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NOTE

The data provided in the accompanying tables and the analysis for the current quarter ending 30 September 2017 are based on market estimates compiled from different sources as the company has not reported results due to their de-listing from the Swiss and other stock exchanges.

Crop Protection Regional Sales

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Europe, Africa & Middle East

The Europe-Africa-Middle East region is Syngenta’s largest region, contributing 33% of global crop protection sales. Sales declined by (3.8%) in Q3; on a constant exchange rate (CER) basis sales declined (3.2%). For the first 9-month period, sales declined (4.3%) and (3.2%) on a CER basis.

The hot and dry weather in western and southern Europe and flooded conditions in northern-eastern Europe had a negative impact on sales of herbicides and fungicides, an impact seen on the industry as a whole. This was slightly offset by sales growth from Solatenol™/ Elatus Plus™ based on the carboxamide benzovindiflupyr launches in France, Poland and CIS country markets.

South Africa also contributed to growth with the start of the summer planting as well as vines and fruit crops using more crop protection products. Insecticide sales helped offset the decline in other products. Seed care sales contributed to some extent. Currency impact was reduced due to the Russian rouble strengthening against the US dollar.

The outlook for Q4 2017 is positive as winter cereal and oilseed rape crop planted area is set to increase, based on the current crop harvests. The sale of certain products to Nufarm, in this region, will have an impact on future sales from Q4 through the year 2018.

North America

The North American region, 28.3% of global sales, improved year-on-year with Q3 sales growing 6.8%, also on CER basis; while sales increased slightly by 2.2% during the 9-month period (+1% CER basis).

Strong sales of their fungicide Trivapro™ (benzovindiflupyr+azoxystrobin+propiconazole) as well as the herbicide Acuron™ in corn, and from S-metolachlor-based Bicep Magnum™ and Dual Magnum™ contributed to growth. The abamectin-based insecticide/ fungicide/nematicide seed treatment range on beans, corn and cotton (Avicta™) added to the performance in the region.

The outlook for Q4 2017 is mildly positive as farmers are expected to plant more wheat this fall with increased use of wheat herbicides and fungicides. Syngenta plans to launch a dicamba+s-metolachlor herbicide pre-mix (Tavium™) for use on Monsanto’s XtendPlus™ system on cotton and soybeans in 2018. The fallout of the dicamba injury reports this year over 3.6 million acres is likely to have an impact as well.

Syngenta have signed an agreement with Dow for the sales of products related to the Enlist™/ Enlist Duo™ system using 2,4-D resistant crops. Cropnosis’s opinion is that Syngenta’s “integrated” structure is placing a lot of stress on distributors’ finances as they need to bear the load of crop protection chemicals, seeds and other services with the consequent result that we have seen. Normally integration of the distribution channels across a country or region would entail financial/commercial/monetary coordination as well, to enable the supply chain to catch up with changing policies.

Latin America

In Latin America, contributing 22% of global performance in crop protection, sales declined (5.4%), which, on a CER basis (3.8%) in Q3 and (14%) (-13% CER basis) during the first 9-months 2017 period.

Sales declined in practically all product lines particularly in Brazil. High inventories of insecticides and fungicides lying with distributors and cooperatives were taken back by companies like Syngenta, BASF and Bayer. The growth of generic products from Chinese and Indian manufacturers is affecting all branded product sales. The recently introduced tougher credit terms in Brazil, Argentina (a 10%-11% impact according to the company) coupled with stopping sales in problem-ridden Venezuela also had a negative impact on sales, although some improvement on profitability was seen thanks to the Real strengthening against the US dollar.

The dominant corporations and co-operatives who form the bulk of sales, are finding it difficult to get extended financing from banks due to their holding back export sales of low-priced grains. This should improve with the currency strengthening to purchase later in the season. Distributors are reluctant to sell on credit to the farmers, as companies themselves are reluctant to extend credit to the distributors. The political situation in Brazil, Argentina, Venezuela is effectively preventing growth in sale.

The outlook for Q4 2017 is positive as the main season crop planting is expected to exceed that of last year.

Asia Pacific

The Asia-Pacific region, which contributed 16.4% of global crop protection sales, grew by 8.5%, or 8.2% on a CER basis in Q3 and by 2% during the first 9 months 2017 period.

Sales improved after the delay caused by the erratic rainfall earlier in the season. Sales of practically all products grew, led by the demand for fungicides in SE Asian countries and in China. Sales in India grew strongly after the initial impact of the new General Sales Tax system introduced earlier during the financial year. Their focus was on divesting plant and production facilities as a requirement for their acquisition by ChemChina as well as competing marketing pressure from BASF, UPL, Bayer, among others.

The outlook for Q4 2017 is positive as most countries in the region have received good rainfall and planting has been well above normal. Aside from portfolio impact of divestment, Syngenta remains in a strong position in this region.

Total Crop Protection Regional Sales

Crop Protection sales grew 0.1%, 0.8% on a CER basis after internal elimination during the quarter with volumes 3%, prices (2%) and currency (0.2%). For the 9-month period ending September 2017 period sales declined (3.9%) or (2.8%) on a CER basis with volume -1.8%, price -2% and currency -0.1%.

Sales of newer herbicides, fungicides and ST products in North America, Asia-Pacific and eastern Europe/CIS countries were not enough to offset declines from the ongoing problems in Latin America, the weather in western and southern Europe and competition in Asia-Pacific.

Syngenta’s integrated distribution is now more or less in place in the Americas and in some regions/countries it is being dismantled to revert to the original system of CP chemicals to pesticide distributors and seeds to seed dealers. Growth in prices and volumes of recently launched herbicides, fungicides, seed care in North America, southern/eastern Europe, and Russia, Ukraine; fungicides in south and SE Asia could not offset severe declines in Brazil and some of the other Latin American countries.

Cropnosis had expected a slightly better performance through the first 3 quarters of 2017 in Europe, for spring planting and for the safrinha crop in Brazil, both of which suffered; the former due to severe drought and flooding in different countries and the latter due to voluntary, planned controls in distribution.

The outlook for Q4 2017 remains mildly positive as planted area under winter cereals and oilseed rape in Northern hemisphere countries is expected to increase, as is the area under corn and soybeans in Latin America.

Inter-Segment Elimination.

Mainly ST and selective herbicides used in captive seed production euc. Dominated by usage in Europe, North and Latin America for maize and vegetable seed production.

Crop Protection Product Sales

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Herbicides

Herbicide sales,which contribute 39% of YTD group sales for the quarter declined 1.8% (-2% CER basis) and (6.3%), or (6.1%) on a CER basis for the 9-month 2017 period.

Sales of selective herbicides during Q3 increased by 4.9%, or 4% CER basis, boosted by sales of pretilachlor, fluazifop-p-butyl and paraquat in Asia-Pacific, parts of Latin America and North America of S-metolachlor and other pre-mixes like Acuron™ , Axial™ and Callisto™ for soybean, cotton and corn. These were offset by lower sales in Europe.

Sales of non-selective herbicides declined (17%) or (14%) on a CER basis during the quarter and (7.8%) or (6.3%) on a CER basis during the first 3 quarters of 2017. Paraquat sales in China were also affected negatively, initially by a blanket ban imposed by Chinese authorities on sub-standard generic formulations and later by farmers switching to the use of glufosinate as a replacement. Voluntary reduction of glyphosate products also contributed to the decline.

Fungicides

Fungicides, which contributed 33.5% of global crop protection sales, grew by 2.3%, or 2.4% on a CER basis for the quarter, while they declined (2.9%) or (2.4%) on a CER basis during the 9-months 2017 period. Growth was driven by benzovindiflupyr (Elatus™/Solatenol™ /Orondis™/ Trivapro™) combinations in North America for peanuts, cereals, and in Europe mainly France and east European markets for cereals, oilseeds and fruit-vegetable crops. Azoxystrobin, mandipropamid and difenoconazole-based fungicides drove growth in India, China and SE Asia.

Sales outlook for Q4 2017 is positive as weather conditions in Europe and Asia as well as North America are expected to be warmer than usual with occasional blasts of freezing temperatures due to La Niña prevailing and winter cereal planting are expected to increase sales. Latin American inventories are expected to drop with the increased planting of soybeans, corn and cotton.

Insecticides

Insecticides which contribute 16.5% to global sales, grew marginally by 0.7%, or 0.8% on a CER basis in Q3, but declined (3.3%) or (2.5%) on a CER basis during the first 3 quarters of 2017, mainly due to the slow seasonal start in Asia-Pacific and overstocked distributor in Latin America. Sales are expected to improve in Q4 2017 on cotton, rice, corn, soybeans and other crops in Asia-Pacific and Latin America.

The outlook for the full year 2017 is expected to be slightly positive.

Seed Care

Seed Care sales which contribute 9.5% of global crop protection business declined (5.4%) or (3.5%) on a CER basis and (0.2%) or +0.4% on a CER basis during the 9-months 2017 period largely due to a slow start in Latin America.

European and North American sales of thiamethoxam remain impacted negatively due to the ban imposed on neonicotinoid insecticidal seed treatments, which has affected sales performance of all the relevant companies negatively. The controversial bee death/colony collapse syndrome, has had a highly negative impact on most companies’ sales in Canada, USA and Europe, especially for products from Syngenta, BASF and Bayer CropScience.

Seed treatment insecticide sales are expected to remain low in those regions since the recent findings reported in a peer-reviewed scientific journal. The study was sponsored by the manufacturers/marketers of the insecticidal seed treatments and the investigators concluded that use of these products did result in high mortality in bees.

The outlook for Q4 and year-end 2017 is positive as seed treatments are effective, practical, economical and far safer than foliar sprays in the seedling stages, so are expected to grow globally on most crops including corn, cotton, soybean, cereals, beans, peanuts and other crops.

Other Crop Protection

Other crop protection products sales grew strongly 7.7%, 8% on a CER basis in Q3 and 3.4%, or 3.5% on a CER basis during the 9-months 2017 period.

These include a wide range of products including biologicals, plant growth regulators like Isabion™, on rice, miscellaneous planting and harvest aids and other products for soil and commercial greenhouse applications. Growth is estimated to have come from Asia-Pacific on rice biologicals and plant growth regulators as Syngenta has sold some of its product lines to third parties and will be validated in the near future. It is also estimated to be due to currency adjustments in Latin America and eastern Europe where the products are sold on fruit & vegetable crops like vines, apples, stone fruit and citrus.

The outlook for such products in Q4 2017 and beyond remains positive with increasing demand for yield enhancers and biologicals.

Total Sales of Crop Protection and Speciality Products

Total Crop Protection sales grew 0.1%, 0.8% on a CER basis after internal elimination during the quarter with volumes 3%, prices (2%) and currency (0.2%). For the 9-month period ending September 2017 period sales declined (3.9%), or (2.8%) on a CER basis with volume -1.8%, price -2% and currency -0.1%.

Herbicides remain the mainstay of Syngenta’s portfolio. Sales of new selective herbicide combinations especially for corn, soybeans, rice and cereals contribute to the bulk of sales, while non-selective herbicides are shrinking. Fungicide combinations based on triazoles, strobilurins and SDHI actives like benzovindiflupyr (Elatus™, Solatenol™) for cereals, fruits and vegetables, rice, plantation crops and sugar beet are major contributors. Insecticides, nematicides and acaricides based on pyrethroids, neonicotinoids and natural products like avermectins are important contributors with sales on crops like rice, cotton, beans, fruit and vegetables.

Internal transfers for public health and production of own brand seeds of barley, sugar-beet, sunflower, soybeans and corn are sourced in-house from other suppliers like Bayer. Syngenta’s older products are already being sorted out with the ChemChina takeover. Recently they have announced sales of certain lines to Nufarm estimated at $590 million for the European market while others have been divested/transferred to Adama Celsius BV for sale in North America through Makhteshim-Agan NA.

ChemChina group companies are rapidly rationalising their individual portfolios and will be contributing to many changes on the crop protection industry landscape. The transactions will improve sales in the Chinese domestic market as well as to customers of CNAC subsidiaries.

The outlook for Q4 2017 and beyond is positive as current crops in Asian countries and North America will be conducive to higher uses of fungicides and insecticides. The Latin American soybean, corn, sugar cane and cotton season and northern hemisphere winter cereal, oilseeds, rice and cotton season commencing Q4 2017 with winter rice, cotton and pulses in Asia will provide markets for their products.