AgroPages-Syngenta group sales up 3% in FY 2014-Agricultural news

Syngenta group sales up 3% in FY 2014

Syngenta’s group sales, including Lawn and Garden, increased by 3% to $15,134 million in the full year of 2014.The crop protection sales were up by 4.2% to $11,381million, while seed business dropped by 1.5% to $3,155 million. EBITDA was $2.9 billion, up 1%, with 19.3% margin.

For the fourth quarter of 2014, sales rose by 8% to $3,651 million. The sales of crop protection grew by 7.7% to $2,798 million, and seeds business saw an increase of 6.5% to $716 million.

Syngenta's sales result in 2014 ($ million)
Ended Dec. 31	Full Year 2014	Full Year 2013	change%	Q4 2014	Q4 2013	change%
Crop Protection	11,381	10,923	+4.2	2,798	2,598	+7.7
Seeds	3,155	3,204	-1.5	716	672	+6.5
Elimination¹	95	130	-	46	58	-
Total	14,441	13,997	+3.2	3,468	3,212	+8.0
Lawn and Garden²	693	691	+0.3	183	170	+7.6
Group Sales	15,134	14,688	+3.0	3,651	3,382	+8.0
¹elimination of crop protection sales to seeds ²Includes business provides professional growers and consumers with flowers, turf and landscape products.

Regional sales

Syngenta's crop protection sales result by region ($ million)
Ended Dec. 31	Full Year 2014	Full Year 2013	change%	Q4 2014	Q4 2013	change%
Europe, Africa and Middle East	3,312	3,033	+9.2	434	351	+23.6
North America	2,578	2,762	-6.7	346	421	-17.8
Latin America	3,769	3,499	+7.7	1,593	1,446	+10.2
Asia Pacific	1,722	1,629	+5.7	425	380	+11.8
Total	11,381	10,923	+4.2	2,798	2,598	+7.7

Syngenta's seed sales result by region ($ million)
Ended Dec. 31	Full Year 2014	Full Year 2013	change%	Q4 2014	Q4 2013	change%
Europe, Africa and Middle East	1,274	1,232	+3.4	169	111	+52.3
North America	1,044	1,140	-8.4	308	326	-5.5
Latin America	522	521	+0.2	148	141	+5.0
Asia Pacific	315	311	+1.3	91	94	-3.2
Total	3,155	3,204	-1.5	716	672	+6.5

Europe, Africa and the Middle East: A strong full year performance saw growth in all territories. The fourth quarter was driven by the rapid expansion of the Hyvido® hybrid barley solution, the consolidation of seeds acquisitions and by strong early demand for crop protection. The CIS registered good volume growth in both crop protection and seeds, with a rebound in the fourth quarter. Significant price increases offset around half of the currency loss following the sharp depreciation of the Russian ruble and the Ukrainian hyrvnia. New SDHI fungicides made a notable contribution to growth in the region, with Seguris® and Vibrance® both increasing sales by more than 75%.

North America: Sales were affected by prolonged cold temperatures in the first half of the year which delayed the start of the US season and reduced insect pressure. In Canada cereals acreage was lower and demand was further affected by flooding. Non-selective herbicide sales in the region were down as a result of the deliberate reduction in glyphosate. In seeds, soybean sales were up due to higher acreage and to increased bulk shipments under an early order program. Corn sales were down in a context of reduced acres but demand for Agrisure Viptera®, for which Chinese import approval was secured in December, was sustained.

Latin America: Although irregular rainfall caused some delays in planting and crop protection consumption, sales were up by 9%, or by 15% excluding glyphosate. In crop protection, the new fungicide Elatus™ recorded sales of over $300 million following its launch in Brazil, where there was also strong insecticide growth due to severe caterpillar pressure in soybean, corn and cotton. Crop protection for sugar cane was lower owing to drought during the summer and to lower ethanol prices affecting the profitability of sugar cane mills. Corn seed sales increased slightly despite lower acreage and soybean was up sharply.

Asia Pacific: Performance was robust in both emerging and developed markets, with particularly strong performances in South Asia, China and Australasia. Growth in fungicides reflected increased adoption of Amistar® technology in China and new launches in South Asia. Vegetables growth was driven by further adoption of Maxveg™ protocols as well as sweetcorn seed growth in China and South Asia. Double digit sales growth in Gramoxone® reflected tight supply and higher prices, particularly in Asian; sales in China were sharply lower in the second half as government restrictions on liquid paraquat formulations took effect.

Sales by products

Syngenta's sales result by category ($ million)
Ended Dec. 31	Full Year 2014	Full Year 2013	change%	Q4 2014	Q4 2013	change%
Selective Herbicides	3,083	3,051	+1.0	613	581	+5.5
Non-selective Herbicides	1,445	1,545	-6.5	272	370	-26.5
Fungicides	3,518	3,035	+15.9	922	686	+34.4
Insecticides	2,066	1,912	+8.1	614	594	+3.4
Seed Care	1,115	1,228	-9.2	346	332	+4.2
Other Crop Protection	154	152	+1.3	31	35	-11.4
Total Crop Protection	11,381	10,923	+4.2	2,798	2,598	+7.7
Corn and Soybean	1,665	1,654	+0.7	450	425	+5.9
Diverse Field Crops	827	842	-1.8	118	87	+35.6
Vegetables	663	708	-6.4	148	160	-7.5
Total Seeds	3,155	3,204	-1.5	716	672	+6.5
Lawn and Garden¹	693	691	+0.3	183	170	+7.6
Group Sales	15,134	14,688	+3.0	3,651	3,382	+8.0
¹Includes business provides professional growers and consumers with flowers, turf and landscape products.

Selective herbicides: major brands Axial®, Callisto® family, Dual magnum®, Biceptm II Magnum, Flex®, Fusilade®Max, Topik®

Sales in Europe, Africa and the Middle East were strong, with the mild winter in the first half leading to increased weed pressure: sales of Axial® on cereals and Biceptm II Magnum on corn were up strongly. In North America some pre-emergent sprays were missed in the first half due to the late season, but sales of Dual magnum® for corn were up strongly in the second half. Fusilade®Max and Flex® on soybean performed well in the USA and in Argentina, where weed resistance is spreading.

Non-selective herbicides: major brands Gramoxone®, Touchdown®

Syngenta has decided to deliberately reduce low margin sales of Touchdown® (solo glyphosate) and to focus on mixtures including selective herbicides which can address the challenge of weed resistance. The impact on sales in 2014 was approximately $150 million. This was partly offset by good growth in Gramoxone® with strong demand and tight supply resulting in volume and price increases, primarily in Asian and Latin America.

Fungicides: major brands Alto®, Amistar®, Bravo®, Elatus™, Revus®, Ridomil Gold®, Score®, Seguris®, Tilt®, Unix®

The main contribution to growth came from the new product Elatus™, based on the active ingredient Solatenol™, for which the ambitious first year sales target in Brazil was exceeded. Seguris®, the SDHI fungicide for cereals, performed well in Europe. Amistar® sales were lower in the Americas but grew strongly in Europe.

Insecticides: major brands Actara®, Durivo®, Force®, Karate®, Proclaim®, Vertimec®

Insecticides showed good growth in all regions except North America where sales were affected by the late season and low pest pressure. Durivo® continued its rapid expansion with sales now exceeding the targeted $400 million. Strong pest pressure in soybean, corn and cotton, including the spread of the helicoverpa caterpillar, drove sales in Brazil.

Seedcare: major brands Avicta®, Cruiser®, Dividend®, Celest®/Maxim®, Vibrance®

Vibrance®, based on the SDHI fungicide sedaxane, continued its rapid expansion with sales up by almost 50%. A reduction in sales of Cruiser® following the EU neonicotinoid suspension was partially offset by increased sales of Celest®/Maxim®, particularly in the CIS. Seedcare sales were also affected by lower sales to other seed companies in Latin America and the USA, where reduced corn acreage and plentiful seed supply affected demand.

Corn and soybean: major brands Agrisure®, Golden harvest®, NK®

Sales in both North and Latin America reflected the shift from corn to soybean; in addition soybean sales in Brazil benefited from a new business partner strategy. Sales of the Agrisure Viptera® corn trait were steady at around 30% of US corn seed sales. In Brazil, Viptera® accounts for around half the portfolio and has unrivalled success in addressing the pest spectrum there. The new proprietary corn rootworm trait Duracade® was planted for the first time in the USA under the “Right to Grow” program. Corn seed sales in Europe showed strong growth driven by the CIS.

Diverse field crops: major brands NK® oilseeds, Hilleshög® sugar beet

Full year sales growth was helped by a strong fourth quarter including the consolidation of acquisitions in Europe. Sunflower sales were affected by reduced acreage in South East Europe but continued to expand in the CIS, where there was also a recovery in sugar beet. In Asia Pacific sales of rice increased reflecting sales from the Devgen acquisition as well as expansion in India.

Vegetables: major brands Rogers®, S&G®

Excluding the divestment of Dulcinea Farms, sales were up 6%. Asia Pacific saw double digit growth driven by sweetcorn and peppers in China and South Asia. Rapid growth in the emerging markets of Africa Middle East continued with expanding melon and tomato penetration. In the CIS there was strong demand for peas and melon. Excluding Dulcinea, sales in North America were up 3% and the developed markets in Europe also returned to solid growth.

Outlook

Mike Mack, CEO of Syngenta, said: “Syngenta’s integrated strategy continues to gain momentum as evidenced by the strong sales growth achieved in 2014. Our focus is now on achieving above market growth and on driving greater profitability through operational leverage.

“In 2015, in an environment of crop price and currency volatility, we will continue our track record of rigorous risk management. We expect to offset a significant part of emerging market currency devaluations through price increases. Sales are expected to be broadly unchanged at constant exchange rates. EBITDA after the impact of currencies will be around the 2014 level. Our continuing attention to working capital management will again result in substantial free cash flow generation.

“Looking further ahead, in 2016 at current levels we expect lower raw material costs to offset the impact of the recent Swiss franc appreciation on our cost base. Sales and margins will increasingly benefit from new product launches and cost efficiencies, both of which underpin our 2018 margin target of 24 to 26 percent. Higher profitability and capital efficiency will ensure that cash generation remains strong, enabling us to continue increasing the cash return to shareholders.”