Syngenta Sales Rise 2%, Meet Expectations
17 Apr 2014 --- Sales in the first quarter of 2014 increased by 5 percent at constant exchange rates. The increase in reported sales was 2 percent owing to the depreciation of a number of emerging market currencies against the dollar.
Integrated sales rose by 5 percent at constant exchange rates, with volumes up 2 percent and prices 3 percent higher. In Europe, Africa and the Middle East growth of 10 percent was driven primarily by crop protection, with an early start to the season and high weed, disease and insect pressure. Growth continued in the CIS despite political instability, with price increases partly offsetting local currency depreciation. In North America, prolonged cold temperatures delayed the start to the US season across the corn belt, while drought in California reduced demand for insecticides and fungicides. Canada saw good growth with the continuing success of VIBRANCE® seedcare and the expansion of canola and sugar beet seed sales.
In Latin America the pace of growth improved compared with the fourth quarter of 2013 despite dry conditions in Brazil and Argentina. High caterpillar pressure contributed to a significant increase in insecticide sales and in Venezuela business resumed following resolution of a payment delay. Sales of ELATUS progressed well in Paraguay and Bolivia; registration in Brazil was announced on February 28. In Asia Pacific, growth was strong across both developed and emerging markets. In Australasia, herbicide sales in particular benefited from distributor support for our early season offers and from rainfall in March. In China, sales of AMISTAR® technology doubled with expansion on rice and vegetables; South Asia saw strong demand for both crop protection and seeds in rice.
Sales of Selective herbicides increased by 6 percent despite the delayed season in the USA. Europe saw strong growth in corn and cereals; in Latin America the greater incidence of glyphosate-resistant weeds boosted demand. In Nonselective herbicides a planned reduction in glyphosate volumes was more than offset by strong growth in GRAMOXONE®. In Fungicides sales of our new SDHI product SEGURIS® more than doubled, contributing to broad-based growth across Europe. Latin America saw double digit fungicides growth with increased use on cotton. The main driver of Insecticides growth was the continuing expansion of DURIVO®, notably in Latin America. Increased pest pressure and the replacement of neonicotinoid chemistry drove sales of FORCE® in Europe. Seedcare sales were lower partly due to the suspension of neonicotinoids, including CRUISER®, for certain crops in the EU. Latin American sales were also lower on reduced corn acreage. New launches included FORTENZA® in Argentina and the new biological product CLARIVA™ for soybean cyst nematode in the USA.
In seeds, Corn and soybean sales were unchanged, with US growers delaying planting decisions. In Latin America sales reflected lower second season corn acreage in Brazil. Sales of our tropical corn germplasm in Asia Pacific continued to expand rapidly. Growth in Diverse field crops was driven by ongoing growth in the CIS; this was partly offset by lower sunflower acreage in other European countries. In Vegetables the recovery in developed markets continued with strong growth in Europe, and sales continued their growth trajectory in Latin America. Global growth in Vegetables adjusted for the divestment of Dulcinea was 9 percent.
Lawn and Garden reflected modest growth in Europe and a decline in North America due to the weather. Sales in Latin America and Asia Pacific grew strongly.
Mike Mack, Chief Executive Officer said: "We have made a solid start to the year despite adverse weather conditions in North America. For the full year we maintain our sales growth expectation for the integrated business of 6 percent at constant exchange rates. As stated in February, lower seeds costs in 2014 will result in gross margin improvement. Research and development spend will increase and will be at the upper end of the targeted 9-10 percent of sales range. Given the depreciation of a number of emerging market currencies in the first quarter, the impact of currencies on full year EBITDA is likely to be around $100 million compared with an earlier forecast of $50 million. We continue to forecast a significant increase in free cash flow before acquisitions to around $1.5 billion."
