EUROPEAN KEY INVESTOR TOUR


November 3-7, 2008
Forward-Looking Statements

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


While Metrics and Projections Vary, Fundamentals of
Demand-Driven Environment for Grain Remain Strong
...
STRATEGIC OUTLOOK

Global Corn Production Per Acre Is Sub-Optimized Today,
Creating an Opportunity for Innovation
        ...
STRATEGIC OUTLOOK

             Monsanto’s Innovation Targeted at Doubling Yield by 2030,
             Extending Competiti...
STRATEGIC OUTLOOK


Monsanto’s Growth Opportunity Lies at the Intersection of
Demand, Innovation and Execution


 Monsanto...
FINANCIAL OUTLOOK

    Yield and Innovation Create the Runway of Growth to 2012
    for Seeds & Traits and for Monsanto as...
FINANCIAL OUTLOOK

Near Term, 2009 Again Projects Double-Digit Earnings
Growth and Strong Cash Generation
                ...
USES OF CASH

Over 70% of the $2.8 Billion of Operating Cash Generated
Invested in Acquisitions, Technology and Capital in...
STRATEGIC OUTLOOK

Seed Platforms Are Business Foundation, Establish Footprint
for Traits, and Create Diversified Crop Por...
STRATEGIC OUTLOOK

Significant Growth Opportunity in Expansion of Existing and
Near Term Commercial Biotech Traits Globall...
FINANCIAL OUTLOOK

 Increased 2009 and 2012 Targets for Roundup Reflect
 Sustainability Even As Supply-Demand Comes Into B...
R&D PIPELINE

 R&D Engine Is Poised to Launch Average of One Game-
 Changing Technology Every Other Year Through Mid-Decad...
R&D PIPELINE

Monsanto’s Yield Leadership Widens With Each New Game-
Changing Technology Launched

                       ...
STRATEGIC OUTLOOK


While Metrics and Projections Vary, Fundamentals of
Demand-Driven Environment for Grain Remain Strong
...
STRATEGIC OUTLOOK

Global Corn Production Per Acre Is Sub-Optimized Today,
Creating an Opportunity for Innovation
        ...
STRATEGIC OUTLOOK


Monsanto’s Growth Opportunity Lies at the Intersection of
Demand, Innovation and Execution


 Monsanto...
STRATEGIC OUTLOOK

             Monsanto’s Innovation Targeted at Doubling Yield by 2030,
             Extending Competiti...
FINANCIAL OUTLOOK

    Yield and Innovation Create the Runway of Growth to 2012
    for Seeds & Traits and for Monsanto as...
FINANCIAL OUTLOOK

Near Term, 2009 Again Projects Double-Digit Earnings
Growth and Strong Cash Generation
                ...
USES OF CASH

Over 70% of the $2.8 Billion of Operating Cash Generated
Invested in Acquisitions, Technology and Capital in...
FINANCIAL OUTLOOK

On Track in 2008, Growth Drivers Continue to Set Stage for
Growth Through 2012
                        ...
OVERVIEW


Gross Profit Growth Comes From Two-Step Strategy:
Establish Seed Footprint, Then Layer on Biotech Traits




  ...
STRATEGIC OUTLOOK

Significant Growth Opportunity in Expansion of Existing and
Near Term Commercial Biotech Traits Globall...
CORN SEED & TRAITS


Corn Gross Profit to Expand 25-30% in 2009, Reflecting
Continuing Momentum in Seed Share and Trait Pe...
FINANCIAL OUTLOOK

  Yield-Enhancing Technology Creates Value – Returning
  $1.50-$3 For Every Dollar Spent By Farmers in ...
CORN SEED & TRAITS


U.S. DEKALB Share Consistently Ahead of Expectations;
Growth Trend Continues in 2009

         DEKALB...
CORN SEED & TRAITS

Seed Platforms Are Business Foundation, Establish Footprint
for Traits, and Create Diversified Crop Po...
CORN SEED & TRAITS

Triple Stack Penetration Accelerates, Creating Added Growth
and Setting Stage for SmartStax Launch

  ...
CORN SEED & TRAITS

Monsanto’s Leadership Continues With Next Game-
Changer in Corn; SmartStax Resets Trait Platform in 20...
CORN SEED & TRAITS

Larger Seed Footprints in South America Enable Larger
Launches and Faster Ramp Up Than Competition
   ...
monsanto ea_investor_tour
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monsanto ea_investor_tour

  1. 1. EUROPEAN KEY INVESTOR TOUR November 3-7, 2008
  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; 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 2
  3. 3. STRATEGIC OUTLOOK While Metrics and Projections Vary, Fundamentals of Demand-Driven Environment for Grain Remain Strong USDA LONG-TERM PROJECTIONS: STATE OF AGRICULTURE: CORN AND SOYBEAN TOTAL TRADE – 2006-2017 Strong Demand Environment FACTORS: 110 70 ► INCREASING PROTEIN Corn Total Trade Soybean Total Trade Soybeans – million metric tons DEMAND 60 105 Corn – million metric tons Wealth drives meat 50 100 consumption – changing feed 40 demand 95 ► ASCENSION OF CHINA 30 China’s growth is driving 90 20 huge changes in global oilseeds and grain trade 85 10 ► ESTABLISHMENT OF BIOFUELS 80 0 Assuming only base-case adoption of biofuels, more corn and soy needed in next decade USDA Demand Outlook • Global corn trade expected to grow 15 percent by 2017 • Imports by China and Mexico help spur demand • USDA assumption on U.S. planted corn acres: ~90M • Global soybean trade grows 40 percent by 2017 • 80 percent of growth is driven by China • USDA assumption on U.S. planted soybean acres: ~70M 4 Source: USDA Agricultural Projections to 2017, available at: http://www.ers.usda.gov/Publications/OCE081/
  4. 4. STRATEGIC OUTLOOK Global Corn Production Per Acre Is Sub-Optimized Today, Creating an Opportunity for Innovation GLOBAL CORN PRODUCTION1: YIELD CORE PRODUCTIVITY MEASURES AND EVALUATION Boosting yield-per- acre can make a meaningful CANADA difference in EU 27 3M ACRES supply-demand 136 BU/AC 500M BUSHELS 27M ACRES 90% HYBRID environment U.S. 99 BU/AC CHINA 2B BUSHELS • If India, Mexico 90M ACRES 151 BU/AC 67M ACRES MEXICO 13B BUSHELS 83 BU/AC and Brazil moved 6B BUSHELS 18M ACRES 25% HYBRID to 100 bushel per INDIA 48 BU/AC BRAZIL 900M BUSHELS acre yields, they 20M ACRES 36M ACRES 45% HYBRID 75% HYBRID 32 BU/AC could produce 58 BU/AC 700M BUSHELS 2B BUSHELS nearly 4 billion additional ARGENTINA bushels of corn 10M ACRES 111 BU/AC 900M BUSHELS annually – equal to total world Optimization of yield per acre corn exports in 2007 Poor/Subsistence Sub-Optimized Optimized 5 1. Source is USDA FAS and internal estimates.
  5. 5. STRATEGIC OUTLOOK Monsanto’s Innovation Targeted at Doubling Yield by 2030, Extending Competitive Lead and Creating New Value DOUBLING YIELD WITH TECHNOLOGY: DOUBLING YIELD BY 2030 U.S. CORN EXAMPLE U.S. BASELINE CROP 2000 BASELINE1 325 137 bu/ac Corn: 300 37 bu/ac Soybeans: 275 Historical Yield 632 lbs/ac 250 Cotton: U.S. Yield Per Acre (bu/ac) 30-Year Trend 225 STRATEGIC RATIONALE Molecular Breeding Advances 200 Biotech Advances Helping meet global demand 175 150 Furthering competitive lead 125 Creating new value for 100 farmers that creates 75 sustainable growth 50 opportunities 25 0 1970 1980 1990 2000 2010 2020 2030 2030 U.S. YIELD U.S. YIELD TARGET ~300 bu/ac 151 bu/ac 2030: 2007: 1. Average U.S. yield by crop, USDA NASS 6
  6. 6. STRATEGIC OUTLOOK Monsanto’s Growth Opportunity Lies at the Intersection of Demand, Innovation and Execution Monsanto’s Simple Philosophy on Opportunity: YIELD More demand requires more INNOVATION More yield requires more GROWTH More innovation delivers more 7
  7. 7. FINANCIAL OUTLOOK Yield and Innovation Create the Runway of Growth to 2012 for Seeds & Traits and for Monsanto as a Whole 2012 GROSS PROFIT TARGET GROSS PROFIT COMMITMENT: RELATIVE TO 2007 BASELINE 2007-2012F $9.5 - Total Gross Profit $9.75B $10,000 $9.5- BUSINESS DETAIL $8.6-9.1B $9.75B Roundup and Other $8,000 ~$1.9B Glyphosate-Based $8-8.5B >2X ~2.25X Herbicides GP (in millions) ~2X 2007 2007 BASELINE ~$300M All Other Ag $6,000 BASELINE 2007 Productivity BASELINE $7.3- Seeds & Genomics $4,000 $7.5B $4,230 2.6-2.7x Corn Seed & $2,000 Traits ~2x Soybean Seed & $0 Traits ORIGINAL MID-YEAR CURRENT BASELINE TARGET UPDATE GUIDANCE ~2x Cotton Seed & 2007 2012F Traits >2.5x •INCREASED •BETTER Vegetable Seeds ROUNDUP GROWTH IN GP TARGET SEEDS & TO $1.8B TRAITS •2008 ACQUISITIONS •ROUNDUP GP TARGET OF $1.9B 8
  8. 8. FINANCIAL OUTLOOK Near Term, 2009 Again Projects Double-Digit Earnings Growth and Strong Cash Generation 2008 2009F EARNINGS $4.20-$4.40 $3.64 ONGOING EARNINGS PER SHARE ~15-20% GROWTH >80% GROWTH FROM 2007 FROM 2008 Seeds & Genomics Gross Profit $3.9B $4.5-$4.6B Corn Seed & Traits Gross Profit $2.2B ~$2.8B Soybean Seed & Traits Gross Profit $725M ~$700M Cotton Seed & Traits Gross Profit $313M ~$300M Vegetable Seeds Gross Profit $394M ~$500M All Other Seed & Traits Gross Profit $251M ~$200M Roundup And All Other Glyphosate-based $2.0B $2.3-2.4B Herbicides Gross Profit All Other Ag Productivity Gross Profit $344M ~$400M CASH MANAGEMENT AND SPENDING FREE CASH FLOW $772M ~$1.8B Operating Cash $2.8B >$3B Capital Expenditures $918M ~$1B SG&A as a Percent of Sales 20% 19% Range R&D as a Percent of Sales 9% 9.5%-10% Range 9
  9. 9. USES OF CASH Over 70% of the $2.8 Billion of Operating Cash Generated Invested in Acquisitions, Technology and Capital in FY08 USES OF CASH PERCENT OF $2.8B OPERATING CASH USED BY CATEGORY: FY2008 2% Cash Generation 13% $772M FY2008 Free Cash Flow: 37% FY2009 Free Cash ~$1.8B Flow Forecast1: 15% CASH PRIORITIES • Bolster direct returns to shareowners • Support commercial growth through capital spending • Invest in future growth through 33% technology collaborations Acquisitions and • Expand the core through strategic Technology Collaborations acquisitions Capital Spending Dividends Share Repurchase 1. Estimate does not contemplate strategic acquisitions. Other 10
  10. 10. STRATEGIC OUTLOOK Seed Platforms Are Business Foundation, Establish Footprint for Traits, and Create Diversified Crop Portfolio Globally U.S. 2012 2008 SHARE TARGETS EU27 25.5% 30-34% 2008 SHARE 2012 TARGETS DEKALB 10.5% ~15% 12% 16-20% ASI CORN 20% 24-28% Asgrow 9% 10-12% ASI INDIA 2008 SHARE 2012 TARGETS 41% ~50% Deltapine 36% 40-44% CORN 5% 12% COTTON LA - NORTH 2008 SHARE 2012 TARGETS 62-66% 58% CORN BRAZIL 2008 SHARE 2012 TARGETS 40% 44-48% CORN ARGENTINA 2008 SHARE 2012 TARGETS 21% 31% COTTON 46% 50-54% CORN Share for row crops provided reflects sales volume for Monsanto brands divided by total planted acres in respective geography. Corn represents hybrid corn share in each respective market. Source for Deltapine share in the U.S. is dmrkynetic 2008 new certified seed share estimates. 11
  11. 11. STRATEGIC OUTLOOK Significant Growth Opportunity in Expansion of Existing and Near Term Commercial Biotech Traits Globally SOYBEANS COTTON CORN INTERNATIONAL MARKET OPPORTUNITY ROUNDUP ROUNDUP BOLLGARD ROUNDUP YIELDGARD MARKET OPPORTUNITY FOR BIOTECH TRAITS THROUGH 20101 ROUNDUP YIELDGARD READY READY AND READY CORN SMARTSTAX READY ROOTWORM BOLLGARD II CORN 2 BORER 2 YIELD (FLEX) U.S. 65-75M 45-55M 10-12M 6-8M 80M 60-70M 45-55M 60-65M 2008 Penetration 97% 0% 63-75% 74-98% 86% 64-75% 55-67% 0% 45-50M2 Brazil 50-60M 3M 2M 15-20M 15-20M 5M 15-20M Argentina 40M - - - 9M 7M 5M 5-7M India - - 15-20M 18-20M 6M 6M - 5-6M Europe (EU27) 1M - - - 24M 8M 5M 15-20M South Africa 0.2M - .15M .15M 6M 4M - 4M 0.5M- Australia - - 0.5M-0.8M - - - - 0.8M OPPORTUNITY: 91-101M 45-50M 19-24M 21-23M 60-65M 40-45M 15M 44-57M Total Intl. Markets 2008 Penetration 77-86%1 66-74% 0% 3-4% 3% 20-23% 0% 0% of Intl. Markets Note: Market Opportunity reflects total acres where technology is applicable, not necessarily acres projected for penetration by 2010. 1. Primarily Bollgard I penetration; opportunity to expand to second generation technology. Roundup Ready 2 Yield is planned to be launched in Brazil as a stack with Insect-Protected soybeans. 2. 12
  12. 12. FINANCIAL OUTLOOK Increased 2009 and 2012 Targets for Roundup Reflect Sustainability Even As Supply-Demand Comes Into Balance ROUNDUP AND OTHER GLYPHOSATE-BASED HERBICIDES: Roundup and Other BRANDED AND NON-BRANDED TRENDS – 2004-2008 Glyphosate-Based Herbicides 300 Branded 2009 Forecast Non-Branded GROSS PROFIT TARGET: $2.3-$2.4B 250 Global Volume (in gallons) Above BRANDED PRICE BAND (PER GALLON): $16-$18 200 2012 Forecast GROSS PROFIT TARGET: $1.9B 150 BRANDED PRICE BAND $16-$18 (PER GALLON): 100 50 0 2004 2005 2006 2007 2008 GLOBAL VOLUME 209M 215M 235M 252M 257M (GALLONS): BRANDED PRICE BAND $11-$13 $11-$13 $11-$13 >$11-$13 ~$20 (PER GALLON): TOTAL ROUNDUP AND OTHER GLYPHOSATE-BASED $703M $637M $648M $854M $2.0B HERBICIDES GROSS PROFIT: 13
  13. 13. R&D PIPELINE R&D Engine Is Poised to Launch Average of One Game- Changing Technology Every Other Year Through Mid-Decade R&D PIPELINE: ADVANCED GAME-CHANGING TECHNOLOGIES 2008 2009 2010 2011 2012 TO MID-DECADE Roundup Drought- Nitrogen- SmartStax Ready 2 Yield Tolerant Corn Utilization Soybeans Family1 Corn Family1 • Second-gen soybean • All-in-one corn trait • Value likely in improved • Targets ways to use trait platform platform yield under stress and nitrogen more efficiently potential for water • China import approval • On track for 2010 launch replacement received September – Submitted for 2008 regulatory review and refuge reduction • On track for 2009 release SUPERIOR, NE - FIELD TRIALS – 2007 FARM PROGRESS SHOW – 2007 WITH GENE CONTROL HYBRID FARM PROGRESS SHOW – 2007 (94 BU/AC) (76 BU/AC) 1. Part of the Monsanto-BASF Yield and Stress R&D Collaboration 14
  14. 14. R&D PIPELINE Monsanto’s Yield Leadership Widens With Each New Game- Changing Technology Launched DuPont Syngenta 2009 Option to License  2011 2nd‐Gen  Roundup Ready 2  Roundup  Soybean Trait Optimum®GAT®³ Yield⁶ Ready 2 Yield¹ 2012 All‐in‐One  2010 No Specified  Corn Trait  Optimum  Platform⁷ SmartStax Platform  AcreMax™ Plus⁴ Biotech  Drought  2012+² 2014+⁵ Post‐2014⁸ Tolerance  Corn 6. Press Release: “Monsanto and Syngenta  1. Controlled commercial release of 1‐2M  3. Optimum® and GAT® are registered  Reach Royalty‐Bearing Licensing  acres; Large‐scale launch of 5‐6M in 2010 trademarks of Pioneer Hi‐Bred; Date as  Agreement on Roundup Ready 2 Yield stated in DuPont press release 07‐17‐08 2. First trait in the Drought‐tolerant corn  Soybean Technology,” 05‐23‐08 family, currently Phase III 4. AcreMax™  is a trademark of Pioneer Hi‐ 7. No specified platform indicated via Corn  Bred; Date as stated by William S. Niebur,  Technology Pipeline, Syngenta Half Year  Ph.D., Merrill Lynch Agricultural Chemicals  Results Presentation, 07‐24‐08, Slide 22.   Conference, 06‐05‐08, Slide 14 Relevant component traits: VIP/Broad lep:  5. Ibid, Slide 23 2009 and RW dual mode of action: 2012 8. Ibid. 15
  15. 15. STRATEGIC OUTLOOK While Metrics and Projections Vary, Fundamentals of Demand-Driven Environment for Grain Remain Strong USDA LONG-TERM PROJECTIONS: STATE OF AGRICULTURE: CORN AND SOYBEAN TOTAL TRADE – 2006-2017 Strong Demand Environment FACTORS: 110 70 ► INCREASING PROTEIN Corn Total Trade Soybean Total Trade Soybeans – million metric tons DEMAND 60 105 Corn – million metric tons Wealth drives meat 50 100 consumption – changing feed 40 demand 95 ► ASCENSION OF CHINA 30 China’s growth is driving 90 20 huge changes in global oilseeds and grain trade 85 10 ► ESTABLISHMENT OF BIOFUELS 80 0 Assuming only base-case adoption of biofuels, more corn and soy needed in next decade USDA Demand Outlook • Global corn trade expected to grow 15 percent by 2017 • Imports by China and Mexico help spur demand • USDA assumption on U.S. planted corn acres: ~90M • Global soybean trade grows 40 percent by 2017 • 80 percent of growth is driven by China • USDA assumption on U.S. planted soybean acres: ~70M 17 Source: USDA Agricultural Projections to 2017, available at: http://www.ers.usda.gov/Publications/OCE081/
  16. 16. STRATEGIC OUTLOOK Global Corn Production Per Acre Is Sub-Optimized Today, Creating an Opportunity for Innovation GLOBAL CORN PRODUCTION1: YIELD CORE PRODUCTIVITY MEASURES AND EVALUATION Boosting yield-per- acre can make a meaningful CANADA difference in EU 27 3M ACRES supply-demand 136 BU/AC 500M BUSHELS 27M ACRES 90% HYBRID environment U.S. 99 BU/AC CHINA 2B BUSHELS • If India, Mexico 90M ACRES 151 BU/AC 67M ACRES MEXICO 13B BUSHELS 83 BU/AC and Brazil moved 6B BUSHELS 18M ACRES 25% HYBRID to 100 bushel per INDIA 48 BU/AC BRAZIL 900M BUSHELS acre yields, they 20M ACRES 36M ACRES 45% HYBRID 75% HYBRID 32 BU/AC could produce 58 BU/AC 700M BUSHELS 2B BUSHELS nearly 4 billion additional ARGENTINA bushels of corn 10M ACRES 111 BU/AC 900M BUSHELS annually – equal to total world Optimization of yield per acre corn exports in 2007 Poor/Subsistence Sub-Optimized Optimized 18 1. Source is USDA FAS and internal estimates.
  17. 17. STRATEGIC OUTLOOK Monsanto’s Growth Opportunity Lies at the Intersection of Demand, Innovation and Execution Monsanto’s Simple Philosophy on Opportunity: YIELD More demand requires more INNOVATION More yield requires more GROWTH More innovation delivers more 19
  18. 18. STRATEGIC OUTLOOK Monsanto’s Innovation Targeted at Doubling Yield by 2030, Extending Competitive Lead and Creating New Value DOUBLING YIELD WITH TECHNOLOGY: DOUBLING YIELD BY 2030 U.S. CORN EXAMPLE U.S. BASELINE CROP 2000 BASELINE1 325 137 bu/ac Corn: 300 37 bu/ac Soybeans: 275 Historical Yield 632 lbs/ac 250 Cotton: U.S. Yield Per Acre (bu/ac) 30-Year Trend 225 STRATEGIC RATIONALE Molecular Breeding Advances 200 Biotech Advances Helping meet global demand 175 150 Furthering competitive lead 125 Creating new value for 100 farmers that creates 75 sustainable growth 50 opportunities 25 0 1970 1980 1990 2000 2010 2020 2030 2030 U.S. YIELD U.S. YIELD TARGET ~300 bu/ac 151 bu/ac 2030: 2007: 1. Average U.S. yield by crop, USDA NASS 20
  19. 19. FINANCIAL OUTLOOK Yield and Innovation Create the Runway of Growth to 2012 for Seeds & Traits and for Monsanto as a Whole 2012 GROSS PROFIT TARGET GROSS PROFIT COMMITMENT: RELATIVE TO 2007 BASELINE 2007-2012F $9.5 - Total Gross Profit $9.75B $10,000 $9.5- BUSINESS DETAIL $8.6-9.1B $9.75B Roundup and Other $8,000 ~$1.9B Glyphosate-Based $8-8.5B >2X ~2.25X Herbicides GP (in millions) ~2X 2007 2007 BASELINE ~$300M All Other Ag $6,000 BASELINE 2007 Productivity BASELINE $7.3- Seeds & Genomics $4,000 $7.5B $4,230 2.6-2.7x Corn Seed & $2,000 Traits ~2x Soybean Seed & $0 Traits ORIGINAL MID-YEAR CURRENT BASELINE TARGET UPDATE GUIDANCE ~2x Cotton Seed & 2007 2012F Traits >2.5x •INCREASED •BETTER Vegetable Seeds ROUNDUP GROWTH IN GP TARGET SEEDS & TO $1.8B TRAITS •2008 ACQUISITIONS •ROUNDUP GP TARGET OF $1.9B 21
  20. 20. FINANCIAL OUTLOOK Near Term, 2009 Again Projects Double-Digit Earnings Growth and Strong Cash Generation 2008 2009F EARNINGS $4.20-$4.40 $3.64 ONGOING EARNINGS PER SHARE ~15-20% GROWTH >80% GROWTH FROM 2007 FROM 2008 Seeds & Genomics Gross Profit $3.9B $4.5-$4.6B Corn Seed & Traits Gross Profit $2.2B ~$2.8B Soybean Seed & Traits Gross Profit $725M ~$700M Cotton Seed & Traits Gross Profit $313M ~$300M Vegetable Seeds Gross Profit $394M ~$500M All Other Seed & Traits Gross Profit $251M ~$200M Roundup And All Other Glyphosate-based $2.0B $2.3-2.4B Herbicides Gross Profit All Other Ag Productivity Gross Profit $344M ~$400M CASH MANAGEMENT AND SPENDING FREE CASH FLOW $772M ~$1.8B Operating Cash $2.8B >$3B Capital Expenditures $918M ~$1B SG&A as a Percent of Sales 20% 19% Range R&D as a Percent of Sales 9% 9.5%-10% Range 22
  21. 21. USES OF CASH Over 70% of the $2.8 Billion of Operating Cash Generated Invested in Acquisitions, Technology and Capital in FY08 USES OF CASH PERCENT OF $2.8B OPERATING CASH USED BY CATEGORY: FY2008 2% Cash Generation 13% $772M FY2008 Free Cash Flow: 37% FY2009 Free Cash ~$1.8B Flow Forecast1: 15% CASH PRIORITIES • Bolster direct returns to shareowners • Support commercial growth through capital spending • Invest in future growth through 33% technology collaborations Acquisitions and • Expand the core through strategic Technology Collaborations acquisitions Capital Spending Dividends Share Repurchase 1. Estimate does not contemplate strategic acquisitions. Other 23
  22. 22. FINANCIAL OUTLOOK On Track in 2008, Growth Drivers Continue to Set Stage for Growth Through 2012 GROSS PROFIT OUTLOOK BY SEGMENT 2007-2012F $10,000 TOTAL GROSS All Other Agricultural Productivity PROFIT GROWS TO >2.25X Roundup and Other Glyphosate-based Herbicides $8,000 2007 BASELINE Seeds & Genomics $6,000 $4,000 2008 SEEDS & GENOMICS $2,000 GENERATES $3.9B OF GROSS PROFIT $0 2007 2008 2009F 2010F 2011F 2012F U.S. Corn Int’l Corn Cotton Vegetables R&D Pipeline Soybeans • Expand seed • Establish and • Prepare for • Accelerate U.S. • Reinvigorate • Largest-ever footprint expand seed commercial traits and margins R&D field footprint launch of breeding effort • Drive trait • DeRuiter Roundup • Drive trait • Drive int’l traits penetration integration Ready 2 Yield penetration SmartStax Accelerated trait Roundup Ready Globalized $1B Vegetable Game-Changing Platform platform 2 Yield Platform Cotton Platform Platform Launches
  23. 23. OVERVIEW Gross Profit Growth Comes From Two-Step Strategy: Establish Seed Footprint, Then Layer on Biotech Traits BREEDING BIOTECH TRAIT 3 R&D TRAIT 2 SEED ENGINE TRAIT 1 SEED Establish Seed Footprint Add Biotech Traits • Seed provides a core gross-profit • Higher margins than seed with contribution minimal incremental cost of goods STRATEGIC VALUE • Seed footprint speeds penetration • Opportunity to stack multiple traits rate of biotech traits per acre • Access to global germplasm • Proven, commercial-driven R&D pools combined with most program backed by industry’s DIFFERENTIATORS advanced breeding technology largest seed-and-trait R&D spend creates seed that outperforms • Collaborator of choice competitors • New trait introductions MEASURES OF SUCCESS • Seed share growth • Trait upgrade and trait platform opportunity Corn: U.S., Argentina, Brazil, Europe, Central America Corn: U.S., Argentina, Brazil KEY CROPS & GEOGRAPHIES Soybeans: U.S. Soybeans: U.S., Brazil Cotton: U.S., India Cotton: U.S., India, Australia Vegetables: Global 25
  24. 24. STRATEGIC OUTLOOK Significant Growth Opportunity in Expansion of Existing and Near Term Commercial Biotech Traits Globally SOYBEANS COTTON CORN INTERNATIONAL MARKET OPPORTUNITY ROUNDUP ROUNDUP BOLLGARD ROUNDUP YIELDGARD MARKET OPPORTUNITY FOR BIOTECH TRAITS THROUGH 20101 ROUNDUP YIELDGARD READY READY AND READY CORN SMARTSTAX READY ROOTWORM BOLLGARD II CORN 2 BORER 2 YIELD (FLEX) U.S. 65-75M 45-55M 10-12M 6-8M 80M 60-70M 45-55M 60-65M 2008 Penetration 97% 0% 63-75% 74-98% 86% 64-75% 55-67% 0% 45-50M2 Brazil 50-60M 3M 2M 15-20M 15-20M 5M 15-20M Argentina 40M - - - 9M 7M 5M 5-7M India - - 15-20M 18-20M 6M 6M - 5-6M Europe (EU27) 1M - - - 24M 8M 5M 15-20M South Africa 0.2M - .15M .15M 6M 4M - 4M 0.5M- Australia - - 0.5M-0.8M - - - - 0.8M OPPORTUNITY: 91-101M 45-50M 19-24M 21-23M 60-65M 40-45M 15M 44-57M Total Intl. Markets 2008 Penetration 77-86%1 66-74% 0% 3-4% 3% 20-23% 0% 0% of Intl Markets Note: Market Opportunity reflects total acres where technology is applicable, not necessarily acres projected for penetration by 2010. 1. Primarily Bollgard I penetration; opportunity to expand to second generation technology. Roundup Ready 2 Yield is planned to be launched in Brazil as a stack with Insect-Protected soybeans. 2. 26
  25. 25. CORN SEED & TRAITS Corn Gross Profit to Expand 25-30% in 2009, Reflecting Continuing Momentum in Seed Share and Trait Penetration CORN SEEDS AND TRAITS: KEY FINANCIAL METRICS AND DRIVERS – 2005-2008F CORN FINANCIAL OUTLOOK 62% $4,000 Gross Profit as Percent of Sales For 2009, Corn Seeds & $3,500 >$3.5B Traits gross profit is forecast 60% to be up 25-30% $3,000 Absolute gross profit is $2,500 58% increased by growing seed $M >$2.1B $2,000 share, increasing trait penetration and increasing 56% $1,721 $1,500 prices $1,000 Margin increases by $1,019 54% $825 increasing mix toward traits $500 2009 DRIVERS $0 52% 2005 2006 2007 2008 Increasing triple-stack penetration in U.S. combined Net Sales Gross Profit Gross Profit as Percent of Sales with stronger trait pricing Launch of new traits in Argentina and Brazil 28
  26. 26. FINANCIAL OUTLOOK Yield-Enhancing Technology Creates Value – Returning $1.50-$3 For Every Dollar Spent By Farmers in Corn U.S. FARMER RETURN ON INVESTMENT: 1983-2008F 170 160 150 32 140 130 Bu/ac 120 FARMER RETURN OF bu/ac 1.5X – 3X 110 PER DOLLAR SPENT 100 ON YIELD-CREATING TECHNOLOGY @ COMMODITY PRICE RANGE OF $2-$4/BU 90 80 PRE-BIOTECH: 1983-1996 POST-BIOTECH: 1996-2008F AVERAGE YIELD DURING AVERAGE YIELD DURING 115.6 bu/ac 138.3 bu/ac PERIOD: PERIOD: 1.7 bu/ac 2.6 bu/ac ANNUAL YIELD GAIN: ANNUAL YIELD GAIN: YIELD-RELATED PRODUCTION Seed/ Chem/ $27.07/ac $43.24/ac Equip/ Labor COSTS SCARCITY-RELATED $19.33/ac $52.02/ac Land Rent $6.23/ac $94.90/ac Fertilizer Source: USDA, Land Rent Averaged using Corn & Soybean, Doane Ag, dmrkynetec data, Yield is calculated using a 3 year rolling average, (32 Yield is 2.6 bu/ac/yr *12 years). 2008F Yield is April 08 Doane Ag. Return – Monsanto Estimate 29
  27. 27. CORN SEED & TRAITS U.S. DEKALB Share Consistently Ahead of Expectations; Growth Trend Continues in 2009 DEKALB U.S. CORN SHARE EVOLUTION: CORN 2001-2009F FINANCIAL OUTLOOK 30% Three years of growth since 2005 have outpaced projected 28% growth each year GROW 26% 2%+ 2009: Trend continues with 25.5% 24% early commitment for accelerated growth in 23% 22% DEKALB and ASI 20% 2009 DRIVERS TARGET 19% 18% 2+ U.S. DEKALB Share 2005 PROJECTED 16% +1 AVERAGE GROWTH 16% U.S. ASI Share TREND 14% TRAIT TARGETS 14% 13% 12% U.S. Triple-Stack 10% 12% 34-35M Penetration 10% 2001 2002 2003 2004 2005 2006 2007 2008 2009F 1.4 1.5 1.7 1.9 2.2 >2.4 ~2.5 DEKALB Trait Penetration Trend: 2003-2009F Average Number of Traits Per Acre in DEKALB Seed1 1. Trait intensity reflects the average number of traits per acre with at least one trait 30
  28. 28. CORN SEED & TRAITS Seed Platforms Are Business Foundation, Establish Footprint for Traits, and Create Diversified Crop Portfolio Globally EU27 2008 SHARE 2012 TARGETS 12% 16-20% CORN U.S. 2012 2008 SHARE TARGETS 25.5% 30-34% DEKALB 10.5% ~15% ASI INDIA 2008 SHARE 2012 TARGETS 36% 40-44% CORN LA - NORTH 2008 SHARE 2012 TARGETS 62-66% 58% CORN BRAZIL 2008 SHARE 2012 TARGETS 40% 44-48% CORN ARGENTINA 2008 SHARE 2012 TARGETS 46% 50-54% CORN Share for row crops provided reflects sales volume for Monsanto brands divided by total planted acres in respective geography. Corn represents hybrid corn share in each respective market. 31
  29. 29. CORN SEED & TRAITS Triple Stack Penetration Accelerates, Creating Added Growth and Setting Stage for SmartStax Launch U.S. CORN TRAIT OPPORTUNITY: 2005-2010F 70 220 200 U.S. TRIPLE-STACK ACRES 60 180 U.S. TRAIT ACRES (IN MILLIONS) 160 50 (IN MILLIONS) 140 40 120 100 30 80 20 60 40 10 20 0 0 2007 2008 2009F 2005 2006 2007 2008F 2009F 2010F 2010 • Opportunity Q3UPDATE Rootworm Control NA 50-65M 20.8M 30.1M Corn Borer Control NA 60-70M 42.4M 45M Glyphosate Tolerance NA 80M 57.9M 68.8M Triple Stack/SmartStax 17.6M 29.1M 34-35M 50-65M Opportunity widens in 2010 with launch of SmartStax 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. 32
  30. 30. CORN SEED & TRAITS Monsanto’s Leadership Continues With Next Game- Changer in Corn; SmartStax Resets Trait Platform in 2010 LIKELIHOOD OF SWITCHING BRANDS FOR SmartStax If your current seed brand did not offer this new Monsanto Insect Protection Technology, SMARTSTAX how likely would you be to switch seed brands to obtain this new technology? Would you say: “Very likely” or “Somewhat likely” COMMERCIAL OPPORTUNITY YIELDGARD CORN 74% BORER USERS WHO LAUNCH TARGET: 2010 TREAT FOR ROOTWORM TARGET ACRE 60-65M OPPORTUNITY: 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% VALUE PROPOSITION PERCENT OF FARMERS 2008 trials evaluating SmartStax in elite HERCULEX® I CORN 65% BORER USERS WHO germplasm, quantifying sources of TREAT FOR ROOTWORM potential on-farm yield advantages: 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Improved 1-2% consistency: SmartStax STATUS Primary pests Improved • Precedent established with U.S. EPA on consistency: 1-2% dual-mode-of-action traits: Secondary pests REFUGE • YieldGard VT PRO received reduced REDUCTION Reduced refuge 3-6% STRATEGY: refuge in Southern geographies • Bollgard II natural refuge in cotton 5-10% • On track for 2010 • COMMERCIAL All components have U.S. approvals TRACK: • Final regulatory package with 5% refuge request submitted in June 2008 33
  31. 31. CORN SEED & TRAITS Larger Seed Footprints in South America Enable Larger Launches and Faster Ramp Up Than Competition LATIN AMERICAN CORN LATIN AMERICA NORTH OUTLOOK: CURRENT 5-YEAR OUTLOOK #1 position in all key SEED & TRAIT TRENDS THROUGH 2012 SEED SHARE: countries 7-8M MEXICO HYBRID ACRES: In approval stage BIOTECH STATUS: HONDURAS GUATEMALA • Integration of Cristiani; Expand seed footprint for FY2009 PRIORITIES: EL SALVADOR pending trait introductions COLOMBIA BRAZIL CURRENT 5-YEAR OUTLOOK 40% (#1 position) SEED SHARE: BRAZIL PERU 25-27M HYBRID ACRES: 1st commercial trait in BIOTECH FY2009 STATUS: • Targeted share gain: 1-2 points FY2009 • 1-2M acre launch of YieldGard Corn Borer; sold- PRIORITIES: out in Q1 ARGENTINA ARGENTINA CURRENT 5-YEAR OUTLOOK 46% (#1 position) SEED SHARE: 8-10M HYBRID ACRES: Commercial planting BIOTECH STATUS: • Targeted share gain: 1-2 points FY2009 PRIORITIES: • 1-2M acre launch of YieldGard Corn Borer with Roundup Ready Corn 2 stack; sold-out in Q1 34
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