Syngenta’s agrochem sales rose 4% in Q2

Syngenta’s crop protection sales grew by 3.6% to $2,813 million in the second quarter of 2012 ended June 30th. Sales were up 12% at constant exchange rates (CER). Seeds business boosted to $970 million, up by 26.5%. Total sales, including crop protection, seed, lawn and garden business, were up by 7.5% to $3,961 million. First-half year crop protection sales of 2012 went up 5.4% to $5,674 million. Mike Mack, Chief Executive Officer, said: “Sales were strong in the key northern hemisphere season despite a cold start in Europe followed by heavy rain in the second quarter. An excellent performance in North America reflected early plantings and widespread optimism for the season coupled with strong demand for our resistance management offers.”

Syngenta’s sales result ($million)
Q2 ended June 30th	Q2 2012	Q2 2011	change%	H1 2012	H1 2011	change%
Crop Protection	2,813	2,714	+3.6	5,674	5,383	+5.4
Seeds	970	767	+26.5	2,195	1,875	+17.1
Inter-segment elimination(1)	(9)	(8)	-	(40)	(25)	-
Total	3,774	3,473	+8.7	7,829	7,233	+8.2
Lawn and Garden(2)	187	212	-11.8	436	469	-7.0
Group Sales	3,961	3,685	+7.5	8,265	7,702	+7.3
(1) Crop Protection inter-segment sales to Seeds. (2) Includes product lines Professional Products and Flowers. Professional Products were formerly reported under Crop Protection and Flowers under Seeds.

Europe, Africa and the Middle East: The main areas of growth were the CIS, the emerging markets of Central and South East Europe, and France. In the first quarter the portfolio was well positioned to benefit from increased planting of spring crops following winter kill on more than seven million hectares of cereals. In France, a change in the law on credit terms moved sales from the fourth quarter of 2011 into the first quarter; in addition, there was good underlying growth in CALLISTO® on corn and in fungicides, particularly AMISTAR® and ALTO®. Growth continued in the second quarter although at a slower rate, owing to the fact that spring crops demand less crop protection; in addition, heavy rainfall in many countries inhibited growers’ ability to spray. However the CIS, in particular, continued to perform strongly, with the ongoing intensification of agriculture and a sharp increase in corn herbicide usage in Ukraine.

North America: The success of integrated offers to combat insect and weed resistance is apparent in the strength of crop protection sales, which was sustained throughout the season. Growth in seeds, which in the first quarter was constrained by lower royalty income, benefited in the second quarter from the recognition of around $200 million in revenue relating to the licensing agreement with Pioneer, announced in 2010, for Syngenta’s proprietary MIR604 corn rootworm trait. This was accompanied by good underlying growth in corn; soybean seed sales were lower due to an expected acreage shift and to the ongoing transition to second generation herbicide tolerance technology.

Syngenta’s crop protection sales result by region ($million)
Q2 ended June 30th	Q2 2012	Q2 2011	change%	H1 2012	H1 2011	change%
Europe, Africa and Middle East	966	1,009	-4.3	2,132	2,093	+1.9
North America	955	813	+17.5	1,739	1,447	+20.2
Latin America	497	470	+5.7	926	934	-0.9
Asia Pacific	395	422	-6.4	877	909	-3.5
Total	2,813	2,714	+3.6	5,674	5,383	+5.4

Latin America: Sales advanced modestly in the low season despite the effect on crop protection applications of severe drought in Argentina and southern Brazil early in the year.  Seeds sales were driven by market share gains and by the expansion of second season corn. Syngenta’s leading trait offer including AGRISURE®VIPTERA® is well placed to benefit from increasing GM penetration. Sales of sunflower seeds are expanding rapidly in Argentina. In Brazil, the PLENE® sugar cane plant at Itápolis was formally opened in May and commercial sales are underway.

Asia Pacific: Excluding the impact of range rationalization in India and Japan and the withdrawal of GRAMOXONE® in South Korea, sales were up three percent. China and the emerging South East Asia markets showed good growth across the business; sales in Australasia were lower owing to cold and wet conditions. Corn seed sales grew strongly and are increasingly being marketed as part of a complete first 45-day solution for small-scale growers.

Syngenta’s seed sales result by region ($million)
Q2 ended June 30th	Q2 2012	Q2 2011	change%	H1 2012	H1 2011	change%
Europe, Africa and Middle East	284	320	-11.3	889	842	+5.6
North America	557	313	+78.0	1,053	810	+30.0
Latin America	56	51	+9.8	132	104	+26.9
Asia Pacific	73	83	-12.0	121	119	+1.7
Total	970	767	+26.5	2,195	1,875	+17.1

Selective herbicides: Both North America and Europe registered double digit growth throughout the season. The corn herbicide portfolio grew strongly in the USA reflecting its success in managing resistant weeds as well as higher corn acres. Sales of the CALLISTO® family also expanded across Europe, most notably in France. AXIAL® in cereals grew strongly in all regions, with the largest contribution coming from Canada, where increased acreage coincided with low channel inventories at the start of the season.

Non-selective herbicides: Growth was driven by TOUCHDOWN®, which registered volume growth of close to 30 percent in both North and Latin America. In North America, sales reflected higher US corn acres and a shortage of generic glyphosate which encouraged a shift to branded products. Similarly in Latin America, growth reflected good product positioning as well as higher soybean acres in the 2011/12 season.

Fungicides: Fungicides achieved modest growth despite a first quarter decline in Latin America owing to drought. Although wet weather in Europe in the second quarter prevented some applications, overall sales were higher thanks to a strong performance by AMISTAR® and ALTO® in France. The new product SEGURIS® (isopyrazam) is growing rapidly on wheat in the UK, with sales up by around 50 percent, and has now been launched in several other countries. Fungicide adoption in South East Asia drove good growth in the Asia Pacific region, despite a decline in Australasia.

Insecticides: Excluding the impact of range rationalization in Japan and India, sales were up eight percent, driven by a very strong performance in North America. A mild winter and early dry weather in the USA created heavy insect pressure in a number of areas. Sales of FORCE® increased by almost 70 percent in the USA as grower awareness of corn rootworm resistance increased and the benefits of soil-based insecticides gained renewed recognition.

Seed care: Sales grew strongly led by CRUISER®, which continued to expand in all regions. Growth in North America reflected a strong performance on spring cereals, while in Latin America there is increasing recognition of the vigor effect. Emerging market adoption continues to increase (Russia, China). Sales of the nematicide AVICTA® quadrupled in Latin America, where the product is sold as part of the integrated soybean offer. VIBRANCE™, first launched in Argentina in 2011, received a US registration.

Syngenta’s sales result by category ($million)
Q2 ended June 30th	Q2 2012	Q2 2011	change%	H1 2012	H1 2011	change%
Selective Herbicides	1,010	920	+9.8	1,922	1,747	+10.0
Non-selective Herbicides	363	315	+15.2	597	565	+5.7
Fungicides	831	848	-2.0	1,732	1,729	+0.2
Insecticides	410	428	-4.2	872	858	+1.6
Seed Care	170	173	-1.7	484	430	+12.6
Other Crop Protection	29	30	-3.3	67	54	+24.1
Total Crop Protection	2,813	2,714	+3.6	5,674	5,383	+5.4
Corn and Soybean	561	328	+71.0	1,268	962	+31.8
Diverse Field Crops	193	218	-11.5	549	515	+6.6
Vegetables	216	221	-2.3	378	398	-5.0
Total Seeds	970	767	+26.5	2,195	1,875	+17.1
Inter-segment elimination(1)	(9)	(8)	-	(40)	(25)	-
Lawn and Garden(2)	187	212	-11.8	436	469	-7.0
Group Sales	3,961	3,685	+7.5	8,265	7,702	+7.3
(1) Crop Protection inter-segment sales to Seeds. (2)Includes product lines Professional Products and Flowers. Professional Products were formerly reported under Crop Protection and Flowers under Seeds.

Outlook

Mike Mack said: “After a strong first half volume performance in the northern hemisphere and the achievement of targeted price increases, the focus of our business is now Latin America where the outlook is positive given record soybean price cashes, our leadership position and advances in our integrated portfolio. Currency headwinds are likely to diminish in the second half and we will realize further cost savings.  For the full year, we expect an increase in EBITDA margin at constant exchange rates and substantial free flow generation.”