Execution is key in Legwork Year for Monsanto, Mr Begemann
This is a year when execution is critical, Monsanto Company's Brett Begemann will tell investors at the Goldman Sachs 14th Annual Agricultural Biotech Forum. In this important year of execution, Begemann will say the company is tracking well against its financial targets and will affirm its full-year earnings per share guidance.
In his role as executive vice president of Seeds & Traits, Begemann leads the team charged with selling seeds to farmers – including Genuity SmartStax corn and Genuity Roundup Ready 2 Yield soybeans, which launch broadly this year. With the North American growing season approaching, he'll say Monsanto remains focused on securing on-farm adoption and continued trial opportunities for its new corn and soybean products.
"When we set out our goals for 2012, we knew 2010 would be a legwork year for us," Begemann will say. "It sets the foundation for our longer-term commercial opportunity. We're launching two new products on nearly double the largest-acre historic introductions, so it's a year of hard-earned sales. This team is committed to the effort to win each sale and demonstrate the value of these products farmer by farmer."
Begemann will say market research completed in the last week indicates that as a result of the late 2009 harvest, the 2010 selling season is still underway. Despite that later-than-usual season, Begemann will indicate Monsanto's aggregate order book continues to point to good overall performance in the U.S. operations in this year of execution.
"What we're seeing is that there are still undeclared acres for corn and soybeans, and we are aggressively working to win that business," Begemann will say. "We're coming off of a perfect year for growing, with adequate moisture and low stress, which resulted in unprecedented crop yields. Farmers saw triple stacks deliver last year and are taking a critical look at their choices for the year ahead."
In particular, the company is still targeting its previously stated acreage for Genuity SmartStax and Genuity Roundup Ready 2 Yield. For Genuity Roundup Ready 2 Yield soybeans, 2010 will be the first year of widespread product availability and the company is focused on expanding the base of farmers who planted the product last year.
For Genuity SmartStax corn, Monsanto is focused on selling its first-year offerings to early adopters and farmers who are interested in upgrading from triple stack corn, Begemann will say.
Begemann also will discuss the outlook for the Latin American corn market, which is a key growth driver for the company, and will say Monsanto is seeing strong farmer adoption in Argentina and Brazil.
Looking at other areas of the company, Begemann will discuss the exceptional performance of Class of '09 and Class of '10 cotton germplasm in the United States, where Monsanto is seeing strong order patterns in key cotton growing markets. The company also is showing positive gains in its vegetable business, where it continues to show the benefits of germplasm upgrades.
Begemann also will affirm the company's full-year 2010 ongoing EPS guidance is in the range of $3.10 to $3.30. Monsanto's full-year 2010 EPS guidance on an as-reported basis is in the range of $2.85 to $3.11. (For a reconciliation of 2010 EPS, see note 1.)