FORM
6-K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16
of
the Securities Exchange Act of 1934
For the month of February
2010
Commission
File Number: 001-15152
SYNGENTA
AG
(Translation
of registrant’s name into English)
Schwarzwaldallee
215
4058
Basel
Switzerland
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F:
|
Form
20-F
|
X
|
Form
40-F
|
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1):
|
Yes
|
No
|
X
|
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7):
|
Yes
|
No
|
X
|
Indicate
by check mark whether by furnishing the information contained in this Form, the
Registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
|
Yes
|
No
|
X
|
If “Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): N/A
Re: SYNGENTA
AG
Press
Release: “2009 Full Year
Results”
Herewith
we furnish a press release related to Syngenta AG. The full text of the press
release is the following:
# #
#
| Syngenta International AG | Media contacts: | Analyst/Investor contacts: | |||
| Media Office | Médard Schoenmaeckers | Jennifer Gough | |||
| CH-4002 Basel | Switzerland | +41 61 323 2323 | Switzerland | +41 61 323 5059 | |
| Switzerland | USA | +1 202 737 6521 | |||
|
Tel:
Fax:
|
+41
61 323 23 23
+41
61 323 24 24
|
John
Hudson
|
|||
| Switzerland | +41 61 323 6793 | ||||
| USA | +1 202 737 6520 | ||||
|
www.syngenta.com
|
|||||
2009
Full Year Results
Sustained
cash generation, positioned for further growth
|
·
|
Sales $11 billion, up 1 percent
at constant exchange rates
|
|
·
|
EBITDA(2) margin maintained at 21.6
percent: Seeds margin 9.5
percent
|
|
·
|
Earnings per share(3) $15.76, 3 percent
lower
|
|
·
|
Earnings per share $14.62 after
restructuring and impairment,
unchanged
|
|
·
|
Free cash flow $580
million
|
|
·
|
2010 cash return around $750
million: maintained dividend, share
repurchase
|
|
Reported
Financial Highlights
|
Excluding
Restructuring, Impairment
|
|||||||
|
2009
$m
|
2008
$m
|
Actual
%
|
2009
$m
|
2008
$m
|
Actual
%
|
CER(1)
%
|
||
|
Sales
|
10,992
|
11,624
|
-
5
|
10,992
|
11,624
|
-
5
|
+1
|
|
|
Crop
Protection
|
8,491
|
9,231
|
-
8
|
8,491
|
9,231
|
-
8
|
-
2
|
|
|
Seeds
|
2,564
|
2,442
|
+5
|
2,564
|
2,442
|
+5
|
+13
|
|
|
Net Income(4)
|
1,371
|
1,385
|
-
1
|
1,478
|
1,540
|
-
4
|
-
|
|
|
Earnings
per share
|
$14.62
|
$14.63
|
-
|
$15.76
|
$16.26
|
-
3
|
-
|
|
Mike
Mack, Chief Executive Officer, said:
“In 2009 Syngenta
achieved earnings close to the record level of 2008 in the face of considerable
challenges including negative currency movements and higher raw material
costs. This achievement reflects our discipline in pricing, made
possible by the proven value of our products to growers, and strong growth in
Seeds accompanied by a significant improvement in profitability. It
also reflects our ability to restrain costs in a difficult environment and to
continue generating substantial free cash flow. Our active management
of risk in Latin America and Eastern Europe also contributed to the ongoing
strength of our balance sheet, and placed us in a good position to benefit from
the upturn in these regions which began towards year end. In the
emerging markets of Asia Pacific, growth continued throughout the year as
growers continued to invest in yield improvement.
“Strong growth in
sales of new Crop Protection products and accelerating returns in Seeds attest
to the success of Syngenta’s sustained investment in R&D. We also
continued to make targeted acquisitions. Around the world we are
focusing on the longer term expansion of our business, for which the fundamental
drivers of population growth and evolving diets remain unchanged.”
|
(1)
|
Growth
at constant exchange rates, see Appendix
A.
|
|
(2)
|
EBITDA,
a non-GAAP measure, is in regular use as a measure of operating
performance and is defined in
Appendix B.
|
|
(3)
|
EPS
on a fully-diluted basis, excluding restructuring and
impairment.
|
|
(4)
|
Net
income to shareholders of Syngenta
AG.
|
Syngenta – February
5, 2010 / Page 1 of
34
Financial
Performance 2009
Sales
$11 billion
Sales at constant
exchange rates (CER) increased by one percent. Reported sales were
five percent lower owing to the strength of the dollar in the first half of
the year. Crop Protection sales* were two percent lower (CER);
Seeds sales increased by 13 percent (CER).
EBITDA
margin 21.6 percent
EBITDA increased by
nine percent (CER) to $2.4 billion. Price increases offset higher raw
material costs and Seeds profitability increased significantly as a result of
portfolio improvements.
Currency
movements
The impact of
currencies on reported sales was particularly marked in the first half,
following the substantial devaluation of emerging market currencies against the
dollar towards the end of 2008. The impact of these devaluations on
operating income was partly offset by price increases. The weakening
of the dollar against all currencies in the second half resulted in a positive
currency effect on fourth quarter sales.
Earnings
per share $15.76
Earnings per share
excluding restructuring and impairment were three percent lower owing to the
adverse currency movements. Including restructuring and impairment,
earnings per share were unchanged at $14.62.
Business
Highlights
Crop
Protection
Crop Protection
sales excluding Professional Products were one percent lower (CER) compared with
a record 2008. This demonstrates the resilience of the business in
the face of lower crop prices, a shorter northern hemisphere season and weather
conditions that were unfavorable for our business. Performance was
underpinned by price increases made possible by the significant value which our
products offer to growers. Our discipline on price was accompanied by an
estimated gain in market share, a clear testimony to the strength of our
portfolio.
In Europe, Africa & the Middle
East the year was characterized by a late start to the season and
subsequent low disease pressure. In addition, sales in Eastern Europe
were restricted for most of the year by rigorous risk management, although the
operating environment improved towards the year end. NAFTA was also affected by a
late season and low pest pressure, offset by a strong performance in cereal and
soybean herbicides. In Latin America, risk management
and drought in the south of the region reduced first half sales; improved
economic conditions, as well as higher commodity prices, contributed to a
rebound in the second half. In Asia-Pacific, demand was
sustained throughout the year, particularly in the emerging markets, where
growers continued to invest in order to improve yield.
In Selective herbicides, growth
in cereals and soybean compensated for lower corn sales. Sales of
Non-selective herbicides
declined owing to a significant price reduction in glyphosate in the second half
of the year. Fungicides were unchanged
despite lower pest pressure in the northern hemisphere: sales in the second half
registered double digit growth, as Syngenta reinforced its leading market
position in a larger Latin American market. Insecticides sales were
slightly lower because of lower insect infestation in the Americas; in Asia
Pacific sales showed good growth. Seed Care also performed
particularly well in Asia Pacific, with new registrations and an ongoing move
towards higher value seed. Professional Products sales
were lower owing to the impact of the economic environment on the golf and
horticulture markets.
* Crop
Protection sales include $71 million of inter-segment sales.
Syngenta – February
5, 2010 / Page 2 of
34
New Products: Sales
of new products (defined as those launched since 2006) increased by 32 percent
to reach $308 million. The cereal herbicide AXIAL®
continued to grow in the key Canadian wheat market, where sales were up by more
than 50 percent. The fungicide REVUS® doubled
sales in its main region Europe and showed significant growth in all other
regions. Following its 2008 launch in Indonesia, the insecticide
DURIVO® was
rolled out in a number of Asian markets with notable success in
China. Sales of AVICTA® are set
to expand with a launch in 2010 on corn. Overall the peak sales
potential of new products exceeds $1.3 billion.
R&D
pipeline: Our Crop Protection pipeline has combined peak sales
potential of over $2 billion. In 2010 we will make the initial
launches of INVINSA™, a unique product for crop stress protection in field
crops, and of isopyrazam, a broad spectrum cereal fungicide. The late
development pipeline also includes sedaxane, a seed treatment fungicide;
bicyclopyrone, a corn and sugar cane herbicide; and an insecticide
cyantraniliprole.
EBITDA of $2.24 billion
represented a margin of 26.4 percent (2008: 26.6 percent). At
constant exchange rates EBITDA was three percent higher with a margin of 27.8
percent. The underlying improvement in profitability reflected the
benefit of price increases in offsetting both higher raw material costs and
emerging market currency devaluations.
Seeds
Seeds sales were 13
percent higher at constant exchange rates with growth in all product
lines. Price increases across the portfolio reflected value capture
from new technology as well as the ability to pass on higher raw material
costs.
Corn & Soybean: Syngenta
has a broad geographic presence in corn, with sales evenly distributed between
US and non-US markets. In 2009, sales expanded in all regions with
the exception of Latin America, where acreage was lower. In the USA,
our AGRISURE® 3000 GT
proprietary triple stack seed accounted for 25 percent of the portfolio compared
with 11 percent in 2008, and the proportion is expected to exceed 50 percent in
2010. Further advances in portfolio quality will be achieved through
stepping up the combination of our proprietary traits with top performing
germplasm. In soybean, solid underlying sales growth for the full
year reflected price discipline and the quality of our germplasm. In
our third year in the Brazilian market, we achieved a market share of 10
percent.
Sales of Corn &
Soybean in the USA benefited from a fourth quarter change in sales terms in line
with industry standards.
Diverse Field
Crops: In Eastern Europe, a key area for sunflower and sugar
beet, we managed risk carefully and saw an improvement in credit conditions in
the course of the year. The scope of our sunflower germplasm has been
further expanded through the acquisition of Monsanto’s sunflower business, which
also builds on our significant emerging market investments. Sales of
glyphosate tolerant sugar beet in the USA again showed good growth.
Vegetables: Sales
continued their record of strong growth with a focus on high value
crops. We established a significant position in the US lettuce market
with the acquisition of Synergene Seed & Technology, Inc. and Pybas
Vegetable Seed Co., Inc. which bring a broad range of proprietary germplasm
combined with strong breeding and production capabilities.
Flowers growth reflected the
consolidation of Goldsmith Seeds, Inc. and Yoder; the underlying business was
affected by the impact of the economic downturn on the horticulture
market.
Syngenta – February
5, 2010 / Page 3 of
34
R&D pipeline: Our global
corn pipeline has peak sales potential of over $2 billion. The near
term pipeline includes Agrisure Viptera™ (MIR 162) for broad lepidoptera control
and Enogen™ for improved productivity and sustainability in the manufacture of
ethanol from corn. Both traits are awaiting final USDA
approval. MIR 162 received full approval from the Brazilian
authorities in November, along with the double stack Bt11xGA21. The
double stack was also approved in Argentina in December.
In April, Syngenta
and Dow AgroSciences announced an agreement to cross-license their respective
corn traits for commercialization within their branded seed
businesses. The agreement will allow Syngenta, from 2011, to offer
its US customers multiple modes of action targeting refuge reduction and
improved efficiency.
EBITDA of $244 million
represented a margin of 9.5 percent (2008: 5.5 percent). At constant
exchange rates EBITDA increased by 128 percent with a margin of 11.2
percent. The improvement reflects the transformation of our corn
offer in the USA and the further development of our high margin vegetables
business. Seeds is firmly on track to achieve the targeted EBITDA
margin of 15 percent in 2011.
Net
financial expense
Net financial
expense of $122 million was below the 2008 level of $169 million owing to the
non-recurrence of fourth quarter exchange rate losses in
2008. Interest cover remains high at 15 times.
Taxation
Further tax
optimization including some non-recurring benefits resulted in an underlying tax
rate of 17 percent (2008: 19 percent). A tax rate in the low to
mid-twenties is expected over the medium term.
Cash
flow
Free cash flow was
$580 million and demonstrated the strongly cash generative nature of Syngenta’s
business. Fixed capital expenditure of $652 million was above
previous levels and included investment in capacity expansion for two major Crop
Protection products. Acquisition spend totaled $188
million. Average trade working capital as a percentage of sales
increased to 42 percent from an exceptionally low level of 37 percent in 2008
with an increase in inventories as a result of a reduced northern hemisphere
season.
Balance
sheet
The ratio of net
debt to equity was 25 percent. The profile of borrowings was enhanced
through the issue of a €500 million Eurobond in June. Return on
invested capital at 24 percent again exceeded the 20 percent
target.
Dividend
and share repurchase
In the light of
continuing strong free cash flow generation, the company proposes to pay a
maintained dividend of CHF 6.00 per share and plans a share repurchase in
2010. The total cash return will be around $750
million.
Syngenta – February
5, 2010 / Page 4 of
34
Outlook
Mike Mack, Chief
Executive Officer, said:
“Improved
conditions in emerging markets are contributing to a more positive outlook for
2010 and lead us to expect volume growth starting in the second
quarter. In Crop Protection we will build on our innovation and
strong market positions in a more competitive environment; in Seeds, we expect
further expansion of sales and profitability. The benefit of lower
raw material costs and favorable currency movements should offset increased
growth investments and a higher tax rate, enabling us to grow full year earnings
per share. We also expect substantial free cash flow. We are
proposing to pay a maintained dividend for 2009 and also plan a share
repurchase, representing a total cash return of around
$750 million.”
Syngenta – February
5, 2010 / Page 5 of
34
Crop
Protection
For
a definition of constant exchange rates, see Appendix A.
|
Full
Year
|
Growth
|
4th
Quarter
|
Growth
|
||||||
|
Product
line
|
2009
$m
|
2008
$m
|
Actual
%
|
CER
%
|
2009
$m
|
2008
$m
|
Actual
%
|
CER
%
|
|
|
Selective
Herbicides
|
2,221
|
2,412
|
-
8
|
-
|
334
|
349
|
-
4
|
-10
|
|
|
Non-selective
Herbicides
|
1,141
|
1,329
|
-14
|
-
8
|
180
|
228
|
-21
|
-24
|
|
|
Fungicides
|
2,442
|
2,620
|
-
7
|
-
|
632
|
517
|
+22
|
+18
|
|
|
Insecticides
|
1,312
|
1,423
|
-
8
|
-
1
|
317
|
334
|
-
5
|
-
7
|
|
|
Seed
Care
|
821
|
830
|
-
1
|
+4
|
243
|
208
|
+17
|
+14
|
|
|
Professional
Products
|
458
|
527
|
-13
|
-11
|
141
|
140
|
+1
|
-
1
|
|
|
Others
|
96
|
90
|
+6
|
+9
|
35
|
26
|
+33
|
+31
|
|
|
Total
|
8,491
|
9,231
|
-
8
|
-
2
|
1,882
|
1,802
|
+4
|
+1
|
|
Selective
Herbicides: major brands AXIAL®, CALLISTO® family, DUAL®/BICEP® MAGNUM, FUSILADE®MAX and TOPIK®.
Sales were
unchanged with broad-based price increases offsetting lower
volume. AXIAL® and
TOPIK® both
performed strongly on cereals in North America. In the USA, increased
soybean acreage and weed resistance resulted in a resurgence of demand for
soybean herbicides. Corn herbicide sales were lower reflecting
reduced acreage and risk management in emerging markets, as well as the impact
of late planting in the USA.
Non-selective
Herbicides: major brands GRAMOXONE® and
TOUCHDOWN®
Sales were lower
owing to price reductions for TOUCHDOWN® in the
second half of the year, which were accompanied by a recovery in volume
growth. GRAMOXONE® sales
were also lower with declines in Australia, due to drought, and in emerging
markets.
Fungicides: major
brands ALTO®,
AMISTAR®,
BRAVO®,
REVUS®, RIDOMIL
GOLD®,
SCORE®,
TILT® and
UNIX®.
Fungicides saw
strong demand on rice in Asia Pacific and, in the second half, on soybean in
Latin America. REVUS® was
launched in a number of new markets and sales almost
doubled. Northern hemisphere sales overall were lower due to a
shorter season and reduced disease pressure. Fungicide pricing was
significantly higher and offset the decline in volume.
Insecticides: major brands
ACTARA®,
DURIVO®,
FORCE®,
KARATE®,
PROCLAIM®,
VERTIMEC®
Sales were slightly
lower with a lack of soybean pest pressure in the USA and Latin
America. Sales in Asia Pacific grew strongly throughout the year with
in particular a successful roll-out of DURIVO®,
offering growers new crop enhancement benefits.
Seed Care: major brands
AVICTA®,
CRUISER®,
DIVIDEND®,
MAXIM®
Seed care sales
increased broadly. The main driver was CRUISER®, where
growth was volume driven with a modest increase in price, and benefited in
particular from a registration in France and a new soybean application in
Canada.
Professional Products: major
brands FAFARD®,
HERITAGE®,
ICON®
Professional
products were affected by the economic downturn, which reduced demand in the
golf and horticulture segments and led customers to purchase more
cautiously.
Syngenta – February
5, 2010 / Page 6 of
34
|
Full
Year
|
Growth
|
4th
Quarter
|
Growth
|
||||||
|
Crop
Protection
by
region
|
2009
$m
|
2008
$m
|
Actual
%
|
CER
%
|
2009
$m
|
2008
$m
|
Actual
%
|
CER
%
|
|
|
Europe,
Africa, Mid. East
|
2,667
|
3,214
|
-17
|
-
5
|
455
|
401
|
+13
|
+2
|
|
|
NAFTA
|
2,567
|
2,693
|
-
5
|
-
|
281
|
338
|
-17
|
-17
|
|
|
Latin
America
|
1,907
|
2,037
|
-
6
|
-
6
|
842
|
824
|
+2
|
+2
|
|
|
Asia
Pacific
|
1,350
|
1,287
|
+5
|
+11
|
304
|
239
|
+27
|
+18
|
|
|
Total
|
8,491
|
9,231
|
-
8
|
-
2
|
1,882
|
1,802
|
+4
|
+1
|
|
Europe, Africa and the Middle
East: Sales were lower owing to a shorter season with lower
disease pressure and to risk management in Eastern Europe. Above
average price increases partly offset the decline in
volume. Operating conditions in Eastern Europe improved towards the
end of the year.
NAFTA: Prices
overall were
higher despite
pressure in the glyphosate market and offset a modest volume decline due to
reduced pest pressure. In Canada volume growth was robust as we
further strengthened our market position in cereal herbicides and Seed
Care.
Latin
America: Dynamic volume growth in the second half largely
offset a first half decline due to drought in the south and to rigorous credit
management. The second half growth reflected greater use of
technology on increased soybean acres. Lower prices related mainly to
glyphosate and to currency-related adjustments in a competitive
environment.
In Asia Pacific, the farm economy
proved resilient to the economic crisis. Ample liquidity enabled
growers to continue investing in yield improvement. Syngenta
strengthened its market position with broad-based growth led by innovation and
the adaptation of the portfolio to local needs.
Seeds
For
a definition of constant exchange rates, see Appendix A.
|
Full
Year
|
Growth
|
4th
Quarter
|
Growth
|
||||||
|
Product
line
|
2009
$m
|
2008
$m
|
Actual
%
|
CER
%
|
2009
$m
|
2008
$m
|
Actual
%
|
CER
%
|
|
|
Corn &
Soybean
|
1,210
|
1,040
|
+16
|
+21
|
241
|
82
|
+195
|
+193
|
|
|
Diverse Field
Crops
|
429
|
462
|
-
7
|
+11
|
55
|
42
|
+29
|
+28
|
|
|
Vegetables
|
594
|
603
|
-
2
|
+5
|
133
|
114
|
+16
|
+13
|
|
|
Flowers
|
331
|
337
|
-
2
|
+5
|
53
|
48
|
+13
|
+10
|
|
|
Total
|
2,564
|
2,442
|
+5
|
+13
|
482
|
286
|
+69
|
+67
|
|
Corn & Soybean: major
brands AGRISURE®, GARST®, GOLDEN
HARVEST®, NK®
Growth across all
regions was led by significant increases in NAFTA and Asia Pacific. Underlying
growth was augmented in the fourth quarter by a change in sales terms in the
USA, implemented in alignment with industry practice. Sales of our
proprietary triple stack corn AGRISURE® 3000 GT
in the USA showed a significant advance. Soybean sales were also
higher with premium pricing for our high quality germplasm. Soybean
also showed strong growth in Brazil due to the popularity of our V-Max
offer. In Asia Pacific, our leading tropical corn germplasm enabled
us to outperform in a growing market.
Syngenta – February
5, 2010 / Page 7 of
34
Diverse Field
Crops: major brands NK®
oilseeds, HILLESHÖG® sugar
beet
Sales increased in
all regions, with Europe and NAFTA accounting for most of the
business. Sales showed solid growth in Western Europe; in Eastern
Europe higher prices more than offset the impact of risk management measures on
volume. In the USA, sales of glyphosate-tolerant sugar beet continued
to expand.
Vegetables: major brands
DULCINEA®,
ROGERS®,
S&G®, Zeraim
Gedera
Growth reflected
the ongoing expansion of high value products in our strategic
crops. Sales growth was especially strong in Latin America and in the
emerging markets of Asia.
Flowers: major brands Fischer,
Goldfisch, Goldsmith Seeds, S&G®,
Yoder
Growth reflected
the consolidation of Goldsmith Seeds Inc. and Yoder; underlying sales were
affected by the economic environment.
|
Full
Year
|
Growth
|
4th
Quarter
|
Growth
|
||||||
|
Seeds
by region
|
2009
$m
|
2008
$m
|
Actual
%
|
CER
%
|
2009
$m
|
2008
$m
|
Actual
%
|
CER
%
|
|
|
Europe,
Africa, Mid. East
|
933
|
1,077
|
-13
|
+3
|
115
|
93
|
+24
|
+21
|
|
|
NAFTA
|
1,187
|
979
|
+21
|
+22
|
213
|
107
|
+100
|
+100
|
|
|
Latin
America
|
243
|
216
|
+12
|
+12
|
87
|
43
|
+100
|
+100
|
|
|
Asia
Pacific
|
201
|
170
|
+18
|
+28
|
67
|
43
|
+56
|
+49
|
|
|
Total
|
2,564
|
2,442
|
+5
|
+13
|
482
|
286
|
+69
|
+67
|
|
Announcements
and Meetings
|
First quarter
trading statement 2010
|
15 April
2010
|
|
AGM
|
20 April
2010
|
|
Announcement
of the half year results 2010
|
22 July
2010
|
|
Third quarter
trading statement 2010
|
14 October
2010
|
Syngenta is one of
the world's leading companies with more than 25,000 employees in over
90 countries dedicated to our purpose: Bringing plant potential to
life. Through world-class
science, global reach and commitment to our customers we help to increase crop
productivity, protect the environment and improve health and quality of
life. For more information about us please go to www.syngenta.com.
|
Cautionary
Statement Regarding Forward-Looking Statements
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 therefor.
|
Syngenta – February
5, 2010 / Page 8 of
34
Syngenta
Group
Condensed
Consolidated Financial Statements
The
following condensed consolidated financial statements and notes thereto, which
do not themselves contain all of the information that IFRS would require for a
complete set of financial statements, are based on and are consistent with
Syngenta’s consolidated financial statements prepared in accordance with
International Financial Reporting Standards (IFRS) as described in Note
1.
Condensed
Consolidated Income Statement
|
For
the year ended December 31,
(US$
million, except share and per share amounts)
|
2009
|
2008
|
||||||
|
Sales
|
10,992 | 11,624 | ||||||
|
Cost of goods
sold
|
(5,586 | ) | (5,713 | ) | ||||
|
Gross
profit
|
5,406 | 5,911 | ||||||
|
Marketing and
distribution
|
(1,812 | ) | (2,039 | ) | ||||
|
Research and
development
|
(960 | ) | (969 | ) | ||||
|
General and
administrative
|
(738 | ) | (849 | ) | ||||
|
Restructuring
and impairment
|
(130 | ) | (196 | ) | ||||
|
Operating
income
|
1,766 | 1,858 | ||||||
|
Income/(loss)
from associates and joint ventures
|
(3 | ) | 3 | |||||
|
Financial
expenses, net
|
(122 | ) | (169 | ) | ||||
|
Income
before taxes
|
1,641 | 1,692 | ||||||
|
Income tax
expense
|
(267 | ) | (307 | ) | ||||
|
Net
income
|
1,374 | 1,385 | ||||||
|
Attributable
to:
|
||||||||
|
Minority
interests
|
3 | - | ||||||
|
Syngenta
AG shareholders
|
1,371 | 1,385 | ||||||
|
Net
income
|
1,374 | 1,385 | ||||||
|
Earnings
per share (US$):
|
||||||||
|
Basic
|
14.72 | 14.75 | ||||||
|
Diluted
|
14.62 | 14.63 | ||||||
|
Weighted
average number of shares:
|
||||||||
|
Basic
|
93,154,537 | 93,916,415 | ||||||
|
Diluted
|
93,760,196 | 94,696,762 | ||||||
All amounts relate
to continuing operations.
Syngenta – February
5, 2010 / Page 9 of
34
Condensed
Consolidated Statement of Comprehensive Income
|
For
the year ended December 31,
(US$
million)
|
2009
|
2008
|
||||||
|
Net
income
|
1,374 | 1,385 | ||||||
|
Components
of other comprehensive income:
|
||||||||
|
Unrealized
gains/(losses) on available for sale financial assets
|
(18 | ) | 9 | |||||
|
Unrealized
gains/(losses) on derivatives designated as cash flow and net investment
hedges
|
72 | (34 | ) | |||||
|
Currency
translation effects
|
289 | (443 | ) | |||||
|
Income tax
relating to other comprehensive income
|
34 | (26 | ) | |||||
|
Total
comprehensive income
|
1,751 | 891 | ||||||
|
Attributable
to:
|
||||||||
|
Minority
interests
|
2 | 1 | ||||||
|
Syngenta AG
shareholders
|
1,749 | 890 | ||||||
|
Total
comprehensive income
|
1,751 | 891 | ||||||
Syngenta – February
5, 2010 / Page 10 of
34
Condensed
Consolidated Balance Sheet
|
At
December 31,
(US$
million)
|
2009
|
2008
|
||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash and cash
equivalents
|
1,552 | 803 | ||||||
|
Trade
receivables
|
2,506 | 2,311 | ||||||
|
Other
accounts receivable
|
558 | 479 | ||||||
|
Inventories
|
3,922 | 3,456 | ||||||
|
Derivative
and other financial assets
|
156 | 381 | ||||||
|
Other current
assets
|
200 | 190 | ||||||
|
Total
current assets
|
8,894 | 7,620 | ||||||
|
Non-current
assets:
|
||||||||
|
Property,
plant and equipment
|
2,738 | 2,188 | ||||||
|
Intangible
assets
|
3,102 | 3,083 | ||||||
|
Deferred tax
assets
|
660 | 514 | ||||||
|
Defined
benefit pension asset
|
679 | 628 | ||||||
|
Derivative
financial assets
|
248 | 152 | ||||||
|
Other
non-current financial assets
|
375 | 399 | ||||||
|
Total
non-current assets
|
7,802 | 6,964 | ||||||
|
Total
assets
|
16,696 | 14,584 | ||||||
|
Liabilities
and equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Trade
accounts payable
|
(2,468 | ) | (2,240 | ) | ||||
|
Current
financial debt
|
(281 | ) | (211 | ) | ||||
|
Income taxes
payable
|
(376 | ) | (322 | ) | ||||
|
Derivative
financial liabilities
|
(145 | ) | (457 | ) | ||||
|
Other current
liabilities
|
(827 | ) | (834 | ) | ||||
|
Provisions
|
(154 | ) | (170 | ) | ||||
|
Total
current liabilities
|
(4,251 | ) | (4,234 | ) | ||||
|
Non-current
liabilities:
|
||||||||
|
Financial
debt and other non-current liabilities
|
(3,527 | ) | (2,869 | ) | ||||
|
Deferred tax
liabilities
|
(884 | ) | (659 | ) | ||||
|
Provisions
|
(879 | ) | (921 | ) | ||||
|
Total
non-current liabilities
|
(5,290 | ) | (4,449 | ) | ||||
|
Total
liabilities
|
(9,541 | ) | (8,683 | ) | ||||
|
Equity:
|
||||||||
|
Shareholders’
equity
|
(7,141 | ) | (5,884 | ) | ||||
|
Minority
interests
|
(14 | ) | (17 | ) | ||||
|
Total
equity
|
(7,155 | ) | (5,901 | ) | ||||
|
Total
liabilities and equity
|
(16,696 | ) | (14,584 | ) | ||||
Syngenta – February
5, 2010 / Page 11 of
34
Condensed
Consolidated Cash Flow Statement
|
For
the year ended December 31,
(US$
million)
|
2009
|
2008
|
||||||
|
Income
before taxes
|
1,641 | 1,692 | ||||||
|
Reversal of
non-cash items
|
668 | 973 | ||||||
|
Cash
(paid)/received in respect of:
|
||||||||
|
Interest and
other financial receipts
|
96 | 199 | ||||||
|
Interest and
other financial payments
|
(380 | ) | (150 | ) | ||||
|
Income
taxes
|
(165 | ) | (283 | ) | ||||
|
Restructuring
costs
|
(79 | ) | (140 | ) | ||||
|
Contributions
to pension plans, excluding restructuring costs
|
(125 | ) | (113 | ) | ||||
|
Other
provisions
|
(81 | ) | (108 | ) | ||||
|
Cash
flow before change in net working capital
|
1,575 | 2,070 | ||||||
|
Change in net
working capital:
|
||||||||
|
Change in
inventories
|
(178 | ) | (982 | ) | ||||
|
Change in
trade and other accounts receivable and
other net
current assets
|
55 | (291 | ) | |||||
|
Change in
trade and other accounts payable
|
(33 | ) | 669 | |||||
|
Cash
flow from operating activities
|
1,419 | 1,466 | ||||||
|
Additions to
property, plant and equipment
|
(652 | ) | (444 | ) | ||||
|
Proceeds from
disposals of property, plant and equipment
|
33 | 29 | ||||||
|
Purchases of
intangible assets
|
(97 | ) | (118 | ) | ||||
|
Purchases of
investments in associates and other financial assets
|
(22 | ) | (70 | ) | ||||
|
Proceeds from
disposals of financial assets
|
87 | 42 | ||||||
|
Net cash
flows from (purchases)/disposals of marketable securities
|
(41 | ) | 97 | |||||
|
Acquisitions
and divestments
|
(188 | ) | (144 | ) | ||||
|
Cash
flow used for investing activities
|
(880 | ) | (608 | ) | ||||
|
Increases in
third party interest-bearing debt
|
926 | 986 | ||||||
|
Repayments of
third party interest-bearing debt
|
(183 | ) | (378 | ) | ||||
|
Sale/(purchase)
of treasury shares and options over own shares
|
(79 | ) | (613 | ) | ||||
|
Dividends
paid
|
(494 | ) | (452 | ) | ||||
|
Cash
flow from financing activities
|
170 | (457 | ) | |||||
|
Net effect of
currency translation on cash and cash equivalents
|
40 | (101 | ) | |||||
|
Net
change in cash and cash equivalents
|
749 | 300 | ||||||
|
Cash
and cash equivalents at the beginning of the year
|
803 | 503 | ||||||
|
Cash
and cash equivalents at the end of the year
|
1,552 | 803 | ||||||
Syngenta – February
5, 2010 / Page 12 of
34
Condensed
Consolidated Statement of Changes in Equity
|
Attributable to Syngenta AG
shareholders
|
||||||||||||||||||||||||||||||||||||
|
(US$
million)
|
Par
value of
ordinary
shares
|
Additional
paid-in
capital
|
Treasury
shares,
at
cost
|
Fair
value
reserves
|
Cumulative
translation
adjustment
|
Retained
earnings
|
Total
share
holders’
equity
|
Minority
interests
|
Total
equity
|
|||||||||||||||||||||||||||
|
December 31,
2007
|
6 | 3,720 | (830 | ) | (154 | ) | 532 | 2,748 | 6,022 | 19 | 6,041 | |||||||||||||||||||||||||
|
Total comprehensive
income
|
(59 | ) | (444 | ) | 1,393 | 890 | 1 | 891 | ||||||||||||||||||||||||||||
|
Share based
compensation and
income tax thereon
|
41 | 60 | 101 | 101 | ||||||||||||||||||||||||||||||||
|
Dividends
paid
|
(450 | ) | (450 | ) | (2 | ) | (452 | ) | ||||||||||||||||||||||||||||
|
Share
repurchases
|
(683 | ) | (683 | ) | (683 | ) | ||||||||||||||||||||||||||||||
|
Cancellation of treasury
shares
|
(143 | ) | 727 | 6 | (590 | ) | − | − | ||||||||||||||||||||||||||||
|
Other
|
4 | 4 | (1 | ) | 3 | |||||||||||||||||||||||||||||||
|
December 31,
2008
|
6 | 3,577 | (745 | ) | (213 | ) | 94 | 3,165 | 5,884 | 17 | 5,901 | |||||||||||||||||||||||||
|
Total comprehensive
income
|
50 | 290 | 1,409 | 1,749 | 2 | 1,751 | ||||||||||||||||||||||||||||||
|
Share-based compensation and
income tax thereon
|
27 | 99 | 126 | 126 | ||||||||||||||||||||||||||||||||
|
Dividends
paid
|
(493 | ) | (493 | ) | (1 | ) | (494 | ) | ||||||||||||||||||||||||||||
|
Share
repurchases
|
(125 | ) | (125 | ) | (125 | ) | ||||||||||||||||||||||||||||||
|
Cancellation of treasury
shares
|
(86 | ) | 626 | (540 | ) | − | − | |||||||||||||||||||||||||||||
|
Other
|
(4 | ) | (4 | ) | ||||||||||||||||||||||||||||||||
|
December 31,
2009
|
6 | 3,491 | (217 | ) | (163 | ) | 384 | 3,640 | 7,141 | 14 | 7,155 | |||||||||||||||||||||||||
A dividend of CHF
6.00 (US$5.27) (2008: CHF 4.80 (US$4.76)) per share was paid to Syngenta AG
shareholders during 2009.
Syngenta – February
5, 2010 / Page 13 of
34
Syngenta
Group
Notes
to Condensed Consolidated Financial Statements
Note
1: Basis of preparation
Nature of operations: Syngenta
AG (“Syngenta”) is a global crop protection and seeds business engaged in the
discovery, development, manufacture and marketing of a range of agricultural
products designed to improve crop yields and food quality.
Basis of presentation and accounting
policies: The condensed consolidated financial statements for the years
ended December 31, 2009 and 2008 incorporate the financial statements of
Syngenta AG and of all of its subsidiaries (“Syngenta Group”). The
condensed consolidated financial statements are based on and are consistent with
Syngenta’s consolidated financial statements. Syngenta’s consolidated financial
statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as issued by the International Accounting Standards
Board (IASB) and, except as described in Note 2 below, with the accounting
policies set out in the Syngenta Financial Report 2008. The condensed
consolidated financial statements were authorized for issue by the Board of
Directors on February 4, 2010.
The condensed
consolidated financial statements are presented in United States dollars (US$)
as this is the major currency in which revenues are denominated.
The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimated.
Note
2: Changes in accounting policies
Syngenta has
adopted the following new IFRSs in 2009:
IAS 1 (revised
September 2007), “Presentation of Financial Statements”. These condensed
consolidated financial statements, including comparative amounts presented
therein, have been presented in accordance with the revised IFRS to include an
additional separate condensed consolidated statement of comprehensive income.
Items presented in the condensed consolidated statement of changes in equity in
previous periods as “gains/(losses) recognized directly in equity” that are
components of other comprehensive income have been presented in the condensed
consolidated statement of comprehensive income. These items include gains and
losses on revaluation of available-for-sale financial assets and derivatives
designated as cash flow hedges, and gains and losses on translating the
financial statements of subsidiaries into US dollars. The condensed consolidated
statement of changes in equity has been revised to present total comprehensive
income and transactions with Syngenta shareholders in their capacity as
shareholders. The above effects of adopting the revised IFRS are presentation
changes only and do not change Syngenta’s reported results of operations,
financial position or cash flow.
Syngenta – February
5, 2010 / Page 14 of
34
IAS 23 (revised
March 2007), “Borrowing Costs” requires borrowing costs directly attributable to
the construction of qualifying assets to be capitalized as part of the cost of
those assets. Qualifying assets include property, plant & equipment
constructed and intangible assets for computer software developed in projects
which take more than 12 months to complete. The adoption of this IFRS did not
have a material impact on Syngenta’s condensed consolidated financial
statements.
IFRIC 13, “Customer
Loyalty Programmes” was issued in June 2007, and requires loyalty award credits
granted to customers as part of a sales transaction to be accounted for as a
component of the related sale. Adoption of IFRIC 13 did not have a material
impact on Syngenta’s condensed consolidated financial statements.
“Improvements
to IFRSs” issued in May 2008 amended various IFRSs pursuant to the IASB’s
‘annual improvements’ process. One amendment to IAS 41, “Agriculture”, changed
the method of determining fair value less costs to sell of biological assets by
removing the requirement to exclude the effect of future biological
transformation from their fair value. This is relevant to the Flowers business
within Syngenta’s Seeds segment. Adopting this amendment did not have a material
effect on Syngenta’s condensed consolidated financial statements.
Amendments to IFRS
7, “Improving Disclosures about Financial Instruments”. The consolidated
financial statements have been revised to provide the additional
disclosures.
Adoption of the
following new or revised IFRSs had no impact on the condensed consolidated
financial statements:
|
·
|
Amendments to
IAS 32 & IAS 1, “Puttable Financial Instruments and Obligations
arising on Liquidation”.
|
|
·
|
“Vesting
conditions and Cancellations”, an amendment to IFRS 2 “Share Based
Payment”.
|
|
·
|
“Embedded
Derivatives” – Amendments to IFRIC 9 and IAS
39.
|
|
·
|
IFRIC 15,
“Agreements for the Construction of Real
Estate”.
|
|
·
|
IFRIC 16,
“Hedges of a Net Investment in a Foreign
Operation”.
|
|
·
|
IFRIC 18,
“Transfers of Assets from
Customers”.
|
New or revised
IFRSs relevant to the Syngenta Group which Syngenta has not yet adopted, and
their effective dates for Syngenta, are:
|
·
|
IFRS 3,
“Business Combinations” (revised January 2008) and IAS 27 “Consolidated
and Separate Financial Statements (revised January 2008) – effective
January 1, 2010
|
|
·
|
Amendments to
IAS 39, “Eligible Hedged Items” – effective January 1,
2010
|
|
·
|
Improvements
to IFRSs issued in April 2009 – effective January 1,
2010
|
|
·
|
IFRIC 17,
“Distributions of Non-cash Assets to Owners” – effective January 1,
2010
|
|
·
|
Amendments to
IAS 32, “Classification of Rights issues” – effective January 1,
2011
|
|
·
|
IAS 24,
“Related Party Disclosures” (revised November 2009) – effective January 1,
2011
|
|
·
|
IFRIC 19,
“Extinguishing Financial Liabilities with Equity Instruments” - effective
January 1, 2011
|
Syngenta – February
5, 2010 / Page 15 of
34
|
·
|
“Prepayments
of a Minimum Funding Requirement”, amendment to IFRIC 14 - effective
January 1, 2011
|
|
·
|
IFRS 9,
“Financial Instruments” – effective January 1,
2013
|
With effect from
January 1, 2010, Syngenta will change its accounting policy for recognizing
actuarial gains and losses on defined benefit pensions and other post-employment
benefits, as permitted by IAS 19, “Employee Benefits”, from the ‘corridor’
method of deferred recognition to immediate recognition in other comprehensive
income.
Note
3: Business combinations, divestments and other significant
transactions
2009
On August 31, 2009,
Syngenta acquired from Monsanto its global hybrid sunflower seeds activities for
a cash payment of US$160 million, which includes certain rights to receive
services during the post-acquisition transition period. Direct acquisition costs
were US$3 million. The consideration paid for Monsanto’s sunflower business
in Spain will be recognized as a prepayment until Spanish competition authority
approval for the transaction is granted. Goodwill of US$24 million has been
provisionally recognized at December 31, 2009. Results of a professional
valuation of acquired land and buildings are still awaited and the valuation of
acquired seed inventories is not yet finalized. The most important factor
contributing to the recognition of this goodwill is the expected value of
revenue and cost synergies and other benefits from combining the acquired
businesses with those of Syngenta.
During 2009,
Syngenta also acquired: the 32 percent remaining minority equity interest in
Koipesol Semillas S.A; 100 percent of the shares of Circle One Global Inc., a
US-based biological crop protection technology business; the remaining 50
percent of the shares of Goldsmith Seeds Europe B.V., the Netherlands-based
business in which Goldsmith Seeds Inc., acquired in November 2008, had a 50
percent equity interest, and 100 percent of the shares of Synergene Seed &
Technology, Inc. and Pybas Vegetable Seed Co., Inc.,
two US-based lettuce seed companies. Because Goldsmith Seeds
Europe B.V. and the two lettuce seed businesses were acquired close to the year
end, all aspects of the purchase price allocation for those acquisitions are
provisional. In aggregate, cash paid for the above acquisitions, excluding the
Monsanto sunflower business, was US$35 million, and no material direct
acquisition costs or goodwill were recognized in 2009.
2008
On November 10,
2008, Syngenta purchased 100 percent of SPS Argentina SA (SPS), a company
primarily specialized in the development, production and marketing of soybean,
corn and sunflower. On November 19, 2008, Syngenta acquired 100 percent of
Goldsmith Seeds, Inc. (Goldsmith). Goldsmith breeds, produces and sells a
broad range of pot and bedding products, including major crops such as cyclamen,
impatiens and petunia. On December 12, 2008, Syngenta acquired the pot and
garden chrysanthemum and aster business of US flowers producer Yoder Brothers
Inc. (Yoder). Chrysanthemums are one of the top five selling pot and garden
flowers in the global industry. On these three acquisitions, direct acquisition
costs incurred were US$5 million, goodwill was US$13 million, cash paid to date,
net of cash acquired with these businesses, is US$140 million, and total
purchase price was US$139 million after a US$6 million contingent consideration
adjustment. The most
Syngenta – February
5, 2010 / Page 16 of
34
important factor
contributing to the recognition of goodwill on these acquisitions were the cost
and revenue synergies anticipated from integrating the operations and net assets
of the acquired businesses with Syngenta’s existing operations. The main
adjustments made in 2009 on finalizing the purchase price allocation compared to
the amounts recognized at December 31, 2008 were a US$24 million increase in
property, plant and equipment to reflect professional valuations, a US$25
million increase to value inventories and biological assets at fair value less
costs to sell and to record US$25 million of related deferred tax
liabilities.
Following a public
offer to minority shareholders of Syngenta India Limited (SIL) made during 2007,
Syngenta acquired a further 1.3 percent of SIL’s share capital in January
2008. The total shareholding of Syngenta in SIL increased to 96.3
percent.
On April 3, 2008,
Syngenta acquired a 49 percent share in the Chinese company Sanbei Seeds Co
Ltd, which specializes in the production and sale of high-quality, high-yielding
corn seeds. The purchase price was US$36 million.
Syngenta – February
5, 2010 / Page 17 of
34
Note
4: Segmental information
|
2009
(US$
million)
|
Crop
Protection
|
Seeds
|
Business
Development
|
Elimination(1)
|
Total
|
|||||||||||||||
|
Segment sales – third
party
|
8,420 | 2,564 | 8 | – | 10,992 | |||||||||||||||
|
Segment sales – other
segments
|
71 | – | – | (71 | ) | – | ||||||||||||||
|
Segment
sales
|
8,491 | 2,564 | 8 | (71 | ) | 10,992 | ||||||||||||||
|
Cost of goods
sold
|
(4,274 | ) | (1,363 | ) | (15 | ) | 66 | (5,586 | ) | |||||||||||
|
Gross
profit
|
4,217 | 1,201 | (7 | ) | (5 | ) | 5,406 | |||||||||||||
|
Marketing and
distribution
|
(1,260 | ) | (542 | ) | (10 | ) | – | (1,812 | ) | |||||||||||
|
Research and
development
|
(512 | ) | (368 | ) | (80 | ) | – | (960 | ) | |||||||||||
|
General and
administrative
|
(515 | ) | (203 | ) | (20 | ) | – | (738 | ) | |||||||||||
|
Restructuring and
impairment
|
(61 | ) | (58 | ) | (11 | ) | – | (130 | ) | |||||||||||
|
Operating
income/(loss)
|
1,869 | 30 | (128 | ) | (5 | ) | 1,766 | |||||||||||||
|
Income from associates and joint
ventures
|
(3 | ) | ||||||||||||||||||
|
Financial expense,
net
|
(122 | ) | ||||||||||||||||||
|
Income before
taxes
|
1,641 | |||||||||||||||||||
|
Total
assets
|
10,379 | 3,582 | 125 | 2,610 | (2) | 16,696 | ||||||||||||||
|
2008
(US$
million)
|
Crop
Protection
|
Seeds
|
Business
Development
|
Elimination(1)
|
Total
|
|||||||||||||||
|
Segment sales – third
party
|
9,158 | 2,442 | 24 | – | 11,624 | |||||||||||||||
|
Segment sales – other
segments
|
73 | – | – | (73 | ) | – | ||||||||||||||
|
Segment
sales
|
9,231 | 2,442 | 24 | (73 | ) | 11,624 | ||||||||||||||
|
Cost of goods
sold
|
(4,425 | ) | (1,331 | ) | (18 | ) | 61 | (5,713 | ) | |||||||||||
|
Gross
profit
|
4,806 | 1,111 | 6 | (12 | ) | 5,911 | ||||||||||||||
|
Marketing and
distribution
|
(1,474 | ) | (555 | ) | (10 | ) | – | (2,039 | ) | |||||||||||
|
Research and
development
|
(556 | ) | (343 | ) | (70 | ) | – | (969 | ) | |||||||||||
|
General and
administrative
|
(655 | ) | (173 | ) | (21 | ) | – | (849 | ) | |||||||||||
|
Restructuring and
impairment
|
(83 | ) | (76 | ) | (37 | ) | – | (196 | ) | |||||||||||
|
Operating
income/(loss)
|
2,038 | (36 | ) | (132 | ) | (12 | ) | 1,858 | ||||||||||||
|
Income from associates & joint
ventures
|
3 | |||||||||||||||||||
|
Financial expense,
net
|
(169 | ) | ||||||||||||||||||
|
Income before
taxes
|
1,692 | |||||||||||||||||||
|
Total
assets
|
9,782 | 3,087 | 115 | 1,600 | (2) | 14,584 | ||||||||||||||
All amounts relate
to continuing operations.
(1)
Intersegment elimination
(2)
Unallocated assets
Note
5: General and administrative
General and
administrative includes gains of US$23 million (2008: US$4 million) on disposals
of property, plant and equipment and subsidiaries and US$109 million
(2008: US$13 million) on cash flow hedges reclassified from other
comprehensive income in connection with the income statement recognition of the
related hedged transactions.
Syngenta – February
5, 2010 / Page 18 of
34
Note
6: Restructuring and impairment before taxes
|
For
the year ended December 31,
(US$
million)
|
2009
|
2008
|
||||||
|
Non-cash
restructuring and impairment, net
|
23 | 80 | ||||||
|
Cash
costs:
|
||||||||
|
Operational
efficiency programs
|
98 | 79 | ||||||
|
Integration
and acquisition costs
|
28 | 46 | ||||||
| 126 | 125 | |||||||
|
Total
restructuring and impairment before taxes(1)
|
149 | 205 | ||||||
|
(1)
|
US$17
million (2008: US$9 million) is included within cost of goods sold and
US$2 million (2008: US$nil) is included within income/(loss) from
associates and joint ventures.
|
Restructuring
represents the effect on reported performance of initiating business changes
which are considered major and which, in the opinion of management, will have a
material effect on the nature and focus of Syngenta's operations, and therefore
requires separate disclosure to provide a more thorough understanding of
business performance. Restructuring includes the effects of
completing and integrating significant business combinations and
divestments. Restructuring and impairment includes the impairment
costs associated with major restructuring and also impairment losses and
reversals of impairment losses resulting from major changes in the markets in
which a reported segment operates.
The incidence of
these business changes may be periodic and the effect on reported performance of
initiating them will vary from period to period. Because each such
business change is different in nature and scope, there will be little
continuity in the detailed composition and size of the reported amounts which
affect performance in successive periods. Separate disclosure of
these amounts facilitates the understanding of performance including and
excluding items affecting comparability. Reported performance before
restructuring and impairment is one of the measures used in Syngenta’s short
term employee incentive compensation plans. Syngenta’s definition of
restructuring and impairment may not be comparable to similarly titled line
items in financial statements of other companies.
2009
Operational
efficiency cash costs of US$98 million includes US$15 million for site closure
costs in NAFTA, US$18 million for further outsourcing of information systems and
US$55 million for the continuation of standardization and consolidation of
global back office operations across Crop Protection and Seeds.
Integration and
acquisition costs of US$28 million relate mainly to the Goldsmith and Yoder
acquisitions made in 2008 and to the continuing integration and synergy program
of the Fischer group.
Non-cash
restructuring and impairment, net includes US$17 million of reversal of
inventory step-up related mainly to the Goldsmith acquisition, US$16 million of
available-for-sale financial asset impairments and US$16 million of fixed asset
write-offs in addition to various insignificant restructuring charges.
Offsetting gains of US$9 million relate to the sale of an
Syngenta – February
5, 2010 / Page 19 of
34
available-for-sale
financial asset, US$10 million to the recognition of a reimbursement receivable
for a product right impairment and US$7 million to negative goodwill realized on
the Goldsmith acquisition.
2008
During 2008,
restructuring charges of US$19 million were incurred by Crop Protection under
the Operational Efficiency program announced in 2007, including US$7 million for
the restructuring of the segment’s product development function. Seeds incurred
charges under the program of US$11 million, including US$6 million for the
continued restructuring of the NAFTA Corn & Soybean marketing and sales
organizations. Other costs incurred under the program related to Crop Protection
and Seeds and consisted mainly of US$13 million for headquarter and information
systems restructuring charges and US$24 million for standardization and
consolidation of back office operations.
Seeds integration
costs of US$46 million related mainly to the integration and synergy program of
the Fischer group, which was acquired in 2007, including severance and
redundancy charges of approximately US$32 million.
Non-cash
restructuring and impairment, net included US$17 million of accelerated
depreciation and property, plant and equipment write-offs from site closures and
rationalizations. An additional US$17 million of impairments of intangible
assets was due to accelerated amortization of a lease related to a Crop
Protection development site, now closed. A further US$37 million related to
impairments of available-for-sale financial assets mainly from a significant
decline in the share price of Verenium (previously Diversa) Corporation. US$9
million reversal of inventory step-up included within non-cash restructuring and
impairment, net related largely to the Zeraim Gedera acquisition.
Note
7: Non-cash items included in income before taxes
The following table
analyzes non-cash items included in income before taxes for the years ended
December 31, 2009 and 2008:
|
For
the year ended December 31,
(US$
million)
|
2009
|
2008
|
||||||
|
Depreciation,
amortization and impairment of:
|
||||||||
|
Property,
plant and equipment
|
249 | 259 | ||||||
|
Intangible
assets
|
229 | 199 | ||||||
|
Financial
assets
|
8 | 41 | ||||||
|
Deferred
revenue and gains
|
(47 | ) | – | |||||
|
Gain on
disposal of non-current assets
|
(23 | ) | (4 | ) | ||||
|
Charge in
respect of share based compensation
|
64 | 49 | ||||||
|
Charges in
respect of provisions
|
159 | 200 | ||||||
|
Income in
respect of reimbursements of provisions
|
(15 | ) | (36 | ) | ||||
|
Net financial
expenses
|
122 | 169 | ||||||
|
(Gains)/losses
on hedges reported in operating income
|
(81 | ) | 99 | |||||
|
Share of net
loss/(income) from associates
|
3 | (3 | ) | |||||
|
Total
|
668 | 973 | ||||||
Syngenta – February
5, 2010 / Page 20 of
34
Note
8: Principal currency translation rates
As an international
business selling in over 100 countries, with major manufacturing and R&D
facilities in Switzerland, the UK, the USA and India, movements in currencies
impact business performance. The principal currencies and exchange rates against
the US dollar used in preparing the financial statements contained in this
communication were as follows:
|
Average
|
Period
ended December 31
|
||||||||||||||||
|
Per
US$
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
Brazilian
real
|
BRL
|
2.04 | 1.79 | 1.74 | 2.33 | ||||||||||||
|
Swiss
franc
|
CHF
|
1.09 | 1.08 | 1.03 | 1.06 | ||||||||||||
|
Euro
|
EUR
|
0.72 | 0.68 | 0.69 | 0.71 | ||||||||||||
|
British pound
sterling
|
GBP
|
0.65 | 0.53 | 0.62 | 0.69 | ||||||||||||
The average rates
presented above are an average of the monthly rates used to prepare the
condensed consolidated income and cash flow statements. The period
end rates were used for the preparation of the condensed consolidated balance
sheet.
Note
9: Issuances, repurchases and repayments of debt and equity
securities
2009
During 2009,
Syngenta repurchased 550,000 of its own shares at a cost of US$125 million to
meet future requirements of share based payment plans. No treasury shares were
reissued except in accordance with Syngenta’s share based payment plans
disclosed in Note 23 to its 2009 annual consolidated financial
statements.
In June 2009,
Syngenta issued a Eurobond with a principal amount of EUR 500 million, a
maturity of June 2014 and a coupon rate of 4.0 percent.
2008
During 2008,
Syngenta repurchased 2,615,008 of its own shares at a cost of US$683 million. No
treasury shares were reissued except in accordance with Syngenta’s share based
payment plans.
In April and
December 2008, Syngenta issued Swiss franc domestic bonds with principal amounts
of CHF 500 million and CHF 375 million, maturities of April 2013 and
December 2012 and coupon rates of 3.375 percent and 3.5 percent
respectively.
Note
10: Subsequent events
No events occurred
between the balance sheet date and the date on which these condensed
consolidated financial statements were approved by the Board of Directors that
would require adjustment to or disclosure in the condensed consolidated
financial statements.
Syngenta – February
5, 2010 / Page 21 of
34
SUPPLEMENTARY
FINANCIAL INFORMATION
Financial
Summary
|
Ex
Restructuring &
impairment(1)
|
Restructuring
&
impairment
|
As
reported
under
IFRS
|
|||||||||||||||||||||
|
For
the year ended December 31,
(US$
million,
except
per share amounts)
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||
|
Sales
|
10,992 | 11,624 | - | - | 10,992 | 11,624 | |||||||||||||||||
|
Gross
profit
|
5,423 | 5,920 | (17 | ) | (9 | ) | 5,406 | 5,911 | |||||||||||||||
|
Marketing and
distribution
|
(1,812 | ) | (2,039 | ) | - | - | (1,812 | ) | (2,039 | ) | |||||||||||||
|
Research and
development
|
(960 | ) | (969 | ) | - | - | (960 | ) | (969 | ) | |||||||||||||
|
General and
administrative
|
(738 | ) | (849 | ) | - | - | (738 | ) | (849 | ) | |||||||||||||
|
Restructuring
and impairment
|
- | - | (130 | ) | (196 | ) | (130 | ) | (196 | ) | |||||||||||||
|
Operating
income
|
1,913 | 2,063 | (147 | ) | (205 | ) | 1,766 | 1,858 | |||||||||||||||
|
Income
before taxes
|
1,790 | 1,897 | (149 | ) | (205 | ) | 1,641 | 1,692 | |||||||||||||||
|
Income tax
expense
|
(309 | ) | (357 | ) | 42 | 50 | (267 | ) | (307 | ) | |||||||||||||
|
Net
income
|
1,481 | 1,540 | (107 | ) | (155 | ) | 1,374 | 1,385 | |||||||||||||||
|
Attributable
to minority interests
|
(3 | ) | - | - | - | (3 | ) | - | |||||||||||||||
|
Attributable
to Syngenta AG shareholders:
|
1,478 | 1,540 | (107 | ) | (155 | ) | 1,371 | 1,385 | |||||||||||||||
|
Earnings/(loss)
per share(US$)(2)
|
|||||||||||||||||||||||
|
-
basic
|
15.87 | 16.40 | (1.15 | ) | (1.65 | ) | 14.72 | 14.75 | |||||||||||||||
|
-
diluted
|
15.76 | 16.26 | (1.14 | ) | (1.63 | ) | 14.62 | 14.63 | |||||||||||||||
|
2009
|
2008
|
2009
CER(3)
|
||||||||||
|
Gross
profit margin excluding
restructuring and impairment
|
49.3% | 50.9% | 50.8% | |||||||||
|
EBITDA(4)
|
2,374 | 2,494 | ||||||||||
|
EBITDA
margin
|
21.6% | 21.5% | 23.1% | |||||||||
|
Tax
rate on
results excluding
restructuring and impairment
|
17% | 19% | ||||||||||
|
Free
cash flow(5)
|
580 | 761 | ||||||||||
|
Trade
working capital to sales(6)
|
36% | 30% | ||||||||||
|
Debt/Equity
gearing(7)
|
25% | 32% | ||||||||||
|
Net
debt(7)
|
1,802 | 1,886 | ||||||||||
|
(1)
|
For
further analysis of restructuring and impairment charges, see Note 6 on
page 19. Net income and earnings per share excluding restructuring and
impairment are provided as additional information and not as an
alternative to net income and earnings per share determined in accordance
with IFRS.
|
|
(2)
|
The
weighted average number of ordinary shares in issue used to calculate the
earnings per share were as follows: For 2009 basic EPS
93,154,537 and diluted 93,760,196; for 2008 basic EPS 93,916,415 and
diluted EPS 94,696,762.
|
|
(3)
|
For
a description of CER see Appendix A on page
28.
|
|
(4)
|
EBITDA
is defined in Appendix B on page
28.
|
|
(5)
|
For
a description of free cash flow, see Appendix E on page
31.
|
|
(6)
|
Period
end trade working capital as a percentage of twelve-month sales, see
Appendix F on page 31.
|
|
(7)
|
For
a description of net debt and the calculation of debt/equity gearing, see
Appendix G on page 32.
|
Syngenta – February
5, 2010 / Page 22 of
34
Full
Year Segmental Results excluding Restructuring and Impairment
|
Syngenta
|
For
the year ended December 31,
|
|||||||||||
|
(US$
million)
|
2009
|
2008
|
CER
%
|
|||||||||
|
Third
party sales
|
10,992 | 11,624 | +1 | |||||||||
|
Gross
profit
|
5,423 | 5,920 | +1 | |||||||||
|
Marketing and
distribution
|
(1,812 | ) | (2,039 | ) | +7 | |||||||
|
Research and
development
|
(960 | ) | (969 | ) | -4 | |||||||
|
General and
administrative
|
(738 | ) | (849 | ) | -1 | |||||||
|
Operating
income
|
1,913 | 2,063 | +9 | |||||||||
|
EBITDA(1)
|
2,374 | 2,494 | +9 | |||||||||
|
EBITDA
(%)
|
21.6 | 21.5 | ||||||||||
|
Crop
Protection
(US$
million)
|
||||||||||||
|
Total
sales
|
8,491 | 9,231 | -2 | |||||||||
|
Inter-segment
elimination
|
(71 | ) | (73 | ) | ||||||||
|
Third
party sales
|
8,420 | 9,158 | -2 | |||||||||
|
Gross
profit
|
4,217 | 4,806 | -3 | |||||||||
|
Marketing and
distribution
|
(1,260 | ) | (1,474 | ) | +11 | |||||||
|
Research and
development
|
(512 | ) | (556 | ) | +2 | |||||||
|
General and
administrative
|
(515 | ) | (655 | ) | +3 | |||||||
|
Operating
income
|
1,930 | 2,121 | +4 | |||||||||
|
EBITDA(1)
|
2,242 | 2,455 | +3 | |||||||||
|
EBITDA
(%)
|
26.4 | 26.6 | ||||||||||
|
Seeds
(US$
million)
|
||||||||||||
|
Third
party sales
|
2,564 | 2,442 | +13 | |||||||||
|
Gross
profit
|
1,218 | 1,120 | +18 | |||||||||
|
Marketing and
distribution
|
(542 | ) | (555 | ) | -3 | |||||||
|
Research and
development
|
(368 | ) | (343 | ) | -11 | |||||||
|
General and
administrative
|
(203 | ) | (173 | ) | -16 | |||||||
|
Operating
income
|
105 | 49 | +243 | |||||||||
|
EBITDA(1)
|
244 | 135 | +128 | |||||||||
|
EBITDA
(%)
|
9.5 | 5.5 | ||||||||||
|
Business
Development
(US$
million)
|
||||||||||||
|
Third
party sales
|
8 | 24 | -69 | |||||||||
|
Gross
profit
|
(7 | ) | 6 | -218 | ||||||||
|
Marketing and
distribution
|
(10 | ) | (10 | ) | -6 | |||||||
|
Research and
development
|
(80 | ) | (70 | ) | -16 | |||||||
|
General and
administrative
|
(20 | ) | (21 | ) | +1 | |||||||
|
Operating
(loss)
|
(117 | ) | (95 | ) | -26 | |||||||
|
EBITDA(1)
|
(107 | ) | (84 | ) | -30 | |||||||
|
EBITDA
(%)
|
n/a | n/a | ||||||||||
|
(1)
|
For
a reconciliation of segment EBITDA to segment operating income, see
Appendix D on page 30.
|
Syngenta – February
5, 2010 / Page 23 of
34
Second
Half Segmental Results excluding Restructuring and Impairment
|
Syngenta
|
For
the six months ended December 31,
|
|||||||||||
|
(US$
million)
|
2009
|
2008
|
CER
%
|
|||||||||
|
Third
party sales
|
4,337 | 4,329 | +1 | |||||||||
|
Gross
profit
|
1,982 | 1,943 | +5 | |||||||||
|
Marketing and
distribution
|
(973 | ) | (1,055 | ) | +8 | |||||||
|
Research and
development
|
(512 | ) | (509 | ) | -1 | |||||||
|
General and
administrative
|
(392 | ) | (381 | ) | -20 | |||||||
|
Operating
income
|
105 | (2 | ) | N/A | ||||||||
|
EBITDA(1)
|
341 | 212 | +58 | |||||||||
|
EBITDA
(%)
|
7.9 | 4.9 | ||||||||||
|
Crop
Protection
(US$
million)
|
||||||||||||
|
Total
sales
|
3,491 | 3,677 | -5 | |||||||||
|
Inter-segment
elimination
|
(45 | ) | (55 | ) | ||||||||
|
Third
party sales
|
3,446 | 3,622 | -4 | |||||||||
|
Gross
profit
|
1,566 | 1,653 | -2 | |||||||||
|
Marketing and
distribution
|
(702 | ) | (793 | ) | +12 | |||||||
|
Research and
development
|
(273 | ) | (288 | ) | +4 | |||||||
|
General and
administrative
|
(250 | ) | (300 | ) | -8 | |||||||
|
Operating
income
|
341 | 272 | +16 | |||||||||
|
EBITDA(1)
|
503 | 436 | +9 | |||||||||
|
EBITDA
(%)
|
14.4 | 11.9 | ||||||||||
|
Seeds
(US$
million)
|
||||||||||||
|
Third
party sales
|
888 | 703 | +29 | |||||||||
|
Gross
profit
|
452 | 325 | +43 | |||||||||
|
Marketing and
distribution
|
(265 | ) | (256 | ) | -4 | |||||||
|
Research and
development
|
(193 | ) | (180 | ) | -7 | |||||||
|
General and
administrative
|
(132 | ) | (69 | ) | -76 | |||||||
|
Operating
income
|
(138 | ) | (180 | ) | +36 | |||||||
|
EBITDA(1)
|
(70 | ) | (137 | ) | +65 | |||||||
|
EBITDA
(%)
|
-7.8 | -19.4 | ||||||||||
|
Business
Development
(US$
million)
|
||||||||||||
|
Third
party sales
|
3 | 4 | -40 | |||||||||
|
Gross
profit
|
(11 | ) | (2 | ) | -394 | |||||||
|
Marketing and
distribution
|
(6 | ) | (6 | ) | -9 | |||||||
|
Research and
development
|
(46 | ) | (41 | ) | -14 | |||||||
|
General and
administrative
|
(10 | ) | (12 | ) | +20 | |||||||
|
Operating
(loss)
|
(73 | ) | (61 | ) | -20 | |||||||
|
EBITDA(1)
|
(67 | ) | (54 | ) | -28 | |||||||
|
EBITDA
(%)
|
n/a | n/a | ||||||||||
|
(1)
|
For
a reconciliation of segment EBITDA to segment operating income, see
Appendix D on page 30.
|
Syngenta – February
5, 2010 / Page 24 of
34
Full
Year Product Line and Regional Sales
|
Syngenta
|
For
the year ended December 31,
|
|||||||||||||||
|
(US$
million)
|
2009
|
2008
|
Actual
%
|
CER
%
|
||||||||||||
|
Crop
Protection
|
8,491 | 9,231 | -8 | -2 | ||||||||||||
|
Seeds
|
2,564 | 2,442 | +5 | +13 | ||||||||||||
|
Business
Development
|
8 | 24 | -69 | -69 | ||||||||||||
|
Inter-segment
elimination
|
(71 | ) | (73 | ) | - | - | ||||||||||
|
Third Party
Sales
|
10,992 | 11,624 | -5 | +1 | ||||||||||||
|
Crop
Protection
|
||||||||||||||||
|
Product
line
|
||||||||||||||||
|
Selective
Herbicides
|
2,221 | 2,412 | -8 | - | ||||||||||||
|
Non-selective
Herbicides
|
1,141 | 1,329 | -14 | -8 | ||||||||||||
|
Fungicides
|
2,442 | 2,620 | -7 | - | ||||||||||||
|
Insecticides
|
1,312 | 1,423 | -8 | -1 | ||||||||||||
|
Seed
Care
|
821 | 830 | -1 | +4 | ||||||||||||
|
Professional
Products
|
458 | 527 | -13 | -11 | ||||||||||||
|
Others
|
96 | 90 | +6 | +9 | ||||||||||||
|
Total
|
8,491 | 9,231 | -8 | -2 | ||||||||||||
|
Regional
|
||||||||||||||||
|
Europe,
Africa and Middle East
|
2,667 | 3,214 | -17 | -5 | ||||||||||||
|
NAFTA
|
2,567 | 2,693 | -5 | - | ||||||||||||
|
Latin
America
|
1,907 | 2,037 | -6 | -6 | ||||||||||||
|
Asia
Pacific
|
1,350 | 1,287 | +5 | +11 | ||||||||||||
|
Total
|
8,491 | 9,231 | -8 | -2 | ||||||||||||
|
Seeds
|
||||||||||||||||
|
Product
line
|
||||||||||||||||
|
Corn and
Soybean
|
1,210 | 1,040 | +16 | +21 | ||||||||||||
|
Diverse Field
Crops
|
429 | 462 | -7 | +11 | ||||||||||||
|
Vegetables
|
594 | 603 | -2 | +5 | ||||||||||||
|
Flowers
|
331 | 337 | -2 | +5 | ||||||||||||
|
Total
|
2,564 | 2,442 | +5 | +13 | ||||||||||||
|
Regional
|
||||||||||||||||
|
Europe,
Africa and Middle East
|
933 | 1,077 | -13 | +3 | ||||||||||||
|
NAFTA
|
1,187 | 979 | +21 | +22 | ||||||||||||
|
Latin
America
|
243 | 216 | +12 | +12 | ||||||||||||
|
Asia
Pacific
|
201 | 170 | +18 | +28 | ||||||||||||
|
Total
|
2,564 | 2,442 | +5 | +13 | ||||||||||||
Syngenta – February
5, 2010 / Page 25 of
34
Second
Half Year Product Line and Regional Sales
|
Syngenta
|
For
the six months ended December 31,
|
|||||||||||||||
|
(US$
million)
|
2009
|
2008
|
Actual
%
|
CER
%
|
||||||||||||
|
Crop
Protection
|
3,491 | 3,677 | -5 | -5 | ||||||||||||
|
Seeds
|
888 | 703 | +26 | +29 | ||||||||||||
|
Business
Development
|
3 | 4 | -40 | -40 | ||||||||||||
|
Inter-segment
elimination
|
(45 | ) | (55 | ) | - | - | ||||||||||
|
Third Party
Sales
|
4,337 | 4,329 | - | +1 | ||||||||||||
|
Crop
Protection
|
||||||||||||||||
|
Product
line
|
||||||||||||||||
|
Selective
Herbicides
|
606 | 733 | -17 | -18 | ||||||||||||
|
Non-selective
Herbicides
|
450 | 590 | -24 | -22 | ||||||||||||
|
Fungicides
|
1,086 | 971 | +12 | +12 | ||||||||||||
|
Insecticides
|
639 | 644 | -1 | +1 | ||||||||||||
|
Seed
Care
|
429 | 442 | -3 | -1 | ||||||||||||
|
Professional
Products
|
233 | 238 | -2 | -4 | ||||||||||||
|
Others
|
48 | 59 | -18 | -21 | ||||||||||||
|
Total
|
3,491 | 3,677 | -5 | -5 | ||||||||||||
|
Regional
|
||||||||||||||||
|
Europe,
Africa and Middle East
|
857 | 964 | -11 | -10 | ||||||||||||
|
NAFTA
|
685 | 843 | -19 | -17 | ||||||||||||
|
Latin
America
|
1,357 | 1,339 | +1 | +1 | ||||||||||||
|
Asia
Pacific
|
592 | 531 | +11 | +11 | ||||||||||||
|
Total
|
3,491 | 3,677 | -5 | -5 | ||||||||||||
|
Seeds
|
||||||||||||||||
|
Product
line
|
||||||||||||||||
|
Corn and
Soybean
|
367 | 226 | +62 | +62 | ||||||||||||
|
Diverse Field
Crops
|
125 | 109 | +15 | +23 | ||||||||||||
|
Vegetables
|
272 | 252 | +8 | +10 | ||||||||||||
|
Flowers
|
124 | 116 | +7 | +10 | ||||||||||||
|
Total
|
888 | 703 | +26 | +29 | ||||||||||||
|
Regional
|
||||||||||||||||
|
Europe,
Africa and Middle East
|
274 | 266 | +3 | +10 | ||||||||||||
|
NAFTA
|
307 | 206 | +49 | +49 | ||||||||||||
|
Latin
America
|
202 | 150 | +34 | +34 | ||||||||||||
|
Asia
Pacific
|
105 | 81 | +30 | +30 | ||||||||||||
|
Total
|
888 | 703 | +26 | +29 | ||||||||||||
Syngenta – February
5, 2010 / Page 26 of
34
Fourth
Quarter Product Line and Regional Sales
|
Syngenta
|
4th
Quarter
|
|||||||||||||||
|
(US$
million)
|
2009
|
2008
|
Actual
%
|
CER
%
|
||||||||||||
|
Crop
Protection
|
1,882 | 1,802 | +4 | +1 | ||||||||||||
|
Seeds
|
482 | 286 | +69 | +67 | ||||||||||||
|
Business
Development
|
1 | 2 | -62 | -62 | ||||||||||||
|
Inter-segment
elimination
|
(28 | ) | (38 | ) | - | - | ||||||||||
|
Third Party
Sales
|
2,337 | 2,052 | +14 | +10 | ||||||||||||
|
Crop
Protection
|
||||||||||||||||
|
Product
line
|
||||||||||||||||
|
Selective
Herbicides
|
334 | 349 | -4 | -10 | ||||||||||||
|
Non-selective
Herbicides
|
180 | 228 | -21 | -24 | ||||||||||||
|
Fungicides
|
632 | 517 | +22 | +18 | ||||||||||||
|
Insecticides
|
317 | 334 | -5 | -7 | ||||||||||||
|
Seed
Care
|
243 | 208 | +17 | +14 | ||||||||||||
|
Professional
Products
|
141 | 140 | +1 | -1 | ||||||||||||
|
Others
|
35 | 26 | +33 | +31 | ||||||||||||
|
Total
|
1,882 | 1,802 | +4 | +1 | ||||||||||||
|
Regional
|
||||||||||||||||
|
Europe,
Africa and Middle East
|
455 | 401 | +13 | +2 | ||||||||||||
|
NAFTA
|
281 | 338 | -17 | -17 | ||||||||||||
|
Latin
America
|
842 | 824 | +2 | +2 | ||||||||||||
|
Asia
Pacific
|
304 | 239 | +27 | +18 | ||||||||||||
|
Total
|
1,882 | 1,802 | +4 | +1 | ||||||||||||
|
Seeds
|
||||||||||||||||
|
Product
line
|
||||||||||||||||
|
Corn and
Soybean
|
241 | 82 | +195 | +193 | ||||||||||||
|
Diverse Field
Crops
|
55 | 42 | +29 | +28 | ||||||||||||
|
Vegetables
|
133 | 114 | +16 | +13 | ||||||||||||
|
Flowers
|
53 | 48 | +13 | +10 | ||||||||||||
|
Total
|
482 | 286 | +69 | +67 | ||||||||||||
|
Regional
|
||||||||||||||||
|
Europe,
Africa and Middle East
|
115 | 93 | +24 | +21 | ||||||||||||
|
NAFTA
|
213 | 107 | +100 | +100 | ||||||||||||
|
Latin
America
|
87 | 43 | +100 | +100 | ||||||||||||
|
Asia
Pacific
|
67 | 43 | +56 | +49 | ||||||||||||
|
Total
|
482 | 286 | +69 | +67 | ||||||||||||
Syngenta – February
5, 2010 / Page 27 of
34
Supplementary
Financial Information
Appendix
A: Constant exchange rates (CER)
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. CER margin percentages for gross
profit and EBITDA are calculated by the ratio of these measures to sales after
restating the measures and sales at prior period exchange rates. The CER
presentation indicates the underlying business performance before taking into
account currency exchange fluctuations.
Appendix
B: Reconciliation of EBITDA to net income
EBITDA is defined
as earnings before interest, tax, minority 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 and is used by Syngenta as the basis of part of
its employee incentive schemes. Management excludes restructuring from EBITDA in
order to focus on results excluding items affecting comparability from one
period to the next. EBITDA is not a measure of cash liquidity or financial
performance under generally accepted accounting principles and the EBITDA
measures used by Syngenta may not be comparable to other similarly titled
measures of other companies. EBITDA should not be construed as an alternative to
operating income or cash flow as determined in accordance with generally
accepted accounting principles.
|
For
the year ended December 31,
(US$
million)
|
2009
|
2008
|
||||||
|
Net
income attributable to Syngenta AG shareholders
|
1,371 | 1,385 | ||||||
|
Minority
interests
|
3 | - | ||||||
|
Income tax
expense
|
267 | 307 | ||||||
|
Financial
expenses, net
|
122 | 169 | ||||||
|
Pre-tax
restructuring and impairment
|
149 | 205 | ||||||
|
Depreciation,
amortization and other impairment
|
462 | 428 | ||||||
|
EBITDA
|
2,374 | 2,494 | ||||||
Syngenta – February
5, 2010 / Page 28 of
34
Appendix
C: Segmental results and inter-segment elimination excluding restructuring and
impairment
|
For
the year ended December 31, 2009
(US$
million)
|
Sales
|
Gross
profit
|
Operating
income
|
EBITDA
|
||||||||||||
|
Crop
Protection
|
8,491 | 4,217 | 1,930 | 2,242 | ||||||||||||
|
Seeds
|
2,564 | 1,218 | 105 | 244 | ||||||||||||
|
Business
Development
|
8 | (7 | ) | (117 | ) | (107 | ) | |||||||||
|
Total
|
11,063 | 5,428 | 1,918 | 2,379 | ||||||||||||
|
Inter-segment
elimination(1)
|
(71 | ) | (5 | ) | (5 | ) | (5 | ) | ||||||||
|
Total
3rd
party
|
10,992 | 5,423 | 1,913 | 2,374 | ||||||||||||
|
For
the second half 2009
(US$
million)
|
Sales
|
Gross
profit
|
Operating
income
|
EBITDA
|
||||||||||||
|
Crop
Protection
|
3,491 | 1,566 | 341 | 503 | ||||||||||||
|
Seeds
|
888 | 452 | (138 | ) | (70 | ) | ||||||||||
|
Business
Development
|
3 | (11 | ) | (73 | ) | (67 | ) | |||||||||
|
Total
|
4,382 | 2,007 | 130 | 366 | ||||||||||||
|
Inter-segment
elimination(1)
|
(45 | ) | (25 | ) | (25 | ) | (25 | ) | ||||||||
|
Total
3rd
party
|
4,337 | 1,982 | 105 | 341 | ||||||||||||
|
For
the year ended December 31, 2008
(US$
million)
|
Sales
|
Gross
profit
|
Operating
income
|
EBITDA
|
||||||||||||
|
Crop
Protection
|
9,231 | 4,806 | 2,121 | 2,455 | ||||||||||||
|
Seeds
|
2,442 | 1,120 | 49 | 135 | ||||||||||||
|
Business
Development
|
24 | 6 | (95 | ) | (84 | ) | ||||||||||
|
Total
|
11,697 | 5,932 | 2,075 | 2,506 | ||||||||||||
|
Inter-segment
elimination(1)
|
(73 | ) | (12 | ) | (12 | ) | (12 | ) | ||||||||
|
Total
3rd
party
|
11,624 | 5,920 | 2,063 | 2,494 | ||||||||||||
(1) Crop
Protection inter-segment sales to Seeds.
Syngenta – February
5, 2010 / Page 29 of
34
Appendix
D: Reconciliation of segment EBITDA to segment operating income
|
For
the year ended December 31, 2009 (US$ million)
|
Crop
Protection
|
Seeds
|
Business
Development
|
Elimination(1)
|
Total
|
|||||||||||||||
|
EBITDA
|
2,242 | 244 | (107 | ) | (5 | ) | 2,374 | |||||||||||||
|
Depreciation,
amortization & impairment
|
(321 | ) | (131 | ) | (10 | ) | - | (462 | ) | |||||||||||
|
Income from
associates & joint ventures
|
9 | (8 | ) | - | - | 1 | ||||||||||||||
|
Operating
income
excl. restructuring & impairment
|
1,930 | 105 | (117 | ) | (5 | ) | 1,913 | |||||||||||||
|
Restructuring
& impairment(2)
|
(61 | ) | (75 | ) | (11 | ) | - | (147 | ) | |||||||||||
|
Operating
income
|
1,869 | 30 | (128 | ) | (5 | ) | 1,766 | |||||||||||||
|
For
the second half 2009
(US$
million)
|
Crop
Protection
|
Seeds
|
Business
Development
|
Elimination(1)
|
Total
|
|||||||||||||||
|
EBITDA
|
503 | (70 | ) | (67 | ) | (25 | ) | 341 | ||||||||||||
|
Depreciation,
amortization & impairment
|
(166 | ) | (67 | ) | (6 | ) | - | (239 | ) | |||||||||||
|
Income from
associates & joint ventures
|
4 | (1 | ) | - | - | 3 | ||||||||||||||
|
Operating
income
excl. restructuring & impairment
|
341 | (138 | ) | (73 | ) | (25 | ) | 105 | ||||||||||||
|
Restructuring
& impairment(2)
|
(33 | ) | (51 | ) | (13 | ) | - | (97 | ) | |||||||||||
|
Operating
income
|
308 | (189 | ) | (86 | ) | (25 | ) | 8 | ||||||||||||
|
For
the year ended December 31, 2008 (US$ million)
|
Crop
Protection
|
Seeds
|
Business
Development
|
Elimination(1)
|
Total
|
|||||||||||||||
|
EBITDA
|
2,455 | 135 | (84 | ) | (12 | ) | 2,494 | |||||||||||||
|
Depreciation,
amortization & impairment
|
(334 | ) | (82 | ) | (12 | ) | - | (428 | ) | |||||||||||
|
Income/(loss)
from associates
& joint
ventures
|
- | (4 | ) | 1 | - | (3 | ) | |||||||||||||
|
Operating
income
excl. restructuring & impairment
|
2,121 | 49 | (95 | ) | (12 | ) | 2,063 | |||||||||||||
|
Restructuring
& impairment(2)
|
(83 | ) | (85 | ) | (37 | ) | - | (205 | ) | |||||||||||
|
Operating
income
|
2,038 | (36 | ) | (132 | ) | (12 | ) | 1,858 | ||||||||||||
(1) Crop
Protection inter-segment sales to Seeds.
(2) Including
reversal of inventory step-up included in Cost of goods sold.
Syngenta – February
5, 2010 / Page 30 of
34
Appendix
E: Free cash flow
Free cash flow
comprises cash flow from operating and investing activities, except investments
in and proceeds from marketable securities. Free cash flow is not a measure of
financial performance under generally accepted accounting principles and the
free cash flow measure used by Syngenta may not be comparable to similarly
titled measures of other companies. Free cash flow has been included as it is
used by many investors as a useful supplementary measure of cash
generation.
|
For
the year ended December 31,
(US$
million)
|
2009
|
2008
|
||||||
|
Cash flow
from operating activities
|
1,419 | 1,466 | ||||||
|
Cash flow
used for investing activities
|
(880 | ) | (608 | ) | ||||
|
Net cash
flows from purchases/(disposals) of marketable securities
|
41 | (97 | ) | |||||
|
Free
cash flow
|
580 | 761 | ||||||
Appendix
F: Period end trade working capital
The following table
provides detail of trade working capital for the years ended December 31, 2009
and 2008 as a percentage of twelve-month sales:
|
(US$
million)
|
2009
|
2008
|
||||||
|
Inventories
|
3,922 | 3,456 | ||||||
|
Trade
accounts receivable
|
2,506 | 2,311 | ||||||
|
Trade
accounts payable
|
(2,468 | ) | (2,240 | ) | ||||
|
Net trade
working capital
|
3,960 | 3,527 | ||||||
|
Twelve-month
sales
|
10,992 | 11,624 | ||||||
|
Trade
working capital as percentage of sales (%)
|
36% | 30% | ||||||
Syngenta – February
5, 2010 / Page 31 of
34
Appendix
G: Net debt reconciliation
Net debt comprises
total debt net of related hedging derivatives, cash and cash equivalents and
marketable securities. Net debt is not a measure of financial position under
generally accepted accounting principles and the net debt measure used by
Syngenta may not be comparable to the similarly titled measure of other
companies. Net debt has been included as it is used by many investors as a
useful measure of financial position and risk. The following table provides a
reconciliation of movements in net debt during the period:
|
For
the year ended December 31,
(US$
million)
|
2009
|
2008
|
||||||
|
Opening
balance at January 1
|
1,886 | 1,385 | ||||||
|
Debt acquired
with business acquisitions and other non-cash items
|
(77 | ) | 127 | |||||
|
Foreign
exchange effect on net debt
|
- | 70 | ||||||
|
Purchase/(sale)
of treasury shares
|
79 | 613 | ||||||
|
Dividends
paid
|
494 | 452 | ||||||
|
Free cash
flow
|
(580 | ) | (761 | ) | ||||
|
Closing
balance as at December 31
|
1,802 | 1,886 | ||||||
|
Components
of closing balance:
|
||||||||
|
Cash and cash
equivalents
|
(1,552 | ) | (803 | ) | ||||
|
Marketable
securities(1)
|
(48 | ) | (7 | ) | ||||
|
Current
financial debt
|
281 | 211 | ||||||
|
Non-current
financial debt(2)
|
3,303 | 2,524 | ||||||
|
Financing-related
derivatives(3)
|
(182 | ) | (39 | ) | ||||
|
Closing
balance as at December 31
|
1,802 | 1,886 | ||||||
|
(1)
|
Long-term
marketable securities are included in other non-current financial assets.
Short-term marketable securities are included in derivative and other
financial assets.
|
|
(2)
|
Included
within financial debt and other non-current
liabilities.
|
|
(3)
|
Included
within derivative financial assets and financial debt and other
non-current liabilities.
|
The following table
presents the derivation of the debt/equity gearing ratio for the years ended
December 31, 2009 and 2008:
|
(US$
million)
|
2009
|
2008
|
||||||
|
Net
debt
|
1,802 | 1,886 | ||||||
|
Shareholders’
equity
|
7,141 | 5,884 | ||||||
|
Debt/Equity
gearing ratio (%)
|
25 | % | 32 | % | ||||
Syngenta – February
5, 2010 / Page 32 of
34
Glossary
and Trademarks
All product or
brand names included in this results statement are trademarks of, or licensed
to, a Syngenta group company. For simplicity, sales are reported under the lead
brand names, shown below, whereas some compounds are sold under several brand
names to address separate market niches.
|
Selective
Herbicides
|
|
|
APIRO®
|
novel grass
weed herbicide for rice
|
|
AXIAL®
|
new cereal
herbicide
|
|
BICEP®
MAGNUM
|
broad
spectrum pre-emergence herbicide for corn and sorghum
|
|
CALLISTO®
|
novel
herbicide for flexible use on broad-leaved weeds for
corn
|
|
DUAL®
MAGNUM
|
grass weed
killer for corn and soybeans
|
|
ENVOKE®
|
novel
low-dose herbicide for cotton and sugar cane
|
|
FUSILADE®
|
grass weed
killer for broad-leaf crops
|
|
LUMAX®
|
unique
season-long grass and broad leaf weed control for corn
|
|
TOPIK®
|
post-emergence
grass weed killer for wheat
|
|
Non-selective
Herbicides
|
|
|
GRAMOXONE®
|
rapid,
non-systemic burn-down of vegetation
|
|
TOUCHDOWN®
|
systemic
total vegetation control
|
|
Fungicides
|
|
|
AMISTAR®
|
broad
spectrum strobilurin for use on multiple crops
|
|
BRAVO®
|
broad
spectrum fungicide for use on multiple crops
|
|
INVINSATM
|
pre-harvest
protection for multiple crops from drought stress
|
|
REVUSTM
|
for use on
potatoes, tomatoes, vines and vegetable crops
|
|
RIDOMIL
GOLD®
|
systemic
fungicide for use in vines, potatoes and vegetables
|
|
SCORE®
|
triazole
fungicide for use in vegetables, fruits and rice
|
|
TILT®
|
broad
spectrum triazole for use in cereals, bananas and
peanuts
|
|
UNIX®
|
cereal and
vine fungicide with unique mode of action
|
|
Insecticides
|
|
|
ACTARA®
|
second-generation
neonicotinoid for controlling foliar and soil pests in multiple
crops
|
|
DURIVOTM
|
broad
spectrum, lower dose insecticide, controls resistant
pests
|
|
FORCE®
|
unique
pyrethroid controlling soil pests in corn
|
|
KARATE®
|
foliar
pyrethroid offering broad spectrum insect control
|
|
PROCLAIM®
|
novel,
low-dose insecticide for controlling lepidoptera in vegetables and
cotton
|
|
VERTIMEC®
|
acaricide for
use in fruits, vegetables and cotton
|
|
Professional
Products
|
|
|
AVICTA®
|
breakthrough
nematode control seed treatment
|
|
CRUISER®
|
novel broad
spectrum seed treatment - neonicotinoid
insecticide
|
|
DIVIDEND®
|
triazole seed
treatment fungicide
|
|
HERITAGE®
|
strobilurin
turf fungicide
|
|
ICON®
|
public health
insecticide
|
|
IMPASSE®
|
termite
barrier
|
|
MAXIM®
|
broad
spectrum seed treatment fungicide
|
|
Field
Crops
|
|
|
AGRISURETM
|
new corn
trait choices
|
|
GARST®
|
US brand for
corn and soybean
|
|
GOLDEN
HARVEST®
|
brand for
corn and soybean in North America and Europe
|
|
HILLESHÖG®
|
global brand
for sugar beet
|
|
NK®
|
global brand
for corn, oilseeds and other field crops
|
|
Vegetables
and Flowers
|
|
|
DULCINEATM
|
consumer
produce brand for value-added fruits and vegetables in North
America
|
|
Fischer
|
Global
premium flowers brand
|
|
PUREHEARTTM
|
DULCINEA™
brand for ‘personal size’ seedless watermelon
|
|
ROGERS®
vegetables
|
leading brand
throughout the Americas
|
|
S&G®
flowers
|
global brand
for seeds and young plants
|
|
S&G®
vegetables
|
leading brand
in Europe, Africa and Asia
|
Syngenta – February
5, 2010 / Page 33 of
34
Addresses
for Correspondence
|
Swiss
Depositary
|
Depositary
for ADRs
|
Registered
Office
|
|
SEGA
Aktienregister AG
|
The Bank of
New York
|
Syngenta
AG
|
|
P.O.
Box
|
Shareholder
Relations
|
Schwarzwaldallee
215
|
|
CH-4601
Olten
|
PO Box
11258
|
4058
Basel
|
|
Church Street
Station
|
Switzerland
|
|
|
New York, NY
10286
|
||
|
Tel: +41
(0)62 205 3695
|
Tel: +1 (212)
815 6917
|
Tel: +41
(0)61 323 1111
|
Cautionary
Statement Regarding Forward-Looking Statements
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
therefore.
Syngenta – February
5, 2010 / Page 34 of
34
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
SYNGENTA AG
|
||||||
|
Date:
|
February
5, 2010
|
By:
|
/s/ Christoph
Mäder
|
|||
| Name: |
Christoph
Mäder
|
|||||
| Title: | Head Legal & Taxes | |||||