monsanto 02-15-05

1

CREDIT SUISSE FIRST BOSTON Agrochemicals ConferenceLondon

Feb. 15, 2005

BRETT BEGEMANNExecutive Vice President, International

2

Forward-Looking Statements

Certain statements contained in this presentation, such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, currency impact, business and financial plans and other non-historical facts are "forward-looking statements." 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 forward-looking statements. Factors that could cause or contribute to such differences include, among others: the company's exposure to various contingencies, including those related to Solutia Inc., litigation, intellectual property, regulatory compliance (including seed quality), environmental contamination and antitrust; successful completion and operation of recent and proposed acquisitions; fluctuations in exchange rates and other developments related to foreign currencies and economies; increased generic and branded competition for the company's Roundup herbicide; the accuracy of the company’s estimates and projections, for example, those with respect to product returns and grower use of our products and related distribution inventory levels; the effect of weather conditions and commodity markets on the agriculture business; the success of the company’s research and development activities and the speed with which regulatory authorizations and product launches may be achieved; domestic and foreign social, legal and political developments, especially those relating to agricultural products developed through biotechnology; the company’s ability to successfully market new and existing products in new and existing domestic and international markets; the company’s ability to obtain payment for the products that it sells; the company's ability to achieve and maintain protection for its intellectual property; the effects of the company's accounting policies and changes in generally accepted accounting principles; the company's ability to fund its short-term financing needs; and other risks and factors detailed in the company's filings with the U.S. Securities and Exchange Commission. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this release. The company disclaims any current intention or obligation to revise or update any forward-looking statements or any of the factors that may affect actual results, whether as a result of new information, future events or otherwise.

3

Non-GAAP Financial Information

This presentation may use the non-GAAP financial measures of “free cash flow,” ongoing earnings per share (EPS), and Return on Capital (ROC). We define free cash flow as the total of cash flows from operating activities and cash flows from investing activities. A non-GAAP EPS financial measure, which we refer to as EPS on an ongoing basis, may exclude the impact of restructuring charges, charges associated with the settlement of litigation, gains and losses on the sale of assets, and certain other items. The specific items that are excluded from, and result in, our non-GAAP EPS financial measure are clearly identified as such in this presentation. ROC means net income exclusive of after-tax interest expenses, divided by the average of the beginning year and ending year net capital employed, as defined in the reconciliation at the end of this presentation. The presentation of free cash flow, ongoing EPS and ROC is intended to supplement investors’ understanding of our operating performance. These non-GAAP financial measures may not be comparable to similar measures used by other companies. Furthermore, these non-GAAP financial measures are not intended to replace net income (loss), cash flows, financial position, or comprehensive income (loss), as determined in accordance with accounting principles generally accepted in the United States. The non-GAAP financial measures used in this presentation are reconciled to the most directly comparable financial measures calculated and presented in accordance with GAAP, which can be found at the end of this presentation.

Fiscal Year

In this presentation, unless otherwise specified, references to Monsanto’s fiscal years refer to the 12-month period ending August 31.

Trademarks

Roundup, Roundup Ready, Bollgard, Bollgard II, YieldGard and Vistive are trademarks owned by Monsanto Company and its wholly-owned subsidiaries.

4

Value Shift from Crop Chemicals to Seeds and Traits Well Under Way

Sources: U.S. 1996-2003 Doane Agrotrak & Seed Studies; 2008 Monsanto estimatesCalendar years

CROP CHEMICALS GERMPLASM BIOTECH TRAITS

GLOBAL AGRICULTURAL INDUSTRY REVIEW

1996 $7.6 BILLION

2003$8.4 BILLION

2008F $9.1 BILLION

$3.0

$0.1

$4.5$3.5

$1.3

$3.6

$3.8

$2.7

$2.6

5

MARKET LEADERSHIP

Seeds and Traits Are a Growing Contributor to Monsanto’s Gross Profit

2001 2003 2005F PRO FORMA

ROUNDUP AND OTHER GLYPHOSATE-BASED HERBICIDES

SEEDS AND TRAITS

$2.6 BILLION $2.3 BILLION $2.9 BILLION

ALL OTHER AG PRODUCTIVITY SEMINIS

GROSS PROFIT

5%

27%50%

23%

47%30%

23%

56%

23%

16%

6

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Sources: Phillips McDougall, Monsanto reportsCalendar year for all companies but MonsantoSyngenta pro forma for acquisition of Advanta and Golden Harvest (Sources: Phillips McDougall and news releases)

MARKET LEADERSHIP

Monsanto Raises the Bar for Leadership in Global Seeds with Addition of Seminis

2003 SEED AND TRAIT REVENUE

$ M

ILLI

ON

S

DUPONT SYNGENTA KWS TAKII DELTA & PINE LAND

DOW

MONSANTO PRO FORMA

MONSANTO LIMAGRAIN SEMINIS BAYER SAKATA

7

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED

ASI EU S. AFRICA

80M 30M 7M

2% 10% 43%

LICENSEDBRANDU.S.

33%14%

Improvements in Corn Seed Breeding Expanding EU/SA Market Share

Corn Breeding

DISCOVERY PHASE IProof of Concept

PHASE IIEarly Development

PHASE IIIAdv. Development

PHASE IVPre-Launch

LAUNCH

CREATING VALUE

CORN MARKET SHARE GROWTH

MARKET LEADERSHIP - BREEDING

Monsanto’s branded corn germplasm out-yielded competitors’ across EU mid-maturities and South Africa in 2004 trials

Comparable performance in Mediterranean region versus leading competitor

Stronger pipeline under development for important EU silage market

• In 2005, Monsanto’s branded seed gained 2 market share points in EU, 3 points in South Africa

• Elite, high-yielding germplasm refreshes product portfolio at high end of pricing

• New licensing strategy for corn in Europe/Africa under development 0%

2%4%

6%

8%10%

12%

2001 2002 2003 200420%

25%

30%

35%

40%

45%

2001 2002 2003 2004

FRANCE SOUTH AFRICA

8

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED

U.S. BRAZIL ARGENTINA

5M TBD TBD

0% 0% 0%

Vistive Moved from Discovery to Launch in Three Years Through Molecular Breeding

VistiveLow Linolenic Soy

First of a three-product step-change in oil profiles

Most oil already under contract with food companies

Oil to be in on-the-shelf consumer products in late 2005




PHASE IVPre-Launch

LAUNCH

• Contract grown, value shared. Monsanto sells to growers, processors pay grower premium and royalty to Monsanto after harvest and crushing

• To be stacked with Mid-Oleic before full market penetration is achieved

• 1 acre = approximately 500 lbs. of oil

OIL PROFILES ALONG THE 3-STEP CHANGE IMPROVEMENT

STANDARD SOYBEAN

LOW LIN

MID OLEIC + LOW LIN

ZERO SAT + MID OLEIC +

LOW LIN

LINOLENIC18:3

LINOLEIC18:2

OLEIC18:1

SATS18:0 / 16:0


CREATING VALUE

9

Seminis Has Largest, Most Diverse Germplasm Pool in Vegetable Industry

Vegetable Breeding

Germplasm investment nearly double that of closest competitor

Vegetable seed germplasm is proprietary, scarce

75% of R&D devoted to breeding

Between 20%-25% of commercial products come from new hybrids introduced in prior two years




PHASE IVPre-Launch

LAUNCH

KEY MARKET POSITION

MARKET POSITION

NAFTALATIN

AMERICAEUROPE-AFRICA

1 1 1

ASIA PACIFIC

1

• Seminis branded seed recognized globally: Royal Sluis, Petoseed, Bruinsma, and Asgrow Vegetable

• Breeding valued for quality, taste, health benefits, disease control

• New seeds have greatest pricing opportunity

0%

5%

10%

15%

20%

25%

2002 2003 2004 2005F

VEGETABLE FRESHNESS INDEX


CREATING VALUE

10

Biotechnology Is Most Rapidly Adopted Technology in History of Agriculture

AC

RE

S I

N M

ILL I

ON

S

Source: Monsanto estimates

0

20

40

60

80

100

120

140

160

180

1996 1997 1998 1999 2000 2001 2002 2003 2004

CANOLA

COTTON

SOYBEANSCORN

MARKET LEADERSHIP - BIOTECHNOLOGY

GLOBAL MONSANTO PLANTED BIOTECH ACRES

11

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005F

MIL

LIO

NS

OF

AC

RE

S

Market Potential for Roundup Ready Corn is Poised to Accelerate


Roundup ReadyCornCREATING VALUE




PHASE IVPre-Launch

LAUNCH

Current forecast of 20M acres of Roundup Ready corn in 2005 U.S. season

With European import approval for single trait, market potentialnow 50M acres in U.S.

Production plans under way to accelerate growth in 2006

ARGENTINA

5M

<1%

KEY MARKET AREAS

TARGET MARKET

PERCENT PENETRATED

U.S.

50M

32%

U.S. ROUNDUP READY CORN ACREAGE GROWTH

• U.S. trait fee of $8-$10 per acre in Monsanto branded seed

• Grower profits average of $12 per acre on yield gains alone; additional cost savings on labor, fuel and equipmentProvides grower greater flexibility in weed control

12

Corn Product Mix Continues to Accelerate Toward Stacked Offerings

AC

RE

S (

MIL

LIO

NS

)

Source: Monsanto estimates


U.S. CORN TRAIT ACRES

0

10

20

30

40

50

1998 1999 2000 2001 2002 2003 2004 2005F

STACKED TRAITS YIELDGARD CORN BORER & YIELDGARD ROOTWORM

SINGLE TRAIT

ROUNDUP READY CORN SINGLE TRAIT

13

Introduction of Ingard II Accelerates Monsanto’s Growth in Australian Cotton Market

Cotton Traits

Biotech trait acreage has grown to approximately 600k acres from 275k in 2004

More than two-thirds of cotton acres planted are Ingard II varieties

Approximately 50% of all biotech cotton acres are stacked Ingard II and Roundup Ready




PHASE IVPre-Launch

LAUNCH


CREATING VALUE

AUSTRALIA

0.5-0.8M

80%

KEY MARKET AREAS

TARGET MARKET

PERCENT PENETRATED

U.S.

10-15M

75%

• Ingard II requires an average of 85% less insecticide than conventional cotton

• Value reflects better insect protection, higher yields, farmer convenience and flexibility

AUSTRALIA MONSANTO BIOTECH ACRES

% T

OT

AL

AC

RE

S

0%

20%

40%

60%

80%

100%

2003 2004 2005

Stacked Ingard/Ingard II RR Cotton

14

Seeds and Traits R&D Is More Than Just Biotechnology; Two Platforms Drive Pipeline Opportunities

INNOVATION - PIPELINE

SM

ALL

-AC

RE

CR

OP

S

LAR

GE

-AC

RE

CR

OP

S

BR

EE

DIN

GFARMER

BENEFITS

PROCESSOR BENEFITS

CONSUMERBENEFITS

BIO

TE

CH

NO

LOG

Y FARMER BENEFITS

PROCESSOR BENEFITS

CONSUMERBENEFITS

ROUNDUP READY FLEX COTTONPHASE IVPre-Launch

HIGH-LYSINE CORNPHASE IVPre-Launch

OMEGA-3 SOYBEANSPHASE IIEarly Development

PROCESSOR PREFERRED CORNPHASE IVPre-Launch

VISTIVE LOW-LIN SOYBEANSPHASE IVPre-Launch

GENOMICS CONVENTIONAL BREEDING

MOLECULAR BREEDING

CROP ANALYTICS BIOTECHNOLOGY

PIPELINE EXAMPLES

ELITE CORN GERMPLASMPHASE IVPre-Launch

15

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED


<1M TBD TBD

0% 0% 0%

Breeding Breakthrough Improves the Taste and Mouth-Feel of Soy-Based Foods

Improved-ProteinSoybeans for Food

Created through breeding technologies

Improves taste and mouth-feel

Consumer applications in beverages and meat alternatives

Developed with molecular markers and analytical screenings to accelerate breeding

Produced in high-yielding varieties for testing




PHASE IVPre-Launch

LAUNCH

• Contract grown, value shared. Monsanto sells to growers, processors pay grower premium and royalty to Monsanto after harvest and crushing

• Small acres, but high value per acre

INNOVATION - BREEDING

CREATING VALUE

16

Molecular Breeding Can Be Applied to Seminis’ Sweet Corn Breeding Programs

Knowledge Transfer to Sweet Corn




PHASE IVPre-Launch

LAUNCH

• Breeding knowledge transfer increases potential new product offerings

• Molecular breeding speeds creation of new hybrids

• Accelerated genetic gains have potential to translate to market share gains, higher market value

INNOVATION - BREEDING

Immediate access to broad corn germplasm base

Corn genotyping capabilities applicable across all corn germplasm including sweet corn

Enables efficient selection for disease and quality traits using marker-assisted selection

CREATING VALUE

WORLDWIDE

4

KEY MARKET POSITION

MARKET POSITION

17

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED




PHASE IVPre-Launch

LAUNCH

Roundup ReadyFlex Cotton

Expanded window of over-the-top application for more “flexible” weed control

Increased grower convenience

Reduced need for specialized spray equipment

8 cotton seed companies currently breeding trait into varieties

Added Flexibility Means Better Weed Control, Greater Value in Cotton

U.S. AUSTRALIA

10-15M 0.5-0.8M

0% 0%

• Value reflects greater convenience and enhanced weed control. Lifts the value of the Roundup Readytrait

• Roundup ReadyFlex Cotton will be available only with Bollgard II, which also should boost Bollgard IIadoption

INNOVATION - BIOTECHNOLOGY

CREATING VALUE

18

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED


4M 1M 4M

0% 0% 0%

High Lysine Corn

Lower cost of animal feed ration – lysine –which cannot be produced by animals, so must be obtained through feed

Improved amino acid balance

Increased total energy

Excellent performance demonstrated in feeding trials to date

First of a two-product step-change in lysine content




PHASE IVPre-Launch

LAUNCH

High Lysine Enhances Animal Feed, Shifts Value to Seed

• Market value for feed-grade lysine in roughly $1 billion annually

• Value shared with Cargill through 50/50 Renessen joint venture


0

200

400

600

800

1,000

1,200

1,400

1,600

1,800 CONTROL WITH GENE

FRE

E L

YS

INE

(P

PM

)

TARGET

SOUTH AMERICA U.S.

LYSINE TOTALS IN TESTING

CREATING VALUE

19

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED


TBD TBD TBD

0% 0% 0%

Drought Stress Tolerance Will Be a Family of High Value Traits

Drought-TolerantCorn

Yield protection on all acres against water deficits

Yield enhancement on all acres through improved water use and cost savings on irrigated acres

Two gene leads obtained positive results with more than one transformed event




PHASE IVPre-Launch

LAUNCH

• Pricing depends on choice of market

• Stacking with weed and insect control enhances the margin opportunity

• Irrigation currently costs $50 to $100 per acre


0

5

10

15

20

25

30

YIE

LD I

NC

RE

AS

E

(BU

/AC

)

EVENT 1 EVENT 2 EVENT 30

2

4

6

8

10

12

14

16

18

EVENT 1 EVENT 2 EVENT 3

3 EVENTS: GENE 1 3 EVENTS: GENE 2

GERMPLASM 1 GERMPLASM 2

CREATING VALUE

YIELD INCREASE IN TWO GENE TRIALS

20

Gross Profit Growth Accelerates with Addition of Seminis to Monsanto Businesses

SEEDS AND TRAITS ALL OTHER ROUNDUP AND OTHER GLYPHOSATE-BASED HERBICIDES

GROSS PROFIT

$ M

ILLI

ON

S

$ M

ILLI

ON

S

MONSANTO PRO FORMA1

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2004 2005F 2006F

7% CAGR

1 Pro forma for acquisition of Seminis

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2004 2005F 2006F

MONSANTO SEED/TRAIT PRO FORMA1

15% CAGR

FINANCIAL GROWTH

21

BASE MONSANTO GUIDANCE

UPSIDE MONSANTO GUIDANCE

PRO FORMA FOR ACQUISITION OF SEMINIS

Guidance for Ongoing EPS Reflects Addition ofSeminis Earnings

EPS ON AN ONGOING BASIS

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

$2.50

2004A 2005F 2006F

• 2005 guidance range increased to $1.85 to $2.00

• 10% base business growth for 2006 expected on increased 2005 guidance

• Earnings in 2005 and 2006 affected by Seminis inventory step-up

• Seminis is expected to be $0.20 accretive to Monsanto in 2007

FINANCIAL GROWTH

22

Acquisition Also Contributes to Free Cash Generation Near-Term

FREE CASH FLOW Seminis expected to generate $50M free cash in 2005 and $75M in 2006

Current $500M share repurchase program will continue; scheduled completion July 2006

Dividends will continue to be considered to return additional value to shareowners-$800

-$550

-$300

-$50

$200

$450

$700

$950

PRO FORMA FOR ACQUISITION OF SEMINIS

2004 2005F 2006F

GUIDANCE PRE-ACQUISIITON

GUIDANCE POST-ACQUISITION

FINANCIAL GROWTH

23

A Clear Focus To Deliver On Commitments

Market LeadershipLargest global seed and trait company Global reach in high-value agriculture segments

Technological InnovationLeading breeding and biotechnology platformsProven, highly productive new product pipeline

Financial GrowthEPS and free cash flow growth reflect seeds and traits leadershipCommitment to return value to shareowners through dividends, share repurchases, investments

24

Reconciliation of Non-GAAP Financial Measures

Reconciliation of Non-GAAP EPS

Reconciliation of Free Cash Flow

$ Millions Fiscal Year 2005 Target

12 Months Ended Aug. 31, 2004

Net Cash Provided (Required) by Operations $1,050 $1,261

Net Cash Provided (Required) by Investing Activities $(1,800) $(262)

Free Cash Flow $(750) $999

Net Cash Provided (Required) by Financing Activities N/A $(243)

Net Increase (Decrease) in Cash and Cash Equivalents N/A $756

Fiscal Year 2006 Target

$975

$(300)

$675

N/A

N/A



Net Income (Loss) $0.86-$1.06 $2.04 - $2.22

Estimated Purchase Accounting Adjustments $0.65 - $0.70Tax Benefit on Loss from Sale of European Wheat andBarley Business

Net Income (Loss) from Ongoing Business $1.85 - $2.00 $2.04 - $2.22

$ per share

Solutia-Related Charge $0.68


$0.99

$0.36

--

$1.61

--

Restructuring Charges -- Net --$0.022004 Discontinued Operations and Related

Restructurings-- Net

--

--

--

--

$0.24Goodwill Impairment Charge for Global Wheat Business

-- --

-- --

--

--

$(0.39)

monsanto 02-15-05

Economy & Finance