GRINNELL, Iowa, Aug. 13, 2009 /PRNewswire-FirstCall/ -- 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(TM) Roundup Ready 2 Yield(R) soybeans and Genuity(TM) SmartStax(TM) 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(R) 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(TM) SmartStax(TM) Corn
Grant also will announce that Monsanto-branded Genuity(TM) SmartStax(TM) is expected to be offered to farmers on 3 to 4 million acres in 2010, the largest corn biotech launch to date. Genuity(TM) SmartStax(TM), 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(TM) SmartStax(TM) 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(TM) SmartStax(TM), and will make a final commercial decision on Genuity(TM) SmartStax(TM) RIB after all yield trials are analyzed late this year.
Genuity(TM) Roundup Ready 2 Yield(R) Soybeans
The company expects seed production for Genuity(TM) Roundup Ready 2 Yield(R) in 2010 to reach 7 to 8 million acres across additional relative maturity zones. Genuity(TM) SmartStax(TM) and Genuity(TM) Roundup Ready 2 Yield(R) 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."
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.
About Monsanto Company
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. To learn more about our business and our commitments, please visit: http://www.monsanto.com.
Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release are "forward-looking statements," such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company's actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company's exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company's research and development activities; the outcomes of major lawsuits; developments related to foreign currencies and economies; successful operation of recent acquisitions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company's estimates related to distribution inventory levels; the company's ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company's facilities; and other risks and factors detailed in the company's most recent reports on Forms 10-Q and 10-K. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this release. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.
Note to Editors: 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 -------------------------------------- ----------- -----
Contact Media - Kelli Powers (314-694-4003)
|SOURCE Monsanto Company|
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