BASEL, Switzerland, Feb. 5, 2014 /PRNewswire/ -- On track to meet growth objectives. Sales $14.7 billion, up 3 percent; up 5 percent at constant exchange rates Integrated sales up 6% 1 underlying growth excluding corn rootworm royalty 8 percent1 EBITDA $2.9 billion: 7 percent lower lower royalty income, non-recurring seeds costs Earnings per share2 $19.30: 12 percent lower Proposed dividend increased by 5 percent to CHF 10.00 New program to accelerate operational leverage: ~$1 billion annual savings by 2018
1 Growth at constant exchange rates.
2 Excluding restructuring and impairment; EPS on a fully-diluted basis.
3 2012 stated after effect of accounting policy change for employee benefits.
4 Net income to shareholders of Syngenta AG (equivalent to 2013 diluted earnings per share of $17.78).
Mike Mack, Chief Executive Officer, said:
"Over the last three years we have put in place a new integrated business model, which has meant a rapid pace of change across our company. Tangible benefits are already coming from leveraging a combined sales force, which has produced clear gains in a number of territories, with increasing acceptance of our integrated offers in the field. However, our financial performance in 2013 did not meet expectations. While this was mainly due to non-recurring costs in our seeds business, we are determined to intensify our focus on cost and capital efficiency while maintaining our ambitious growth objectives. Today we are announcing a program to accelerate operational leverage across the organization.
"Our growth rate over the last three years has been in line with our sales target for the eight key crops of $25 billion in 2020. In each year we have achieved double digit growth in the emerging markets, where the huge scope for productivity improvements is driving an accelerated pace of technology adoption. At the same time growth in developed markets has been underpinned by the strength of our field force and by innovation. As we continue to bring major new products to market while scaling up our integrated offers, we look forward with confidence to sustained profitable growth and cash generation."
Financial highlights 2013
Sales $14.7 billion
Sales increased by five percent at constant exchange rates, with volume up three percent and prices two percent higher. Integrated sales were up six percent. Adjusted for corn rootworm trait revenue in 2012, integrated sales rose by eight percent.
EBITDA $2.9 billion
EBITDA was seven percent lower with an EBITDA margin of 19.7 percent (2012: 21.9 percent). The main factors affecting profitability were: reduced trait royalty income; an increase in seeds production costs of $175 million following the drought in the USA in 2012; and a seeds inventory write-down of $170 million.
Net financial expense and taxation
Net financial expense of $200 million (2012: $147 million) included the higher cost of hedging in a period of emerging market currency volatility.
The tax rate before restructuring and impairment was unchanged at 15 percent.
Net income $1.6 billion
Net income including restructuring and impairment was 11 percent lower. Earnings per share, excluding restructuring and impairment, were 12 percent lower at $19.30.
Cash flow and balance sheet
Free cash flow of $385 million reflected lower EBITDA and an increase in working capital. Average trade working capital as a percentage of sales was higher at 40 percent compared with 35 percent in 2012. Fixed capital expenditure including intangibles was $727 million (2012: $679 million). Acquisition spending at $140 million was significantly lower than the record level of $654 million in 2012. Cash flow return on investment at 13 percent again exceeded the 12 percent target. The ratio of net debt to equity was 24 percent (2012: 19 percent).
Dividend and share repurchase
The total cash return to shareholders in 2013 was $987 million. The dividend was raised by 19 percent, or 16 percent in US dollars, to give a total dividend payout of $921 million. Share repurchases amounted to $66 million.