27 August 2021, UK: Syngenta Group today reported strong financial results for the second quarter and first half ended June 30, 2021. Group sales in second quarter were $7.4 billion, up 28 percent versus Q2 2020 (+20 percent at CER). EBITDA increased in the second quarter 25 percent (+21 percent at CER) to $1.2 billion.
Group sales for the first half of 2021 were $14.4 billion, up 24 percent year-on-year (+18 percent at CER). EBITDA for the first half of the year was $2.7 billion, 22 percent higher year-on-year (+25 percent at CER).
|Q2 2021||Q2 2020||CHANGE||CHANGE (CER)|
|H1 2021||H1 2020||CHANGE||CHANGE (CER)|
Prices of most grains remained robust during the first half of 2021, resulting in increased planted area and higher demand. Demand was strongest for Syngenta Group products that help farmers combat ongoing drought conditions in North and Latin America, especially the western United States and Brazil, as well as cold snaps in Europe and floods worldwide.
Strong Syngenta Group first quarter 2021 performance continued in the second quarter. All business units achieved double-digit growth in the first half of 2021. EBITDA margin held, despite logistics and cost inflation, driven by new innovations and productivity.
The Group has invested heavily in agtech and has leading technology in precision agriculture, wheat hybridization, biotechnology and gene editing traits. Through strategic investments, Syngenta Group has created multiple digital platforms with farm management tools that help farmer sustainability and increase sales. Syngenta Group biologicals sales, including Valagro, demonstrated 27 percent growth in the first half which further strengthens the Group’s leading position in this rapidly growing market.
Growth was supported by channel and farmer stock-building due to COVID-19-related logistics concerns.
Syngenta Group China delivered strong growth across all segments. MAP sales more than tripled to $0.9 billion in the first half by providing farmers with products and services that enable them to grow more sustainably and produce higher quality crops that can be sold at higher prices. This farmer-focused ecosystem continued to expand in China, adding 87 new centers since the beginning of the year. At the end of June, there are 413 MAP centers, with over 200 partner organizations and 37 MAP beSide™ products that connect consumers to the farms where their food is grown. Syngenta Group China’s performance has also been enhanced by the Group’s effective intellectual property protection efforts.
Successful acquisitions, such as Winall Hi-tech Seed and Jiangsu Huifeng Bio Agriculture’s crop protection business, finalized in the first half of 2021, further strengthened the Group’s capabilities to serve Chinese farmers.
Synergy-driven sales increased 90 percent in the first six months to more than $0.3 billion and a profit contribution of $0.1 billion.
“Our continued strong performance and results demonstrate how our teams around the world are serving farmers and helping them address the challenges of COVID-19 and be part of the solution to climate change. We are focused on developing and launching products and services that enable farmers to grow good crops despite drought, heat, flooding, and high wind or other weather extremes,” said Syngenta Group CEO Erik Fyrwald. “Our results demonstrate that we are meeting the needs of local growers not only with our sustainable products, but also with our digitally enabled services.”
Syngenta Group CFO Chen Lichtenstein said, “Our teams have again delivered double-digit sales and strong profit growth across all our business units. We have launched innovative products, tapped into growth synergies for the Group, controlled costs, and managed to meet the increased demand of our customers even as the pandemic continues. Our focus on R&D and targeted acquisitions will help us drive future growth.”
For further information, see the public reporting of financial results for ADAMA Ltd. (SHE: 000553), Sinofert Holdings (SEHK: 0297), Winall Hi-tech Seed (SHE: 300087) and Yangnong Chemical (SHA: 600486).
Sales by Business Units
|Q2 2021||Q2 2020||CHANGE||CHANGE (CER)|
|Syngenta Crop Protection||3.4||2.8||+23||+18|
|Syngenta Group China||2.3||1.6||+46||+32|
|H1 2021||H1 2020||CHANGE||CHANGE (CER)|
|Syngenta Crop Protection||6.8||5.7||+20||+17|
|Syngenta Group China||4.2||2.9||+47||+34|
Syngenta Crop Protection
In the first six months of 2021, Syngenta Crop Protection sales grew 20 percent (+17 percent at CER) to $6.8 billion.
Sales in Europe, Africa and the Middle East were up 12 percent; in North America, sales increased by 16 percent; sales in Latin America grew 36 percent; sales in Asia Pacific (excluding China) grew 23 percent; and in China sales increased by 35 percent.
Brazil saw high growth of CALARIS™ herbicide that offers better weed control with 65 percent lower volume needed per hectare.
Products that helped farmers combat the effects of extreme weather, such as MIRAVIS™ did well, as did SPIROPIDION™, which protects plants from sucking insects yet is safe for pollinators.
In France, there was strong demand for MEGAFOL™, a plant stimulant made from seaweed extract that enables plants to better withstand extreme temperatures, which helped grape growers combat the effects of a late spring cold snap.
ADAMA grew sales by 18 percent (14 percent at CER) during the first six months of 2021, with continued robust growth in all key regions, pushing year-to-date-sales to a record high of more than $2.9 billion.
Sales in Europe grew by 3 percent compared to the corresponding quarter last year, resulting in a marginal decline of 1 percent over the six-month period. Sales in North America increased by 19 percent over the six-month period; sales in Latin America grew 18 percent; sales in India, Middle East and Africa recorded growth of 17 percent; sales in Asia Pacific (excluding China) grew 23 percent; and in China sales increased by 55 percent.
ADAMA continued its roll-out of ASORBITAL™ formulation technology-based fungicide in key markets, which improves active ingredient penetration into the plant and thereby enables lower rate usage.
Syngenta Seeds sales grew 19 percent (18 percent at CER) to $2.0 billion in the first half of 2021.
Field crop sales in Europe, Africa and the Middle East grew by 14 percent; in North America, sales increased by 1 percent; sales in Latin America increased by 10 percent; in Asia Pacific (excluding China), sales were up 15 percent and in China, sales more than tripled, assisted by the acquisition of Winall.
Vegetable Seeds grew in all regions, resulting in a 15 percent increase in sales and Flowers recorded sales growth of 27 percent.
Heightened demand in the US drove increased demand for ENOGEN™ corn for feed, which increases feed efficiency in both beef and dairy by 5 percent and reduces methane intensity by as much as 7 percent.
In Latin America, the expansion of corn hybrids with the Agrisure Viptera™ trait has become the only above-ground insect trait that provides effective control of the Fall Army Worm.
Syngenta Group China
Syngenta Group China, consisting of the Group’s seeds, crop protection, crop nutrition, the Modern Agriculture Platform (MAP) and digital activities in China, achieved in the first six months of the year sales of $4.2 billion with a growth of 47 percent compared to the previous year (34 percent at CER).
MAP and digital revenues continued to grow rapidly, more than tripling. In the first half of the year, 87 new MAP centers were added, for a total of 413 centers in major agricultural areas in China. With the expansion, more than 9.88 million hectares of land are now equipped with MAP’s digital solutions. In addition, MAP beSide™ agricultural products, which offer quality control and traceability certification, were further expanded.
Syngenta Group China’s Crop Protection business increased sales by 35 percent. Sales of Seeds, including vegetables, tripled, assisted by the Winall acquisition, and Crop Nutrition sales increased 18 percent.
The business unit saw strong demand for newly launched, innovative ADEPIDYN™ after the floods, protecting crops from flood-caused diseases.
Utilizing advanced technologies in heavily-affected Henan province, Chinese farmers were able to work with the Group to use satellite images to see where the worst damage from floods took place, and then send in drones for targeted fungicide and biostimulant applications. This allowed them to recover most of the crop. Additionally, the digital photos enabled the farmers to apply for crop insurance.
Syngenta Group summary financials
|Q2 2021||Q2 2020||Q2 2021||Q2 2020|
|Syngenta Crop Protection||3.4||2.8||22.3||19.9|
|Syngenta Group China||2.3||1.6||14.8||11.1|
|Of which MAP||0.6||0.2||4.1||1.4|
|H1 2021||H1 2020||H1 2021||H1 2020|
|Syngenta Crop Protection||6.8||5.7||44.1||39.9|
|Syngenta Group China||4.2||2.9||27.4||20.2|
|Of which MAP||0.9||0.3||5.9||1.9|
Unless otherwise mentioned, comparisons are to the same period in 2020.
The results presented in this release are an unaudited 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. Yangnong Chemical was acquired through a business acquisition under common control in July 2021, and its respective sales as of the beginning of 2020 appended to the Group’s crop protection units and domestically to Syngenta Group China.
Syngenta Group was formed in 2020 as a business combination under common control under PRC GAAP; on this basis, consolidation starts from the period either ChemChina or Sinochem acquired control of the relevant entity and reported figures for 2020 include the above companies in the consolidation scope for the year.
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 (note Syngenta AG H1 condensed consolidated financial statements); 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 senior management.
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.