Monsanto Outlines New Strategic Action
Monsanto is creating a separate division for its Roundup and other herbicides business which is expected to enable the company to better align spending and working capital needs. This action is designed to enable Monsanto to stabilize the business and allow it to deliver optimal gross profit and a sustainable level of operating cash in the coming seasons.
In addition to the new division, Monsanto announced a planned restructuring that will include a reduction of approximately 900 employees across the entire company. The reduction will vary from country to country and will be less than four percent of the company’s global workforce. The company anticipates the actions will require a one-time restructuring charge estimated at approximately $350 million to $400 million, or $0.41 to $0.47 per share to the company’s fourth-quarter EPS in fiscal year 2009. The company expects to complete its restructuring in fiscal year 2010.
"Over the last six years, Monsanto’s business has undergone a dramatic transition from a company historically built on chemical innovations to one focused on delivering enhanced seed offerings that help farmers get more out of each acre of farmland while reducing the footprint of the inputs used on that land," said Hugh Grant, Monsanto chairman, president, and CEO. "The actions announced today will allow our company to better navigate in today’s changing business environment and keep the company on a clear path for growth.
"We believe these steps are in the best interests of our shareowners, our customers and our employees. This is designed to bring more clarity and predictability to our Roundup business and greater focus to our growing seeds and traits business."