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1
BRETT BEGEMANNEXECUTIVE VICE PRESIDENT,
INTERNATIONAL COMMERCIAL
MONSANTO BIENNIEL U.S. INVESTOR DAYNov. 10, 2005
2
OVERVIEW
Two-Step, Two-Horizon Strategy Creates a Line of Sight for Success through 2010
20102009200820072006
GROWGrow Current Portfolio
Grow Globally
Grow the Pipeline LEADLead through Innovation
Lead in an Increasingly Competitive Market
Lead in New Market Opportunities
TARGET: INTERNATIONAL COMMERCIAL
3
International Branded Roundup Herbicide
OVERVIEW
Roundup Brand Remains Stable Internationally After More Than a Decade Post-Patent
CREATING VALUE
! Increased" Decreased
BUSINESS REPORT
International Branded Roundup Herbicide
!Product Innovations
"Working Capital Investment
Staffing
"Business Complexity
Higher 2005 pricing was unique event; pricing to return to $11-$13 per REG band
Incremental branded volume growth with Roundup Ready crop expansion
Working capital management remains priority, particularly in Latin America
4
U.S., Argentina and Brazil Supply World’s Corn and Soy Needs
Source: U.S.D.A. Foreign Agricultural Service, ABIOVE, Independent Economists & Monsanto Estimates
OVERVIEW
EUROPE
20102005
3M MT1M MTSoy
55M MT52M MTCorn
ASIA
20102005
23 MT22M MTSoy
132M MT122M MTCorn
ARGENTINA
20102005
40M MT38M MTSoy
27M MT23M MTCorn
Net Exporter Production = ConsumptionNet Importer
BRAZIL
20102005
81M MT60M MTSoy
53M MT44M MTCorn
UNITED STATES
20102005
81M MT86M MTSoy
297M MT278M MTCorn
WORLD AREA GRAIN PRODUCTION
5
Regulatory Know-How in Complex Global Environment Provides Competitive Edge
OVERVIEW
0
10
20
30
40
2004 2005 2006F 2010F
INTERNATIONAL PRODUCT APPROVALS#
GROWING BIOTECH CROPS
GRANTING IMPORT APPROVALS
APPROVING FIELD TRIALS
NU
MB
ER
OF
PR
OD
UC
TS
6
Acceleration In Seeds and Traits Drives International Commercial Gross Profit Evolution
OVERVIEW
2003
TOTAL GROSS PROFIT = $2.3M
MONSANTO GROSS PROFIT GROWTH
TOTAL GROSS PROFIT = $3.0M
TOTAL GROSS PROFIT = $3.6M
2005 2007F
ALL OTHER AGRICULTURAL PRODUCTIVITY
ROUNDUP AND OTHER GLYPHOSATE-BASED HERBICIDES
SEEDS & GENOMICS
7
GROW AND LEAD
Opportunity for Near-Term Growth in International Driven by Seed and Trait Expansion
20102009200820072006
GROW
LEAD
TARGET: INTERNATIONAL COMMERCIAL
Grow value of corn franchise
Grow branded and licensed cotton trait market share while rapidly penetrating second-generation stacked trait combinations
Drive additional biotech penetration globally, led by Brazil, India and Australia
Commercialize new agronomic biotech trait products, and accelerate breeding gains globally
•Monsanto’s global “genetic footprint” has expanded
•Monsanto’s combination of germplasm and stacked traits is platform of choice for farmers
•Full value is being captured in international markets that have started to upgrade to stacked and next-generation trait products
8
Monsanto’s global “genetic footprint” has expanded
TARGET: LEAD
International Breeding Effort
LEAD
Diverse Genetic Pool in Corn Continues to Create New Opportunities Internationally Through End of Decade
Monsanto has the largest private international collection of corn germplasm, spanning 6 continents, 3 temperature zones, and 36 acquired breeding programs
U.S. shares germplasm with Europe and Argentina
Brazil shares germplasm with South Africa and Asia
INTERNATIONAL GERMPLASM NETWORK
9
Grow value of corn franchise
TARGET: GROW
International Corn Commercial Markets
GROW
Monsanto’s Global Germplasm Reach Has Translated Into Greater Market Share
We would expect sustainable growth of 1 to 2 points per year
#1#1#1
#1
#1
#1
#1
#2
#1
#3
#4
#3
BRANDED SHARE
POSITION2004 TO
2005
SCORECARD
FLATBRAZIL
+1%MEXICO
FLATARGENTINA
+5.7%SOUTH AFRICA
$
$
$
FLATLATIN AMERICA REGION
+5.1%INDIA
+1.9%ASIA PACIFIC REGION
+5.2%TURKEY
+1.2%HUNGARY
+1.7%ITALY
+2.5%FRANCE
+2.2%EUROPE-AFRICA REGION
10
Grow value of corn franchise
TARGET: GROW
International Corn Commercial Markets
GROW
Global Breeding Programs Should Fuel Future Market Share Growth in Seed in Europe-Africa
0%2%4%6%8%
10%12%14%16%18%
2003 2004 2005 2006F 2007F
EUROPE-AFRICA CORN MARKET SHARE GROWTH
MONSANTO BRANDED SEED GAINED 4 SHARE POINTS IN THE LAST 2 YEARS
SUSTAINABLE 1-2 POINT BRANDED SHARE GAINS
Seed supply strategy to increase reliability
Branded performance gains driving share growth
Driving growth in Eastern Europe
11
Grow value of corn franchise
TARGET: GROW
International Corn Commercial Markets
GROW
In India, Global Breeding Programs Should Fuel Market Expansion in Corn
INDIA CORN MARKET SHARE GROWTH
MONSANTO BRANDED SEED GAINED 10 SHARE POINTS IN THE LAST 2 YEARS
SUSTAINABLE 1-2 POINT BRANDED SHARE GAINS
Conversion of open pollinated to hybridization expands market potential
Introduction of new hybrids with superior fit
0%5%
10%15%20%25%30%35%40%
2003 2004 2005 2006F 2007F
12
Monsanto’s global “genetic footprint” has expanded
TARGET: LEAD
European Channel Strategy
LEAD
Europe Is Next Opportunity for a Multiple Channel Approach
RELATIVE MATURITIES (DAYS)
BU
SH
ELS
/AC
RE
1
2Europe-AfricaTarget reach:Retail, RegionalOutlet:Licensed, non-exclusiveChannel:
2005 COMPETITIVE CORN YIELD COMPARISON
NationalTarget reach:RetailOutlet:OwnedChannel:
100
110
120
130
140
150
160
85 90 95 100 105 110 115
MONSANTO BRANDS COMPETITORS
13
Monsanto’s global “genetic footprint” has expanded
TARGET: LEAD
Argentine Channel Strategy
LEAD
Argentine Corn Technology and Breeding Capabilities Drive Enough Materials for Two Channels
1
2NationalTarget reach:Retail, RegionalOutlet:Licensed, non-exclusiveChannel:
TRAIT PENETRATION IN ARGENTINE CORN MARKET
NationalTarget reach:RetailOutlet:OwnedChannel:
YIELDGARD CORN BORER TRAIT PENETRATION
ROUNDUP READY TRAIT PENETRATION
0%
10%20%
30%
40%
50%60%
70%
80%
1999 2000 2001 2002 2003 2004 2005 2006F 2010F
Higher Penetration andStack Launch
14
Monsanto’s combination of germplasm and stacked traits is platform of choice
TARGET: LEAD
Market Opportunity
LEAD
Market Potential for Biotech Traits Highlights Continued Growth Opportunity
11M31M55M22.5M -27.8M
24.5M -29.8M 86.2MTOTAL KEY
MARKETS
-4M6M10M11M0.2MAFRICA
CORNCOTTONSOYBEANS
---0.5M-0.8M0.5M-0.8M-AUSTRALIA
5M8M24M--1MEUROPE
---10-15M10-15M-INDIA
1M4M5M--35MARGENTINA
5M15M20M2M3M50MBRAZIL
YieldGardRootworm
YieldGardCorn Borer
Roundup Ready
Bollgard I and II
Roundup ReadyFlex
Roundup Ready
KEY MARKETS
#
UPDATED FORECAST
15
0
25
50
75
100
125
150
•International markets upgrade to stacked and next-generation trait products
TARGET: LEAD
Second-Generation Traits
LEAD
Momentum in Cotton Trait Adoption Will Accelerate With Second-Generation Launches in India and Australia
ROUNDUPREADY
COTTON
ROUNDUPREADYFLEX
CONVENTIONALCOTTON SEED
BOLLGARD II STACK WITH BOLLGARD II &
ROUNDUP READY FLEX
US
$/A
CR
E
In India, biotech cotton adoption reflects economic and environmental benefits
Yield Increase 58%
Pesticide Reduction (50%)
Farmer Net Return 163%
In India, Bollgard II will launch on small acres in 2006 and Roundup Ready Flex in 2010 range
In Australia, success of Bollgard II / Roundup Ready sets stage for launch of Bollgard II/ Roundup Ready Flex starting in 2006
COTTON RETAIL VALUE IN AUSTRALIAN MARKET
16
•Drive additional trait penetration globally
TARGET: LEAD
Brazilian Value Capture System
LEAD
Brazil Offers Largest Global Opportunity to Create Value From New Trait Penetration
SeedMultiplier
Grain Delivery
4-5M acres for saleRetail price suggested at
$9 per acre
15–20Macres saved seed
Fee of $4.50 per acre
SoybeanFarmer
Monsanto
Monsanto
Royalty receivedfrom seed supplier
Royalty receivedfrom grain company, shared generously
Situation Update: Planted soybean acres: 50M
Dual value-capture systems
New seed royalty
Saved seed paid upon delivery of grain
Grain delivery system to be expanded in Brazil
17
Monsanto’s combination of germplasm and stacked traits is platform of choice
TARGET: LEAD
Roundup RReady2Yield Soybeans
LEAD
Second-Generation Roundup RReady2Yield Soybeans Will Upgrade Traits Globally
BRAZILIAN HISTORICAL SOY YIELD GAINS
BU
SH
ELS
/AC
RE y = 0.9043x - 1772.2
202530
354045
1991 1996 2001 2006
Return value to farmer by bringing new technology
Yield improvement of 3 - 4+ bushels per acre in 2004 field trials
Flexibility by providing wider window of application
Research under way on potential for additional insurance for Asian soybean rust
Provides the platform for future soy technologies
Source: CONAB & Monsanto estimates
18
Monsanto’s combination of germplasm and stacked traits is platform of choice
TARGET: LEAD
Market Opportunity
LEAD
Market Potential for Biotech Traits Highlights Continued Growth Opportunity
11M31M55M22.5M -27.8M
24.5M -29.8M 86.2MTOTAL KEY
MARKETS
-4M6M10M11M0.2MAFRICA
CORNCOTTONSOYBEANS
---0.5M-0.8M0.5M-0.8M-AUSTRALIA
5M8M24M--1MEUROPE
---10-15M10-15M-INDIA
1M4M5M--35MARGENTINA
5M15M20M2M3M50MBRAZIL
YieldGardRootworm
YieldGardCorn Borer
Roundup Ready
Bollgard I and II
Roundup ReadyFlex
Roundup Ready
KEY MARKETS
#
BIOTECH ACRES PLANTED 2005
REMAINING AVAILABLE MARKET
UPDATED FORECAST 59% 0% 15% 0% 20% 0%
19
GROW AND LEAD
Opportunity for Near-Term Growth in International Driven by Seed and Trait Expansion
20102009200820072006
GROW
LEAD
TARGET: INTERNATIONAL COMMERCIAL
Grow value of corn franchise
Grow branded and licensed cotton trait market share while rapidly penetrating second-generation stacked trait combinations
Drive additional biotech penetration globally, led by Brazil, India and Australia
Commercialize new agronomic biotech trait products, and accelerate breeding gains globally
•Monsanto’s global “genetic footprint” has expanded
•Monsanto’s combination of germplasm and stacked traits is platform of choice for farmers
•Full value is being captured in international markets that have started to upgrade to stacked and next-generation trait products