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Press release from PR Newswire

Monsanto Increases Fiscal Year 2013 Earnings Guidance As Global Momentum Fuels Expected 20 Percent Plus Ongoing Earnings Growth; Projects Mid-Teens Ongoing Earnings Growth For Fiscal Year 2014 Off Anticipated Higher Base

Wednesday, May 29, 2013

Monsanto Increases Fiscal Year 2013 Earnings Guidance As Global Momentum Fuels Expected 20 Percent Plus Ongoing Earnings Growth; Projects Mid-Teens Ongoing Earnings Growth For Fiscal Year 2014 Off Anticipated Higher Base

08:00 EDT Wednesday, May 29, 2013

- Fiscal year 2013 guidance range for ongoing EPS raised to $4.50-$4.55, projecting greater than 20 percent ongoing earnings growth; reaffirms fiscal year 2013 free cash flow range of $1.8-$2 billion
- Projects improved second-half outlook over previous guidance, with Q3 ongoing EPS range of $1.55-$1.60 and better year-over-year Q4

ST. LOUIS, May 29, 2013 /PRNewswire/ -- Continued business momentum is propelling Monsanto Company's (NYSE: MON) expected ongoing earnings growth of greater than 20 percent in fiscal year 2013, and is projected to carry through to fiscal year 2014 in the form of mid-teens ongoing earnings growth off the current fiscal year's higher base, Chairman and Chief Executive Officer Hugh Grant said at the Sanford Bernstein Strategic Decisions Conference today.

"We're in a growth mode, and with the combination of momentum in our core businesses and new layers of growth coming online from an increasingly global portfolio, we have the strategic drivers in place to continue our growth trajectory next year and beyond," Grant said.  "Our opportunity is driving yield and productivity and, even against the yearly variability in agriculture, the long-term need for greater agricultural productivity and the strong fundamentals in our business create a compelling runway for our company."

Grant said the company is raising 2013 earnings per share guidance to the range of $4.50 to $4.55 on an ongoing basis and $4.52 to $4.57 on an as-reported basis, translating to year-over-year ongoing earnings growth of greater than 20 percent for the fiscal year.  (For a reconciliation of ongoing EPS, see note 1.)

Grant affirmed the company's full-year free cash flow guidance in the range of $1.8 to $2 billion.  The company expects net cash provided by operating activities to be $2.9 billion to $3.3 billion, and net cash required by investing activities to be $1.1 billion to $1.3 billion for fiscal year 2013.  (For a reconciliation of free cash flow, see note 1.)

Strong Overall Business Portfolio Drives Full-Year and Second-Half OutlookMonsanto's increased full-year outlook reflects the continuation of the early trends that contributed to the business strength in the first half of the year, including overall full-year growth in the company's global corn portfolio and better-than-expected strength in the Agricultural Productivity segment. 

Monsanto expects third-quarter ongoing and as-reported earnings in the range of $1.55 to $1.60 and a smaller year-over-year fourth-quarter loss.  The improvement in the 2013 fourth quarter reflects the expected continued contribution from Agricultural Productivity and the company's global corn business, driven by the acceleration and mix benefit in the company's growing Latin American corn business. (For a reconciliation of ongoing EPS, see note 1.)

The second half outlook includes decreased year-over-year contribution in the third quarter from the Brazil soybean business, which was excluded from earnings guidance, and a decrease in overall planted cotton acres, partially offset by strength in the Agricultural Productivity segment and a discrete tax benefit.  Continuing through the second half, Grant indicated the company projects record total volumes in its global corn business, which is expected to translate to mid-teens sales growth in corn on a full-year basis. While the corn outlook is up significantly for the full year compared with 2012, the third quarter is expected to reflect the continued effect of higher production costs from the extraordinary 2012 drought.

 "This year has been an important confirmation of the momentum in our business and as we step back and look at the full year in context, as we've been able to execute on our global portfolio, I'm particularly pleased in our ability to deliver greater than 20 percent ongoing earnings growth," said Grant.

Mid-Teens Ongoing Earnings Growth in 2014In his prepared remarks, Grant will review the layers of growth that he says will allow Monsanto to build on the momentum coming out of 2013.  Off the higher fiscal year 2013 earnings base, Grant projected continued strong growth in 2014 and continuing over a multi-year horizon.

"On top of an even-greater 2013 base, we're confident in projecting strong earnings growth in fiscal year 2014, even at this relatively early point," said Grant.  "That confidence is a reflection of our expectation that the same core factors that drove our success this year carry into 2014, while we start the ramp up of some additional transformative layers of new growth."

The drivers that Grant will highlight include the continued growth coming from its core North American business, expansion from emerging areas of growth including the corn opportunity in Latin America and Eastern Europe, and new growth platforms beginning to come online, including new soybean platforms in the Americas and next-generation technologies that position Monsanto's technology at the heart of improved farmer productivity.

Webcast InformationGrant presents at the Sanford Bernstein conference at 8 a.m. central time (CT).  The webcast presentation will discuss matters in this release and focus on results and future expectations and may include a discussion of Monsanto's strategic initiatives, product performance and other matters related to the company's business.  The webcast and accompanying slides will be available at www.monsanto.com/investors and may be accessed by visiting the company's website at www.monsanto.com and clicking on "Investor Information."  Visitors may need to download Windows Media Player? prior to listening to the webcast. Following the live broadcast, a replay of the webcast will be available on the Monsanto website for three weeks.

Monsanto will report its complete third-quarter financial results and strategic outlook on June 26. Financial results and supporting information for the earnings release will be available through the investor section of Monsanto's website at http://www.monsanto.com/investors.  Monsanto publishes details on upcoming webcasts on this website in both the Presentation and Financial Reports section and the Calendar of Events section. Investors should look to this site as the source of information on future investor conference webcasts. The site includes a calendar of upcoming investor events, details on accessing scheduled webcasts and information from previous investor events.

About Monsanto CompanyMonsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. Monsanto remains focused on enabling both small-holder and large-scale farmers to produce more from their land while conserving more of our world's natural resources such as water and energy. To learn more about our business and our commitments, please visit: www.monsanto.com.  Follow our business on Twitter® at www.twitter.com/MonsantoCo, on the company blog, Beyond the Rows at www.monsantoblog.com, or subscribe to our News Release RSS Feed.

Cautionary Statements Regarding Forward-Looking Information:Certain statements contained in this release are "forward-looking statements," 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 and the previously-announced SEC investigation; 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 Form 10-K 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 release. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.

Monsanto Company

Selected Financial Information

(Dollars in millions)

Unaudited

1.

Ongoing EPS and Free Cash Flow:  The presentations of ongoing EPS and free cash flow are not intended to replace net income (loss) attributable to Monsanto Company, cash flows, financial position or comprehensive income (loss), and they are not measures of financial performance as determined in accordance with generally accepted accounting principles (GAAP) in the United States.  The following tables reconcile ongoing EPS and free cash flow to the respective most directly comparable financial measure calculated in accordance with GAAP.

Reconciliation of EPS to Ongoing EPS:  Ongoing EPS is calculated excluding certain after-tax items which Monsanto does not consider part of ongoing operations.

 

Fiscal Year

2013

Guidance

2013 Q3 Guidance

Diluted Earnings per Share

$4.52-$4.57

$1.55-$1.60

Income on Discontinued Operations

(0.02)

-

Diluted Earnings per Share from Ongoing Business

$4.50-$4.55

$1.55-$1.60

Reconciliation of Free Cash Flow:  Free cash flow represents the total of cash flows from operating activities and investing activities.  With respect to the fiscal year 2013 free cash flow guidance, Monsanto does not include any estimates or projections of Net Cash Provided (Required) by Financing Activities because in order to prepare any such estimate or projection, Monsanto would need to rely on market factors and conditions that are outside of its control.

 

Fiscal Year

2013 Guidance

Net Cash Provided by Operating Activities

$

2,900-3,300

Net Cash Required by Investing Activities

(1,100)-(1,300)

Free Cash Flow

$

1,800-2,000

Net Cash Required by Financing Activities

N/A

Effect of Exchange Rate Changes on Cash and Cash Equivalents

N/A

Net Increase in Cash and Cash Equivalents

N/A

Cash and Cash Equivalents at Beginning of Period

N/A

Cash and Cash Equivalents at End of Period

N/A

Contact

Media: Sara Miller (314-694-5824)

Analysts: Bryan Hurley (314-694-8148)

SOURCE Monsanto Company

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