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Press release from PR Newswire

Syngenta New Segment Reporting

Tuesday, June 26, 2012

Syngenta New Segment Reporting01:00 EDT Tuesday, June 26, 2012BASEL, Switzerland, June 26, 2012 /PRNewswire/ -- As announced in February, Syngenta will adopt new segment reporting of sales and profitability starting with the first half 2012 results, to be announced on July 26.  The new segments reflect the company's integrated strategy and align reporting with previously announced changes in management structure.  As such, segment reporting is based on the four geographic regions, with the exception of the global Lawn and Garden business which is reported separately.This press release provides restated figures for the first half of 2011 and the full years 2011 and 2010.  In addition, 2011 quarterly sales performance is reported in line with the new segment structure.  Group earnings are unaffected by the restatement.Reclassification of certain expensesThe boundary between Marketing and distribution / Research and development expenses has been redefined.  Syngenta's global Research and development organization now manages all field trial sites and activities worldwide, including those related to maintaining product registrations. In order to maximize cost efficiency, the provision of support services in Finance, Information Systems, Human Resources and Indirect Procurement has been centralized through Syngenta Business Services.  The allocation of these costs by expense line has changed to reflect the usage of the services.  The allocation of costs for these services at a regional level is based on the level of transactional activity in revenues and costs, with revenue-related charges included in Marketing and distribution. Some costs of the integrated organization do not relate to a geographic destination and are reported as non-regional.  These include global marketing teams, Research and development and corporate headquarter functions.  In addition, regional gross profit performance is based on budgeted product costs: variances to the budget are reported as non-regional in order to align the reported results with organizational accountability.These reclassifications have no impact on consolidated operating income or on consolidated income before taxes.New Segmental ResultsFor the six months ended June 30, 2011(US$ million)EAME(1)North AmericaLatin AmericaAsia PacificNon-regionalTotal Lawn and Garden(2)Total groupSegment sales2,9242,2511,0321,026-7,2334697,702Cost of goods sold(1,309)(1,145)(557)(537)(19)(3,567)(242)(3,809)Gross profit1,6151,106475489(19)3,6662273,893Marketing and distribution(349)(287)(229)(147)(45)(1,057)(115)(1,172)Research and development----(564)(564)(28)(592)General and administrative(78)(49)(45)(25)(50)(247)(33)(280)Restructuring and impairment(10)(11)(5)(3)345(24)(19)Operating income/(loss)1,178759196314(644)1,803271,830For the year ended December 31, 2011(US$ million)EAME(1)North AmericaLatin AmericaAsia PacificNon-regionalTotal Lawn and Garden(2)Total groupSegment sales3,9823,2733,3051,887-12,44782113,268Cost of goods sold(1,806)(1,648)(1,813)(984)(131)(6,382)(404)(6,786)Gross profit2,1761,6251,492903(131)6,0654176,482Marketing and distribution(685)(554)(542)(290)(89)(2,160)(227)(2,387)Research and development----(1,135)(1,135)(56)(1,191)General and administrative(166)(114)(77)(48)(155)(560)(62)(622)Restructuring and impairment(88)(25)(23)(13)(29)(178)(53)(231)Operating income/(loss)1,237932850552(1,539)2,032192,051For the year ended December 31, 2010(US$ million)EAME(1)North AmericaLatin AmericaAsia PacificNon-regionalTotal Lawn and Garden(2)Total groupSegment sales3,4232,9692,7631,707-10,86277911,641Cost of goods sold(1,568)(1,571)(1,578)(909)116(5,510)(390)(5,900)Gross profit1,8551,3981,1857981165,3523895,741Marketing and distribution(623)(548)(378)(267)(71)(1,887)(208)(2,095)Research and development----(1,024)(1,024)(57)(1,081)General and administrative(153)(121)(72)(39)(174)(559)(54)(613)Restructuring and impairment(64)(1)(12)(5)(57)(139)(20)(159)Operating income/(loss)1,015728723487(1,210)1,743501,793(1)  EAME: Europe, Africa and Middle East(2)  The supply of chemical active ingredient to Lanxess AG for the materials protection market, previously reported as part of Professional Products, has been integrated into the geographical segments.  This reflects Syngenta's divestment of the materials protection business to Lanxess AG in 2011New Segmental Results excluding Restructuring and ImpairmentSyngenta(US$ million)June 2011December 2011December 2010Third party sales7,70213,26811,641Gross profit3,8996,4965,759Marketing and distribution(1,172)(2,387)(2,095)Research and development(592)(1,191)(1,081)General and administrative(280)(622)(613)Operating income1,8552,2961,970Depreciation, amortization and impairment294594509Income from associates and joint ventures-1526EBITDA2,1492,9052,505EBITDA (%)27.921.921.5 Total(1)Lawn and Garden(US$ million)June2011December 2011December 2010June2011December 2011December 2010Third party sales7,23312,44710,862469821779Gross profit3,6726,0795,359227417400Marketing and distribution(1,057)(2,160)(1,887)(115)(227)(208)Research and development(564)(1,135)(1,024)(28)(56)(57)General and administrative(247)(560)(559)(33)(62)(54)Operating income1,8042,2241,889517281Depreciation,amortization and impairment279563477153132Income fromassociates and joint ventures-1526---EBITDA2,0832,8022,39266103113EBITDA (%)28.822.522.014.112.514.5(1)  Total excludes Lawn and Garden and includes non-regionalNew Segmental Results excluding Restructuring and Impairment: continuedEurope, Africa and Middle EastNorth America(US$ million)June2011December 2011December 2010June2011December 2011December 2010Third party sales2,9243,9823,4232,2513,2732,969Gross profit1,6202,1841,8551,1071,6311,401Marketing and distribution(349)(685)(623)(287)(554)(548)Research and development------General and administrative(78)(166)(153)(49)(114)(121)Operating income1,1931,3331,079771963732Latin AmericaAsia Pacific(US$ million)June2011December 2011December 2010June2011December 2011December 2010Third party sales1,0323,3052,7631,0261,8871,707Gross profit4751,4921,189489903798Marketing and distribution(229)(542)(378)(147)(290)(267)Research and development------General and administrative(45)(77)(72)(25)(48)(39)Operating income201873739317565492New Segmental Operating Income reconciled to New Segmental Results excluding Restructuring and ImpairmentFor the six months ended June 30, 2011(US$ million)EAME(1)North AmericaLatin AmericaAsia PacificNon-regionalTotal Lawn and GardenTotal groupOperating income/(loss)1,178759196314(644)1,803271,830Restructuring and impairment:Cost of goods sold(2)51---6-6Expenses101153(34)(5)2419Operating income excluding restructuring and impairment1,193771201317(678)1,804511,855Operating margin (%)40.834.319.530.9n/a24.910.924.1For the year ended December 31, 2011(US$ million)EAME(1)North AmericaLatin AmericaAsia PacificNon-regionalTotal Lawn and GardenTotal groupOperating income/(loss)1,237932850552(1,539)2,032192,051Restructuring and impairment:Cost of goods sold(2)86---14-14Expenses882523132917853231Operating income excluding restructuring and impairment1,333963873565(1,510)2,224722,296Operating margin (%)33.529.426.429.9n/a17.98.817.3For the year ended December 31, 2010(US$ million)EAME(1)North AmericaLatin AmericaAsia PacificNon-regionalTotal Lawn and GardenTotal groupOperating income/(loss)1,015728723487(1,210)1,743501,793Restructuring and impairment:Cost of goods sold(2)-34--71118Expenses6411255713920159Operating income excluding restructuring and impairment1,079732739492(1,153)1,889811,970Operating margin (%)31.524.726.728.8n/a17.410.416.9(1)  EAME: Europe, Africa and Middle East(2)  Reversal of inventory step-up2011 Quarterly Sales PerformanceIntegrated sales(US$ million)Q12011Q22011Q32011Q42011H12011H22011FY2011Europe, Africa and Middle East1,5971,3276444142,9241,0583,982North America1,1251,1264845382,2511,0223,273Latin America5165169491,3241,0322,2733,305Asia Pacific5225044184431,0268611,887Total3,7603,4732,4952,7197,2335,21412,447Lawn and Garden(1)257212168184469352821Group Sales4,0173,6852,6632,9037,7025,56613,268Sales by businessCrop Protection2,6692,7142,0752,2195,3834,2949,677Seeds1,1087674335421,8759752,850Elimination of Crop Protection sales to Seeds(17)(8)(13)(42)(25)(55)(80)Total3,7603,4732,4952,7197,2335,21412,447Lawn and Garden(1)257212168184469352821Group Sales4,0173,6852,6632,9037,7025,56613,268Crop Protection regional salesEurope, Africa and Middle East1,0841,0095113542,0938652,958North America6348134252861,4477112,158Latin America4644707651,2089341,9732,907Asia Pacific4874223743719097451,654Total2,6692,7142,0752,2195,3834,2949,677Seeds regional salesEurope, Africa and Middle East522320135868422211,063North America497313662668103321,142Latin America5351187118104305409Asia Pacific36834572119117236Total1,1087674335421,8759752,850(1)  Includes product lines Professional Products and Flowers. Professional Products were formerly reported under Crop Protection and Flowers under Seeds2011 Quarterly Sales Performance: continuedProduct line sales(US$ million)Q12011Q22011Q32011Q42011H12011H22011FY2011Selective Herbicides8279204534171,7478702,617Non-selective Herbicides2503153212315655521,117Fungicides8818485657041,7291,2692,998Insecticides4304284364968589321,790Seed Care2571732563324305881,018Other Crop Protection243044395483137Total Crop Protection2,6692,7142,0752,2195,3834,2949,677Corn and Soybean6343281753349625091,471Diverse Field Crops2972188477515161676Vegetables177221174131398305703Total Seeds1,1087674335421,8759752,850Elimination of Crop Protection sales to Seeds(17)(8)(13)(42)(25)(55)(80)Lawn and Garden(1)257212168184469352821Group Sales4,0173,6852,6632,9037,7025,56613,268(1)  Includes product lines Professional Products and Flowers. Professional Products were formerly reported under Crop Protection and Flowers under SeedsReclassified Condensed Consolidated Income StatementsFor the six months ended June 30,(US$ million)2011 as reportedResearch and developmentSyngentaBusiness Services2011reclassifiedSales7,7027,702Cost of goods sold(3,785)(24)(3,809)Gross profit3,917-(24)3,893Marketing and distribution(1,052)39(159)(1,172)Research and development(559)(39)6(592)General and administrative(457)177(280)Restructuring and impairment(19)(19)Operating income1,830--1,830 For the year ended December 31,(US$ million)2011as reportedResearch and developmentSyngentaBusiness Services2011reclassifiedSales13,26813,268Cost of goods sold(6,737)(49)(6,786)Gross profit6,531-(49)6,482Marketing and distribution(2,145)76(318)(2,387)Research and development(1,127)(76)12(1,191)General and administrative(977)355(622)Restructuring and impairment(231)(231)Operating income2,051--2,051 For the year ended December 31,(US$ million)2010 as reportedResearch and developmentSyngentaBusiness Services2010reclassifiedSales11,64111,641Cost of goods sold(5,866)(34)(5,900)Gross profit5,775-(34)5,741Marketing and distribution(1,892)66(269)(2,095)Research and development(1,032)(66)17(1,081)General and administrative(899)286(613)Restructuring and impairment(159)(159)Operating income1,793--1,793Announcements and MeetingsFirst half results 2012July 26, 2012Crop updateSeptember 24-26, 2012Third quarter trading statement 2012October 23, 2012Full year results 2012February 06, 2013First quarter trading statement 2013April 18, 2013Syngenta is one of the world's leading companies with more than 26,000 employees in over 90 countries dedicated to our purpose: Bringing plant potential to life.  Through world-class science, global reach and commitment to our customers we help to increase crop productivity, protect the environment and improve health and quality of life.  For more information about us please go to www.syngenta.com.Cautionary Statement Regarding Forward-Looking StatementsThis document contains forward-looking statements, which can be identified by terminology such as 'expect', 'would', 'will', 'potential', 'plans', 'prospects', 'estimated', 'aiming', 'on track' and similar expressions. Such statements may be subject to risks and uncertainties that could cause the actual results to differ materially from these statements. We refer you to Syngenta's publicly available filings with the U.S. Securities and Exchange Commission for information about these and other risks and uncertainties. Syngenta assumes no obligation to update forward-looking statements to reflect actual results, changed assumptions or other factors. This document does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer, to purchase or subscribe for any ordinary shares in Syngenta AG, or Syngenta ADSs, nor shall it form the basis of, or be relied on in connection with, any contract there for.Syngenta International AG Media contact:  Analyst / Investor contact:Media Office  Daniel Braxton  Jennifer GoughCH-4002 Basel  Switzerland +41 61 323 2323 Switzerland +41 61 323 5059Switzerland   USA             +1 202 737 6521Tel:  +41 61 323 23 23Fax: +41 61 323 24 24SOURCE Syngenta