2011 Full Year Results
Strong performance in first year of integrated strategy

· Sales USD13.3 billion, up 14 percent; up 12 percent at constant exchange rates[1]
· Sustained volume growth, improved Crop Protection pricing
· Seeds EBITDA margin 17.1 percent (2010: 12.7 percent)
· Net income[2] $1.6 billion, up 14 percent
· Earnings per share[3] $19.36, up 18 percent
· Record free cash flow: $1.5 billion
· Increased cash return: proposed dividend CHF 8.00
 
Mike Mack, Chief Executive Officer, said:

“At the beginning of 2011 Syngenta announced its new strategy, bringing together our Crop Protection and Seeds businesses to develop fully integrated offers on a global crop basis.  I am pleased to report that we were able to deliver strong growth in sales and earnings for the year while implementing the strategy at a pace which has surpassed our initial expectations.  The integration of our commercial teams is already yielding opportunities for increased sales.  Our confidence has been reinforced by a positive response from our customers who recognize the role integrated offers can play in managing an increasingly complex agricultural environment.

“Crop prices in 2011, although volatile, continued to be supported by ongoing growth in demand.  This growth is concentrated in emerging markets where our sales increased by 18 percent to represent just under half of the total.  In developed markets we achieved solid growth of six percent reflecting the success of new products and our strong customer relationships.  In the USA, we are leveraging our market-leading position in crop protection to increase awareness of our enhanced corn and soybean seed portfolio, which has contributed to the Seeds business substantially exceeding its margin target for the full year.  Free cash flow in 2011 reached a record level of $1.5 billion, enabling us to fund investments and again increase the amount of cash we will return to shareholders in 2012.”


Financial highlights 2011

Sales $13.3 billion

Sales increased by 12 percent at constant exchange rates (CER).  Sales volume increased by 11 percent and prices were up one percent.  Currency added a further two percent to give growth in reported sales of 14 percent.


EBITDA $2.9 billion

EBITDA increased by 18 percent (CER); the EBITDA margin was also higher at 21.9 percent (2010: 21.5 percent).  At constant exchange rates the margin was 22.8 percent, reflecting good volume growth and higher prices in both Crop Protection and Seeds.  Investments in growing the business, notably in emerging markets, continued.  Total cost savings including efficiency gains from the integrated business model were $132 million.


Currency movements

Currency movements had a negative impact of $52 million on EBITDA.  The positive impact of a weaker dollar on the top line was more than offset by the impact of a strong Swiss franc on the cost base.  This was however mitigated by hedges implemented in 2010.


Net income $1.6 billion

Net income including restructuring and impairment was up 14 percent.  Earnings per share, excluding restructuring and impairment, increased by 18 percent to $19.36.


Net financial expense and taxation

Net financial expense of $165 million was slightly higher than in 2010 and the tax rate was unchanged.


Cash flow and balance sheet

Average trade working capital as a percentage of sales was reduced to 37 percent from 39 percent in 2010.  The improvement was due to a further reduction in inventories as a percentage of sales as demand in both Crop Protection and Seeds remained strong.  Fixed capital expenditure including intangibles was $575 million (2010: $526 million).  Acquisition spend totaled $19 million.  Free cash flow reached a record level of $1.5 billion.  Cash flow return on investment at 14 percent exceeded the 12 percent target.  The ratio of net debt to equity was 15 percent (2010: 20 percent).  


Dividend and share repurchase

The total cash return to shareholders in 2011 was $903 million.  The dividend was raised by 17 percent, or 36 percent in US dollars, to give a total dividend payout of $705 million.  In addition, we repurchased shares to the value of $198 million.

In the light of continuing strong free cash flow generation, the Board of Directors will propose to the AGM on April 24, 2012 an increase in the dividend to CHF 8.00 per share from CHF 7.00 in 2010.  This represents an increase of 14 percent in Swiss francs and around 15 percent in US dollars at end January exchange rates.  In addition, the company’s current plan is to repurchase shares in 2012 for an amount of $200 million, giving a total cash return of around $1 billion.

Outlook

Mike Mack, Chief Executive Officer, said:

“As we enter the 2012 season, notwithstanding the current economic uncertainty, we look forward to sustained sales growth and further market share gains.  The rapid integration of our commercial teams, the success of our first integrated offers in the field and the strong momentum within the Syngenta organization increase our confidence that we will outperform in an expanding market.  We also expect the combined business to achieve a further advance in EBITDA margin at constant exchange rates.  Strong cash flow generation is expected to continue.”