Capital Structure
- Funding strategy
- Capital Structure & Funding Policies
- Gearing
- Key ratios
- Legal Positioning of Group Debt
Funding strategy
Short term liquidity
Although Syngenta operates globally, the two largest markets are NAFTA and Europe, Africa and the Middle East (EAME), representing approximately 34% and 33% respectively of consolidated sales in 2009 (2008: 31% and 37%). Both sales and operating profit of these two regions are seasonal and are weighted towards the first half of the calendar year, reflecting the northern hemisphere planting and growing cycle. This results in a seasonal working capital requirement.
Syngenta's principal source of liquidity consists of cash generated from operations. Working capital fluctuations due to the seasonality of the business are supported by short term funding available from a USD 2,500 million Global Commercial Paper program supported by a USD 1,200 million committed, revolving, multi-currency, syndicated credit facility.
Long term financing
The long term capital resources are currently financed through an unsecured non-current bond issued under the Euro Medium Term Note (EMTN) program and unsecured non-current Notes issued under a Note Purchase Agreement in the US Private Placement market.
Capital Structure & Funding Policies
Capital Structure
Syngenta is committed to a low single A rating, which provides an optimal balance between financial flexibility and the cost of capital. We aim to maintain balanced capital efficiency through investment to meet the requirements of our growing business, make selective acquisitions and at the same time return cash to shareholders. Our net debt to equity target is 25% to 35%.
Refinancing risk
Syngenta takes a prudent liquidity risk management approach through ongoing monitoring of the cash requirements of the Group and its debt profile. The Company's policies ensure that sufficient headroom is available at all times.
Interest Rates
Syngenta monitors its interest rate exposures and analyzes the potential impact of interest rate movements on net interest expense. Syngenta's policies allow entering into derivative transactions to manage the Group's sensitivity to interest rate movements arising from its financial assets and liabilities.
Gearing
Net Debt to Equity: Ratio 25%
31 December 2009
Composition of Net Debt
31 December 2009
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1 Cash and cash equivalents + Marketable securities - Short term debt - Other long term debt
Key Ratios
| Full Year 2009 | Full Year 2008 | |
|---|---|---|
| Cash flow from operating activities/Net Debt | 79% | 78% |
| Cash flow from operating activities/Net Debt (including pension deficit) | 65% | 66% |
| Net debt/EBITDA1 | 76% | 76% |
| Net debt/Equity | 25% | 32% |
- Excluding restructuring costs
Legal Positioning of Group Debt
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