Syngenta's sales down 2% in H1 2017
Jul. 28, 2017
EBITDA was 5 percent lower in H1 2017. The EBITDA margin was 24.2 percent (H1 2016: 24.9 percent) reflecting lower volumes and prices.
Erik Fyrwald, Chief Executive Officer, said: “The first half of the year marked a historic moment in Syngenta’s history with the closing of the transaction with ChemChina. With the support of ChemChina, we are fully focused on our objectives of strengthening our leadership in Crop Protection and of becoming a strong number three in Seeds. We are ready to drive the determined execution of our new strategies for these businesses and have put in place a simplified organization aligned to best meeting the needs of our customers.
In the first half of 2017, despite adverse weather and low commodity prices, our sales in Europe, Africa and the Middle East and in North America were unchanged at constant exchange rates, with new products continuing to make a significant contribution. Our Latin America sales declined significantly again as the industry faces low commodity prices, and there are high channel inventories in Brazil. We continue to drive productivity and efficiency savings, partially offsetting the impact of the difficult market conditions on our profitability.
Looking ahead, we will be focused on profitable market share growth and on our ambition – to be the most collaborative and trusted team in agriculture, providing seeds and crop protection innovations to enhance the prosperity of farmers, wherever they are. In the first half of 2017, our innovations in Crop Protection enabled us to partially offset the impact of weak market conditions. Innovation is also a key driver for our Seeds business, and I am delighted that we recently received import approval in China for the Agrisure Duracade® trait. Obtaining the regulatory approval opens up new opportunities for our corn seed portfolio, giving US growers access to exciting new hybrids as well as the latest in corn rootworm technology.”
Sales by region
Sales in Europe, Africa and the Middle East were unchanged at constant exchange rates despite cold weather and low disease pressure, which contributed to a late start to the season in Northern and Central Europe. The impact of these conditions on Crop Protection volumes was partially offset by the successful launches of SOLATENOL™ in France and other European countries.
In North America sales were unchanged after a strong second quarter which was mainly driven by corn trait royalty income and growth in soybean seed sales. Fungicides also performed well across the region, reflecting the ongoing success of TRIVAPRO™, based on SOLATENOL™.
In Latin America sales declined by 18 percent. High channel stock levels in Brazil reduced the demand for crop protection products. Seedcare sales continued to expand driven by CRUISER® and the successful launch of FORTENZA®.
In Asia Pacific sales were one 1 percent lower. The decline in the second quarter was largely due to a change in sales taxes in India, which shifted sales into the third quarter, and dry conditions in Australia. ASEAN performed strongly, benefiting from a good performance in fungicides, notably AMISTAR® and SCORE®.