Syngenta's crop protection sales up 3% in Q2 2013

Syngenta’s crop protection sales were up by 2.8% to $2,892 million year-over-year in the second quarter ended Jun. 30, 2013. For the first half year of 2013, the sales of crop protection increased by 6% to $6,017 million versue the same period of last year.

The total sales for Syngenta dropped by 3.6% to $3,820 million in the second quarter, including  crop protection, lawn and garden, and seed businesses. For the first six months of 2013, total sales were up by 1.5% to $8,390 million. The six-month EBITDA was down by 3.2% to $2,179 million.


Regional sales

Europe, Africa and the Middle East is the largest sales region.The region sales for crop protection declined by 3.0% to $937million in the second quarter of 2013,while the sales of first half year rose by 3.4% to $2,204 million. A strong first quarter was followed by a cold wet spring which reduced the number of crop protection applications, particularly for fungicides in northern Europe. Overall growth for the first half was driven by the CIS, France, Iberia and the emerging markets of South East Europe. Performance in the CIS reflected the ongoing intensification of agriculture and Syngenta’s leading market position, with sunflower sales making a strong contribution. Sunflower also drove growth in South East Europe. In France the rapid expansion of AXIAL® on cereals and CALLISTO® on corn continued. The Iberian markets staged a strong recovery following last year’s drought and economic constraints. 

Syngenta’s crop protection sales result by region ($million)
Q2 ended Jun. 30	Q2 2013	Q2 2012	change%	Six-month 2013	Six-month 2012	change%
Europe, Africa and Middle East	937	966	-3.0	2,204	2,132	+3.4
North America	994	955	+4.1	1,884	1,739	+8.3
Latin America	529	497	+6.4	1,029	926	+11.1
Asia Pacific	432	395	+9.4	900	877	+2.6
Total	2,892	2,813	+2.8	6,017	5,674	+6.0

Latin America with strong sales growth in the low season was driven by Brazil and Argentina, where grower sentiment remains strong in a buoyant crop price environment. Significant contributions came from sugar cane, seed care and corn seed, where new trait combinations are proving their success. Demand for TOUCHDOWN® benefited from a shortage of glyphosate supply from competitors. Sales in Venezuela were lower due to uncertain credit conditions following the change in government.Sales for crop protection increased by 6.4% to $529 million in this quarter, and six-month sales were up by 11.1% to $1,029 million.

Syngenta’s seed sales result by region ($million)
Q2 ended Jun. 30	Q2 2013	Q2 2012	change%	Six-month 2013	Six-month 2012	change%
Europe, Africa and Middle East	294	284	+3.5	980	889	+10.2
North America	294	557	-47.2	754	1,053	-28.4
Latin America	82	56	+46.4	160	132	+21.2
Asia Pacific	102	73	+39.7	160	121	+32.2
Total	772	970	-20.4	2,054	2,195	-6.4

Asia Pacific growth accelerated in the second quarter, with a rebound from adverse weather in Australasia and good progress across the emerging markets, particularly Indonesia and Thailand. In ASEAN GroMore™ protocols continued to expand on rice. In South Asia an early monsoon contributed to double digit growth with particularly strong performances in corn and vegetables. China saw broad-based growth with a notable contribution from AMISTAR®, with a new launch on rice. Sales of crop protection  increased by 9.4% to $432 million in the quarter, and half year sales were up by 2.6% to $900 million.

 Product line sales

Herbicides are the largest product category, accounting for about 45% of six-month crop protection sales. Half-year herbicide sales were up by 8.4% to $2,731 million.

Sales for selective herbicides decreased by 3.6% to $974 million in the second quarter,while half year sales were up by 3.3% to $1,985 million .  A strong first quarter was followed by slightly lower sales in the second quarter as unfavorable weather in the northern hemisphere reduced applications. Growth for the first half was driven by AXIAL® on cereals in France and Canada, resistance management solutions in the USA and the expansion of CALLISTO® in Europe. Corn herbicides also performed well in Asia Pacific, where they are part of ‘First 45 day solutions’ enabling small scale growers to establish yield potential.

Sales for non-selective Herbicides were up by 23.3% to $444 million in the second quarter,and half year sales were up by 25% to $746 million. Growth was driven mainly by TOUCHDOWN®, notably in Latin America. Strong demand and a shortage of supply from competitors resulted in significant volume and price gains. Sales of GRAMOXONE® were also higher with increased demand in a number of ASEAN countries and in China.
 

Syngenta’s sales result by category ($million)
Q2 ended Jun. 30	Q2 2013	Q2 2012	change%	Six-month 2013	Six-month 2012	change%
Selective Herbicides	974	1,010	-3.6	1,985	1,922	+3.3
Non-selective Herbicides	444	363	+23.3	746	597	+25.0
Fungicides	857	831	+3.1	1,783	1,732	+2.9
Insecticides	392	410	-4.4	872	872	0
Seed Care	202	170	+18.8	581	484	+20.0
Other Crop Protection	23	29	-20.7	50	67	-25.4
Total Crop Protection	2,892	2,813	+2.8	6,017	5,674	+6.0
Corn and Soybean	318	561	-43.3	1,018	1,268	-19.7
Diverse Field Crops	231	193	+19.7	646	549	+17.7
Vegetables	223	216	+3.2	390	378	+3.2
Total Seeds	772	970	-20.4	2,054	2,195	-6.4
Lawn and Garden(1)	166	187	-11.2	366	436	-16.1
Group Sales	3,820	3,961	-3.6	8,390	8,265	+1.5
(1)Includes product lines Professional Products and Flowers. Professional Products were formerly reported under Crop Protection and Flowers under Seeds.

Lawn and garden sales dropped 16.1% to $366 million in the first half year, and down by 11.2% to $166 million in the second quarter. The falls were due to divestments in 2012, which were made in order to focus the business on “elite genetics and high-value chemistry” They have resulted in a significant improvement in profitability, in line with the target of a 20 percent full year EBITDA margin in 2015. with half-year earnings before interest, tax, depreciation and amortisation (EBITDA)was up by $20 million to $77 million. The EBITDA margin reached 21.2% versus the 13.2% of last year.

For the diverse field crops, Sales growth accelerated in the second quarter with an excellent performance by sunflower in the CIS and South East Europe. Growth in these markets reflected favorable spring crop conditions, ongoing intensification and strong market recognition for Syngenta’s leading hybrids. Sunflower also performed strongly in Argentina. In Asia Pacific, where the business includes rice, sales more than doubled reflecting the acquisition of Devgen and the expansion of TEGRA® programs. Sugar beet sales were lower in the CIS owing to an acreage reduction but grew significantly in China.

The vegetables business is confirming its return to growth. With economic recession still having some impact on consumption of high value fresh produce in developed countries, growth was driven by the emerging markets notably Latin America. Sales also showed significant growth in South Asia, reflecting an early monsoon and the ability to capture value from leading hybrids for okra, tomato and cauliflower.

Outlook

"For the second half of the year we expect an acceleration of underlying sales growth based on the positive outlook for Latin America and Asia Pacific. In Latin America, we expect the high commodity price to encourage further investment in soybean, where we continue to have a leading market position underpinned by the increasing integration of our offers. We also see ongoing expansion of the opportunity in sugar cane and significant further potential for our corn trait portfolio. In Asia Pacific, we aim to expand our leadership position in the emerging markets, where strong growth is expected to continue.”  said Mike Mack, Chief Executive Officer.

“For the full year, we remain on track to deliver sales growth in line with our longer term objective. We also expect to achieve growth in underlying earnings and to generate substantial free cash flow. Looking further ahead, we maintain our target of an EBITDA margin in the range of 22 to 24 percent in 2015, and will focus on delivering sustained sales growth and further increases in profitability supported by cost efficiency and the leverage of our integrated offers.” stated Mike Mack.