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Maxunitech Inc.
Beijing Multigrass Formulation Co., Ltd.

Makhteshim Agan sales up 5.3% in 2012qrcode

Mar. 12, 2013

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Mar. 12, 2013

Revenues rose by 5.3% to $2,834.5 million in 2012. Revenues increased by 5.5% to $579.5 million in the fourth quarter ended Dec 31,2012. The primary contributors to growth in sales were an increase in the quantity of products sold and higher selling prices, partially offset by currency effects.

Gross profit in 2012 amounted to $899.6 million compared with gross profit of $841.5 million in 2011. Gross profit for the fourth quarter of 2012 amounted to $158.7 million compared to $149.8 million. The improvement in gross profit and gross margins during FY 2012 and the fourth quarter derived from a rise in selling prices, increased sales volume, as well as an improved product mix.

Operating profit in 2012 amounted to $281.6 million compared with operating profit of $243.1 million in 2011. Operating profit in the fourth quarter of 2012 amounted to $3.0 million compared with an operating loss in the amount of $6.2 million during the corresponding quarter of the previous year.

EBITDA for FY 2012 was $429.8 million (15.2% of sales) compared to $372.8 million (13.8% of sales) for FY 2011, an increase of 15.3%. EBITDA for the fourth quarter of 2012 was $41.1 million (7.1% of sales) compared to $26.6 million (4.8% of sales) for the comparable period in 2011.

Makhteshim Agan’s sales results ($ million)
Q4 ended Dec. 31
Q4 2012
Q4 2011
%change
Full Year 2012
Full Year 2011
% change
Sales
579.5
549.3
5.5%
2,834.5
2,691.4
5.3%
Gross profit
158.7
149.8
5.9%
899.6
841.5
6.9%
Net income
(21.9)
(26.7)
17.8%
122.6
120.7
1.6%
EBITDA1
41.1
26.6
54.3%
429.8
372.8
15.3%
1.earnings before interest, tax, depreciation and amortization

Commenting on the results, Mr. Yang Xingqiang, MAI’s Chairman of the Board, said, “2012 was another successful year for the Company with continued growth in all regions, and improvement in all our financial indicators, including EBITDA and operating profit. During the year, the Company progressed in implementing its strategic initiatives, including the integration of MAI’s and ChemChina’s operations, expansion of the Company’s global marketing activities and the launch of new, differentiated products.”

"We are pleased with the business progress made so far. I am confident that the continued focus on enhancing MAI's operational and commercial capabilities will favorably position the Company to maintain its leading position in the crop protection market and lead to continued growth and profitability”, concluded Xingqiang.

Sales by region

On a geographic basis, the strongest sales increases were in the Company’s Asia Pacific region which contributed $497.3 million for the year, a 10% increase from $451.9 million in 2011. The increase stems from increased sales volume (particularly in Australia, India and Thailand) resulting from new product launches and strengthened market initiatives, as well as a rise in selling prices, and despite difficult climactic conditions. The increases were offset, in part, by local currency exchange erosion. For the fourth quarter of 2012, sales in the region rose to $98.3 million compared to $93.6 million for the comparable period in 2011, an increase of 5%.

Sales in Latin America for fiscal year 2012 amounted to $642.9 million compared with $609.3 million in 2011, a 5.5% increase. For the fourth quarter of 2012, sales in Latin America totaled $210.1 million compared to $189.1 million for the comparable period in 2011, an increase of 11.1%. Increased sales for the year and the quarter resulted due to both the increases in selling prices and higher sales volume. Sales in Brazil were positively affected by the receipt of several key product registrations.

North American sales for FY 2012 rose to $497.5 million from $478.4 million for 2011, an increase of 4%. During the fourth quarter of 2012, sales in North America rose to $107.6 million from $104.7 million for the corresponding period in 2011, an increase of 2.7%. The increase during the year and quarter arose mainly from increased sales volume, partially offset by a decrease in selling prices and despite challenging weather conditions in the US.

European sales for 2012 were $1,092.4 million compared to $1,049.3 million for 2011, an increase of 4.1%, attributable to a rise in selling prices, partially offset by the erosion in exchange rates (excluding the currency hedging transactions carried out by the Company. During the fourth quarter of 2012, sales in Europe totaled $136.6 million compared to $137.5 million for the same period in 2011. Sales remained stable due to the strengthening of the US dollar against local currencies).

Makhteshim Agan’s sales results by regions ($ million)
Q4 ended Dec. 31
Q4 2012
Q4 2011
%change
Full Year 2012
Full Year 2011
%change
European
136.6
137.5
0.7%
1,092.4
1,049.3
4.1%
Latin America
210.1
189.1
11.1%
642.9
609.3
5.5%
North America
107.6
104.7
2.7%
497.5
478.4
4.0%
Asia Pacific
98.3
93.6
5.0%
497.3
451.9
10.0%
Israel
27.0
24.4
10.7%
104.4
102.6
1.8%
Total
579.6
549.3
5.5%
2,834.5
2,691.5
5.3%

Mr. Erez Vigodman, President and CEO of Makhteshim Agan, commented: "I am proud to report that 2012 was another year of strong performance across a range of financial and business parameters. This was a year with a host of challenges, including increases in raw material prices, exchange rate fluctuations, and challenging weather conditions in key markets, we achieved impressive financial results”.

"We demonstrated significant growth in all of the geographical regions in which we operate, specifically in emerging markets while strengthening our infrastructure and capabilities in these markets. At the same time, we continued to focus on implementing our strategic and operational change program. To support this effort, we continued to launch differentiated, value adding, effective solutions to support and cement our market position, as we seek to simplify agriculture everywhere, whilst continuously improving our capabilities in areas such as manufacturing, supply chain, registration, product development, and product portfolio”.

"As part of our strategic initiatives we pursued intensive activities designed to strengthen our competitive position worldwide. Our activities are targeted at creating an infrastructure for continuous expansion and profitable growth which includes strengthening our abilities in areas such as: R&D, development of differentiated and unique products, advanced IT systems, advanced marketing capabilities, and innovation culture . At the same time we are realizing the potential of our merger with ChemChina. We made steady progress in advancing our goal of creating an operational and commercial infrastructure in China that will enable us to ramp up our presence in the Asia Pacific region, to tap the growth potential in the growing Chinese market and support our global activities. We are confident that our activities will complement and significantly enhance MAI's global leadership position and will enable us to present a unique and differentiated business model in the crop protection industry,” concluded Vigodman.

Strategic Update

Merger with ChemChina

During 2012, progress was made in analysis and design of the operational and commercial potential within China for MAI. This process included investigation of assets and opportunities in China which would best serve MAI's strategic intent to create a substantial platform in China.

Strengthening Global Market and Customer Focus

During 2012, the Company created and filled two new executive positions, Ignacio Dominguez as Chief Commercial Officer and Jean-Marc Dardier, Head of Global Marketing. The new positions are meant to strengthen MAI’s market and customer focus, better harness its global marketing strengths and execute its market strategies.
 

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