Biotech Values

[DewDiligence]

Monsanto Reports 2011 Yields; Reiterates FY2012 Guidance

[The 2011 harvest in the Northern Hemisphere is almost complete, and MON’s corn and soybean yields look very solid. On the half-day investor webcast that accompanied this PR last week, there were copious data from both MON and third-party observers on how MON’s key products stacked up against DuPont.

MON reiterated non-GAAP EPS guidance of $3.34-3.44 for FY2012 (ending 8/31/12) and guided to the high end of the $0.10-0.15 range for FY1Q12.

The webcast slides (103 pages) are at #msg-68866095.]

http://monsanto.mediaroom.com/index.php?s=43&item=991

›Nov 10, 2011 10:30am

ST. LOUIS, Nov. 10, 2011 /PRNewswire/ -- Monsanto Company (NYSE: MON) Chief Executive Officer Hugh Grant today will detail the company's strategic path to deliver mid-teens earnings for 2012 and set up continued growth going forward, explaining to investors how the company's next growth phase in agriculture reflects Monsanto's preeminence as a yield company.

During Monsanto's Biennial Investor Day at its Chesterfield research facility, executives also will confirm the company's fiscal year 2012 guidance, guiding to high end of its first quarter range, and present comprehensive 2011 harvest data that validates once again Monsanto's record as the industry's yield leader.

"Our commitment to delivering yield for farmers around the world is clear in our 2011 results and in our continued investment in technology that produce the high-performing products that set us apart as the industry leader," Grant said.

During the event Monsanto executives will present details on the four key strategic elements the organization will focus on over the next several years to deliver growth:

• The ability to continually discover, develop and deliver products that matter to farmers, which are the standard for customer expectations for traits and performance and represent the only integrated business platform across row crops and vegetables.

• Expanding Monsanto's scale across both crop platforms and geographies to capture growth opportunities on an increasingly global scale.

• Leveraging the size and scope of Monsanto's industry-leading research and development efforts through the convergence of breeding and biotechnology.

• The company's continued financial discipline, which is expected to fuel its strategic growth engine.

Harvest Results Show Monsanto's Products Continue to Deliver Against Competitors

The company's early and significant investment in both breeding and biotechnology has given it a sustained edge that's played out on the farm, Grant said. Monsanto has furthered its yield advantages over competitors according to the latest U.S. harvest results.

• In U.S. corn, DEKALB® germplasm extended its historical advantage relative to competitive products, reinforcing Monsanto's long standing yield advantage. In 2011, DEKALB germplasm outperformed all competitors with an average 11.2 bushels per-acre advantage, as the benefits of Monsanto's germplasm provided differentiated performance amidst difficult and variable growing conditions.

• In its second season, Genuity® SmartStax® corn proved its next-generation hybrids deliver yield, outperforming competitor triple stacks by an average 3.8 bushels per acre advantage. In areas with heavy insect pressure [i.e. in the central corn belt of Illinois, Indiana, Iowa, and southern Minnesota], the comprehensive insect protection of SmartStax® was reflected with an average 8.5 bushels per acre advantage.

• Genuity® VT Triple PRO® corn once again delivered strong results, with a yield advantage of 11.3 bushels per acre on average over competitor triple stacks, proof the company's southern corn breeding investments are delivering results on the farm. Like the other products in the reduced refuge family, Genuity® VT Triple PRO® shows an even stronger advantage in the cotton belt through reduced refuge that brings an average incremental three to six bushels.

• Genuity® VT Double PRO® corn has demonstrated a side-by-side average yield advantage of 6.6 bushels per acre versus competitors, with the reduced refuge benefits delivering an additional whole acre yield of more than 8 bushels on average, a real advantage for farmers in the western corn belt.

In soybeans, the company cited the strong yield performance of Genuity® Roundup Ready 2 Yield®, now in its third year of deployment. Top-performing Roundup Ready 2 Yield® products extended their yield advantage to an average of 4.2 bushels per acre versus competitive soybeans with the Roundup Ready trait [i.e. vs competitors with first-generation Roundup Ready], even as overall soybean yields are expected to be more variable in 2011. The strong performance reflects the growth in availability of varieties as Monsanto has built out its portfolio since introduction. In 2012, the company expects to ramp up the number of Roundup Ready 2 Yield® varieties to more than 300 and reach its projected 27 million to 30 million acres.

Yield Opportunity Reflected in Fiscal Year 2012 Mid-Teens Outlook

Looking at growth opportunities by region, the company expects international markets to represent a significant percentage of its growth, driven by the ascension of Latin America. Growth in the U.S. market is expected to come from upgrades in germplasm and traits and increased volume as Monsanto expands its Genuity® Roundup Ready 2 Yield® platform in soybeans and Genuity® reduced refuge family in corn.

The company reaffirmed its earnings per share guidance of $3.34 to $3.44 for fiscal year 2012 [non-GAAP], when top-line growth is expected to come from seeds and traits as the business continues to benefit from mix upgrades and diversification geographically and across crops. The company also guided to the high end of its first quarter earnings forecast of $0.10 to $0.15 per share, reflecting the performance of the early Latin American planting season, where increased acres and broad business growth underscore the opportunity in this region.

The company continues to project free cash flow in the range of $1.3 billion to $1.5 billion for fiscal year 2012. The company expects net cash provided by operating activities to be $2.2 billion to $2.5 billion, and net cash required by investing activities to be approximately $900 million to $1 billion for fiscal year 2012.

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 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™ prior to listening to the webcast.‹