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1、120,105,90,75,60,45,30,Monsanto,Deutsche BankMarkets Research,RatingBuyNorth AmericaUnited States,CompanyMonsanto,Date30 November 2012Company Update,IndustrialsChemicals/Commodity,ReutersMON.N,BloombergMON UN,Exchange TickerNYSMON,Price at 28 Nov 2012(USD)Price target52-week range,91.31100.0092.08-6
2、7.45,Strong Yield Data Supports FurtherShare Gains in 2013DEKALB Corn:8.3 bu/ac yield advantage.RR2Y Soybeans:4.5 bu/ac advantageWith another year of impressive US corn and soybean yield data,we remainconfident in Monsantos ability to grow volume and gain share in theupcoming 2013 growing season.In
3、2012,Monsantos DEKALB corn achievedan 8.3 bu/acre yield advantage vs competitors while its Roundup Ready 2 Yieldsoybean products achieved a 4.5 bu/acre advantage versus first generationRoundup Ready soybeans.Following share gains of more than 1 point in bothbranded US corn and soybeans in 2012(resul
4、ting in US corn and soybeanshares of 37%and 28%,respectively),we believe this yield data positionsMonsanto for similar 1%share gains in both US corn and soybean in 2013.Monsanto 2012 Yield DataMonsanto provided 2012 crop yield data on November 28th in New York.Withthe most robust product pipeline in
5、 seeds globally,recession resistant 16%EPS growth in 13E and valuation a fair 21.2x 13E EPS,reiterate Buy.Key Takeaways1)2012 harvest data for DEKALB corn and Roundup Ready 2 Yield(RR2Y)soybeans showed significant yield advantages vs competitors.2)In its 4th yearof development,RR2Y delivered 4.5 bu/
6、ac yield advantage vs first generationRoundup Ready soybeans(vs 4.2 bu/ac in 11 and 3.8 bu/ac in 10).At$15,David Begleiter,CFAResearch Analyst(+1)212 250-Ramanan SivalingamAssociate Analyst()212 250-Jermaine BrownResearch Associate(+1)212 250-3624jermaine-Price/price relative,bu/acre,this translates
7、 into$70/acre of additional value.Yield advantages were,11/09,5/10,11/10,5/11,11/11,5/12,consistent across the US with 4.5bu/ac advantages in the key Northern,Central and Southern regions.In 12,RR2Y represented 75%of Monsantos,S&P 500 INDEX(Rebased),branded sales and 50%of its licensed sales.3)RR2Y
8、varieties numbered 300-plus in 12 vs 80 in 10.RR2Y 13 acreage target remains 39-41MM vs 32MMin 12 and 17M in 11.4)The soybean pipeline is robust with two potential100MM acre products:INTACTA and RR 2 Xtend.Monsanto estimates,Performance(%)AbsoluteS&P 500 INDEX,1m6.30.3,3m5.00.4,12m31.318.5,INTACTA c
9、an drive high single-to-low double digit yield increases in soy,providing$80/ac in value thru the combination of RR2Y and the VT gene forcaterpillar resistance.Monsanto expects to employ its typical 25-33%valuecapture model for INTACTA which is track for commercialization in 13(Brazilian spring seas
10、on).5)DEKALB corn showed a 8.3bu/ac yield advantageversus competitors in 12(vs 11.2 bu/ac in 11 and 9.7 bu/ac in 10)withparticular strength in the Central(9.7 bu/ac)Northern(8.8 bu/ac)corn belt(vs8.2bu/ac in the south and 5 bu/ac in Western drylands).6)DEKALBs droughtcorn hybrids showed a strong 5 b
11、u/ac yield advantage in the Western GreatPlains.7)FieldScripts,part of Monsantos Integrated Farming Systems,showed an additional 5-10 bu/ac advantage.Price target$100;Risks:lower grain prices,regulatory delaysOur$100 PT reflects Monsanto trading at 23.3x 13E EPS,in-line with itscurrent year multiple
12、.Risks:regulatory delays,lower grain prices.Forecasts And Ratios,Year End Aug 31FY EPS(USD),2012A3.70,2013E4.30,2014E4.90,Source:Deutsche Bank estimates,company data_Deutsche Bank Securities Inc.Deutsche Bank does and seeks to do business with companies covered in its research reports.Thus,investors
13、 shouldbe aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors shouldconsider this report as only a single factor in making their investment decision.DISCLOSURES AND ANALYSTCERTIFICATIONS ARE LOCATED IN APPENDIX 1.MICA(P)072/04/2012.,30 Novem
14、ber 2012Chemicals/CommodityMonsantoFigure 1:2012 US Competitive Corn Yield Comparison,12,11.2,108,6.4,6.86.3,8.27.1,8.47.8,8.4 8.3,9.6,8.8,9.9,9.3,9.79.7,10.38.3,10,6420,5.7,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011,2012,Source:MonsantoPage 2,Dekalb Annual Yield Advantage,Dekalb Three-Year R
15、olling Yield AdvantageDeutsche Bank Securities Inc.,30 November 2012Chemicals/CommodityMonsantoFigure 2:North America Corn Market Share45%,40%,40%,39%,38%,37%,35%,36%,36%,35%35%,36%36%,37%36%,35%30%25%20%,19%,33%32%30%24%,30%,32%,15%,12%,13%,14%,10%10%5%0%,2001,2002,2003,2004,2005,2006,2007,2008,200
16、9,2010,2011,2012,Source:Monsanto;DuPontDeutsche Bank Securities Inc.,Monsanto,Dupont,Page 3,30 November 2012Chemicals/CommodityMonsantoFigure 3:Brazil INTACTA RR2 PRO TRIALS(in bushels per acre)80,70,67,63,69,64,68,63,6050403020100,57,51,2008/2009,2009/2010INTACTA RR2 Pro,2010/2011Roundup Ready,2011
17、/2012,Source:Monsanto,Figure 4:Reduced-Refuge corn acreage penetration,2010-13E(millions of acres),Figure 5:Roundup Ready 2 Yield soybean acreage,2010-13E(millions of acres),403530,27M,36-38M,454035,32M,39-41M,30252520,20,17M,15,13M,15,10,10,6M,50,3M,50,2010,2011,2012,2013F,2010,2011,2012,2013F,Sour
18、ce:MonsantoPage 4,Source:Monsanto,Deutsche Bank Securities Inc.,30 November 2012Chemicals/CommodityMonsanto,Figure 6:Global Corn Yields by Country/Region(bu/acre;2011),Figure 7:Global Corn Acreage by Region(millions ofacres;2011),160,147,145,100,92,140120100806040,129,126,119,98,84,78,68,37,90807060
19、504030,70,32,27,25,200,2010,10,9.5,6.5,4.5,3,0,Source:Global Insights,USDAFigure 8:Global Corn Consumption(MM tons)MM Tons,Source:Global Insights,USDAFigure 9:Arable Land Per CapitaAcres/Capita,1200,1090,1.2,1000800,970,10.8,1.02,0.75,600,600,0.6,0.55,400,220,410,0.4,0.44,0.41,2000,0.2,1965,1980,200
20、0,2020E,2030E,0,1961,1980,2000,2020E,2030E,Source:Global InsightsDeutsche Bank Securities Inc.,Source:Global Insights,Page 5,Page6,DeutscheBankSecuritiesInc.,Monsanto,Chemicals/Commodity,30November2012,4,4,4,3,4,1,4,4,3,3,2,2,2,1,Figure 10:Monsantos R&D Pipeline,Project,Phase,Value,Country ofLaunch,
21、AcreagePotential Country ofLaunch,AdditionalGeographicOpportunity,Comment,SOYBEAN PIPELINE,Soymega SDA Omega-3Vistive Gold,$250MM$250MM,U.S.U.S.,1MM10MM-15MM,Insect-Protected+Genuity Roundup Ready 2 Yield,500MM,Brazil,40MM-60MM,Argentina,First-ever trait developed for Brazilian market.,Family,Broad-
22、Acre Higher-Yielding FamilyDicamba-Tolerant,$250MM-$500MM$250MM,U.S.U.S.,35MM-45MM Brazil,Argentina,Part of the Monsanto-BASF yield and stressCanadaR&D collaboration.35MM-45MM Brazil,Argentina,Canada,Soybean Nematode ResistanceCORN PIPELINE,To be decided when project enters Phase II,Drought-Tolerant
23、 Family,$250MM-$500MM,U.S.,45MM-55MM Brazil,Argentina,Initial product targeted for US Western dry-land,region.Part of the Monsanto-BASF yield andstress R&D collaboration,Roundup Hybridization SystemBroad-Acre Higher-Yielding,500MM,N/MU.S.,N/M45MM-55MM Brazil,Argentina,Part of the Monsanto-BASF yield
24、 and stress,R&D collaboration.,Corn Rootworm IIIYieldGard Corn Borer IIIDicamba-,Glufosinate-,and Glyphosate-Tolerant CornNitrogen-Utilization Family,$500MM$250MM-$500MM$250MM-$500MM$250MM-$500MM,U.S.U.S.U.S.U.S.,30MM-40MM Brazil,Argentina45MM-55MM Brazil,Argentina45MM-55MM Brazil,Argentina45MM-55MM
25、 Brazil,Argentina,Potential to reduce nitrogen costs or improve,yields.Field tests have shown yields maintainedat lower nitrogen applications and yieldimprovements with normal nitrogen application.Part of the Monsanto-BASF R&D,FOPs-Tolerant CornSource:Monsanto,To be decided when project enters Phase
26、 II,30 November 2012Chemicals/CommodityMonsantoValuationOur$100 price target is based on Monsanto trading at 23.3x 2013 EPS in 12 months,roughly in-line with its current multiple of 23.9x(12 EPS).We believe this valuation iswarranted by the Monsantos defensive earnings growth characteristics as well
27、 as ourforecast of 11.3%in 2013E and 11.3%in 2013E,and the close correlation we havefound(R275%)between chemical sector valuations and ROIC.RisksKey downside risks include regulatory delays on approvals for new biotech seedproducts,lower farm incomes which could result in farmers spending less on pr
28、emiumseeds and traits,and increased regulatory barriers to genetically modified crops.,Deutsche Bank Securities Inc.,Page 7,30 November 2012Chemicals/CommodityMonsantoFigure 11:Monsanto Annual Income Statement,2010-2014E($in millions,except per-share data),2010,2011,2012,2013E,2014E,Net Sales%Change
29、Cost of GoodsGross ProfitGross M argin%ChangeSelling,General&AdministrativeSG&A/Sales%ChangeResearch&DevelopmentR&D/Sales%Change(SG&A+R&D)/SalesOperating ProfitOperating M argin%ChangeInterest Expense%ChangeInterest Income,10,502(10%)(5,310)5,19249.4%(24%)(2,064)19.7%(0%)(1,205)11.5%8%31.1%1,92318.3
30、%(47%)(162)26%56,11,79612%(5,744)6,05251.3%17%(2,190)18.6%6%(1,387)11.8%15%30.3%2,47521.0%29%(162)0%75,13,51615%(6,471)7,04552.1%16%(2,346)17.4%7%(1,517)11.2%9%28.6%3,18223.5%29%(191)18%77,14,4507%(6,826)7,62452.8%8%(2,550)17.6%9%(1,530)10.6%1%28.2%3,54424.5%11%(200)5%75,15,5908%(7,210)8,38058.0%10%
31、(2,750)17.6%8%(1,615)10.6%6%30.2%4,01525.8%13%(190)(5%)72,Solutia Related-Expenses,Other Income(Expense)Pretax IncomePretax M argin%ChangeTaxesTax RateM inority InterestsNet IncomeNet M argin%ChangeBasic Shares Outstanding%ChangeDiluted Shares Outstanding%ChangeBasic EPS%ChangeDiluted EPS%Change,(6)
32、1,81117.2%(48%)(470)26.0%(12)1,32912.7%(46%)544(0.5%)549(1.0%)$2.44(46%)$2.42(45%),(40)2,34819.9%30%(712)30.3%(52)1,58413.4%19%537(1.3%)542(1.3%)$2.9521%$2.9221%,(46)3,02222.4%29%(974)32.2%(48)2,00014.8%26%534(0.4%)540(0.4%)$3.7427%$3.7027%,(40)3,37923.4%12%(1,014)30.0%(52)2,31316.0%16%534(0.1%)538(
33、0.4%)$4.3416%$4.3016%,(45)3,85224.7%14%(1,156)30.0%(60)2,63616.9%14%5340.0%5380.0%$4.9414%$4.9014%,Source:Deutsche Bank,Company Data,Page 8,Deutsche Bank Securities Inc.,30 November 2012Chemicals/CommodityMonsantoFigure 12:Monsanto Quarterly Income Statement,2012-2013E($in millions,except per-share
34、data),2012,2013E,Q1,Q2,Q3,Q4,YEAR,Q1,Q2,Q3,Q4,YEAR,Net Sales%ChangeCost of GoodsGross ProfitGross M argin%ChangeSelling,General&AdministrativeSG&A/Sales%ChangeResearch&DevelopmentR&D/Sales%Change(SG&A+R&D)/SalesOperating ProfitOperating M argin%ChangeInterest Expense%ChangeInterest IncomeOther Incom
35、e(Expense)Pretax IncomePretax M argin%ChangeTaxesTax RateNoncontrolling InterestsNet IncomeNet M argin%ChangeBasic Shares Outstanding%ChangeDiluted Shares Outstanding%ChangeBasic EPS%ChangeDiluted EPS%Change,2,43933%(1,343)1,09644.9%34%(500)20.5%11%(351)14.4%16%34.9%24510.0%277%(53)23%18(6)2048.4%71
36、6%(70)34.3%(8)1265.2%1045%535(1%)541(1%)$0.241052%$0.231052%,4,74815%(2,043)2,70557.0%17%(499)10.5%(1%)(353)7.4%10%17.9%1,85339.0%25%(47)21%20(37)1,78937.7%23%(554)31.0%(1)1,23426.0%22%534(0%)541(0%)$2.3122%$2.2822%,4,21918%(1,856)2,36356.0%21%(638)15.1%8%(375)8.9%4%24.0%1,35032.0%34%(39)11%21(3)1,3
37、2931.5%37%(420)31.6%(29)88020.9%29%533(0%)539(0%)$1.6530%$1.6330%,2,110(6%)(1,229)88141.8%(9%)(709)33.6%10%(438)20.8%8%54.4%(266)(12.6%)233%(52)16%180(300)(14.2%)191%7023.3%(10)(240)(11.4%)95%534(0%)5391%($0.45)96%($0.45)94%,13,51615%(6,471)7,04552.1%16%(2,346)17.4%7%(1,517)11.2%9%28.6%3,18223.5%29%
38、(191)18%77(46)3,02222.4%29%(974)32.2%(48)2,00014.8%26%534(0%)540(0%)$3.7427%$3.7027%,2,5655%(1,390)1,17545.8%7%(535)20.9%7%(355)13.8%1%34.7%28511.1%16%(52)(2%)18(5)2469.6%21%(74)30.0%(9)1636.4%30%534(0%)540(0%)$0.3130%$0.3030%,5,21510%(2,201)3,01457.8%11%(550)10.5%10%(355)6.8%1%17.4%2,10940.4%14%(52
39、)11%18(30)2,04539.2%14%(614)30.0%(2)1,43027.4%16%534(0%)540(0%)$2.6816%$2.6516%,4,4305%(1,938)2,49256.3%5%(700)15.8%10%(380)8.6%1%24.4%1,41231.9%5%(51)31%19(3)1,37731.1%4%(413)30.0%(30)93421.1%6%5340%5400%$1.756%$1.736%,2,2406%(1,297)94342.1%7%(765)34.2%8%(440)19.6%0%53.8%(262)(11.7%)(2%)(45)(13%)20
40、(2)(289)(12.9%)(4%)8730.0%(11)(213)(9.5%)(11%)5340%534(1%)($0.40)(11%)($0.40)(10%),14,4507%(6,826)7,62452.8%8%(2,550)17.6%9%(1,530)10.6%1%28.2%3,54424.5%11%(200)5%75(40)3,37923.4%12%(1,014)30.0%(52)2,31316.0%16%534(0%)538(0%)$4.3416%$4.3016%,Source:Deutsche Bank,Company Data,Deutsche Bank Securities
41、 Inc.,Page 9,30 November 2012Chemicals/CommodityMonsantoFigure 13:Monsanto Annual Segment Income Statement,2010-2014E($in millions,except per-share data),2010,2011,2012,2013E,2014E,SalesSeeds and Genom ics,Corn Seed and Traits%ChangeSoybean Seed and Traits%ChangeCotton Seed and Traits%ChangeVegetabl
42、e Seeds%ChangeAll Other Crops Seeds and Traits%ChangeTotal Seeds and Genom ics%ChangeTotal Agricultural Productivity%ChangeTotal Sales%Change,4,2604%1,4863%61131%8353%419(9%)7,6114%2,891(35%)10,502(10%),4,80513%1,5424%84739%8957%49318%8,58213%3,20011%11,78212%,5,81421%1,77115%779(8%)851(5%)58619%9,8
43、0114%3,71516%13,51615%,6,50012%1,9259%675(13%)9006%6002%10,6008%3,8504%14,4507%,7,25012%2,15012%7156%9506%6254%11,69010%3,9001%15,5908%,Gross ProfitSeeds and Genom ics,Corn Seed and TraitsGross M argin%ChangeSoybean Seed and TraitsGross M argin%ChangeCotton Seed and TraitsGross M argin%ChangeVegetab
44、le SeedsGross M argin%ChangeAll Other Crops Seeds and TraitsGross M argin%ChangeTotal Seeds and Genom icsGross M argin%ChangeTotal Ag ProductivityGross M argin%ChangeTotal Segm ent Gross ProfitGross M argin%Change,2,55359.9%(3%)90961.2%4%45474.3%32%49258.9%12%22353.2%(14%)4,63160.8%2%56119.4%(75%)5,
45、19249.4%(24%),2,86459.6%12%1,04567.8%15%64275.8%41%53459.7%9%22144.8%-1%5,30661.8%15%75023.4%34%6,05651.4%17%,3,58961.7%25%1,16065.5%11%58575.1%-9%41949.2%-22%30652.2%38%6,05961.8%14%98626.5%31%7,04552.1%16%,4,04462.2%13%1,28066.5%10%50074.1%-15%45550.6%9%32053.3%5%6,59962.3%9%1,02526.6%4%7,62452.8%
46、8%,4,55062.8%-100%1,42566.3%11%52573.4%5%49552.1%9%33553.6%5%2,78023.8%-58%1,05026.9%2%3,83024.6%-50%,EBIT,Seeds and Genom icsEBIT M argin%ChangeAgricultural ProductivityEBIT M argin%ChangeOtherTotal Segment EBITEBIT Margin%ChangeNet Interest ExpenseTaxesTax RateNet Incom eNet M argin%ChangeBasic Sh
47、ares Outstanding%ChangeDiluted Shares Outstanding%ChangeBasic EPS%ChangeDiluted EPS%Change,1,83924.2%(10%)652.2%(96%)01,90418.1%(46%)(106)(470)26.0%1,32812.6%(46%)544(0.5%)549(1.0%)$2.44(46%)$2.42(45%),2,11724.7%15%2457.7%277%02,36220.0%24%(87)(691)29.4%1,58413.4%19%537(1.3%)542(1.3%)$2.9521%$2.9221
48、%,2,56026.1%21%51213.8%109%03,07222.7%30%(114)(958)31.7%2,00014.8%26%534(0.4%)540(0.4%)$3.7427%$3.7027%,2,91727.5%14%53513.9%4%03,45223.9%12%(125)(1,014)30.0%2,31316.0%16%534(0.1%)538(0.4%)$4.3416%$4.3016%,3,36028.7%15%55014.1%3%03,91025.1%13%(118)(1,156)34.2%2,63716.9%14%5340.0%5380.0%$4.9414%$4.90
49、14%,Source:Deutsche Bank,Company Data,Page 10,Deutsche Bank Securities Inc.,30 November 2012Chemicals/CommodityMonsantoFigure 14:Monsanto Quarterly Segment Income Statement,2012-2013E($in millions,except per-share data),2012,2013E,Q1,Q2,Q3,Q4,YEAR,Q1,Q2,Q3,Q4,YEAR,SalesSeeds and Genom ics,Corn Seed
50、and Traits%ChangeSoybean Seed and Traits%ChangeCotton Seed and Traits%ChangeVegetable Seeds%ChangeAll Other Crops Seeds and Traits%ChangeTotal Seeds and Genom ics%ChangeTotal Agricultural Productivity%ChangeTotal Sales%Change,89546%2427%19473%157(14%)4664%1,53432%90536%2,43933%,2,81617%68912%66(1%)2
