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Syngenta Third Quarter 2012: Sustained Sales Growth

Tue, 10/23/2012 - 11:33am

BASEL, Switzerland, Oct. 23, 2012 /PRNewswire/ -- Sales in the third quarter of 2012 increased by 6 percent at constant exchange rates driven by an excellent performance in Latin America. Sales in the first nine months of the year increased by 9 percent to reach a record $11 billion, with volume up 6 percent and prices up 3 percent.

Third-Quarter Regional Sales

Total integrated sales increased by 7 percent at constant exchange rates. In Latin America, a strong start to the season drove sales growth of 18 percent, with expansion across all product lines. High soybean prices are leading to acreage expansion and increased investment by soybean growers in Brazil and Argentina. Sales of crop protection for sugar cane doubled as a result of rapid technology adoption. In Asia Pacific, sales increased 3 percent. Significant growth in Corn seeds, notably in South East Asia, demonstrates the continuing momentum of an enhanced corn portfolio. Vegetables seeds showed a marked recovery with double digit growth. Crop protection sales were lower in Japan and also in India, owing to a delayed monsoon; expanding seed care use across the region was reflected in sales growth of more than 50 percent.

In Europe, Africa and the Middle East, the success of the integrated hybrid barley product offer drove sales particularly in Germany and Northern Europe. Eastern Europe maintained its record of broad-based growth, with sales in the CIS up by almost 20 percent. Overall crop protection sales in the low season were unchanged after a strong first half, with significant growth in fungicides offsetting lower herbicide and insecticide sales. In North America, crop protection sales were broadly unchanged despite a reduction in fungicide applications due to drought and a shift in selective herbicides phasing to the fourth quarter. Non-selective herbicides and seed care grew strongly; in addition, sales of FORCE@ tripled with increasing grower awareness of resistance to a competitor's corn rootworm trait.

Third-Quarter Product Line Sales

Growth in Selective herbicides in Latin America largely offset lower sales in Europe and in North America. Non-selective herbicides sales increased 13 percent reflecting strong demand in Latin America and an increase in REGLONE@ sales in Canada. Fungicides in Europewere driven by AMISTAR@ and by the new product REVUS@. This, together with growth in Latin America, more than offset the impact of drought in North America. Insecticides sales reflected strong performances by DURIVO@in all regions, ACTARA@ in Latin America and FORCE@in the USA. In Seed care, increasing recognition of the yield and vigor benefits offered by CRUISER@ was reflected in sales growth of over 30 percent; adoption of AVICTA@ against nematodes accelerated.

Growth in Corn and soybean sales was driven by Latin America and by Asia Pacific, where new corn hybrids were introduced in Indonesia and the trait offer in the Philippines expanded. This more than offset end-of-season adjustments in North America and Europe. Diverse field crops sales, which include hybrid barley seeds, were up by 35 percent. Vegetables sales continue to be affected by weak consumer demand in southern Europe and North America, but grew strongly in Latin America and Asia Pacific.

Third-Quarter Lawn And Garden Sales

The divestment of Fafard in North America reduced sales by $10 million.

Crop Pipelines

In 2012 Syngenta has held two crop updates focusing on four of its strategic crops: Cereals, Corn, Rice and Vegetables. Increased pipeline targets for these crops support a revised total sales target for all eight key crops of $25 billion by 2020. These targets comprise growth in the existing portfolio and the launch of new products, with an increasing emphasis on integrated offers reflecting the new R&D and crop team structure.

Acquisitions

Du Pont Professional Products insecticide business (announced 29 August): The acquisition will strengthen the Lawn and Garden leadership position and reflects its strategic focus on high value chemistry and genetics.

Pasteuria Bioscience (announced 19 September): The acquisition adds a unique biological technology platform for nematode control to Syngenta's extensive portfolio of biological solutions.

Devgen acquisition offer (public offer announced on 21 September): The intended acquisition would enable Syngenta to combine its leading crop protection portfolio for Rice with Devgen's rice hybrids and broad germplasm diversity. In addition, Devgen would bring proven expertise in RNAi-based insect control.

Outlook

Mike Mack, Chief Executive Officer said: "Continued growth in the third quarter demonstrates the breadth of our portfolio and the gathering momentum of our strategy. In Latin America, where Brazil is in its third year of integration, we are starting to realize the full potential of our leading commercial offers and new technologies. This, together with the increase in our targets for key crops, gives us increased confidence in our long term growth potential. We will continue to invest in growth opportunities while maintaining a high level of profitability. For the full year 2012, we expect an increase in the EBITDA margin at constant exchange rates and strong growth in earnings per share."

Syngenta is one of the world's leading companies with more than 26,000 employees in over 90 countries dedicated to our purpose: Bringing plant potential to life. Through world-class science, global reach and commitment to our customers we help to increase crop productivity, protect the environment and improve health and quality of life. For more information about us please go to www.syngenta.com.

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