New York, New York
May 6, 2008
Strong cash backbone supports
innovation, drives future growth
Monsanto Company's (NYSE:
MON) strong operating cash position gives it the resources to
extend its competitive lead, Monsanto's Chief Financial Officer
and Executive Vice President, Terry Crews will tell investors
tomorrow. Crews will deliver his remarks as part of a
presentation at the Bank of America 2008 BASics/Industrials
Conference on Wednesday in New York.
Crews' presentation will discuss how Monsanto is leveraging its
strong cash position to more than double its gross profit from
2007 through 2012.
"In terms of Monsanto's five-year strategic plan, one of the
advantages we have is our strong operating cash position," Crews
said. "It's a position that gives us the opportunity to make
timely investments and key additions that advance our strategy,
improve and extend our competitive position in the industry, and
create new value for shareowners and farmers.
"As a technology company in agriculture, we have a unique
opportunity because our technology creates value for our farmer
customers regardless of which crop they grow, where they
ultimately sell their grain, or at what price that grain is sold
on the commodity markets."
Translating Cash to Leadership
Crews will highlight how Monsanto's ability to convert earnings
into operating cash allows its business to focus on areas that
contribute to growth and return value to shareowners. These
areas include:
- Returning cash directly to
shareowners in the form of dividends and share repurchases
-- Monsanto is currently more than half way through a
four-year $800 million share repurchase program, and last
month it announced a new share repurchase program for up to
$800 million of the company's common stock over a three-year
period. Also, Monsanto's strong earnings growth continues to
be reflected in dividend payouts. Monsanto has increased its
dividend six times -- an increase of 200 percent -- since
2001.
- Using capital spending to
support growth areas of its current commercial business --
Recent focus areas include Monsanto's investment in global
corn seed production expansion to support share growth in
its DEKALB brand and ASI businesses, as well as a planned
expansion of its Luling, Louisiana, facility to support its
Roundup agricultural herbicides business.
- Focused R&D investment --
Monsanto's R&D pipeline is poised to launch four
game-changing technologies through the middle of the next
decade including, Roundup Ready 2 Yield soybeans, SmartStax
corn, and
drought-tolerant and nitrogen-utilization corn technologies.
- Converting cash from its
established businesses into acquisition opportunities --
Monsanto has consistently used the cash from its operations
to fund, higher-margin growth-oriented acquisitions, such
as the American Seeds, Inc. (ASI) regional seed business
acquisitions and the planned acquisition of the De Ruiter
Seeds business, a leader in the protected-culture segment of
the vegetable industry.
Strategic Update
Crews will also note that Monsanto's five-year growth trajectory
is expected to be driven by six growth drivers -- all of which
reflect the company's seeds-and-traits business. These factors
include its: U.S. and international corn seeds and traits
business; soybean business; cotton business; vegetable seed
business; and R&D pipeline.
With the planting season underway in the Northern Hemisphere,
Crews will indicate that the company's strategic plans are
advancing as expected.
"When we look at the dashboard of these six growth drivers this
year, every one is on track with the 2012 plan," said Crews. "In
fact, of the growth drivers that are the most meaningful to the
strategy in 2008, we're actually ahead of plan."
One of the most influential drivers for the 2008 fiscal year is
the company's corn business, which Crews will indicate continues
to perform ahead of original expectations on the strength of
strong share growth in the DEKALB and ASI brands, as well as
continued penetration of Monsanto's triple-stack trait
technology.
"Farmers across the United States are in the process of planting
corn, and while weather conditions are always a variable with
spring planting, we continue to expect another exceptional year
in our corn business."
Webcast Information
Crews' presentation slides and simultaneous audio webcast of the
presentation may be accessed by visiting the company's web site
at
http://www.monsanto.com/investors. Following tomorrow's live
broadcast set for 8 a.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. |
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