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Syngenta reports third quarter sales of $2.5 billion

Group sales of $2.5 billion were down 3 percent at constant exchange rates compared with the third quarter of 2015. Reported sales were also 3 percent lower, with the dollar broadly stable against major selling currencies. For the first nine months of 2016, sales declined 3 percent at constant exchange rates to $9.6 billion.

“In a challenging year for the industry, it is encouraging to see strong uptake of our new technologies in a number of markets. This reflects the success of our R&D investments, which will continue to bring broad-based innovation to growers around the world.”

Excluding the impact from the change in sales terms in Brazil, sales at constant exchange rates were up 2 percent in the quarter and were unchanged in the first nine months.

Third quarter sales by region at CER
Regional sales of $2.4 billion were 4 percent lower at constant exchange rates.

Volumes were 7 percent lower. Prices were 3 percent higher, driven by increases in Brazil and in the CIS to offset prior year local currency depreciation.

Sales in Europe, Africa and the Middle East rose by 8 percent, benefiting from robust fungicides sales and successful seedcare campaigns. Growth in seeds reflected good performances for cereals in North Europe and sunflower in South East Europe. For the first nine months, regional sales were up 3 percent, despite adverse weather conditions in the second quarter.

In North America, growth of 11 percent was driven by selective herbicides, reflecting the continuing success of Syngenta’s weed management solutions. Non-selective herbicides sales were down, largely due to the deliberate reduction in solo glyphosate. Corn and soybean seeds sales were higher, as end-season closing adjustments were below last year’s level.

Sales in Latin America were 21 percent lower. Excluding the change in sales terms, sales were 10 percent lower. In Brazil, volumes continued to be affected by high levels of insecticide inventories, with pest pressure remaining low and increased soybean trait adoption. In Argentina, with the improved market environment, we registered double-digit growth.

Asia Pacific recorded a 22 percent sales increase, helped by the ending of El Niño and a better monsoon in South Asia. Demand for crop protection products was strong, particularly for fungicides in ASEAN and insecticides in South Asia. Seeds sales were driven by high demand for conventional corn in South Asia and for GM hybrids in the Philippines.

Erik Fyrwald, Chief Executive Officer, said: “In a challenging year for the industry, it is encouraging to see strong uptake of our new technologies in a number of markets. This reflects the success of our R&D investments, which will continue to bring broad-based innovation to growers around the world.

“For the fourth quarter of 2016, we expect a continuation of the recovery in Asia Pacific and an improved performance in Latin America, with no further impact from the change in sales terms in Brazil. We confirm our full year guidance of slightly lower sales at constant exchange rates, with a mid-single digit decline in reported sales. The EBITDA margin is expected to be around last year’s level despite the non-recurrence of the $200 million trait revenue received in the fourth quarter of 2015. Our ongoing focus on working capital management should result in free cash flow for the year of over $1 billion.

“The transaction with ChemChina will ensure continuing choice and broad-based innovation for growers worldwide. The process of obtaining regulatory approvals is well underway, with CFIUS clearance and 11 anti-trust approvals already received. In a context of industry consolidation, regulators in the EU and elsewhere have recently requested a large amount of additional information, and we now expect the regulatory process to extend into the first quarter of 2017. ChemChina and Syngenta remain fully committed to the transaction and are confident of its closure."

For more information:
www.syngenta.com

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