monsanto 03-28-07

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monsanto 03-28-07

  1. 1. HUGH GRANT CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER LEHMAN BROTHERS GLOBAL CHEMICAL LEADERS INDUSTRY CONFERENCE March 29-30, 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 References to periods before 2000 include the agricultural business of Pharmacia Corporation. 2
  3. 3. OVERVIEW Building From Established Platform, Monsanto Has a Window of Opportunity to Extend Our Leadership R&D LEADERSHIP STRATEGIC PERFORMANCE SEEDS & TRAITS COMMERCIAL PLATFORM In the 10 years since the introduction of Integrated platform with commonality the first biotech trait, Monsanto has of technology and commercial invested >$5B in seeds-and-traits R&D approach among crop platforms TRAITS Monsanto developed and CHANNELS TO MARKET commercialized the first Industry’s only company to broad-acre biotech traits; widely employ dual market First to launch stacked approach of branded and traits and second- licensed seed and trait sales generation traits SEEDS Global germplasm library COMMERCIAL COORDINATION unmatched in scale – with Roundup, world’s best- 36 integrated breeding SEED & TRAIT selling herbicide brand, programs from 12 PLATFORM uniquely complements countries for corn and soy seed-and-trait platform and the world’s leading vegetable seed company BREEDING >100 breeding research FINANCIAL PERFORMANCE High-margin technology centers worldwide, business that generates underpinning companywide sustainable free cash flow focus around molecular breeding 3
  4. 4. OVERVIEW Six Building Blocks Extend Leadership and Elevate Gross Margin Opportunity Through 2010 MONSANTO’S OPPORTUNITY GROSS MARGIN OPPORTUNITY Delta between 2006 gross margin and GROSS PROFIT AS A PERCENT OF SALES a 51-53% trajectory reflects continued 54% growth opportunity for seeds and traits FACTOR VALUE1 GROSS MARGIN ‘PULL’ 52% HIGH U.S. corn International MEDIUM 50% corn Global biotech MEDIUM traits 48% LOW CURRENT LEVEL Cotton platform MEDIUM Seminis 46% HIGH R&D pipeline 44% 2003 2004 2005 2006 2007F 2008F 2009F 2010F 1. Increment to total gross profit in the period 2006-2010; Some growth factors will overlap. MEDIUM LOW HIGH >$250M $100M - $250M <$100M 4
  5. 5. U.S. CORN GROWTH Farmers Buy Yield; Our Business Strategy Is Oriented Around Meeting That Customer Need R&D APPROACH PERCENT OF GENETIC YIELD GENETIC POTENTIAL FARM APPROACH GAIN PRESERVED = X Farmer’s Purchase Inherent yield possible from the seed Amount of yield potential Decision BREEDING GERMPLASM protected = SEED • Starting point of all agriculture; farmers maximize genetics in seed for yield • 60% of farmers select • Germplasm library • >2,000 genetic seed first, then • Monsanto is only assembled from markers used by decide on biotech company to develop 36 programs in 12 traits breeders for corn and commercialize countries X today complete above- • >100 breeding • 50% of breeding ground, below-ground research centers population comes insect-control and worldwide from intra-company, TECHNOLOGY weed-control traits inter-country crosses • Technology is used to protect and maximize • Molecular breeding yield potential of seed improves genetic potential by 2X versus conventional breeding 5
  6. 6. U.S. CORN GROWTH First Decision Farmers Make Is Seed Germplasm; More and More Farmers Have Been Choosing Monsanto Seed U.S. CORN MARKET SHARE EVOLUTION MONSANTO BRANDS AND LICENSEES U.S. Corn LICENSEES’ BRANDS 60% AMERICAN SEEDS, INC. BRANDS SITUATION: ASGROW AND DEKALB BRANDS • In 2006, Monsanto’s DEKALB 50% and Asgrow brands grew by 3 market share points 40% Share gains • Over 5 years, comparable in national market share gain was 9 points 30% brands through end of the decade 20% 10% 0% 2001 2002 2003 2004 2005 2007F 2006 ACREAGE EXPANSION In 2006, the addition of 1 market share point in a Monsanto national brand translated into an average incremental value of approximately $10M-$15M in gross profit opportunity for Monsanto for the seed alone 6
  7. 7. U.S. CORN GROWTH With the Corn Trait Technology in Hand Today, There’s Opportunity to Double Penetration By End of Decade U.S. CORN TRAIT OPPORTUNITY U.S. TRAIT ACRE OPPORTUNITY: TOTAL MARKET OPPORTUNITY IN 20101 U.S. Corn CURRENT COMMERCIAL CORN TRAITS SITUATION: RELATIVE RETAIL VALUE YIELDGARD ROOTWORM • Through 2006, roughly 50 2006: percent of the available market PER ACRE has been penetrated with traits Only 50% YIELDGARD penetrated CORN BORER to date OUTLOOK: 2006 2010F ROUNDUP READY ROUNDUP READY 32.7M 60M CORN CORN 2 YIELDGARD 10.0M 25-30M 60 40 50 ROOTWORM 30 10 20 U.S. TRAIT-ACRE OPPORTUNITY YIELDGARD CORN 32.3M 50-60M (ACRES IN MILLIONS) BORER TRIPLE STACK SINGLE TRIPLE 6.0M 25-30M DOUBLE TRAITS ~10M ACRES 25-30M ACRES 20-25M ACRES OPPORTUNITY 1. Market Opportunity Acres exclusively Because YieldGard Above triple STACKED reflects total acres where technology is using Roundup Rootworm has the stack, remaining applicable, not Ready, which would lowest market YieldGard Corn necessarily acres projected for include “refuge” opportunity of the 3 Borer forms penetration by 2010. acres required for traits, its market double-stack other acres using potential is the proxy for opportunity insect-protected total potential for triple traits stack 7
  8. 8. U.S. CORN GROWTH With Higher Demand for Stacks, the “Average” DEKALB Acre Now Contains More Than Two Traits TRAIT PENETRATION TRENDS U.S. Corn ACROSS KEY COMMERCIAL CHANNELS SITUATION: DEKALB/ASGROW 2.5 2007F TRAIT • With increased stacking, (AVERAGE NUMBER OF TRAITS PER INTENSITY: > 2.0 TRAIT INTESITY INDEX there is a positive mix effect 2 across the portfolio TRAIT ACRE) 1.5 OUTLOOK: TOTAL MARKET TRAIT INTENSITY • In 2007, the trait intensity for 1 LESS BRANDED: 1.7 DEKALB and Asgrow will surpass 2.0 for the first time 0.5 – reflecting that the average corn acre now contains more 0 than 2 biotech traits 2003 2004 2005 2006 2007F • With an infusion of technology, ASI’s trait TRIPLE STACKED TRAIT PENETRATION STACKED PENETRATION PENETRATION penetration levels are closing in on DEKALB and Asgrow 2006 2007F 2006 2007F 2006 2007F LICENSEE BRANDS 55% 60 - 65% 43% 55 - 60% 7% 10 - 15% REGIONAL BRANDS 75% 80 - 85% 55% 65 - 70% 15% >30% NATIONAL BRANDS 90% 90 - 95% 69% 70 - 75% 20% >35% 8
  9. 9. INTERNATIONAL CORN GROWTH Gross Profit Value of Seed Internationally Varies, Yet Still Solid Contributor to Growth, Commercial Platform TOTAL HYBRID SHARE GROSS MONSANTO MARKET MARKET POINT PROFIT BRAND OUTLOOK SIZE SIZE CHANGE VALUE PER SHARE (ACRES) (ACRES) (’04-’06) ACRE1 International Corn EUROPE-AFRICA SITUATION: HIGH • Molecular France 7.1M 7.1M 15% +5 • Primary value in breeding HIGH Italy 2.8M 2.8M 21% +7 application is international corn markets roughly 2 years today is in the seed MEDIUM Hungary 2.8M 2.8M 32% +6 behind U.S. • Breeding gains that have • Corn Borer- HIGH Turkey 0.8M 0.7M 21% +4 Roundup Ready 2 been made in the U.S. set stack approved in pace for market share LOW January in South South Africa 6.0M 6.0M 50% +12 growth in other Africa international markets LATIN AMERICA OUTLOOK: MEDIUM • Argentina is only Mexico 17.3M 3.9M 61% +3 • Monsanto is targeting to country in region LOW Brazil 30.8M 20.6M 34% -1 with biotech traits grow share in each of the • Next priority for most valuable corn-growing accelerated LOW Argentina 7.3M 7.0M 35% FLAT countries molecular breeding ASIA-PACIFIC • India is primary market of longer- LOW India 15.6M 5.9M 35% +6 term value in region 1. Average incremental value in gross profit opportunity for the seed value (excluding traits) of the addition of an acre in a Monsanto brand: MEDIUM HIGH LOW >$20 $10 - $20 <$10 9
  10. 10. INTERNATIONAL CORN GROWTH Gross Profit Value of Seed Internationally Varies, Yet Still Solid Contributor to Growth, Commercial Platform GERMPLASM VALUE: FRANCE SEED VALUE RANGE FOR ADDED ACRES IN DEKALB/ASGROW BRANDS International Corn SITUATION: • Primary value in international corn markets today is in the seed FRANCE • In France, DEKALB market share has grown 5 points over MARKET FACTORS 7.1M the last 3 years (2.9M Ha) Total Acres Planted (2006) OUTLOOK: 71,000 acres Acre: Market Share Conversion • For the first time ever, PRICING FACTORS DEKALB is co-leader of French $62 market Average Seed Retail Price Per Acre • Monsanto is targeting to grow share in each of the most COST FACTORS 40-45% valuable corn-growing Assumed Industry-Standard Gross Margin countries GROSS PROFIT VALUE $25-28 Average Gross Profit: Per Acre1 HIGH 1. Average incremental value in gross profit opportunity for the seed value (excluding traits) of the addition of an acre in a Monsanto-owned brand: MEDIUM HIGH LOW >$20 $10 - $20 <$10 10
  11. 11. GLOBAL BIOTECH TRAIT GROWTH Significant Growth Opportunity Lies in Expansion of Existing Commercial Biotech Traits Globally GLOBAL MARKET OPPORTUNITY MARKET OPPORTUNITY FOR BIOTECH TRAITS THROUGH 20101 Global Biotech Traits SITUATION: SOYBEANS COTTON CORN • Historically, most rapid BOLLGARD ROUNDUP ROUNDUP YIELDGARD ROUNDUP AND YIELDGARD adoption has been in the READY READY CORN READY BOLLGARD ROOTWORM CORN 2 BORER (FLEX) II U.S., also the most highly penetrated market United States 70M 10-15M 6-8M 60M 50-60M 25-30M • Penetration is moving globally, trait by trait, country Brazil 50M 3M 2M 20M 15M 5M by country Argentina 35M - - 5M 4M 1M OUTLOOK: • As is the case in the U.S., India - 10-15M 10-15M 3 – 5M 3 – 5M - largest category of Europe 1M - - 24M 8M 5M opportunity internationally is corn trait adoption Africa 0.2M 11M 10M 6M 4M - • Even where some traits – like 0.5M- 0.5M- Australia - - - - cotton – are penetrated, 0.8M 0.8M there’s still an upgrade 34.5- 28.5- 118- opportunity to second- Total Key 156.2M 84-96M 36-41M generation traits Markets 44.8M 35.8M 120M 2006 86% 39% 57% 29% 42% 26% Penetration 1. Market Opportunity reflects total acres where technology is applicable, not necessarily acres projected for penetration by 2010. 11
  12. 12. GLOBAL BIOTECH TRAIT GROWTH Roundup Ready Soybean Strategy in Brazil Emphasizes Acreage Penetration ROUNDUP READY SOYBEANS IN BRAZIL PROJECTED EPS CONTRIBUTIONS (2007 VS 2010) Global Biotech Traits SITUATION: $0.12 $0.09-$0.11 • Largest soybean market $0.10 outside U.S. is Brazil • Recent pricing action taken CONTRIBUTION TO EPS there to promote penetration $0.08 of new seed ($ PER SHARE) OUTLOOK: $0.06 $0.025-$0.05 ON PENETRATION ALONE EPS CONTRIBUTION • In a total Brazilian market of COULD MORE THAN $0.04 ~50M acres, 2006 penetration DOUBLE 2007-2010 was almost 20M acres – reflecting a remaining 30M- $0.02 acre upside • Penetration target of 45% for $0.00 2007 is on track 2007F 2010F 2007 2008F 2009F 2010 ASSUMPTIONS ASSUMPTIONS PRICING PRICING $2.50-$3.00/acre $2.50-$3.00/acre MARKET SIZE MARKET SIZE 50M 50M PENETRATION PENETRATION 45% 90% 12
  13. 13. COTTON GROWTH Upgrade to Second-Generation Cotton Traits Flourishes, Highlighted by 2007 Roundup Ready Flex Growth PENETRATION RATE OF SECOND-GENERATION TRAITS PENETRATION TREND OF COTTON TRAITS AS A PERCENT OF ANNUAL PLANTED ACRES1 Cotton Platform 2006 RESULTS SITUATION: • Cotton trait platform is the first 17% Bollgard II to move forward on complete replacement of first-generation 14% Roundup traits with second-generation Ready Flex upgrades • Roundup Ready Flex cotton 2007 FORECAST launched in the U.S. in 2006; 25-30% Launched in Australia for Bollgard II FY2007 planting 25-30% Roundup OUTLOOK: Ready Flex • Transition to second- generation traits continues in 2007 0% 5% 10% 15% 20% 25% 30% • Roundup Ready Flex was planted on ~14% of planted ROUNDUP READY FLEX acres in 2005 – that should double in 2007 Even on potentially lower total planted acres, Roundup Ready Flex penetration rate should double in 2007 to >25% of total cotton crop 1. Percent of annual planted acres reflects the ratio of number of actual trait acres planted to total planted acres in the identified year for the specified geography 13
  14. 14. SEMINIS GROWTH Seminis To Leverage Portfolio, Pricing and Molecular Breeding To Create New Growth SEMINIS VALUE CREATION STAGED OPPORTUNITIES FOR INCREASING BUSINESS VALUE Seminis SITUATION: Significant use of molecular markers • In 2006, narrowed commercial VALUE CREATION OPPORTUNITY and research focus to 25 crops Aggressively make hybrid that generate the most profit conversions in strategic crops • Began application of breeding technology, with a target of Identify and implement opportunities 1,000+ markers each for 9 to price products to value crops by 2009 OUTLOOK: Assemble genetic maps for key crops • Seminis is targeted to contribute $0.10 - $0.125 to EPS in FY2007 now that Focus on 25 most-profitable key crops inventory step-up charge is complete 2005 2006 2007 2008 2009 2010 PIPELINE OPERATIONAL EXCELLENCE NEW VALUE CREATION ADVANCEMENT Monsanto Seminis Seminis Commercialize acquires modestly projected to be first hybrids Seminis accretive accretive to developed by to FY2006 FY2007 EPS in molecular EPS range of $0.10- breeding $0.125 14
  15. 15. SEMINIS GROWTH Development of Fungal-Resistant Peppers For North America Provides New Pricing Opportunity for Seminis KEY MARKET ACRES NORTH AMERICA AVAILABLE MARKET 200K Fungal-Resistant Peppers PERCENT PENETRATED 0% VALUE OPPORTUNITY: FUNGAL RESISTANCE Seminis EXAMPLE: NORTH AMERICAN PEPPERS Fungal-Resistant Peppers 2.00 INDEXED RETAIL SEED PROJECT CONCEPT: 49% VALUE PER ACRE Fungal disease pressure affects almost 60 1.50 percent of North American pepper acres, diminishing yield and increasing input 1.00 expenses for growers. Using molecular markers, Seminis is creating hybrid peppers that exhibit fungal resistance. 0.50 2006 PERFORMANCE UPDATE: • Seminis is mapping molecular 0.00 markers for 9 key crops, which is CONVENTIONAL FUNGAL-RESISTANT helping better locate genetic sites for PEPPERS PEPPERS factors like fungal resistance and disease, allowing breeders to apply Fungal disease affects 60% of the 200K+ acres of peppers grown that information to upgrade product in the U.S., Canada and Mexico, requiring intensive chemical offerings faster spraying for control • Ultimately fungal-resistance could be Using molecular-breeding tools, Seminis scientists are working combined with other or additional on developing hybrid peppers that are resistant to fungal disease disease-resistance characteristics for The enhanced value of fungal resistance is projected to increase commercial launch the per-acre retail price by almost half 15
  16. 16. PIPELINE UPDATE Pipeline Demonstrates Increased Breadth and Depth; Key Projects on Track for Commercial Launch R&D PIPELINE: JANUARY 2007 PHASE PHASE PHASE PHASE PHASE PHASE PHASE PHASE D D 1 2 3 4 1 2 3 4 PROCESSOR BENEFITS FARMER BENEFITS MAVERA™ HIGH-VALUE CORN ROUNDUP READY FLEX COTTON WITH LYSINE1 ROUNDUP RREADY2YIELD SOYBEANS MAVERA™ I HIGH-VALUE SOYBEANS1 ROUNDUP RREADY2YIELD CANOLA MAVERA™ II HIGH-VALUE SOYBEANS1 DICAMBA-TOLERANT SOYBEANS 2nd-GEN HIGH-VALUE CORN WITH LYSINE1 DICAMBA-TOLERANT COTTON FEED CORN WITH BALANCED PROTEINS1 YIELDGARD VT ROOTWORM/RR2 2ND-GEN YIELDGARD ROOTWORM HIGH OIL SOYBEANS FOR PROCESSING1 YIELDGARD VT PRO 2ND-GEN YIELDGARD CORN BORER CONSUMER BENEFITS INSECT-PROTECTED SOYBEANS YIELDGARD ROOTWORM II IMPROVED-PROTEIN SOYBEANS SOYBEAN NEMATODE-RESISTANCE VISTIVE II SOYBEANS BOLLGARD III VISTIVE III SOYBEANS COTTON LYGUS CONTROL OMEGA-3 SOYBEANS HYBRIDIZATION SYSTEM FOR CORN DROUGHT-TOLERANT CORN 2ND-GEN DROUGHT-TOLERANT CORN High Impact Technologies (HIT) project HIGHER-YIELDING CANOLA Jan. 4, 2007 Advancements/Additions WATER-USE EFFICIENCY SOYBEANS Jan. 4, 2006 Advancements/Additions DROUGHT-TOLERANT COTTON 1. These product candidates are in the Renessen pipeline. Renessen is a HIGHER-YIELDING CORN Monsanto/Cargill joint venture. NITROGEN UTILIZATION CORN 2. The colored bar associated with each project indicates which phase that project is HIGHER-YIELDING SOYBEANS in. It is not intended to represent the relative status of the project within a particular stage. 3. Roundup Ready Flex Cotton advanced from Phase 4 to commercialization in 2006. 16
  17. 17. PIPELINE UPDATE Yield and Stress Biotech Collaboration with BASF Creates Enhanced Opportunity in Key Growth Area for Next Decade LICENSEE BRANDS MONSANTO DISOVERY REGIONAL BRANDS PROGRAM INTENSIFIED YIELD & STRESS BASF PIPELINE DISCOVERY NATIONAL BRANDS Collaboration creates PROGRAM DEVELOPMENT OF a new joint pipeline SUCCESSIVE UPGRADES focused on stepping TO CREATE A “FAMILY” up the volume of OF PRODUCTS leads and certainty of commercial success DISCOVERY DEVELOPMENT COMMERCIALIZATION in the emerging category of “yield” • Pairs two separate, but • Greater volume of leads • Broad-licensing approach traits for corn, complementary discovery and cost sharing reduce allows for products to soybeans, cotton and engines risk of failure, increasing reach broadest market canola probability of possible, allowing farmers • Increased rate of commercial success to choose traits in the discovery, unlocking more KEY seed brands they prefer sources of genes than • Successive upgrades ADVANTAGES for the greatest ever before emerge sooner, creating performance steady stream of traits in • With combined effort, a “product family” in products should advance each crop at faster-than-average development timelines, esp. in early-phase research 17
  18. 18. PIPELINE UPDATE Multi-Generational Drought-Tolerant Corn Creates Value Across Multiple Market Segments KEY MARKET ACRES U.S. EU27 BRAZIL ARGENTINA AVAILABLE MARKET 80M 28M 30M 6M Drought-Tolerant Corn PERCENT PENETRATED 0% 0% 0% 0% P R O JE CT SEGMENTED VALUE OPPORTUNITY R&D Pipeline ACROSS MARKETS: EUROPE EXAMPLE Drought Monitor Drought-Tolerant Corn D0: Abnormally Dry PROJECT CONCEPT: D1: Drought - Moderate First-generation drought tolerance is D1: Drought - Severe targeted to minimize uncertainty in farming by buffering against the effects of water D1: Drought - Extreme limitation, primarily in areas of annual water D1: Drought - Exceptional stress 2006 PERFORMANCE UPDATE: Phase 2 2006 STATUS: • Yield enhancement demonstrated again in 2006 under water-stress Source: Monsanto from rainfall 25 years average conditions in U.S. IRRIGATED DRYLAND STABILITY • Lead gene chosen Irrigated Non-Irrigated Non-Irrigated • 2007 trials expected to demonstrate yield enhancement in multiple Value is in replacing Value is in improved Value is in improved hybrids under dryland conditions irrigation, reducing yields annually, by yields when variable costs of improving water-use moisture is less than VALUE CATEGORIES: irrigation efficiency optimal TOTAL RETAIL $10 - $30/acre VALUE/ACRE: 18
  19. 19. PIPELINE UPDATE First of Drought-Tolerant Corn Traits Continues To Deliver Yield Boost in Third-Year Testing KEY MARKET ACRES U.S. BRAZIL ARGENTINA AVAILABLE MARKET 80M 30M 6M Drought-Tolerant Corn PERCENT PENETRATED 0% 0% 0% P R O JE CT 2006 TESTING: YIELD IMPROVEMENT OF LEAD EVENT UNDER DROUGHT STRESS R&D Pipeline Percent yield difference vs. control Drought-Tolerant Corn 14 7.3% 10.5% 10.9% 23.2% 9.0% PROJECT CONCEPT: 12 First-generation drought tolerance is targeted to minimize uncertainty in farming VS. CONTROL (BU/ACRE) 10 YIELD DIFFERENCE by buffering against the effects of water limitation, primarily in areas of annual water 8 stress KEY RESULTS 6 2006 PERFORMANCE UPDATE: NOT TESTED Phase 2 2006 STATUS: 4 • Yield enhancement demonstrated 2 again in 2006 under water-stress 0 conditions in U.S. 2004 2005 2006 • Lead gene chosen • 2007 trials expected to demonstrate Hybrid 1: 2004, 4 locations; 2005 5 locs; 2006, 1 loc (20 reps) Hybrid 2: 2004, not tested; 2005, 5 locs, 2006, 3 locs yield enhancement in multiple hybrids under dryland conditions In third year field testing in U.S., drought-tolerant leads are VALUE CATEGORIES: consistently delivering higher yields compared with controls under drought-stressed conditions TOTAL RETAIL $10 - $30/acre VALUE/ACRE: First leads show primary benefit under water-stress conditions 19
  20. 20. SUMMARY All Six Growth Drivers Are On Track in 2007, Setting Stage for Continued Growth Through End of Decade MONSANTO’S OPPORTUNITY FY2007 PRIORITIES FACTOR FOCUS: GROSS PROFIT AS A PERCENT OF SALES • Drive trait penetration, especially triple-stacks 54% U.S. corn • Seed market share growth in U.S. national and ASI brands GROSS MARGIN ‘PULL’ 52% International • Grow market share in key international market corn • Achieve 2.5-5 cents EPS for 50% Global biotech Roundup Ready soybeans in traits Brazil • Complete Delta and Pine Land 48% acquisition Cotton CURRENT LEVEL platform • Continue penetration of second- generation stacked traits in U.S. 46% • Achieve 10-12.5 cents EPS Seminis contribution 44% 2003 2004 2005 2006 2007F 2008F 2009F 2010F • Emphasis on “HIT” projects R&D pipeline 20

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