Monsanto 4Q16 Earnings Call Notes

Monsanto’s (MON) CEO, Hugh Grant on Q4 2016 Results

Bayer is the right decision for our shareholders

“We unanimously determined that our combination with Bayer represents the most compelling value for our shareowners with the most certainty through the old cash consideration. So with this agreement as the backdrop, our two priorities going forward are as follows. First, delivering on the 2017 operational plan and key business milestones and second, executing on the necessary steps to close the deal which is targeted for the end of calendar year 2017.”

Productivity necessary to meet growing world demand

“This deal was struck because the overarching needs to deliver innovation to growers continues as demand continues to climb. I know that that may seem incongruent especially when corn is below $4 a bushel and soybeans are below $10. However the most recent WASDE report demonstrates that the demand trend remains both in tact and robust. In fact as seen on Slide 8, the trend line is more than $1 billion bushels of growth a year for corn and greater than 500 million bushels of growth a year for soybeans, which is consistent with the historical growth trends. Meeting that demand over the next decade would require a two-fold increase in the rate of yield growth for corn and a four-fold increase for soybeans. Innovation quite simply is the best way to increase productivity to meet this projected demand.”

Thereis little overlap between Monsanto and Bayer

“Yes, Don, thanks for your question this morning. I’d go back to my opening remarks. The unique thing about this transaction is there is very little overlap. So you are bringing together a seed business and a crop protection business and I think we can bring these two businesses together with much better insight for the grower by using digital agriculture.”

High capacity for innovation in improving decision quality on the farm

“So, as you look innovation, I think, number one, the needs never been great, or number two, I think the capacity to accelerate innovation particularly in the area of digital agriculture and particularly in the area of precision agriculture we are developing software and where we are using literally harvested data to improve decision quality on farm.”

Brett Begemann

Plant population growing a bit

“But if you look right now, this coming year or the near-term has been shaping up. If you look at the year we just finished in 2016 and the year we are going into in 2017, you can clearly see the trend continuing across corn particularly in North America where planting populations are increasing a bit and it’s exactly what Hugh was describing. That’s part of how you drive yield as increasing of plants in the field.”