Syngenta AG (SYT)

Crop Protection sales in 2006 will benefit from the launches of the new cereal herbicide AXIAL^® and seed treatment AVICTA™. In Seeds, underlying sales growth is likely to slow from the levels seen in 2005. Syngenta expects progressively to launch new genetically modified seeds with input traits in the period through 2008, but competitor genetically modified seeds may develop the market before Syngenta’s full portfolio of in-house traits is available. Overall, whilst in the course of a season, weather may have unpredictable positive or negative impacts on sales, revenue growth before acquisitions is expected to moderate in 2006. Further production cost savings are expected to offset the continued impact of the higher oil and gas prices and expense growth in 2006 is forecast to slow significantly, with switching of resource from low growth areas in Crop Protection towards higher growth opportunities in Seeds and Professional Products. Ceasing independent development of biopharmaceuticals is expected to reduce losses in Plant Science.

Net income growth in 2006 is forecast to be driven by moderate sales volume growth, tightly constrained cost growth and savings from the Operational Efficiency Program offsetting further adverse impacts from the oil price. However, net income will also continue to be impacted by restructuring and impairment charges associated with the implementation of the Operational Efficiency program and the integration of the 2004 acquired seeds businesses. The level of such charges will be dependent on the timing of irrevocable restructuring commitments and is difficult to forecast in any one calendar year, but total cash and non-cash charges in 2006 are expected at a similar level to 2005. The total cost of the Operational Efficiency program is still expected to be approximately US$850 million over five years, including 2004 and 2005, of which US$350 million are non-cash charges. Charges of US$320 million were recorded in 2004 under the program, of which US$184 million were non-cash (including the Swiss pension fund transition charge), and US$150 million in 2005, of which US$25 million were non-cash. Cash expenditure on the Operational Efficiency program noted above will continue in 2006. However, cash flow from operating activities is expected to remain at similar levels to 2005 except for the December pension injection of US$350 million, which is not currently planned to be repeated in 2006.

The Board is recommending a further significant increase in the dividend to CHF 3.30 per share, to be paid by way of a nominal par value reduction, subject to shareholder approval at the AGM on April 19, 2006. In addition on February 22, 2006, the Company granted to shareholders one free put option per share with an initial intrinsic value of CHF 1.50. With 30 put options each shareholder has the right to sell one Syngenta registered share to the Company on May 29, 2006. Each put option has a maturity of three months from grant and will be tradeable on the SWX Swiss exchange between February 23 and May 22, 2006. The exercise of all options will result in the Company being committed to repurchase approximately 3.3 million shares in 2006.

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