BASEL, Switzerland,
July 23, 2014 /PRNewswire/ --
- Sales $8.5 billion, up 1
percent: up 4 percent at constant exchange rates
- Late start to North American season reduced crop protection
use
- Strong growth in all other regions
- price increases across the business
- EBITDA $2.1 billion, 3 percent
lower owing to currency movements
- up 6 percent at constant exchange rates
- Earnings per share1 $15.60, 2 percent lower
|
Reported Financial
Highlights
|
|
1st
Half 2014
$m
|
1st Half
2013
$m
|
Actual
%
|
CER2 %
|
Sales
|
8,508
|
8,390
|
+1
|
+4
|
Operating
income
|
1,725
|
1,792
|
- 4
|
|
Net
income3
|
1,391
|
1,409
|
- 1
|
|
EBITDA
|
2,111
|
2,179
|
- 3
|
+6
|
Earnings per
share1
|
$15.60
|
$15.92
|
- 2
|
|
|
1
Excluding restructuring and impairment; EPS on a fully-diluted
basis.
2 Growth at constant exchange rates.
3 Net income to shareholders of Syngenta AG (equivalent
1st Half 2014 diluted earnings per share of
$15.11).
|
Mike Mack, Chief Executive
Officer, said:
"The pace of sales growth in the first half was held back by
adverse weather conditions in North
America which, combined with a reduction in corn acreage,
significantly impacted the crop protection market. Growth in all
other regions was robust, exceeding our full year target rate of
six percent at constant exchange rates. Emerging market sales
increased by 11 percent, with performance clearly demonstrating the
success of our integrated strategy. Pricing remained firm across
the business.
"Profitability was affected by the lower sales volume in
North America and by emerging
market currency weakness. At constant exchange rates the EBITDA
margin increased, helped by price increases, lower seeds costs and
savings from our existing operational efficiency program. In
February we announced a comprehensive new program to accelerate
operational leverage from 2015. Project teams are working on the
implementation of this program across the company, and we are on
track to deliver significant savings in production, commercial
operations and R&D. Our priority is to ensure that ongoing
sales growth is accompanied by improved profitability and strong
cash flow generation."
Financial highlights 1st Half 2014
Sales $8.5 billion
Sales increased by 4 percent at constant exchange rates. The
increase reflected higher prices with volumes unchanged owing to
the adverse weather in North
America; all other regions showed volume increases. The
underlying rate of price increase, excluding currency-related
adjustments and glyphosate, was just over 2 percent.
EBITDA $2.1 billion
EBITDA was 3 percent lower in reported terms but increased by 6
percent at constant exchange rates. The EBITDA margin (CER) was
26.6 percent (H1 2013: 26.0 percent).
Net financial expense and taxation
Net financial expense at $100
million was slightly higher (H1 2013: $90 million) due to increased hedging costs
associated with emerging market growth. The tax rate was 15 percent
(H1 2013: 18 percent).
Net income $1.4 billion
Net income including restructuring and impairment was 1 percent
lower. Earnings per share, excluding restructuring and impairment,
were 2 percent lower at $15.60.
Cash flow
Free cash flow before acquisitions was $(113) million compared with $(319) million in H1 2013. Since the start of the
year cash flow from inventory reduction has had a favorable impact
of $428 million compared with last
year. Average trade working capital as a percentage of sales was 42
percent (H1 2013: 37 percent) reflecting the increase in
inventories in the second half of 2013. Inventories as a percentage
of sales are expected to decrease by two percentage points as the
2014 Latin American season progresses.
Fixed capital expenditure including intangibles was $312 million (H1 2013: $274 million); for the full year capital
expenditure of around $750 million is
expected.
Dividend and share repurchase
A dividend of CHF 10.00 per share
(2013: CHF 9.50) was paid on
May 7, representing a total payout of
$1,032 million. In the first half of
the year the company repurchased 136,000 shares for a total amount
of $48 million, at an average share
price of CHF 322.60.
Balance sheet
In March Syngenta completed two bond issues as part of its
normal funding requirements and in order to further enhance its
debt maturity profile. A EUR 750
million issue comprised a EUR 250
million Eurobond maturing in 2017 and a EUR 500 million Eurobond maturing in 2021. A
CHF 750 million Swiss domestic bond
issue comprised a CHF 350 million
bond maturing in 2019, a CHF 250
million bond maturing in 2024 and a CHF 150 million bond maturing in 2029.
Business highlights 1st Half 2014
|
Half Year
|
Growth
|
|
2nd
Quarter
|
Growth
|
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
Europe, Africa, Middle
East
|
3,336
|
3,165
|
+5
|
+7
|
|
1,241
|
1,229
|
+1
|
+2
|
North
America
|
2,443
|
2,628
|
-7
|
-6
|
|
1,211
|
1,287
|
-6
|
-5
|
Latin
America
|
1,269
|
1,174
|
+8
|
+11
|
|
674
|
606
|
+11
|
+14
|
Asia
Pacific
|
1,096
|
1,057
|
+4
|
+10
|
|
538
|
532
|
+1
|
+7
|
Total integrated
sales
|
8,144
|
8,024
|
+1
|
+4
|
|
3,664
|
3,654
|
-
|
+2
|
Lawn and
Garden
|
364
|
366
|
-1
|
-
|
|
162
|
166
|
-3
|
-2
|
Group
sales
|
8,508
|
8,390
|
+1
|
+4
|
|
3,826
|
3,820
|
-
|
+2
|
Integrated sales performance
- Sales $8.1 billion, up
4%1
- EBITDA $2.0 billion (H1 2013:
$2.1 billion)
- EBITDA margin1 26.8% (H1 2013: 26.2%)
1 At constant exchange rates
Europe, Africa and the Middle East: An early start to the season
led to increased weed, disease and insect pressure contributing to
a strong first half performance. The slower pace of growth in the
second quarter was primarily due to the impact of lower spring
plantings on seeds sales; crop protection demand remained robust.
In the first half all territories registered growth in integrated
sales, with the strongest growth rates coming from the CIS and
Iberia. In the CIS, volume growth was achieved despite the
political uncertainty and was augmented by significant price
increases in Ukraine to offset
currency depreciation.
North America: Prolonged cold temperatures delayed
the start of the US season until late May, reducing the level of
disease and insect pressure as well as the need for pre-emergent
herbicide sprays. In Canada,
demand in the second quarter was affected by a reduction in cereals
acreage and by flooding. In addition, sales of low margin
TOUCHDOWN® were deliberately constrained, with the aim
of focusing on higher value mixture products to combat resistance.
Sales of corn and soybean seeds reflected the acreage shift in the
USA and overall were slightly
higher.
Latin America: In
Latin America, the pace of growth
continued to improve despite dry conditions in Brazil and Argentina which reduced selective herbicide
sales in the second quarter. TOUCHDOWN® sales were also
lower in line with the re-focusing of this business. Infestation by
the helicoverpa caterpillar contributed to a significant
increase in insecticide sales in Brazil, where fungicide sales also increased
sharply. In Venezuela, sales
resumed following a payment delay at the end of 2013. Sales
of both corn and soybean seeds increased.
Asia Pacific: Growth was
strong in both developed and emerging markets. In Australasia,
rainfall increased grower confidence resulting in growth across the
crop protection portfolio. South
Asia saw strong growth in protocols for Vegetables and a
significant increase in corn seed sales. In China, sales of AMISTAR® technology
continued to expand on rice and vegetables.
Lawn and Garden performance
- Sales $364 million,
unchanged1
- EBITDA $70 million (H1 2013:
$77 million)
- EBITDA margin1 20.9% (H1 2013:
21.2%)
1 At constant exchange rates
The late spring in North
America also affected consumer demand for flowers, while in
Europe demand reflected the
subdued economic environment in a number of countries. Emerging
markets however continued to expand rapidly, with double digit
sales growth in Latin America and
Asia Pacific. The EBITDA margin at constant exchange rates
remained above the 20 percent target level set for 2015.
Acquisitions
In April Syngenta acquired Societa Produttori Sementi (PSB), a
leading Italian durum wheat seed company. The acquisition will
accelerate innovation in the breeding and production of durum wheat
for pasta.
In June Syngenta announced an agreement to acquire Lantmannen's
winter wheat and oilseed rape businesses in Germany and Poland. Through the acquisition Syngenta will
gain access to high quality germplasm, a seeds pipeline and
commercial varieties which complement the existing portfolio.
New partnerships
In April Syngenta announced an agreement with Cellulosic Ethanol
Technologies, LLC to license its ACE (Adding Cellulosic Ethanol)
technology, a new process for ethanol plants. ACE technology is
being combined with Syngenta's proprietary corn trait
ENOGEN®; production of cellulosic ethanol has already
commenced at the Quad County Corn Processors plant in Galva, Iowa.
In June Syngenta and Anheuser-Busch InBev (AB InBev) announced a
partnership to secure the sourcing of high quality malting barley
for the beer industry. The partnership will give growers access to
agronomic support alongside the best malting barley varieties,
enabling them to achieve consistent yield and quality increases.
Outlook
Mike Mack, Chief Executive
Officer said:
"In the second half of the year we expect an acceleration of
sales growth driven by Latin
America, where we see strong momentum for the launch of
ELATUS™. On this basis we continue to expect full year integrated
sales growth of around 6 percent at constant exchange rates.
Profitability in the second half of the year will benefit from the
non-recurrence of the seeds inventory write-down incurred in the
second half of 2013. For the full year, earnings growth, together
with a reduction in trade working capital as a percentage of sales,
will underpin targeted free cash flow before acquisitions of around
$1.3 billion."
Crop Protection
|
Half Year
|
Growth
|
|
2nd
Quarter
|
Growth
|
Crop
Protection
by product line
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
Selective
herbicides
|
1,977
|
1,985
|
-
|
+2
|
|
922
|
974
|
-5
|
-3
|
Non-selective
herbicides
|
790
|
746
|
+6
|
+10
|
|
485
|
444
|
+9
|
+13
|
Fungicides
|
1,917
|
1,783
|
+8
|
+8
|
|
913
|
857
|
+7
|
+7
|
Insecticides
|
934
|
872
|
+7
|
+10
|
|
421
|
392
|
+7
|
+9
|
Seed care
|
520
|
581
|
-11
|
-7
|
|
198
|
202
|
-2
|
+1
|
Other crop
protection
|
73
|
50
|
+45
|
+46
|
|
28
|
23
|
+17
|
+19
|
Total
|
6,211
|
6,017
|
+3
|
+5
|
|
2,967
|
2,892
|
+3
|
+4
|
Selective herbicides: major brands AXIAL®,
CALLISTO® family, DUAL MAGNUM®,
BICEP® II MAGNUM, FUSILADE®MAX,
TOPIK®
Strong growth in Europe,
Africa and the Middle East and in Asia Pacific more than offset weather-related
weakness in the Americas. The cereal herbicide AXIAL®
continued to register double digit growth in Europe, with rapid expansion notably in
Iberia. Good growth in the corn herbicide DUAL/BICEP® II
MAGNUM was partly offset by weakness in other corn herbicides
owing to reduced applications. Sales of soybean herbicides grew
significantly with increased acreage in the Americas and a
continuing need for resistance management solutions.
Non-selective herbicides: major brands
GRAMOXONE®, TOUCHDOWN®
TOUCHDOWN® sales were lower as volumes in the
Americas were deliberately constrained on account of low
profitability. Prices continued to rise but at slower rate than in
2013. GRAMOXONE® grew strongly in Latin America and Asia Pacific, where usage is driven by the
adoption of minimum-till farming practices and the need to reduce
reliance on hand weeding.
Fungicides: major brands ALTO®,
AMISTAR®, BRAVO®, ELATUS™, REVUS®,
RIDOMIL GOLD®, SCORE®, SEGURIS™,
TILT®, UNIX®
The early start to the season in Europe led to higher disease pressure and
strong growth across the portfolio. Sales in Europe of the new SDHI fungicide
SEGURIS™ were up by more than 60 percent. Latin America also saw a strong fungicide
performance despite dry conditions, with good consumption of PRIORI
Xtra® pending the full launch of ELATUS™ in the second
half of the year. Fungicide sales were lower in North America owing to the late start to the
season.
Insecticides: major brands ACTARA®,
DURIVO®, FORCE®, KARATE®,
PROCLAIM®, VERTIMEC®
Insecticide use in North
America was also affected by the cold weather but sales grew
strongly in all other regions, most notably in Latin America. The main drivers were
ACTARA® and DURIVO®; the latter again saw
sales growth of more than 50 percent. In EU countries the
substitution of CRUISER® by FORCE®
significantly boosted sales of this product.
Seed care: major brands AVICTA®,
CRUISER®, DIVIDEND®,
CELEST®/MAXIM®, VIBRANCE®
The two year suspension of neonicotinoid chemistry in the
European Union reduced sales of CRUISER® by $32 million. Seed care sales were also affected
by lower sales to other seeds companies in Latin America. These developments masked the
ongoing success of the new SDHI seed treatment VIBRANCE®
for use on cereals, soybean and canola. This product has now been
launched in all regions and saw first half sales surpass
$100 million.
|
Half Year
|
Growth
|
|
2nd
Quarter
|
Growth
|
Crop
Protection
by region
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
Europe, Africa, Middle
East
|
2,412
|
2,204
|
+9
|
+10
|
|
985
|
937
|
+5
|
+5
|
North
America
|
1,745
|
1,884
|
-7
|
-6
|
|
953
|
994
|
-4
|
-2
|
Latin
America
|
1,121
|
1,029
|
+9
|
+12
|
|
592
|
529
|
+12
|
+15
|
Asia Pacific
|
933
|
900
|
+4
|
+10
|
|
437
|
432
|
+1
|
+6
|
Total
|
6,211
|
6,017
|
+3
|
+5
|
|
2,967
|
2,892
|
+3
|
+4
|
|
Seeds
|
|
Half Year
|
Growth
|
|
2nd
Quarter
|
Growth
|
Seeds
by product line
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
Corn and
soybean
|
1,012
|
1,018
|
-1
|
+2
|
|
328
|
318
|
+3
|
+7
|
Diverse field
crops
|
578
|
646
|
-10
|
-4
|
|
176
|
231
|
-23
|
-16
|
Vegetables
|
376
|
390
|
-3
|
-3
|
|
203
|
223
|
-9
|
-9
|
Total
|
1,966
|
2,054
|
-4
|
-1
|
|
707
|
772
|
-8
|
-5
|
Total seeds sales were one percent lower at constant exchange
rates owing to the divestment of the Dulcinea Farms fresh produce
business in December 2013. Adjusted
for this divestment, seeds sales were up one percent.
Corn and soybean: major brands
AGRISURE®, GOLDEN HARVEST®,
NK®
Sales were two percent higher despite the impact of lower corn
acreage in the USA and
Brazil. North American corn seed
sales were down four percent, reflecting the acreage decline in the
USA. Sales in both Latin America and Europe were slightly higher. Asia Pacific saw double digit growth with the
continuing success of Syngenta hybrids based on tropical germplasm.
Soybean sales, which in the first half are almost entirely in the
USA, showed double digit growth,
with the transition to RR2Y technology now complete.
Diverse field crops: major brands NK®
oilseeds, HILLESHOG® sugar beet
Lower sales largely reflected market trends in Europe following an exceptionally strong
season in 2013. Sunflower acreage in the important South East Europe area was down and in
Ukraine some growers delayed
planting owing to the political uncertainty. In the USA, sales were affected by performance issues
in sugar beet.
Vegetables: major brands ROGERS®,
S&G®
Excluding the divestment of Dulcinea sales were five percent
higher at constant exchange rates. Europe, Africa and the Middle East continued to show solid growth.
Sales in North America were
slightly higher after adjustment for Dulcinea. Latin America and Asia Pacific generated good growth; a notable
performance came from South Asia,
where programs to boost smallholder productivity have enabled
growers to increase marketable yield.
|
Half Year
|
Growth
|
|
2nd
Quarter
|
Growth
|
Seeds
by region
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
|
2014
$m
|
2013
$m
|
Actual
%
|
CER
%
|
Europe, Africa, Middle
East
|
934
|
980
|
-5
|
-
|
|
259
|
294
|
-12
|
-7
|
North
America
|
713
|
754
|
-6
|
-5
|
|
262
|
294
|
-11
|
-10
|
Latin
America
|
153
|
160
|
-4
|
+1
|
|
84
|
82
|
+3
|
+4
|
Asia Pacific
|
166
|
160
|
+4
|
+12
|
|
102
|
102
|
+1
|
+9
|
Total
|
1,966
|
2,054
|
-4
|
-1
|
|
707
|
772
|
-8
|
-5
|
The full version of the 2014 Half Year Results press release is
available here and a presentation illustrating the results will
also be available by 07:30 (CET).
Change of auditor
The Annual General Meeting on April 29,
2014 approved the motion to elect KPMG as auditor to
Syngenta. KPMG replaced EY (formerly Ernst & Young),
which held the role since 2002.
Announcements and meetings
Third quarter trading
statement 2014
|
October 16,
2014
|
Full year results
2014
|
February 4,
2015
|
First quarter trading
statement 2015
|
April 17,
2015
|
Annual General
Meeting
|
April 28,
2015
|
Syngenta is one of the world's leading companies with more than
28,000 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 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
there for.
Syngenta International AG
Media Office
CH-4002 Basel
Switzerland
Tel: +41 61 323 23 23
Fax: +41 61 323 24 24
www.syngenta.com
|
|
|
Media contacts:
Paul Barrett
Switzerland +41 61 323 2323
Paul Minehart
USA +1 202 737 8913
|
|
|
Analyst/Investor contacts:
Jennifer Gough
Switzerland +41 61 323 5059
USA +1 202 737 6521
Lars Oestergaard
Switzerland +41 61 323 6793
USA +1 202 737 6520
|
SOURCE Syngenta International AG