Syngenta's agchem sales up 6% in 2013

Syngenta’s crop protection sales were up by 3.3% to $2,598 million in the fourth quarter ended Dec. 31, 2013. Seeds business rose by 12% to $672 million. Total group sales, including crop protection, seeds, lawn and garden business, increased by 4.4% to $3,382 million in the final quarter.

For the full year of 2013, sales of crop protection were up by 5.9% to $10,923 million. Seeds business slightly dropped by 1% to $3,204 million, while group sales rose by 3.4% to $14,688  million. EBITDA was 7% lower with an EBITDA margin of 19.7 % (2012: 21.9%).The main factors affecting profitability were: reduced trait royalty income; an increase in seeds production costs of $175 million following the drought in the USA in 2012; and a seeds inventory write-down of $170 million.

Syngenta’s sales result ($million)
Q4 ended Dec. 31	Q4 2013	Q4 2012	change%	Full Year 2013	Full Year 2012	change%
Crop Protection	2,598	2,514	+3.3	10,923	10,318	+5.9
Seeds	672	600	+12.0	3,204	3,237	-1.0
Total	3,212	3,065	+4.8	13,997	13,445	+4.1
Lawn and Garden(1)	170	174	-2.3	691	757	-8.7
Group Sales	3,382	3,239	+4.4	14,688	14,202	+3.4
(1)Includes product lines Professional Products and Flowers. Professional Products were formerly reported under Crop Protection and Flowers under Seeds.

 

Regional sales

Crop protection sales in Latin America reached $3499 million, up by 7.3%, and sales for seeds rose by 8.8% to $521 million in 2013. The region showed good growth driven largely by Brazil, where a resilient soybean price and the depreciation of the Real underpinned grower profitability. Syngenta’s expanding soybean seed portfolio registered significant gains with the launch of new varieties.

In the fourth quarter, crop protection sales grew by 2.5% to $1,446 million, while sales for seeds slipped by 4.7% to $141 million. The fourth quarter growth rate reflected a delayed fungicide registration and lower corn seed sales in Brazil, due to the acreage reduction, as well as risk management measures in Argentina and Venezuela. In Latin America South, corn was the main driver for seeds growth for the year, with sales driven by new trait combinations and a combined field force. As the value of seeds sold in the region has increased, so has demand for seed care, notably CRUISER® and CELEST®. Sales of TOUCHDOWN® increased sharply, reflecting the expansion of herbicide tolerant crops and a shortage of glyphosate supply from competitors. Crop protection sales in sugar cane continued their track record of strong growth despite the difficult environment for the ethanol industry.

Syngenta’s crop protection sales result by region ($million)
Q4 ended Dec. 31	Q4 2013	Q4 2012	change%	Full Year 2013	Full Year 2012	change%
Europe, Africa and Middle East	351	325	+8.0	3,033	2,910	+4.2
North America	421	422	0	2,762	2,577	+7.2
Latin America	1,446	1,411	+2.5	3,499	3,261	+7.3
Asia Pacific	380	356	+6.7	1,629	1,570	+3.8
Total	2,598	2,514	+3.3	10,923	10,318	+5.9

Crop protection sales in North America were up by 7.2% to $2,762 million, while seeds sales substantially dropped 18.5% to $1,140 million in 2013. The sales progression was affected by the reduction in trait royalty income: on an underlying basis sales were up five percent. A healthy performance in crop protection was led by seed care, reflecting the successful launch of VIBRANCE® on cereals, canola and soybean. Strong demand for selective herbicides was augmented by increasing concern over glyphosate-resistant weeds. Wet conditions in parts of the USA reduced insect pressure. Seed sales in the first half were constrained by the reduced availability of new traited hybrids following the drought in 2012. In the second half seeds registered double digit growth.

Syngenta’s seed sales result by region ($million)
Q4 ended Dec. 31	Q4 2013	Q4 2012	change%	Full Year 2013	Full Year 2012	change%
Europe, Africa and Middle East	111	83	+33.7	1,232	1,101	+11.9
North America	326	292	+11.6	1,140	1,398	-18.5
Latin America	141	148	-4.7	521	479	+8.8
Asia Pacific	94	77	+22.1	311	259	+20.1
Total	672	600	+12.0	3,204	3,237	-1.0

Crop protection sales in Europe, Africa and Middle East increased by 4.2% to $3,033 million, and seed sales achieved some 12% increase to$1,232 million. A strong first quarter was followed by a cold spring which reduced the number of crop protection applications. France in particular saw strong demand for fungicides in the early part of the year, with growth further boosted by the success of their herbicide portfolio on cereals and corn. Sales in Italy and Iberia improved after the economic constraints and drought of 2012 with market share gains in both territories. Double digit growth in the CIS reflected the ongoing intensification of agriculture and syngenta leading market position, notably in sunflower. South East Europe also grew strongly with broad-based growth across the portfolio and the introduction of new offers.

Sales of crop protection in Asia Pacific improved by 3.8% to$1,629 million, and seeds sales sharply boosted around 20% to $311 million in 2013. Double digit expansion for the full year in emerging markets reflected the ongoing adoption of fungicides and modern insecticide chemistry. South Asia saw strong demand in corn, vegetables and cereals, which was augmented by an early monsoon season. Growth accelerated in the fourth quarter with particularly strong performances in ASEAN and South Asia.

In ASEAN countries such as Thailand and Indonesia, rice sales benefited from the continuing success of GROMORE™ protocols; corn seeds also expanded rapidly accompanied by the uptake of CRUISER®. China saw growth particularly in herbicides, seed care and fungicides, with AMISTAR® making a notable contribution following its new launch on rice. The developed markets of the region showed moderate growth.

Product line sales for crop protection

Sales for selective herbicides recorded a 3.8% increase to$3,051 million in 2013.Corn herbicides grew strongly with the largest contribution coming from CALLISTO® in the USA driven by its success as part of weed resistance management offers. Also on corn,BICEP II MAGNUM® grew strongly in the CIS and France. AXIAL® for cereals continued to expand in Europe, with growth led by France, and maintained its momentum in North America.

Syngenta’s sales result by category ($million)
Q4 ended Dec. 31	Q4 2013	Q4 2012	change%	Full Year 2013	Full Year 2012	change%
Herbicides	914	779	+17.3	3,645	3,298	+10.5
-Selective Herbicides	581	589	-1.4	3,051	2,939	+3.8
-Non-selective Herbicides	370	298	+24.2	1,545	1,246	+24.0
Fungicides	686	758	-9.5	3,035	3,044	-0.3
Insecticides	594	513	+15.8	1,912	1,841	3.9
Seed Care	332	320	+3.8	1,228	1,107	+10.9
Other Crop Protection	35	36	-2.8	152	141	+7.8
Total Crop Protection	2,598	2,514	+3.3	10,923	10,318	+5.9
Corn and Soybean	425	386	+10.1	1,654	1,836	-9.9
Diverse Field Crops	87	66	+31.8	842	719	+17.1
Vegetables	160	148	+8.1	708	682	+3.8
Total Seeds	672	600	+12.0	3,204	3,237	-1.0
Lawn and Garden(1)	170	174	-2.3	691	757	-8.7
Group Sales	3,382	3,239	+4.4	14,688	14,202	+3.4
(1)Includes product lines Professional Products and Flowers. Professional Products were formerly reported under Crop Protection and Flowers under Seeds.

Sales of non-selective herbicides registered a 24% rise to $1,545 million. Growth was driven mainly by TOUCHDOWN®. Strong demand and shortage of supply helped drive significant volume and price gains. Brazil was the leading contributor with sales more than doubling. Sales of GRAMOXONE® were also higher with increased demand leading to double digit growth in Asia Pacific and Brazil.

Fungicides sales reached $3,035 million. The main contribution to growth came from SEGURIS®, the new SDHI fungicide for cereals, for which sales almost tripled. Sales of AMISTAR® Technology grew by more than 20 percent in Asia Pacific with a new launch on rice in China and rapid adoption in the ASEAN countries; Canada also saw strong growth in the potato and cereals market. A decline in fourth quarter fungicide sales reflected a delayed registration in Brazil for the new product ELATUS™, based on the active ingredient Solatenol™.

Insecticides sales boosted by some 4% to $1,912 million , driven by Asia Pacific and by Latin America, where growth accelerated in the fourth quarter with continued technology adoption and high insect pressure in Brazil. In the USA insect pressure was low, reducing sales of ACTARA®. Globally the largest contribution came from the new product DURIVO®, with sales up by over 40 percent and growth in all regions.

Seed care sales improved by 10.9% to $1,228 million. VIBRANCE®, based on the SDHI fungicide sedaxane, was successfully launched on several crops globally, with the most significant contributions coming from Canada and the USA. CRUISER® continued to see strong growth in demand in Latin America and Asia Pacific, more than offsetting a decline in Europe due to the EU suspension of neonicotinoid registrations.

Outlook

In 2014 Syngenta expects integrated sales to grow at a similar rate to 2013. The gross margin will improve with lower seeds costs including the non-repetition of the inventory provision incurred in 2013. An improvement in gross margin and cost savings from the current operational efficiency program will offset further growth investments, with research and development spend at the upper end of the forecast 9-10 percent range.