The Rising Influence of Rising Affluence

[DewDiligence]

Moody’s downgrades SYT’s credit outlook to negative:

https://www.moodys.com/research/Moodys-changes-outlook-on-Syngentas-A2P-1-ratings-to-negative--PR_319026

The change of outlook to negative reflects our expectation that following the increase in debt leverage reported in 2012-2013, a more challenging operating environment in agricultural chemicals and seeds may prevent Syngenta from strengthening its operating profitability and cash flow generation sufficiently to offset the continuous growth in the company's dividend and restore its financial metrics back to levels that are fully supportive of the A2/P-1 ratings within the next 18 months.

In the past three years, Syngenta's financial metrics have weakened. Even as net debt rose as a result of higher investments and a significant working capital increase in 2012-2013, profitability has been constrained by the growth investments linked to the implementation of the group's Integrated Strategy, persistent cost inflation as well as, in 2014, adverse effects from emerging market currencies and a tough operating environment in North America. As Syngenta continued to grow its dividend, its retained cash flow (RCF) to net debt ratio fell to 28% at the end of 2014, which is markedly below our guidance for the A2 rating.