Monsanto Co. expects to double its gross profit potential over the next five years. What factors will push that growth?
The St. Louis, MO-based company’s growth from the end of 2007 through 2012 is expected to result in an ongoing earnings per share growth rate in the mid-to-high teens over the next five years.
Monsanto’s management team also notes that, by the end of 2012, the free cash flow generation of its business, exclusive of potential acquisitions, will be in the range of $2 billion to $2.2 billion. This growth is expected to provide its business with greater flexibility for additional acquisitions, technology investments, dividends, and share repurchases.
“Backed by the growing demand for our seed and trait products, our business is poised for significant organic growth between now and the end of 2012,” says Hugh Grant, chairman, president, and CEO of Monsanto. “We believe we can effectively double the gross profit potential of our business just with the businesses we have in hand today while continuing to return value to our shareowners.”
Monsanto executives expect the company’s seeds and traits business to be shaped by six key factors over the next five years. These factors include: its U.S. and international corn seeds and traits business; its soybean business; its cotton business; its Seminis fruit and vegetable seed business; and its R&D pipeline.