BRAZIL OVERVIEW Mike Stern

BRAZIL OVERVIEW
April 10, 2013
Mike Stern
Vice President, Americas Row Crops
Forward-Looking Statements
Certain statements contained in this presentation are "forward-looking
g statements," such as statements concerning
g 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 forwardlooking statements. Factors that could cause or contribute to such differences include, among others: continued
competition
p
in seeds, traits and agricultural
g
chemicals; the company's
p y exposure
p
to various contingencies,
g
including
g
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
inventoryy levels;; the company's
p y ability
y to fund its short-term financing
g needs and to obtain p
payment
y
for the p
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 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.
Trademarks
Trademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. All other
trademarks are the property of their respective owners.
© 2013 Monsanto Company
2
Brazil Agriculture:
Among the Most Prominent Industries with
Strong Opportunity from Export Markets
BRAZIL AGRICULTURE
BRAZIL AGRICULTURE
EXAMPLE: 2012 KEY EXPORTS
KEY FACTORS
MILLION METRIC
M
C TONS
35

Brazil Ag Exports
30
•
•
•
25
20

BRAZIL HAS MANY ADVANTAGES,
•
•
•
•
•
•
•
10
5
CROP
VALUE
(IN USD
BILLIONS)
22% of GDP
39% of Exports
39% of Work Force
SOME WHICH CANNOT BE REPLICATED
15
0
AGRICULTURE IS AN IMPORTANT PART
OF THE BRAZIL ECONOMY1
Soybeans
~$17
Sugar
~$13
Corn
~$5
Soy Meal Chicken
~$7
~$8
Alcohol
~$2.5
Soy Oil
~$2
Beef
~$6
Pork
~$1.5
Brazil’s
Brazil
s Agriculture Expansion Being Fueled
by Exports
1. Confederacao da Agricultura e Pecuaria do Brasil (CNA), Instituto Brasileiro de Geografia e Estatistica( IBGE) 
Technology
p
Human Resources & Capabilities
Weather
Available Land
Water
Biofuels Potential
Competitive Costs
BRAZIL IS DEVELOPING ITS POLICIES
AND INFRASTRUCTURE TO ADDRESS
THE CHALLENGES FACING THE AG
INDUSTRY
•
•
•
•
Institutional Framework
Credit & Grower Income Policies
Trade Agreements
Infrastructure and Logistics
3
Emerging Growth:
Brazil is Poised for Rapid Growth in Ag,
Creating Opportunity for Monsanto
SOUTH EAST–NORTH EAST
CERRADOS
• Perennial crops
• Mainly Summer corn
• Dealers are the main
• Soy and Safrinha Corn
• Dealers are the main customer
access
customer access
• Large/Mega growers
• Small to medium growers
SOUTH
• Soybean and Summer corn
• Cooperatives and dealers are the
main customer access
• Small growers
Cerrados
South East-North East
South
4
Monsanto Brazil Business:
Net Sales Growth Reflects Emergence of
Seed-and-Traits Business
$2.0
MONSANTO BRAZIL
BRAZIL NET SALES1
Chart Title
FY2010-FY2012
$1.5
(IN USD BILLIONS)
BRAZIL NET SAL
B
LES
$1.6B $1.3B $
$1.6 B
NUMBER OF FULL
TIME EMPLOYEES:
2,500
KEY BUSINESS MODELS
$1.1B CORN:
• #1 germplasm share position
• Biotech adoption and upgrade
• New genetics and germplasm refresh
f
provide pricing opportunity
$1.0
$0.5
P
Percent
t
of Int’l
Sales
FY2012
NET SALES:
FY2010
FY2011
FY2012
23.7%
23.4%
25.9%
SOY:
• Anticipate high demand for Intacta RR2
PRO with established point-of-delivery
system
t
(POD)
• License genetics and traits through
Monsoy
Brazil Alone Represents approximately 26 Percent of
International Company Sales
1. Monsanto 2012 10-K
5
Brazil’s Expanding Corn Market:
Monsanto’s Corn Genetics Poised Well for
Growing Safrinha Season
BRAZIL’S TWO COMPLEMENTARY SEASONS:
SUMMER AND SAFRINHA ANNUAL CROPS
BRAZIL CORN MACRO DATA
2012 COMBINED SEASONS HYBRID
PLANTED ACRES:
AVERAGE HYBRID-ACRE YIELD:
RR
AP
~31M
31M
90-100
BU/AC
STATUS AND OUTLOOK
AM
CE
MA
PA
PI
AC
TO
RO
•
RN
PB
PE
AL
SE
•
Safrinha season realized record planted corn acres in 2013,
with growth of more than 15 percent year-over-year
From 2010 – 2013F Safrinha planted acres have grown by
nearly 7 million acres
BA
MT
GO
MG
ES
MS
SP
RJ
BRAZIL GERMPLASM OPPORTUNITY
GROWTH DRIVER
PR
SC
RS
Monsanto is rapidly refreshing the germplasm
portfolio with higher yielding genetics driving
pricing premium opportunity due to added value
SUMMER PLANTING AREA (MAY – NOVEMBER)
SAFRINHA PLANTING AREA (DECEMBER – APRIL)
SUMMER AND SAFRINHA OVERLAPPING PLANTING AREA
6
Brazil Corn Opportunity:
Long Runway for Continued TraitU
d O
t it
Upgrade
Opportunity
GERMPLASM
UPGRADES
FY2012
1ST WAVE BIOTECH
UPGRADES
NEXT GENERATION
BIOTECH UPGRADES
New Growth
KEY
Y GROWTH DR
RIVERS
STRATEGIC SOURCES OF INCREM
MENTAL GROWTH
H
BRAZIL CORN GROWTH DRIVERS
TRAIT LAUNCHES
VT PRO MAX
Biotech
VT PRO 3
TRAIT ADOPTION
YieldGard Corn Borer,
YieldGard VT PRO, VT PRO 2
Seed
GERMPLASM
#1 Share Position
BRAZIL CORN
SEEDS & GENOMICS
GROSS PROFIT
NEAR-TERM GROWTH
NEAR-TERM GROWTH
FUTURE GROWTH
GROWTH DRIVER ROLL OUT OVER TIME 
BRAZIL
EMERGING GROWTH MODEL
 #1 hybrid
y
p product
p
corn seed share p
position with rapid
refresh
 First biotech trait launches in FY09 rapidly adopted
 New layers of growth added as additional traits come on line
7
Brazil Focuses on Soybeans:
Creating Significant Opportunity With
Growing Acreage and Appetite for Technology
BRAZIL’S SOYBEAN PLANTING:
SOYBEAN DENSITY BY REGION
BRAZIL SOYBEAN MACRO DATA
2012 PLANTED ACRES:
AVERAGE HYBRID-ACRE YIELD:
~62M
39
BU/AC
STATUS AND OUTLOOK
•
•
•
High insect pressure in Brazil’s tropical climate
creates significant demand for Intacta
License germplasm through Monsoy multipliers
89% trait share with first generation Roundup Ready
55%
CERRADOS
TRAIT UPGRADE OPPORTUNITY
Fewer Growers and
Large Farms Drive
Technology Adoption
in the Cerrados
SOUTHEAST
7%
GROWTH DRIVER
Significant Value Opportunity Exists as
Growers Upgrade from Roundup Ready to
Intacta RR2 PRO
Soybean Density by Municipality
From 0% to 2%
From 2% to 5%
From 5% to 10%
From 10% to 20%
From 20% to 50%
Greater than 50%
SOUTH
38%
High Insect
Pressure Expected
to Drive Intacta RR2
PRO Penetration in
the South
8
Brazil’s Intacta RR2 PRO Trials:
Second Year of Ground Breakers Showing
Game-Changing Performance Again
BRAZIL INTACTA RR2 PRO TRIALS
INTACTA RR2 PRO
GROUND BREAKERS YIELD DATA2
 Ground Breakers
trials expected in
FY2014
 Commercial launch
expected in FY2015 in
Argentina
65
INTACTA RR2 PRO
NEW
Roundup Ready
60
BUSHELS/AC
CRE
BRAZIL
 Expanded Ground
Breakers trials in
FY2013
 On track for Brazil
commercial launch in
FY20141
ARGENTINA
UPDATE
Significant yield advantage of
greater than 4 bu/ac
57.2
53.9
53 9
55
51.0
50
48.7
45
40
No.
No of Ground
Breakers
Growers
2011/2012
2011/2012
500
2012/2013
2012/2013
1,000
GROUND BREAKERS INTACTA RR2 PRO
EXPECTED TO OUTPACE PREVIOUS SOYBEAN TRAIT LAUNCHES


Results from Intacta RR2 PRO Ground Breakers translate to a grower value creation of ~$80/ac,
$
depending on currency
exchange rate and commodity prices3
Second year of Ground Breakers involving 2X the number of growers with more than 1000, growers demonstrating the
efficacy and yield enhancement of the Roundup Ready 2 Yield and Bt Insect control stack
1. Received Brazil “in-country” regulatory approvals. Full scale launch pending import approvals in key export markets. 2. Preliminary data based on approximately 50% of the harvest data and more than 1700 comparisons from the
2012/2013 on-farm Ground Breakers trials across Brazil. 3. Expected value created through yield gains, reduced use of insecticides, and less use of machinery (based on an exchange rate $1US Dollar = 2.00 Brazilian Reals
9
Monsanto’s Business Focus:
Turning Yield Into Growth
Key take
take-aways:
aways:

Brazil is poised for Rapid
Growth in Ag, Creating
pp
y for Monsanto
Opportunity

Brazil Corn is at the leading
edge of upgrades with latest
genetics and trait p
g
products like
VT PRO MAX

Intacta RR2 PRO provides a
step-change in soybean
productivity for growers –
Expected to be the fastest
soybean trait ramp up in
Monsanto’s history
10