Thursday, January 5, 2017

Monsanto returns prior to the Takeover by Bayer in profit zone – Handelsblatt


In the on 30. November to the end of the previous first quarter, has made the group a net profit of $ 29 million.

(photo: Reuters)

St. Louisof The US seed giant Monsanto to controls in a strengthened Constitution to the Acquisition by Bayer. For the end of November completed the first quarter of the financial year 2016/17, Monsanto reported a small profit of $ 29 million, compared to 253 million Dollar loss in the previous year. The expectations of analysts, who were convinced that the seed giant, on average, only a balanced result, he was able to surpass this easily.


  • The American company Monsanto is one of the world’s largest manufacturer of – and often also genetically-modified seed and Herbicides.

  • The company is headquartered in St. Louis, in the U.S. State of Missouri is one of the 500 largest publicly traded in the United States and recently around 15 billion dollars (13 billion euros). In the process, Monsanto has achieved a Surplus of $ 2.3 billion.

  • Worldwide, the company employs according to their own information just have 21,200 people, almost half of them in the United States. The seed group is represented in 66 countries – also in Germany.

  • Monsanto referred to sustainable agriculture as a “core concern”, it is, however, criticized the world of environmental organisations, among other things, for the production of genetically modified seed violently.

    source: Reuters

unlike last year, when you had to repeatedly correct the earnings forecasts downwards, could Monsanto CEO Hugh Grant also in October presented the earnings forecast for 2017 to reaffirm now. For the adjusted earnings per share for the full year it represents an increase to 4.50 to 4.90 dollars per share, compared with 4,48 dollars in the previous year. Free cash flow is expected to reach after 1.4 to 1.6 billion dollars.
The Figures suggest that the US group as promised, actually returned to growth will be held back and that seems to be in the trough of the current agro-lull through the steps. They come in this respect, the plans of the Bayer group, the bet with the planned Takeover to the fact that the plant protection and seed business after the lull in the last two years, comes back stronger in the swing. The Leverkusen-based group had agreed after months of negotiations in September with the Monsanto Management to a Takeover of the US group for a total of approximately 66 billion dollars. Around 57 billion dollars are attributable to the acquisition of Monsanto shares, and nine million on the Acquisition of Monsanto’s liabilities. A law enforcement this is the largest Acquisition in the history of the company Bayer is expected by the end of the year.
Bayer CEO Werner Baumann is that the combination of the two companies in the agri-sector innovation significantly strengthened, because you have to in the future, the development of seed and plant protection products, to create stronger networks. This argument has now also emphasizes the Monsanto Management. “Together with Bayer, we see the opportunity to accelerate innovation and provide integrated, optimized solutions,” said chief technology officer Robb Fraley. The current research Pipeline of Monsanto includes Fraleys statement products with a peak sales potential of $ 25 billion. This corresponds to almost the double of the last year, sales of 13.5 billion dollars.
Th e turnaround in Earnings performance in the last quarter leads back to Monsanto, meanwhile, especially for a better business in Argentina and Brazil, where farmers expanded after two weak years, the cultivation areas. In addition, the appreciation of the Brazilian real had a positive effect. Revenues were $ 2.6 billion, almost a fifth on the previous year and also slightly above analysts ‘ expectations. Growth came solely from the seed business, while the herbicide-decreased sales and income due to further reductions in the price of the herbicide glyphosate. The operating profit improved to $ 247 million compared with an operating loss of $ 272 million in the previous year, as Monsanto had made high provisions for a cost-reduction program. Excluding special items, improved the adjusted earnings per share according to Monsanto from eleven to 21 Cents per share.
The quarterly figures and the earnings forecast for 2017 imply a significant improvement compared to the previous year. The output values of the years 2014 and 2015, as the US company earned on an adjusted Basis, more than five dollars per share, is not expected to Monsanto’s reach yet again. Also, the free cash flow will remain with an expected 1.4 to 1.6 billion dollars is still significantly behind the average values for the last few years (of over two billion dollars per year). To achieve a reasonable rate of return on the purchase price, Bayer increases, however, more significant earnings in the case of Monsanto.
After all, the US group has provided a return to double-digit profit growth starting in the year 2018. Bayer also expects at least 1.5 billion dollars in ongoing cost savings by the combination of Monsanto with its own Agro-business.


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