Monsanto Company's Global Business Performance Drives Increased Full-Year Earnings Outlook Full-Year Ongoing Earnings Per Share Guidance Raised to $4.40 to $4.50, or $4.42 to $4.52 As-Reported

ST. LOUIS, April 3, 2013 /PRNewswire/ -- With half of its fiscal year complete, Monsanto Company (NYSE: MON) announced today that the continued strength of its growing global business delivered another strong quarter for its fiscal year 2013 and translated to a second consecutive quarterly increase in full-year ongoing and as-reported earnings per share guidance. In reporting earnings results for the second quarter and first half of the year, executives noted results were driven by contributions from across the company's business portfolio, including continued growth of its global corn business and positive performance of its agricultural productivity segment.



Second Quarter


Six Months

($ in millions)


2013


2012


2013


2012

Net Sales By Segment









Corn seed and traits


$

3,280



$

2,816



$

4,419



$

3,711


Soybean seed and traits


677



689



908



931


Vegetable seeds


199



215



355



372


Cotton seed and traits


60



66



245



260


All other crops seeds and traits


130



138



174



184


TOTAL Seeds and Genomics


$

4,346



$

3,924



$

6,101



$

5,458











Agricultural productivity


$

1,126



$

824



$

2,310



$

1,729


TOTAL Agricultural Productivity


$

1,126



$

824



$

2,310



$

1,729











TOTAL Net Sales


$

5,472



$

4,748



$

8,411



$

7,187











Gross Profit


$

3,070



$

2,705



$

4,467



$

3,801











Operating Expenses


$

958



$

896



$

1,846



$

1,747


Interest Expense – Net


$

8



$

27



$

36



$

62


Other Expense – Net


$

22



$

37



$

39



$

43


Net Income Attributable to Monsanto Company


$

1,483



$

1,211



$

1,822



$

1,337











Diluted Earnings per Share (See note 1.)


$

2.74



$

2.24



$

3.37



$

2.47


Items Affecting Comparability – EPS Impact









Income on discontinued operations


(0.01)



(0.01)



(0.02)



(0.01)


Nitro Claims Settlement




0.05





0.05


Diluted Earnings per Share from Ongoing Business (For the

definition of ongoing EPS, see note 1.)


$

2.73



$

2.28



$

3.35



$

2.51


Effective Tax Rate


29

%


31

%


28

%


31

%

 




Second Quarter


Six Months

Comparison as a Percent of Net Sales:


2013


2012


2013


2012


Gross profit


56

%


57

%


53

%


53

%


Selling, general and administrative expenses


11

%


11

%


14

%


15

%


Research and development expenses


7

%


7

%


8

%


10

%


Income from continuing operations before income taxes


38

%


37

%


30

%


27

%


Net income attributable to Monsanto Company


27

%


26

%


22

%


19

%

 

"Our commitment to serving our farmer customers around the world is at the core of everything we do," said Hugh Grant, chairman and chief executive officer for Monsanto. "By understanding their needs and finding new ways to work with them to meet growing demand, we've achieved momentum in our business and strong results across our global portfolio. Our performance underscores our expectation for a third consecutive year of strong earnings growth and reinforces our opportunities for the future as well. As we move into the second half of the year, we are thankful for the opportunity to serve our customers and continue to earn their business as a leader in this dynamic industry."

Results of Operations

The company achieved strong second quarter and first half results that reflect the continued growth of its global business. Net sales for the quarter increased $724 million or 15 percent to $5.5 billion in the three-month comparison driven in part by 16 percent sales growth from its global corn business. For the first six months, net sales increased $1.2 billion or 17 percent.

Operating expenses were up $62 million in the second quarter compared to the prior year. In the three-month comparison, selling, general and administrative (SG&A) expenses increased 10 percent to $598 million.  Quarterly research and development (R&D) expenses were up 2 percent to $360 million compared to the prior year period.

The company's second quarter earnings per share (EPS) was $2.73 on an ongoing and $2.74 on an as-reported basis, compared to an EPS of $2.28 on an ongoing and $2.24 on an as-reported basis in the same quarter last year. EPS for the first six months of fiscal year 2013 was $3.35 on an ongoing and $3.37 on an as-reported basis. (For a reconciliation of EPS to ongoing EPS see page 1).

Cash Flow

For the first half of fiscal year 2013, cash flow from operations was a source of nearly $1.9 billion compared to $1.7 billion for the same period last year.

Net cash required by investing activities for the first half of fiscal year 2013 was $301 million, compared to $402 million for the same period of fiscal year 2012. Net cash required by financing activities for the first half of 2013 was $422 million, compared to net cash required of $672 million for the same period of fiscal year 2012. 

Free cash flow was a source of nearly $1.6 billion for the first half of fiscal year 2013, compared to a source of $1.3 billion for the first half of fiscal year 2012. (For a reconciliation of free cash flow, see note 1.)

Outlook

The company raised its full year ongoing EPS guidance to $4.40 to $4.50 per share. Full year 2013 EPS guidance on an as-reported basis is expected in the range of $4.42 to $4.52 per share. (For a reconciliation of EPS, see note 1.)

The company affirmed its previously announced full year free cash flow guidance of $1.8 billion 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.)

Seeds and Genomics Segment Detail

($ in millions)


Net Sales


Gross Profit



Second Quarter


Six Months


Second Quarter


Six Months

Seeds and Genomics


2013


2012


2013


2012


2013


2012


2013


2012

Corn Seed and Traits


$

3,280



$

2,816



$

4,419



$

3,711



$

2,083



$

1,847



$

2,769



$

2,378


Soybean Seed and Traits


677



689



908



931



395



443



513



616


Vegetable Seeds


199



215



355



372



106



85



189



166


Cotton Seed and Traits


60



66



245



260



44



47



171



182


All Other Crops Seeds and Traits


130



138



174



184



71



69



82



65


TOTAL Seeds and Genomics


$

4,346



$

3,924



$

6,101



$

5,458



$

2,699



$

2,491



$

3,724



$

3,407


 

($ in millions)


Earnings Before Interest & Taxes (EBIT)




Second Quarter


Six Months


Seeds and Genomics


2013


2012


2013


2012


EBIT (For a reconciliation of EBIT, see note 1.)


$

1,840



$

1,699



$

2,060



$

1,846





















 

The Seeds and Genomics segment consists of the company's global seeds and related traits business.

Sales in the Seeds and Genomics segment for the second quarter were $4.3 billion, an increase of $422 million over the same period last year.  For the first six months, sales for the segment are up $643 million over the same period last year. 

Monsanto's global corn business led the Seeds and Genomics segment performance, as it expects to hit record total corn volumes in 2013. The second quarter results were driven in part by the conclusion of a successful and record second season in Brazil where the company continued to achieve strong demand for its latest corn products. The U.S. corn business also drove the results for the quarter, with the company projecting another year of strong performance from the business driven by the positive mix improvement across its corn portfolio. The company is on track to reach the high end of its 36 million to 38 million acre target range for its Genuity® reduced refuge family. 

The current and emerging opportunities in the company's global soybean business complement the global corn business. In the United States, the company has achieved strong results year-to-date, with the positive order book and shipments positioning the company well to deliver to the high end of its 39 million to 41 million acre target range for its Genuity® Roundup Ready 2 Yield® platform. This performance comes as the company prepares to enter the next phase of innovation in its soybean platform, including the addition of both Roundup Ready 2 Xtendand Intacta RR2 PROsoybeans. The company noted that new results from its second year of Intacta RR2 PRO Ground Breakers® on-farm field trials in Brazil have demonstrated a better than 4 bushel per acre yield advantage against first-generation Roundup Ready® soybeans at more than 1,000 locations, double the number of locations from its 2012 Ground Breakers® on-farm field trials in Brazil.

Agricultural Productivity Segment Detail

 ($ in millions)


Net Sales 


Gross Profit



Second Quarter


Six Months 


Second Quarter


Six Months



2013


2012


2013


2012


2013


2012


2013


2012

Agricultural Productivity


$

1,126



$

824



$

2,310



$

1,729



$

371



$

214



$

743



$

394


TOTAL Agricultural Productivity


$

1,126



$

824



$

2,310



$

1,729



$

371



$

214



$

743



$

394


 

($ in millions)


Earnings Before Interest & Taxes (EBIT)



Second Quarter


Six Months

Agricultural Productivity


2013


2012


2013


2012

EBIT (For a reconciliation of EBIT, see note 1.)


$

256



$

82



$

526



$

164


Unusual Items Affecting EBIT:









EBIT from Discontinued Operations


$

6



$

11



$

17



$

11


Nitro Claims Settlement


$



$

(44)



$



$

(44)


 

The Agricultural Productivity segment consists of the crop protection products and lawn-and-garden herbicide products.

Net sales in the second quarter of fiscal 2013 for Monsanto's Agricultural Productivity segment increased $302 million over the same period last year, reflecting the continued benefit of a favorable marketplace environment.  The company remains focused on its established Roundup® strategy.

Webcast Information
In conjunction with this announcement, Monsanto will hold a conference call at 8:30 a.m. central time (9:30 a.m. eastern time) today.  The call will focus on these 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.

Presentation slides and a simultaneous audio webcast of the conference call may be accessed by visiting the company's website at www.monsanto.com/investors or by visiting http://edge.media-server.com/m/p/pbzn6osi/lan/en. 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 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 Company
Monsanto 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.

Notes to editors: Monsanto and the Vine Design, Genuity, Roundup, Roundup Ready 2 Yield, Roundup Ready 2 Xtend, Intacta RR2 PRO and Ground Breakers are trademarks of Monsanto Company and its wholly-owned subsidiaries.

Monsanto Company
800 North Lindbergh Blvd
St. Louis, Missouri 63167


Contact

Media: Sara Miller (314-694-5824)


Analysts: Bryan Hurley (314-694-8148)

 

Monsanto Company

Selected Financial Information

(Dollars in millions, except per share amounts)

Unaudited


Statements of Consolidated Operations


Three Months Ended


Six Months Ended



February 28, 2013


February 29, 2012


February 28, 2013


February 29, 2012

Net Sales


$

5,472



$

4,748



$

8,411



$

7,187


Cost of Goods Sold


2,402



2,043



3,944



3,386


Gross Profit


3,070



2,705



4,467



3,801


Operating Expenses:









Selling, general and administrative expenses


598



543



1,140



1,043


Research and development expenses


360



353



706



704


Total Operating Expenses


958



896



1,846



1,747


Income From Operations


2,112



1,809



2,621



2,054


Interest Expense


35



47



86



100


Interest Income


(27)



(20)



(50)



(38)


Other Expense, Net


22



37



39



43


Income from Continuing Operations Before Income Taxes


2,082



1,745



2,546



1,949


Income Tax Provision


603



540



725



610


Income from Continuing Operations Including Portion Attributable to Noncontrolling Interest


$

1,479



$

1,205



$

1,821



$

1,339


Discontinued Operations:









Income from Operations of Discontinued Businesses


6



11



17