Syngenta Group reports on results for the first half of 2023

Syngenta Group announced financial results for the first half and second quarter of 2023. Sales in the first half of 2023 were US$17,5 billion, a decrease of US$0,6 billion or 3% compared to the previous year , compared to an exceptionally strong 2022.

EBITDA in the first half of the year was US$3,2 billion, 7% lower year on year. Sales in the second quarter of 2023 were $8,3 billion, a decrease of $0,8 billion or 9%. In the second quarter of 2023, EBITDA was 15% lower than the previous year at US$1,4 billion.

Sales in the first half of 2023 reverted to the usual seasonal phase in crop protection and crop nutrition as distributors and retailers reduced accumulated inventories to weather the previous year's supply chain disruptions. Sales were also impacted by increased customer working capital costs in a higher interest rate environment, causing many channel partners and farmers to set lower target inventory levels. This performance is compared to the same period last year, in which the Group achieved record sales and profits.

Syngenta Crop Protection and Adama reported lower sales compared to exceptionally strong quarters a year ago. The crop protection market, especially in Latin America, saw accelerated demand in the first half of 2022 due to farmers' concerns about supply bottlenecks, which also resulted in higher costs and sales prices.

Syngenta Seeds' business grew 9% to US$2,5 billion in the first half of 2023. The anticipated scaling of royalties in 2023, which was carried out in the third quarter of last year, positively impacted seed sales in the second quarter 2023 and will make third-quarter year-over-year comparison more challenging.

The Syngenta China Group continued its growth, reaching total sales of US$5,9 billion in the first half of 2023. Syngenta Group's MAP ("Modern Agricultural Platform") was again a strong driver. Its sales grew 40% to $2,5 billion as the number of MAP centers increased by 151 from the previous year, for a total of 691 centers. Average sales per center increased 9% compared to the previous year.

All business units were impacted by adverse currency effects as the US dollar strengthened.

The Syngenta Group continued to focus on productivity improvements and price adjustments, where applicable, to help mitigate the impact of higher costs. Syngenta Group's EBITDA margin in the first half of 2023 was 18,3%, slightly below the year-ago period.

At the end of the first half of the year, the Group's digital solutions were adopted on more than 230 million acres worldwide, with high demand from farmers in key markets.

Syngenta Crop Protection

Syngenta Crop Protection sales were 5% lower; reached US$8,1 billion in the first half of 2023.

In the first six months, sales in North America grew 8%; sales were 3% lower in Europe, Africa and the Middle East and 4% lower in Asia-Pacific (excluding China). Sales in China increased by 20%. Sales in Latin America were 21% lower as distributors "reduced accumulated inventory compared to the previous year." At CER, business grew in all regions except Latin America.

During this period, the company continued to focus on providing innovations to farmers by introducing plinazolin technologies (see here, here, here e here) and Tymirium (see here) in more markets. It also announced a collaboration agreement to commercialize Tetflupirolimet (see here), a new herbicide with a new mode of action for rice farmers in Asia.

Adama

Adama sales were 15% lower; fell to US$3,0 billion in the first half of 2023.

In the first six months, sales in Europe, Africa and the Middle East were 4% lower. In Latin America, the drop was 8%. Sales in North America were 22% lower, mainly affected by the consumer and professional segments; Asia-Pacific (excluding China) were 16% lower. Sales in China were 28% lower, largely due to lower non-agricultural by-product prices.

Adama has successfully registered Mastercop ACT in Poland, a copper-based fungicide with "Adama's proprietary technology to minimize environmental impact".

Syngenta Seeds

Seed sales grew 9%, to US$2,5 billion, in the first half of 2023. The result was mainly driven by price increases.

During this period, sales of agricultural crops in Europe, Africa and the Middle East grew by 14 percent; North America grew 14%; Asia-Pacific (excluding China) increased by 16%; and China 20 percent. Latin America fell 18%, limited by product availability. Sales of vegetable seeds increased slightly.

Syngenta Seeds has opened a research and development center in Malta, Illinois, designed to bring together North American farmers and researchers to accelerate advances in agricultural seed products and services for this strategic market.

Syngenta China

Syngenta Group China, comprised of the Group's seed, crop protection, crop nutrition, MAP and digital activities in China, achieved sales of US$5,9 billion, an increase of 13%, in the first half of 2023.

Syngenta Group China's first-half crop protection sales rose 4%, with growth in formulated and branded sales more than offsetting lower selling prices of non-agricultural by-products. Seed sales grew 19 percent. Crop nutrition sales fell 7%, but profit levels were maintained.

In the first half of the year, MAP sales grew 40%, to US$2,5 billion. The number of MAP centers increased by 151 from the previous year, to a total of 691. MAP digital applications have reached more than 2,4 million registered users, providing online tools that help modernize farms across China.