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Monsanto Reconfirms 2010 Guidance and 2012 Financial Commitments on Strength of Larger Expected Launches for Blockbuster Products
Date:11/10/2009

ST. LOUIS, Nov. 10, 2009 /PRNewswire-FirstCall/ -- The positive mix lift expected as farmers choose to upgrade to next-generation technologies allows Monsanto Company (NYSE: MON) to reconfirm its commitment to double its 2007 gross profit in 2012, Monsanto President and CEO Hugh Grant will tell investors today. Speaking at the company's biennial investor day, Grant will indicate that accelerated launches for its Genuity(TM) SmartStax(TM) corn and Genuity(TM) Roundup Ready 2 Yield® soybean products, along with accelerated trait penetration in Latin America, create the opportunity and set the priorities as the company's management outlines the operational plans to meet its 2012 financial and commercial targets.

Monsanto's management team will also indicate the company remains on track to meet its fiscal-year 2010 guidance targets.

"Our growth strategy from 2010 through 2012 boils down to three operational imperatives: the conversion to Genuity SmartStax in U.S. corn, the farmer choice of upgrading to the Genuity Roundup Ready 2 Yield platform in U.S. soybeans, and the opportunity as Latin America increases its technology adoption," said Grant. "We are positioned as an agricultural technology company that can consistently deliver innovation on farm every year, and our R&D prowess makes it possible for us to deliver the positive mix lift across our product offerings. This creates real value for farmer customers that will in turn strengthen their businesses."

As part of the event, Grant and Monsanto's executive team will outline the operational plans and expectations for these three key factors. Specifically, the company expects:

  • A larger-than-expected launch of Genuity SmartStax, with initial commercial opportunity of more than 4 million acres in 2010, an increase over the previously announced 3 million to 4 million acre range. Genuity SmartStax supply is expected to be unconstrained by 2012, enabling the company to meet market demand a year earlier than originally expected. As part of the accelerated adoption of Genuity SmartStax, the company unveiled a new portfolio of product upgrades for key U.S. corn segments, making it the only company in the industry offering three differentiated corn traits with reduced-refuge options. In addition to Genuity SmartStax, the company offers Genuity(TM) VT Double PRO(TM) traits package, the first-of-its-kind double-stack corn offering a reduced refuge of 5 percent in the corn belt and Genuity(TM) VT Triple PRO(TM), the only triple-stack with reduced refuge of 20 percent available in the South. Monsanto expects that approximately 2 million acres of Genuity VT Triple PRO will be available in 2010. Additionally, the company announced its intention to work with collaborator Dow AgroSciences LLC to submit the regulatory package by the end of the 2009 calendar year to support a 5 percent Refuge-in-a-Bag (RIB) option for Genuity SmartStax.
  • A more rapid conversion to the Genuity Roundup Ready 2 Yield® platform. The company unveiled early-season yield-trial data that indicates Genuity Roundup Ready 2 Yield is consistently delivering a step-change yield improvement over competitive varieties. With a three-year rolling average yield benefit of more than 7 percent across almost 25,000 comparisons, Genuity Roundup Ready 2 Yield has delivered even stronger yield benefits in the largest soybean-growing states. The company increased its launch-year expectation for 2010 to 8 million to 10 million acres, compared with its previous projection of 7 million to 8 million acres.
  • The ascension of the Latin American corn market as Argentina and Brazil are gaining momentum in the adoption of biotech traits. Both Argentina and Brazil have granted breakthrough approvals for core corn traits and are on the front-edge of adoption curves for these traits. In the last few months, Brazilian regulatory authority CTNBio granted approval for Monsanto's second-generation corn-borer trait product and the first simple corn stack product, allowing for potential availability in 2011, a year earlier than originally planned.

"If the last few years have been about demonstrating the value of our stacked trait platform, the task of the next two years is about expanding the opportunity for growers to experience that platform," Grant said. "That means we have to offer a technology touch to every farmer, and today we have in our toolkit more differentiated tools to do that than ever before."

Beyond 2012: The Industry's Best R&D Pipeline

Beyond 2012, Monsanto's opportunity reflects its industry-leading R&D pipeline. Chief Technology Officer Robb Fraley and senior technology leaders will unveil a number of significant advances in the company's R&D pipeline, highlighting the following:

  • After an early assessment of the company's R&D results for 2009, the company expects nine projects in the biotechnology pipeline to advance phases when it reports its R&D results in January 2010. These early assessments do not yet include evaluations of the company's yield-and-stress pipeline, yet they would be close to matching Monsanto's record of 10 phase advancements in a single year.
  • Monsanto has confirmed the value of its biotechnology pipeline, and by 2020 expects it will create more than $4 billion in gross sales at the farmgate - beyond the launches of Genuity SmartStax and Genuity Roundup Ready 2 Yield. The company also unveiled valuations for its germplasm pipeline, where it expects investments in breeding and breeding technology to create more than $3.5 billion in 2020 gross sales at the farmgate. Additionally, the company unveiled the industry's first disease-focused breeding platform for germplasm.
  • Taken together, the company estimates its R&D pipeline can deliver more than $8 billion in gross sales at the farmgate through biotechnology and breeding in 2020, with upside opportunity through product and geographic expansions.

Confirming Guidance

Monsanto affirmed its full-year ongoing 2010 EPS guidance is in the range of $3.10 to $3.30. Monsanto's full-year 2010 EPS guidance on an as-reported basis is in the range of $2.85 to $3.11. (For a reconciliation of 2010 EPS, see note 1.)

The company also confirmed guidance for free cash flow for fiscal year 2010 will be in the range of $900 million to $1 billion, including the after-tax cash effect from a restructuring of approximately $250 million. The company expects net cash provided by operating activities to be $2 billion to $2.2 billion, and net cash required by investing activities to be approximately $1.1 billion to $1.2 billion for fiscal year 2010. (For a reconciliation of free cash flow, see note 1.)

In recommitting to its 2012 commitment to double gross profit by making farmers more profitable through its innovative products, Monsanto expects total-company gross profit in 2012 in the range of $8.6 billion to $8.8 billion, with gross-profit contribution from its Seeds and Genomics platform representing $7.3 billion to $7.5 billion of the 2012 target.

Investor Meeting Webcast and Materials

A live webcast of Monsanto's investor briefing is available through Monsanto's web site at: http://www.monsanto.com/investors. Materials related to today's event posted at this site include: the presentation agenda, briefing slides, downloadable audio files of each presentation, and speaker bios. Following the live broadcast, a replay of the webcast will be available on the Monsanto web site for three weeks. To access presentation slides and the simultaneous audio webcast of the presentation, visitors may need to download Windows Media Player(TM) prior to listening to the webcast.

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: www.monsanto.com. Follow our business on Twitter at www.twitter.com/MonsantoCo, on Facebook at www.facebook.com/MonsantoCo, or subscribe to our News Release RSS Feed.

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.

Notes to editors: Monsanto and the Vine design, Genuity, SmartStax, Roundup Ready 2 Yield, VT Double PRO and VT Triple PRO are trademarks owned by Monsanto Technology LLC.

                                Monsanto Company
                         Selected Financial Information
                             (Dollars in millions)
                                   Unaudited

    1. Reconciliation of 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.

       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
                                                          2010
                                                        Guidance
                                                        --------
    Diluted Earnings per Share                         $2.85-$3.11
    Restructuring Charges                              $0.19-$0.25
                                                       -----------
    Diluted Earnings per Share from Ongoing Business   $3.10-$3.30
    ------------------------------------------------   -----------



       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 2010 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
                                                           2010
                                                         Guidance
                                                         --------
    Net Cash Provided by Operating Activities          $2,000-2,200
    Net Cash Required by Investing Activities          (1,100-1,200)
                                                       -------------
    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 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
    ------------------------------------------         -------------

    CONTACT     Media - Kelli Powers (314-694-4003)

SOURCE Monsanto Company


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SOURCE Monsanto Company
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