Monsanto sales up 10% in FY 2013

Date:10-14-2013

Monsanto's sales were up by 10% to $14,861 million in fiscal year 2013 ended August 31. Seed and trait sales increased by 5.6% to $10,340 million and agrochemical sales rose by 21.7% to $4,521 million compared to last year. Growth was driven by the strength of agrochemicals and global corn seeds and traits revenue.”The strength of our broad global portfolio enabled us to deliver a third consecutive year of strong business results, and by building off our proven strategy we're confident the key elements are in place to carry that momentum through to achieve strong business growth in 2014,”said Hugh Grant, chairman and chief executive officer for Monsanto.

Monsanto’s sales result ($ million)
Year ended Aug 31	Q4 2013	Q4 2012	change%	Full year of 2013	Full year of 2012	change%
Sales	2,202	2,098	+5.0	14,861	13,504	+10.0
-Seeds & traits	1,185	1,203	-1.5	10,340	9,789	+5.6
-Agrochemicals	1,017	895	+13.6	4,521	3,715	+21.7
EBIT1(loss)	(330)	(264)	_	3,460	3,047	+13.6
- Seeds & traits(loss)	(568)	(387)	_	2,412	2,570	-6.1
- Agrochemicals	238	123	+93.5	1,048	477	+119.7
Net income(loss)	(249)	(229)	_	2,482	2,045	+21.4
1 earnings before interest & taxes

For the fiscal year 2013, agrochemical sales increased by 21.7% to $4,521 million and gross profit soared by 59.2% to $1,570 million. The increases reflected the overall positive market environment and Monsanto's focused business strategy,the company notes. Monsanto anticipates the Agricultural Productivity segment,covering the crop protection products and lawn-and-garden herbicide products, to continue to be a steady-to-stronger contributor to the business in fiscal year 2014.

Agrochemical sales posted a 13.6% increase to $1,017 million and gross profit rose sharply at 52% to $380 million in the fourth quarter of FY 2013.

Seed and trait sales were up by 5.6% to $10,340 million, while gross profit was flat at $6,083 million compared with $6,059 million of last year. The growth was driven by maize sales with a 13.5% increase at $ 6,596 million, and gross profit rose by 9.5% to $3,929 million. Soybean sales were down by 6.7% to $1,653 million ,with gross profit down by 18.3% to $948 million. Cotton sales declined by 10.8% to $695 million and gross profit dropped at 11.3% to $519 million.

Seed and trait sales recorded a slight 1.5% decrease to $ 1,185 million, with gross profit down by13.8% to $544 million in the fourth quarter of FY 2013.The decline was due to a 38.7% drop to $87 million in soybean sales, and gross profit declined by 54.3% to $37 million. Corn sales were up by 5.1% to $618 million, with gross profit up by 6% to $301 million. Cotton sales jumped by124.1% to $65 million, with gross profit up nearly three-fold to $53 million.

The company expects continued growth in its Seeds and Genomics segment in fiscal year 2014, reflecting the opportunity in both the core U.S. and accelerating international businesses.The opportunity begins with the company's global corn business where it is focused on continued unit volume growth and margin expansion from its better year-over-year cost position and germplasm and trait mix upgrades globally, including rapidly expanding emerging markets like Latin America and Eastern Europe.

Complementing the continued global corn opportunity in fiscal year 2014 is the expected strong soybean business growth as a result of the expanded Roundup Ready 2 Yield® opportunity in the United States and the launch of the Intacta RR2 PRO™ soybean product in Latin America.

Outlook

Monsanto recently announced a definitive agreement to acquire The Climate Corporation for a cash purchase price of approximately $930 million. The acquisition combines Monsanto's leading R&D capabilities with The Climate Corporation's leading analytical expertise, accelerating the opportunity of Monsanto's Integrated Farming Systems platform and unlocking the next incremental yield opportunity for farmers.

In fiscal year 2014, Monsanto expects continued strong operational growth from its core business, reflected in mid-to-high teens growth in EBITDA and overall margin expansion. Monsanto expects to achieve EPS of $5.00 to $5.20 after approximately $0.14 of dilution related to The Climate Corporation acquisition.

The total company gross profit is expected in the range of $8.4 to $8.7 billion in 2014, representing double-digit year-over year growth. The biggest driver of the growth is expected to be from the Seeds and Genomics segment in which the company expects to achieve mid-teens gross-profit growth in fiscal year 2014 as it significantly expands gross-profit margins in the segment.