STRONG FIRST QUARTER FOR ADAMA WORLDWIDE ALONGSIDE
SLOW START TO SEASON IN EUROPE
Sales up 10.9%, adding more than $100 million and crossing the $1 billion mark for first
time:
Volumes up 6.9%, with strong growth in all regions except Europe, which had a slow start to
season due to the prolonged winter
Lower than expected sales in Europe not sufficient to offset negative impact of hedge
positions on Euro created last year; excluding such impact, sales as well as each profit line
would be higher by $25 million
Continued market share gains in all key markets, including Europe
Gross profit up 6.8% to $352 million:
Gross margin of 34.5% vs 35.8% in Q1 last year
Excluding the 2017 Euro hedge impact, gross profit would have been $377 million and gross
margin 36.0%
Continued positive mix contribution of new and differentiated products
Robust demand conditions facilitate increased prices of 2% across the portfolio to offset
higher procurement costs
EBITDA of $191 million compared to $195 million in Q1 last year:
EBITDA margin of 18.7% vs 21.2% in Q1 last year
Excluding the 2017 Euro hedge impact, EBITDA would have been $216 million and EBITDA
margin would have been 20.6%
Net income of $85 million compared to $118 million in Q1 last year:
Net income margin of 8.3% vs 12.8% in Q1 last year
Excluding the 2017 hedge impact, net profit would have been $110 million and net income
margin would have been 10.5%; remaining gap due to lower effective tax in Q1 2017
Containment of working capital in spite of strong growth momentum
Significantly reduced leverage:
Balance sheet net debt of $513 million, $428 million below Q1 last year
Net debt / EBITDA ratio of 0.8x vs. 1.6x in Q1 last year
Significant progress with China Build-up and Integration
Q1 2018 sales of branded and formulated products more than tripled
Continued ramp-up of global distribution of key backward integrated products
Successful conclusion of Transfer & Divestment process
Effective integration of the product portfolio transferred from Syngenta as well as the
simultaneous transition of divested products, ensuring continuity of supply, maintenance of
quality and minimal disruption to customers
1
BEIJING, CHINA and TEL AVIV, ISRAEL, April 26, 2018 – Adama Agricultural Solutions Ltd.
(“Solutions”), together with Hubei Sanonda Co., Ltd. (the “Listed Entity”), to be named ADAMA
(together, “ADAMA” or “the Combined Company”), today reported their combined consolidated
financial results for the first quarter ended March 31, 2018.
Adjusted Q1 2018 Q1 2017 % Change
$m $m
Revenues 1,022 922 +10.9%
Gross profit 352 330 +6.8%
Gross margin 34.5% 35.8%
Operating income (EBIT) 137 143 -4.8%
EBIT margin 13.4% 15.6%
Net income 85 118 -28.2%
Net income margin 8.3% 12.8%
EBITDA 191 195 -2.2%
EBITDA margin 18.7% 21.2%
Earnings per share – USD 0.0347 0.0505
– RMB 0.2204 0.3475
The results of the Combined Company are presented after restatement of prior periods to include the financial position,
results of operations and cash flow of Solutions. All income statement items contained in this release are presented on a
combined, adjusted basis, reflecting the performance of the Combined Company. For a detailed description and analysis
of the differences between the adjusted income statement items and the items as reported in the financial statements, see
“Analysis of Gaps between Adjusted Income Statement and Income Statement in Financial Statements” in the appendix to
this release.
Revenues grew by 7.7% in constant currency terms in the quarter.
Earnings per share are the same for basic and diluted. The number of shares used to calculate earnings per share in Q1
2017 is 2,341.9 million shares, reflecting the issuance of shares as part of the combination transaction in 2017. The
number of shares used to calculate earnings per share in Q1 2018 is 2,446.6 million shares, including also the issuance of
shares in the subsequent private placement equity offering.
Commenting on the results, Yang Xingqiang, Chairman of ADAMA, said, “Our strong growth in
the quarter, despite the late start to the season in Europe, demonstrates the robustness of our
diversified global footprint as well as the increasing penetration of key markets worldwide. Our build-
up in China is proceeding at full pace, with rapid growth in the vast domestic market. In addition, our
end-to-end value chain and global distribution of key backward-integrated products is providing us
with a significant competitive advantage.”
Chen Lichtenstein, President and CEO of ADAMA, added, “Our business grew strongly over the
quarter, with continued market share gains in all key regions. We are particularly pleased with our
strong growth throughout the Americas, China, India and the rest of APAC, which compensated for
the weather-driven delay to the season in Europe. Our increasingly differentiated portfolio, driven
forward by continuous product launches in all key markets, including most recently the Brazilian
launches of NIMITZ and CRONNOS, is bringing tangible value to farmers worldwide, and driving
our continued performance.”
2
Market Environment
Continued subdued demand for crop protection products due to ongoing low soft
commodity prices and farmer incomes, combined with certain re-opening of distribution
channels – while most agricultural commodities' prices are generally stable, grain inventories
continued to remain high, keeping pressure on prices. This environment is continuing to impact
farmers’ incomes now for the fourth consecutive year. In some regions, inventory levels in the crop
protection distribution channels are lower in comparison to a year ago, which allows customary
market activity levels to resume in these regions.
The extended winter in Europe has caused a delay to the start of the season, impacting demand in
the region. The pace of temperature rise in the coming weeks will determine how much of the delay
can still be captured. The negative impact of 2017 Euro hedge position seen in Q1 is expected to
conclude in Q2.
Despite these overall uneven market conditions, the Combined Company continues to deliver robust
volume growth, driven by the introduction of new and differentiated products, and increased
penetration in markets across the globe. In particular, Brazilian launch of Nimitz in Q1, together with
the ongoing launch of Cronnos, are expected to make a meaningful contribution to Adama’s growth
starting in the second half of the year.
Containment of manufacturing costs, higher procurement costs due to shortages of raw
materials and intermediates – The Combined Company continues to exercise strong control of its
manufacturing costs. However, higher procurement costs due to shortages in certain raw materials
and intermediates, mostly owing to increased environmental focus in China, have raised product
costs compared to the first quarter of last year. Robust demand conditions facilitate increased prices
of approximately 2% across the portfolio to offset the higher procurement costs.
Financial Highlights
Revenues grew by 10.9% in the quarter to $1,022 million, compared to the corresponding period
last year. This robust growth was driven by a 6.9% increase in volumes, led by higher volumes of an
increasingly differentiated portfolio in North America, Latin America, China and the rest of APAC,
and India, Middle East and Africa, but partially offset by lower volumes in Europe as a result of the
extended winter and late start to the season. In addition to the robust volume growth, the improved
demand conditions ensured a somewhat stronger pricing environment, allowing the Combined
Company to pass on some of the impact of the constrained supply. Revenues also benefited from
the positive impact of currency movements, with the strengthening of most currencies against the
US dollar, which was partially offset by currency hedging, most importantly the negative impact of
the 2017 Euro hedge of $25m. Without the impact of such hedge positions, revenues in the quarter
would have been $1,047 million.
Gross profit increased by 6.8% in the quarter to $352 million, compared to the corresponding
period last year. The increase in gross profit resulted from the increased volumes of better product
mix as well as higher prices, aided by the net positive impact of currency movements against the US
dollar, notwithstanding the 2017 Euro hedge impact, without which gross profit would have
increased by $25 million to $377 million with a gross margin of 36.0%. These trends were somewhat
offset by the increased procurement costs of raw materials and intermediates.
Operating expenses. Total operating expenses were $216 million (21.1% of sales or 20.6%
excluding 2017 Euro hedge impact) in the quarter, compared to $186 million (20.2% of sales) in the
corresponding period last year.
Within the total operating expenses, Sales and Marketing expenses in the quarter were $160 million
(15.6% of sales), compared to $140 million (15.2% of sales) in the corresponding period last year.
3
The increase in this component resulted primarily from an increase in sales-related personnel in
growing geographies and an increase in other variable expenses as a result of the increase in sales
volumes.
Within the total operating expenses, R&D, General and Administrative expenses in the quarter were
$51 million (5.1% of sales) compared to $42 million (4.5% of sales) in the corresponding period last
year. The increase in this component resulted primarily from increased spend on strategic research
and development projects, and a related increase in research personnel and expenses.
In addition to the abovementioned factors, part of the increase in total operating expenses stemmed
from the impact of the strengthening of most currencies against the US dollar.
Operating income in the quarter was $137 million, compared to $143 million in the corresponding
period last year. Excluding the 2017 Euro hedge impact, operating income in the quarter would have
been $162 million.
EBITDA in the quarter was $191 million, compared to $195 million in the corresponding period last
year. Excluding the 2017 Euro hedge impact, EBITDA in the quarter would have been $216 million.
Financial expenses and investment income. Total net financial expenses and investment income
in the quarter were $34 million compared to $20 million in the corresponding period last year. This
increase was primarily due to the first time adoption of new accounting standards which classify part
of interest income on sales to customers as revenues rather than financial income.
Tax expenses. Net tax expenses were $18 million in the quarter, compared to tax expenses of only
$5 million in the corresponding period last year. The comparatively low tax expenses recorded in the
first quarter of last year reflect the benefit from the utilization of tax loss carryforwards in that quarter.
Net income in the quarter was $85 million, compared to $118 million in the corresponding period
last year. Excluding the 2017 Euro hedge impact, net income would have been $110 million.
Working capital was higher by $56 million compared to the corresponding period last year,
accommodating the Company’s higher sales growth momentum. Inventories were higher due to
higher procurement costs as well as product preparation in advance of the season. Receivables
were higher due to the strong sales growth, partially offset by an increase in payables.
Cash Flow. Operating cash flow was a negative $34 million in the quarter, compared to $5 million
generated in the corresponding quarter last year, reflecting the change in operating profit and
somewhat higher working capital.
Net cash from investing activities in the quarter amounted to $7 million, compared to $41 million
used in the corresponding period last year. Additions to assets include the transfer of products in
Europe from Syngenta, as well as other investments in product registrations and other intangible
and fixed assets. Investments in fixed assets, net of investment grants, amounted to $27 million in
the quarter, compared to $19 million in the corresponding quarter last year. Proceeds from disposal
of assets includes the proceeds from the divestment of certain products in Europe in connection
with the obtaining of the approval of the European Commission for ChemChina’s acquisition of
Syngenta.
Free cash flow was a seasonally negative $31 million in the quarter, compared to negative $44
million in the corresponding quarter last year, reflecting improvement notwithstanding the strong
growth achieved during the quarter.
4
Leverage. Balance sheet net debt at the end of the quarter was $513 million, down by $428 million
compared to the $940 million in net debt as of March 31, 2017. This has resulted in the Net
Debt/EBITDA ratio dropping to approximately 0.8x.
Dividend. On March 27, 2018, the Combined Company declared a cash dividend of RMB 0.63 per
10 shares to all shareholders, resulting in a total cash dividend of RMB 154.1 million (approximately
$24.5 million). The distribution of the dividend remains subject to shareholder approval.
Regional Sales Performance
Q1 2018 Q1 2017 % Change % Change
USD (m) USD (m) USD CER
Europe 392 399 -1.7% -5.4%
Latin America 141 116 +21.1% +22.4%
North America 201 174 +15.9% +14.8%
Asia Pacific 177 148 +19.7% +13.1%
Of which China 72 53 +36.6% +27.0%
India, Middle East & Africa 111 85 +30.9% +25.5%
Total 1,022 922 +10.9% +7.7%
Europe: Sales in Europe were lower by 5.4% in the quarter in constant currency terms, compared
with the corresponding period last year. This is primarily due to reduced volumes as a result of the
delayed start to the agricultural season mainly in northern and southwestern Europe due to the
extended winter, and the continuing high levels of inventory in the distribution channels, both of
which served to reduce demand.
Several differentiated products were registered in the quarter, including the new generation growth
regulator CALMATM in cereals and the dual action fungicide KARNEOLTM in apples in Ukraine, the
two-way mixture herbicide SULCOTREK in Spain, Portugal, Poland, Czech Republic and Serbia,
the broad-spectrum dual-action fungicide CUSTODIA in France, the differentiated mixture
fungicide BANJO FORTE in Greece and Bulgaria, as well as the systemic and contact seed
treatment fungicide SEEDRON in Germany and Slovakia.
During the quarter the Combined Company effectively managed the integration of the product
portfolio transferred from Syngenta as well as the simultaneous transition of divested products.
In US dollar terms, sales in Europe were lower by 1.7% in the quarter, reflecting the net positive
contribution of currency movements, which was partially offset by the Euro currency hedging.
North America: Sales increased by 14.8% in the quarter in constant currency terms, compared with
the corresponding quarter last year. This was driven by significant volume growth resulting from
strong demand for differentiated products in both the United States and Canada.
There was robust demand for cotton solutions, including the insecticide DIAMOND, the herbicide
DIREX and the insecticide ACEPHATE 97 WDG, in anticipation of a strong cotton season due to
the recent growth in cotton planting areas. In addition, launches in Canada of the proprietary
nematicide NIMITZ and the broadleaf and grassy weed herbicide DAVAI are bringing new
solutions to the market.
5
In the US non-crop market, ADAMA launched a suite of ‘Pressurized Solutions’ – innovative
aerosols to serve professional pest control operators – manufactured at a new facility within the
Pasadena, Texas plant.
In US dollar terms, sales increased by 15.9% in the quarter, compared with the corresponding
period last year.
Latin America: Sales increased by 22.4% in the quarter in constant currency terms, compared with
the corresponding quarter last year. This strong growth was driven by significant volume growth,
reflecting strong performance, especially in Brazil, Colombia, Peru and Argentina.
Robust sales growth was achieved in Brazil, with a further differentiated portfolio driving volume
expansion. Registrations were obtained for the novel non-fumigant nematicides NIMITZ and
LEGADO, as well as the seed treatment BLINDADO. The launch of CRONNOS, a unique three-
way mixture fungicide for soybean rust is ongoing, which together with NIMITZ is expected to bring
highly effective and safe solutions to farmers, and to make a meaningful contribution to growth for
ADAMA starting in the second half of the year. The quarter also saw the launch of ADAMA
SAGRESTM, an innovative cloud-based system used by farmers and distributors to manage their
fleets.
Strong growth was achieved in Argentina, despite lower demand for insecticides and fungicides due
to extended drought in the country. ADAMA BLACKTM – a new program in Argentina focused on
increasing farmer engagement – is driving business growth.
In US dollar terms, sales increased by 21.1% in the quarter, compared with the corresponding
period last year, reflecting the impact of the slight weakening of local currencies against the US
dollar.
Asia-Pacific: Sales increased 13.1% in the quarter in constant currency terms, compared with the
corresponding quarter last year. This robust growth was driven by a significant increase in
differentiated product volumes, with notable performance in China, Australia, Japan and Korea.
During the quarter, registrations were obtained for several differentiated products, including
TRIVOR for insect control in pears and citrus in Korea; the insecticide KOHINOR for rice and
fruits in Thailand; and the plant growth regulator MARVEL ULTRA for turf in Australia.
In China, ADAMA more than tripled its sales of branded and formulated products, and continues to
expand its geographic footprint and product portfolio, with new launches of the insecticides
CORMORAN for apples and RIMON FAST for cabbage, as well as the herbicides LI FAN for
broadleaf weed control and NARKIS for grass control in rice paddies.
In US dollar terms, sales increased by 19.7% in the quarter, compared to the corresponding period
last year, reflecting the strengthening of local currencies, primarily the Australian dollar, against the
US dollar.
India, Middle East & Africa: Sales increased 25.5% in the quarter in constant currency terms,
compared with the corresponding quarter last year. This noteworthy performance was driven by
strong performance of differentiated products launched in recent years, and supported by strong
demand conditions leading to increased volumes particularly in India, Turkey and Israel, supported
by a markedly stronger pricing environment, and despite continued drought conditions in South
Africa.
The quarter also saw strong sales of key backward integrated products, including ACEMAIN in
India, as well as of the systemic pre-emergence herbicide COTTONEX in Turkey.
In US dollar terms, sales increased by 30.9% in the quarter compared to the corresponding period
last year, reflecting the strengthening of the local currencies against the US dollar.
6
Revenues by operating segment
First quarter sales
Q1 2018 Q1 2017
% %
USD(m) USD(m)
Crop Protection 948 92.7% 853 92.6%
Intermediates and Ingredients 74 7.3% 69 7.4%
Total 1,022 100.0% 922 100.0%
Further Information
All filings of the Combined Company, together with a presentation of the key financial highlights of the period,
can be accessed through the websites of the Combined Company at www.adama.com and
www.sanonda.cn.
##
About the Combined Company
The Combined Company, which will be named ADAMA subject to required approvals, is comprised of
Adama Agricultural Solutions Ltd. and Hubei Sanonda Ltd., and is one of the world's leading crop protection
companies. We strive to Create Simplicity in Agriculture – offering farmers effective products and services
that simplify their lives and help them grow. With one of the most comprehensive and diversified portfolios of
differentiated, quality products, our 6,600 strong team reaches farmers in over 100 countries, providing them
with solutions to control weeds, insects and disease, and improve their yields. For more information, visit us
at www.adama.com and follow us on Twitter at @AdamaAgri.
Contact
Wayne Rudolph Yanlai Xu
Head of Investor Relations China Investor Relations
Email: ir@adama.com Email: irchina@adama.com
7
Abridged Consolidated Financial Statements
The following abridged consolidated financial statements and notes have been prepared as
described in Note 1. While prepared based on the principles of PRC GAAP, they do not contain all
of the information which either PRC GAAP or IFRS would require for a complete set of financial
statements and should be read in conjunction with the consolidated financial statements of both
Hubei Sanonda Co., Ltd and Adama Agricultural Solutions Ltd. as filed with the Shenzhen and Tel
Aviv Stock Exchanges, respectively.
Abridged Consolidated Income Statement for the Quarter
Q1 2018 Q1 2017 Q1 2018 Q1 2017
Adjusted1
USD(m) USD(m) RMB(m) RMB(m)
Revenues 1,022 922 6,500 6,344
Cost of Sales 667 589 4,241 4,057
Business taxes and surcharges 3 2 19 17
Gross profit 352 330 2,239 2,270
% of revenue 34.5% 35.8% 34.5% 35.8%
Operating expenses 216 186 1,370 1,283
Operating income (EBIT) 137 143 869 987
% of revenue 13.4% 15.6% 13.4% 15.6%
Financial expenses and investment income 34 21 216 141
Income before taxes 103 123 653 847
Taxes on Income 18 5 113 33
Net income 85 118 539 814
% of revenue 8.3% 12.8% 8.3% 12.8%
Attributable to:
Owners of the Company 85 118 539 814
Non-controlling Interests - - - -
EBITDA 191 195 1,215 1,345
% of revenue 18.7% 21.2% 18.7% 21.2%
Earnings per Share – Basic 0.0347 0.0505 0.2204 0.3475
– Diluted 0.0347 0.0505 0.2204 0.3475
The number of shares used to calculate earnings per share in Q1 2017 is 2,341.9 million shares, reflecting the issuance of shares as
part of the combination transaction in 2017. The number of shares used to calculate earnings per share in Q1 2018 is 2,446.6 million
shares, including also the issuance of shares in the subsequent private placement equity offering.
1
For an analysis of the differences between the adjusted income statement items and the income statement items as reported in the
financial statements, see below “Analysis of Gaps between Adjusted Income Statement and Income Statement in Financial Statements”.
8
Abridged Consolidated Balance Sheet
March 31 March 31 March 31 March 31
2018 2017 2018 2017
USD (m) USD (m) RMB (m) RMB (m)
Assets
Current assets:
Cash at bank and on hand 891 458 5,605 3,163
Bills and accounts receivable 1,018 953 6,398 6,579
Inventories 1,247 1,101 7,844 7,599
Assets held for sale - - - -
Other current assets, receivables and 394 436 2,475 3,009
prepaid expenses
Total current assets 3,550 2,950 22,323 20,350
Non-current assets:
Fixed assets, net 1,076 1,040 6,763 7,173
Intangible assets, net 1,518 1,296 9,547 8,944
Deferred tax assets 116 108 731 745
Other non-current assets 80 76 503 526
Total non-current assets 2,790 2,520 17,544 17,387
Total assets 6,340 5,470 39,866 37,737
Liabilities
Current liabilities:
Loans and credit from banks and other 134 174 845 1,201
lenders
Bills and accounts payable 739 587 4,646 4,053
Other current liabilities 752 715 4,726 4,931
Total current liabilities 1,625 1,476 10,217 10,184
Long-term liabilities:
Long-term loans from banks and other
75 139 472 956
lenders
Debentures 1,171 1,130 7,363 7,796
Deferred tax liabilities 69 40 435 274
Employee benefits 95 76 595 525
Other long-term liabilities 74 64 466 442
Total long-term liabilities 1,484 1,448 9,330 9,993
Total liabilities 3,109 2,925 19,547 20,177
Equity
Total equity 3,231 2,545 20,319 17,560
Total equity 3,231 2,545 20,319 17,560
Total liabilities and equity 6,340 5,470 39,866 37,737
9
Abridged Consolidated Cash Flow Statement
Q1 2018 Q1 2017 Q1 2018 Q1 2017
USD (m) USD (m) RMB (m) RMB (m)
Cash flow from operating activities:
Cash flow from operating activities -34 5 -216 37
Cash flow from operating activities -34 5 -216 37
Investing activities:
Additions to fixed and intangible assets -373 -47 -2,374 -324
Proceeds from disposal of fixed and intangible assets 379 0 2,412 2
Other investing activities 1 5 7 37
Cash flow used for investing activities 7 -41 46 -285
Financing activities:
Receipt of loans from banks and other lenders 0 15 0 100
Repayment of loans from banks and other lenders -289 -47 -1,836 -325
Other financing activities -8 -26 -50 -178
Cash flow from (used for) financing activities -297 -58 -1,886 -403
Effects of exchange rate movement on cash and cash 10 0 -211 -20
equivalents
Net change in cash and cash equivalents -313 -94 -2,267 -671
Cash and cash equivalents at the beginning of the period 1,204 553 7,864 3,834
Cash and cash equivalents at the end of the period 890 458 5,597 3,163
Free Cash Flow -31 -44 -196 -303
10
Notes to Abridged Consolidated Financial Statements
Note 1: Basis of preparation
Basis of presentation and accounting policies: The abridged consolidated financial statements for the
quarters ended March 31, 2018 and 2017 incorporate the financial statements of Hubei Sanonda Ltd. (so
called prior to its expected name change) and of all of its subsidiaries (“The Combined Company”), including
Adama Agricultural Solutions Ltd. (“Solutions”) and its subsidiaries.
The Combined Company has adopted the Accounting Standards for Business Enterprises issued by the
Ministry of Finance (the "MoF") and the implementation guidance, interpretations and other relevant provisions
issued or revised subsequently by the MoF (collectively referred to as "CASBE").
Solutions’ consolidated financial statements are prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
The abridged consolidated financial statements contained in this release are presented in both Chinese
Renminbi (RMB) as the Combined Company’s shares are traded on the Shenzhen Stock Exchange as well as
in United States dollars ($) as this is the major currency in which the Combined Company’s business is
conducted. For the purposes of this release, a customary convenience translation has been used for the
translation from RMB to US dollars, with Income Statement and Cash Flow items being translated using the
quarterly average exchange rate, and Balance Sheet items being translated using the exchange rate at the
end of the period.
The preparation of financial statements requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimated.
Note 2: Abridged Financial Statements
For ease of use, the Financial Statements shown in this release have been abridged as follows:
Abridged Consolidated Income Statement:
“Operating expenses” includes selling and distribution expenses; general and administrative (including
research and development); impairment losses; gain (loss) from disposal of assets and non-operating
income and expenses
“Financial expenses and investment income” includes net financing expenses; gains from changes in
fair value; and investment income (including share of income of equity accounted investees)
Abridged Consolidated Balance Sheet:
“Other current assets, receivables and prepaid expenses” includes financial assets at fair value
through profit or loss; financial assets in respect of derivatives; prepayments; other receivables; and
other current assets
“Fixed assets, net” includes fixed assets and construction in progress
“Intangible assets, net” includes intangible assets and goodwill
“Other non-current assets” includes assets available for sale; long-term equity investments; long-term
receivables; investment property; and other non-current assets
“Loans and credit from banks and other lenders” includes short-term loans and non-current liabilities
due within one year
“Other current liabilities” includes financial liabilities in respect of derivatives; payables for employee
benefits, taxes, interest, dividends and others; advances from customers and other current liabilities
“Other long-term liabilities” includes long-term payables, provisions, deferred income and other non-
current liabilities
11
Analysis of Gaps between Adjusted Income Statement and
Reported Income Statement in Financial Statements
Q1 Adjusted Adjustments Reported
USD(m) Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017
Revenues 1,022 922 - - 1,022 922
Gross profit 352 330 1 -0 351 330
Operating expenses 216 186 304 -10 -88 196
Operating income (EBIT) 137 143 -302 9 439 134
Income before taxes 103 123 -302 9 405 114
Net income 85 118 -235 7 320 111
EBITDA 191 195 -311 -2 502 197
Earnings per share 0.0347 0.0505 -0.0960 0.0032 0.1307 0.0473
Q1 Adjusted Adjustments Reported
RMB(m) Q1 2018 Q1 2017 Q1 2018 Q1 2017 Q1 2018 Q1 2017
Revenues 6,500 6,344 - - 6,500 6,344
Gross profit 2,239 2,270 9 -1 2,230 2,271
Operating expenses 1,370 1,283 1,932 -65 -561 1,348
Operating income (EBIT) 869 987 -1,922 64 2,791 923
Income before taxes 653 846 -1,922 64 2,575 782
Net income 539 814 -1,493 51 2,032 763
EBITDA 1,215 1,345 -1,978 -14 3,193 1,359
Earnings per share 0.2204 0.3475 -0.6101 0.0218 0.8306 0.3257
Income Statement Adjustments
Q1 2018 Q1 2017 Q1 2018 Q1 2017
USD (m) USD (m) RMB (m) RMB (m)
Net Income (as Reported) 319.6 110.8 2,032.0 762.7
Non-cash legacy amortization of 2011 PPA for acquisition of Solutions, net of tax 9.5 9.5 60.5 65.4
Combination Transaction – one-time taxes 1.5 - 9.4 -
Adjustment of 2017 LTI provision made in Q4 to accrual over the full year - -2.1 - -14.4
Royalty payments allocation to applicable prior year periods 1.7 - 10.6 -
One-time capital gain from sale of EU registrations, related to ChemChina acquisition of -244.8 - -1,556.6 -
Syngenta, net of taxes
Reinstatement of depreciation expenses due to classification of to-be-divested -2.6 - -16.5 -
European registrations as “Held-for-Sale”, related to ChemChina acquisition of Syngenta
Total adjustments -234.7 +7.4 -1,492.6 +51.0
Net Income (as Adjusted) 84.9 118.2 539.3 813.7
12
Exchange Rate Data for the Combined Company's Principal
Functional Currencies
March 31 Q1 Average
vs. USD
2018 2017 Change 2018 2017 Change
EUR/USD 1.232 1.069 15.2% 1.229 1.065 15.3%
USD/BRL 3.324 3.168 (4.9%) 3.244 3.143 (3.2%)
USD/PLN 3.414 3.946 13.5% 3.400 4.060 16.3%
USD/ZAR 11.82 13.44 12.1% 11.945 13.246 9.8%
AUD/USD 0.768 0.766 0.3% 0.786 0.757 3.8%
GBP/USD 1.407 1.246 12.9% 1.391 1.239 12.3%
USD/ILS 3.514 3.632 3.2% 3.458 3.733 7.3%
USD LIBOR 3M 2.03% 1.15% 76.2% 1.81% 1.07% 69.0%
March 31 Q1Average
vs. RMB
2018 2017 Change 2018 2017 Change
USD/RMB 6.288 6.899 (8.9%) 6.358 6.288 1.1%
EUR/RMB 7.746 7.375 5.0% 7.813 7.333 6.5%
RMB/BRL 0.529 0.459 (15.1%) 0.510 0.457 (11.7%)
RMB/PLN 0.543 0.572 5.1% 0.535 0.590 9.3%
RMB/ZAR 1.789 1.948 8.2% 1.838 1.925 4.5%
AUD/RMB 4.831 5.284 (8.6%) 4.999 5.212 (4.1%)
GBP/RMB 8.847 8.595 2.9% 8.843 8.525 3.7%
RMB/ILS 0.559 0.526 (6.2%) 0.544 0.542 (0.3%)
RMB SHIBOR 3M 4.462% 4.393% 1.6% 4.680% 4.078% 14.8%
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