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monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
monsanto 05-15-08
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monsanto 05-15-08

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  1. BMO CAPITAL MARKETS CARL CASALE EXECUTIVE VICE PRESIDENT, STRATEGY AND OPERATIONS MAY 15, 2008
  2. Forward-Looking Statements Certain statements contained in this presentation are quot;forward-looking statements,quot; 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 presentation. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results. Trademarks Trademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. All other trademarks are the property of their respective owners. © 2008 Monsanto Company
  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. OVERVIEW Market Forces Are Changing Supply-Demand Patterns Globally, Creating a New Dynamic Across Agriculture EMERGENCE OF DEMAND-DRIVEN AGRICULTURE: STATE OF AGRICULTURE: NEW DEMAND AND PRODUCTION TRENDS The New Demand Environment   FACTORS: Growing wealth Expanding ethanol ► INCREASING PROTEIN and population in and export DEMAND Asia creates new demands favor U.S. demand for as low-cost corn Wealth drives meat imported grain producer consumption – changing feed demand ► ASCENSION OF CHINA China’s growth is reaching limits of domestic production, driving huge changes in export   environment Brazil exploits land Argentina ► ESTABLISHMENT OF availability advantage leverages to become BIOFUELS geographic commodity soy proximity to Assuming only base-case producer to meet supply corn to demand from China adoption of biofuels, more Latin America corn and soy needed in next decade 4
  5. OVERVIEW Even with Record Corn Prices Spurring Planting, Global Corn Production Per Acre Is Sub-Optimized Today GLOBAL CORN PRODUCTION1: YIELD CORE PRODUCTIVITY MEASURES AND EVALUATION Boosting yield-per- acre can make a meaningful difference in supply-demand CANADA environment EU 27 3M ACRES 136 BU/AC 500M BUSHELS 27M ACRES • If India, Mexico and 90% HYBRID U.S. Brazil moved to 100 99 BU/AC CHINA 2B BUSHELS bushel per acre yields, 90M ACRES 151 BU/AC 69M ACRES they could produce MEXICO 13B BUSHELS 83 BU/AC 6B BUSHELS nearly 4 billion 18M ACRES additional bushels of 25% HYBRID INDIA 48 BU/AC BRAZIL corn annually – equal to 900M BUSHELS 20M ACRES 36M ACRES total world corn exports 45% HYBRID 75% HYBRID 32 BU/AC in 2007. 58 BU/AC 700M BUSHELS 2B BUSHELS • If the EU27 and Brazil adopted the corn-borer ARGENTINA resistant biotech trait, 10M ACRES they would have the 111 BU/AC 900M BUSHELS potential to increase yields by almost 200 Optimization of yield per acre million bushels – the amount used by U.S. food companies as sweeteners in 2007. Poor/Subsistence Sub-Optimized Optimized 1. Source: USDA FAS and internal estimates.
  6. OVERVIEW Monsanto Has Created and Is Extending Its Leadership Through Innovation Monsanto Strategy MONSANTO’S FINANCIAL INDICATORS: Monsanto is an innovation- GROSS PROFIT BY SEGMENT AND ONGOING EPS – FY04 TO FY08F FY08F: driven R & D based company $4,000 $3.50 $3.15 -$3.25 in Agriculture that creates Ag Productivity value through improved Gross Profit $3,500 $3.00 Seeds & Genomics yields and seed Gross Profit performance. (in $ millions) $3,000 Ongoing EPS $2.50 Ongoing EPS Gross Profit SIX GROWTH DRIVERS $2,500 $2.00  U.S. Corn $2,000 $1.50  International Corn $1,500 $1.00  Soybeans $1,000 $0.50  Cotton $500 $0.00  Vegetables 2004 2005 2006 2007 2008F  R & D Pipeline Leadership extends as we 2004-2008F: 41% CAGR in EPS deliver four game-changing driven by growth of Seeds & technologies between now Genomics segment, where innovative and the middle of the next solutions translate into seed share decade. gains and trait penetration globally 6
  7. OVERVIEW Foundation of Seeds and Traits Creates Unmatched Capabilities in Ag CREATION OF UNMATCHED SEED BASE Monsanto’s Strategy Transforms Agriculture EXTENDING LEADERSHIP CREATING LEADERSHIP 1996 to 2007: BUILD SEED BASE 2008 to 2012: INTENSIFY & EXPAND BASE 1996: 1997: 1998: 2005: 2004 to 2006: 2007: 2008: Acquired Acquired Acquired Acquired Created ASI & Acquired Announced Asgrow Holden’s DEKALB, Seminis Acquired 25 Delta & intent to Foundation Cargill Intl Regional Corn Pine Land acquire De Seeds Inc. and Corn Seed & Soybean and Ruiter Seeds Corn States Seed AgroEste Companies DEVELOPMENT OF GAME-CHANGING BIOTECH TRAITS Monsanto’s Strategy Transforms Agriculture EXTENDING LEADERSHIP CREATING LEADERSHIP 2008 to 2012:FOCUS ON TRAITS TO 1996 to 2007:FOCUS ON TRAITS TO PROTECT YIELD ENHANCE YIELD 2009: 2010: ~2012: ~2014: 1997: 1998: 1996: 2006: 2005: 2003: Roundup Roundup Roundup YieldGard Triple- Bollgard II Roundup SmartStax First Nitrogen- Ready 2 corn Generation Utilization Ready Ready Ready Rootworm stack Roundup Yield Drought Corn soybeans, Cotton and Corn Ready corn Flex soybeans, Tolerant Bollgard YieldGard YieldGard Corn Cotton CornBorer Cotton VT PRO 7
  8. CREATING LEADERSHIP Monsanto Has Portfolio Balance That Carries Between Crops Even as Planted Acres Fluctuate PORTFOLIO BALANCE: STATE OF AGRICULTURE: INDEXED GROSS PROFIT FOR MONSANTO-BRANDED CROP OFFERINGS Portfolio Balance 1.2 ► In 2008, for every 1 million 1.00 acres that shift between 1 0.94 soybeans and corn or cotton, on average, there 0.8 is an estimated $0.01 EPS change for Monsanto 0.6 0.47 ► With brands in corn, cotton and soybeans, 0.4 Monsanto is positioned to meet demand regardless 0.2 of crop planting patterns in any given year 0 ► With the 2009 controlled CORN COTTON SOYBEANS commercial release of Roundup Ready 2 Yield 2008 U.S. TRAIT 1.6 1.4 0.95 PENETRATION – and the 2010 launch of ALL CHANNELS SmartStax this dynamic portfolio will be re- balanced 8
  9. CREATING LEADERSHIP DEKALB and ASI Gain Share as Investment in Breeding Delivers Yield Advantage U.S. CORN DEKALB AND ASI U.S. CORN SHARE EVOLUTION: 2001-2008F STATUS 30% • In June 2007, announced 3- DEKALB Brand Share – U.S. year, $610M plan to expand 25 - 26% ASI Share – U.S. and build seed facilities in 25% the U.S. • In 2008, plan has been 23% 20% accelerated to reflect 20% growth in DEKALB and ASI 15% combined with continued 16% growth expectations 10 - 11% 14% 9% through 2012 13% 10% 12% • Outlook to 2012: 10% 5% • DEKALB to grow share 5% 4% through 2012 by up to 10 points cumulatively from 2007 share of 23 percent 0% • Continued organic share 2001 2002 2003 2004 2005 2006 2007 2008F growth in ASI 2008F Projecting 2-3% share gains for DEKALB and 1-2% share gains for ASI 9
  10. CREATING LEADERSHIP 2008 Triple Penetration Ahead of Expectations, Setting Stage for SmartStax Launch U.S. CORN TRAIT OPPORTUNITY: 2005-2010F 60 220 200 U.S. TRIPLE-STACK ACRES 50 180 U.S. TRAIT ACRES (IN MILLIONS) 160 (IN MILLIONS) 40 140 120 30 100 80 20 60 40 10 20 0 0 2008F 2010 2005 2006 2007 2008 2010F 2007 Opportunity ORIGINAL Q2 OUTLOOK UPDATE Rootworm Control 45-55M 20.8M 26-28M 27-29M Corn Borer Control 60-70M 42.4M 40-42M 40-42M Glyphosate Tolerance 80M 57.9M 63-65M 65-67M Triple Stack 17.6M 25-27M 26-28M 45-55M 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. 10
  11. CREATING LEADERSHIP Leading Brand Share Positions in Corn in Brazil and Argentina Provide Footprint for New Trait Launches International Corn Argentina & GEOGRAPHY: Brazil LATIN AMERICA: SEED FOOTPRINT Expand ARGENTINA BRAZIL international OBJECTIVE: footprint 2007 2008F 2007 2008F 2008 STATUS (06/07 SEASON) (07/08 SEASON) (06/07 SEASON) (07/08 SEASON) • Expected to grow 5 share 8M1 10M1 23M 27M points in a market that is HYBRID ACRES 25 percent larger than in 2007 in Argentina 40% 45% 40% 40% MONSANTO • DEKALB and Agroeste SHARE combined are forecasted to be flat with 2007 in AVG. RETAIL Brazil, delivering on our PRICE FOR DEKALB HYBRID goal to stabilize share $23/ac $29/ac $29/ac $34/ac CORN SEED 2012 OUTLOOK • Target 1-to-2 share points of growth annually through 2012 11 1. Source: KLEFFMANN Marketing Services
  12. EXTENDING LEADERSHIP With Two Recent Approvals, New Growth Opportunity Exists For Corn Traits in Latin America International Corn LATIN AMERICA: TRAIT OPPORTUNITY Argentina & GEOGRAPHY: Brazil ARGENTINA BRAZIL Trait Penetration OBJECTIVE: 2008 STATUS APPROVED • YieldGard Corn Borer • Roundup Ready Corn 2 TRAITS • Roundup Ready Corn 2 with YieldGard Corn Borer • YieldGard Corn Borer • YieldGard Corn Borer + stack received regulatory Roundup Ready Corn 2 approval in Argentina end Stack of August 2007 RECENT Granted approval for Granted first corn trait DEVELOPMENTS stack in August 2007 approval in February • YieldGard Corn Borer received final approvals in 2009 OUTLOOK Seed production 30-40% of DEKALB seed underway for 1-2M Brazil in early 2008 will be double-stack commercial acres of • Pricing for new traits to be YieldGard corn on par with the U.S. and TRAIT RETAIL On par with U.S. On par with U.S. value sharing above 50% PRICING to promote adoption CORN BORER 7M 15-20M OPPORTUNITIES CONTROL 2012 OUTLOOK 2010 TRAIT GLYPHOSATE 9M 15-20M • Increasing trait penetration TOLERANCE sets the stage for ROOTWORM 5M 5M SmartStax introduction CONTROL 12
  13. CREATING LEADERSHIP Monsanto’s Pricing Model Aimed at Total Value Created; Shared With Farmer to Build Stable Long-Term Growth EXAMPLE : LOW-PRICE ENVIRONMENT EXAMPLE : HIGH-PRICE ENVIRONMENT Farmer Value Proposition On Triple Stack at Farmer Value Proposition On Triple Stack at $2.50 Corn Prices $4.50 Corn Prices VALUE CREATION VALUE CREATION 15-20 bu/ac 15-20 bu/ac Improved Yield1 Improved Yield1 $2.50/bu $4.50/bu Commodity Price: Commodity Price: $37-$50 $67-$90 Value: Value: $5 $5 Indirect Benefits2 Indirect Benefits2 $42-$55 $72-$95 Incremental Value Created Incremental Value Created PRICING APPROACH PRICING APPROACH $28-$36 $28-$36 Per-Acre Trait Cost3 Per-Acre Trait Cost3 ($17) ($17) – Cost of Replacements4 – Cost of Replacements4 $16-$19 $16-$19 Incremental Farmer Cost Incremental Farmer Cost With $2.50 corn, about 50% of the incremental yield value created is shared with the farmer; With $4.50 corn, about two-thirds of that value accrues to the farmer 1. Monsanto estimates, based on better insect and weed control over conventional options 2. Monsanto estimates, based on farmer surveys quantifying benefits such as convenience and peace of mind 3. Retail royalty range for YieldGard VT Triple in 2008, at normal seeding rates 4. Subtracts costs farmers would have spent had they not used a trait package 13
  14. EXTENDING LEADERSHIP Strong Pipeline Reflects Growing Innovation and Value of Emerging Yield and Stress Traits DISCOVERY PHASE 1 PHASE 2 PHASE 3 PHASE 4 Drought- HIGH Tolerant FAMILY TRAITS► Family CORN: COLLABORATION YIELD & STRESS Nitrogen- BROAD-ACRE HIGH Utilization FAMILY TRAITS► YIELD Family Broad-Acre, MEGA Higher-Yielding FAMILY TRAITS► Family SOYBEANS: Broad-Acre, BROAD-ACRE HIGH Higher-Yielding FAMILY TRAITS► YIELD Family 2020 VALUE RANGES: Roundup Omega-3 Bollgard III Ready 2 Yield soybeans soybeans MEGA HIGH Roundup Insect-protected $300M-$500M Ready 2 >$1BM Roundup Ready YieldGard Yield canola 2 Yield soybeans VT PRO Dicamba- corn MID LOW tolerant soybeans <$150M $150M-$300M Vistive III Improved- protein High-oil Corn Soybeans Cotton Canola soybeans soybeans 14
  15. EXTENDING LEADERSHIP Roundup Ready 2 Yield Soybeans Raise the Performance Bar with 7 to 11 Percent Yield Advantage ROUNDUP READY 2 YIELD SOYBEANS: STATE OF AGRICULTURE: SECOND-GENERATION WEED CONTROL FIELD RESULTS A New Soybean Platform Near-Isoline Comparisons: Roundup Ready 2 Yield vs. Roundup Ready % Yield Increase over Roundup Ready 12% HIGHER-YIELDING 11% 10% DICAMBA-TOLERANT 9% VISTIVE III 9% 8% ROUNDUP READY 2 YIELD 7% 7% 6% ► Roundup Ready 2 Yield becomes the platform for 4% soybean traits ► Three soybean pipeline 2% traits advanced to Phase 3 0% commercial development in 4 YEAR recent R&D update 2004 2005 2006 2007 AVERAGE  Roundup Ready 2 Yield soybeans yield 7 to 11 percent higher than Roundup Ready soybeans based on 73 Monsanto field trials from 2004-2007 ► Power in the pod; Over 200 observations indicate that Roundup Ready 2 Yield soybean plants produce significantly more 3-bean pods per plant compared to Roundup Ready soybeans 15
  16. EXTENDING LEADERSHIP SmartStax Corn Projected to Increase Value on Farm Through Potential Refuge Reduction and Improved Insect Control Projected SmartStax Value: On-Farm Increased Yield (per-acre and on-farm) + SmartStax Value: YIELD Refuge Reduction Considerations YIELD COMPONENT BENEFIT1 PER-ACRE U.S. EPA requires set-aside refuge  Improved consistency: 1-2% for current single-mode-of-action Primary pests insect-protected traits in corn  Improved protection: 1-2% 20% Secondary pests ON-FARM 80%  Reduced refuge 3-6% 4-10% Total Estimated Yield Benefit Flexibility to move to one technology + 20 BU/AC platform on-farm 1 Durability + Yield Differential Flexibility to increase planting Farmers in Illinois in 2007 reported + populations average 20 bu/acre yield difference Platform for future traits between YieldGard VT Triple and + refuge acres Access to superior seed + Total Projected SmartStax Value = 1. Yield benefit reflects expected yield benefit above triple-stack standard, on a 16 per-acre and whole-farm basis as noted. Ranges may overlap
  17. EXTENDING LEADERSHIP First Generation Drought-Tolerant Corn Has First Mover Advantage In Yield and Stress Traits Average Yield Improvement of Lead Event Yield Difference (bu/acre) R&D Pipeline 16 Percentage yield difference vs. control 13.4% 6.7% 10.6% 11.3% 14 Drought-Tolerant Corn Family: Lead Project 12 10 PRODUCT HIT Project KEY RESULTS CONCEPT Phase 3 8 TARGET RANGE 6 PROJECT CONCEPT: 4 Drought-tolerance family aimed at providing consistent yield and 2 buffering against effects of water 0 limitations a b b b 2004 2005 2006 2007 VALUE: 15 TOTAL 9 TOTAL 11 TOTAL 8 TOTAL LOCATIONS LOCATIONS LOCATIONS LOCATIONS LAUNCH-COUNTRY 55M a: data from two hybrids ACRES1: b: data from three hybrids $300-$500M 2020 VALUE2: SEGMENTED VALUE OPPORTUNITY ACROSS MARKETS SOURCES OF VALUE: KEY OPPORTUINITY  First leads show Improved yield benefit under Targeting 8-10% yield 1 water-stress improvement in water-stress WESTERN environments conditions DRYLAND 10-12M Acres  First product 1. Acre opportunity reflects acres where technology fits at Monsanto's current 2007 market share in respective crops targeted at 2. 2020 value reflects gross sales opportunity in launch country western dryland in year 2020 Low annual High annual region of 10-12M precipitation precipitation acres Source: Spatial Climate Analysis Service, Oregon State University 17
  18. EXTENDING LEADERSHIP Second Generation Drought-Tolerant Corn Targeted to Expand Reach Drought Efficacy for Second-Gen Events Yield Difference Over Controls (%) 16 R&D Pipeline 14 Drought-Tolerant Corn Family: 12 Second-Generation Project 10 PRODUCT CONCEPT Phase 2 8 STATUS: TARGET KEY RESULTS RANGE 6 PROJECT CONCEPT: 4 Drought-tolerance family aimed at 2 providing consistent yield and 0 EVENT 1EVENT 2 EVENT 3 EVENT 1 EVENT 2 EVENT 3 buffering against effects of water limitations HIGHER-YIELDING ENVIRONMENT LOWER-YIELDING ENVIRONMENT AVERAGE YIELD: 166 BU/AC AVERAGE YIELD: 53 BU/AC VALUE: 2007 2006 LAUNCH-COUNTRY 55M (All three events significant @ p≤0.10); Statistical significance determined by ANOVA (2006) or nonparametric test (2007) ACRES1: $300-$500M 2020 VALUE2: SOURCES OF VALUE: SEGMENTED VALUE OPPORTUNITY ACROSS MARKETS Improved yield  Second generation KEY OPPORTUINITY IRRIGATED Targeting 8-10% yield demonstrates 1 improvement in water-stress 8-12M Acres performance over environments WESTERN broad range of stress DRYLAND Water substitution conditions in both 10-12M Acres low and high-yielding 2 Variable costs in pumped environments irrigation of >$100/ acre STABILITY  Potential for a broad 60-70M Acres Low annual High annual 1. Acre opportunity reflects acres where technology fits at acreage fit across all precipitation Monsanto's current 2007 market share in respective crops precipitation acres planted 2. 2020 value reflects gross sales opportunity in launch country Source: Spatial Climate Analysis Service, Oregon State University in year 2020 18
  19. EXTENDING LEADERSHIP Nitrogen-Utilization Corn Designed to Create Value Via Improved Yields or Reduced Nitrogen Usage PER-ACRE NITROGEN COST STATE OF AGRICULTURE: FOR CORN PRODUCTION IN THE U.S.: 1990-20071 Breakthroughs in Nitrogen-Use Research Under normal nitrogen conditions, lead Nitrogen- $60 Utilization trait has demonstrated yield advantages in multiple backgrounds over multiple years $50 12 * $40 Yield Increase (bu/Ac) ** *** * 10 $30 8 6 $20 4 2 $10 0 -2 TRIALS IN $0 TRIALS IN MULTIPLE MULTIPLE 1990 1993 1996 1999 2002 2005 2008B HYBRID HYBRID Nitrogen accounts for approximately one-fifth of BACKGROUNDS BACKGROUNDS the direct operating costs for a corn producer2 and (15 LOC) (16 LOC) continues to escalate with current estimates of nearly $780 per ton or approximately $70 per acre 2005 2006 2007 by the fall. Nitrogen-Utilization corn offers the potential to * Statistically significant @ p≤0.10 bring the value of nitrogen into the seed: Bar color correlates with the specific hybrid background tested. • Reducing farmers’ exposure to nitrogen Same bar color in different tests and different years indicates same price volatility hybrid was used. • Boosting yield All trials conducted under sufficient nitrogen application levels. • Improving ease of use, flexibility 1. NASS 2. USDA and University of Illinois 2008 Crop Budgets 19
  20. USES OF CASH Leadership and Innovation Underscored by Strong Cash Generation for Investment in Next Wave of Growth USES OF CASH FY08F ESTIMATED USES OF CASH CUMULATIVE: 2005-2007 ESTIMATED $2.5B CASH GENERATED BY OPERATIONS American Seeds, Inc. (2004-2007) FY2007 Seminis (2005) Dividend FY2008 increased $3,000 Delta & Pine Land $313M of 40% to 70 $2,450 (2007) dividends & $2,500 cents/share share $545 Agroeste (2007) $2,000 repurchases ($200) through Q2 $1,500 $639 $1,000 ($950) $3,161 $266 $500 ($830) $0 ($500) $1,160 FY2008 ($1,000) Estimated $2.5B FY2008 ($1,500) of Operating FY2008 Cash Flows CAPEX: generated Acquisitions Year two of ACQUISITIONS: $610M corn Entered FY2007 seed Capital Spending agreement to Capex focused expansion purchase De on corn seed project; year Technology Investments Ruiter Seeds for expansion; year one of $196M €546M - ~$830M one of 3 year glyphosate Dividends if closes in $610M project expansion FY08 Share Repurchases FY2008 Technology Operating Cash Flows Investments 20
  21. ACQUISITION STRATEGY Acquisition Strategy Set to Strengthen and Expand Core and Drive Differentiation Through Innovation INVESTMENT OPPORTUNITY In an expanding agriculture environment, value is defined by innovation – Monsanto’s strategy is targeted on innovation: discovering and developing technology that is game-changing CATEGORY EXAMPLES OUTLOOK ► Delta and Pine Land • ASI and Delta and Pine Land  Intensify The Space moving to integration ► American Seeds, Inc. Strengthen position of the • Leading position in (ASI) Companies protected-culture established core business, largely by ► Agroeste (Brazil) in vegetables building the germplasm ► De Ruiter Seeds • Continued opportunity for footprint of seeds add-on international corn and vegetable seed companies ► Seminis • Continually looking for areas  Expand The Space where Monsanto can apply core technology quickly or Expansion to adjacent spaces benefit from advanced – where core technology can research be applied quickly and with transformational benefits ► Yield and Stress R&D • Most highly transformational,  Redefine The Space but rarest to find appropriate Collaboration with BASF fit Investments that rewrite the ► SmartStax agreement with landscape, providing new Dow avenues, new technologies ► Global Seed Treatment and creating new markets Alliances 21
  22. EXTENDING LEADERSHIP De Ruiter Seeds Helps Address Gap in Monsanto Vegetable Seed Portfolio in Growing Protected-Culture Segment FY07 Annual net Sales = $145M FY07 Annual Net Sales = $612M Portfolio Composition: Percent of Sales1 Portfolio Composition: Percent of Sales1 10% 12% Open-Field Protected-Culture 88% 90% Pairing Seminis with De Ruiter Seeds brings together the leading positions in open-field and protected-culture segments • Both segments benefit from the coordinated molecular breeding infrastructure 1. Size of pies not to scale with revenue generated by Seminis or De Ruiter Seeds 22
  23. SUMMARY Monsanto’s Strategy to Extend Competitive Lead Through Innovation, Driving 2012 Growth 2012 GROWTH RANGE GROSS PROFIT OUTLOOK BY SEGMENT Gross profit targeted to more 2007-2012F than double from 2007 through >2X 2012 including recent lift in Roundup to $1.8B gross profit $10,000 2007 BASELINE STRATEGIC PLAYBOOK All growth is organic, from base $8,000 business and pipeline IN MILLIONS  U.S. Corn $6,000  International Corn  Soybeans  Cotton $4,000  Vegetables  R&D Pipeline $2,000 Acquisitions to be pursued, but are not included in this growth projection $0 Earnings continue to translate 2007 2008F 2012F into operating cash, and value created for shareowners All Other Agricultural Productivity through combination of Roundup And Other Glyphosate-based acquisitions, technology Herbicides investments, share repurchases Seeds & Genomics and dividends 23
  24. Reconciliation of Non-GAAP Financial Measures Reconciliation of Non-GAAP EPS Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year $ per share 2008F 2007 2006 2005 2004 Net Income (Loss) per Share $3.38 - $3.48 $1.79 $1.25 $0.47 $0.50 Cumulative Effect of Change in Accounting Principle - - $0.01 -- -- Diluted Earnings (Loss) per Share Before Effect of $3.38 - $3.48 $1.79 $1.26 $0.47 $0.50 Accounting Change Solutia Claim Settlement ($0.23) Tax Charge on Repatriated Earnings -- -- $0.04 -- -- Seminis In-Process R&D -- -- -- $0.38 -- Solutia-Related Charge -- -- -- $0.32 -- Tax Benefit on Loss from European Wheat and -- -- -- $(0.19) -- Barley Business Restructuring Charges -- Net -- -- -- $0.01 $0.18 Loss (Income) on Discontinued Operations 1 -- ($0.13) -- $0.05 -- Impairment of Goodwill -- -- -- -- $0.12 In-Process R & D Write-Off Related to the Delta & Pine Land -- $0.34 -- -- -- (D&PL) Acquisition Diluted Earnings (Loss) per Share from Ongoing Business $3.15 - $3.25 $2.00 $1.30 $1.04 $0.80 Note: EPS figures reflect the stock split effective July 28, 2006 24 1. The operating results of Stoneville and Nexgen have been conformed to discontinued operations for all relevant years presented.

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