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Monsanto increases fiscal year 2012 earnings guidance, projecting up to 25 percent ongoing earnings growth; free cash flow guidance at high end of previous outlook

St. Louis, Missouri, USA
May 30, 2012

With seed selling seasons for North and South America now complete, Monsanto Company (NYSE: MON) today cited continued strong third-quarter sales as the company again increased fiscal-year 2012 earnings guidance. Speaking to investors at the Sanford Bernstein Strategic Decisions Conference in New York, Monsanto's Chairman, President and Chief Executive Officer Hugh Grant said he expects year-over-year ongoing earnings to grow up to 25 percent in fiscal year 2012, ahead of continued strong growth in fiscal year 2013.

Grant said the company is raising 2012 earnings per share guidance to the range of $3.65 to $3.70 on an ongoing basis and $3.73 to $3.78 on an as-reported basis. (For a reconciliation of ongoing EPS, see note 1.)

Reflecting the increased full-year expectation and strong performance through the key selling seasons, the company projects third-quarter EPS of $1.57 to $1.62 on an ongoing basis and $1.69 to $1.74 on an as-reported basis. As-reported EPS also reflects a discrete tax adjustment related to the resolution of a legacy tax matter. Grant said performance also is reflected in the company's full-year free cash flow, as it narrowed its guidance to $1.7 billion to $1.8 billion, the high end of the previous range.

The company expects net cash provided by operating activities to be $2.6 billion to $2.8 billion, and net cash required by investing activities to be $900 million to $1 billion for fiscal year 2012. (For a reconciliation of free cash flow, see note 1.)

Grant also indicated Monsanto expects continued growth in 2013 after greater than 20 percent ongoing earnings growth achieved in 2011 and expected for 2012, with mid-teens ongoing earnings growth for fiscal year 2013 projected from the higher base of $3.65 to $3.70 announced today.

Strong Overall Business Drives Exceptional 2012 Growth

"With continued strong sales in the third quarter, the performance we saw in the early part of the year has proven to be a powerful signal of even better results from some key businesses," Grant said. "Now that we have a more complete view on the greater planted acres from the United States and Europe, it is clear our performance reflects an even greater component of business strength and momentum versus timing of a historically early selling and planting season."

The culmination of strong selling seasons in both the Southern and Northern hemispheres highlighted the continued business performance and upside from key areas in the company's seed-and-traits business, complemented by better-than-expected sales across Monsanto's chemistry portfolio including its Roundup®, selective herbicides and lawn-and-garden businesses.

In South America, the end of the second season in Brazil continued the performance trend in Monsanto's corn business with total acres and overall sales higher than anticipated. In the Northern hemisphere, the expanded acres and growth in Monsanto's core business in Eastern Europe helped drive better-than-expected performance.

In the key U.S. market, the larger total acres planted of both corn and soybeans drove strength that continued from the early spring throughout the planting season. For example, Grant indicated that as part of the strong U.S. season, Monsanto now projects 2012 acres of its Genuity® reduced-refuge corn family to exceed the company's initial target acreage range and Genuity® Roundup Ready 2 Yield® soybeans to achieve the high end of its expected range.

"This year has been important confirmation of the momentum in our business, as we've taken advantage of the strong global acres and agricultural environment and delivered on the key business drivers we set as priorities," said Grant. In the core U.S. business, Grant said positive customer response to Monsanto's expanded product-pricing strategy is apparent in the step up of its core platforms and overall performance, which is complemented by international growth coming from the company's global businesses.

"Looking beyond this year, we feel very good that the fundamentals driving 2012 carry into next year as well, and we have the strategic growth drivers in place to support continued growth in 2013," Grant said.

Layers of Opportunity Drive Growth in 2013

In his presentation, Grant will focus on Monsanto's layers of growth, which allow the company to build on the momentum confirmed in 2012. The drivers that Grant will highlight as creating the opportunity for mid-teens ongoing earnings growth in fiscal year 2013 include the continued expansion of Monsanto's core businesses in the United States, the continued acceleration of the Latin American corn opportunity, and further growth from other international markets. Additionally, Grant cited the future growth opportunity from new products and platforms emerging from the company's research and development efforts.

Grant presents at the Sanford Bernstein conference at 8 a.m. central time (CT). The webcast presentation will discuss matters in this release and focus on results and future expectations and may include a discussion of Monsanto's strategic initiatives, product performance and other matters related to the company's business. The webcast and accompanying slides will be available at www.monsanto.com/investors and may be accessed by visiting the company's website at www.monsanto.com and clicking on "Investor Information." Visitors may need to download Windows Media Player™ prior to listening to the webcast. Following the live broadcast, a replay of the webcast will be available on the Monsanto website for three weeks.
Monsanto will report its complete third-quarter financial results and strategic outlook on June 27. Financial results and supporting information for the earnings release will be available through the investor section of Monsanto's website at http://www.monsanto.com/investors.


Monsanto Company
Selected Financial Information
(Dollars in millions)
  1. Ongoing EPS and Free Cash Flow:  The presentations ongoing EPS and free cash flow are not intended to replace net income (loss) attributable to Monsanto Company, 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.
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
Third Quarter
Diluted Earnings per Share
Income on Discontinued Operations
Nitro Claims Settlement
Resolution of a Legacy Tax Matter
Diluted Earnings per Share from Ongoing Business

Reconciliation of Free Cash Flow: 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 2012 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.

Fiscal Year
2012 Guidance
Net Cash Provided by Operating Activities
Net Cash Required by Investing Activities
Free Cash Flow

More news from: Monsanto Company

Website: http://www.monsanto.com

Published: May 30, 2012

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