BASEL, Switzerland, July 22, 2011 /PRNewswire/ --

Double digit growth in sales and net income

• Sales $7.7 billion, up 14 percent; up 12 percent at constant exchange rates(1)
• Robust volume growth, improved pricing environment: Q2 prices unchanged
• Seeds EBITDA margin 25.7 percent (H1 2010 20.0 percent)
• Net income(2) $1.4 billion, up 14 percent
• Further improvement in working capital ratios: inventory reduction

(1) Growth at constant exchange rates, see Appendix A.

(2) Net income to shareholders of Syngenta AG.

(3) Excluding restructuring and impairment; EPS on a fully-diluted basis.

Mike Mack, Chief Executive Officer, said:

"In the first half of 2011, growers in the Northern hemisphere faced familiar challenges, with unfavorable weather and volatile crop prices.  However, tight grain supply in a context of growing demand meant that the overall level of crop prices was high, encouraging increased investment in technology.  Our sales showed sustained volume momentum in all regions and were, in addition, driven by the breadth of our portfolio and our strong emerging market presence.  An improved price environment for Crop Protection was reflected in stable pricing in the second quarter.  In Seeds, strong growth across crops and the further enhancement of our US corn portfolio resulted in a substantial improvement in profitability.

"In February we announced our new strategy based on three core objectives: Integrate, Innovate and Outperform.  We have already made rapid strides in execution and are ahead of schedule in the process of commercial integration.  The response from our customers has been positive and is a recognition of their need for innovation in an increasingly complex environment.  Their support is an endorsement of our continued investments in Research and Development and in the expansion of our footprint in key growth areas, notably the emerging markets.  These investments are being made with a clear focus on our over-arching objective, the development of an integrated offer on a global crop basis."

Financial highlights 1st Half 2011

Sales $7.7 billion

Sales at constant exchange rates (CER) increased by 12 percent.  Reported sales were up 14 percent.  Crop Protection sales* were up 10 percent (CER), with 12 percent volume growth and a two percent reduction in price.  Seeds sales registered volume growth of 15 percent with prices two percent higher.

EBITDA $2.1 billion

At constant exchange rates, EBITDA increased by 10 percent with a margin of 28.3 percent compared with 28.6 percent in 2010.  The gross margin was maintained at constant exchange rates despite lower prices in Crop Protection; operating costs reflected further investments in growing the business.

Currency movements

Currency movements net of hedging increased EBITDA by $26 million.  Due to the appreciation of the Swiss franc versus the US dollar, the negative impact of currencies on full year EBITDA is expected to be approximately $75 million.

Net income

Reported net income increased by 14 percent to $1.43 billion.  Earnings per share, stated before restructuring and impairment, increased by 12 percent to $15.60 (2010: $13.95).

*   Crop Protection sales include $25 million of inter-segment sales.

Business Highlights 1st Half 2011

Crop Protection

• Sales $5.6 billion, up 10%*
• Volume +12%, price -2%
• EBITDA $1.64 billion (2010: $1.57 billion)
• EBITDA margin 29.3%* (2010: 31.5%)

Strong volume growth was maintained in the second quarter (+9 percent) despite challenging weather conditions in North America and Europe.  The pricing trend continued to improve with price stability in the second quarter (Q1: -3 percent).  The EBITDA margin was lower primarily due to lower prices in the first quarter.

Europe, Africa & the Middle East registered double digit volume growth in the first half despite the drought which hit several countries in the second quarter.  Growth was particularly strong in the CIS where weather conditions improved compared with last year and we offered an expanded range.  France also grew strongly with the launch of AXIAL® on cereals and the expansion of CALLISTO® and CRUISER® on increased corn acres.  In North America, volume growth offset a decline in herbicide prices notably in the first quarter.  Fungicide prices were stable and volume rose strongly with increased usage intensity.  Latin America has now seen double digit growth for six consecutive quarters.  Growth in the first half was led by insecticides, with further expansion in ACTARA® and the roll-out of AMPLIGO® (DURIVO® family).  A reduction in generic competition contributed to higher pricing.  Sales in Asia Pacific reflected our market-leading position and broad portfolio, with further impetus from high rice and cotton prices.  Sales were particularly strong in ASEAN and in China, where seed care sales on rice, cotton, corn and cereals are expanding rapidly.

Growth in Selective herbicides was concentrated in the emerging markets, notably the CIS and Central Europe.  AXIAL® was successfully launched in France and Iberia.  Sales of atrazine grew strongly in the Americas with lower imports of generic product.  Sales of Non-selective herbicides were broadly flat, with volume growth offsetting some further price weakness.  Fungicides showed growth in all regions, with a particularly strong performance in the USA where awareness of the crop enhancement effects of AMISTAR® is increasing.  Growth in Insecticides was broad-based with double digit increases in a number of products.  Seed care sales were boosted by the further expansion of AVICTA® and CRUISER® and by the success of MAXIM® in Europe.  In Professional products sales increased reflecting an improvement in the consumer segment in Europe and higher turf sales in Asia Pacific.

New products:  Sales of new products (defined as those launched since 2006) increased by 27 percent* to reach $386 million.  The main drivers were AVICTA®, up 72 percent*, with expansion on soybean and cotton, and DURIVO®, rolled out on a number of crops and now sold in all regions.

*   At constant exchange rates.

Seeds

• Sales $2.1 billion, up 17%*
• Volume +15%, price +2%
• EBITDA $537 million (2010: $352 million)
• EBITDA margin 26.4%* (2010: 20.0%)

Corn & Soybean:  Sales of Corn & Soybean increased in all regions.  In the USA, growth was driven by Corn with first season sales of AGRISURE VIPTERA™ and increased licensing revenue.  Corn technology also drove growth in Latin America and Asia Pacific, with further trait launches to come in the 2011/12 season.  Growth in Europe was particularly strong in the CIS reflecting the adoption of high performing hybrids.

Diverse Field Crops:  Diverse Field Crops also performed well in the CIS with further expansion of our market share in the high value sunflower market in Russia.  Sugar beet sales benefited from the consolidation of Maribo from October 2010.

Vegetables:  Growth was primarily driven by Europe, with numerous innovations including new tomato products in Turkey and block pepper varieties in the Netherlands.  In the CIS we gained share in the important cabbage market; growth in the emerging markets of Latin America and Asia was also strong.  Sales in North America were lower due to high inventories of processed products.

Flowers: Sales increased modestly with signs of improvement in the consumer environment in Europe and in North America.

Combined crop pipelines: At a Capital Markets Day on June 21, Syngenta presented integrated pipelines for the following key crops: Cereals, Corn, Rice, Soybean, Sugar cane, Sunflower and Vegetables.  The pipelines enable the company to target sales of over $17 billion for these crops post 2015, compared with $8.4 billion in 2010.

*   At constant exchange rates.

Integration update: We are integrating our business model through the creation of 19 territories with a strategic crop focus.  The territories are grouped under the four geographic regions against which we continue to report.  So far in 2011 we have launched integrated commercial organizations in three territories – Australasia, Canada and the USA – and the pace of launches will accelerate through the remainder of the year.  We expect commercial integration to be completed worldwide by mid 2012, ahead of schedule.

We have appointed global crop teams for each of our strategic crops.  These teams are fully operational and will work alongside territory and regional management to develop and maximize an integrated offer by crop.

We are on track to realize efficiency gains from the integrated business model of $75 million in 2011, mainly in SG&A expenses.  Net annualized savings of $650 million are targeted for 2015, of which around 45 percent will come from SG&A and 55 percent from COGS.

Net financial expense

Net financial expense of $67 million was slightly higher than in 2010 ($55 million).

Taxation

The underlying tax rate was 19 percent (2010: 19 percent). For the full year we expect a tax rate around 20 percent.

Cash flow

Average trade working capital as a percentage of sales was reduced to 37 percent from 43 percent in the first half of 2010.  The improvement was due to a further reduction in inventories as demand in both Crop Protection and Seeds remained strong.  Fixed capital expenditure including intangibles declined to $193 million (H1 2010: $266 million) following the completion in 2010 of capacity expansion for two major Crop Protection products.  Acquisition spend totaled $18 million.

Dividend and share repurchase

A dividend of CHF 7.00 per share (2010: CHF 6.00) was paid on April 28, representing a total payout of $705 million.  In February the company announced its intention of repurchasing shares with a planned amount of $200 million in 2011.  In the first half of the year, 306,500 shares were repurchased with a value of $100 million.

Outlook

Mike Mack, Chief Executive Officer, said:

"As we enter the second half of the year, a positive outlook for the main Latin American season starting in September is underpinned by favorable fundamentals.  We also expect further expansion in Asia Pacific and look forward to continuing strong growth in volumes with further gains in market share across the business.  We expect to generate 2011 full year free cash flow in excess of $1 billion.  In addition, the outlook for pricing for the rest of the year is positive and we expect stable pricing for the full year.  For the 2012 season, we are currently raising prices across the business with the aim of achieving an overall increase in the mid single digits.  This will enable us to offset the impact of inflation and to make further investments in the development of our integrated offer.

"We continue to target above-market growth while expanding the size of the market through crop-based innovation.  Our proven ability to manage manufacturing costs and to leverage our global presence will contribute to maintaining a high level of profitability.  Finally, we target Cash Flow Return on Investment in excess of 12 percent and a continuous increase in the dividend."

Selective herbicides:  major brands AXIAL®, CALLISTO® family, DUAL®/BICEP® MAGNUM,  FUSILADE®MAX, TOPIK®

Selective herbicide volumes were significantly higher, notably in Europe driven by AXIAL® on cereals and the corn herbicide CALLISTO®.  Growth in demand in the CIS was augmented by the successful integration of the Dow AgroSciences portfolio.  In North America, strong sales of atrazine reflected increased corn acreage and reduced generic competition.  TOPIK® sales were adversely affected by high opening channel inventories in Canada.  Pricing was positive in all regions with the exception of North America.

Non-selective herbicides:  major brands GRAMOXONE®, TOUCHDOWN®

In Non-selective herbicides, volumes increased across all regions driven in particular by the use of GRAMOXONE® in Asia as an alternative to hand weeding.  TOUCHDOWN® volumes were also higher.  Pricing remained below last year with the exception of Brazil, where lower inventory levels are leading to price recovery.

Fungicides:  major brands ALTO®, AMISTAR®, BRAVO®, REVUS®, RIDOMIL GOLD®, SCORE®, TILT®, UNIX®  

Fungicides sales were 13 percent higher due to strong volume growth in all regions and slightly higher pricing.  North America volumes increased by almost 40 percent reflecting positive market sentiment and growers' desire to maximize yields through crop enhancement solutions, as well as an increased level of disease pressure.  Volumes in both the CIS and China were up strongly reflecting increased technology adoption.  AMISTAR® sales were up 21 percent globally with significant growth in North America and in Asia Pacific, where they were driven by growth in rice, fruit and vegetables as well as higher consumption in cereals.  The new fungicide SEGURIS® continued to grow with a UK launch on wheat.

Insecticides: major brands ACTARA®, DURIVO®, FORCE®, KARATE®, PROCLAIM®, VERTIMEC®

Insecticides sales were up 19 percent with volume growth in all regions driven primarily by DURIVO® and ACTARA®.  Both Europe and Brazil saw significant sales growth linked to increased insect pressure.  DURIVO® sales were up 85 percent due to its continued roll out; growth in Asia Pacific was mainly driven by launches in vegetables, notably in China.  ACTARA® sales were largely driven by Latin America where we were able to capture significant share resulting from the replacement of organophosphates, as well as building on the success of ENGEO® launched in 2010.

Seed care: major brands AVICTA®, CRUISER®, DIVIDEND®, MAXIM®, VIBRANCETM

Seed care sales were 13 percent higher reflecting strong growth in Europe and increased adoption rates in Asia Pacific, notably China.  CRUISER® sales in France more than doubled with expansion on corn and first sales on oilseed rape; further growth was generated through its expanded use on oilseeds in Central Europe and potatoes in Latin America.  AVICTA® sales were up in North America due to extended use on cotton; MAXIM® performed strongly in Europe.  VIBRANCETM seed treatment was launched in Argentina in May.

Professional products: major brands FAFARD®, HERITAGE®, ICON®

Professional products sales were six percent higher led by higher ornamentals sales in Northern Europe and increased demand in the golf and landscape market in Asia Pacific.

Europe, Africa and the Middle East:  Sales were up 16 percent reflecting the successful launch of AXIAL® in France and Iberia.  Owing to adverse cereal growing conditions there was a shift from cereal to corn acreage resulting in a strong performance by CALLISTO® and DUAL GOLD® corn herbicides.  Weather conditions also increased the demand for insecticides with strong sales increases seen in ACTARA® and KARATE®.  Continued high commodity prices have encouraged farmers to secure yields through the use of fungicides:  AMISTAR® showed strong growth in the CIS and South East Europe; REVUS® performed strongly in Northern Europe.  Increased corn acreage boosted sales of seed care products.

In North America strong volume growth was offset by lower prices compared with the first half of 2010; however, prices were unchanged versus end 2010, and the second quarter showed a significant improvement compared with the first quarter.  In a context of high crop prices, growers are making significant investment in crop enhancement solutions to maximize yields, leading to significant growth in fungicides.  The largest contributor was AMISTAR® with volumes up 63 percent and prices up five percent.  Sales of cereal herbicides and non-selectives in Canada were lower.

Latin America:  Sales were up 14 percent driven in particular by growth in Insecticides.  Sales in ACTARA® were boosted by the substitution of organophosphates as well as by extended use in both sugar cane and cotton.  Growth was further enhanced by AMPLIGO® which was up significantly following last year's launch on fruit and vegetables.  Continued expansion of GM seed areas increased overall demand for TOUCHDOWN®.  The further growth in CRUISER® enhanced seed care sales.

Asia Pacific:  Asia Pacific saw a further significant volume increase driven by the continued roll out of the DURIVO® family across the region, with an initial launch of AMPLIGO® in China and continued ramp up in the Bangladesh and Vietnam rice markets.  AMISTAR® volumes continued to grow in China and across ASEAN reflecting enhanced positioning and continued high crop prices.   Strong volume demand for GRAMOXONE® was seen as channel inventories declined in several countries.

Corn & Soybean: major brands AGRISURE®, GARST®, GOLDEN HARVEST®, NK®

Corn and Soybean sales increased 19 percent with growth across all regions.  Sales in North America were driven by our new multi-stack offer including VIPTERA™ and by increased licensing revenues.  In Europe a strong performance was seen primarily in Eastern Europe where corn acres increased following the drought in 2010 and high commodity prices incentivized increased acreage.  In Italy strong volumes reflected the positive response to our new integrated business model.  Growth in Latin America was largely driven by high commodity prices encouraging a shift towards GM hybrids.  In North America pricing was up in the first half reflecting the quality of the portfolio.

Diverse Field Crops:  major brands NK® oilseeds, HILLESHOG® sugar beet

Diverse Field Crop sales were up by more than 30 percent reflecting an ongoing strong performance in the CIS.  Sunflower sales advanced in all major growing areas reflecting the quality of our portfolio and our market leader position in the high value segment.  Sugar beet sales in Europe increased due to the integration of the Maribo acquisition and were further augmented by additional tender business orders in Eastern Europe.  Sunflower also performed strongly in Latin America due to both volume growth and price increases.

Vegetables: major brands DULCINEA®, ROGERS®, S&G®, Zeraim Gedera

Vegetables sales reflected significant volume growth in the CIS and South East Europe driven by attractive grower returns.  The focus in Eastern Europe was on high quality brassica segments.  Spain and the Middle East expanded through a number of our innovative tomato, pepper and melon varieties.  Latin America, China and India all saw strong growth in tomato and pepper.  North America sales were down due to a cautious market environment with high inventories of processed products.

Flowers: major brands GoldFisch®, Goldsmith Seeds, Yoder®

Flowers sales were up one percent in the first half.  Europe, North America and North East Asia showed signs of an improving consumer environment.

Announcements and Meetings

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.

Cautionary Statement Regarding Forward-Looking Statements

This document contains forward-looking statements, which can be identified by terminology such as 'expect', 'would', 'will', 'potential', 'plans', 'prospects', 'estimated', 'aiming', 'on track' and similar expressions. Such statements may be subject to risks and uncertainties that could cause the actual results to differ materially from these statements. We refer you to Syngenta's publicly available filings with the U.S. Securities and Exchange Commission for information about these and other risks and uncertainties. Syngenta assumes no obligation to update forward-looking statements to reflect actual results, changed assumptions or other factors. This document does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer, to purchase or subscribe for any ordinary shares in Syngenta AG, or Syngenta ADSs, nor shall it form the basis of, or be relied on in connection with, any contract therefor.

SOURCE Syngenta