Monsanto Backs Growth Targets; Says Climate Corporation Adoption Faster than Expected

Jackie Pucci Posted by Jackie Pucci|20 August 2014
"The current environment certainly touches everyone in agriculture, but unlike more commodity-oriented organizations, Monsanto’s ability to continually innovate to deliver new value each year for farmers is a strategic differentiator for our company,” said Hugh Grant, chairman and chief executive officer. “Our focus on innovation creates more opportunities to deliver growth in both the current environment and over the long-term as strong demand-driven fundamentals reinforce agriculture’s multi-year opportunity.” --Monsanto Chairman and CEO Hugh Grant

“Our focus on innovation creates more opportunities to deliver growth in both the current environment and over the long-term as strong demand-driven fundamentals reinforce agriculture’s multi-year opportunity.” –Monsanto Chairman and CEO Hugh Grant

Monsanto said on Wednesday it is on track to deliver at the upper end of its original fiscal-year 2014 guidance, and that adoption of its precision agriculture-focused Climate Corporation platform has been stronger than expected.

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The company confirmed 2014 ongoing earnings per share guidance of $5.10 to $5.20, as-reported EPS guidance of $5.12 to $5.22, and free cash of $700 to $800 million.

“Drawing on its ability to develop new technology, deliver consistent upgrades and build from a diversified global product portfolio, Monsanto’s management also will highlight its target to at least double full-year ongoing EPS by the end of fiscal year 2019, with projected annual growth over the five-year period beginning with fiscal year 2015,” the company said in a statement.

Monsanto highlighted three key growth platforms it expects will contribute more than $1 billion each in total incremental gross profit growth over the next five years:

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  • “The Decade of the Soybean” – With the progression of significant technology upgrades that target more than 100 million acres of global soybean opportunity through Roundup Ready 2 Yield, Intacta RR2 PROand the Roundup Ready 2 Xtend Crop System system, the soybean platform embodies the opportunity of Monsanto’s technology innovation.
  • Breeding-Backed Global Corn Upgrades – One of the largest continuing opportunities is to deliver new value to growers through the annual upgrade of Monsanto’s global corn portfolio with newer, better-yielding offerings. Monsanto remains on track with this portfolio upgrade opportunity, bolstering its mix of new products that drive a steady uplift in its seed germplasm offerings in every major corn-growing market.
  • Global Corn Footprint Expansion and Portfolio Leverage Monsanto also is well-positioned for global growth from a portfolio of premium-performing corn products globally, ranging from contribution from operational efficiency to the opportunity to become a leading player in expanding markets like Eastern Europe while growing its offerings in its foundation markets.

The company also said that adoption of The Climate Corporation platform has been stronger than originally projected. It reached more than 50 million acres with its Climate Basic service. “The strong farmer response sets the stage for the confidence in the build out of the platform as the Climate Corporation helps create a new unified approach to helping farmers manage information to improve productivity,” the company said.

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