ST. LOUIS, Sept. 16 /PRNewswire-FirstCall/ -- Monsanto Company (NYSE:
MON) raised its fiscal year 2008 ongoing earnings per share (EPS) guidance
to a range of $3.58 to $3.60, and revised its reported EPS guidance to a
range of $3.49 to $3.51, compared with its previously announced EPS
guidance of $3.37 on an ongoing basis, and $3.63 on an as reported basis,
Monsanto's Chief Financial Officer Terry Crews, will tell investors today.
The change in ongoing earnings reflected higher-than-expected sales and
gross profit in the company's seeds and traits business and its Roundup(R)
and other glyphosate- based herbicide business. (For a reconciliation of
ongoing EPS, see note 1.)
The change in as reported guidance for the year now reflects the effect
of income from discontinued operations, the Solutia settlement and in
process research and development from the De Ruiter acquisition. The
ongoing EPS represents approximately 80 percent growth over last year's
ongoing EPS of $1.99, and last year's reported EPS of $1.79 had even
greater growth. Previous guidance and 2007 EPS have been adjusted to
reflect discontinued operations of Monsanto's dairy business.
Monsanto now expects its seeds and genomics segment will generate above
$3.8 billion in gross profit for its 2008 fiscal year, up from the earlier
expectation of $3.7 billion, representing a growth rate of more than 25
percent compared with 2007 gross profit. The increased expectation for
segment gross profit reflects higher than expected sales from the company's
corn, soybean and vegetable platforms. Crews will indicate that Monsanto's
Roundup(R) and other glyphosate-based herbicides business is on track to be
above $1.9 billion of gross profit for the 2008 fiscal year, ahead of the
previous forecast.
"The fundamentals of agriculture and our businesses are strong and
getting stronger," Crews said. "We continue to see strong adoption of our
branded seed products, growing use of our trait technologies globally and
remain focused on introducing new game-changing technologies for farmers
that can increase yields and improve their productivity. We are committed
to delivering innovative tools that can deliver value to farmers."
Crews will also note that for the 2008 fiscal year, the company's corn
business should exceed $2 billion in gross-profit generation for the first
time. For 2009, Crews will reiterate that Monsanto expects the corn
business to grow by 25-30 percent, propelling the company's expanding
seeds-and-traits opportunity.
Crews will deliver his remarks as part of a presentation at the Bank of
America 38th Annual Investment Conference held in San Francisco. Crews's
presentation is scheduled for 4 p.m. CT today. Presentation slides and a
simultaneous audio webcast will be available through the investor section
of Monsanto's website at http://www.monsanto.com/investors.
"We've seen exceptional growth across the breadth of our portfolio in
2008, which sets up our opportunity in 2009," Crews said. "From this
momentum, we intend to continue to grow the footprint of our branded seeds
and traits business globally, which will drive our overall company growth
going forward."
During Crews's presentation, he will also announce that Monsanto's
guidance for free cash for fiscal year 2008 is now at approximately $750
million, compared with previous guidance of $550 million. Higher
collections from accounts receivable and customer prepayments contributed
to the increase in free cash flow. The company's free cash flow guidance
for the 2008 fiscal year reflects the cash effect of Monsanto's
acquisitions of the De Ruiter vegetable seed business and the Semillas
Cristiani Burkard corn seed business.
The company expects net cash provided by operating activities to be
approximately $2.8 billion, and net cash required by investing activities
to be approximately $2 billion for fiscal year 2008. Net cash required by
financing activities is expected to be approximately $100 million for
fiscal year 2008. (For a reconciliation of free cash flow, see note 2.)
Demand-driven Ag Environment
Later this week, Monsanto's Executive Vice President Carl Casale will
be speaking at the Credit Suisse Chemical and Ag Science Conference held in
New York City. As part of his presentation, Casale will address how
Monsanto continues to set itself apart by its innovation and execution, in
a demand-driven environment, creating new momentum and opportunity as the
company begins its 2009 fiscal year.
Casale will discuss that Monsanto sees expanding prospects in the
demand-driven ag environment. The company has stated that the world needs
more grain and has responded with its own commitment to sustainably double
yields in the company's key crops, which is core to the continuing business
opportunity ahead.
"Doubling yield is a business proposition that rewards both farmers and
shareowners," Casale said. "We're creating new value that leads to a
sustainable opportunity to grow the business year in and year out."
Casale will highlight an example of innovation delivered in corn, where
over the last decade, the average U.S. corn yields have improved by 32
bushels per acre because of yield-enhancing technology including improved
seed and new biotech traits. These innovations have created a return of
approximately $3.50 for every dollar a farmer spends on corn seed and
traits.
"Our business model is one of innovation based on increasing yields and
productivity for farmers worldwide," Casale said. "As we continue to
deliver innovation, our opportunity gets larger. Simply stated, there is
substantial growth still to come. We're poised to launch multiple
game-changing platforms that will rewrite productivity per acre and create
compelling business opportunity for us into the next decade."
Webcast information
Presentation slides and a simultaneous audio webcast of the
presentations will be available through the investor section of Monsanto's
website at http://www.monsanto.com/investors. Crews's presentation is
scheduled for 4 p.m. CT today, and Casale's is scheduled for 11 a.m. CT on
Sept. 18. Following the live broadcasts, a replay of the webcasts will be
available for two weeks through this same link.
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.
Monsanto Company Cautionary Statements Regarding Forward-Looking
Information:
Certain statements contained in this release are "forward-looking
statements," such as statements concerning Monsanto'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 report 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.
Monsanto Company
Selected Financial Information
(Dollars in millions)
Unaudited
1. 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 Previous Fiscal
Year Fiscal Year Year
2008 2008 2007
Target Guidance(A) Actual(A)
Diluted Earnings per Share $3.49 - $3.51 $3.63 $1.79
Income on Discontinued Operations $(0.03) $(0.03) $(0.14)
In-Process R&D Write-Off
Related to the De Ruiter $0.35 -- --
Acquisition
In-Process R&D Write-Off Related to
Delta & Pine Land -- -- $0.34
Acquisition
Solutia Claim Settlement $(0.23) $(0.23) --
Diluted Earnings per Share from
Ongoing Basis $3.58 - $3.60 $3.37 $1.99
(A) Previous 2008 guidance and fiscal year 2007 results are updated to
reflect discontinued operations of Monsanto's dairy business.
2. Reconciliation of Free Cash Flow: Free cash flow represents the total
of cash flows from operating activities and investing activities.
Fiscal Year Fiscal Year
2008 2007
Target Actual
Net Cash Provided by Operating
Activities $2,785 $1,854
Net Cash Required by Investing
Activities $(2,035) $(1,911)
Free Cash Flow $750 $(57)
Net Cash Required by Financing
Activities $(100) $(583)
SOURCE Monsanto Company
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CONTACT:
Media, Danielle Jany of Monsanto Company,
+1-314-694-2478
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