CITI CONFERENCE
HUGH GRANT
CHIEF EXECUTIVE OFFICER
December 2, 2008
Forward-Looking Statements
2
Certain statements contained in this presentation 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; 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 reports on forms 10-Q and 10-K. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this presentation. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.
TrademarksTrademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. All other trademarks are the property of their respective owners.
© 2008 Monsanto Company
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Monsanto’s Growth Opportunity Lies at the Intersection of Demand, Innovation and Execution
More demand requires more YIELD
More yield requires more INNOVATION
More innovation delivers more GROWTH
Monsanto’s Simple Philosophy on Opportunity:
STRATEGIC OUTLOOK
4
STRATEGIC OUTLOOK
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1964
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1968
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1970
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1972
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9P
STRETCHING SUPPLYWORLD CORN STOCKS-TO-USE RATIO1
ST
OC
KS
-TO
-US
E R
AT
IO
1. USDA PSD View database query for global corn
STATE OF AGRICULTURE:Yield Always Matters
► GLOBAL CORN STOCKS ESTIMATED AT 50 DAYS
► Global corn ending stocks-to-use ratio projected to be 14 percent for 2008/09
► Stocks-to-use are below the nearly 50-year average of 24 percent and at ratio not seen for almost 35 years
► Largest corn crops on record were produced in 2007 and 2008
► Production needs to be sustained at 4% above this year’s crop, and demand unchanged, to return to 24 percent
Increasing Protein Demand, Coupled with Boost from Biofuels, Creates Sustained Long-Term Grain Demand; Near-Term Inventories Re-Build
GLOBAL CORN STOCKS-TO-USE1
GLOBAL CORN CONSUMPTION1
M M
ET
RIC
TO
NS
1964/1965 2008/20091986/1987
Global Corn Production Per Acre Is Sub-Optimized Today, Creating an Opportunity for Innovation
Optimization of yield per acre
OptimizedSub-OptimizedPoor/Subsistence
U.S.90M ACRES151 BU/AC13B BUSHELS
CANADA3M ACRES136 BU/AC500M BUSHELS
INDIA20M ACRES
45% HYBRID32 BU/AC
700M BUSHELS
MEXICO18M ACRES
25% HYBRID48 BU/AC
900M BUSHELS BRAZIL36M ACRES75% HYBRID58 BU/AC2B BUSHELS
ARGENTINA10M ACRES111 BU/AC900M BUSHELS
CHINA67M ACRES83 BU/AC6B BUSHELS
EU 2727M ACRES 90% HYBRID99 BU/AC 2B BUSHELS
YIELD
Boosting yield-per-acre can make a meaningful difference in supply-demand environment• If India, Mexico
and Brazil moved to 100 bushel per acre yields, they could produce nearly 4 billion additional bushels of corn annually – equal to total world corn exports in 2007
GLOBAL CORN PRODUCTION1: CORE PRODUCTIVITY MEASURES AND EVALUATION
1. Source is USDA FAS and internal estimates. 5
STRATEGIC OUTLOOK
$0
$2,000
$4,000
$6,000
$8,000
$10,000
2003 2004 2005 2006 2007 2008 2009F 2012F
Yield and Innovation Create the Runway of Growth to 2012 for Seeds & Traits and for Monsanto as a Whole
6
$7.2-$7.4B
GROSS PROFIT COMMITMENT: 2003-2012F
GP
(in m
illio
ns)
~2.25X2007
BASELINE
FINANCIAL OUTLOOK
$9.5-$9.75B
$4.20-$4.40ONGOING
EPS
$4.2B
SEEDS & GENOMICS GROSS PROFIT
AG PRODUCTIVITY GROSS PROFIT
BASELINE
2009 OUTLOOK
►Order pace for U.S. DEKALB corn within band of prior two years
►Order pace for branded U.S. soybean exceeds pace of the two previous seasons
►Latin America strong in the first quarter for both seed and traits and Roundup; monitoring credit for second season in Brazil
►Roundup pricing and volumes on track with $2.3-$2.4B gross profit estimates for this business
CORN SEED & TRAITS
CORN SEED & TRAITS
GROSS PROFIT PROGRESSION
GLOBAL GROSS PROFIT SPLIT
Corn Gross Profit Builds on Expanding Leadership in Branded Corn Seed, Launch of SmartStax and International Traits
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$1,721$2,174
$2,800
2007 2008 2009F 2012F
$4,500- $4,600
70%
30%U.S.Intl. 70%
30%
2008 2012F
2012 MILESTONE TARGETS►Grow U.S. DEKALB corn share to 30-34
share points; grow ASI to ~15 share points
►Grow international branded corn share in key countries by 1-2 share points annually
►Launch SmartStax in the U.S. in 2010; target market of 60-65M1 acres
►Launch YieldGard Corn Borer/ Roundup Ready corn in Argentina in 2009; target market of 7M1 acres
►Launch YieldGard Corn Borer in Brazil in 2009; target market of 15-20M1 acres
►Advance drought-tolerant corn I through Phase 4
$ in millions
1. Target market defined as acres where technology is applicable, not necessarily a projection of acres penetrated by 2012.
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Preliminary Yield Trial Results Reinforce Yield Advantage of DEKALB Seed in the U.S.
GEOGRAPHY: U.S.2009 OBJECTIVE:
Grow 2 Share Points
2008 PERFORMANCE UPDATE
• In > 12,800 comparisons, DEKALB out-yields competitive best by 9.8 bu/acre on average
• On 60 percent of the acres planted, DEKALB has 8-12 bu/acre advantage
2008 PRELIMINARY U.S. COMPETITIVE CORN YIELD COMPARISON: DEKALB
184
193191
207
198 199
171
182
190
196
189 189
150
155
160
165
170
175
180
185
190
195
200
205
210
215
COMPETITORS
DEKALB
BU
SH
ELS
/AC
RE
(AP
PR
OX
IMA
TE
DIF
FER
EN
CE
S)
RELATIVE MATURITIES (DAYS)► 90/95 RM 100 RM 105 RM 110 RM 115 RM OverallCOMPARISONS: >840 >2,550 >670 >4,370 >4,350 >12,800
APPROXIMATE BU/AC ADVANTAGE: 12.4 11.4 1.0 11.0 8.4 9.8
Source: Preliminary 2008 Monsanto and third party head-to-head comparisons of 5 leading DEKALB hybrids within each RM zone to national competitor products containing similar crop protection traits within 2 RM days as of November 14, 2008. Weighted average calculated to 15% moisture.
CORN SEED
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Launch of Roundup Ready 2 Yield Soybeans Key to Long-Term Growth of Leading Soybean Platform
SOYBEAN SEED & TRAITS
SOYBEAN SEED & TRAITSGROSS PROFIT PROGRESSION
GLOBAL GROSS PROFIT SPLIT
$588 $725
2007 2008 2009F 2012F
80%
20%U.S.Intl.
85%
15%
~$1,200
~$700
2008 2012F
2012 MILESTONE TARGETS►Controlled commercial release of
Roundup Ready 2 Yield on 1-2M acres in the U.S. in 2009
►Large-scale launch of Roundup Ready 2 Yield on 5-6M acres in 2010; target market of 45-55M1 acres
►Grow Asgrow brand to 25 share points in the U.S. by 2012
► Increase Brazil Roundup Ready soybean penetration to 80 percent by 2012 in anticipation of launch of insect-protected Roundup Ready 2 Yield soybeans
$ in millions
1. Target market defined as acres where technology is applicable, not necessarily a projection of acres penetrated by 2012.
Cotton Seed and Traits Focused on Continued Upgrade to Second Generation Technology in U.S. and India
COTTON SEED & TRAITS
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COTTON SEED & TRAITSGROSS PROFIT PROGRESSION
GLOBAL GROSS PROFIT SPLIT
$267 $313
2007 2008 2009F 2012F
70%
30%U.S.
Intl. 55%
45%
~$500
~$300
2008 2012F
2012 MILESTONE TARGETS►Expand second-generation trait
penetration in U.S. Deltapine brand
►Expand Bollgard II acres in India; currently 25 percent penetrated in 18-20M acre opportunity
►Grow U.S. Deltapine brand share from current share of 41 percent to ~50 percent by 2012
►Grow Brazil branded cotton share by 10 points to 31 percent; grow India to 12 percent share
$ in millions
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Vegetable Platform Focused on Execution and Growth To Generate 65 Percent Margins by 2012
VEGETABLE SEEDS
VEGETABLE SEEDSGROSS PROFIT PROGRESSION
GLOBAL GROSS PROFIT SPLIT
$267$394
~500
2007 2008 2009F 2012F
20%
80%
U.S.Intl.
20%
80%
2008 2012F
2012 MILESTONE TARGETS► Integrate De Ruiter protected culture
seeds►Continue margin expansion toward
goal of 65 percent by 2012Price existing products to valueLaunch new products with increased valueExpand high-margin protected-culture segment
►Accelerate new product launches via use of molecular markers
$ in millions~$750
GLOBAL VOLUME (GALLONS): 209M 215M 235M 252M 257M
BRANDED PRICE BAND (PER GALLON): $11-$13 $11-$13 $11-$13 >$11-$13 ~$20
TOTAL ROUNDUP AND OTHER GLYPHOSATE-BASED HERBICIDES GROSS PROFIT:
$703M $637M $648M $854M $2.0B
ROUNDUP
Roundup and Other Glyphosate-Based
Herbicides2009 Forecast
GROSS PROFIT TARGET: $2.3-$2.4B
BRANDED PRICE BAND (PER GALLON FORECAST):
Above $16-$18
2012 Forecast
GROSS PROFIT TARGET: $1.9B
BRANDED PRICE BAND (PER GALLON FORECAST): $16-$18
Increased 2009 and 2012 Targets for Roundup Reflect Sustainability Even As Supply-Demand Comes Into Balance
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ROUNDUP AND OTHER GLYPHOSATE-BASED HERBICIDES: BRANDED AND NON-BRANDED TRENDS – 2004-2008
0
50
100
150
200
250
300
2004 2005 2006 2007 2008
Glo
bal V
olum
e (in
gal
lons
)
BrandedNon-Branded
USES OF CASH
Over 70% of the $2.8 Billion of Operating Cash Generated Invested in Acquisitions, Technology and Capital in FY08
13
33%
15%
2%
13%
37%
Share Repurchase
Dividends
Capital Spending
Acquisitions and Technology Collaborations
USES OF CASHPERCENT OF $2.8B OPERATING CASH USED BY CATEGORY: FY2008
Cash Generation
FY2008 Free Cash Flow: $772M
FY2009 Free Cash Flow Forecast1: ~$1.8B
CASH PRIORITIES
• Bolster direct returns to shareowners
• Support commercial growth through capital spending
• Invest in future growth through technology collaborations
• Expand the core through strategic acquisitions
Other 1. Estimate does not contemplate strategic acquisitions.
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R&D PIPELINE
R&D Engine Is Poised to Launch Average of One Game-Changing Technology Every Other Year Through Mid-Decade
R&D PIPELINE: ADVANCED GAME-CHANGING TECHNOLOGIES
2008 2009 2010 2011 2012 TO MID-DECADE
Roundup Ready 2 YieldSoybeans
SmartStaxDrought-Tolerant Corn Family1
Nitrogen-Utilization Corn Family1
• Second-gen soybean trait platform
• China import approval received September 2008
• On track for 2009 release; 2010 full launch
• All-in-one corn trait platform
• On track for 2010 launch – Submitted for regulatory review and refuge reduction
• Value likely in improved yield under stress and potential for water replacement
• Targets ways to use nitrogen more efficiently
CONTROL HYBRID(76 BU/AC)
WITH GENE(94 BU/AC)
SUPERIOR, NE - FIELD TRIALS – 2007
1. Part of the Monsanto-BASF Yield and Stress R&D Collaboration
FARM PROGRESS SHOW – 2007
FARM PROGRESS SHOW – 2007
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Roundup Ready 2 Yield Soybeans Is One Of the Most-Anticipated Launches Because of Step-Change In Yield
Roundup Ready 2 Yield soybeans yield 7 to 11 percent higher than Roundup Readysoybeans based on 73 Monsanto field trials from 2004-2007Seamless price set at ~$70 per acre for seed, trait and treatment, a $20 per acre premium over first generation Roundup Ready; result of 3-5 bu yield advantage
Near-Isoline Comparisons:Roundup Ready 2 Yield vs. Roundup Ready
4 YEAR AVERAGE
NEW: ROUNDUP READY 2 YIELD SOYBEANS:SECOND-GENERATION WEED CONTROL OPPORTUNITY
SOYBEAN SEED & TRAITS
11%
7%
9%
7%
9%
0%
2%
4%
6%
8%
10%
12%
2004 2005 2006 2007
% Y
ield
Incr
ease
ove
r R
ound
up R
eady
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Monsanto’s Leadership Continues With Next Game-Changer in Corn; SmartStax to Reset Trait Platform
SMARTSTAX
COMMERCIAL OPPORTUNITY
LAUNCH TARGET: 2010TARGET ACRE
OPPORTUNITY: 60-65MVALUE PROPOSITION
2008 trials evaluating SmartStax in elite germplasm, quantifying sources of potential on-farm yield advantages:
Improved consistency: Primary pests
1-2%
Improved consistency: Secondary pests
1-2%
Reduced refuge 3-6%
5-10%
CORN SEED & TRAITS
SmartStax STATUS
REFUGE REDUCTION STRATEGY:
• Precedent established with U.S. EPA on dual-mode-of-action traits:
• YieldGard VT PRO received reduced refuge in Southern geographies
• Bollgard II natural refuge in cotton
COMMERCIALTRACK:
• On track for 2010 launch• All components have U.S. approvals• Final regulatory package with 5% refuge
request submitted in June 2008
CONTROL HYBRID(76 BU/AC)
WITH GENE(94 BU/AC)
SUPERIOR, NE - FIELD TRIALS – 2007
2007 Dryland Field Tests of Lead Drought Event Offers Visual Evidence of Increased Yield In Stressed Conditions
2007 FIELD TESTING SHOWS VISUAL PROOF OF YIELD IMPROVEMENT
Water stress exposure during different stages of development can have significant effect on corn yield; Monsanto’s lead drought-tolerance trait shows a significant yield advantage compared with controls under drought stress
1. Acre opportunity reflects acres where technology fits at Monsanto's 2007 market share in respective crops
2. 2020 value reflects gross sales opportunity in launch country in year 2020
R&D PipelineDrought-Tolerant Corn Family: Lead Project
HIT Project Phase 3PROJECT CONCEPT:
Drought-tolerance family aimed at providing consistent yield and buffering against effects of water limitationsVALUE:
LAUNCH-COUNTRY ACRES1: 55M
2020 VALUE2: $300-$500MSOURCES OF VALUE:
1Improved yieldTargeting 6-10% yield improvement in water-stress environments
R&D PIPELINE
PART OF THE MONSANTO BASF YIELD AND STRESS R&D COLLABORATION 17
18
Monsanto’s Growth Opportunity Lies at the Intersection of Demand, Innovation and Execution
More demand requires more YIELD
More yield requires more INNOVATION
More innovation delivers more GROWTH
Monsanto’s Simple Philosophy on Opportunity:
SUMMARY
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