Syngenta Group today announced financial results for the first quarter of 2024.
Sales for the first quarter 2024 were $7.4 billion, down $1.8 billion or 20 percent (-18% at CER), compared to a strong first quarter 2023. First quarter 2024 EBITDA decreased 34 percent (-26% at CER) from prior year to $1.2 billion.
Sales in the first quarter of 2024 continued to be impacted by industry-wide channel destocking in Crop Protection as distributors and retailers further reduced inventories in response to the pressure to lower working capital in the higher interest rate environment.
Given the current market environment, the Group remained focused on measures to improve operational efficiency and productivity to offset lower volumes and prices. EBITDA margin for the Group was 16.7 percent versus 20.2 percent in the first quarter 2023.
Syngenta's Crop Protection, driver of approximately 40 percent of Syngenta Group's sales, declined amidst a still challenging crop protection market.
ADAMA also recorded a weaker first quarter compared to Q1 2023 in a challenging environment for suppliers of post patent active ingredients, with the business downturn in Asia Pacific (excluding China) and Europe greatly affecting the comparison.
Syngenta Seeds overall was 8 percent lower than in the first quarter last year but showed strong growth in Vegetables Seeds, Flowers and in China.
Syngenta Group China saw a sales decline of 18 percent versus last year's record first quarter. Its Seeds business maintained its growth and the branded formulation crop protection business showed further growth on the back of recently launched products. The sales decline was partially offset by a better business mix and cost reductions.
Syngenta Crop Protection
Syngenta Crop Protection sales in the first quarter 2024 fell by 24 percent to $3.2 billion compared with a very strong first quarter 2023.
All regions saw a decline in sales, except China, where sales grew 14 percent, mainly driven by strong momentum in Biologicals, continued outstanding performance of the ADEPIDYN technology and the launch of TYMIRIUM technology. North America sales were 44% lower as customers delayed purchasing towards the start of the planting season. Sales in Asia, the Middle East & Africa were 24 percent lower; Europe sales were 28 percent lower. In Latin America, sales were 1 percent lower.
In Q1 2024, Syngenta received the re-registration for 15 years in EU for trinexapac, offering farmers long-lasting growth regulation as well as best storage protection for cereal crops. Generally, in Europe, issues in farmer profitability drove cautious purchasing behavior.
ADAMA
ADAMA sales declined 16 percent to $1.1 billion in the first quarter 2024.
Sales in Europe, Africa and the Middle East were 15 percent lower; Latin America declined 18 percent. North America decreased by 9 percent; Asia Pacific (excluding China) decreased 24 percent; sales in China were 16 percent lower.
In the first quarter of 2024, ADAMA launched an innovative herbicide solution to control ?glyphosate-tolerant Palmer amaranth in the US states Nebraska and Colorado. The product received an emergency exemption from the US Environmental Protection ?Agency following the pressing need for a sugar beet herbicide solution.?
Syngenta Seeds
First quarter sales of Syngenta Seeds were $1.4 billion, 8 percent lower, with sales and earnings growth in China and Vegetables and Flowers offsetting particularly lower sales in Asia, the Middle East and Africa.
Field crop sales in Europe declined 5 percent; North America fell 7 percent; Brazil Region grew 2 percent, while sales in Latin America North & South were 18 percent lower; Asia, Middle East & Africa decreased 51 percent, while sales in China grew 25 percent. Sales of Vegetable Seeds increased by 10 percent and sales of Flowers were 5 percent higher.
In the first quarter of 2024, Syngenta completed the acquisition of Dafeng Seed in China, greatly enhancing its corn portfolio. In Brazil, Syngenta Seeds Field Crops announced the acceleration of its franchise model, thereby creating a more direct, demand-generating presence in the field with farmers. In Europe, the company launched the first Barley Yellow Dwarf Virus resistant barley hybrid, helping farmers to control the disease without the need for neonic seed treatments.
Syngenta Vegetable Seeds inaugurated an expanded R&D facility in El Ejido, Spain, and a new state-of-the-art Seed Health Lab in Hyderabad, India. These strategic facilities enhance Syngenta's ability to respond faster to the needs of farmers with innovative, high-quality vegetable seeds. Syngenta Vegetable Seeds also signed an exclusive global licensing partnership with Emerald Seed Company, strengthening Syngenta's portfolio in onion seeds, one of the most important crops globally.
Syngenta Group China
Syngenta Group China sales were $2.7 billion, 18 percent lower. The robust growth in branded formulations, seeds, and bio-fertilizers was offset by a significant year-on-year price decline and a strategic scaling back of grain trading operations.
Sales of Seeds grew 25 percent. Sales of Branded Formulation were 3 percent higher. Sinofert sales were 4 percent lower. Yangnong Chemical was 32 percent lower.
Based on the 2023 TYMIRIUM technology approval in China, the company continued the roll-out of innovative and highly effective nematicides and fungicides containing this ingredient. It offers a soil-applied solution that will provide early protection in a wide range of crops and is compatible with multiple application methods. Sinofert also launched three new bio-fertilizer products with bio-fertilizer sales increasing 19% year-on-year.
New sustainability priorities
Today Syngenta Group announced its new sustainability priorities for the entire Group, also including ADAMA and Syngenta Group China, that replace the previous sustainability targets. In 2013, Syngenta was one of the first companies in the industry to launch a comprehensive sustainability plan. The 'Good Growth Plan' successfully served as the organization's sustainability compass.
The new priorities place sustainability at the core of the company's strategy and demonstrate continued commitment to sustainable innovation. This approach and clear targets help integrate sustainability on a strategic and operational level whilst creating long-term value:
Priority 1: 'Higher yields, lower impact' through the acceleration of crop productivity in the agricultural sector, while reducing the impact on the planet through more sustainable technologies.
Priority 2: 'Regenerate soil and nature' by enabling the adoption of regenerative agriculture practices to help farmers improve productivity, soil health, biodiversity and climate.
Priority 3: 'Improve rural prosperity' by focusing on the prosperity of low-income and under-served farmers and their access to inputs, knowledge, finance and markets.
Priority 4: 'Sustainable operations' by the means of reducing the environmental impact of Syngenta Group's own operations and the supply chain; strengthening a diverse and inclusive culture and ensuring the health and safety of its employees.
The new priorities leverage the power of innovation, guide investments and collaboration as well as add a new level of transparency through a Portfolio Sustainability Framework (PSF). To find out more about Syngenta Group's new sustainability priorities, the specific targets and the PSF, please visit the website Sustainability Priorities.
Today Syngenta Group also published the Syngenta Group and Syngenta AG ESG reports for the year ended 31 December 2023.
About Syngenta Group
Syngenta Group is one of the world's biggest agricultural technology companies, with roots going back more than 250 years. With around 60,000 employees, operating in more than 100 countries, the company strives to transform agriculture with science-driven, technological innovations to deliver high productivity and high-quality food while fighting climate change and restore nature. Syngenta Group works with farmers and partners to deliver four Sustainability Priorities: Higher Yields, Lower Impact; Regenerate Soil and Nature; Improve Rural Prosperity and Sustainable Operations. The priorities are underpinned by regenerative agriculture practices to nurture and restore soil health, protect the climate and biodiversity, and enhance farm productivity and profitability. Syngenta Group, which is registered in Shanghai, China, and has its management headquarters in Switzerland, draws strength from its four business units: Syngenta Crop Protection, headquartered in Switzerland; Syngenta Seeds, headquartered in the United States; ADAMA, headquartered in Israel and Syngenta Group China. Together, these businesses provide industry-leading ways to serve customers around the world.
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