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NYSE:MON

NYSE:MON. MII Robel Chiappini November 4 th , 2008. Agenda. Business Overview Competition Investment Overview Valuation & Key Stats Risks VAR Questions?. Business Overview. Global provider of agricultural products for farmers – seeds, biotech traits, and herbicides

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NYSE:MON

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  1. NYSE:MON MII Robel Chiappini November 4th, 2008

  2. Agenda • Business Overview • Competition • Investment Overview • Valuation & Key Stats • Risks • VAR • Questions?

  3. Business Overview • Global provider of agricultural products for farmers – seeds, biotech traits, and herbicides • $11.3 Billion in revenues for FY2008 • Half of total sales came abroad

  4. Business Overview cont.Financial Review

  5. Business Overview Cont.Seeds and Genomics • $6.3 Billion in sales last year • Corn and Soybeans account for 75% of sales • Germplasm • Hybrid corn, soybean, tomato, melon, and cucumber seeds • Biotechnology Traits • Enable crops to protect themselves from insects and herbicides • Seen as driver of future growth for company

  6. Business Overview cont.Agricultural Productivity • $5 Billion in Revenue for last year • Roundup brand herbicides – 82% of sales

  7. Business Overview cont.Sales by Segment

  8. Business Overview Cont.Gross Margin Breakdown

  9. Competition • Global and Regional competition • Most of seed competitors are also licensees of MON’s germplasm or biotechnology traits • Roundup is market leader with great brand recognition • Integrated into seed business: Roundup Ready

  10. Investment Overview • World food demand • Industry Leadership • Management

  11. World Food DemandIncreased Corn and Soybean Demand • Income + Population = Need More Food • 25% increase in U.S. corn production by 2017 • 30% increase in Soybean related products

  12. World Food DemandCloser Look at Soybeans • Most of Soybean production growth will come from Brazil and Argentina • MON’s existing and growing presence in both Nations: 20% of 2008 sales

  13. World Food DemandIncreased Demand for Livestock • More Wealth = More Meat • 27% increase in U.S. meat exports • How is this livestock going to be supported? • Main ingredients used in commercially prepared feed are corn and soybeans

  14. World Food DemandLimited Supply of Farmland • 9% increase in farmland across U.S. • Corn and Soybean producing states • IL – 15.5% • IN – 11.3% • NE – 18.7% • IA – 17.6% • MN – 11.5% • ND – 20.7% • SD – 17.7%

  15. World Food DemandLimited Supply of Farmland • “Industry experts” – prices stable • Increased interest in agricultural real estate • Safe tangible investments poised to increase in popularity • “Perfect Storm” for Monsanto • Need for more efficient seeds with higher crop yields

  16. Industry LeadershipContinued focus on R&D • $3.5 Billion invested over past 5 years • BASF joint R&D collaboration • $1.5 Billion to focus on high-yielding and high tolerance crops

  17. Industry LeadershipCompetitive Advantage • 1st generation vs. 2nd and 3rd generation • Higher quality seeds = higher prices • Patent protection through 2025 • 35% top line growth in Roundup business on price increases

  18. Industry LeadershipProduct Pipeline • Roundup Ready 2 Yield Soybeans • YieldGard VT Triple Pro • YieldGard VT Pro • SmartStax Corn • Emerging Market Penetration • YieldGard stacked w/ Roundup Ready Corn 2 • YieldGard Corn

  19. Management • CEO (2003-Present): Hugh Grant • M.S. degree in Molecular Biology and Agricultural Zoology, MBA • With the company since 1998 • EVP, Strategy and Ops (2007-Present): Carl Casale • B.S. degree in agricultural economics, MBA • With company since 2003

  20. ManagementAggressive Acquisitions • De Ruiter • DPL • Semillas Cristiani • Agroeste • Aly Particpacoes

  21. Valuation and Key Stats • PPS: $87.34 (close monday) • Mkt Cap: 48.76B • P/E: 25.31 • 52 week range: ($68.02-$145.80) • Div. Yield: 1.1% • A+ and A-1 short term • Trading at 5 times book value • ROE: 23.78% • Cash: $1.6B

  22. Valuation and Key Stats Cont.2 year w/ 100 day moving average

  23. Risks • Tight Credit • Regulatory Approval • Negative Consumer perceptions

  24. VAR • Melvin Woodson, Loan Originator, Country Mortgages Farm Credit • How are you helping farmers? • Slowdown in farming? • Historical Perspective? • Anonymous, Fed. Gov. with industry expertise • Market turmoil affect on farming credit? • Rates? • Is it hard to secure credit now?

  25. Questions?

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