A summary of Syngenta's audited consolidated financial statements. For full details and analysis of the Group's audited financial results, prepared in accordance with IFRS, please refer to our comprehensive Financial Report. References to EBITDA in the following financial information exclude the impact of restructuring and impairment1. Income Statement Review Sales, at constant exchange rates (CER), were one percent lower, with growth in the second half of two per cent (CER). Crop Protection sales were two per cent lower; excluding the impact of range rationalization they were unchanged. Seeds sales rose by five per cent. A disciplined pricing strategy resulted in the stabilization of Crop Protection prices and, with a contribution from Seeds, pricing at the group level was positive. EBITDA improved by four per cent (CER) due to second half sales growth, cost savings and an improving product mix. Earnings per share excluding restructuring and impairment were up 36 per cent to $3.56 reflecting lower net financial expenses and a further reduction in the tax rate. After charges for restructuring and impairment earnings per share were $2.63 (2002: $0.26). Currency: Sales were positively impacted by seven per cent due to the weakness of the US dollar. At the EBITDA level this positive impact was partly offset by the strength of European currencies, in particular the Swiss franc and sterling, which increased European costs reported in dollars. Crop Protection: Sales showed a slight decline for the full year but with a marked upturn in the second half, driven by Latin America and NAFTA. The performance of Insecticides and Professional Products was particularly encouraging and sales of Selective Herbicides, the largest product line, were up after several years of decline. Modernization of the product portfolio continued to be a prime focus throughout the year. Total sales of new products reached $501 million; growth in new products sales, notably the CALLISTO® range and ACTARA®/CRUISER®, was $177 million (CER), more than offsetting the impact of range rationalization ($107 million). The cumulative growth of new products since merger is $418 million (CER) with the cumulative impact of range rationalization at $256 million (CER). The benefit of new launches, portfolio rationalization and continued focus on cost of goods sold resulted in an increase in gross profit margin at constant exchange rates to 50.3 per cent (2002: 49.0 per cent). EBITDA rose one per cent (CER) to $1239 million. Seeds: Sales in Field Crops and Vegetables and Flowers progressed well throughout the year. The main drivers were corn in Latin America and vegetables in Europe. The expansion of higher margin businesses, good cost control and the benefits of a disciplined pricing strategy contributed to a 15 per cent (CER) increase in EBITDA to $146 million. Plant Science: QUANTUMâ„¢ microbial phytase, developed jointly with Diversa Corporation, received its first registration in Mexico at the end of 2003 and is expected to achieve US registration in 2004 and will generate the first revenues for Plant Science. Synergies: Synergies totaling $197 million were realized in 2003. Since the start of the program in 2000, $559 million of savings have been generated at an associated net cash cost of some $820 million. It is now expected that the $625 million target will be achieved in 2004, one year ahead of schedule; the cumulative cash cost of the program is expected to be just over $1 billion. During 2003 cost savings of $94 million were made in Cost of Goods; $55 million in Selling, General and Administrative; and $48 million in Research and Development. Since merger, the total number of employees has been reduced by some 3,600. Restructuring and Impairment: Restructuring and Impairment charges of $163 million (2002: $396 million) largely relate to restructuring costs associated with implementation of the merger synergy program. Of the total amount $35 million is a non-cash charge. A gain of $39 million was realized through the receipt of shares and warrants from the research agreement with Diversa, announced in early 2003.   Summarized Financial Information 2003 and 2002   Excluding restructuring and impairment1 Restructuring and impairment1 Including restructuring and impairment1   2003 $m 2002 $m CER2 % 2003 $m 2002 $m 2003 $m 2002 $m Sales 6578 6197 -1 — — 6578 6197 Gross profit 3285 3065 +1 — — 3285 3065 Marketing and distribution (1204) (1146) +3 — — (1204) (1146) Research and development (727) (697) +4 — — (727) (697) General and administrative (645) (582) -3 — — (645) (582) Restructuring and impairment — — — (163) (396) (163) (396) Operating income 709 640 +12 (163) (396) 546 244 Income before taxes and minority interests 574 445 +29 (163) (396) 411 49 Income tax expenses (207) (174) -19 68 104 (139) (70) Net income 363 265 +37 (95) (292) 268 (27) Earnings per share3   basic ($) $3.57 $2.61   $(0.93) $(2.87) $2.64 $(0.26)   diluted ($) $3.56 $2.61   $(0.93) $(2.87) $2.63 $(0.26) Gross profit margin 49.9% 49.5%           EBITDA4 1219 1154           EBITDA margin 18.5% 18.6%           Tax rate5 36% 39%           Free cash flow6 562 542           1  Restructuring and impairment are material items which management regards as requiring separate disclosure to provide a more thorough understanding of business performance: see page 38. Net income including restructuring and impairment is prepared in accordance with IFRS. 2  Growth rates are shown at constant exchange rates (CER) except for income before taxes, income tax expense and net income, which are at actual dollar rates. 3  The weighted average number of ordinary shares in issue used to calculate the earnings per share were as follows: for 2003 basic EPS, 101,682,672; 2003 diluted 101,952,669; 2002 basic EPS, 101,541,119; 2002 diluted EPS, 101,635,654. 4  EBITDA is a non-GAAP measure in regular use by investors as a measure of an issuer's gross cash flow generation. See detailed definition. 5  Tax rate on results excluding restructuring and impairment. 6  Free cash flow is a non-GAAP measure often used by investors as a useful supplementary measure of cash generation. See detailed definition.

Regional Sales Analysis

Crop Protection
Sales in Europe, Africa and the Middle East were particularly affected by range rationalization. In addition, extremely dry weather conditions in Western Europe negatively affected demand for the first nine months of the year. In the fourth quarter sales were restricted by prudent channel inventory management in France.

In NAFTA sales were down slightly in the USA owing to highly competitive conditions in the non-selective herbicide market. Syngenta reinforced its leading position in US corn selective herbicides with impressive growth in the CALLISTO® range and a strong second half performance by DUAL®/BICEP®. Other product lines also performed well, notably Seed Treatment and Insecticides, which were driven by the success of CRUISER® and FORCE®. Sales showed good growth in Canada and Mexico.

Latin America: Sales expanded across the portfolio in Brazil and Argentina as Syngenta capitalized on buoyant conditions and its broad product offer and marketing strength. Higher commodity prices, more competitive currencies and strong export increased grower confidence and led to expanded corn and soybean acreage.

In Asia Pacific sales were lower largely due to channel de-stocking in China, market decline in South Korea and the impact of range rationalization. Japan was also heavily affected by range rationalization; excluding this, sales showed growth in a declining market. In Australia sales improved following an easing of drought conditions.

Seeds
Sales in Europe, Africa and the Middle East grew strongly in oilseeds, vegetables and flowers. The main impetus came from Eastern Europe, in particular sunflower and oilseed rape. Varieties of high-value fresh vegetables continued to grow in both Mediterranean and northern European markets.

NAFTA sales decreased slightly owing to the closer alignment of corn sales to the planting season. Soybean sales showed strong growth in the USA.

Sales in Latin America benefited from the recovery in Brazil (corn and soybean) and Argentina (corn and sunflower).

In Asia Pacific growth in sales of corn in India and the Philippines contributed to an improved performance.

Unaudited Product Line and Regional Sales Analysis with 2002 Comparatives
	First half		Second half		Full year		Full year growth
	2003 $m	2002 $m	2003 $m	2002 $m	2003 $m	2002 $m	Actual %	CER1 %
Syngenta
Crop Protection	3370	3256	2137	2004	5507	5260	+5	-2
Seeds	735	646	336	291	1071	937	+14	+5
Total	4105	3902	2473	2295	6578	6197	+6	-1
Crop Protection
Product Line
Selective Herbicides	1187	1125	530	481	1717	1606	+7	+1
Non-selective Herbicides	364	381	252	269	616	650	-5	-10
Fungicides	898	871	540	527	1438	1398	+3	-6
Insecticides	506	480	454	375	960	855	+12	+7
Professional Products	328	304	314	281	642	585	+9	+4
Others	87	95	47	71	134	166	-19	-29
Total	3370	3256	2137	2004	5507	5260	+5	-2
Regional
Europe, Africa and Middle East	1335	1218	718	701	2053	1919	+7	-8
NAFTA	1345	1378	508	486	1853	1864	-1	-1
Latin America	243	210	507	386	750	569	+26	+26
Asia Pacific	447	450	404	431	851	881	-3	-10
Total	3370	3256	2137	2004	5507	5260	+5	-2
Seeds
Product Line
Field Crops	430	381	140	122	570	503	+13	+4
Vegetable and Flowers	305	265	196	169	501	434	+16	+5
Total	735	646	336	291	1071	937	+14	+5
Regional
Europe, Africa and Middle East	394	316	144	111	538	427	+26	+6
NAFTA	286	270	108	126	394	396	-1	-1
Latin America	25	33	54	32	79	65	+22	+22
Asia Pacific	30	27	30	22	60	49	+22	+14
Total	735	646	336	291	1071	937	+14	+5
1 Growth at constant exchange rates (CER).

Operational Efficiency

In line with the commitment to sustain operational excellence, Syngenta will continue to streamline global operations. This new program is expected to deliver annual cost savings of $300 million by 2008. It will include the relocation of assets to lower cost regions, further reducing the asset base, increasing globalization of purchasing and streamlining global processes. The cash cost is expected to be around $500 million over five years with an associated non-cash charge of around $350 million.

Other Financial Information

Cash Flow and Balance Sheet: Free cash flow of $562 million (2002: $542 million) reflected the benefits of a continuing reduction in trade working capital and lower financial expenses and tax. The ratio of trade working capital as a percentage of sales at year end improved to 40 per cent (2002: 42 per cent). Fixed capital expenditure of $221 million was below depreciation ($263 million). At the period end, net debt was $1.2 billion (2002: $1.7 billion) representing a gearing ratio of 24 per cent (2002: 38 per cent).

Dividend and share repurchase program: In recognition of the growth in earnings and strong cash flow, the Board has recommended a doubling of the dividend to CHF 1.70 per share (2002: CHF 0.85) to be paid by way of a nominal par value reduction, subject to shareholder approval at the Annual General Meeting (AGM) on 27 April 2004. In addition, the Board has approved a share repurchase program which, in conjunction with a progressive dividend policy, should lead to more than $800 million being returned to shareholders over the next three years. The share repurchase program is expected to commence after the AGM.

Treasury shares: Since the creation of the company, Syngenta has held Treasury Shares purchased as part of the merger agreement. On 10 February 2004 Syngenta entered into an agreement to sell 4.5 million of these shares; this agreement will allow the company to purchase an equivalent number of shares which will subsequently be cancelled, subject to approval at the 2005 AGM. The remaining 6.4 million shares are to be allocated to share-based compensation plans through 2006.

Constant exchange rates (CER)
In this report results from one period to another period are, where appropriate, compared using constant exchange rates (CER). To present that information, current period results for entities reporting in currencies other than US dollars are converted into US dollars at the prior period's exchange rates, rather than at the exchange rates for the current year. CER margin percentages for gross profit and EBITDA are calculated by the ratio of these measures to sales after restating the measures and sales at prior period exchange rates. The CER presentation indicates the underlying business performance before taking into account currency exchange fluctuations.

Free cash flow
Free cash flow comprises cash flow after operating activities, investing activities, taxes and operational financing activities, but prior to capital financing activities such as drawdown or repayment of debt, dividends paid to Syngenta Group shareholders, share repurchase and other equity movements. Free cash flow is not a measure of financial performance under generally accepted accounting principles and the free cash flow measure used by Syngenta may not be comparable to similarly titled measures of other companies. Free cash flow has been included as it is used by many investors as a useful supplementary measure of cash generation.

EBITDA
EBITDA is defined as earnings before interest, tax, minority interests, depreciation, amortization and impairment. Information concerning EBITDA has been included as it is used by investors as one measure of gross cash flow generation and is used by Syngenta for performance monitoring and as the basis of part of employee incentive schemes. EBITDA is not a measure of cash liquidity or financial performance under generally accepted accounting principles and the EBITDA measures used by Syngenta may not be comparable to other similarly titled measures of other companies. EBITDA should not be construed as an alternative to operating income or cash flow as determined in accordance with generally accepted accounting principles.

Sales excluding range rationalization (Ex RR)
Following the formation of Syngenta, the Crop Protection business has set out to improve business quality and create value through the rationalization and modernization of the product portfolio. From 121 active ingredients (AIs) at the time of the merger, plans are in place to reduce the portfolio to 76 AIs and the range had been reduced to 83 AIs by the end of 2003. In addition, various third party products previously formulated and distributed by Syngenta but generating lower levels of profitability have been exited. Sales growth rates excluding rationalization impact has been calculated by excluding the sales decline at constant exchange rates between current year and prior period caused by these phase-out products.

Restructuring and impairment
The impact of major restructuring and impairment on the income statement is separately disclosed to provide a more thorough understanding of business performance. Restructuring represents the effect on reported performance of initiating business changes which are considered major and which, in the opinion of management, will have a material effect on the nature and focus of Syngenta's operations. Restructuring and impairment includes the impairment costs associated with major restructuring and also impairment losses and reversals of impairment losses resulting from major changes in the markets in which a reported segment operates. Restructuring costs in 2002 and 2003 relate primarily to merger and integration activities following the formation of Syngenta in November 2000. Further information on restructuring and impairment is available in the 2003 Financial Report.

Condensed Consolidated Income Statement For the year to 31 December
	2003 $m	2002 $m
Sales	6578	6197
Cost of goods sold	(3293)	(3132)
Gross profit	3285	3065
Marketing and distribution	(1204)	(1146)
Research and development	(727)	(697)
General and administrative	(645)	(582)
Restructuring and impairment	(163)	(396)
Operating income	546	244
Income/(loss) from associates and joint ventures	(1)	(7)
Financial expense, net	(134)	(188)
Income before taxes and minority interests	411	49
Income tax expense	(139)	(70)
Income/(loss) before minority interests	272	(21)
Minority interests	(4)	(6)
Net income/(loss)	268	(27)
Earnings per share1
basic ($)	2.64	(0.26)
diluted ($)	2.63	(0.26)
1  The weighted average number of ordinary shares in issue used to calculate the earnings per share were as follows: for 2003 basic EPS, 101,682,672; 2003 diluted 101,952,669; 2002 basic EPS, 101,541,119; 2002 diluted EPS, 101,635,654.

Restructuring and Impairment Income Statement Charge
	2003 $m	2003 $m	2002 $m	2002 $m
Merger and integration costs		(21)		(28)
Restructuring costs
Write-off or impairment:
- property, plant and equipment	(44)		(102)
- intangible assets	—		(32)
Non-cash pension restructuring charges	9		(14)
Cash costs	(163)		(220)
Total		(198)		(368)
Other impairment of assets		—		—
Gains from product disposals		17		—
Gain on sale of technology and intellectual property license		39		—
Total restructuring and impairment		(163)		(396)

Condensed Consolidated Balance Sheet
As at 31 December
	2003 $m	2002 $m
Assets
Current assets
Cash and cash equivalents	206	232
Trade accounts receivable	1707	1602
Other accounts receivable	308	243
Other current assets	696	516
Inventories	1811	1704
Total current assets	4728	4297
Non-current assets
Property, plant and equipment	2374	2310
Intangible assets	2658	2813
Investments in associates and joint ventures	107	95
Deferred tax assets	668	666
Other financial assets	430	345
Total non-current assets	6237	6229
Total assets	10965	10526
Liabilities and equity
Current liabilities
Trade accounts payable	(862)	(725)
Current financial debts	(749)	(1207)
Income taxes payable	(289)	(210)
Other current liabilities	(747)	(794)
Provisions	(265)	(222)
Total current liabilities	(2912)	(3158)
Non-current liabilities
Non-current financial debts	(1017)	(925)
Deferred tax liabilities	(1071)	(1098)
Provisions	(845)	(915)
Total non-current liabilities	(2933)	(2938)
Total liabilities	(5845)	(6096)
Minority interests	(67)	(80)
Total shareholders' equity	(5053)	(4350)
Total liabilities and equity	(10965)	(10526)

Condensed Consolidated Cash Flow Statement
For the year to 31 December
	2003 $m	2002 $m
Operating income	546	244
Reversal of non-cash items;
Depreciation, amortization and impairment on:
- property, plant and equipment	312	374
- intangible assets	243	282
Gain on disposal of fixed assets	(67)	(26)
Charges in respect of provisions	420	432
Cash (paid)/received in respect of;
Interest and other financial receipts	72	181
Interest and other financial payments	(185)	(398)
Taxation	(120)	(191)
Restructuring provisions	(210)	(246)
Contributions to pension schemes	(110)	(209)
Other provisions	(157)	(49)
Cash flow before working capital changes	744	394
Change in net current assets and other operating cash flows	55	408
Cash flow from operating activities	799	802
Additions to property, plant and equipment	(221)	(165)
Proceeds from disposals of property, plant and equipment	36	54
Purchase of intangibles, investments in associates and other financial assets	(58)	(166)
Proceeds from disposals of intangible and financial assets	21	6
Proceeds from business divestments	14	11
Acquisitions of minorities	(29)	—
Cash flow used for investing activities	(237)	(260)
Increases in other third party interest-bearing debt	369	511
Repayment of third party interest-bearing debt	(938)	(1067)
Sale of Treasury stock	4	3
Dividends paid to group shareholders	(65)	(48)
Dividends paid to minorities	(4)	(6)
Cash flow used for financing activities	(634)	(607)
Net effect of currency translation on cash and cash equivalents	46	9
Net change in cash and cash equivalents	(26)	(56)
Cash and cash equivalents at the beginning of the period	232	288
Cash and cash equivalents at the end of the period	206	232