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Syngenta yesterday released its 2012 results While EBITDA was lower than expected because of an unfavourable geographical mix in Q4, net income was higher than expected. Business growth in Latin America and the USA bodes well for the first half of 2013. The outlook remains positive, with both volumes and prices set to continue rising in 2013. Agricultural commodity prices remain high, supported by low estimated grain stocks, representing a support factor for farmers’ expenditure. We reiterate our PLUS rating for the share.
Syngenta has published better than expected half-yearly results and confirmed its 2012 objectives. The outlook is still good, supported by volumes and prices which continue to grow. The trend will remain positive in H2 and 2013. The group will be able to more than offset the negative impact of raw material prices and currency effects thanks to its excellent pricing power and cost control. Agricultural commodity prices rose significantly in the past few weeks because of the unfavourable weather conditions, encouraging farmer’s spending. We confirm our PLUS rating for this share.
Prospects for the agrochemicals sector are still looking good in 2012. Estimates of grain stocks remain low while demand is rising. This environment is reflected in the current high crop price levels. Syngenta is well-placed to benefit from this trend with rising volumes and prices in the “Crop Protection” division and a further improvement of margins in the “Seeds” division. By 2015, integration of the business model should generate sales growth of around 7% on average per year, together with a 0.5 pt/year market share gain and cost savings which will be worth USD 650 million, some of which will be reinvested in R&D and in expansion on the emerging markets.
Syngenta has published annual results in line with expectations. 2012 targets are vague but lay emphasis on further growth in terms of both volumes and prices. We confirm our PLUS opinion on this share. The outlook is still good, supported by further improvement of business activity, integration of the Seeds and Crop Protection divisions, market share gains and improved pricing power. Agricultural commodity prices remain high, encouraging farmers’ spending.
The prospects of the agrochemicals industry remain well-oriented for H2 and 2012. Syngenta is in a good position to benefit from the growth of the market. The company has a diversified geographical exposure and is present on the majority of crops which will enable it to tap into the growth of this market while benefiting from internal leverage, generated notably by the integration of its business activity. PLUS code confirmed.
Syngenta has published first half results which were lower than expectations, despite a solid growth in volume in the second quarter and excellent figures from the Seed division. The fall in the share price, caused by the weakness in margins in H1, represents an opportunity to reinforce positions, given the much better prospects in the second half and in 2012. Opinion PLUS confirmed.
We met the Syngenta COO, Dr John Atkin, last week. Conditions are improving in the US, accompanied by increased planting in the last 2 weeks. However, activity in Europe has been hit by the drought. The negative impact is still hard to quantify and will depend on the weather conditions in the coming weeks. Beyond the 2nd quarter, however, prospects are still looking good, supported by a recovery of the Seeds business, integration of the business model, improved pricing power and agricultural commodity price levels which are expected to remain high. PLUS code confirmed.
Syngenta’s 1st quarter sales exceeded expectations (+4% against consensus). The management mentioned of an excellent start in the Northern Hemisphere. Prospects for 2011 are looking good and the company has confirmed its objectives for 2015. We are maintaining our PLUS code on this share: it offers attractive growth (estimated 2011-2012 EPS growth ≈+15% on average) and benefits from some internal leverage (improved performance of the Seeds division, integration of the business model).
Fundamentals of the agricultural market are improving and Syngenta’s position as a leader in the agrochemicals industry will enable it to tap into this growth while benefiting from some internal leverage. 4 reasons to invest: farmers are spending again, improvement of the “Seeds” division, integration of the business activity (announced in February) and strong presence of the group on the emerging markets. We are adopting a PLUS code.
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