- The document reports on Monsanto's financial results for the second quarter of 2008, projecting continued strong earnings growth, margins, and cash generation.
- Key highlights included a projected 58-63% increase in ongoing earnings per share, gross profit margins reaching 53% (two years ahead of target), and over $1.3 billion in free cash flow.
- Monsanto expected its seeds and traits business to double gross profits from 2007 to 2012 through new product launches and increased seed and trait penetration globally.
3. Non-GAAP Financial Information
This presentation may use the non-GAAP financial measures of “free cash flow,” and earnings per share (EPS) on
an ongoing basis. We define free cash flow as the total of cash flows from operating activities and investing
activities. A non-GAAP EPS financial measure, which we refer to as on-going EPS, excludes certain after-tax items
that we do not consider part of ongoing operations, which are identified in the reconciliation. ROC means net
income (without the effect of certain items) exclusive of after-tax interest expenses, divided by the average of the
beginning year and ending year net capital employed, as defined in the reconciliation. Our presentation of non-
GAAP financial measures is intended to supplement investors’ understanding of our operating performance. These
non-GAAP financial measures are not intended to replace net income (loss), cash flows, financial position, or
comprehensive income (loss), as determined in accordance with accounting principles generally accepted in the
United States. Furthermore, these non-GAAP financial measures may not be comparable to similar measures used
by other companies. The non-GAAP financial measures used in this presentation are reconciled to the most
directly comparable financial measures calculated and presented in accordance with GAAP, which can be found at
the end of this presentation.
3
4. Ongoing and As-Reported Earnings
PERFORMANCE SUMMARY
Second
Quarter 2008
Second
Quarter 2007
First Half
2008
First Half
2007
Diluted Earnings
Per Share $2.02 $0.98 $2.48 $1.14
Loss (Income) From
Discontinued
Operations
- $0.01 - $0.02
Diluted Earnings
Per Share on an
Ongoing Basis
$1.79 $0.99 $2.25 $1.16
-($0.23)
Solutia Claim
Settlement
($0.23) -
4
6. FINANCIAL OUTLOOK
Monsanto’s Strategic and Financial Opportunity Lies in
Seeds and Traits
$0
$2,000
$4,000
$6,000
$8,000
$10,000
2007 2008F 2012F
SEEDS & GENOMICS
ROUNDUP AND OTHER GLYPHOSATE-
BASED HERBICIDES
ALL OTHER AGRICULTURAL
PRODUCTIVITY
INMILLIONS
GROSS PROFIT OUTLOOK BY SEGMENT
2007-2012F
SEEDS &
GENOMICS CAGR
FROM 2008
15-18%
FLAT
ROUNDUP AND
ALL OTHER
GLYPHOSATE-
BASED
HERBICIDES CAGR
FROM 2008
Gross Profit
2008 STATUS
• New FY2008 targets of $3.6 -
$3.7B gross profit for Seeds and
Genomics; $1.7 - $1.8B for
Roundup and other glyphosate-
based herbicides
2012 OUTLOOK
2012F
$6.5-7.0B
$1.8B
$350M
SEEDS &
GENOMICS
ROUNDUP AND
OTHER
GLYPHOSATE-
BASED
HERBICIDES
ALL OTHER AG
PRODUCTIVITY
6
7. 7
2008 U.S. TRAIT
PENETRATION –
ALL CHANNELS
1.6 1.4 0.95
FINANCIAL OUTLOOK
Monsanto Has Portfolio Balance That Carries Between Crops
When Acres Switch Year-to-Year
PORTFOLIO BALANCE:
INDEXED GROSS PROFIT FOR MONSANTO-BRANDED CROP OFFERINGS
0.94
1.00
0.47
0
0.2
0.4
0.6
0.8
1
1.2
CORN COTTON SOYBEANS
STATE OF AGRICULTURE:
Portfolio Balance
► In 2008, for every 1 million
acres that shift between
soybeans and corn or
cotton, on average, there is
an estimated $0.01 EPS
change for Monsanto
► With brands in corn, cotton
and soybeans, Monsanto is
positioned to meet demand
regardless of crop planting
patterns in any given year
8. FINANCIAL OUTLOOK
8
Vegetable Seed Business On Track; De Ruiter Seeds Boosts
Achievement of Identified Goals
VALUE CREATION FOR VEGETABLE SEED PLATFORM:
STAGED OPPORTUNITIES FOR INCREASING GROSS PROFIT
Focus on operational excellence; working capital management
VALUECREATIONOPPORTUNITY
Assemble genetic maps for key crops
Identify and implement opportunities to price products to value
Aggressively shift mix via protected culture and hybrid conversion
New product launches;
use of molecular markers
2007 2008 2009 2010 2011 2012
2007
Monsanto vegetable
seed sales top
$600M in 2007; 7.5%
top-line growth
2008
De Ruiter Seeds
acquisition announced –
strengthens protected-
culture portfolio
2012
Monsanto vegetable
seeds projected to
be >$1B in sales,
mid-60s margin
2012
Molecular marker platform
begins transforming
Seminis and De Ruiter
portfolios
~2010
De Ruiter Seeds accretive to
Monsanto vegetable seed EPS
contribution in second full fiscal
year following closing
OPERATIONAL EXCELLENCE NEW VALUE CREATION
PIPELINE
ADVANCEMENT
9. 2008 Again Projects Double-Digit Earnings Growth,
Strong Cash Generation and Improved Margins
FINANCIAL OUTLOOK
2007 2008F
EARNINGS
ONGOING EARNINGS PER SHARE
$2.00
54% GROWTH
FROM 2006
$3.15-$3.25
58-63% GROWTH
FROM 2007
Gross Profit as a Percent of Sales 50%
53%; two years ahead of
2010 target of 52-54%
Seeds & Traits Gross Profit $3.0B $3.6 - $3.7B
Roundup and All Other Glyphosate-based
Herbicides Gross Profit
$854M $1.7 – $1.8B
All Other Ag Productivity Gross Profit $418M ~$350M
CASH MANAGEMENT AND SPENDING
FREE CASH FLOW $(57)M ~$1.3B
Capital Expenditures $509M ~$950M
SG&A as a Percent of Sales 22% ~20%
R&D as a Percent of Sales 9% ~9%
Receivables as a Percent of Sales 18% High Teens
Inventories as a Percent of Sales 20% High Teens
9
10. $1.30
$0.80
$1.04
$2.00
$3.15-$3.25
$0.50
$0.75
$1.00
$1.25
$1.50
$1.75
$2.00
$2.25
$2.50
$2.75
$3.00
$3.25
$3.50
2004 2005 2006 2007 2008F
FINANCIAL REVIEW
EARNINGS PER SHARE GROWTH
PROGRESSION OF ONGOING EPS (2004-2008F)
30% 25% 54% 58-63%
Note: EPS figures reflect the stock split effective July 28, 2006
2008F ONGOING EPS GUIDANCE:
58-63% GROWTH
CASH FLOW PROJECTIONS
2007-2008F
Guidance previously
set as $2.70 to $2.80
per share
Earnings Growth of 58 to 63 Percent and Increased
Cash from Operations Reflect Strong Growth Drivers
($1,402)
($509)
$2,450
$1,854
($200)
($950)
($2,000)
($1,500)
($1,000)
($500)
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
10
2007 2008F
Cash Flows from Operations
Capital Expenditures
Cash Used in Investing,
Excluding Capital Expenditures
11. On Track to Double Gross Profit From 2007 to 2012, Growth
Drivers Roll Out In Balanced, Additive Progression
OVERVIEW
GROSS PROFIT DRIVERS:
TIMELINE OF INCREMENTAL IMPACT
2008 2009 2010 2011 2012
U.S. Corn
International Corn
Soybean
2009
Roundup Ready 2
Yield soybeans
controlled
commercial release
Cotton
2010
U.S. SmartStax
corn launch
Large-scale
Roundup Ready 2
Yield soybean
launch
MILESTONES
Seminis
R&D Pipeline
• Trait penetration and seed share growth
• SmartStax platformDRIVERS:
• Seed share growth
• New trait approvals in LADRIVERS:
• Roundup Ready 2 Yield platform
• Seed share growth
DRIVERS:
• 2nd
-gen trait acceleration
• Breeding inroads
DRIVERS:
• Protected culture
• Molecular markers
DRIVERS:
• Yield & stress platform
• Breakthrough platforms
DRIVERS:
Planned progression of significant new
gross-profit generation from each
strategic driver
2008 to 2012 Projected branded corn share gains globally
2012+
U.S. drought-
tolerant corn launch
2011-2012
Delta and Pine
Land U.S.
portfolio
converted to
second-
generation stack
2012+
Stacked trait
soybean launches,
including dedicated
product for Brazil
First major selling
season for LA corn
traits
11
12. U.S. CORN
DEKALB AND ASI U.S. CORN SHARE EVOLUTION:
2001-2008F
U.S. Corn
GEOGRAPHY: U.S.
OBJECTIVE: Grow footprint
2008 STATUS
• DEKALB brand expected to
gain 2- 3 points in 2008 for
total share of 25-to-26
percent in U.S.
• ASI expected to gain 1-to-2
share points organically in
2008 season
2012 OUTLOOK
• DEKALB to grow share
through 2012 by up to 10
points cumulatively from
2007 share of 23 percent
• Continued organic share
growth in ASI
10%
12%
13%
14%
16%
20%
23%
9%
5%
4%
0%
5%
10%
15%
20%
25%
30%
2001 2002 2003 2004 2005 2006 2007 2008F
25 - 26%
10 - 11%
12
DEKALB Brand Share – U.S.
DEKALB and ASI Share Growth Ahead of Original Plan –
2008 Milestones Reinforce Acceleration
ASI Share – U.S.
13. Monsanto Expected to Gain Corn Share in Argentina and Hold
Share in Brazil; Retaining Leadership in Both Markets
INTERNATIONAL CORN
International Corn
GEOGRAPHY:
Argentina &
Brazil
OBJECTIVE:
Expand
international
footprint
2008 STATUS
• Expected to grow 5 share
points in a market that is
25 percent larger than in
2007 in Argentina
• DEKALB and Agroeste
combined are forecasted
to be flat with 2007 in
Brazil, delivering on our
goal to stabilize share
2012 OUTLOOK
• Target 1-to-2 share points
of growth annually
through 2012
LATIN AMERICA: SEED FOOTPRINT
$29/ac
45%
10M1
2008F
(07/08 SEASON)
$29/ac
40%
23M
2007
(06/07 SEASON)
BRAZILARGENTINA
$34/ac$23/ac
AVG. RETAIL
PRICE FOR
DEKALB HYBRID
CORN SEED
40%40%MONSANTO
SHARE
27M8M1
HYBRID MARKET
SIZE
2008F
(07/08 SEASON)
2007
(06/07 SEASON)
1. Source: KLEFFMANN Marketing Services 13
14. 14
U.S. CORN
2008 Triple Penetration Ahead of Expectations – Reinforcing
Continued Opportunity and Setting Stage for SmartStax
U.S.TRAITACRES
(INMILLIONS)
0
20
40
60
80
100
120
140
160
180
200
220
2005 2006 2007 2008 2010F
0
10
20
30
40
50
60
U.S.TRIPLE-STACKACRES
(INMILLIONS)
U.S. CORN TRAIT OPPORTUNITY: 2005-2010F
Trait acres reflect the total acres planted with each individual trait. In the case of stacked traits, each absolute
acre will be reflected by two or more trait acres.
2008F 2010
Opportunity
2007 ORIGINAL
OUTLOOK
Q2
UPDATE
20.8M 27-29M
40-42M
65-67M
26-28M
42.4M
57.9M
17.6M
45-55M
60-70M
80M
45-55MTriple Stack 25-27M
Rootworm Control 26-28M
Corn Borer Control 40-42M
63-65MGlyphosate Tolerance
15. INTERNATIONAL CORN
International Corn
GEOGRAPHY:
Argentina &
Brazil
OBJECTIVE: Trait Penetration
2008 STATUS
• Roundup Ready Corn 2
with YieldGard Corn Borer
stack received regulatory
approval in Argentina end
of August 2007
• YieldGard Corn Borer
received regulatory
approval in Brazil from
CTNBio and CNBS
• Hybrid registrations just
received, opening door for
seed production
2012 OUTLOOK
• Increasing trait penetration
sets the stage for
SmartStax introduction 5M5MROOTWORM
CONTROL
15-20M9MGLYPHOSATE
TOLERANCE
15-20M7MCORN BORER
CONTROL
On par with U.S.On par with U.S.
TRAIT RETAIL
PRICING
LATIN AMERICA: TRAIT OPPORTUNITY
Seed production
underway for 1-2M
commercial acres of
YieldGard corn
Granted first corn trait
approval in February
• YieldGard Corn Borer
BRAZILARGENTINA
30-40% of DEKALB seed
will be double-stack
2009 OUTLOOK
Granted approval for
stack in August 2007
RECENT
DEVELOPMENTS
• YieldGard Corn Borer
• Roundup Ready Corn 2
• YieldGard Corn Borer +
Roundup Ready Corn 2
Stack
APPROVED
TRAITS
With Two Recent Approvals, New Growth Opportunity Exists
For Corn Traits in Latin America
2010TRAIT
OPPORTUNITIES
15
16. Roundup Ready 2 Yield on Track for 2009 Controlled
Commercial Release of One to Two Million Acres
SOYBEANS
ROUNDUP READY 2 YIELD SOYBEANS:
LAUNCH PLANSSoybeans
GEOGRAPHY: U.S.
OBJECTIVE:
2nd-Gen
Launch
2008 STATUS
• Consistent 7-to-11
percent yield advantage
with Roundup Ready 2
Yield versus Roundup
Ready
• U.S., Canadian and
Japanese approvals
received; awaiting key
export approvals from
China, Mexico and Europe
PRICING
• Yield improvement shared
with grower using a multi-
year soybean commodity
price
Branded and licensed seed production
U.S. Full-Scale
Launch Target:
5- 6M Acres
Grower level marketing, awareness and trial
Licensee breeding
U.S. Controlled
Commercial
Release Target:
1- 2M Acres
2010200920082007
Pursuit of export approvals in China, Europe and
Mexico – JAPAN RECEIVED
Industry coordination and communications
• American Soybean Association and key agri-food
stakeholders
P R O J E C T
16
17. Reconciliation of Non-GAAP Financial Measures
Reconciliation of Free Cash Flow Fiscal Year
2008
Forecast
Fiscal Year
2007
6 Months Ended
Feb. 29, 2008
6 Months Ended
Feb. 28, 2007
$1,877 $520
(230)
290
(200)
15
$105
(404)
$1,473
(142)
88
$1,419
$2,450
(1,150)
$1,300
N/A
Effect of Exchange Rate Changes on Cash and Cash Equivalents N/A 46
N/A
Net Cash Provided (Required) by Operations $1,854
Net Cash Provided (Required) by Investing Activities (1,911)
Free Cash Flow ($57)
Net Cash Provided (Required) by Financing Activities (583)
Net Increase (Decrease) in Cash and Cash Equivalents ($594)
$ Millions
$ per share
Fiscal Year
2008F
Fiscal Year
2007
Fiscal Year
2006
Fiscal Year
2005
Fiscal Year
2004
Net Income (Loss) per Share $3.38 - $3.48
-
$3.38 - $3.48
Solutia Claim Settlement ($0.23)
--
--
--
--
--
--
--
$1.25
--
$3.15 - $3.25
Cumulative Effect of Change in Accounting Principle
$0.50$0.47$1.79
-
$1.79
--
--
--
--
$0.01
--
($0.13)
--
--
$0.34
--
$0.47
$2.00
--
$0.38
$0.32
$(0.19)
$0.01
$0.05
Impairment of Goodwill -- -- $0.12
In-Process R & D Write-Off Related to the Delta & Pine Land
(D&PL) Acquisition
-- --
$0.50
--
$1.04
--
--
--
--
$0.18
--
$0.80
Tax Charge on Repatriated Earnings
Diluted Earnings (Loss) per Share Before Effect of
Accounting Change
$1.26
$0.04
Seminis In-Process R&D --
Solutia-Related Charge --
Tax Benefit on Loss from European Wheat and
Barley Business
--
Loss (Income) on Discontinued Operations1
--
Restructuring Charges -- Net --
Diluted Earnings (Loss) per Share from Ongoing Business $1.30
Reconciliation of Non-GAAP EPS
17
Note: EPS figures reflect the stock split effective July 28, 2006
1. The operating results of Stoneville and Nexgen have been conformed to discontinued operations for all relevant years presented.