Syngenta Group Reports H1 2024 Earnings
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Syngenta Group
/ Key word(s): Half Year Results
29 August 2024, Basel, Switzerland / Shanghai, China
Syngenta Group today announced financial results for the first half and the second quarter of 2024. Sales for the first half of 2024 were $14.5 billion, down $3.0 billion or 17 percent year-on-year, compared to a strong 2023 H1. Sales were down 15 percent at constant exchange rates (CER).
EBITDA for the first half of the year was $2.1 billion, 36 percent lower (-30% at CER) year-on-year. The Group's EBITDA margin for the first half of 2024 was 14.1 percent, down 4.2 percentage points compared to 18.3 percent in H1 2023.
Sales for the second quarter 2024 were $7.2 billion, down $1.1 billion or 14 percent (-11% at CER). In Q2 2024, EBITDA was 39 percent lower than the prior year (-35% at CER) at $0.8 billion. Sales remained affected by significant industry-wide channel destocking in Crop Protection. Overall farmer income was lower, and distributors and retailers continued to cut inventories to address the pressure of reducing working capital amid the higher interest rate environment. These factors, in addition to a provision reduction in 2023 and unfavorable mix, weighed negatively with the EBITDA comparison from the same period last year.
Sales were additionally impacted by lower farmer income from reduced agricultural commodity prices and unfavorable weather, especially in the United States, at the beginning of the planting season, as well as an overcapacity in the market for some commodity crop protection products.
In a challenging market, Syngenta Group introduced additional measures to enhance productivity, operational efficiency and cash flow, reducing capital expenditures and working capital. Despite the market challenges, cash flow in the first half improved significantly compared to the prior year.
With signs of market stabilization and a lower 2023 baseline, Syngenta Group expects sales and margin improvements in the second half.
H1 2024
Q2 2024
Syngenta Crop Protection sales declined in a market that remained challenging. The second quarter proved particularly difficult, with ongoing channel inventory destocking linked to the higher interest rate environment and adverse weather conditions affecting several markets. Additionally, buying patterns shifted further towards last-minute decision-making. Despite these challenges, Biologicals delivered further growth.
ADAMA experienced a weaker first half of the year, amid a challenging environment for suppliers of post-patent active ingredients. The business downturn in Asia Pacific (excluding China) and Europe continued to significantly impact the comparison. Despite lower sales, ADAMA delivered higher profitability and remains committed to accelerating its ongoing business and transformation plan, which already resulted in an improving cash flow in H1 2024.
The Seeds business delivered $2.4 billion sales in the first half of 2024, 4 percent lower year-on-year (-2% at CER). Vegetables Seeds continued to show strong growth, offset by the performance of Field Crops, although sales recovered in the second quarter.
Syngenta Group China experienced a 16 percent sales decline in the first half of the year compared to last year’s record period. This sales decline was mainly the result of the active downsizing of low-margin business and negative currency effects, which were partially mitigated by an improved business mix.
As previously announced, ADAMA’s board of directors has appointed Gaël Hili as its President and Chief Executive Officer, effective October 1, 2024. He will succeed Steve Hawkins, who has been appointed President of Syngenta Crop Protection, also effective October 1, 2024.
Highlights
Sales by Business Units
H1 2024
Q2 2024
Syngenta Crop Protection
Syngenta Crop Protection sales were 21 percent lower at $6.2 billion in the first half of 2024 amid ongoing channel destocking in key markets, except for China. Sales were also impacted by adverse weather conditions across key markets, including flooding in South Brazil and heavy rains in Western Europe. In the United States, unfavorable weather led to a delayed planting season, affecting purchasing patterns in Q2 2024. The decline in agricultural commodity prices further decreased the demand for crop inputs.
In the first six months, sales in North America were 37 percent lower. Sales were down 17 percent in Europe as well as 17 percent lower in Asia, the Middle East & Africa. Sales in Latin America were also 17 percent lower as distributors and retailers showed delayed buying behavior. Sales in China were up 9 percent.
During this period, the business continued to focus on delivering innovations to farmers, including the very successful launch of ADEPIDYN® technology in the UK and India. Farmers in over 55 countries globally are now able to access this novel fungicide, which is expected to be Syngenta's first crop protection active ingredient to achieve billion-dollar annual sales within eight years of its commercialization. Syngenta has also forged multiple partnerships in biologicals aimed at accelerating the launch of novel technologies and boosting crops’ nutrient use efficiency. The biologicals business saw continued growth momentum with outstanding performance in China, driven by ISABION®, a highly effective biostimulant, providing abiotic stress relief for rice, fruits, and vegetables.
ADAMA
ADAMA sales declined 16 percent to $2.1 billion in the first half of 2024.
In the first six months, sales in Europe, Africa and the Middle East were 11 percent lower. Latin America sales were 29 percent lower. North America sales were 5 percent lower, and sales in Asia Pacific (excluding China) were 19 percent lower. Sales in China were 15 percent lower largely due to soft demand for non-agricultural products.
During the first half of 2024, ADAMA successfully registered BAZAK® in India, a new solution helping farmers to control brown plant hoppers in rice thanks to the combination of two systemic molecules (Pymetrozine and Dinotefuran) with different modes of actions. In Europe, the company received a re-registration renewal for its active ingredients Folpet and Captan which supports the successful FOLPAN® 500 SC product, a contact fungicide that is used to protect against Septoria leaf blight (Septoria tritici) in cereals.
Syngenta Seeds
Seeds sales were $2.4 billion in the first half of 2024, down 4 percent year-on-year.
Field crops sales in North America grew 2 percent; sales in China grew 29 percent, while sales in Europe were flat. As the Latin America season begins, we are seeing a strong start to Brazil delivering 38 percent sales growth; Latin America South & North at 34 percent lower, largely due to corn stunt disease causing a feeble market in Argentina. Asia, Middle East & Africa sales decreased 33 percent due to ongoing trade restrictions. Sales of Vegetable Seeds increased by 8 percent and sales of Flowers were 3 percent higher.
North America seeds benefitted from both branded and licensed soybean market share growth while holding to flat corn market share despite reduced corn acres. China seeds continue GM commercialization advancement by conducting corn and soybean large-scale trials all while balancing year-on-year growth through the launch of 31 new commercial products across corn, rice, and other crops. Europe saw its first corn and sunflower seed bags sold through a 100% online (end-to-end e-commerce) platform with personalized product recommendation supported by Cropwise® Seed Selector. And new corn hybrid launches reach the top tier of yield results in third party trials in Brazil.
Syngenta Vegetable Seeds experienced strong sales growth, led by double-digit growth in the Europe, Africa, Middle East region and the Asia Pacific region. Growth was driven by strategic pricing, the introduction of new products in Europe with value-added traits, such as resistances against Tomato Brown Rugose Fruit Virus (ToBRFV) and the New Delhi Virus (ToLCNDV), and a sharp focus in South East Asia, all while extending Syngenta’s leadership position in key crops in India, including tomato and cauliflower.
Syngenta Group China
Syngenta Group China achieved sales of $5.4 billion in the first half of 2024, 16 percent lower year-on-year.
The robust growth in branded formulations, seeds, and bio-fertilizers was counterbalanced by a substantial year-on-year price decline and a planned reduction in grain trading operations.
Sales of Seeds grew 28 percent. Sales of Branded Formulation were 2 percent higher. Sinofert sales were flat. Yangnong Chemical sales were 23 percent lower. Syngenta Group China reduced lower-margin grain trading activities and, as a consequence, grain trading business sales were 54 percent lower.
In the first six months in China, several new products, including TYMIRIUM® technology, were successfully launched. The advancement of the “Bio+” strategy in the crop nutrition business, marked by the launch of four new biofertilizers, led to a 30 percent increase in biofertilizer gross profit. In Seeds, 31 new varieties were introduced, and the commercialization of GMO was expedited with an 85,000-hectare demonstration planting area. Additionally, MAP promoted its "product + service" model, thereby improving its profitability.
Syngenta Group Summary Financials
H1 2024
Endnotes
For further information, see the reporting of financial results for ADAMA Ltd. (SHE: 000553), Sinofert Holdings (SEHK: 0297), Winall Hi-tech Seed (SHE: 300087), Yangnong Chemical (SHA: 600486) and Syngenta AG.
Unless otherwise mentioned, comparisons are to the same period in 2023. Certain amounts, including components of change (%), may not add up due to rounding. The results presented in this release are unaudited and a consolidation of the business units in the Syngenta Group which includes Syngenta AG, Syngenta Group China, ADAMA Ltd., Sinofert Holdings, Winall Hi-tech Seed and Yangnong Chemical.
As a change to previous reporting, Yangnong Chemical sales have been fully included within the Syngenta Group China results, including exports, rather than partially appended in the Group’s Crop Protection units as previously presented. In addition, the regional split of Syngenta Crop Protection, Syngenta Seeds, and the subsidiary split of Syngenta Group China have been amended to reflect a revised management structure and operating model within these units. Comparative figures for 2023 have been amended to reflect these changes on a consistent basis; total sales are unchanged.
Results in this report from one period to another period are, where appropriate, compared using constant exchange rates (CER). To present that information, current period results for entities reporting in currencies other than US dollars are converted into US dollars at the prior period's exchange rates, rather than at the exchange rates for the current year. The CER presentation indicates the business performance before taking into account currency exchange fluctuations.
EBITDA is a non-GAAP measure and EBITDA as defined by Syngenta Group may not be comparable to similarly described measures at other companies. Syngenta Group has defined EBITDA as earnings before interest, tax, non-controlling interests, depreciation, amortization, restructuring and impairment. Information concerning EBITDA has been included as it is used by management and by investors as a supplementary measure of operating performance. Syngenta Group excludes restructuring and impairment from EBITDA to focus on results excluding items affecting comparability from one period to the next.
EBITDA as used in this press release excludes one-time events; other documents may treat this as an underlying or adjusted EBITDA. EBITDA excludes other one-off or non-cash/non-operational items that do not impact the ongoing performance of the business, as well as the impact of a time-bound, Group launch long-term incentive scheme for leadership.
When referred to as such, “the Group” means Syngenta Group. About Syngenta Group Syngenta Group is one of the world’s biggest agricultural technology companies, with roots going back more than 250 years. With around 60,000 employees, operating in more than 100 countries, the company strives to transform agriculture with science-driven, technological innovations to deliver high productivity and high-quality food while fighting climate change and restoring nature. Syngenta Group works with farmers and partners to deliver four Sustainability Priorities: Higher Yields, Lower Impact; Regenerate Soil and Nature; Improve Rural Prosperity; and Sustainable Operations. The priorities are underpinned by regenerative agriculture practices to nurture and restore soil health, protect the climate and biodiversity, and enhance farm productivity and profitability. Syngenta Group, which is registered in Shanghai, China, and has its management headquarters in Switzerland, draws strength from its four business units: Syngenta Crop Protection, headquartered in Switzerland; Syngenta Seeds, headquartered in the United States; ADAMA®, headquartered in Israel; and Syngenta Group China. Together, these businesses provide industry-leading ways to serve customers around the world. For Syngenta Group photos and videos, please visit the Syngenta Group Media Library. Contact Information Media Relations Data protection is important to us. You are receiving this publication on the legal basis of Article 6 para 1 lit. f GDPR (“legitimate interest”). However, if you do not wish to receive further information about Syngenta Group, just send us a brief informal message and we will no longer process your details for this purpose. You can also find further details in our privacy statement. Cautionary Statement Regarding Forward-Looking Statements This document may contain 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. For Syngenta Group, such risks and uncertainties include risks relating to legal proceedings, regulatory approvals, new product development, increasing competition, customer credit risk, general economic and market conditions, compliance and remediation, intellectual property rights, implementation of organizational changes, impairment of intangible assets, consumer perceptions of genetically modified crops and organisms or crop protection chemicals, climatic variations, fluctuations in exchange rates and/or grain prices, single source supply arrangements, political uncertainty, natural disasters, and breaches of data security or other disruptions of information technology. Syngenta Group assumes no obligation to update forward-looking statements to reflect actual results, changed assumptions or other factors.
End of Media Release |
| Language: | English |
| Company: | Syngenta Group |
| Rosentalstrasse 67 | |
| 4002 Basel | |
| Switzerland | |
| Phone: | 061 323 11 11 |
| E-mail: | media@syngentagroup.com |
| Internet: | https://www.syngentagroup.com/ |
| EQS News ID: | 1977065 |
| End of News | EQS News Service |
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1977065 29.08.2024 CET/CEST
