Grinnell, Iowa, USA
August 13, 2009
Genuity™ SmartStax™ Corn,
Genuity™ Roundup Ready 2 Yield® lead robust R&D pipeline
Monsanto Company's (NYSE: MON) R&D pipeline is on the verge
of a technology explosion that is expected to deliver
value-added products with improved yield for growers and has the
company poised to meet its goals for 2012 and beyond, Hugh
Grant, Monsanto's chairman, chief executive officer and
president, will tell investors today.
Grant's comments will kick off the company's fourth annual
summer field event for investors which starts today at
Monsanto's manufacturing facility in Grinnell, Iowa. At
Grinnell, investors will see firsthand some of the
state-of-the-art technology used to create the highest-quality
seed available. The group also will visit Ames, Iowa to view
large-acre trials of Genuity™ Roundup Ready 2 Yield® soybeans
and Genuity™ SmartStax™ corn and Monsanto's BioFuture site in
Huxley, Iowa.
"We see substantially increased demand from agriculture, and the
most sustainable way to meet that demand is to create more yield
on existing acreage," Grant said. "We have committed to using
our technology to double yields in our three core crops - corn,
soybeans and cotton - by 2030, while reducing our use of key
resources by one-third per unit produced. Innovation has us well
on our way to achieving this, with our most robust pipeline
ever. We're on the verge of an unprecedented technology
explosion that will deliver the types of products growers want
most - those that offer greater yield and value."
Grant said the company is on track to expand the seeds and
traits side of the business at a 20 percent compound annual
growth rate from 2007 to 2012. He also reaffirmed the company's
commitment to double 2007 gross profit by 2012. By 2012, Grant
said seeds and traits are expected to reach $7.3 to $7.5 billion
of gross profit, approximately 2.5 times its 2007 level, and the
Roundup® division is expected to provide approximately 10
percent of total gross profit at approximately $1 billion.
Reinforcing Monsanto's commitment to deliver seven new high
impact technologies (HIT), on average one a year, Grant said the
projects have the potential to deliver an incremental $3 billion
in gross revenues by 2020 in the first countries of launch. The
company's HIT projects include traits from the drought-tolerant
corn family; the broad-acre, higher-yielding corn and soybean
families; and the nitrogen-utilization corn family, all of which
are part of Monsanto's yield and stress collaboration with BASF;
as well as insect-protected soybean technology for Brazilian
farmers.
"These projects came to be through a disciplined investment in
seed and biotech that is unmatched in the industry," Grant said.
"We consistently invest 14 to 15 percent of our total net sales
for seeds and genomics in research and development for breeding
and biotechnology. This investment underlines our commitment to
continued innovation and growth."
Genuity™ SmartStax™ Corn
Grant also will announce that Monsanto-branded Genuity™
SmartStax™ is expected to be offered to farmers on 3 to 4
million acres in 2010, the largest corn biotech launch to date.
Genuity™ SmartStax™, created through a cross-licensing agreement
and research and development collaboration between Monsanto and
Dow AgroSciences LLC, a wholly-owned subsidiary of The Dow
Chemical Company (NYSE: DOW), recently received regulatory
registration from the United States, Canada and Japan.
Genuity™ SmartStax™ is the agriculture industry's most advanced,
all-in-one corn trait platform featuring a combination of insect
control traits that significantly reduce the risk of resistance
for both above- and below-ground pests. This will allow
reduction of typically structured farm refuge from 20 percent to
5 percent in the U.S. Corn Belt and Canada and from 50 percent
to 20 percent in the U.S. Cotton Belt.
Monsanto continues its extensive, multi-year research of a
refuge in the bag (RIB) concept, a blended seed system that
would allow a farmer to plant one bag of seed that contains all
of the necessary refuge seed for both above-ground and
below-ground requirements. The U.S. Environmental Protection
Agency's decision to grant a lower structured refuge to 5
percent in the Corn Belt is a critical first step to a
commercially-viable RIB product. Monsanto is evaluating the
scientific data, and most importantly, the value to farmers
delivered through RIB with Genuity™ SmartStax™, and will make a
final commercial decision on Genuity™ SmartStax™ RIB after all
yield trials are analyzed late this year.
Genuity™ Roundup Ready 2 Yield® Soybeans
The company expects seed production for Genuity™ Roundup Ready 2
Yield® in 2010 to reach 7 to 8 million acres across additional
relative maturity zones. Genuity™ SmartStax™ and Genuity™
Roundup Ready 2 Yield® will be the platforms for all new traits
to come and will create the value to allow for incremental
pricing and mix lift as they become an increasing portion of
Monsanto's portfolio.
"As a technology company in the agricultural space, our right to
be a partner with growers is purely a function of the value we
create and the value we share," Grant said. "Every decision we
make about our business is rooted in these two basic principles.
All things being equal, the sharing with the grower matters the
most, and that sharing gives us the permission to sell more seed
with more technologies year after year. Our pricing has the
flexibility built in to ensure the grower captures the greatest
return from his seed investment, irrespective of market
volatility."
Guidance Reaffirmed
Monsanto continues to expect that its full-year 2009 ongoing EPS
will be at the low end of its previously-announced range of
$4.40 to $4.50. (For a reconciliation of ongoing full year EPS,
see note 1.)
Investor Event Materials
Materials related to this investor briefing are available on the
company's web site at
http://www.monsanto.com/investors. These materials include:
a comprehensive guide that provides an overview of the projects
featured as part of the investor field event and presentations
by Monsanto's executive team.
Monsanto Company is a leading global provider of
technology-based solutions and agricultural products that
improve farm productivity and food quality. Monsanto remains
focused on enabling both small-holder and large-scale farmers to
produce more from their land while conserving more of our
world's natural resources such as water and energy.
Monsanto and the Vine Design, Genuity, SmartStax, Roundup and,
Roundup Ready 2 Yield are trademarks of Monsanto Technology LLC.
SmartStax multi-event technology developed by Monsanto and Dow
AgroSciences.
Monsanto Company
Selected Financial Information
(Dollars in millions)
Unaudited
1. Ongoing EPS: The presentation of ongoing EPS is not intended to
replace net income (loss), cash flows, financial position or
comprehensive income (loss), and it is not a measure of financial
performance as determined in accordance with generally accepted
accounting principles (GAAP) in the United States. The following
table reconciles ongoing EPS to the respective most directly
comparable financial measure calculated in accordance with GAAP.
Reconciliation of EPS to Ongoing EPS: Ongoing EPS is calculated
excluding certain after-tax items which Monsanto does not consider
part of ongoing operations.
Fiscal Year
2009 Fiscal Year
Guidance 2008
-------- ----
Diluted Earnings (Loss) per Share $3.76-$3.92 $3.62
Solutia Claim Settlement - ($0.23)
Loss (Income) on Discontinued
Operations ($0.02) ($0.04)
Restructuring Charges, Net $0.41-$0.47 -
In-Process R & D Write-Off Related to
the De Ruiter Acquisition - $0.29
In-Process R & D Write-Off Related to
the Aly $0.19 -
----- ---
Diluted Earnings (Loss) per Share from
Ongoing Business $4.40-$4.50 $3.64
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