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monsanto 11-10-05d

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  • 1. BRETT BEGEMANN EXECUTIVE VICE PRESIDENT, INTERNATIONAL COMMERCIAL LUNCH PRESENTATION: THE SEMINIS COMMERCIAL OPPORTUNITY MONSANTO BIENNIAL U.S. INVESTOR DAY Nov. 10, 2005 1
  • 2. OVERVIEW Seminis Provides Ready-Made, Leading Position in Untapped Seed Segment for Monsanto SEMINIS SALES GROWTH Seminis outperformed original 580 financial expectations in 2005, expected to be accretive in 560 2006 and 2007 540 Richness of germplasm and 520 breeding capabilities 500 confirmed, ready to be accelerated 480 Opportunities to enhance 460 market share and pricing 440 being further refined 420 Kerry Preete and Marlin 2003 2004 2005 Edwards to join Seminis to complement commercial, breeding strategies Note: 2003 Seminis fiscal year 2
  • 3. OVERVIEW Seminis’ Commercial Portfolio Adds Diversity Globally and Opens the Door to Small-Acre Crops 2005 SEED SALES BY REGION 2005 SEED SALES BY PRODUCT FAMILY LEAFY & LARGE OTHERS SEED SOUTH AMERICA ROOT & BULB ASIA EUROPE-AFRICA SOLANUM CUCURBITS NORTH AMERICA BRASSICAS 3
  • 4. OVERVIEW Seminis Is a Leader In Every Major World Market, Yet Still Has Opportunity to Grow EUROPE-AFRICA NORTH AMERICA 2005 Market Share 19% 2005 Market Position 1 Market Share 34% Market Position 1 ASIA 2005 Market Share 7% Market Position 3 SOUTH AMERICA 2005 Market Share 37% Market Position 1 4
  • 5. GROW AND LEAD Seminis Builds Current Pipeline First, Creates Space for Future Breeding Advancements TARGET: SEMINIS 2006 2007 2008 2009 2010 GROW Grow Seminis by advancing and LEAD refreshing current product pipeline, while building new base for cutting-edge breeding Seminis is a substantial part of the technologies company’s margin expansion, led by growth from new generation of breeding improvements in the product portfolio, and by expanded go-to- market approaches 5
  • 6. GROW Like Our Large-Acre Businesses, Seminis’ Targets Are in Farmer, Processor, Consumer Markets CONSUMER PROCESSOR FARMER CUSTOMER BENEFITS BENEFITS BASE BENEFITS PRODUCT • YIELD • UNIFORMITY • NUTRITION VALUE • DISEASE RESISTANCE • SHELF-LIFE • CONVENIENCE • PRODUCTIVITY • PACK-OUT • FLAVOR • COLOR VALUE SEED SALES TO FARMERS SHARED PREMIUM WITH SHARED PREMIUM WITH CREATION PROCESSORS END-PRODUCT FOOD COMPANIES Through 2007, strongest financial contribution will come from optimizing existing business, which largely focuses on seed sales to farmers 6
  • 7. GROW Foundation for Long-Term Growth Starts with World’s Leading Germplasm Library, Intellectual Property As in our large-acre crops, Seminis’ germplasm GERMPLASM resources create global foundation for RESOUCES application of new breeding technologies Breeding 1.5 Million Lines 100 Technology (Across public Alliances and private EUROPE- AFRICA organizations) 52 research or NORTH ASIA- Research screening AMERICA PACIFIC Stations stations in 17 countries 148 owned or Patents co-owned SOUTH AMERICA PVP 717 issued or Certificates pending 7
  • 8. LEAD Cucurbits and Solanaceous Families Are Largest Investments in Seminis Active Breeding Programs PERCENT OF R&D PROGRAM PRIMARY CROP TARGETS FAMILIES SPEND BROCCOLI CAULIFLOWER BRASSICA 13% BRUSSELS SPROUTS RADISH CABBAGE CUCUMBER SQUASH CUCURBITS 26% GOURD WATERMELON MELON BEAN PEA LARGE SEED 11% OKRA SWEET CORN CELERY CORIANDER- FENNEL CILANTRO LEAFY 10% ENDIVE-ESCAROLE LETTUCE SPINACH BEET LEEK ROOT & BULB 11% CARROT ONION EGGPLANT SWEET PEPPER SOLANACEOUS 29% HOT PEPPER TOMATO 100% FOCUS CROPS TARGETED FOR GENETIC MAPPING, POTENTIAL FOR ACCELERATED BREEDING 8
  • 9. GROW Significant Value Is Created in Hybrid Conversion MULTIPLIER VALUE PERCENT HYBRID – HISTORY OF CROP Price premium over open HYBRIDIZATION INDUSTRYWIDE pollination exclusive of volume effect First hybridized in TOMATOES 88% 80 Times 1939 in England First male sterility PEPPERS 87% 50 Times lines discovered in 1958 in U.S. First hybridized in MELON 95% 40 Times 1955 in U.S. First hybridized in 1955 in U.S.; first WATERMELON 95% 20 Times seedless watermelons developed in 1962 First hybridized in 1950 in U.S.; SPINACH 85% 4 times developed with resistance to downey mildew Male sterility lines ONIONS 50% 3 Times discovered in 1925 in U.S. 9
  • 10. GROW Fresh Cut Melons Important Entrée Into Creating Additional Processor Value Fresh Cut Melons CREATING VALUE 2005 FIELD REPORT Melon product with better shelf life and sugar levels for fresh-cut retail products MULTI-STAGE: PHASE II THROUGH LAUNCH Not as well as Better than As expected expected expected Quality FRENCH KISS Horticultural Performance New Hybrids (PS03913108 and French Kiss) OBSERVATIONS • 55% useable cut-fruit yield versus industry average of 35% • Higher marketable yield and profitability • Better shelf life and excellent flavor • Growers, processors recognizing role of genetics in fresh 3108 cut fruit DISCOVERY PHASE I PHASE III PHASE II PHASE IV LAUNCH Proof of Concept Adv. Development Early Development Pre-Launch 10
  • 11. GROW Freshness of Portfolio Mix Critical to Success; Target in Low 20% Range Going Forward SEMINIS FRESHNESS INDEX 25% PERCENT OF NEW PRODUCTS IN 20% COMMERCIAL PORTFOLIO 15% 10% 5% 0% 2002 2003 2004 2005 11
  • 12. GROW Seminis Begins to be Accretive in Fiscal Year 2006, With Acceleration in 2007 MONSANTO ONGOING EPS $3.50 $3.00 Seminis modestly accretive in 2006; $2.50 adds 20-25 cents per share in 2007 $2.00 Seminis $1.50 contributes $75M- $100M free cash $1.00 2006-2007 $0.50 $0.00 2004 2005 2006F 2007F 12

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