Monsanto Delivers Year of Strong Growth on Performance of Global Seeds and Traits Portfolio; Foundation Set for Countinued Growth In FY15 and Over Multi-Year Horizon

Monsanto Company (NYSE: MON) today announced fiscal year 2014 results slightly above the high end of its guidance range on the strength of its global seeds and traits business, the biggest driver of growth for the year. This is the company’s fourth consecutive year of strong ongoing earnings growth. Executives noted that the balance of the company’s global business positions it well for continued growth and investment in fiscal year 2015 as the company executes on its plan to at least double ongoing EPS over the next five years.

“We’re confident in our ability to deliver the targets we’ve set in both the near term and over the longer term,” said Hugh Grant, chairman and chief executive officer for Monsanto. “In an industry that’s particularly near-term focused right now, there are few companies as well positioned to deliver strong growth today while significantly increasing investments to enable the continued delivery of a broad range of innovative solutions for tomorrow.”

Results of Operations

Monsanto reported net sales of approximately $2.6 billion for the fourth quarter of fiscal year 2014. Net sales for the full fiscal year were approximately $15.9 billion, a seven percent increase over fiscal year 2013. Full-year net sales results were driven by the strength of the Seeds and Genomics segment, including a record year for the company’s soybean business.

Seeds and Genomics segment net sales were approximately $1.4 billion for the quarter. For the fiscal year, net sales for the Seeds and Genomics segment reached $10.7 billion. Agricultural Productivity segment net sales were $1.3 billion for the quarter. Net sales for the Agricultural Productivity segment for the fiscal year reached $5.1 billion.

Monsanto reported a net loss of $156 million in the fourth quarter of fiscal year 2014, compared with a reported net loss of $249 million in the same period last year. Net income attributable to Monsanto for fiscal year 2014 was approximately $2.7 billion, an increase over fiscal year 2013 net income attributable to Monsanto of $2.5 billion.

The company's fiscal year 2014 earnings per share (EPS) was $5.23 on an ongoing basis and $5.22 on an as-reported basis, demonstrating the company’s ability to deliver strong growth despite a more challenging agricultural environment. For the fourth quarter, the company reported a loss per share of $0.27 on an ongoing basis and a loss per share of $0.31 on an as-reported basis. The fiscal year 2014 and fourth quarter as-reported EPS results include a $0.04 loss for a legacy environmental settlement. (For a reconciliation of ongoing EPS, see page 1 and note 1.)

Cash Flow

For fiscal year 2014, net cash provided by operating activities was a source of $3.1 billion, compared with a source of $2.7 billion in fiscal year 2013. Net cash required by investing activities was $2.1 billion in fiscal year 2014, compared with net cash required of $777 million in fiscal year 2013. This is inclusive of the cash used for the company’s acquisition of The Climate Corporation and The BioAg Alliance with Novozymes. Net cash required by financing activities was $2.3 billion in fiscal year 2014, compared with net cash required of $1.5 billion in fiscal year 2013. Free cash flow was a source of $959 million in fiscal year 2014, compared with a source of nearly $2 billion in fiscal year 2013. (For a reconciliation of free cash flow, see note 1.)

In fiscal year 2014, the company used its free cash flow position to return cash to shareowners through buybacks and dividends, including the completion of the company’s $2 billion share repurchase authorization. In June, the company announced a new $10 billion share repurchase authorization, inclusive of a $6 billion accelerated buyback program.

Outlook

Monsanto is positioned to deliver strong double-digit to mid-teens earnings growth in fiscal year 2015 despite continued industry headwinds and an increase in investments to unlock future growth. Monsanto expects to achieve EPS of $5.75 to $6.00 in fiscal year 2015. The company’s growth outlook is anchored on the continued strength of its core business, with the Seeds and Genomics segment setting the pace for overall EPS growth in fiscal year 2015.

The company projects free cash flow in the range of $2 billion to $2.2 billion for fiscal year 2015. The company expects net cash provided by operating activities to be $3.2 billion to $3.6 billion, and net cash required by investing activities to be approximately $1.2 billion to $1.4 billion. (For a reconciliation of free cash flow, see note 1.)

Increased investment to support growth of new technology platforms will be balanced against the company's base-business operating expenses, where the company expects only inflation-level increases in SG&A and R&D as it takes a disciplined approach to overall expense management.

As its business has expanded globally over the past several years, the company has seen its earnings flow evolve between quarters. This trend continues in fiscal year 2015 as the company anticipates an overall shift in its full-year earnings pattern, as several structural factors result in a full-year earnings flow with a smaller first quarter and a concentration of growth in the third quarter. With macro conditions resulting in lower planted acres for key regions in both corn and cotton in the quarter, combined with a timing shift as the company moves more of its Agricultural Productivity business to branded-product sales, Monsanto expects its first quarter will be roughly half of the total earnings from the first quarter of 2014. Beyond the first quarter, the biggest first half timing effect relates to the evolution in its Channel® seed brand business model that is expected to shift business timing from the first and second quarters to the third quarter. The company expects second quarter earnings to be relatively flat year-over-year with a significant uptick in third quarter earnings reflecting the timing shifts and business growth in its largest markets. The earnings flow is punctuated by a fourth quarter that is expected to be break-even to positive year-over-year on an absolute basis.

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

For the fiscal year, Monsanto realized Seeds and Genomics segment sales of $10.7 billion, led by a record year for its global soybean portfolio that achieved a 27 percent increase over the prior year. In 2014, the company also increased its corn margins even as its corn business faced headwinds from lower acres and currency effects. Within the global corn business, the company’s cost of goods sold was lower, portfolio mix was on track, total price uplift was positive and it had good volume against declining planted acres.

Seeds and Genomics segment sales in the fourth quarter were approximately $1.4 billion.

The company expects double-digit gross profit growth in its Seeds and Genomics segment in fiscal year 2015, with more than three-quarters of the growth opportunity expected to come from its core corn and soybean businesses.

Within soybeans, the company will build on the successful launch of Intacta RR2 PRO™ in Latin America, noting it is on track to reach its projected 10 million to 12 million acre target for fiscal year 2015. The record setting adoption pace of Intacta RR2 PRO™ lays the foundation for the continued acceleration of the company’s soybean opportunity. This includes the advancement of the Roundup Ready® Xtend Crop System, which is expected to move into final commercial preparation in fiscal year 2015.

The accelerated soybean opportunity will be complemented in fiscal year 2015 by the performance of the company’s global corn business. This includes new portfolio introductions of better-performing hybrids across key corn growing regions, a mix benefit driven in the range of a mid-single digit germplasm portfolio lift, overall corn footprint expansion and a continued cost-improvement benefit.

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

Segment sales for the quarter reached $1.3 billion. For the fiscal year, the segment delivered net sales of $5.1 billion. The company anticipates Agricultural Productivity segment gross profit to be down by up to 10 percent in fiscal year 2015, offsetting some of the anticipated core growth from its seeds and traits business.

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 http://edge.media-server.com/m/p/zir9hzra/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 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® at twitter.com/MonsantoCo, on the company blog, Beyond the Rows® 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 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 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; 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.

Notes to editors: Monsanto and the Vine Design, Channel, Roundup Ready 2 Xtend, Intacta RR2 PRO and Beyond the Rows are trademarks of Monsanto Company and its wholly-owned subsidiaries. All other trademarks are the property of their respective owners.

(A) Includes the income tax provision from continuing operations, the income tax benefit (provision) on noncontrolling interest, and the income tax on discontinued operations.