Monsanto Reiterates Confidence in Ability to Reach 2012 Financial Targets and Reaffirms 2010 Guidance
December 08 2009 - 7:00AM
PR Newswire (US)
President and CEO Hugh Grant Previews Yield Results Supporting
Blockbuster New Products and Reaffirms Earnings Per Share and Cash
Flow Guidance for 2010 ST. LOUIS, Dec. 8, 2009
/PRNewswire-FirstCall/ -- Monsanto Company (NYSE: MON) is on track
in its operational path to reach its 2012 financial commitments,
President and CEO Hugh Grant will tell investors today. Speaking at
the Bank of America Merrill Lynch 2009 Global Industries Conference
in New York, Grant also will preview yield results the company
plans to release later today as promising indicators for 2010 and
the path toward 2012. Grant will focus his remarks on the strength
of the company's operational plan and the three key elements that
are expected to enable Monsanto to double 2007 gross profit in
2012: the launches and rapid penetration of Genuity(TM)
SmartStax(TM) corn and Genuity(TM) Roundup Ready 2 Yield® soybean
products as well as rapid trait penetration in Brazil and
Argentina. "Our goals are ambitious but achievable," Grant will
say. "Our pipeline is at its most robust, holding great promise for
years to come. We are continuing to see acceptance of biotechnology
around the world, which will enable us to meet future demand. And
this year marks the beginning of a wave of technologies that will
each bring step changes in performance on farm - and that starts
with Genuity SmartStax and Genuity Roundup Ready 2 Yield."
Addressing the yield results Monsanto will release later today at
the American Seed Trade Association annual conference in Chicago,
Grant will say these products are already delivering on the farm.
"What we're seeing in our yield results this year tells me we are
off to a great start in reaching the goals we've set for our
company," Grant will say. "As farmers experience the superior
performance and profitability on their farms we're confident they
will be compelled to upgrade to our latest technology. And this
technology upgrade will drive the mix improvement we expect to help
us reach our 2012 objectives." Grant will highlight the yield
results for Genuity SmartStax corn and Roundup Ready 2 Yield
soybeans, which indicate: -- Genuity SmartStax will bring unmatched
value from greater whole farm yield, cost savings and more farmer
convenience. Genuity SmartStax delivered a significant yield
advantage in Monsanto's 2009 trials versus competitor triple
stacks, and those results should improve under more typical growing
conditions. This indicates that farmers have the opportunity to
realize a positive revenue advantage of $60 or more per acre versus
competitors from this total package of benefits. -- Roundup Ready 2
Yield has delivered a step-change in yield improvement of greater
than 7 percent over a three-year period against the competitive
first-generation Roundup Ready® offerings. Earnings Guidance Grant
also will reaffirm the company's full-year 2010 ongoing earnings
per share (EPS) guidance is in the range of $3.10 to $3.30. Grant
will say the company continues to expect a small loss in the
first-quarter ongoing EPS in the range of $(0.05) or better.
Monsanto expects first-quarter EPS on an as-reported basis to be in
the range of $(0.07) or better and 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 and first quarter EPS, see note 1.) For the
first quarter, the company confirmed free cash flow guidance to be
a use of cash on the order of $1.8 billion, primarily reflecting
the year-over-year decrease in the glyphosate business.
Additionally, the first-quarter cash flow comparison to last year
is expected to be affected by a shift in timing of working capital
use, reflecting in part a shift in timing of some customer
prepayments, as well as a one-time benefit to cash in fiscal year
2009 from the divestiture of Monsanto's dairy business. Net cash
required by operating activities is expected to be in the range of
$1.5 billion to $1.7 billion and net cash required by investing
activities is expected to be in the range of $100 million to $300
million in the first quarter. The company expects 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.) A live webcast of
Grant's presentation is available through Monsanto's web site at:
http://www.monsanto.com/investors. Following today's live broadcast
set for 9:40 a.m. C.T., 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: http://www.monsanto.com/ . Follow our business on
Twitter at http://www.twitter.com/MonsantoCo on Facebook at
http://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 and Roundup
Ready 2 Yield are trademarks owned by Monsanto Technology LLC.
SmartStax multi-event technology developed by Monsanto and Dow
AgroSciences. CONTACT Media - Kelli Powers (314-694-4003) 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 First
Quarter 2010 Guidance Guidance ---------------- ------------------
Diluted Earnings (Loss) per Share $2.85-$3.11 $(0.04)-$(0.07)
Restructuring Charges $0.19-$0.25 $0.02-$0.03 -----------
----------- Diluted Earnings (Loss) per Share from Ongoing Business
$3.10-$3.30 $(0.05) --------------------------------------
----------- ------ 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. With respect to the fiscal year and first
quarter 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 First
Quarter 2010 Guidance Guidance ---------------- ------------------
Net Cash Provided (Required) by Operating Activities $2,000-2,200
$(1,500)-(1,700) Net Cash Required by Investing Activities
(1,100)-(1,200) (100)-(300) --------------- ----------- Free Cash
Flow $900-1,000 $(1,800) Net Cash Required by Financing Activities
N/A N/A Effect of Exchange Rate Changes on Cash and Cash
Equivalents N/A N/A --- --- Net Increase in Cash and Cash
Equivalents N/A N/A Cash and Cash Equivalents at Beginning of
Period N/A N/A --- --- Cash and Cash Equivalents at End of Period
N/A N/A --------------- --- --- DATASOURCE: Monsanto Company
CONTACT: Kelli Powers of Monsanto Company, +1-314-694-4003 Web
Site: http://www.monsanto.com/
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