Monsanto Executive Addresses Investors at Annual AG Conference, Outlining Vision and Strategic Rationale for Integrated Agriculture Company and Providing Business Update
Highlighting its innovation advantage in meeting the long-term demand to feed a growing population, Monsanto Company (NYSE:MON) today will cite the company’s unique ability to lead the next evolution in agriculture. Speaking to investors at the BMO Capital Markets 10th Annual Farm to Market Conference in New York, Monsanto’s President and Chief Operating Officer Brett Begemann will discuss how Monsanto’s ability to innovate and share value with farmers continues to be its strategic differentiator.
“The future of agriculture belongs to those who sustainably steward every field – with precise, integrated solutions to enhance the productivity of every seed on an increasingly static footprint,” Begemann will note. “Companies with a track record of innovation and with the vision and discipline to execute will succeed in this new space.”
Vision and Strategic Rationale for Proposal to Create Leading Integrated Agriculture Company
In his presentation, Begemann will expand on Monsanto’s vision and strategic rationale for the Syngenta proposal, noting the opportunity is about creating a new company that pursues a truly integrated solutions strategy – redefining the future of agriculture.
- Innovation: The new company would leverage the strengths of Monsanto and Syngenta – including their world-class scientists and R&D capabilities – to enhance the scope and speed of breakthrough innovation in the industry. This would enable more efficient delivery of integrated and sustainable solutions across all the major technology-driven platforms of breeding, biotechnology, crop protection, microbials and precision agriculture. By running R&D pipelines across platforms in parallel, the company could accelerate the development of innovations and have the breadth of perspective to unlock new solutions not yet envisioned.
- Scale and Reach: Monsanto also believes the proposal would unlock enhanced scale and reach, providing the opportunity to offer farmers an integrated solution set across a broader set of crops, geographies and production practices. This increased scale would offer access to the world’s most cutting-edge opportunities to farmers who, due to limitations of technology, are currently only able to maximize production on just a fraction of arable lands. By offering a broader spectrum of products for all growers, regardless of crop or production practice, the new company would be able to create better solutions for each farmer’s unique challenges.
- Integrated Solutions: Knowing there’s no single right way for every farmer to protect their fields, the new company would also be able to optimize and enhance a diverse range of integrated solutions by unlocking synergies in both the current portfolios. By adding Syngenta’s leading crop protection portfolio to Monsanto’s leading seed footprint, the company would be able to integrate its broad set of solutions into its recommendations to create new value for farmers.
- Precision: Moving beyond the synergies of combining leading seed and crop protection portfolios, Monsanto’s Climate platform would enable the new company to provide a more precise approach to agriculture by providing farmers with even more valuable insights about their crops and fields. Precision agriculture will serve as the integrator across the space, providing more actionable information to help better support the decisions farmers make to maximize their productivity while ensuring inputs are applied in a precise manner to meet society’s goal to preserve our environment.
- Synergies: Monsanto also believes the proposed combination would deliver substantial synergies that create value for shareowners of both companies, as well as takes advantage of the growth prospects of the combined company. This includes an attractive financial profile, including return on invested capital.
Begemann will also reinforce that, in conjunction with its financial and legal advisors, the company has devoted significant time and resources to analyzing a potential combination of Syngenta and Monsanto and remains confident in its ability to address regulatory concerns. This includes the company’s commitment to divest all of Syngenta’s seeds and traits assets and certain overlapping chemistry assets, making Monsanto better positioned than anyone in the industry to create a new company committed to integrated, value-added solutions and enabling continued choice in the seed industry. Further, the proceeds from the planned divestitures would create a source of cash to allow the combined company to have a responsible capital structure post-close.
Business Update and Long-Term Outlook
In addition to outlining the vision and strategic rationale for the integrated agriculture company, Begemann also will provide a brief business update and highlight progress on several key milestones that reinforce confidence in the company’s strategy and ability to more than double its ongoing earnings per share by 2019, despite continued near-term industry headwinds.
As the company looks across its pipeline of new products, as well as its existing portfolio and brand franchises, it continues to attract significant licensing opportunities as noted in its second quarter earnings call and demonstrated by today’s announced expanded commercial licensing and technology agreement with Scotts Miracle Gro.
The license agreement with Scotts will unlock additional value in the Roundup(R) brand in the lawn and garden segment and provide Monsanto with $300 million in gross profit contribution, a substantial portion of which will be reflected in its fiscal year 2015 third quarter. For the full year, a portion of the licensing income had been contemplated to occur in the fourth quarter, and the company expects the remainder to mitigate some additional softness in Ag Productivity, U.S. soybean acres and the ex-U.S. corn business.
Beyond the agreement with Scotts, Begemann will note the company continues to deliver on key milestones in its core business, further highlighting the company’s ability to innovate and capture value.
“The annual dynamics of agriculture may cause our rate of gain to be uneven at times, but it doesn’t change our trajectory for growth as we continue to deliver on the key milestones critical for our long-term opportunities,” Begemann added.
Webcast and Materials
Presentation slides and a simultaneous audio webcast for today’s presentation may be accessed by visiting the company’s website at www.monsanto.com/investors. Visitors may need to download Windows Media PlayerTM 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. Full materials are also available on the company’s website at 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.
Monsanto will report its third-quarter financial results and strategic outlook on June 24.
About Monsanto Company
Monsanto is committed to bringing a broad range of solutions to help nourish our growing world. We produce seeds for fruits, vegetables and key crops – such as corn, soybeans, and cotton – that help farmers have better harvests while using water and other important resources more efficiently. We work to find sustainable solutions for soil health, help farmers use data to improve farming practices and conserve natural resources, and provide crop protection products to minimize damage from pests and disease. Through programs and partnerships, we collaborate with farmers, researchers, nonprofit organizations, universities and others to help tackle some of the world’s biggest challenges. To learn more about Monsanto, our commitments and our more than 20,000 dedicated employees, please visit: discover.monsanto.com and monsanto.com. Follow our business on Twitter(R) at twitter.com/MonsantoCo, on the company blog, Beyond the Rows(R) at 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 anticipated financial results, current and future product performance, regulatory approvals, business and financial plans of the company and the potential combined business of the company and Syngenta, including the expected benefits of a potential combination as well as whether a potential combination will be entered into or completed, 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 the company`s manufacturing; the accuracy of the company`s estimates related to distribution inventory levels; the recent increases in and expected higher levels of indebtedness; 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; the possibility that a potential transaction involving Syngenta will not be entered into or will be pursued on different terms and conditions, failure to obtain necessary regulatory approvals or to satisfy any of the other conditions to a possible transaction, failure to realize the expected benefits thereof, or the impact of changes in business, financial, market, legal or other conditions; 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 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.
Other Information: This document does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer, to purchase or subscribe for any ordinary shares in Syngenta AG, or Syngenta ADSs, nor shall it form the basis of, or be relied on in connection with, any contract there for.
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