2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil...

16
Basel: October 15, 2015 2015 Third Quarter sales

Transcript of 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil...

Page 1: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

Basel: October 15, 2015

2015 Third Quarter sales

Page 2: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

2

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 there for.

SAFE HARBOR

Page 3: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

3

Sales unchanged at CER*

Sales 8% lower excluding Brazil sales terms change and glyphosate reduction

Challenging conditions in Latin America: drawing on long experience of managing customer relationships and credit risk

THIRD QUARTER 2015 OVERVIEW

*At constant exchange rates

New products continue to perform well

Improving business quality: glyphosate reduction, increasing corn trait revenue, AOL program on track

Page 4: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

4

THIRD QUARTER AND NINE MONTHS SALES

Third quarter sales Nine months sales

Sales 2%* higher at $10.3bn

Reported sales 11% lower

Integrated sales up 3%* - volume -2%, price +5%

Sales unchanged* at $2.6bn

Reported sales 12% lower

Integrated sales unchanged* at $2.5bn

Integrated sales exclude Lawn and Garden *At constant exchange rates

Page 5: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

5

THIRD QUARTER 2015: INTEGRATED BUSINESS UPDATE BY REGION

Growth at constant exchange rates

North America: -22%

Latin America: +13% Asia Pacific: -9%

Sales excluding change in sales terms and glyphosate 8% lower

Real depreciation; customers facing liquidity squeeze

Strong demand for ELATUS™

Extended drought in ASEAN, weak monsoon in South Asia

High rice stocks and reduced farm support in Thailand

Sustained price increases

Europe, Africa & Middle East: -1%

Sales ex glyphosate -20%

Selective herbicide phasing: ACURON™ launch

Low commodity prices affecting fungicide applications

Dry weather affecting herbicide applications

Continued resilience in CIS: further price increases

Strong performance year to date

Page 6: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

6

CURRENCY MOVEMENTS

*Sales-weighted basket of emerging market currencies excl. BRL, UAH, RUB

BRL USD exchange rate -28% in Q3, -50% ytd

CIS: further RUB weakness; ytd currency impact entirely offset by price

Full year EBITDA currency impact ex CIS: ~$130m

EUR, CHF, GBP: EBITDA protection through hedging

End quarter % change vs. dollar (2015 end month % change vs. dollar) Indexed to December 31, 2012

-80

-60

-40

-20

0

20

CHF

EUR

RUB BRL

UAH

GBP

Emerging Markets*

2014 2015 2013

Russian ruble Brazilian real Ukrainian hryvnia

FY net financial expense ~$270m: hedging costs and unhedged exposures

Page 7: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

7

TRACK RECORD IN EMERGING MARKETS

Industry leading position in emerging markets

Solid experience in managing profitability in volatile conditions

Selective extension of credit -25%

-15%

-5%

5%

15%

25%

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Currency % Price %

0

3

6

9

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

+12% CAGR

$bn

Sales development in emerging markets

Price and currency impact on sales in EM

Innovations in financial solutions

Strong track record in offsetting currency headwinds through price increases

Page 8: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

8

Market FY 2015

FX Inventory consumption

Product demand FY 2015

Gly price

Intacta adoption

CP tech adoption

Product demand FY 2014

Evolution of crop protection market ($bn)

Market expected to decline by 16%: FX and glyphosate are main causes

High insecticide inventories compounded by low pest pressure

Technology adoption even in adverse market conditions

Limited impact of Intacta penetration

Market FY 2014

11.7 11.0 0.4 -0.2

-0.4 10.8 -0.2

-0.8 9.8

BRAZIL: UNDERLYING DEMAND RESILIENT

Source: Syngenta estimates

Page 9: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

9

CROP PROTECTION: THIRD QUARTER SALES UP 3%

Strong H1 performance; dry conditions in Europe in Q3. Continuing ACURON™ success

Reduction in solo glyphosate; drought affecting GRAMOXONE® in ASEAN

Growth in Brazil, ELATUS™ success

Growth in all regions except APAC, led by ACTARA®

Q3 recovery; renewed Brazilian registration for AVICTA®

Chart excludes ‘Other’: Q3 $32m; YTD $85m Growth at constant exchange rates

0 200 400 600 800

Selective herbicides

Insecticides

Fungicides

Non selective

herbicides

Seedcare

$m

Q3 -7% YTD +10%

Q3 -34% YTD -32%

Q3 +28% YTD +17%

Q3 +4% YTD +3%

Q3 +19% YTD +3%

Page 10: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

10

GLYPHOSATE: ACCELERATED REDUCTION OF SOLO, SIGNIFICANT MIX IMPROVEMENT

Strategic reduction of solo: sales impact started in 2014

2015 volume impact: ~($250m)

Mixtures to represent half of sales by 2016: higher margins

Full year glyphosate sales

Glyphosate selling price

79% 76%

62% 51%

21% 24%

38% 49%

0200400600800

1,0001,2001,400

2013 2014 2015e 2016eSolo Mixtures

$m

5

10

15

20

2003 2005 2007 2009 2011 2013 2015

Improving profitability through targeted action

$/l

Page 11: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

11

ELATUS™: ON TRACK WITH SALES OBJECTIVES

YTD volumes >65% of 2014 full year ‘000 liters

Sales volumes in Brazil

-

1,000

2,000

3,000

4,000

2014 YTD 2014 FY 2015 YTD 2015 Q4e 2015 FYe

FY sales expected to reach >$400m including negative currency impact

US registration of SOLATENOL™ received in September

2015 AGROW award winner in the "Best new crop protection product or trait“ category

Meeting an urgent grower need: strong uptake in adverse market conditions

2014 9m 2015 9m 2015 Q4e 2015 FYe 2014 FY

Page 12: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

12

SEEDS: THIRD QUARTER SALES DOWN 15%

Corn & Soybean

Vegetables

Diverse field crops

$m 0 100

Q3 -33% YTD -11%

Q3 -8% YTD +10%

Q3 +4% YTD +1%

USA: growth in corn, lower soybean acres Brazil: change in sales model

Strong HYVIDO® barley uptake in Europe; sunflower and oilseed rape lower

Growth in all regions except APAC; broad-based price increases

Growth at constant exchange rates

Page 13: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

13

-

200

400

600

800

1,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

SEEDS: VALUE CREATION THROUGH TRAIT OUTLICENSING

MIR 162 now licensed to Monsanto, DuPont Pioneer, Dow, KWS, Limagrain

KWS / Limagrain license: 2015 EBITDA benefit ~$150m

$m

Corn trait revenue and royalty income – cash basis

Traits

Revenue stream to double between 2014 and 2020

GLG licensees Direct licensees

Access to market

Access independent seed

companies

Direct licensing to other majors Branded business

enablement

SYT Brands

$200m from KWS / Limagrain

Comprehensive insect control including Refuge In a Bag

Complete independent corn trait platform

Page 14: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

14

OUTLOOK

Mid single digit decline in reported EBITDA

Double digit increase in EBITDA at constant exchange rates

2015 First half results

On track to deliver targeted operational leverage savings in 2015

Sales around 2014 level at constant exchange rates

Continuing improvement in profitability

Maintaining robust free cash flow generation

Page 15: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

15

OUR FOCUS

Expanding our leadership position in turbulent market conditions

Delivering new products and pipeline: peak sales >$6 billion

Delivering world-class efficiency through our AOL program

Unlocking the inherent worth of our global seeds portfolio

Underlying demand resilient

Four years’ experience of integration: commercial expertise, targeted offers

Page 16: 2015 Third Quarter sales - Syngenta · 3 . Sales unchanged at CER* Sales 8% lower excluding Brazil sales terms change and glyphosate reduction Challenging conditions in Latin America:

16