 8 - 1 317 334 - 5 - 7 Seed Care 821 830 - 1 +4 243 208 +17
+14 Professional Products 458 527 -13 -11 141 140 +1 - 1 Others 96
90 +6 +9 35 26 +33 +31 Total 8,491 9,231 - 8 - 2 1,882 1,802 +4 +1
Selective Herbicides: major brands AXIAL®, CALLISTO® family,
DUAL®/BICEP® MAGNUM, FUSILADE®MAX and TOPIK®. Sales were unchanged
with broad-based price increases offsetting lower volume. AXIAL®
and TOPIK® both performed strongly on cereals in North America. In
the USA, increased soybean acreage and weed resistance resulted in
a resurgence of demand for soybean herbicides. Corn herbicide sales
were lower reflecting reduced acreage and risk management in
emerging markets, as well as the impact of late planting in the
USA. Non-selective Herbicides: major brands GRAMOXONE® and
TOUCHDOWN® Sales were lower owing to price reductions for
TOUCHDOWN® in the second half of the year, which were accompanied
by a recovery in volume growth. GRAMOXONE® sales were also lower
with declines in Australia, due to drought, and in emerging
markets. Fungicides: major brands ALTO®, AMISTAR®, BRAVO®, REVUS®,
RIDOMIL GOLD®, SCORE®, TILT® and UNIX®. Fungicides saw strong
demand on rice in Asia Pacific and, in the second half, on soybean
in Latin America. REVUS® was launched in a number of new markets
and sales almost doubled. Northern hemisphere sales overall were
lower due to a shorter season and reduced disease pressure.
Fungicide pricing was significantly higher and offset the decline
in volume. Insecticides: major brands ACTARA®, DURIVO®, FORCE®,
KARATE®, PROCLAIM®, VERTIMEC® Sales were slightly lower with a lack
of soybean pest pressure in the USA and Latin America. Sales in
Asia Pacific grew strongly throughout the year with in particular a
successful roll-out of DURIVO®, offering growers new crop
enhancement benefits. Seed Care: major brands AVICTA®, CRUISER®,
DIVIDEND®, MAXIM® Seed care sales increased broadly. The main
driver was CRUISER®, where growth was volume driven with a modest
increase in price, and benefited in particular from a registration
in France and a new soybean application in Canada. Professional
Products: major brands FAFARD®, HERITAGE®, ICON® Professional
products were affected by the economic downturn, which reduced
demand in the golf and horticulture segments and led customers to
purchase more cautiously. Full Year Growth 4th Quarter Growth Crop
Protection 2009 2008 Actual CER 2009 2008 Actual CER by region $m
$m % % $m $m % % Europe, Africa, Mid. East 2,667 3,214 -17 - 5 455
401 +13 +2 NAFTA 2,567 2,693 - 5 - 281 338 -17 -17 Latin America
1,907 2,037 - 6 - 6 842 824 +2 +2 Asia Pacific 1,350 1,287 +5 +11
304 239 +27 +18 Total 8,491 9,231 - 8 - 2 1,882 1,802 +4 +1 Europe,
Africa and the Middle East: Sales were lower owing to a shorter
season with lower disease pressure and to risk management in
Eastern Europe. Above average price increases partly offset the
decline in volume. Operating conditions in Eastern Europe improved
towards the end of the year. NAFTA: Prices overall were higher
despite pressure in the glyphosate market and offset a modest
volume decline due to reduced pest pressure. In Canada volume
growth was robust as we further strengthened our market position in
cereal herbicides and Seed Care. Latin America: Dynamic volume
growth in the second half largely offset a first half decline due
to drought in the south and to rigorous credit management. The
second half growth reflected greater use of technology on increased
soybean acres. Lower prices related mainly to glyphosate and to
currency-related adjustments in a competitive environment. In Asia
Pacific, the farm economy proved resilient to the economic crisis.
Ample liquidity enabled growers to continue investing in yield
improvement. Syngenta strengthened its market position with
broad-based growth led by innovation and the adaptation of the
portfolio to local needs. Seeds For a definition of constant
exchange rates, see Appendix A in full English version. Full Year
Growth 4th Quarter Growth Product line 2009 2008 Actual CER 2009
2008 Actual CER $m $m % % $m $m % % Corn & Soybean 1,210 1,040
+16 +21 241 82 +195 +193 Diverse Field Crops 429 462 - 7 +11 55 42
+29 +28 Vegetables 594 603 - 2 +5 133 114 +16 +13 Flowers 331 337 -
2 +5 53 48 +13 +10 Total 2,564 2,442 +5 +13 482 286 +69 +67 Corn
& Soybean: major brands AGRISURE®, GARST®, GOLDEN HARVEST®, NK®
Growth across all regions was led by significant increases in NAFTA
and Asia Pacific. Underlying growth was augmented in the fourth
quarter by a change in sales terms in the USA, implemented in
alignment with industry practice. Sales of our proprietary triple
stack corn AGRISURE® 3000 GT in the USA showed a significant
advance. Soybean sales were also higher with premium pricing for
our high quality germplasm. Soybean also showed strong growth in
Brazil due to the popularity of our V-Max offer. In Asia Pacific,
our leading tropical corn germplasm enabled us to outperform in a
growing market. Diverse Field Crops: major brands NK® oilseeds,
HILLESHOG® sugar beet Sales increased in all regions, with Europe
and NAFTA accounting for most of the business. Sales showed solid
growth in Western Europe; in Eastern Europe higher prices more than
offset the impact of risk management measures on volume. In the
USA, sales of glyphosate-tolerant sugar beet continued to expand.
Vegetables: major brands DULCINEA®, ROGERS®, S&G®, Zeraim
Gedera Growth reflected the ongoing expansion of high value
products in our strategic crops. Sales growth was especially strong
in Latin America and in the emerging markets of Asia. Flowers:
major brands Fischer, Goldfisch, Goldsmith Seeds, S&G®, Yoder
Growth reflected the consolidation of Goldsmith Seeds Inc. and
Yoder; underlying sales were affected by the economic environment.
Full Year Growth 4th Quarter Growth Seeds by region 2009 2008
Actual CER 2009 2008 Actual CER $m $m % % $m $m % % Europe, Africa,
Mid. East 933 1,077 -13 +3 115 93 +24 +21 NAFTA 1,187 979 +21 +22
213 107 +100 +100 Latin America 243 216 +12 +12 87 43 +100 +100
Asia Pacific 201 170 +18 +28 67 43 +56 +49 Total 2,564 2,442 +5 +13
482 286 +69 +67 Announcements and Meetings First quarter trading
statement 2010 15 April 2010 AGM 20 April 2010 Announcement of the
half year results 2010 22 July 2010 Third quarter trading statement
2010 14 October 2010 Syngenta is one of the world's leading
companies with more than 25,000 employees in over 90 countries
dedicated to our purpose: Bringing plant potential to life. Through
world-class science, global reach and commitment to our customers
we help to increase crop productivity, protect the environment and
improve health and quality of life. For more information about us
please go to http://www.syngenta.com/. Cautionary Statement
Regarding Forward-Looking Statements This document contains
forward-looking statements, which can be identified by terminology
such as 'expect', 'would', 'will', 'potential', 'plans',
'prospects', 'estimated', 'aiming', 'on track' and similar
expressions. Such statements may be subject to risks and
uncertainties that could cause the actual results to differ
materially from these statements. We refer you to Syngenta's
publicly available filings with the U.S. Securities and Exchange
Commission for information about these and other risks and
uncertainties. Syngenta assumes no obligation to update
forward-looking statements to reflect actual results, changed
assumptions or other factors. This document does not constitute, or
form part of, any offer or invitation to sell or issue, or any
solicitation of any offer, to purchase or subscribe for any
ordinary shares in Syngenta AG, or Syngenta ADSs, nor shall it form
the basis of, or be relied on in connection with, any contract
therefor. (1) Growth at constant exchange rates, see Appendix A in
full English version. (2) EBITDA, a non-GAAP measure, is in regular
use as a measure of operating performance and is defined in
Appendix B in full English version. (3) EPS on a fully-diluted
basis, excluding restructuring and impairment. (4) Net income to
shareholders of Syngenta AG. * Crop Protection sales include $71
million of inter-segment sales. Syngenta International AG Media
contacts: Analyst/Investor contacts: Media Office Medard
Schoenmaeckers Jennifer Gough CH-4002 Basel Switzerland Switzerland
Switzerland +41 61 323 2323 +41 61 323 5059 Tel: +41 61 323 23 23
USA Fax: +41 61 323 24 24 +1 202 737 6521 John Hudson Switzerland
+41 61 323 6793 USA http://www.syngenta.com/ +1 202 737 6520
DATASOURCE: Syngenta CONTACT: Media, Medard Schoenmaeckers,
Switzerland, +41-61-323-2323, Analyst/Investors, Jennifer Gough,
Switzerland, +41-61-323-5059, USA, +1-202-737-6521, John Hudson,
Switzerland, +41-61-323-6793, USA, +1-202-737-6520, all of Syngenta
International AG Web Site: http://www.syngenta.com/
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