Monsanto Sees Record Sales in Fiscal Year 2008

Key contributors to growth included increased sales of Roundup and other glyphosate-based herbicides globally, higher worldwide corn seed and traits revenue, increased revenue from the company's U.S. soybean and cotton seeds and traits businesses.

09/10/08 Monsanto reported record net sales of $2 billion for the fourth quarter of fiscal year 2008, which were 35 percent higher than sales in the same period in fiscal year 2007. Key drivers for the quarter were higher sales of branded Roundup herbicides and soybean seeds and traits. Sales of vegetable seeds also improved primarily from the inclusion of the De Ruiter vegetable seeds business, which was not part of the company's business in the prior fourth quarter.

Monsanto saw record net sales of $11.4 billion in the company's fiscal year 2008, which were 36 percent higher than sales in fiscal year 2007. Key contributors to the company's growth included increased sales of Roundup and other glyphosate-based herbicides globally, higher worldwide corn seed and traits revenue, increased revenue from the company's U.S. soybean and cotton seeds and traits businesses. Increased revenue from the company's vegetable seed portfolio also contributed to results in the year.

Monsanto reported a net loss of $172 million in the fourth quarter of fiscal year 2008, compared with a reported net loss of $210 million in the same period last year. The company previously disclosed an expected loss for the fourth quarter as a result of seasonality in certain product sales and in- process research and development (IPR&D) expenses related to the acquisition of the De Ruiter vegetable seeds business. For fiscal year 2008, Monsanto reported net income of $2 billion, which was significantly higher than net income of $993 million in fiscal year 2007.

Loss per share for the fourth quarter was $(0.31) on an as-reported basis, and was $(0.03) on an ongoing basis. Earnings per share (EPS) for fiscal year 2008 was $3.62 on an as-reported basis, and $3.64 on an ongoing basis. (For a reconciliation of ongoing EPS, see page 1.) As-reported EPS results for both periods reflect the effect of discontinued operations for the Posilac brand and related dairy business, as well as IPR&D charges. EPS results for the full year were also affected favorably by $0.23 per share after tax from the settlement of Monsanto's claims in conjunction with Solutia's emergence from bankruptcy.

For fiscal year 2008, net cash provided by operating activities was $2.8 billion, compared with $1.9 billion in the same period in 2007. Net cash required by investing activities was $2 billion in fiscal year 2008, compared with net cash required of $1.9 billion for the same period last year. As a result, free cash flow was a source of $772 million for fiscal year 2008, compared with a use of $57 million in fiscal year 2007. Free cash flow in fiscal year 2008 supported the investment of $1 billion in acquisitions and technology investments, a reinvestment of an additional $918 million in capital expenditures as well as the return of $419 million of cash to shareowners through dividends, and a $361 million share repurchase investment. Net cash required by financing activities was $102 million for fiscal year 2008, compared with net cash required of $583 million last year.

Monsanto said that its full-year 2009 EPS guidance, on an as-reported and ongoing basis, is in the range of $4.20 to $4.40. The company's 2009 EPS guidance reflects a projected growth rate of approximately 15 percent to 20 percent from the fiscal year 2008 EPS ongoing base of $3.64 per share.

The company also provided guidance for free cash flow for fiscal year 2009 in the range of $1.8 billion. The company expects net cash provided by operating activities to be $3 billion, and net cash required by investing activities to be approximately $1.2 billion for fiscal year 2009.

Monsanto also noted that it expects that SG&A expense as a percent of sales for fiscal year 2009 will be in the range of 19 percent and that its R&D expenses as a percent of sales for fiscal year 2009 are expected to be in the range of 9.5 percent to 10 percent.

Monsanto announced that it now expects that gross profit for the entire company will grow to $9.5 billion to $9.75 billion for 2012, or roughly two- and-a-quarter times the company's 2007 base. This estimate exceeds the company's prior gross profit estimate of $8.6 billion to $9.1 billion. The company also noted that it expects to realize a compound annual growth rate for gross profit of 18 percent to 20 percent through 2012.

Monsanto Chairman, President and Chief Executive Officer Hugh Grant said, "Across the industry, every company is dealing with historic volatility caused by uncertainty in the commodities and credit markets, but our fundamental belief is that if we focus on the things in our business that we control, and we do those things well, there's significant growth ahead for our business. As the markets sort themselves out, our basic premise will be the same - greater grain demand drives the need for more yield, more yield requires more innovation, and the companies that innovate will grow. That's exactly who we are."