- Sales up 11 percent at constant exchange rates to $2.9 billion
- Strong start to Latin American season
- Full year sales target maintained
- Exceptional US corn seed production yields: 2013 inventory write-down
Sales in the third quarter of 2013 increased by 11 percent at constant exchange rates. Reported sales for the quarter increased by 8 percent reflecting currency movements in a number of emerging markets. Sales in the first nine months of the year increased by 5 percent at constant exchange rates to $11.3 billion. Underlying integrated sales were 8 percent higher.
Third quarter integrated sales by region
In Latin America a strong start to the season drove sales growth of 17 percent at constant exchange rates. The main driver was Brazil, where the soybean seed portfolio outperformed in a strong market: a robust commodity price and the depreciation of the Real are boosting grower profitability and are expected to result in record soybean plantings. Non-selective herbicides also grew strongly; fungicides sales are weighted to the fourth quarter as invoicing is aligned to consumption. In Asia Pacific, emerging markets registered double digit growth reflecting the ongoing adoption of fungicides and modern insecticide chemistry. Performance was particularly strong in South Asia, where good monsoon conditions further increased demand.
Sales in Europe, Africa and the Middle East continued to grow. Sales in Italy rose sharply with share gain in an improving market. The emerging markets of South East Europe, notably Turkey, continued to expand rapidly with broad-based growth across the portfolio. Growth in North America was driven by pre-season demand for selective herbicides, augmented by increasing concern over glyphosate-resistant weeds. Wet conditions in parts of the USA contributed to reduced insect pressure but created new opportunities for fungicides.
Third quarter product line sales
Sales of Selective herbicides were driven by the Americas. CALLISTO® for corn and FLEX® for soybean both grew strongly in response to demand for effective weed resistance management. In Non-selective herbicides sales of TOUCHDOWN® continued to expand rapidly in Brazil, with strong demand and a shortage of supply from competitors resulting in significant volume and price gains. Insecticides sales were slightly higher, with good growth in Asia Pacific and Europe offset by a decline in the USA due to low insect pressure. Sales of DURIVO® were up by almost 50 percent with growth in all regions. Fungicides sales were driven by AMISTAR®, with sales more than doubling in the USA and continuing their rapid expansion in Asia Pacific. Seed care was driven by the new product VIBRANCE®, based on the SDHI fungicide sedaxane. During the quarter VIBRANCE was registered on over 30 additional crops in the USA, including corn, and received Annex 1 approval in the EU.
In seeds, Corn and soybean grew strongly with a significant contribution from soybean in Brazil. Growth in Diverse field crops was modest after a strong first half and came mainly from oilseed rape in Europe. Vegetables growth was concentrated in the USA and Brazil.
Third quarter Lawn and Garden sales
Sales increased by 9 percent at constant exchange rates; excluding acquisitions and divestments growth was 12 percent. The divestment of lower margin activities and the attractive prospects for high value chemistry and genetics put this business well on track to achieve the target of a 20 percent EBITDA margin in 2015.
Mike Mack, Chief Executive Officer said: 'The third quarter performance demonstrates our ability to sustain growth across our business in a context of crop price and currency volatility. Following a good start to the Latin American season, we remain on track to deliver full year sales growth in line with our longer term target.
'During the quarter it has become clear that US corn seed production yields are significantly ahead of expectations. We will recognize this in 2013 by writing down the value of seeds in excess of estimated sales for the coming season. Full year earnings will also reflect a lower than expected currency benefit. Final results will depend on the progress of the Latin American season but at this stage earnings per share are expected to be close to last year's underlying level.
'Looking further ahead, we remain on track to deliver our target of $25 billion in sales of our eight key crops in 2020. We expect improved profitability in 2014 and maintain our target of an EBITDA margin in the range of 22 to 24 percent in 2015.'
A presentation illustrating the third quarter 2013 sales will be available on www.syngenta.com/q3-2013 by 07:30 (CET).
All figures expressed as underlying exclude $256 million corn rootworm trait royalty income in 2012
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