Monsanto expects more growth with new corn and bean products

Monsanto logo
(Farm and Dairy file photo)

ST. LOUIS — During the Monsanto Co.’s eighth Whistle Stop tour event for investors, chairman and chief executive officer Hugh Grant and other members of the Monsanto executive leadership team will highlight how the industry’s leading technology platforms and digital integration are addressing evolving grower needs and accelerating the future of agriculture.

“Monsanto has the right strategic plan in place to create significant shareowner value over the long term, built on strong business fundamentals,” said Grant. “With proven leadership in seeds, traits, digital agriculture and a robust supporting R&D pipeline, Monsanto remains uniquely positioned to address evolving grower needs through our integrated solutions strategy, while delivering on our long-term earnings potential.”

Leading share position

Monsanto confirmed it remains on track to be at the low end of its $3.36 to $4.14, as-reported 2016 full-year guidance range and at the low end of its ongoing EPS 2016 full-year guidance range of $4.40 to $5.10.

Net cash provided by operating activities is expected to be $2.2 billion to $2.6 billion, and net cash required by investing activities to be approximately $900 million to $1.1 billion for fiscal year 2016.

The company also confirmed its 2016 full-year free cash flow guidance range of $1.3 billion to $1.5 billion.

Next year

Looking ahead to fiscal year 2017, the company continues to expect a return to growth in EPS driven by the return on innovation for products such as Intacta RR2 PROTM and Roundup Ready 2 XtendTM soybeans, improved cost of goods and financial discipline.

Beyond fiscal year 2017, the opportunity to expand is expected to be driven by a continued return on innovation for the company’s growth drivers, coupled with continued financial discipline and a balanced approach to capital allocation.

This includes an expected target of mid-teens compounded annual EPS growth rate from the end of fiscal year 2017 through fiscal year 2021.

Leading technology

During the event, Monsanto executives will also highlight the company’s industry-leading core pipeline with a value of up to $25 billion in peak net sales.

The event will focus on cutting-edge innovation that continues to fuel the company’s leadership in its breeding, biotechnology, chemistry, biologicals and data science platforms. It will also showcase in-field demonstration of late-stage technologies including SmartStax PRO corn, Roundup Ready 2 Xtend soybeans, DEKALB Disease ShieldTM corn hybrids, next-generations of Intacta RR2 PROTM soybeans and the latest offerings in its Climate FieldViewTM platform.

Corn improvements

Steady growth is enabled by upgrading the germplasm in its leading share positions around the world, as well as next-generation trait platforms, such as SmartStax PRO and TreceptaTM corn.

The company also announced its investment plans for greenhouses in Arizona, which will support protected culture capabilities and serve to increase the long-term rate of genetic gain in both corn and soybeans.

Soybean improvements

For soybeans, the coming years are significant, with key blockbuster traits such as Intacta RR2 PROTM and Roundup Ready 2 Xtend soybeans accelerating penetration.

The recent royalty-bearing license agreement for Syngenta to sell dicamba-tolerant soybean technologies further enables the opportunity for 55 million acres of Roundup Ready 2 Xtend soybeans in the U.S. by fiscal year 2019.

Management also sees the opportunity for 45 to 55 million acres of Intacta RR2 PRO in South America in fiscal year 2017.

Weed control

The introduction of the Roundup Ready Xtend Crop System is expected to enable the upgrade of the Roundup Ready platform, creating tremendous value through integrated solutions.

With the recent receipt of the European import approval for the trait, the company is one step closer to delivering on a target of 15 million acres by fiscal year 2017.

The continued advancement of the company’s Vapor GripTM Technology formulation of dicamba and signed agreement with DuPont to offer this technology further shows the value of the platform.

The company looks forward to the EPA’s expected final decision by late summer or early fall for over-the-top dicamba use, which enables a full system launch in the U.S. in 2017.


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