ST. LOUIS, MISSOURI - Monsanto Company (NYSE: MON) executives will share 2010 harvest results with investors today, noting that the results confirm the company's innovative corn and soybean trait platforms provided farmers significant yield advantages versus competitor products. The company said the results underpin its product strategy and mid-teens earning growth projections going forward.
"Our harvest data provides confidence supporting our U.S. product strategy in 2011," said Hugh Grant, Monsanto chairman and chief executive officer. "We've seen the broad performance advantage of Genuity(R) Roundup Ready 2 Yield(R) soybeans, and Genuity(R) SmartStax(R) delivered in key geographies, setting up a tremendous year for our corn portfolio. Yield results of the Genuity corn portfolio clearly demonstrate the value proposition of the reduced refuge."
Seed and Trait Technologies Demonstrate Value
The 2010 data set is drawn from more than 350,000 data points spanning broad company testing and third-party data. Among the highlights of the data:
• In their first full year on broad acres and second year of availability, Genuity Roundup Ready 2 Yield soybeans delivered a yield advantage over competitor varieties of the first-generation Roundup Ready(R) trait of greater than 3 bushels per acre. In particular, multi-year testing of Genuity Roundup Ready 2 Yield indicates the technology is delivering an average yield advantage of 3.8 bushels per acre. The 2010 data results indicate that Genuity Roundup Ready 2 Yield varieties also delivered an average 3.8 bushel-per-acre yield advantage in more than 17,000 comparisons versus competitive platforms. With roughly 80 varieties available this season farmers were able to take advantage of an increased number of varieties to match their growing environments. For 2011, the genetic bandwidth and diversity increases as the company expects to introduce the Class of 2011 with more than 120 new varieties available for sale. With this strong performance, Monsanto continues to expect Genuity Roundup Ready 2 Yield soybeans to ramp up to a range of mid-teens millions of acres in the U.S. for the 2011 season.
"Every year, one of the most important decisions a farmer makes is his seed decision," said Monsanto Chief Technology Officer Robert Fraley, Ph.D. "Genuity Roundup Ready 2 Yield soybeans set an important tone that carries across to our other new product launches, demonstrating again that our products deliver tangible value and give farmers a better choice of options to increase their productivity as they make their seed purchase decisions."
• In corn, Monsanto's reduced refuge product portfolio delivered strong performance results through better insect control and a greater whole farm yield opportunity. In particular, Genuity(R) SmartStax(R) hybrids demonstrated a yield advantage over hybrids with Monsanto's industry-leading YieldGard VT Triple(R) in the 90-105 day relative maturities in the northern Corn Belt, where the majority of the commercially available Genuity SmartStax hybrids were planted. In more than 5,600 comparisons in this geography, the Genuity SmartStax hybrid portfolio showed an average yield advantage of 3.6 bushels per acre when compared with the YieldGard VT Triple portfolio. In this key geography, farmers have the potential to see a whole-farm yield advantage of greater than 6 bushels per acre compared to YieldGard VT Triple hybrids due to the reduced refuge associated with Genuity SmartStax.
• Across the broader reduced-refuge family of corn products, Genuity SmartStax corn is complemented by strong performance from Genuity(R) VT Double PRO(TM) corn and Genuity(R) VT Triple PRO(TM) corn. In nearly 10,000 head-to-head comparisons, corn products with Genuity VT Triple PRO traits demonstrated an average of 8.8 bushel per acre yield advantage over all competitors in the southern cotton growing region and in the south-central Corn Belt. The reduced refuge of 20 percent in the South provides farmers in the Cotton Belt the opportunity to gain an additional 3-to-6-bushel per acre whole farm yield advantage. Trial results for Genuity VT Double PRO, the first-ever double stack with a 5 percent refuge in the Corn Belt, show a 7.9 bushel per acre advantage on average versus national double stack competitors in more than 1,100 head-to-head comparisons. The reduced refuge can provide an additional 1.5 to 3 bushels per acre for a total yield advantage of approximately 10 bushels per acre. The reduced-refuge family forms the backbone of Monsanto's strategy to provide farmers more products at more price points in 2011. With an expansion in the number of new, elite Genuity SmartStax hybrids, the company expects that the three products in the reduced-refuge family will be planted on a range of mid-teens millions of acres for the 2011 planting season.
• Seed brand leader DEKALB hybrids maintained their germplasm yield advantage in 2010. In more than 14,700 company and third-party head-to-head comparisons, DEKALB brand hybrids out yielded all competitors by an average of 9.7 bushels per acre. In more than 8,400 company and third-party comparisons, DEKALB brand hybrids out yielded Pioneer hybrids by an average of 9.6 bushels per acre.
The complete data review and related presentation is available on the Investor section of Monsanto's website: http://www.monsanto.com/investors.
Performance Underscores Strategy and Guidance
Grant will indicate that the 2010 corn and soybean performance reinforces the company's U.S. corn and soybean strategies, with Genuity SmartStax and Genuity VT Double PRO corn and Genuity Roundup Ready 2 Yield soybeans as centerpiece technologies for future offerings such as refuge-in-the-bag and drought tolerance for Genuity SmartStax expected in 2012 and a triple-stack soybean product expected by the middle of the decade.
Monsanto also confirmed 2011 ongoing EPS guidance of $2.72 to $2.82 on an ongoing basis and $2.67 to $2.77 on an as-reported basis. (For a reconciliation of 2011 EPS guidance, see note 1.) The company continues to project free cash flow in the range of $800 million to $900 million, which reflects an expected investment of $600 million -to $700 million in capital expenditures. The company expects net cash provided by operating activities to be $1.7 billion to $1.9 billion, and net cash required by investing activities to be approximately $900 million to $1 billion for fiscal year 2011. (For a reconciliation of free cash flow, see note 1.)
Ongoing EPS and Free Cash Flow: The presentations of ongoing EPS and free cash flow are not intended to replace net income (loss), cash flows, financial position or comprehensive income (loss), and they are not measures of financial performance as determined in accordance with generally accepted accounting principles (GAAP) in the United States. The following tables reconcile ongoing EPS and free cash flow to the respective most directly comparable financial measure calculated in accordance with GAAP.
Reconciliation of EPS to Ongoing EPS : Ongoing EPS is calculated excluding certain after-tax items which Monsanto does not consider part of ongoing operations.
12 Months Ended - Aug. 31, 2010
Diluted Earnings per Share
|Income on Discontinued Operations||—||$(0.01)|
|Diluted Earnings per Share from Ongoing Business||$2.72-$2.82||$2.41|
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 2011 free cash flow target, 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.
|Net Cash Provided by Operating Activities||$1,700-1,900|
|Net Cash (Required) Provided by Investing Activities||(900-1,000)|
|Free Cash Flow||$800-900|
|Net Cash Provided (Required) by Financing Activities||N/A|
|Effect of Exchange Rate Changes on Cash and Cash Equivalents||N/A|
|Net (Decrease) Increase in Cash and Cash Equivalents||N/A|
|Cash and Cash Equivalents at Beginning of Period||N/A|
|Cash and Cash Equivalents at End of Period||N/A|
In conjunction with this announcement, Monsanto will hold a conference call at 11 a.m. central time (noon eastern time) today. The call will focus on this yield data for Monsanto corn and soybean products in 2010. The call may also include a discussion of Monsanto's business performance and expectations, operational path and other matters related to the business during the presentation.
Presentation slides and a simultaneous audio webcast of the conference call may be accessed by visiting the company's web site at www.monsanto.com/investors. Visitors may need to download Windows Media Player(TM) prior to listening to the webcast. Following the live broadcast, a replay of the webcast will be available on the Monsanto web site for three weeks.
SOURCE: Monsanto Company