At an investor meeting hosted by Monsanto Company (NYSE: MON) today, executives announced that the company expects continued strong ongoing earnings per share (EPS) growth and free cash flow generation through 2007.

“Our seeds and traits business is poised to drive our growth in the near- to mid-term, and our technology pipeline and recent acquisitions will help us strengthen our foundation as the leader in the agriculture sector,” said Hugh Grant, Chairman, President and Chief Executive Officer of Monsanto.

Company Announces Fiscal Year 2007 Guidance

As part of today’s presentation, the company announced its growth projections for fiscal year 2007 and confirmed its fiscal year 2006 EPS guidance.  EPS is expected to be in the range of $2.82 to $3.00 on a reported and an ongoing basis for fiscal year 2007, which reflects a 20 percent growth rate from the fiscal year 2006 EPS guidance. The company confirmed that its fiscal year 2006 EPS is expected to be in the range of $2.35 to $2.50, on a reported and an ongoing basis, which reflects a growth rate of up to 20 percent from the fiscal year 2005 EPS ongoing base of $2.08 per share.  (For a reconciliation of EPS, see note 1.)

Terry Crews, Executive Vice President and Chief Financial Officer for Monsanto, also indicated that the company expects free cash flow for fiscal year 2007 to be in the range of $875 million to $950 million.  Guidance for free cash flow in fiscal year 2006 remains the same in the range of $825 million to $900 million.(For a reconciliation of free cash flow, see note 2.)

Pipeline Technologies Progress; Seeds and Traits Set To Drive Additional Growth

As a part of the meeting, executives described the company’s key growth objectives for its seeds and traits platform. Grant began the investor meeting with an overview of Monsanto’s current operations; highlighting the company’s objectives over the next two to five years.

Following Grant’s presentation, four other executives presented at the meeting – including:

• Robb Fraley, Executive Vice President and Chief Technology Officer;
• Carl Casale, Executive Vice President and North America Commercial Lead;
• Brett Begemann, Executive Vice President and International Commercial Lead; and,
• Terry Crews, Executive Vice President and Chief Financial Officer.

Fraley’s presentation discussed progress in the company’s research and development pipeline. He highlighted Monsanto’s near-term products like its new soybean technology, Roundup RReady2Yield soybeans, and Mavera™ High-Value Corn with lysine, the first processor-focused product developed through Renessen, the company’s joint venture with Cargill. Fraley also provided a 2005 field performance update on the company’s yield platform – including nitrogen utilization and drought-tolerance technology, which now has expanded to cotton.

Following Fraley’s presentation, Casale and Begemann provided an update on the company’s strategic initiatives and product performance in key world areas.

Casale’s presentation discussed the growth potential of Monsanto’s corn and cotton traits businesses in the mid-term. He noted that Monsanto’s seed availability of Roundup Ready and YieldGard Rootworm technology looks strong, and is expected to contribute to additional corn trait growth in an expanding corn market.

Casale noted that Monsanto’s Roundup Ready corn is likely to reach 60 million acres through 2010 – higher than the previous expectation of 50 million acres. Monsanto’s YieldGard Corn Borer corn is likely to reach 50-60 million acres through 2010 – higher than the previous expectation of 30-40 million acres. Monsanto’s YieldGard Rootworm corn is likely to reach 25-30 million acres through 2010 – higher than the previous expectation of 15-20 million acres.

Begemann’s presentation provided an update on the Seminis vegetable and fruit seed business, where breeding advancements are expected to deliver new hybrid offerings in the near- to mid-term. Begemann concluded his remarks with an update on the company’s expansion in key agricultural markets around the world, including the approval of Roundup Ready soybeans in Brazil. He also underscored the company’s growth potential in corn- and cotton-growing markets.

Monsanto now expects business growth through the adoption of second-generation cotton technologies like Bollgard II and Roundup Ready Flex in cotton-growing markets, like India and Australia. Additionally, the company expects business growth in corn-growing markets, like Brazil and Europe, with the adoption of Monsanto’s corn trait technologies.

Monsanto Company a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. 

Note to editors: Bollgard II, Roundup Ready, Roundup RReady2Yield and YieldGard are trademarks owned by Monsanto Company and its wholly owned subsidiaries. The Mavera trademark is owned by Renessen, LLC.

RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

Ongoing EPS and Free Cash Flow: The presentations of ongoing EPS and free cash flow are not intended to replace net income (loss), cash flows, financial position or comprehensive income (loss), and they are not measures of financial performance as determined in accordance with generally accepted accounting principles (GAAP) in the United States. The following tables reconcile ongoing EPS and free cash flow to the respective most directly comparable financial measure calculated in accordance with GAAP.