New York, New York
February 12, 2008
Monsanto (NYSE: MON) has raised its fiscal year 2008 ongoing
earnings per share (EPS) guidance to a range of $2.70 to $2.80,
compared with its previously announced range of $2.50 to $2.60,
reflecting increased confidence in its seed and traits business
commitments and continuing strong performance of its Roundup and
other glyphosate-based herbicides business, Monsanto's Executive
Vice President of Global Commercial business, Brett Begemann,
will tell investors today.
Monsanto now expects its glyphosate business could deliver
between $1.3 billion to $1.4 billion of gross profit in fiscal
year 2008. Begemann will also confirm that Monsanto's seed and
traits business is expected to contribute approximately $3.5
billion of gross profit in fiscal year 2008.
(For a discussion of ongoing EPS, see note 1.)
Begemann will deliver his remarks as part of a presentation at
Goldman Sachs' 2008 AgForum Conference held in New York. During
his presentation, he will also note that Monsanto's guidance for
free cash flow for fiscal year 2008 is now at the upper end of
its previously announced range of $900 million to $1 billion.
The company expects net cash provided by operating activities to
be in the range of $1.95 billion to $2.05 billion, and net cash
required by investing activities to be approximately $1.05
billion for fiscal year 2008.
(For a reconciliation of free cash flow, see note 1.)
"The value of our seeds and traits strategy -- and the power of
our innovation -- is once again playing itself out in our
earnings growth and free cash generation," Begemann said. "This
value is reflected both in the expansion of our seed market
share and trait penetration globally, but also in the revival of
our Roundup and non-branded glyphosate franchise."
Begemann will outline a number of factors that are contributing
to the company's growth in 2008 and its expectations for
additional growth in the near-term. These factors include:
- Roundup business gross
profit accelerates: Monsanto expects that its Roundup and
other glyphosate-based herbicides business could deliver
between $1.3 billion to $1.4 billion of gross profit in
fiscal year
2008, backed by increased volumes and prices globally. The
improved performance is being driven by increased Roundup
Ready acres, increased adoption of conservation tillage
practices, and competitive
pricing.
- Strong early-season order
patterns: Monsanto is seeing strong early-season order
patterns in its U.S. corn seed and traits business. Begemann
confirmed that Monsanto's DEKALB corn seed brand in the
United States could realize an increase of 2 to 3 share
points this year and noted that Monsanto's triple-stack
trait product could be planted on 25-to-27 million acres in
the United States, an increase of
approximately 50 percent over the prior year.
- American Seeds Inc. (ASI)
set to support growth in U.S. corn market: Monsanto expects
that its ASI corn seed business could realize growth of 1 to
2 share points this year in the U.S. corn seed market. If
realized, ASI could attain share of greater than 10 percent
this season.
- Argentine farmers embrace
yield-advantage of DEKALB corn seed, YieldGard Corn Borer:
Monsanto's DEKALB corn seed brand realized a 5 share point
gain for a second consecutive season in Argentina,
eclipsing previous growth projections of 1 to 2 share points
this year. DEKALB's growth has it well positioned for the
broad commercial introduction of the first stacked trait
corn offering in the country,
Monsanto's YieldGard Corn Borer with Roundup Ready Corn 2.
Monsanto estimates that the higher-margin stacked offering,
which was planted on 100,000 acres in its first year of
availability, will make up
30 percent to 40 percent of its branded corn seed portfolio
next season.
- Brazilian corn seed
businesses hold share, set up future growth: Monsanto
confirmed that its corn brands, DEKALB, Agroceres and
Agroeste, are expected to collectively hold share at 40
percent of the Brazilian corn seed market. The performance
of these brands, which is in line with the company's
commitment, serves as a foundation for both organic growth
of 1 to 2 share points next season and for future trait
offerings, such as YieldGard Corn Borer, once approved by
Brazilian officials.
- Asgrow, ASI supports
growth in U.S. soybean market, sets footprint for future
traits: Monsanto's Asgrow soybean business is expected to
realize organic growth of 1 share point annually between now
and 2012.
ASI's soybean business is also expected to realize organic
growth of half-a-share point annually between now and 2012.
This growth establishes the footprint for the introduction
of second-generation technologies and stacked offerings.
- Roundup Ready 2 Yield
soybeans approvals positive step toward launch: Roundup
Ready 2 Yield soybeans received import approvals in several
Asian markets last week and is slated to be available to
farmers in the 2009 season. These approvals increase the
company's confidence in meeting its 1-to-2 million acre
controlled launch in 2009, and a step closer to its
full-scale 5-to-6 million acre launch planned for 2010.
- Brazilian soybean farmers
expand use of Roundup Ready soybeans: Monsanto now estimates
that Brazilian soybean farmers used its Roundup Ready
technology on 55 percent of acres this season, an increase
of 10 percent compared with planted acres in 2007. More than
half of the Roundup Ready acres were sold as certified seed.
The growth represents a positive step toward the 90 percent
penetration level the company estimates for the end of the
decade. The adoption also establishes the footprint for the
introduction of insect-protected Roundup Ready 2 Yield
soybeans, expected after the turn of the decade.
Begemann's presentation slides and
a simultaneous audio webcast of the presentation will be
available through the investor section of Monsanto's website at
http://www.monsanto.com/investors. Following today's live
broadcast, scheduled for 12:40 p.m. ET, a replay of the webcast
will be available for two weeks through this same link.
Monsanto Company is a leading global provider of
technology-based solutions and agricultural products that
improve farm productivity and food quality.
Monsanto Company
Selected Financial Information
(Dollars in millions)
Unaudited
1. 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. Ongoing EPS is calculated excluding
certain after-tax items which Monsanto does not consider part of
ongoing operations. Due to the current status of Solutia's plan
of reorganization, the company is not currently able to estimate
the impact to the company's reported earnings of any potential
outcome or to reflect any potential impact in its 2008 guidance.
Reconciliation of Free Cash Flow: The following table reconciles
free cash flow to the most directly comparable financial measure
calculated in accordance with GAAP. Free cash flow represents
the total of cash flows from operating activities and investing
activities, as reflected in the Statements of Consolidated Cash
Flows presented in this release. With respect to the fiscal year
2008 free cash flow guidance, Monsanto does not include any
estimates or projections of Net Cash Provided (Required) by
Financing Activities because in order to prepare any such
estimate or projection, Monsanto would need to rely on market
factors and conditions that are outside of its control.
Asgrow, Agroeste, Agroceres DEKALB, Roundup, Roundup Ready,
Roundup Ready 2 Yield and YieldGard are trademarks of Monsanto
Company and its wholly owned subsidiaries. References to Roundup
and other glyphosate-based herbicides in this release exclude
lawn-and-garden herbicide products.
Fiscal Year
2008
Guidance
|
Net Cash Provided by
Operating Activities |
$1,950 - $2,050 |
| Net
Cash Required by Investing Activities |
(1,050) |
|
Free Cash Flow
|
$900 - $1,000 |
| Net
Cash Required by Financing Activities |
N/A |
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents |
N/A |
| Net
Increase (Decrease) in Cash and Cash Equivalents |
N/A |
|
Cash and Cash
Equivalents at Beginning of Period |
N/A |
| Cash
and Cash Equivalents at End of Period |
N/A |
|
|
