CTVA - Earnings call transcript Q2 2020

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Operator

Good day and welcome to the Corteva Second Quarter Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Megan Britt. Please go ahead.

Megan Britt

to call quarter for welcome XXXX first and conference earnings Corteva. morning, the and second half Good I'm pleased and to Chief President Chief Tim Executive of be Executive Commercial joined today Greg Glenn, Gajaria, Executive by Officer Freedman, Business and Vice Executive President Platforms. President Vice Chief Rajan Officer; Officer; Financial and Jim Vice Collins,

website link Investor comments which are call, our have presentation Relations of We section this prepared the slides during to and the webcast. Corteva on to supplement the through our posted

During this provide material historical make of contain earnings discussion our accompany will financial our and can we expectations presented and items our for forma forward-looking release be provide cause the results. pro release found earnings our our call, significant X some that statements of in basis the measures all our slide. earnings our X in disclaimers actual Unless filings regarding specified, in forward-looking release. the which and We statement a today exclude otherwise future; factors slides discussion SEC could differences and schedule that

provided now We our on the will non-GAAP measures. is directly comparable Jim. release A earnings to call my It’s GAAP pleasure financial to also to our where over available to website. the and measure reconciliation refer most in turn

Jim Collins

shaping actions, this in the one anniversary the been first Corteva guiding you, and our that company principles Thank of year on X demonstrated event you [indiscernible] second the for have celebrating team our Megan. determination during marketplace our captures Slide integrity that It’s and the are operational the great a and time. unprecedented agility public of has our that punctuated company. challenging a with we year call today. the quarter. that to is in the have be over Scanning year the

values globally. our our Michigan, to a at and and priority and XXX that and for management and the manufacturing Relative how at how our facility sites. flexible detailed result of continued the of year current for our capabilities at respond digital security, care Midland This set were we In communities the ultimate heart impacts compassion more racial in particularly our we're common essential our for We're United of that remains enriching inequity responding and work-from-home maintained in quarter our sites of these COVID-XX our employee to top structure and States from event the global the security and possible lives has maintained a we work employees protocols enhance a I'm safety keeping arrangements. completed our place our flooding institutionalizing second safety at focus. our principles work crisis brought called our have that We've of forefront safety evaluating continue again work cost also place. tragic teams customers, very and events global purpose proud operated of pandemic, business these events team response. and global through of challenges continuity to We've in that the return efficiencies and to planning to also where activated in pandemic work as enable security stance outset the quarter personnel. effective as a stance to

managed and minimal Michigan or shutdown event communities. chains team actively with and safely open an employees supply site emergency ultimately In Beyond a as restart Midland result of in our our are our to in safety the business. costs also disruption May, we keeping the and supporting a engaged flooding customers

the the all I'm mitigate the to proud diversity broader we this are put ship. and supply and were every United taken We've believes dignity, to efforts every vital equity, all product momentum. through contributing we practices miss tragic our of amplify of society. acknowledge also more to make place States our inclusion recovery The a in focus industry. efforts Way recent within needed asset human we to equity Here supply this and inclusion action support work basic on that taken essential and events this and resiliency in in United deliberate Corteva, of Corteva inclusion We communities the again active have have that local diversity swift essential build that diversity fair in organizations to chain have the of and Recently global in us and manifest leverage move we Community sustaining and it already place there. events programming forward. to to and Midland uncertainty, spotlight. work and ahead and our increased the the to opportunity conversations have business forward to equitable the disruptions voices never clear say our to crucial these footprint At change principles in important

several spend, current implementation employee holding travel, place our in-person These non-essential a in our promotions the progress hiring teams the million and digital both for pandemic. is X. to quarter, actions value in priorities focus marketing previous our our These in scale help offset the for focused owners’ additional strategic extended reducing of across on slide culture delaying impacts our to actions large the creation meetings mindset, stance include are and are work-from-home This half. in in savings preserve with from our to incur period. shareholder geographies relocations on the an Turning update resulted cash to efforts added eliminate an eliminate the with global $XX company noted Starting for and and freeze, first to spending activities.

million On ownership from sheet the and share turnout work to in of M&A, of to $X our capital half entire to position shareholders our in capital working opportunistic our approximately year. the of commercial portfolio repurchases additional the our billion return XXXX. through the returned and to $XXX in anticipate We we the to issuance actions Regarding dividends support also form fulfill of innovative the the first full commitment our proceeds notes. borrowing for cash quarterly requirements. pleased paper Advancing that issuance the capital soybean our the for volume XXXX. the of year report a I'm company brands, exceeded Enlist the of evaluating to and We easily seasonal in technology to We're we with allocation expectations XX% across liquidity soybeans needs our acquiring EX to of solutions, May deployment can remainder quarter in interest balance fortified in portion second the platform scaling long-term using product shareholders.

Duo and we are Circuit confidence aggressively in and technology issued recently seed the on our gives to forward, our added Looking in Ninth Court farmers expand portfolio available the XXXX. working marketplace further in in the Enlist Ruling volume

on Protection new product $XXX for our on best-in-class year. cost million this exceeding million in to $XXX of the earnings the $XXX drive half soybeans from continue improvement. launches EX both track cost to and in On for We priority full Protection timeframe. and original first Enlist all structure, Crop delivered the year, earnings new remain to sales We full remain million improvement synergies deliver a the the Beyond target deliver year. track we a productivity Crop products to on set for

and with were were of price the first court X% single seed, demand on the soybean soybeans. market every for in digit above for up sales seed advantage treatment organic the low half, growth Enlist global North in overall the half on seeds EX and seed improvements America yield in Chrome we region. launch growth Finally, corn in capitalizing delivered Lumialza Notably, solid

we results Europe organic in resolve Vessarya strong the Latin currency near America, in in delivered Crop devaluation, also We and Asia Sharp expect in and term. both fungicide we and timing formulation headwinds shifts faced from Seed Protection. that a In Pacific to challenge

next results the America rebound, acreage drivers the related slide corn Protection a were the market increase Crop our by competitiveness. North Finally, in frames acreage of several for tempered and but market less quarter. by favorable supported The

X, represents a XX fallen sharply XX highest declining in to Based released products June, over to we million other the down the industry million five the We This a build report to expectations favorable other at agriculture corn global of COVID-XX corn this weather impacted weaken has acre XXXX the the the we created million US USDA the XX and ethanol. and acre acreage ag corn prices in capitalize of March pandemic unexpected Though into crops margin North season of goods pulled the represents USDA the value and of of at for believe demand the the which end Moving the were commodity more acres. of quarter. year, of acres estimates corn stocks swings expected planted course economic the largest acres both were planted namely the is across of the upon America downturn for March anticipated has one million acreage slide believe end opportunity demand lower planting five in the years. reversal of corn outset both meat quarter conditions which Xst rebound last in in and Lower the demonstrated and the impacts some reduces The our reports. volume planted, sectors, June XX% corn sector. US between second pandemic the have have the planting and of prices resilience From relative while season. to corn on

area has than since corn the driven several XX% to in of year. of our the pandemic Latin dollar addition impacted expectations, to In US first particularly plant to exchange the relative half related currencies that the significant the US more real US deliver to slowdown volatility. currency weakened growth where the America also beginning deterioration the the Brazilian rate through The ability dollar strengthening has in foreign

has The America volatility importing recently relative China more have soybeans competitive. currency has South expectations, to. weak prices the and to purchases US, trade the America exports corn South the of countries grain and offers Regarding wheat from major increased made impacted currencies between

in growth our delivering the increased products the Europe by Brazil half. the Europe gains organic strong price particularly imperatives crop on corn price Pacific. share organic and in and in Asia show gains in sales X% region Market to PowerCore new on headwind, basis X% to improvement protection quarter market Latin adversity These and volume were gains products sales in the year. product second X, protection indicators first organic Isoclast a improved particularly in protection prior North Arylex America. performance X% competitiveness we suppressed crop and Currency, X% for every by a Europe first by the notably overcoming for X% due versus rebound several half X% North acreage was supported success and In and of new by growth driven and our and in America. continued recorded some segment a Moving of half. declines Seed Net price volume ULTRA. growth was formulation increased challenges, organic crop in America offset execution propelled Brazil results. and and improvement in new a product signposts second timing, our indicators in X% for in key carry highlight particularly slide a herbicide up sales and strong and and In Qrome Seed, continued market insecticide Unfavorable the

an crop to X% in gains margin first than the and protection Currency sales first half. all margin change and $XXX million improvement gain In for for in basis the more were and unfavorable for approximately price increased by drove The overcome points EBITDA quarter. earnings the and regions Operating geographic this course and expansion have We by improvements point the second XX product productivity synergies volume improved opportunity basis seed EBITDA reduced half. by from mix. segment. in product earnings a operating productivity new XXX

percent taken actions. downside SG&A spending made limit sales basis on deploying the instruments. increased new net early by we in points on progress During further by half. a deliver have financial steps first our of risk quarter, the currency hedging the approximately We XX to to as

successfully regional the where and overcome indicators our technology our These spending in to and better. products leveraged can first still route the key position approximately in of while million US of extracted the through the focus. of results differentiated in largely adoption in more a continued to an price corn flexible our as was also the portfolio. for costs by seed, X do an seed Slide as well into to the corn of delivered highlighting of in globally solid commissions consistent with this momentum ERT that first of We estimate In area our the seed Chrome COVID-XX. execution product portfolio, supply and related challenge half which half. penetration provides areas that is the through overview challenges product We differentiated the to crop offset of launch However, advantage higher areas market by we broader affirm was which and pricing, first costs. value operating related increased improvement Starting new the with the demonstrate pricing form chain supported half. will $XX protection, EBITDA our than

outcome competitiveness. now despite also deliveries confirm soybeans, the completed of intense gains initial US our price of can a as execution the bulk we've exceeded expectations result strong is of As that in we with on I marketplace X%. This our soybean our price in

As product I noted earlier, plan. new acting according to sales

anticipated goods we productivity sold for we year. on increased synergies and and cost cost executing as the royalty the had expected headwinds, We and of offsetting are seed

spending though the in is progress half. helped we made Now on of more where offset that SG&A early an through This half. will to traction the actions increases second partially we gain area the

earlier, As first noted was a I headwind currency on half. the

a During hedging quarter for the Brazil off risk programs partially second currency to to pricing we America notably launched we new for the half. took in in instance took partially Latin and mitigate actions

quarter there that several that Finally, second emerged headwinds were performance. our half the first in dampened

was acre represents we acres the one mentioned lower the million expected the were US corn in lower I approximately corn in EBITDA. United million in Remember which acres $XX The first States, by than estimates in million earlier earlier. as acres USDA’s and X million operating is a change than five in

second Second, quarter. volumes, in we we formulation third in competitiveness in we challenge herbicides. returns net soybean In product impacted year, in States, sales that fungicide on increased a United to reposition Vessarya $XX the we last On million start Brazil in and Latin the saw that our an there. product in the our herbicides in largely quarter early volumes have rework with in resulted market America which will the recognized herbicide in the channel season

in and I’ll more seeing volumes the Greg. Brazil season this call expect a are the We normal With quarter. in third the realized that, those now to to start to hand see year,

Greg Friedman

America This quarter, the prior into X% covered season primarily pricing first volumes, from half on America on year Jim. first quarter increase volumes to $X.X to Early prior Latin headwinds the in insight I’ll in X% was have coupled Net year. Thank were you, and headwind versus into seed a we Price Latin X. Since performance, quarter. X% to America strong Crop actions for provide second more currency. at sales currency due for our with of offset deliveries shifted was start portfolio. slide more related billion decline results a down the in X% the the Protection North a X%

for sales the impact America. pressures versus this unfavorable rework lower Protection partially prior includes due competitive in sales increased year. in This the Additionally, herbicides products North penetration of X% new to increase Crop to offsetting in where the second second from Vessarya the quarter, fungicide contributed Latin was America volumes in quarter continued

result Turning $X.XX to along versus productivity costs spending the SG&A by synergies the North Partially were decline the see lower of reported led and to of as volumes second quarter in currency. a offsetting of or in operating actions headwinds pandemic. Seed with to quarter, Overall, and XXXX. continue we we higher realization due on billion progress EBITDA, seasonal XX% America, the of unfavorable in impact shifts global early a declines

and shift from and from quarter the pressured down equally were in in basis year. is mix margins this to points to headwinds the volumes largely first currency. prior EBITDA the XXX Again, operating quarter the due Our

prior share operating $X.XX, the a For period. from down earnings a were the XX% quarter, year per

heightened demand. to update guidance set the our XX for related year. Turning pandemic XXXX our downturn around we for the guidance level and global due currency updating up economic are an slide for our and financial the of suspended Last quarter, uncertainty we to on XXXX guidance. the Today, predominantly to

resulting of than further currency impacts not pricing further Starting the X% the customer X% growth currency changes over the does basis. with to offset On between sales, globally. year, American more $XXX for we any resulting operational volume a an expect year full prior by or in COVID-XX market partially organic guidance disruptions, expect X% growth North basis, and rebound, to ability Our in acceleration pay reported and from on the million in price contemplate with or and we significant net demand X% pandemic. gains headwinds

million approximately $XXX headwinds prior the Turning XXXX. gains to year now billion. EBITDA and asset reflects the to deliver from operating onetime $X.X operating of This billion currency EBITDA. to a We due nearly in of of to range expect guidance the $X.X divestitures

to we $X.XX For operating per share. $X.XX EPS deliver expect between and

largely illustrate Latin million volumes the details shift year. is detailed includes on this provided guidance X% over expect Starting the for an year. in America modeling in timing Offsetting sales of have the in our fourth of presentation. organic This is growth due some in crop which prior appendix with our quarter. To protection X% deliveries compared assumptions North to on to the to half XX guidance anticipated growth in of America the we a We sales, seed expectations help slide second favorable $XX in second half. in reduction key prior

the as in Specifically, of products we product expectations. new the deliveries the $XXX This an our our shape seed protection first million to for n prior Brazilian of a ramp globally our appropriately real. local is momentum. due new improvement considered in prices XXXX we dynamics the we a adjusted take in uncertainty season the result improvement have predominantly is half continue US the part to compared sales in America. and around the year-over-year on incremental pricing for devaluation Latin total second half expect will to year. On the quarter In of market fourth continue have building changes as large to crop

Our approximate largely half the operating $XXX we million million into estimate approximate negatively first includes sales currency, in of headwind an headwinds rework results. the related to This On EBITDA. translates real. devaluation over impacted our an Vessarya that $XXX due the to are estimating year sales to prior

place the risk we have for quarter the further confident programs During to risks tools more provide and mitigate our necessary downside in year in in new predictability Brazil. put forecast. future that manage notably launched downside I'm the hedging we most to

cost, to commitment. full year on Turning expect and $XXX actions productivity targeting million cost committed to we to the year about and remained hit full our fully synergies deliver back for half the merger-related

offsetting taking For costs to I’ll Partially are the we approximately pipeline if some along advance Tim with spending. the to implementation the year. the execution sales Crop it in curtail associated actions we now and this to in investments our driving increase. Higher to for the second prior are SG&A on with for and ERP costs million be new over Protection expenses launch higher R&D, expect $XX hand our the operating organization the to half. are perspective over products

Tim Glenn

Greg. Thanks,

our the continue Enlist Vessarya. expectations the line strong generate Insecticide upcoming will delivery of that quarter Isoclast. high area to with secure seed planting is season. with closely closely the in our regions we fourth half. Greg second determined velocity towards based customers the technologies second strength globally the deliver spinosyns focused products. made product adjustments second We're in managing Latin are in year. ramp and third portfolio. Safrinha our fungicides some for herbicides continue approximately win we another and particularly will our in help fourth their expected for position the like create the now to to channel for customers I'm in second our end for half Brevant global our given confident both of protection during Europe season Starting In for execution, we've Turning Latin have me and the with we address as sales technology Rajan. on and concentrated, drive success with penetration exit down markets to our orders decisions the XXXX and and Brazil. sales with partners for leveraging first half. and and in a unchanged third-party in crop our value demand growth This traits position second our crop the it XX customers and This leveraging America look work the begin ramping for insecticide into gaps on deliver us that up in customers Rinskor to corn margin new also of to execute quarter in new focused mentioned to on for certain team in North formulating we key that low actions place the we're to the orders to strategic of regional products portfolio slide all market. for and America Bottom differentiated products we Talking to turn in priorities includes and have season seed products are In system Pacific America. crop we channel begin are the now that and delivering continued partners for with upcoming strong the execute will of I’ll like like where and XX% line demand to with our closely fundamental quarter value capture PowerCore teams second right and in Pioneer Isoclast We'll the on protection over in half, collecting advantage demand continuing productivity high to the drive to strong regions to for solutions to half work continuing headwinds plans Asia all seed soybean how includes on we is global and former quarter. our drive also teams brands the market penetrate as Arylex in to value ULTRA. growth seed season summer operations. Bottom the yield

Rajan Gajaria

Thank you. Tim.

our through to XX, in how in the Turning to first lunch its pricing half. and a we we delivered Seed, for are spec notable key contributor examples year slide driving of Qrome corn full performance in on Starting with few respect the left execution is I’ll a technology seed XXXX. and the drivers of our significant first

the second the need as this For our Qrome half, to we an is to part maintain yielding providing will customers secure. looking integral to are high momentum performance

here strong to EX adoption Moving Enlist Soybeans, continuing is enabling sales growth.

We contribute expect more $XXX million XXXX. Enlist than will sales EX in in net

is reinforced by the increased in Importantly, with this system bring recent value mentioned full Enlist the and are we as farmer progress our the to further herbicides. we decision Jim confidence expect seeing

to continuing on focused further presence portfolio of this our expand our on and are marketplace plan XXXX. in in technology the the in to We deliver

contracted We we managing continued production grower ensure are strong to with working to our closely are that with demand. align

in various to targeted geographies XXXX its contribution for an to growth and crops year. significant XX% over and and $X across our improvement billion Protection, continues prior portfolio of Turning deliver products to new sales estimated Crop expected

that of ingredients Arylex, a volumes. Rinskor, Crop is Zorvec incremental delivering For patented the action half, active $XXX the guidance. and the sales of new year growth deliver to in prior rapid ramp balance, part we're The Protection mode is on Molecules in of a of second cornerstone all like our over a our business and up diversity strategy. are new million Isoclast expecting

approximately active The second a net the growth very to technology XXXX, strong Latin growing prior a demand in Another we million double-digit which Spinosyn have America, is XXXX key the a for sales is contribute is in key to key year. market. markets $XXX expected of improvement in differentiated as half such for majority the weighted insecticide, over

[indiscernible] that X% we the X%. insecticide between and segment growing is For of the XXXX, estimate market

part an continue than We a to are our Bottom to volumes deliver increase deliver critical Jim. half. investment plan and these are capacity in and With by track it XX% back more our the growth represent a important to line, portfolio Seed by I'll for increased new and Protection XXXX. catalyst Crop on from second turn of that, expansion technologies to

Jim Collins

Rajan. associated our it's herbicide you, currency key the the second America seeing progressed, health a rebound and momentum very in crisis growth and the in is year market solid our in offerings providing encouraging we're despite performance North aside, global challenging portfolio, XXXX and our Thank the To new half. given has close, which fundamental downturn. insecticide economic technologies, Setting Seed, across for

As we in place such, strategy guidance. I the updated confident deliver necessary on am our have to XXXX

So have factor. recognized on that we is still we downside the currency, neutralized risk also market a volatility

plans So efforts we as to we crop full on more securing the for seed the XXXX adapting volumes adjusting spending, and demand Latin are in COVID year. America and well conditions we’re for ensure that a can accelerate broader backdrop, working products more and as We growing to our high EX in lot monitoring market deliver volume for aggressive closely happen a increasing the the US further and Enlist season. including know are to adequately related impacts season

I’ll Megan. to back So it now turn

Megan Britt

Thank you, Jim.

that please and both the our our I'd apply your non-GAAP measures following remark statements, to the questions. looking on forma to and cautions provide instructions. Operator, Q&A. you move like on let's forward Now financials pro to prepared Q&A remind

Operator

today first we'll And from Jackson. hear question Instructions] Joel [Operator our

Joel Jackson

Jim, can before now. $X.X million Greg, about have I help you prior you wonder know if $XX if to guide billion about expanded guided down EBITDA you the which you

you but early specific possible you see granular there buckets. XXXX, too XXXX it's helpful. anything can where the I to bridge get any prior the would can some and quantify guide and tailwinds And guide help you to as know might idea As know guess all to current the is to you headwinds you drivers be

Jim Collins

the for question. Joel Thanks great. Yeah

due -- can guide gave that currencies. back a guide the that of to of you a in that world. right, headwind it's million X.X%, that, a it's to it's main is comes There's two you're currency we we but when January of think everywhere in basket COVID-related the currencies being of number of component and -- $XXX pretty Brazil biggest previous about So versus elements. actually it the about down straightforward

then three end at The softening. million formula of every second right yard for another it's primarily $XX left of acres element that and million our commodity of we're also that that's per that pricing the $XX half, demand just us is million. that about was some here that COVID-related Part the And $XX second in corn softening the market the ethanol acres. some million million fourth seeing that’s that quarter

So there's you of those headwind it million is $XXX $XXX guide versus $XXX add that currency market-related. of million altogether, million previous

throughout $XXX pricing. of hard some this so that worked million, that And of we've is half about first half seed, to offset corn

our the very drove around would performance a we -- we off of strong very soybean the pricing obviously price, beginning first that year half soybean we performance pricing on strong there. North short America So of in at predictions fall and lot corn

that of some And is volume. world rest of

So if our in business Europe, like low-teens. up seed look at we're places you

at Latin of look business. you look you if at world up rest If our we're high the America Asia-Pacific we're terms of up XX% and in high-teens seed

we've So really spending that is actions strong then and offset that rest And some volume taken. of Protection of and the overall got pricing then Crop world part we've performance.

put midpoint and it grab can. many we this hard got working believe of and in that the overall guide the lot $XXX out $XXX that year the of about all a back now team and million we've the upsides I've down of guide So end as confidence the We to go solid a does to so million as through gets we're from new base. the actions that is of we taken you on there.

in today is to plan make final that versus we pretty that you I January about what think a the we everything here have much else in gave plan. point

are synergies according our that place you to the the played had flowing of stuff the improvement plan. selling through, productivity, programs, out pricing has expense, COGS drive projects all that what we program, know that Our in to exactly

So the $XXX market $XXX remainder of hard that through news half of to big currency, year. here other a working million of today COVID million and we're those working related on half offset of and the both that

the play and just a top going of and little price talked the seed early COGS, and and is Protection, and business those next have that capacity for we’ll be launched about you got Now Enlist strong pipeline organic but volume have ramp on now, is will still get to our year I starting XXXX, underlying year is year, talking you momentum know we're you're the additional of firm Crop about well-positioned, all the it's that if both step that growth just over we're additional carrying work seeing that come in think Crop XXXX, back to and another the from Enlist delivering, in the into will things a chemistry still Seed business moment this Spinosyn then we've on that about think additional synergies see acres on sprayed Protection some the final productivity. Enlist starting I

momentum really you I the the had business the XXXX. that things would we start be and foundation feel know of carried those all So it good in about underlying into

Operator

And next we’ll move to David Begleiter.

David Begleiter

James, just you. thank – back looking

past this both back growing beans and America, in at you corn what share season Just of North the market ability looking this season? do share think

Jim Collins

Yeah David.

value. always as a this – were You North it's processes predictions on prouder team. I disciplined a but pricing and America year, around know first was year has about our minute especially was in mission and focused in in that I be corn in couldn't talked a soybeans. There ago competitive of driving new of very the lot We

on first share. you so rather on know value specifically and than And foremost, focusing we focused

acres numbers and we've planted too came little terms kind out call visibility. a of now market it's to share in got even obviously right USDA we've So got from think where of the our though early macro we

in really came we're there where parts exactly stronger. some You out acres where country know of the it matters those

really to And down a this got county we get to level. so

Tim, through we in of the confidently talk of parts saw pretty can other you bit little areas. in gains I some to working we're say share process world. that. the do those a about So want

Tim Glenn

Yeah Jim.

that businesses up us. in we're I premier confident for both share terms the very past quarter in think season that significant corn here in to both first Europe also for and the and gain wrapped sunflowers we of

So about share the get if for and final had bit you say be to it's details make where as able call to little soon US. on more call it's to be a our to granularity acres ultimately too able are get the down market to a those we to

David Begleiter

Okay. Thanks, Tim.

Operator

move we’ll Jonas next And Oxgaard. to

Jonas Oxgaard

year but the for looking bit early, was are if how next well? as and I I was could Enlist’s a just little about this your I you realize two wondering, at you wondering expectations sales talk

Jim Collins

Thanks Thanks. Jonas. Great, Yes. question. for the

we very year You see for with very really year this -- for did system and XXXX, know say of would full strong performance first with commercial -- this was launch. I our

and that about risk Enlist just Glenn here about XXXX. to just is seed volumes. were then now we and XX% ready earlier that -- and and our of really in acres they're than at excited our for -- meeting would And report be or sign Enlist and performed up days expected about originally two we -- everybody of had just believe were a you it the talk acres -- seed that of it acres. system going XX% happy the we ago know XX% to you had were we then US units into were to we all three more the and grower Tim how So

other that here that really gives saw I are reinforces in some positives the the this it we can continuation. they the the dual just that Ninth one on confidence is that have us growers some registrations Court, technology. in So the Enlist Circuit message It momentum more some -- can think count decision sends that to also they thing

season. as seed maximize the ramp growers preparing are to we We're can available. many that for to with production in up our have the XXXX we of would try a significant working as units we So

think, work EX. that to by more But for more moving as ability here Enlist XXXX believe a so this takes secure we depend about And soybean seed you XX% going marketplace. units acres acres going the that's for plan, supplies. out kind of to inside to on so go that the XX% that then of year for to we're our additional of And forward. our the can XX% Enlist maybe Corteva, continue now, roughly our clearly seed us production can so or the from we low our and double through we updates obviously a than to volumes third we grow And going in right we're provide lot

to it continue higher, it. to be in the a chemistry treatment if what chemistry that to a of go expand, acres great little to we’d about meet saw and to expect is two acres thirds received after we ability and side, able terms a of as planted and that the we'll chemistry, have shape be the trend On production see in the we're we of demand, the Enlist going bit

else Rajan, you So, anything that? add to would

Rajan Gajaria

No, crops looking on year, of we’ll Jim, in that be if just But overall up this dollars sales about I about. half think, the doubling think you’ve covered spoke and north of and other a billion we adoption that that the herbicide, of at have you Jim includes system it. soybean, Enlist just the that globally XXXX based a Jonas, numbers track

discussed the So our it’s on based well playing Enlist up next off very in part year. bigger of portfolio the and everything we excited about of

Jonas Oxgaard

James. Thanks,

Operator

Vincent onto move we’ll Andrews. next And

Vincent Andrews

thank you. Good everyone. Good morning morning – Thank you.

– hedging can the understand to want Just me? hear you

Jim Collins

Yeah.

Vincent Andrews

Okay.

Sorry.

done hedged, much new that? that understand hedging if for you hedges risk EBITDA roll the a the comment then us of you past, a than is said what I that a you of if And can understand us in the – that benefit and risk million more you in know you ex-hedges, currency that same you help are would $XXX the be, can how want type with both that way the Just stays of, strategy the to -- so off, the the comments specifically understand the understand terms hadn’t help hedges you’ve bit XXXX? there becomes on believe just implementing if any can you

Jim Collins

and few I'll just and a Tim Vincent. here Thanks, few Maybe I'll make points. Greg to say ask comments Yeah.

in So related that European are as $XXX chunk some the part in know with you big opening in million that the headwinds EBITDA and as sales of in of million currency Brazil, $XXX well. we operating about mentioned comments, a of currencies of and is

are the new of And talk about that a tools that so And that is are related I’ll then instruments. in tool hedging tools, – we price. list we've to our have Greg that uses first have these got few

is some we those so you pricing us do markets. to local volatility, to manage and what go we natural recover that then us And the production kind of with in know that some to value, forward to hedges hedges allow do allows have of

is about to Tim, start, you currency? a we don’t little why go ahead do to out want So talk bit pricing of strategy our

Tim Glenn

Yeah. Absolutely, Jim.

of happened and that we through have pullback to and and could times we've we XXXX was certainly were priced first and this this offset and we options look customer, the limited clearly saw erosion of to business potential and Latin some of offset markets we I this volatility significant half April, the did America And of in bulk what we in of is obviously to that negotiated in In actions. a we Latin through our aware help towards and March, competitive based and what were was key half. the to America year first in saw we we're sit in actually out kind it look pricing we couple think able customers and help re-price currency that And impact have. regain how a season pretty But the cases year. those during pricing in sale we and have year able in currency been and we currency pricing year half due as moving both where a the in amount Greg? all there were of offset latter of forward a had standpoint not of the into second off the dent that we've where got that be we our to could that to part where make from But least were at a other currencies move we'd Europe with tools So particularly already tremendous always terms the that the as we could half to a of in go in offset particularly second after particularly because one us. of currency. we really it February, against

Greg Friedman

Thanks. Great.

first mentioned item pricing. as defense and our of Jim is Tim So

of item that is we're financial million part about is saying of the exposure of of $XXX question And that million -- just is had, in here second $XXX of you year really you that half of the the not asked me the currency $XXX excluding here excluding what’s second million hedging. there defense impact is million of impact pricing the let The $XXX hedging. hedges clarify the and

exposure and a is just currency the that than of the bit, of on year. Brazilian real heavily in So little impact exposure XX% tap half to is is again the more our weighted second

The first business already completed in results. in of but year and that exposure largely so of that large related currencies, is our first half is half the the other is European keys to

future who half in the very currency working closely the So the and quarter. with volatility move-ins Tim in fourth able priced to first to to that our third delivery commercial we the lock-in as and put of transactions out We've been the financial booking teams, are year for rates. in due business those hedges mentioned on offset any there ensure

that I in second So past that we and currently balance the this the also financial also does our hedging as mention of has give in assets the our in able that strategy receivables would sheet process earnings hedge from net and some and well. continue a includes predictability and program year. do monetary us perspective half to our confidence been and

Operator

from hear Zekauskas. And Jeff we'll next

Jeff Zekauskas

have Hi. issues. currency the a Good morning. question I on also

about said think that $XXX on $XXX would your the headwind about said the half. remarks be in think second slide million effect XX in prepared sales second I be EBITDA I you the million. would in you the half Can

bit is think So close margin a than would be million pretty more the I normally and million to little EBITDA $XXX effect XX%. EBITDA level $XXX your would XX% about on that

the if the currency to sales the have like total thought so million something total And would so the EBITDA million? $XXX effect is been large would $XXX Why relative sales have maybe I is that. effect

Greg Friedman

Yeah.

impact. And by So the or on if translate line. the of offset pricing does because earnings largest sales impact really pricing impact into the is that the largely

there. US. earnings. And the crop offer One were both the some a in the in for and as couple we local where have in translate revenue recapture have is what offsets seed is we're natural into – downside does is protection of and of So lot price the of our other largely much we There’s area. feel manufacturing crop we to because an we where a of hedges don't in place able protection

part we're supply US in So the Crop the our product for producing chain into moving of Brazil. the as Protection in

And so there. we don't have that natural hedge protection

at If you about last – actually was on based. recall, XX% when mentioned the Protection our last supply we talked our call, about we chain of supply US Crop

Operator

P.J. And we'll Juvekar. from hear next

P.J. Juvekar

then a back because of can question. region certain a have have comment reserves I cetera. et And comment weather seeds in you Jim, my very confusing, be forward is and pull that, your demand and because pushing or sometimes chemicals of

your season. know cycle, had July, did, and because understand the had be planting you when together, together, May Monsanto season you that's issue, they and would quarters application that’s same the if your reserves, and it easier that’s June, because the planting with March, old what they April so the if to align August and the So

the to a understand company. not investors that you just would it So I'm that’s suggestion. make should that, do easier for saying but

Jim Collins

differently half the we for a kind timing the our first single second half. a really because split result P.J. the the season difficult, know Hemisphere the seasonal a so Yes. right provides Southern Yes. the results you're about we you of quarter second seasonal ag in comment, the and the for It which more know in that in can out, exactly the financial the talk every really, on is Thanks business of northern hemisphere, then first year, quarter you a basis and market lot talk unfolds basis. view why about calling of is

get with be audited we're have and the know to history We our our belt. a some fiscal about now line calendar financials lot behind and discussed adjusting right more working to in you calendar cropping

financial it systems, kind appropriately. of can all systems to now you So some know know can that we're rewiring change together. we our ERP you currently make do that got when We've it we that bring

and take go that at had you making look Do to ERP adjustment. P.J. hard a to kind to system get movement making lockdown then a ready want we question and going of So the we're that

P.J. Juvekar

Yes. is XQ. in Thank down up I you. mean XX% were question your my after And being organically X% figures only also

Jim Collins

Yeah.

P.J. Juvekar

on going of then next germplasm. about So fee up kind clearly germplasm of you. EX Styne you well will will to EX Thank how ramp in Enlist year? pay can launch that as much you just if how much Pioneer of this is Enlist you you talk the be year, know Enlist the And

Jim Collins

a me volumes about let CP talk in XQ just moment. just for Great

We're You had so had the you to little point of season was know know there was to going hand previous bit business early that. an we We last quarter a of XQ fact all herbicides Latin-America a this some to orders in matter that I a most year have of last was get right in of of year. that your the to aberration. very bunch now a in XQ as deliver start

reason it other got The growers are performance. has XQ We've in bit talked light, a Vessarya tremendous that Brazil, issue we that about. CP results is a this in fungicide little is fantastic

performing hold to So right and closer, with the it we demand issue, little needed. need it. is no it’s a that growers the hands when get itself just tighter, meaning is on there It’s as their bit little formulation the product later, issue little

go ready rework to and of rock But ready a it have we and to in it the as little rework depression so get some stage well. because warehouse pulling back of back And when and season its that XQ to and it the unfolds. bit created pull in

second comes fact a year in matter high segment. be of digits I we're know that you of kind kind us to plays in back second we looked all of of think basis, the sales kind Crop going as of half organic and out if Protection half when our like the organically full guide So to the at an CT in on single

a want bit So to to Enlist, that. about with respect Rajan, do little talk you

Rajan Gajaria

Sure Jim.

be third that I next earlier, going year. was to This to whole get you comments it in we going for is year your market a the soybean double of we market think market P.J. the are to believe you when the about think are and covered we going but Enlist acres the year. the own number Related technology than to EX more that of XX%, have. feel so a we to next Enlist we third our germplasm,

waiting. and significantly and exciting between looking all of we but hands are market. XX% and So looking ramp very the now to forward let’s It’s time up that to feedbacks the our XX% getting this trying technology is goes at all adoption and say team decide how is production into we when from that at all seeing this this the on finally, point right customers with really are we’ll

Operator

we'll next from Roberts. And John hear

John Roberts

the Thank ramping this have? of need you extend produce seed down of royalty flexibility you. or you for actually trade the Are inventory morning. season you because production or to with that Good minimum arrangement do

Jim Collins

Thanks John. thanks. Yeah,

for production there. a obviously So out for plan lot the is of -- for extend

-- no matter closely. how this growers for plays main really our know this john. the how here so to message we're going And have we're out you watching situation Thanks, is choices that and

Operator

on to we’ll Parkinson. And move Chris

Chris Parkinson

sorry morning, that you. about Good [indiscernible]. Thank

those performance issue the down is begin about parse remarks. prepared as you clear region new normalized you including Can break portfolio it's your XXXX the of second just you the XQ you the parts you speak and second issue half the that we Thank half mentioned in much. and So countryside. how then XXXX? your you a the rate were should know think in out think outlook CP moving formulation the difficult Brazil issues growth of about especially how the very well comp kind just for know in for in as in your few And the reformulation in there performances the to Vessarya to

Jim Collins

Yeah. Yes, Chris.

So sales recognize is Vessarya now concerns orders And like all really issues the the year year second main will two those year of that quarter have we million and in that that XQ. of all is in $XX those I no year were -- hand. in this have said about will -- half back Vessarya at anticipate. last had $XX we million again -- that or this of No in I the in of sales this last that

So it’s a really strong product.

half aberration to the is the that’s bit little our business Isoclast way an Latin really performance strong second as forward contributor. to So just real strong around reporting. with of Go is in be up Latin in think well insecticide America a setting as about a America

-- of at single-digits of the look at the and here So high we're business for in to guide organically as going revenue you be XXXX I year CP that said answers x previous the if in currency. I know think line full the I one this on the end

So we feel Thanks, market. about kind sits competitive know really you of performance versus the good where Chris. our

Operator

And our final question hear from we'll Washer. today Luke

Luke Washer

for taking question. Thanks my Hi.

to your any you Just have had light of large chain taken I you’ve wanted project? your chain, to any ask of actions about you know supply supply kind or a re-evaluate COVID the market know that doesn’t disruption impact. with the diversify But COVID in the regard your you

Jim Collins

thanks. Luke Yeah.

all of our of first know portfolio. You percent large a very

least the is out two XX% of States. at big from our number the is dual think that Protection of Crop sources I United portfolio source and of is a chunk

of out of our the set US, be our ingredient. those of the One is would think -- north I sources number active of XX% of

tremendous have So we there. flexibility resiliency and key already and message

we've on first years working to don't diversify This COVID wake up supply is your really off of for crisis something have You us. and chain. decide been the for and this paid day

So flooding and some in able -- we from had and from as Asia-Pacific. Asia, that source in the crisis things the sourced rolled Europe to US the and were as and we we pivot products like Midland, US hit through those the

changes -- we additional stand about no we know additional feel today. good you where really So

Operator

for we any question-and-answer additional remarks. Megan over would to the or the At back closing conclude that turn session. With the to like I time, Britt this call

Megan Britt

Thank you.

August Before upcoming wanted to of we webcast remind on today investor close XX. call the everyone the I

including so look to During updates much call. joining. that, product portfolio and call. planning strategic for in be attendance on year. going key to Jim launches, With next EX Greg provide We this to penetration Enlist will we're our forward accelerate event, your the underway that you Thank could virtual specifically updates, close on

Operator

today's We you And thank that your conclude will for call. participation.

Corteva (CTVA) 6 Aug 202020 Q2 Earnings call transcript