monsanto 11-10-05e
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monsanto 11-10-05e monsanto 11-10-05e Presentation Transcript

  • BRETT BEGEMANN EXECUTIVE VICE PRESIDENT, INTERNATIONAL COMMERCIAL MONSANTO BIENNIEL U.S. INVESTOR DAY Nov. 10, 2005 1
  • OVERVIEW Two-Step, Two-Horizon Strategy Creates a Line of Sight for Success through 2010 TARGET: INTERNATIONAL COMMERCIAL 2006 2007 2008 2009 2010 GROW Grow Current Portfolio Grow Globally LEAD Grow the Pipeline Lead through Innovation Lead in an Increasingly Competitive Market Lead in New Market Opportunities 2
  • OVERVIEW Roundup Brand Remains Stable Internationally After More Than a Decade Post-Patent International Branded Roundup Herbicide CREATING VALUE BUSINESS REPORT Higher 2005 pricing was unique event; pricing to return to $11- International Branded $13 per REG band Roundup Herbicide quot; Decreased ! Increased Incremental branded volume quot; growth with Roundup Ready Business Complexity crop expansion ! Working capital management Product Innovations remains priority, particularly in Latin America Staffing quot; Working Capital Investment 3 View slide
  • OVERVIEW U.S., Argentina and Brazil Supply World’s Corn and Soy Needs WORLD AREA GRAIN PRODUCTION EUROPE UNITED STATES ASIA 2005 2010 2005 2010 2005 2010 Corn 52M MT 55M MT Corn 278M MT 297M MT Corn 122M MT 132M MT Soy 1M MT 3M MT Soy 86M MT 81M MT Soy 22M MT 23 MT ARGENTINA BRAZIL 2005 2010 2005 2010 Corn 44M MT 53M MT Corn 23M MT 27M MT Soy 60M MT 81M MT Soy 38M MT 40M MT Production = Consumption Net Importer Net Exporter 4 Source: U.S.D.A. Foreign Agricultural Service, ABIOVE, Independent Economists & Monsanto Estimates View slide
  • OVERVIEW Regulatory Know-How in Complex Global Environment Provides Competitive Edge INTERNATIONAL PRODUCT APPROVALS# 40 NUMBER OF PRODUCTS 30 20 10 0 APPROVING GRANTING IMPORT GROWING 2004 2005 2006F 2010F FIELD TRIALS APPROVALS BIOTECH CROPS 5
  • OVERVIEW Acceleration In Seeds and Traits Drives International Commercial Gross Profit Evolution MONSANTO GROSS PROFIT GROWTH 2003 2005 2007F TOTAL GROSS TOTAL GROSS TOTAL GROSS PROFIT = $2.3M PROFIT = $3.0M PROFIT = $3.6M ALL OTHER AGRICULTURAL SEEDS & GENOMICS ROUNDUP AND OTHER PRODUCTIVITY GLYPHOSATE-BASED HERBICIDES 6
  • GROW AND LEAD Opportunity for Near-Term Growth in International Driven by Seed and Trait Expansion TARGET: INTERNATIONAL COMMERCIAL 2006 2007 2008 2009 2010 GROW Grow value of corn franchise LEAD Grow branded and licensed cotton trait market share while rapidly penetrating second- Monsanto’s global “genetic footprint” generation stacked trait combinations • has expanded Drive additional biotech penetration globally, led Monsanto’s combination of germplasm and by Brazil, India and Australia • stacked traits is platform of choice for farmers Commercialize new agronomic biotech trait Full value is being captured in international • products, and accelerate breeding gains globally markets that have started to upgrade to stacked and next-generation trait products 7
  • LEAD Diverse Genetic Pool in Corn Continues to Create New Opportunities Internationally Through End of Decade TARGET: LEAD International Monsanto’s global “genetic footprint” Breeding Effort has expanded INTERNATIONAL GERMPLASM NETWORK Monsanto has the largest private international collection of corn germplasm, spanning 6 continents, 3 temperature zones, and 36 acquired breeding programs U.S. shares germplasm with Europe and Argentina Brazil shares germplasm with South Africa and Asia 8
  • GROW Monsanto’s Global Germplasm Reach Has Translated Into Greater Market Share TARGET: GROW International Corn Grow value of corn franchise Commercial Markets SCORECARD BRANDED We would expect 2004 TO SHARE 2005 POSITION sustainable growth of 1 to 2 +2.2% #3 points per year $ EUROPE-AFRICA REGION +2.5% #4 FRANCE +1.7% #3 ITALY +1.2% #1 HUNGARY +5.2% #2 TURKEY +5.7% #1 SOUTH AFRICA +1.9% #1 $ ASIA PACIFIC REGION +5.1% #1 INDIA FLAT #1 $ LATIN AMERICA REGION +1% #1 MEXICO FLAT #1 BRAZIL FLAT #1 ARGENTINA 9
  • GROW Global Breeding Programs Should Fuel Future Market Share Growth in Seed in Europe-Africa TARGET: GROW International Corn Grow value of corn franchise Commercial Markets EUROPE-AFRICA CORN MARKET SHARE GROWTH Seed supply strategy MONSANTO BRANDED SEED to increase reliability GAINED 4 SHARE POINTS IN THE LAST 2 YEARS 18% Branded 16% performance gains 14% driving share growth 12% SUSTAINABLE 10% 1-2 POINT Driving growth in 8% BRANDED 6% SHARE GAINS Eastern Europe 4% 2% 0% 2003 2004 2005 2006F 2007F 10
  • GROW In India, Global Breeding Programs Should Fuel Market Expansion in Corn TARGET: GROW International Corn Grow value of corn franchise Commercial Markets INDIA CORN MARKET SHARE GROWTH Conversion of open MONSANTO BRANDED SEED pollinated to GAINED 10 SHARE POINTS IN THE LAST 2 YEARS hybridization 40% expands market 35% potential 30% 25% SUSTAINABLE Introduction of new 20% 1-2 POINT BRANDED hybrids with 15% SHARE GAINS 10% superior fit 5% 0% 2003 2004 2005 2006F 2007F 11
  • LEAD Europe Is Next Opportunity for a Multiple Channel Approach TARGET: LEAD European Monsanto’s global “genetic footprint” Channel Strategy has expanded 2005 COMPETITIVE CORN YIELD COMPARISON 1 Channel: Owned 160 Outlet: Retail Target reach: National 150 BUSHELS/ACRE 140 130 120 2 110 Channel: Licensed, non-exclusive 100 Outlet: Retail, Regional 85 90 95 100 105 110 115 Target reach: Europe-Africa RELATIVE MATURITIES (DAYS) COMPETITORS MONSANTO BRANDS 12
  • LEAD Argentine Corn Technology and Breeding Capabilities Drive Enough Materials for Two Channels TARGET: LEAD Argentine Monsanto’s global “genetic footprint” Channel Strategy has expanded TRAIT PENETRATION IN ARGENTINE CORN MARKET 1 Channel: Owned 80% Outlet: Retail 70% Target reach: National 60% 50% Higher 40% Penetration and 30% Stack Launch 20% 2 10% Channel: Licensed, non-exclusive 0% Outlet: Retail, Regional 1999 2000 2001 2002 2003 2004 2005 2006F 2010F Target reach: National YIELDGARD CORN BORER ROUNDUP READY TRAIT TRAIT PENETRATION PENETRATION 13
  • LEAD Market Potential for Biotech Traits Highlights Continued Growth Opportunity TARGET: LEAD Market Opportunity Monsanto’s combination of germplasm and stacked traits is platform of choice SOYBEANS COTTON CORN Roundup Roundup Bollgard I Roundup YieldGard YieldGard KEY Ready Ready and II Ready Corn Borer Rootworm MARKETS Flex # BRAZIL 50M 3M 2M 20M 15M 5M ARGENTINA 35M - - 5M 4M 1M INDIA - 10-15M 10-15M - - - EUROPE 1M - - 24M 8M 5M AFRICA 0.2M 11M 10M 6M 4M - AUSTRALIA - 0.5M-0.8M 0.5M-0.8M - - - 22.5M - TOTAL KEY 24.5M - 86.2M 55M 31M 11M MARKETS 29.8M 27.8M UPDATED FORECAST 14
  • LEAD Momentum in Cotton Trait Adoption Will Accelerate With Second-Generation Launches in India and Australia TARGET: LEAD Second-Generation International markets upgrade to stacked • Traits and next-generation trait products COTTON RETAIL VALUE IN AUSTRALIAN MARKET In India, biotech cotton adoption reflects economic and environmental benefits 150 Yield Increase 58% 125 Pesticide Reduction (50%) 100 Farmer Net Return 163% US $/ACRE 75 In India, Bollgard II will launch on small acres 50 in 2006 and Roundup Ready Flex in 2010 25 range In Australia, success of 0 ROUNDUP ROUNDUP STACK WITH CONVENTIONAL BOLLGARD II Bollgard II / Roundup READY READY BOLLGARD II & COTTON SEED FLEX COTTON ROUNDUP Ready sets stage for READY FLEX launch of Bollgard II/ Roundup Ready Flex starting in 2006 15
  • LEAD Brazil Offers Largest Global Opportunity to Create Value From New Trait Penetration TARGET: LEAD Brazilian Value Drive additional trait penetration • Capture System globally Situation Update: Seed Monsanto Planted soybean Multiplier acres: 50M Dual value-capture 4-5M acres for sale systems Royalty received Retail price suggested at from seed $9 per acre New seed royalty Soybean supplier Farmer Saved seed paid upon delivery of grain Grain Grain delivery system Monsanto Delivery to be expanded in Brazil Royalty received 15–20M from grain company, acres saved seed shared generously Fee of $4.50 per acre 16
  • LEAD Second-Generation Roundup RReady2Yield Soybeans Will Upgrade Traits Globally TARGET: LEAD Roundup RReady2Yield Monsanto’s combination of germplasm Soybeans and stacked traits is platform of choice Return value to farmer by BRAZILIAN HISTORICAL SOY YIELD GAINS bringing new technology Yield improvement of 3 - 4+ bushels per 45 acre in 2004 field trials y = 0.9043x - 1772.2 40 BUSHELS/ACRE Flexibility by 35 providing wider 30 window of application 25 Research under way 20 on potential for additional insurance 1991 1996 2001 2006 for Asian soybean rust Provides the platform for future soy technologies Source: CONAB & Monsanto estimates 17
  • LEAD Market Potential for Biotech Traits Highlights Continued Growth Opportunity TARGET: LEAD Market Opportunity Monsanto’s combination of germplasm and stacked traits is platform of choice SOYBEANS COTTON CORN Roundup Roundup Bollgard I Roundup YieldGard YieldGard KEY Ready Ready and II Ready Corn Borer Rootworm MARKETS Flex # BRAZIL 50M 3M 2M 20M 15M 5M ARGENTINA 35M - - 5M 4M 1M INDIA - 10-15M 10-15M - - - EUROPE 1M - - 24M 8M 5M AFRICA 0.2M 11M 10M 6M 4M - AUSTRALIA - 0.5M-0.8M 0.5M-0.8M - - - 22.5M - TOTAL KEY 24.5M - 86.2M 55M 31M 11M MARKETS 29.8M 27.8M 15% 0% 20% 0% 59% 0% UPDATED FORECAST BIOTECH ACRES PLANTED 2005 REMAINING AVAILABLE MARKET 18
  • GROW AND LEAD Opportunity for Near-Term Growth in International Driven by Seed and Trait Expansion TARGET: INTERNATIONAL COMMERCIAL 2006 2007 2008 2009 2010 GROW Grow value of corn franchise LEAD Grow branded and licensed cotton trait market share while rapidly penetrating second- Monsanto’s global “genetic footprint” generation stacked trait combinations • has expanded Drive additional biotech penetration globally, led Monsanto’s combination of germplasm and by Brazil, India and Australia • stacked traits is platform of choice for farmers Commercialize new agronomic biotech trait Full value is being captured in international • products, and accelerate breeding gains globally markets that have started to upgrade to stacked and next-generation trait products 19