KERRY PREETE
PRESIDENT, SEMINIS


MERRILL LYNCH
AGRICULTURAL CHEMICALS CONFERENCE


June 5, 2007


                       ...
Forward-Looking Statements

Certain statements contained in this presentation are quot;forward-looking statements,quot; su...
OVERVIEW

Opportunity in Vegetables Parallels Opportunity in
Corn Market a Decade Ago
 CURRENT STATUS OF BUSINESS AND MARK...
OVERVIEW

 Reflecting Increasing Global Produce Demand, Vegetable
 Seed CAGR Projected at 4 Percent through 2012
         ...
OVERVIEW

 Top 10 Vegetable Seed Companies Generate Vast Majority of
 Industry Revenue; Market Highly Fragmented Thereafte...
OVERVIEW

 Tomatoes, Peppers, Cucumbers and Melons Are Predominant
 Revenue and Acreage Opportunities

                   ...
OVERVIEW

 Asia Represents Largest Current Production Acreage and
 Source of Greatest Future Demand

                     ...
OVERVIEW

  Yield – and Protecting Yield – Drives Grower Spend on
  Vegetable Seeds
                               EXAMPLE...
SEMINIS GROWTH


Since Joining Monsanto, Seminis Has Refocused on Gross
Profit Growth, Leveraging Portfolio, Pricing and B...
SEMINIS GROWTH


 Four Growth Drivers Enrich Seminis Gross Profit Contribution
 Through 2012


                           ...
OVERVIEW

Path Set to Improve Global Market Share Mix in Core
Crop Areas


CURRENT STATUS AND OPPORTUNITY: SEMINIS FOCUS C...
SEMINIS GROWTH

Market Capabilities to be Enhanced with Strategic Acquisitions
in Key Markets, Crops

                    ...
OVERVIEW

    Research and Development Focused on High Value Crops
    and Improved Quality and Disease Resistance


     ...
SEMINIS GROWTH

Five New Products Identified As Key Product Launches By
End of the Decade

NEW PRODUCT OPPORTUNITY: PRODUC...
SEMINIS GROWTH

   Raised Head Broccoli Brings Cost of Harvesting Into
   Value of Seed
                                  ...
SEMINIS GROWTH

    Genetic Mapping Timetable Supports Commercial
    Launches of Molecular Breeding Hybrids by End of Dec...
SEMINIS GROWTH

Breeding Transfers Value of Virus Protection From Fungicide
Into Seed                          KEY REGIONS...
SUMMARY


Seminis One of Six Gross Profit Drivers for Monsanto,
Reflecting Growth Opportunity Through End of Decade

     ...
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monsanto 06-04-07

  1. 1. KERRY PREETE PRESIDENT, SEMINIS MERRILL LYNCH AGRICULTURAL CHEMICALS CONFERENCE June 5, 2007 1
  2. 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, including proceedings related to Solutia Inc.; developments related to foreign currencies and economies; successful completion and operation of recent and proposed acquisitions, including Delta and Pine Land Company; 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 periodic report to the SEC. 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. Mavera™ is a trademark of Renessen. All other trademarks are the property of their respective owners. © 2007 Monsanto Company 2
  3. 3. OVERVIEW Opportunity in Vegetables Parallels Opportunity in Corn Market a Decade Ago CURRENT STATUS OF BUSINESS AND MARKET ENVIRONMENT IN KEY CATEGORIES CORN VEGETABLES Large-acre Opportunity Small-acre Opportunity PRODUCTION VALUE High Value per Acre Medium Value per Acre Consolidated to major agricultural PRIMARY MARKETS Fragmented by crop and geography countries SEED VALUE >20 percent <10 percent (RELATIVE TO OTHER INPUT COSTS) DOWNSTREAM VALUE Commodity-oriented High-value food-oriented Advanced Infancy APPLIED TECHNOLOGY Significant use of biotechnology Beginning application of advanced and advanced breeding tools breeding tools Prolific SKU profile reflecting wide- Rationalized SKUs reflecting PORTFOLIO COMPOSITION ranging product offering by crop focused portfolio and geography Expanding Expanding Driven by strong demand for Driven by demand of growing biofuels and exports global incomes, growing MARKET DEMAND populations and focus on dietary improvement 3
  4. 4. OVERVIEW Reflecting Increasing Global Produce Demand, Vegetable Seed CAGR Projected at 4 Percent through 2012 VEGETABLE SEED: GLOBAL MARKET SIZE TOTAL INDUSTRY REVENUE PROJECTION (2006-2012) $3,250 ANNUAL INDUSTRY REVENUE $3,000 4 percent CAGR (IN $ BILLIONS) drives a seed market $2,750 opportunity of more than $3 billion annually by 2012 $2,500 $2,250 $2,000 2006 2007F 2008F 2009F 2010F 2011F 2012F MARKET BENCHMARKS SEED MARKET $2.6B RETAIL PRODUCE * $256B PRODUCTION ACRES 96M 4 * Includes developed food retail, processed and food service Source: Company estimates
  5. 5. OVERVIEW Top 10 Vegetable Seed Companies Generate Vast Majority of Industry Revenue; Market Highly Fragmented Thereafter VEGETABLE SEED: GLOBAL MARKET COMPOSITION TOP 10 VEGETABLE SEED COMPANIES BY REVENUE (2006)1 $600 $500 ANNUAL REVENUE (IN US$ MILLIONS) $400 $300 $200 $100 $0 Takii Seminis De Ruiter Sakata Nunhems Syngenta Vilmorin Rijk Zwaan Bejo Enza 1. Source: Rabobank 5
  6. 6. OVERVIEW Tomatoes, Peppers, Cucumbers and Melons Are Predominant Revenue and Acreage Opportunities INDUSTRY SALES: PRODUCT FAMILIES PRODUCTION ACRES: PRODUCT FAMILIES TOTAL INDUSTRY PROJECTION (2006) TOTAL INDUSTRY PROJECTION (2006) 7% 15% 11% 28% 31% 8% Solanaceous Solanaceous Cucurbits Cucurbits Brassica 13% Brassica Large Seed Large Seed 15% Leafy & Other Leafy & Other Root & Bulb Root & Bulb 22% 19% 19% 12% Product categories that Product categories that include tomatoes, include tomatoes, peppers, cucumbers and peppers, cucumbers and melons represent 50% of melons represent 50% of global vegetable seed global vegetable seed production acres revenue 6 Source: Company estimates
  7. 7. OVERVIEW Asia Represents Largest Current Production Acreage and Source of Greatest Future Demand REGIONAL BREAK OUT: INDUSTRY SALES REGIONAL BREAK OUT: PRODUCTION ACRES TOTAL INDUSTRY REVENUE PROJECTION (2006) TOTAL INDUSTRY ACRES PROJECTION (2006) 2% 5% 12% 23% Europe-Middle East Europe-Middle East 42% Asia Asia 4% South America South America North America North America 31% 81% Asia currently represents Asia is a disproportionate 31% in annual sales, but is representative of the the source of greatest production acreage, with growth into the early next low yields in lower value decade as rising incomes crops are creating more demand for vegetables 7 Source: Company estimates
  8. 8. OVERVIEW Yield – and Protecting Yield – Drives Grower Spend on Vegetable Seeds EXAMPLE: MULTIPLE MARKET OPPORTUNITIES -- TOMATOES YIELD/A SEED RATE/A SEED COST/A INPUT COST/ A REVENUE/A OPEN-FIELD DETERMINATE 32 tons $1.6K $2.4K 6Mx $42 PLASTIC HOUSE 57 tons $26K $32K 10Mx $1200 GREENHOUSE PROTECTED- 230 tons $180K $207K 14Mx $2600 CULTURE PROTECTED-CULTURE VALUE CREATION In protected culture cultivation, growers raise crops indoors where 30 AVERAGE SEED VALUE PER ACRE there is a controlled environment, 25 consistent quality and less 20 pressure from insects and disease. (INDEXED) 15 Because of the added value from 10 increased yield and quality, the premium on greenhouse tomato 5 seed is 26X seed for open-field 0 cultivation OPEN-FIELD PLASTIC HOUSE GREENHOUSE TOMATOES 8
  9. 9. SEMINIS GROWTH Since Joining Monsanto, Seminis Has Refocused on Gross Profit Growth, Leveraging Portfolio, Pricing and Breeding SEMINIS VALUE CREATION STAGED OPPORTUNITIES FOR INCREASING BUSINESS VALUE Seminis SITUATION: Significant use of • In 2006, narrowed molecular markers commercial and VALUE CREATION OPPORTUNITY research focus to 25 Aggressively make hybrid crops that generate the conversions in strategic crops most profit • Began application of Identify and implement opportunities breeding technology, to price products to value with a target of 1,000+ markers each for 9 Assemble genetic maps for key crops crops by 2009 OUTLOOK: • Use of molecular Focus on 25 most-profitable key crops markers and conversion to hybrids should allow 2005 2006 2007 2008 2009 2010 for new products with PIPELINE OPERATIONAL EXCELLENCE NEW VALUE CREATION improved value and ADVANCEMENT margins 9
  10. 10. SEMINIS GROWTH Four Growth Drivers Enrich Seminis Gross Profit Contribution Through 2012 SEMINIS GROWTH DRIVERS Seminis SITUATION: Four growth drivers build on the strength of the existing business and begin to leverage the capability Monsanto brings to Seminis to generate growth • In 2006, narrowed commercial through the end of the decade and research focus to 25 crops that generate the most profit Increase price of existing portfolio and • Began application of breeding PRICE new products launched on basis of value technology, with a target of created and shared with the grower 1,000+ markers each for 9 crops by 2009 Increase share in higher value segments OUTLOOK: MARKET SHARE via shifts to protected culture and • Through end of decade, MIX disease resistance products post 2010 Seminis grows through current offerings – via price and improved market share mix – Develop and launch products into high NEW PRODUCT and pipeline opportunity – with value segments with a focus on disease LAUNCHES new product launches resistance, protected cultures and yield Accelerate pipeline product launches PIPELINE through the use of new molecular ACCELERATION breeding tools 10
  11. 11. OVERVIEW Path Set to Improve Global Market Share Mix in Core Crop Areas CURRENT STATUS AND OPPORTUNITY: SEMINIS FOCUS CROPS IN PROFESSIONAL MARKETS CURRENT VALUE MARKET WEIGHTED VALUE SHARE OPPORTUNITY OPPORTUNITY AVERAGE GLOBAL TOP TWO (M ACRES) PRICE (ANNUALSALES $M) (percent) MARKETS SOLANACEOUS TOMATOES 7.9 $700/kg 20% $425-$475 Spain, U.S. PEPPERS 7.6 $1,200/kg 30% $275-$325 Spain, Mexico ROOT & BULB ONION $150-$200 U.S., Mexico 3.7 $100/kg 20% CUCURBITS CUCUMBERS 2.9 $125/kg 30% $150-$200 U.S., Mexico Spain, Central MELON $100-$150 1.3 $550/kg 15% America 11
  12. 12. SEMINIS GROWTH Market Capabilities to be Enhanced with Strategic Acquisitions in Key Markets, Crops CORN VEGETABLES In 2004, Monsanto established a new model Last month, Seminis announced a model with American Seeds, Inc. (ASI) – an for vegetables based on the success of ASI umbrella of companies that retain their in corn – establishing the International local brand equity and specialization, but Seed Group (ISG) to more directly connect with an added degree of back-end support vegetable customers to significant to speed innovation innovations in breeding while continuing to operate locally and building the value of brands INTERNATIONAL SEED GROUP LOCAL LOCAL LOCAL LOCAL SEED SEED SEED SEED COMPANY COMPANY COMPANY COMPANY WESTERN SEED POLONI SEMENCES BASED IN FRANCE, BASED IN HOLLAND, WITH STRENGTH IN SPECIALIZING IN MELON BREEDING PROTECTED CULTURE TOMATOES 12
  13. 13. OVERVIEW Research and Development Focused on High Value Crops and Improved Quality and Disease Resistance R & D SPEND TECHNOLOGY FOCUS: SEMINIS 2006 R&D SPEND SEMINIS 2006 R&D SPEND TOTAL ALLOCATION BY TECHNOLOGY SEGMENT TOTAL ALLOCATION BY CROP SEGMENT • R & D spend balanced between quality, disease and agronomic 16% 11% improvements 28% CROP FOCUS: 10% 34% • Spend by family Solanaceous aligned well with Cucurbits highest value crop Brassica 9% Large Seed families in the 30% Leafy & Other industry Root & Bulb • Focused on high 26% 14% value tomatoes, 23% peppers, cucumbers, onions Yield Disease and melons. Quality Agronomic 13
  14. 14. SEMINIS GROWTH Five New Products Identified As Key Product Launches By End of the Decade NEW PRODUCT OPPORTUNITY: PRODUCTS TO BE LAUNCHED BY END OF DECADE MARKET PRODUCT TYPE OF VALUE PER KEY MARKETS OPPORTUNITY CONCEPT BENEFIT ACRE (TOTAL ACRES) SOLANACEOUS Disease, Multiple agronomic nematode SWEET PEPPER $1,600 26,000 U.S. improvements and virus resistance BRASSICA Enabled RAISED HEAD Labor Up to $600 200,000 U.K., Spain, U.S. mechanical BROCCOLI savings harvest CUCURBITS $80-$100 50,000 pickling pickling Disease Disease CUCUMBER U.S., Mexico resistance resistance 100,000 slicers $150-$170 slicers $160 NA Enhanced WATERMELON Ultra firm flesh 100,000 U.S., Mexico, Europe processing $260 EA LEAFY Processor Extended RUGBY LETTUCE $160 40,000 U.S., Mexico Quality shelf life 14
  15. 15. SEMINIS GROWTH Raised Head Broccoli Brings Cost of Harvesting Into Value of Seed KEY REGIONS Spain, U.K., Mexico, U.S. AVAILABLE ACRES 200K Acres Raised-Head Broccoli PERCENT PENETRATED 0% VALUE OPPORTUNITY: RAISED HEAD BROCCOLI Seminis Raised Head Broccoli PROJECT CONCEPT: Mechanical • Raised head broccoli enables mechanical harvesters can harvest with improved quality move through 2007 PERFORMANCE UPDATE: fields, more easily • Breeding and mechanical harvester removing prototypes developed individual • Commercial varieties under development broccoli heads • Demonstration trials planted from raised- head varieties Labor for traditional broccoli harvesting costs roughly $200-$400 an acre Targeting the increased use of mechanization for harvesting, the cost savings per acre could be up to 80% of the labor savings Reduced cooling/warehousing costs and greater harvest flexibility provide additional $200/acre of savings Raised-head on broccoli Market delivery improvement leads to enhanced quality plants 15
  16. 16. SEMINIS GROWTH Genetic Mapping Timetable Supports Commercial Launches of Molecular Breeding Hybrids by End of Decade MARKER PLATFORMS MARKER APPLICATION FOR KEY CROPS (2006-2009) Seminis SITUATION: 5,000 SWEET CORN • Began application of NUMBER OF MARKERS DEVELOPED breeding technology, with genome-wide marker platform for tomatoes and peppers • Melons, watermelons TARGET: 1,000 and brassica family of 1,000 markers cabbage, broccoli and cauliflower next OUTLOOK: BRASSICA • By 2009, Seminis 500 TOMATO should have 1,000+ markers for each of the MELON 9 crops PEPPER EXPLORATORY: ONION, CUCUMBER, LETTUCE, BEAN WATERMELON 2009F 2007F 2008F Current Status 16
  17. 17. SEMINIS GROWTH Breeding Transfers Value of Virus Protection From Fungicide Into Seed KEY REGIONS Europe, U.S., Mexico AVAILABLE ACRES 120K Acres PERCENT PENETRATED 0% Tomato Yellow Leaf Curl – 2ND GENERATION Virus VALUE OPPORTUNITY: TOMATO YELLOW LEAF CURL VIRUS SECOND GENERATION Seminis Tomato Yellow Leaf Curl Virus FIRST GENERATION: • The first generation of resistance to tomato yellow leaf curl is in the marketplace and is increasing in penetration with profound effects on grower returns vs. susceptible varieties SECOND GENERATION: • Second generation resistance identified and working aggressively to bring to the marketplace Yield losses from areas affected by tomato yellow leaf curl virus range from 50%-90%. Value creation is $1000-$3250 per acre. Disease is prevalent in most tropical climates where tomatoes are grown, including Florida, Mexico, Southern Europe, Northern Africa, Australia and Japan 17
  18. 18. SUMMARY Seminis One of Six Gross Profit Drivers for Monsanto, Reflecting Growth Opportunity Through End of Decade MONSANTO’S OPPORTUNITY SEMINIS CONTRIBUTION By the end of the decade, Monsanto projects a Seminis’ core business is currently a 60% gross margin in the range of 51-53%, reflecting margin business. That margin mix should growth opportunity in six areas of seeds and further improve by the end of the decade traits as Seminis continues to focus on its four key growth drivers: 54% PRICE GROSS MARGIN ‘PULL’ 52% MARKET SHARE MIX 50% NEW PRODUCT LAUNCHES 48% CURRENT LEVEL PIPELINE 46% ACCELERATION 44% 2003 2004 2005 2006 2007F 2008F 2009F 2010F 18
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