Replies to post #10903 on The Rising Influence of Rising Affluence

[DewDiligence]

All told, MON's FY4Q15 results and FY2016 outlook are not as bad as I feared after DD reported severe weakness of its agriculture sector in Brazil (#msg-117490455, #msg-117504461, #msg-117516476).

[jbog]

I guess just because they missed last years projection by a measly 20% shouldn't be of concern when they project 4 years out.

These guys must have night jobs as weathermen.

[DewDiligence]

MON’s 8-K filing on layoff, exit from sugarcane business, and related write-offs:

http://www.sec.gov/Archives/edgar/data/1110783/000111078315000197/form8k.htm

On October 6, 2015, Monsanto committed to take actions to realign resources to increase productivity, enhance competitiveness by delivering cost improvements and support long-term growth. Planned actions include streamlining and reprioritizing some commercial, enabling and research and development efforts, including the exit of the sugarcane business.

Together, these actions are expected to include separation of approximately 2,600 employees over the next 18 to 24 months across the entire company. The scope of the separations will vary from country to country and is expected to be approximately 12% percent of the company’s global workforce.

These actions are expected to require a restructuring charge estimated at approximately $850 million to $900 million [of which $450M (after taxes) will be in cash—see below]. Approximately $493 million of the charge occurred in the fourth quarter of fiscal year 2015 with a majority of the remainder expected to occur in fiscal year 2016. The charge is expected to be comprised of approximately $330 to $350 million in severance and related benefits, $145 to $160 million in site closures and contract termination costs, and $375 to $390 million in asset impairments and write-offs related to property, plant and equipment, inventory and intangible assets. The restructuring actions are expected to require future cash expenditures of approximately $450 million, which includes cash expenditures related asset impairments. The Restructuring Plan is expected to be completed in fiscal year 2018.

[DewDiligence]

MON inks $3B (combined) share-buyback agreements with Citi and JPM:

http://www.sec.gov/Archives/edgar/data/1110783/000119312515341437/d36167d8k.htm

[DewDiligence]

MON lowers FY2016 GAAP guidance due to additional restructuring (non-GAAP guidance is unchanged):

http://finance.yahoo.com/news/monsanto-executive-addresses-investors-morgan-123000061.html

Monsanto continues to expect to achieve ongoing [non-GAAP] EPS of $5.10 to $5.60 in fiscal year 2016, with EPS on an as-reported basis [GAAP] updated to reflect additional estimated restructuring charges.

These additional estimated charges are early estimates for the cost of the supplemental phase of restructuring actions, which, in combination with cost savings initiatives, is now expected to generate up to $200 million of savings, bringing the total estimated savings to $500 million [per annum] by the end of fiscal year 2018. The company now expects EPS on an as-reported basis [GAAP] to be $4.00 to $4.66 in fiscal year 2016.

The old range for FY2016 GAAP EPS was $4.44-$5.01.

Note: This PR was issued yesterday before the open, and MON declined 1.5% yesterday. (The stock rose 0.7% today.)