Syngenta’s half year report – Competitive performance despite challenging global conditions

  • Sales USD 6.8 billion (2018 $7.2 billion): 2 percent1 lower compared with H1 2018, 1 percent adjusted for divestments and lower royalty income under change of control clauses
  • Crop Protection sales flat1,2
  • Seeds sales 3 % 1,2 lower

    Innovation focused on helping growers deal with increasing challenges: two new product introductions in North America and combatting Fall Armyworm in Asia

    EBITDA USD 1.5 billion: 15 % below H1 2018, 13 %t adjusted for divestments and lower income under change of control agreement.

Erik Fyrwald, Chief Executive Officer, said: “The first half of this year saw many challenges for agriculture, including historic flooding in the US that resulted in significantly late planting and severe droughts in Australia and Indonesia. Growers continue to face challenges with trade issues. Sales for the first half of 2019 were 1 % lower at constant exchange rates than in 20182. Adverse weather conditions were mostly offset by strong volume growth in Latin America.

We remain committed to focusing our innovation on helping growers deal with the impacts of climate change, including changing weather patterns and increasing pest pressure. New product introductions in the first half included fungicide seed treatment, VAYANTIS™, for the control of Pythium and Phytophthora diseases with first registrations expected in the US and Canada in 2020, and the registration of TAVIUM™ PLUS VAPORGRIP® TECHNOLOGY herbicide in the US and Canada. Syngenta is working with local teams to quickly respond to increasing Fall Armyworm infestation in Asia by providing advice and integrated pest management solutions, including FORTENZA® DUO, BT traits and biologicals.”

Financial highlights 1st Half 2019

Sales USD 6.8 billion

Sales of USD 6.8 billion were 2 % lower at constant exchange rates (CER) versus H1 2018, 1 % adjusted for the impact of divestments. Excluding divestments, Crop Protection sales of USD 5.2 billion were flat against 2018 at CER. Seeds sales of USD 1.6 billion were 3 % lower than adjusted 2018 sales at CER.

EBITDA USD 1.5 billion

EBITDA of $1.5 billion, was 15 % lower than H1 2018, 8 % down at constant exchange rates adjusted for the impact of divestments, reflecting the difficult weather conditions in the US and increased raw material costs in China.

Net income USD 798 million

Net income was $798 million compared to USD 1209 million in H1 2018. Restructuring in 2018 included gains on mandated divestments, while 2019 charges include higher impairments partly from the closure of a production site. Excluding restructuring, net income was 6 percent lower, with the reduced operating result and increased interest expense after the 2018 bond issuance, partly offset by a one-off deferred tax revaluation gain due to the Swiss tax reform.

Free Cash Flow – USD 0.33 billion

Free cash flow before acquisitions and the US litigation settlement was –USD 0.33 billion (H1 2018 USD 0.71 billion). 2018 included proceeds from the mandated divestments, while 2019 includes the sale of Syngenta’s Basel headquarters. Otherwise, lower free cash flow reflected the delayed and lower sales in the United States, coupon payments on the bonds issued last year, and higher tax payments.

Crop Protection regional sales performance

Sales in Europe, Africa and the Middle East were 1 % lower at constant exchange rates (CER) compared with H1 2018 despite a challenging market environment. A strong early season in the North with increased cereals demand in crop protection gave way to weakness in the second quarter.

In North America, sales were down 14 % CER, impacted by extreme weather conditions. The first half saw two new product introductions: TAVIUM™ PLUS VAPORGRIP® TECHNOLOGY herbicide for use in soybeans and cotton, and VAYANTIS™ for Pythium and Phytophthora control in a variety of crops.

In Latin America, overall momentum from 2018 was maintained with strong volume growth in Crop Protection partially offset by the impact of weaker currency. Sales in H1 2019 were 28 % higher (CER) than in 2018.

In Asia Pacific, sales were down by 5 % (CER), driven by drought in Australia and Indonesia and difficult market conditions in Vietnam.

China experienced continued momentum with Crop Protection sales increasing by 11 % (CER) compared to H1 2018 assisted by successful in-licensing.

Seeds regional sales performance

Seeds sales in Europe, Africa and the Middle East were 1 percent higher at constant exchange rates (CER) against H1 2018, with growth offset by challenging market and credit conditions in the East. Reported sales also reflected unfavorable currency impact.

In North America, where extreme weather conditions severely delayed planting and reduced acreage, Seeds sales were 16 percent lower compared with H1 2018.

In Latin America, sales rose by 4 percent (CER) with volume increase and the successful integration of Nidera™. Reported sales were reduced by unfavorable currency impact.

Sales in Asia Pacific, including China, increased by 14 percent (CER) with continued strong momentum in corn, new product launches and growth in Vegetables.

More detailed financial information is available on: http://www.financial-results.syngenta.com

Syngenta is one of the world’s leading agriculture companies. Our ambition is to help safely feed the world while taking care of the planet.  We aim to improve the sustainability, quality and safety of agriculture with world-class science and innovative crop solutions. Our technologies enable millions of farmers around the world to make better use of limited agricultural resources. With 28000 people in more than 90 countries we are working to transform how crops are grown. Through partnerships, collaboration and The Good Growth Plan we are committed to improving farm productivity, rescuing land from degradation, enhancing biodiversity and revitalizing rural communities.

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