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In-depth financial analysis of seedcompanies globally
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Founded by Sir Shriram in 1889 (as DCM limited).
Managed by Mr. Ajay Shriram ( Chairman and Sen. MD).
A company with turnover of Rs.3523 crores and primary business interests in
Agri Businesses Sugar
Urea
Agri- inputs
Hybrid seeds
Haryali Kisaan Bazaar
Energy Intensive Businesses
Chemicals
PVC Resins
Calcium Carbide
Cement
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Value Added Businesses
Fenesta Building Systems
PVC Compounds
Other Businesses
Textiles
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Study the growth potential of the global seed companies.
Study of their consolidated and segment- wise financials.
The research would be taken into consideration by the company further.
LIMITATIONS
The study limits to the secondary sources and the information as
provided by the company guide and his team.
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Growing Population.
Improving farming activities .
Increased use of biotechnology in seed research .
With Growing market, there is an increasing demand for pest resistantseeds and hybrid seeds.
Indian Seed Industry valued in excess of Rs. 7500 Crores.
Expected to grow 12% as huge growth potential.
Indian leading players are rasi seeds, Shriram Bioseed Ltd., Rallis IndiaLtd., Advanta, Monsanto India.
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Seeds industry is expected to reach nearly $50 billion in 2015worldwide.
The largest seed market is the US, with demand expected to showcontinued growth, driven by transgenic and hybrid seeds.
The fastest growing market for seeds is Asia Pacific, forecast to post5% annual growth in the next ten years.
Grain seeds is the largest sector globally followed by horticulture andvegetable seeds.
Bayer Group, Monsanto, Basf, DuPont, Dow Chemicals and Syngentaare major players.
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Business Presence- India, Vietnam(rice seeds) and Philippines(Corn
seeds) i.e. tropical and sub-tropical regions.
Test Marketing in Thailand, China and Indonesia and Asia pacificregion.
R&D, Seed conditioning plants, cold storage plants, quality assurancefacilities, multiple parent seed farms, genetics, scientists required.
Field and vegetable crops, corn, rice, cotton, Millet, pigeon pea,sunflower, paddy.
License from Monsanto for BT technology and brought BT cottonseeds.
3rd largest player in the country for hybrid seeds.
Reported a high sales of Rs.291.5 Crores, PBIT of Rs. 37.8 crores andcapital employed of Rs. 119 crores in 2011.
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A U.S.-based multinational agricultural biotechnology corporation.
World's leading producer of the herbicide glyphosate, marketed as"Roundup". Monsanto is also the leading producer of geneticallyengineered (GE)seed.
Provides the technology in 90% of the world's genetically engineeredseeds.
There are two main segments-
Seeds And Genomics Agricultural Productivity
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Total Revenue 5,462.0 4,673.0 4,924.0 5,423.0 6,294.0 7,344.0 8,563.0 11,365. 11,724. 10,502.
0.00
5,000.00
10,000.00
15,000.00
INU$MILO
NET SALES
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Operating Income 659 319 471 621 742 1,177.00 1,418.00 2,721.00 3,103.00 1,607.00
Total Net Income 295 -1,693.0 68 267 255 689 993 2,024.00 2,109.00 1,109.00
-2000
-1000
0
1000
2000
3000
4000
INU$MILO
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
SG&A As % Of Revenue 21.7 26.3 23.2 23 22.3 22.4 22.1 20.3 17.4 19.7
R&D As % Of Revenue 10.3 11.3 9.8 9.4 9.3 9.9 9.1 8.6 9.4 11.5
0
5
10
15
20
25
30
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Close PE Ratio 30.18 -2.97 98.88 36.60 67.91 37.952 38.96 31.56 22.07 26.19
-20.00
0.00
20.00
40.00
60.00
80.00100.00
120.00
Close PE Ratio
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Quick Ratio 1.3 1.6 1.7 1.8 1.2 1.4 0.9 1 1.1 1.1
Current Ratio 2 2.4 2.6 2.6 2.2 2.4 1.7 1.7 2.1 2
0
0.5
1
1.5
2
2.5
3
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Receivables Turnover 1.8 1.9 1.4 2.3 3.3 4 4.6 4.8 4.7 4.6
Inventory Turnover 1.8 1.5 1.2 2.1 2 2 2.2 2.2 1.6 1.7
0
1
2
3
4
5
6
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
LT-Debt To Equity Ratio 0.12 0.16 0.24 0.2 0.26 0.25 0.15 0.19 0.17 0.18
0
0.05
0.1
0.15
0.2
0.250.3
LT-Debt To Equity Ratio
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Interest Coverage (Cont. Operations) 7.3 4.4 0.3 5.4 3.3 8.7 10.5 27.4 23.8 10.2
LT-Debt As % Of Invested Capital 10.7 14.1 19.6 17 20.6 20.1 13.3 16 14.6 15.6
0
5
10
15
20
25
30
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Return On Stock Equity (ROE) 4 2.5 0 5.1 4.5 10.7 13.2 21.6 21 11.2
Return On Capital Invested (ROCI) 3.5 2.1 -0.2 4.2 3.6 8.5 11.5 18.1 17.9 9.4
Return On Assets (ROA) 2.6 1.5 -0.1 2.9 2.4 5.9 7.6 11.3 11.8 6.3
-5
0
5
1015
20
25
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Net Profit Margin 5.4 2.8 -0.3 4.9 4.1 9.5 11.6 17.8 18 10.7
EBITDA MARGIN(%) 24.4 18.9 15.6 21.9 23.9 23.1 25.0 30.4 35.6 23.0
-5
0
5
10
15
20
25
30
35
40
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gross Profit Margin(%) 48.43 46.65 63.53 46.71 47.73 48.31 50.05 54.35 57.68 48.43
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
Gross Profit Margin(%)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Basic EPS - Total 1.14 -6.5 0.26 0.5 0.48 1.28 1.83 3.69 3.86 2.04Diluted EPS - Total 1.12 -6.45 0.26 0.5 0.47 1.25 1.79 3.62 3.8 2.01
-8
-6
-4
-2
0
2
4
6
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SEED AND GENOMICS
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Net Sales 1733 1601 1921 2320 3252 3978 4964 6369 7297 7611
Gross Profits 856 827 1073 1369 1982 2433 3014 3857 4504 4538
EBIT -241 -2088 182 196 374 794 905 1200 1655 1597
-4000
-2000
0
20004000
6000
8000
10000
INU$MILO
SEEDS AND GENOMICS
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Ebit% -13.91 -130.42 9.47 8.45 11.50 19.96 18.23 18.84 22.68 20.98
-150.00
-100.00
-50.00
0.00
50.00
Ebit%
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gross Profits margin(%) 49.4 51.66 55.86 59.01 60.95 61.16 60.72 60.56 61.72 59.62
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Gross Profits margin(%)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Return on assets(%) -39.61 589.56 4.76 5.86 10.59 10.2 9.12 12.37 11.75
-200.00
0.00
200.00
400.00
600.00
800.00
Return on assets(%)
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AGRICULTURAL
PRODUCTIVITY
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Net Sales 3717 3073 3003 3103 3042 3316 3385 4996 4427 2891
Gross Profits 1734 1319 1200 1158 1022 1086 1216 2320 2258 548
EBIT 760 362 -24 249 -27 301 470 1691 1352 -25
-1000
0
1000
2000
3000
4000
5000
6000
INU$MILO
Agricultural Productivity
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Ebit% 20.45 11.8 -0.8 8.0 -0.9 9.1 13.9 33.8 30.5 -0.9
-10.00
0.00
10.00
20.00
30.00
40.00
Ebit%
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gross Profits margin(%) 46.7 42.9 40.0 37.3 33.6 32.8 35.9 46.4 51.0 19.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Gross Profits margin(%)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Return on assets(%) 8.4 -0.5 4.9 -0.6 7.1 11.4 35.0 30.1 -0.6
-10.0
0.0
10.0
20.0
30.0
40.0
Return on assets(%)
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MONSANTO Monsanto on the whole had an increasing trend as far as the sales and profitability
is concerned for ten years from 2001 to 2010 though there was a slight decline inthe figures in 2010 in comparison to the period before due to the decline in thefigures in Roundup and Glycophosate herbicides. The EPS was also low in 2010due to low net income.
In turn the ratios were also affected during the last year for the company and theoverall financial condition of the company was sound.
Seeds and genomics segment observed increase in sales and gross profitsduring the period from 2001 to 2010. The EBIT declined for 2010.
The corn, cotton, soyabean, vegetable seeds and development of GenuitySmartStax and Genuity VT Triple Pro and Product Pipeline has done remarkablywell.
Agricultural productivity segment saw a decline in net sales, gross profits andEBIT was negative during 2010 due to fall in Roundup and Glycophosate
herbicides.
Remain committed to the cost and cash management and managing workingcapital in future.
The Crop protection segment should support the Roundup ready which willgenerate cash in future.
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World leading agribusiness operating in the Crop Protection and Seedsbusinesses.
Also has a Business Development segment, which is engaged in thedevelopment of enzymes and traits with the potential to enhanceagronomic, nutritional and biofuel properties of plants.
Major segments- Crop Protection1. Selective Herbicides
2. Non-Selective Herbicides
3. Fungicides4. Insecticides
5. Professional Products
6. Seed Care
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Seeds1. Corn and Soybean
2. Diverse Field Crops3. Vegetables
4. Flowers
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010SALES 6,323.00 6,197.00 6,578.00 7,269.00 8,104.00 8,046.00 9,240.00 11,624.0 10,992.0 11,641.0
0.00
5,000.00
10,000.00
15,000.00
INU$MILO
SALES
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
INCOME FROM OPERATIONS 642 640 709 895 1,072.001,130.001,499.002,054.001,896.001,952.00
NET INCOME 223 -27 268 460 622 634 1,109.001,385.001,371.001,397.00
-500
0
500
1000
1500
2000
2500
INU$MILO
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Research & Development (R&D)
Expense(%)11.4 11.2 11.1 11.1 10.1 9.9 9.0 8.3 8.7 8.9
selling, General & Administrative
(SG&A) Expense(%) 27.8 27.9 28.1 28.0 27.9 26.6 24.3 24.8 23.2 24.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Close PE Ratio 24.1 0 5.1 24.5 20.3 29.2 22.2 13.4 19.3 19.6
EPS (basic) 2.2 -0.26 2.46 4.37 6.22 6.46 11.56 14.75 15.11 15.07
EPS(DILUTED) 2.2 -0.26 2.45 4.34 6.13 6.35 11.42 14.63 15.01 14.99
-5
0
5
10
15
20
25
30
35
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Activity
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
quick ratio 0.7 0.7 0.8 0.8 0.8 1 0.9 0.8 1.1 1
current ratio 1.3 1.4 1.6 1.7 1.5 1.9 1.7 1.8 2.1 1.8
0
0.5
1
1.5
2
2.5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Receivables Turnover 2.9 3.1 3.4 3.4 3.6 3.5 3.5 4.1 3.7 3.7Inventory Turnover 1.6 1.4 1.6 1.4 1.6 1.5 1.7 1.7 1.4 1.5
0
0.5
1
1.5
2
2.5
33.5
4
4.5
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
LT-Debt As % Of Invested Capital 17 17.5 16.8 16.5 13.6 21.7 22.3 32.8 31.6 27.2
Interest Coverage (Cont. Operations) 2.6 1.2 3.7 5.2 5.5 6.6 11.6 12.4 11 10.7
0
5
10
15
20
25
30
35
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
LT-Debt To Equity Ratio 0.2 0.21 0.2 0.2 0.16 0.28 0.29 0.49 0.46 0.37
0
0.1
0.2
0.3
0.40.5
0.6
LT-Debt To Equity Ratio
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Return On Stock Equity (ROE) 5.5 -0.62 5.30 8.13 11.51 11.19 18.42 23.54 19.20 18.78
Return On Capital Invested (ROCI) 4.5 -0.5 4.4 6.8 10 8.8 14.3 15.8 13.1 13.7
Return On Assets (ROA) 2.1 -0.3 2.4 3.8 5.4 5.3 8.4 9.5 8.2 8.1
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
EBITDA MARGIN 17.8 18.6 18.5 19.2 19.1 19.1 20.6 21.5 22.1 21.5
gross Profit Margin 49.4 49.5 49.9 51.4 51.3 50.5 49.5 50.9 49.2 49.6net income margin 3.5 -0.4 4.1 6.3 7.7 7.9 12.0 11.9 12.5 12.0
-10.0
0.0
10.0
20.0
30.040.0
50.0
60.0
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CROP PROTECTION
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Sales 5385 5260 5507 6030 6307 6378 7,285 9,231 8,491 8,878
Gross profit 2645 2579 2724 3108 3297 3,260 3,680 4,806 4,229 4,382
0
2000
4000
6000
8000
10000
$mio
crop protection
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Operating income 738 745 780 1030 1125 1,184 1,501 2,121 1,970 1,839
EBITDA 1173 1214 1239 1463 1513 1,509 1,821 2,455 2,282 2,194
0
500
1000
1500
2000
2500
3000
$mio
crop protection
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Marketing and distribution -948 -909 -927 -1040 -1106 -1,037 -1,167 -1,474 -1,255 -1,321
Research and development 458 425 454 499 -509 490 496 556 508 555
General and administrative -501 -500 -563 -539 -557 -549 -516 -655 -496 -667
-2000
-1500
-1000
-500
0500
1000
$mio
crop protection
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Operating income margin(%) 13.7 14.16 14.16 17.1 17.83 18.56 20.60 22.98 23.20 20.71
Research and development(%) 8.51 8.08 8.24 8.3 8.07 7.68 6.81 6.02 5.98 6.25
0.0
5.0
10.0
15.0
20.0
25.0
crop protection
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
EBITDA margin(%) 21.8 23.1 22.5 24.3 23.9 23.7 25 26.6 26.9 24.7
Gross profit margin(%) 49.1 49.0 49.46 51.5 52.27 51.11 50.51 52.06 49.81 49.36
0.0
10.0
20.0
30.0
40.0
50.0
60.0
crop protection
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SEEDS
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Sales 938 937 1071 1239 1797 1,743 2,018 2,442 2,564 2,805
Gross profit 479 486 561 629 881 866 901 1,120 1,220 1,373
0
500
1000
1500
2000
2500
3000
$m
Seeds
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Operating income 71 68 100 5 91 99 28 49 117 187
EBITDA 110 109 146 68 148 158 98 135 256 357
0
50
100
150
200250
300
350
400
$mio
SEEDS
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Marketing and distribution 230 -237 -275 -339 -408 -429 -465 -555 -540 -559
Research and development 112 119 127 186 -213 232 283 343 364 410
General and administrative -66 -62 -59 -99 -169 -106 -125 -173 -199 -217
-800-600-400-200
0200400600
$mio
seeds
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Operating income margin(%) 7.6 7.26 9.34 0.4 5.06 5.68 1.39 2.01 4.56 6.67
Research and development(%) 11.9 12.70 11.86 15.0 11.853 13.31 14.02 14.05 14.20 14.62
0.0
5.0
10.0
15.0
20.0
seeds
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
EBITDA margin(%) 11.7 11.6 13.6 5.5 8.2 9.1 4.9 5.5 10 12.7
Gross profit margin(%) 51.1 51.9 52.38 50.8 49.02 49.68 44.65 45.86 47.58 48.95
0.0
10.0
20.0
30.0
40.0
50.0
60.0
seeds
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SYNGENTA The net sales and profitability had been increasing during the ten year period from
2001 to 2010. The EPS was slightly low though in 2010 as compared to 2009.
The ratios show the companys good overall financial position
The crop protection segment has an increasing trends in sales and profitsincluding operating income, net income and EBITDA from 2001 to 2008, though
there was a slight decrease in the figures for the years 2009 and 2010.
The seeds segment which is our prime concern has been observing an increasingtrends in the net sales, operating income, net income and EBITDA during the periodfrom 2001 to 2010, particularly due to increase in sales ofvegetable and flowerseeds.
High demand and high market penetration and so should continue to invest in corn,soyabean , vegetable and flower seeds.
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The companies had been quiteprofitable during last ten years.
Market penetration in areas likeUS, North America, Latin America,Brazil, Argentina and Asia asdemand is quite high.
Demand for corn, cotton,vegetable, soyabean and flowerand fruit seeds increasing.
In coming years will be profitablefor the company to invest in thismore.
Excessive investment and R&Dexpenditure and currencyfluctuations are the major riskfactors.
Stable Growth rate in the marketas mature market.
Long Gestation period.
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Research and development
Growth potential
Huge investment
Long gestation period
Genetics
Competent scientists
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