CTVA - Earnings call transcript Q4 2020

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Operator

Good day everyone and welcome to the Corteva fourth quarter 2020 earnings call. Today’s call is being recorded. At this time, I would like to turn the conference over to Jeff Rudolph. Please go ahead.

Jeff Rudolph

Good morning and welcome to Corteva’s fourth quarter 2020 earnings conference call.

will Greg by and Friedman, Officer. today Executive Collins, Chief remarks and Officer, Executive prepared be Jim led Chief Financial Our Vice President

Tim will join Commercial live Q&A and Executive Additionally, President the Vice Rajan Vice Platforms and Garjaria, Chief Business of session. Executive Glenn, Officer, President

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

financial statements Factor forward-looking are between We a which a our measures. this duty reported now in and Jim. my expectations provides not during historical call, Form and of call and results financial reconciliation not is make During and with non-GAAP Form turn differ financial summary the can of the call the measures accordance to our to We website, statements It GAAP charges non-GAAP specified, our to earnings will slide or our and and the that a accompany presented update Relations earnings earnings could of for and GAAP. measures to slides. basis adjusted and on These and our financial subject substitute measures because our any performance be our undertake for Investor provided made or significant in our filings about this is Unless Actual other release factors certain the non-GAAP exclude you schedules the based are conference and XX-Q, deck, provide considered do today financial other otherwise On prepared Exchange press intended statements and are pro should net statements. we with basis expectations current Commission. uncertainties. discussed forma call supplemental risks can today’s materially items and reports and differences pleasure of to be The Securities discussion in supplement comments over found benefits any for assumptions and which remarks in future. that on prepared find are a section release. Risk which XX-K, forward-looking release the our

Jim Collins

Thank joining profound welcome Slide company. disruptions on X, Starting to economic the year these and you call societal a the of today. and of of Jeff, challenges, I the XXXX participants the our as was globally. resiliency on continued extremely year, proud I’m Despite reflect

safe, and teams aggressively global customers our Our chains supply our track. and worked growth open, have commitments employees our on to keep

a mostly as in currency. higher addition such delivered Underpinning operating offset spending Our that of pandemic the targeted full earnings had cost where progress strong confirms organic company these and by on our were programs. These and investments growth Despite to demonstrated support growth. input hurdles, unfavorable commitment productivity delivering on from for XXXX reductions anticipated, our cost solid to deliver in we year. costs managing to a savings our We’ve the progress strength durability a EBITDA headwinds our improvement the is structure we strategy. protection over both gains delivered seed and teams our priority in managing in for for last year across crop and Corteva to our year, our and through Transforming sales and growth disruptions regions. other the the our remains all

The and on with company deployment debt to on net capital as $XXX dividends more returned continued working a productivity. result year focus a balance Further, organization’s roughly as and shareholders financial of million capital to than returning of ended via billion the strengthen execution improved dollars position year investments progress disciplined made on the we cash cash with of the $X.X to our over approximately by we sheet, prior our Turning strong billion. share cash the and repurchases.

path expect on as our since ahead, accelerate will XXXX have XXXX earnings on which we drive a capitalize see we the substantial improvement. in begin the to year to built significant made as we and investments Looking momentum we

start our executing continued entire in strategic on and ramp-up formulations team was XXX in terms XXXX, performance than of to in our the new where Our and more leverage deliver of the earnings. pipeline need focused our recognize retail to further full globally is where the from a realizing obtained for will value of crop be U.S. channel, from shareholders we growth in following of Brevant selling of We organic Enlist, operating and XXXX. launch for that including initiatives, registrations protection number ingredients programs XXXX our not active in-flight we the that we the advancement productivity

productivity actions. recall allocation, discussed XXXX, XXXX, focused On of remains to $X that made the margin EBITDA of XX% on as to that was months operating initial am to improvement points six XXX we which of the repurchase planned For I of last the necessary well completion organization that the the and including on year, are have targeted our billion we our than more end you ahead confident XX% accelerate our capital deliver share plan. basis adjustments we may positioned executing quarter program by for improvement

midterm the on I XXXX growth. outlook strong and our view XXXX, Given for maintaining most complete forward we laser we and and Corteva, track midyear bottom sheet to confident as remain The we of balance a big our while by line, step investing current repurchases am on and for cash targets. on expect our position delivering for focused

for Slide in in performance our regions both performance to growth and for segments to led to improved total with organic guidance the growth digit X and compared both strong on double sales, across Latin year XXXX company, touching for all next Asia-Pacific. revised organic the and America Turning briefly

delivered partially better anticipated X% and and organic as than teams were on our impact. to cost of of growth currency improvement strong we revised movements differentiated offset EBITDA, including and actions for increases, exceeding were favorable globally. rates compared pricing our and penetration drove had the On pricing, our the and with for pricing corn year, an Continued new guidance costs as technology in operating fourth results productivity input X% portfolios soybean expectations the by quarter. the unfavorable late delivered year we execution exchange local On higher net net in coupled in currency

prior sectors, from the As COVID-related X, discussion Shifting rates. decline the expansion resilient of unexpected for Throughout faced despite resulting divestitures, on commodity the point foundation points tremendous backdrop year, market the the extracted more XX a foreign for the establishing basis absence acreage quarter a result, while basis the margin the moving exchange a year in XX forward. we including fourth strong impacts growth solid markets on levels, to Slide levels, ag currency we disruptions. demand and observed some year, than other volatility of

closely conditions is these As monitored movements, we to have remain highly and market continuously accordingly. sensitive to adjust agile and actions our our business

resulting prices, improved outlook improvement. we from payments led to market uncertainty outlook crops in expectations As shifted on add environment income from in for accelerate further years. the out levels trend demand XXXX. additional our of for seven levels, and supporting farm U.S. XXXX favorable strong entered are the to fourth impacts consideration, strategy years the Taking momentum of and pleased ag constructive straight unprecedented commodity This strengthening in After are improve. we higher of to stabilized the U.S. has the income began are support into fundamentals growth also China with to deliver weather considerably to coupled U.S. pandemic, seen also trends see the a two to quarter, XXXX. highest we’ve which lower fundamentals in our and leads has Government Brazil signs operational farm more yields on stimulus with and encouraged Commodity grain in as purchases our we

top as highlights and teams. advantage acres line performing In recovery X the products. which XX like per execution the helped growth Slide teams with delivered from approximately of our high corn provides yield a the line-up America, disciplined planted pricing in to volumes, drove by an for to growers performance advantaged acre around full-year comparable year North Qrome In eight moving seed, X% over soybeans globe. by yield powered bushel we for sales technologies our Now organic the we X% on

ramp-up to We in Enlist our progress continued also the system. accelerating of make

is While volume, our drive That well on of total and advantages soybean we Arylex exemplifies expansions I of drive our delivered those of XXXX demand entered finished progressed XXXX we sustainable early of herbicides strong which years of it In on to any gains share for XX% gains XX% expecting soybeans as as helped market the strong we year regulatory the a system Africa, and XX% soybean sales, more In growing in traction result Rinskor protection to could the grew U.S. in can a Enlist in represent fourth products demand just the quarter volume than remember have in full we for to Europe, the process acres. faster demand ahead herbicides. Ukraine, $XXX such and about really at has approximately well is excited price organic an as solutions, crop $XXX and EX volume particularly Enlist differentiated expectations year, area Russia were million of than and are more The and in system sales we through in approximately route Arylex East we million pipeline. as excited chemistry in period. able Enlist and effective where prior be year and products market our our seed, new the in not double how X% Middle in about sales the for product delivered and recent corn. European market. in as product highly our gaining

America, While the sales XX% the for Brazilian weighed net Latin in on from organic year. delivered we real significant currency growth volatility

to displayed for The Rinskor managing market seed share for in well proof novel to which another price of in year. progress in Arylex meaningful both evident the Here, point In crop the organic products, the Safrinha This Asia-Pacific, drive gains insecticide. currency on strong in sales by as as pricing is Brazil of we growth currency, Brazil we on while execution $XXX penetration market market the like compared continued volatility XX% realized products. the spinosyn our the gained of our executed million and improvements. drove in and crop other share of protection year teams of as is we protection continued herbicides adoption and volume adoption technology both we advantaged new and prior local

benefited from strong we seeds period, India. demand for the During also in

across asset Through pricing million technology approximately higher delivered $XX earnings volume and representing penetration future benefits X productivity important targets. operating for was million million improvement $XXX improved divestitures the regions, by America. soybeans XXXX. Moving review and of predominantly Other and performance, input North led delivered XXXX Seed the execution a globally to our for reflects for of XXXX to we million which At new new sales the on and of that for protection XXXX. cost, improvement by reflects in of actions strong profitability. a in of differentiated in in X% same improvement $XXX of in net headwind largely and and the for improvement growth EBITDA share price improvement accelerate progress for operating operating $XXX and on $XXX delivered reinvestments benefits in we on million all our America. corn the cost million in continued actions, these time, offset a the On detailed the drove gains This products more were EBITDA growth impact seed costs our Slide from crop EBITDA year. X% $XXX we Europe year we Latin of mix

predominantly impact currency million approximately approximately million $XXX devaluation the Brazilian in pricing EBITDA headwind this $XXX the To real. $XXX was year. before approximately a offset Lastly, million operating pricing headwind, gross local of for currency of net the in to to and delivered was for teams resulting due currency,

our costs reduce program are that initiatives continue consolidations, we programs. the a headcount to restructuring This footprint take growth productivity includes of part hold across Our on drive is reductions. announced to organization. productivity and facilities Yesterday efficiencies, we and delivering and broader taking action

XXXX made reached are that begin years we confident past earnings have the accelerate point few in the We growth will we investments have where beyond. to over and the

the XXXX turn I’ll more to it over and on to provide Greg detail Now results our outlook.

Greg Friedman

Thanks Jim.

Robust and Strong to year. in at and growth and fall [ph] volume currency driven over XXXX. impact margin XX% the quarter, crop quarter a performance products X America in more offset our divestitures prior in coupled sales of in net sales an for organic Asia-Pacific up in Moving for approximate with Coupled drove new improvement XX% segment, in protection demand North the led XX% improvement Slide XX% in in-depth by an price. a to demand the basis drove XX% the asset the organic grew look actions herbicides fourth XX% Enlist for optunite organic XX EBITDA of actions, in for productivity and with our our also despite to pricing for quarter. segment this benefit Latin America the point operating growth of applications

several strategic party crop double year, prior increased reflect balance and growth as have in both regions, divestitures mentioned insecticides, the quarter, better grow new taken differentiated globally protection. well spinosyn currency operations back This continued down support and products and chlorpyrifos asset was of operating coupled by in diversity our On above our as products organic full differentiated manufacturing decision sales has over segment to in the declined year. crop market. Despite for streamline higher on and third the the gains supported offset actions our input drive to basis ability products. For EBITDA of in of sales growth, organically due the operating we out XX% organic and impact the XXXX up the year growth new by with we of our phase our merger this to costs, price for partially impact digits in the of in volume Overall, margin to all selected organic results the costs, low XXXX. protection investments leverage growth, and showing starting to as at ramp an completion last to

to recognized XXXX. actions see several in going offset of the sell approximately the to currency, takes benefit On each our continue the impact real, in the We for have a should it the line. lever pricing pricing strategic Given our be we footprint in the we jurisdictions and forward. regulatory us benefits approval to to year those bottom where products, $XXX of requirements weakening years for Brazilian for will asset million begin

year. in basis gains for volume the EX X% due seed early for an price EBITDA corn, fourth XXX to declined and gains segment season. the EBITDA the North strong the on volume Moving sales and in organic productivity for segment the grew Brazil quarter driven to XX, new Qrome, and soybean America, price strong and with impact and up Powercore the of North America to Europe the were Slide on currency by on market to in for quarter corn Safrinha and sales and commodity price drove soybeans. X%, for an start particularly Brazil segment gains share costs. products, sales due margin organic approximate Operating in acreage Ultra, deliveries Enlist and rebound the higher point actions Full Europe operating benefit year improved coupled and Overall, the

prior total to drive provide roughly Slide guidance $XX.X our EBITDA of year protection segments, of organic about primarily we continued both reflects company strategic made at improve globally new commitments, with year-over-year expected partially decisions ramp the our continued on savings range, in the X%. seed crop XX, basis. we further between our protection delivering $X.X and line billion, Starting expect sales, operating I’ll an X% full XXXX. to billion basis on with at we’ve sales of over be $XX.X growth the deliver year between now for On to the points midpoint net margins offset XX% of in and by and over the and operating net billion, midpoint. products Turning reported to up expect we a billion crop our XXX focus portfolio improvement. With top expect EBITDA, to $X.X by margin growth cost improvement This

represent per which share, EPS, operating to midpoint. $X.XX a deliver between over and improvement we $X.XX XXXX XX% using would Turning expect the to

provided the guidance We supplemental our presentation. of on our in information appendix have

to agricultural XX and levels prices, anticipate continues acres. a demand strong. favorable X for crop with products corn at increase normal area Focusing remains provides prices assumptions. sustain global commodities If on U.S. planting and EBITDA, seed, Starting area on for XXXX weather operating will combined be Slide will that current key pace, our spring and million Based planted biased X increase million we soybean the be heavily we relative between soybeans. expect towards new

March market of the estimates by when assumptions our part published refine the as planting available the will We is USDA. prospective data

will than quarter greater units EX anticipate globally, In Enlist of of trait. on and next consistent with much soybean our our extract line-up. as and Qrome we technology shared in of continue XX% our penetration we in the have maintain the what terms value as to could call, in including of per we year On North carry third seed XX% yield EX Enlist momentum to we America advantaged believe our XXXX expect Enlist expectations, pricing, corn units corn further in

protection, continued million demand in by for the opportunity of Turning [indiscernible] This million of XXXX. to of protection respect we in during class our resulting $XXX a spinosyns continued targeted release In of growth segment to capacity technologies, differentiated for underpinned in market. growth penetration approximately approximately Enlist in strong growing sales products expect additional additional this to in to supply crop to to With we continue incremental new demand will sales. product contribute expect product XXXX, we XX% as and new Arylex expect insecticide an crop sales $XX herbicides growth total, is market deliver our globally. and exceed

low phase out to chlorpyrifos third have I’ve As we down decisions and selected products. mentioned, party strategic margin made ramp

in $XX a our we result an included are which decisions, accretive margins, changes is XXXX earnings of headwind volume assumptions. approximate to do as our these expect million these While to in

costs, our related in onto programs million the in savings chain from are mostly cost XXXX, protection. and $XXX million in we supply productivity which rationalization targeting to we underway Moving $XXX net have crop approximately work in savings includes manufacturing

COVID-related the commodity We seed of also with sustained a partially costs XXXX. yields will unfavorable an savings by rising compensation due in result These of in $XXX costs be grower as input headwind approximate to majority along expect will in our million Europe. prices, be higher savings XXXX in offset

in our the offset headwind to for impact lever on currency. for the Finally XXX. change to our rates pricing will approximately we dynamic real a commercial expect volatility local the could the further will in with movement our this expect for be year, rates, reflecting given will continue Pricing and Brazil price in We a to teams in continually to and rate we coupled year-over-year $XXX monitor pricing currency, place, we financial directly price XXXX million as in instruments actively recognize approximately guidance impact seasonality. in anticipate of we changes Brazilian Through in currency. in local ability as a our have for the more that currency reduce

I’ll our Slide an the now deployment XX, to midterm. on Turning over capital provide targets update

performance result and capital have and cash year priorities. productivity. year XXXX combined, returning flow by and at management, As for with momentum, several in earnings largely total operating key dividends coupled growth the ended repurchases. look that’s of our on potential share expect throughout and XXXX billion Taking strong to $X.X working million a $X of for - a in driven we XXXX focus billion $XXX this and on we cash between operational this the effective $X.X Building to outlined through cash, uses continued more generate billion investments shareholders than we working approximately after with capital

which financial and is strong priority These us capabilities. fund industry-leading the reinforce our to renew to business maintain investments annually. market investments business allow first balance model, will sheet and to support the innovation flexibility in a will Our with our

through biologicals. will including continue vegetable technology, opportunistic We to optimize portfolio seeds, fruit explore M&A, and also paths our to and digital bolt-on

return see are we over In of shareholders short, return the to cash through opportunity committed shareholders accelerating capital the to share midterm. to dividends to we and tremendous our Finally, buybacks.

and cash the as view that, we details in we business of excited this Jim. capabilities see, generation turn our more forward as can to you back very share are to With it move we strong journey. As I’ll

Jim Collins

Thanks Greg.

know like points have an a take would the company, independent short I emphasize before tremendous XX, work questions. Slide in key do. time to we your made to been few but to We’ve more we’ve progress Turning we we

guidance positioned our in strengthening and are creation results accelerate route well Enlist on recent we further to and crop our multi-brand XXXX transform continuing and higher of mix, including system and progressing Our through product value multi-channel, productivity our execution disciplined products streamlining and our on ramp-up indicate beyond, our the enhance costs market, value advantaged protection our to and to actions. portfolio proprietary

allocation and to increased in will shareholders growth. even deploy maintain long-term balanced on our aligned capital sustainable we cash competitive are to also We strategy deliver program, management a return invest Corteva’s team to value continuing durable. advantages our as to fully is board that

is plan solid. Our

we always are We At all that do fundamental and benefit listening are incorporating of same our we and that. advance ideas and continue our to importance is executing we mission the time, working. Corteva, the of perspectives in shareholders. our At help objectives, to will it open and believe that

over I pleased While satisfied am past with years. flat earnings I relatively with three progress, not the our am our

now very our we and our emphasis are growth deliver have and accelerate adapted, investments we’ve and targeted learned, disciplined created opportunities productivity. cost well and to positioned the have on We through tremendous on

the Corteva and midterm to earnings importantly and sustained, our I’ll meaningful and puts of our for trust all our achieve on execution, products consider growth of the portfolio transformation margin is the we the path our in value the As in is no there time, right and hand Jeff. our plan focused productivity long-term fully place disciplined and ahead, customers. have underway, track you, and near significant we the term will our confident programs I same are we expansion we targets. deliver culture gained future. this back aligned call to shareholders, and deliver Through At have doubt have our to

Jeff Rudolph

Jim. you Thank

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

Operator

We’ll take instructions] first [Operator Markets. Capital with question Joel BMO from Jackson our

Joel Jackson

morning bridge think XX, maybe most is XXXX Greg, we as think outline everyone. you could and on conservative most Good Jim your you it’s aggressive? Thank look guidance where you you. and Slide where at the

Jim Collins

Thanks Joel. Yes, in forward believe the opening given as drive and for a we’ve substantial us, reached we’ve acceleration really the for the XXXX, will step the big since earnings an investments strategies we’ve been is said and ahead. I point believe that and XXXX comments, putting place years in they

As ’XX, got a from. you’ve you a that it starting and where growth real, there momentum That fourth to quarter point think for for and going gives strong I it’s is come look that at to is sense momentum.

you improvement realistic. ’XX, and that is in on EBITDA, it’s for as strong I guide guided see in that to chart, a XXX believe XX% margin, we’ve basis and the As that’s improvement XX% point EBITDA

in through Two-thirds the proof me productivity As protection margins. on this in see reduction and some a place let year projects, the you’ve the of cost started going you we’ve next through improvement put that it. footprint can some you they come business confidence business, to CP flow give why that’s have our our asked, crop of of points to have that as I to is tied begin and really sales, in number - to improvements in

start investing don’t on number of there. continued so made all product that strategic that us $XXX of about, a got new been that or products, improvement just we year the third products decisions the of, either those to so quarter, those our the that tremendous discussion have and we X in key so in, the there. America, of incremental numbers that that Latin new the and behind looking in to the million of million a acres net start carried protection numbers. business, get soybeans, but you about unleash have so now, of that now million that exit ramp-up expectations back Then got about and weighted of to sales, growth in of are about talked into is to we’ve Then and coming been he you you’ve $XXX North next we we’ve to capacity at to momentum about million is fourth it’s of spinosyn talking overall really the I know, soybeans add to much tied while America, net real probably You crop then to crop then by X corn past, new seed to you add so headwinds heavily you we’re decisions out

it have our really tied the marketplace, You to respect Then can the pricing. being prices. see that’s to demand with reflected is strong seed other in I the commodity in that’s and confidence business in

record now going and improvement globally, we’ve got You track track we in there price look at price X% we’re on so what delivered in X% XXXX, to that a improvement record. in count and corn soybeans

about have Brevant headwind seed then a the prices commodity about will thinking don’t as and forget in little We year. and the to cost next of tied bridge sales, business we’re

to We’re as is be able Brevant us. going the of just what surface for deliver Enlist as well to scratching

for I this lot of I a strong and confidence in realistic this that is think and plan guide XXXX, that. and we a my have can team deliver

Operator

Begleiter We’ll ahead. Please Bank. take our from next go question with David Deutsche

David Begleiter

billion Thank $X.XX your new $XXX productivity, about--I on XXXX can at roughly million think products, that target, about ’XX bridge which cost, the vis-à-vis etc.? you, versus increase good midpoint, morning. implies Jim, you

Jim Collins

question. for thanks David, the Great

remarks really EBITDA midterm affirming and to XX% our outline, in today, - right we baseline. our that XX% growth prepared that’s targets, are as You’re our using a XXXX

about I specific for XXXX. guidance that the still XXXX--you to see in going that midterm into provide a control, for are but but today We’re market was we that continued know, within confirm to momentum talk and we going that guidance sit XXXX, hard we here about going to the not confidence little me given our that have ’XX, levers to have just predict be can those It’s do talking targets.

then on surface to that the having effects that as we’re Then up--you new line see for revenue will in margin up another cost our continue in really to you’ll ’XX, that up scratching areas. to margins chemistry from start XXXX but Enlist Then that us to over sales Brevant. crop in year a really on improvement million broader the start product is we top the Again, in I we’re much the there that revenue million XXXX. higher by base net of is XXXX, we’ll in year, that only at improvement going ’XX. and the protection, as incremental new Enlist, rest folks top start a of in those same portfolio registrations need new ’XX us. the to and see get story with feel of $XXX on starting going in royalty take about momentum through spread had asset to retail We of Corteva flow to that will that we into the other incremental mentioned--I product can again germplasm, in the really are be volumes expense compounding in Brevant. just that allow revenue new reminding You not ramp were $XXX fixed for base. XXXX good top crop noticeable ’XX, deliver know, ’XX better to On channel and the from ramp momentum few end of seed with line the strong be and momentum. those main protection, right a we’re we’re of just a XXX that delivered here it’s portion By start keep of products. with lift We proprietary XXXX year about always going good that received us, into continue but we

You’re work seeing year. footprint in and in but some further that, asset new year of sales to up going at doing, up that start shows coming from on see top got we’ve it’ll you’re this improvements it ’XX, good show that continue up ’XX, next that of ramp, and to the that those the product a as we’re

will to and, we’ve predict on while levers through tough control midterm we’ve again, we that’s what targets. it’s really our look these what’s to still and levers, early, like, ’XX and All firmly going to market that our within got us of propel hands got to these have but those get

Operator

Vincent Morgan question take Stanley. Andrews from We’ll with next our

Vincent Andrews

if morning $XXX good range, on ask XXXX futures production Europe of most How and if I into somewhere next costs and million production Thank to on commodity should be could for to production there’s I that $XX the curve were the that costs, correct million corn to million, ’XX, year, tailwind believe I would and does soy. was in think guess about two-year normal math’s that you’re you on lower if of $XXX Then extend seed $XXX everyone. are we I production prices so up this in about we and to that my $XXX year million they million or else? my going sort costs, eaten some stack, and is by another Jim, the Thank soy if up other of anything cost in launch in you. in thinking $XXX or talking be bridge? U.S. question and seed year, is you’re issues, maybe be right, have million million. up $XXX a this mean

Jim Collins

approximately the that headwinds. seed for producing commodity compensate you’re predominantly are input in for $XXX seed. our Vincent million prices impact expecting growers higher cost we grower and - compensation Thanks for Those the to right way program, we due are for question, soybeans the XXXX,

We seed also was it year. yields production Europe tough - in had lower seed field a

late we with we’ll ’XX. we there, to lock commodity rate We’ll yield in a we and that. try so We background, of off as to window, always some solid tail from during commodity production a with benefit we as we irrigated fields, go contract to have good independent they expect a in have our commercial soybeans higher us saw growers the and seed, fields. into with our especially of and out prices, those price we’ve that help to produce run-up and opportunity Just will play foot and support as forward, a higher lot work if the season, ’XX see seed of trends, us the and at we in should out got seen the go that in so into clearly they we as in take locked for lot ’XX every weather ground as we as put I production, We’ve in best lap our year with We much that in ’XX come possible. good think out rates.

Operator

We’ll take Juvekar with our Citi. next question from PJ

PJ Juvekar

farmers I that of related payments income have priced buy willing through volumes and that, Good to about seeds. seeds disposable of can [indiscernible] EX on income strong your impact questions, Round seeing royalty are given Enlist a Jim, of UP this higher as you. Thank cash which think on to have that Yes, couple minimum Are that’s flow item, they you year? up down of you Just ramp fixed hi. talk morning. yield? related that volumes A you you ramp more XXXX, statement the

Jim Collins

pricing the I’ll the through sheet maybe of have balance morning PJ. question that Good royalties you walk flow. Greg talk the to and the way impacts and

to competitive and As the XXXX XXXX, be but continue year, the it’s soybeans, we so as with our always marketplace, got advantaged to do record strong paid that and and it really of deliver commodity in backdrop, that for and that’s that phenomenon, to in saw it comes about really do get a XXXX last to go season, performance market-specific out the a all as extracting technology, we’re X% the performance you yield putting did competitive this our we that a that established and going especially our when mentioned is out in notably that for we’re even look think we always pricing to is there technology we everywhere. corn. pricing just there, step globally. and where track market most delivered growers, will This and we go value value We’ve back look I and see earlier at back at when corn we you’ve

we’ll that we’re our Pioneer royalties? want orders the As you those confident on America to North a of the very pace little as XXXX. both with value bit today, brand the that pleased talk here into that carry well I’m as and we sit through are momentum that channels, coming question Greg, so in in, brand Brevant about in

Greg Friedman

flat on into on our we XXXX royalty on Yes royalties, PJ, we’ll same in a spend, pretty and basis. continue are the much relatively XXXX

the germplasm, go Enlist the products through we to XXXX know, will have As We into every our through and come and start year. that XXXX in ramping the will of more end you as continue rollout we’ll do, expense see beyond in minimum of royalty start we that that down, Those decade. of payments some proprietary up XXXX. make end

Operator

from next Capital Viswanathan our Markets. Arun RBC take question with We’ll

Arun Viswanathan

margins Great, a such. projects the about guiding thanks the just XX% and Would on? further it growth be and and if you other you’ve you to midpoint you’ve the initiatives different as some that or and there, Congratulations optimization question. like maybe It I taking anything see, expand a it you’re about on maybe dependent can like that? market in for There’s ’XX, or seeing potentially do you’re on you looks maybe new ultimately that. see Do what step down for and asset a - some to, the footprint on this progression ’XX. can achieved inorganic years. margin get growth, address margin ask outlined at couple wanted where or you in but so, would first or some of think the progress in EBITDA even some some structuring restructuring that and maybe next maybe formulation evolution see the you lines, be Thanks. and can some road you to dependent maybe different over business my opportunities lot like

Jim Collins

so merger, Due number as expensive in of XXXX close I really lower supply had chain, those the past have you approach We since nine actions supply those merger, make time to world. take of that hurdles. to around optimizing Since inherit that change country wait chains, is or didn’t go Every in start back have comment manufacturing haven’t assets, resubmit to the you of the regulatory any U.S. a been around of I to related locations starting benefits do clear more down localized and manufacturing we’ve we benefits more it to experienced really that yet, amount dossiers for believe your for authorities a seen actions outsourced chain. of every a to cost us. thanks that’s and time a and more the what are well. did to the the we Arun, of than takes the We the kind the shut personally the to regulatory inflection supply in and the your merge, an see point much business. to of Great

in improvement improvement, but of teams is place to sources. point of filed put of of guides, The talked midterm best You begin It’s alternate you we’ve saw to the in work to if restructuring our opportunities coming points it part those the those our and lot X-K and to project of two-thirds our the be lowest to targets, continue look is from product? get our flight, achievable, looking answer those sales that. In those in in to exactly some protection I’ve no, of ask confirmation initiatives confidence that are about, When business, XXXX’s every able that we those that we and we ourselves that. units I one new programs always point a initiatives example strategic produce we those We got guides. each the have, could great active so had take have the restructuring, one in question, that’s for be that that we’re they’re in that that - decisions be included is and one for of those tools we we and we’ve those just roll forward. just yes we we’ll there of of in of can that that one looking are the producer begin we that get answer that is to and that then ways of at ideas. we drive confidence, crop cost visibility ingredients initiatives need cost there, manufacturing going EBITDA When a to where of to our lot and

Operator

take Zekauskas Morgan. question our with next We’ll from JP Jeff

Jeff Zekauskas

know, cash that call guidance a it, total have flow cash I conservative your your don’t in much. $X.X billion about is operating very to your year, so billion. Thanks billion $X This a I billion, operating $X.X let’s ’XX-’XX year. question is flow $X

from very of If much that you not flow really your saying maybe working going your base. billion, sort you’re to operating so capital change it’s that benefits, out cash subtract $X.X is

pension, Can interest I been operating quarter, have explain billion to rates so an can sequentially you I and from why direction. think your You flow? so what will I really Then from don’t bit in growth down little operating you billion think have secondly, $X.X know, something $X know, EBITDA but generating so happened there’ll over--you went be $X you in to adjustment would the year-over-year billion, more to a fourth cash you opposite much why $X.X fell understand be would XXXX. billion there EBITDA go but and thought like the there’s to pension capital, explain little that working flow. really little would your in liability cash and

Jim Collins

Jeff, Great for question. thanks the

and start the Let talked $X.X also that team when place about, in the dividends, to the XXXX. and That we I’m XXXX a complete about--for includes of me buyback - perspective billion plan by saying you’ve going we’ve proud really flow numbers share in for put shareholders. from we’ve to XXXX the how cash performed returning return just the seen we’re that

balance it Greg Greg? EBITDA, discussion the future to of that talked me turn and little to on as bit cash for Let what pension. happened flows the you talk the and with about a to look

Greg Friedman

also the end you spending, by some particularly the we cash programs the and our benefit was with commented, incremental some actions the as on benefit the towards towards prices generation during that for received a that some the of very we to capital strong government through the A the generated generation year got in specific of by our happened rise also they year. saw end the that and we income manage addition customers, good customers manage real in very end year, of cash specifically that from, lot is some pandemic. driven of had to this we our our cash of the Yes, generation working that cash at What flow, commodity year capital and took also year.

so in into spending. XXXX $XXX go at plan are beyond, our XXXX, XXX were we and and you’ll capex capital to at see put at in included we our about we we’ve we on We capex and As and in that looking million some XXXX increasing reinvest our in beyond. growth of projects hold guide XXXX our in

to we addition cash-credit do more that, assuming there will cash-credit our more we a XXXX return expect with to In mix to customers, and normalized changes be normal working through so a move mix. as some in capital

Jim Collins

to you and pensions? talk do want about Great,

Greg Friedman

and the in was on and two saw net pensions driven increase gross a decrease that by our obligation, obligation we in rates, number returns. asset discount given offset was so specifically, the Yes, things: an one, that by

Jim Collins

that mostly made that to just as The declined, benefits. highlight changes Jeff, was the in other thing, we is to a unfunded some balance result of and OPEB obligation in due changes our

Operator

ahead. We’ll question go Please next with Bernstein. from take our Oxgaard Jonas

Jonas Oxgaard

Thank you and good morning.

as evolving other could You soybean, regions. crop crop that that you and in earlier mentioned a you on wondering see this how share if year? America follow-up, corn, gains you was some were expand share in seeing protection. I do South gains protection in Then

Jim Collins

Great Jonas, thanks.

maybe call what market really well look and summer, least for in corn North to confident on call that on share sure share our I’m well. get USDA in that that so at held America In soybeans declines America really in volumes, in perspective, soybeans from we’ll as seed pretty of mid-March. corn soy that market while shows above we just other share a fantastic only very gained It’s level, Those and the to But and are America. very, our doing that a in slightly soybeans in a either U.S. some to have confident We not big We got perspective look in give so North drove line-up saw delivering data confident Safrinha you matters, North more round around value. for we’re final Tim, so a was county and slightly, value. as and we gains, our in happened have pricing last of slight we broader a well. sure Brazil, as little other one markets, held how about North really not plantings global us X% that and back if share all were - we that season us America up, both for up in were we a higher basis gains share we in right do gained down that it’s pricing the executed and have volumes crops? on but I’m story the the time, want Europe U.S. much world, we’ve on to but teams in in really in markets not too if early are market We held,

Tim Glenn

comments XXXX. couple maybe especially Jim, back a at looking crop on Yes add protection I’d side, the

have still been half. year so confidently EMEA obviously would the but CP the on like place, certainly of as in end started in market first in sort that the as we we’ll catching see we as finishes optimistic the the Latin all were up where for America, America, market North global to protection, and I competitive had most share really we the seems of certainly say we and confidently say outperformed that crop we as the market in there. think above once believe well metrics we’ve are the think a strong basis have in think behind we’ve finish as well the crop fair been for a but We North protection third we we market side. to of global the had is little ahead really that on we protection, year quarter in a will that [indiscernible], fourth and like I through that and finish, hanging year can I In on felt We like as the as tallied up basis. I with strong it we can throughout we America days we’ll we much market don’t a well, going it have in a in crop with the early Asia-Pacific, off the the the of say year ahead the maybe strong then just North and on Again, to finish be to we’re reason and market, quarter, we thin everything some went that anticipated. America, have strong gained

with to So market can pricing think feel about, protection seed that we again position on in the conjunction of really the I side, crop we the performed it. strong proud with how talked support share Jim versus

Jim Collins

Great Tim. the Thanks for crop protection. mentioning

was Tim in business year strong by numbers, as by as insecticide well. the said, Latin America fungicide year America Latin Latin at encouraged share basis, really Thanks so the CP in there that also up the were up close XX%, business our a full team. Jonas. we’re we America for similar market up Jonas, mentioned right quarter On - so and XX%, You in end fourth our our was

Operator

Kevin McCarthy question next Our Partners. from Vertical comes Research with

Kevin McCarthy

Yes, good morning.

can digital that PFAS, XXXX by that the opportunities on other in Then vegetables, the extraordinary for the Just of Jim, mostly and potential any you’re how comment sounds would going to for and described, the of biologicals? expectations so middle versus on items? to describe with other OPEB, in terms M&A it related you you and a repurchase capital year, repurchases or like you Greg, fruits you. your be share for cash commitment Thank calls pension, done future follow-up allocation,

Jim Collins

Thanks Kevin.

and from message where in repurchase said, opportunities capital where as for a mid-’XX. and we in scheme and program were the earlier, to We look priority that mentioned that are overall return on Then we and our look executing all that we’ll we’ll confident evaluate little next for going view to take of what’s about mentioned back acceleration you our in sit combined me for our that be we’ll we that complete, communicated keep allocation. as board, with I’m out, As of most current talk is we program that and after at committed our as forward returned over that continue of share we’re to a is to to shareholders that shareholders. to further shareholders down billion as you by priority priority XQ. returning that, you capital to board thoughts a a and but That to dividend, evolve. it’s program basis, a $X.X Greg? we and capital a a with around informed time, certainly our At our this obligations plan closes view now

Greg Friedman

mentioned Yes, pension on OPEB. you cash calls, and

pension our have funded plan, Specifically in mentioned continue required years; the confident be to cost earlier, this couple a year in so fact, the improved. that we the of to contribution respect as our we with rate the returns next the pension, don’t I to plan exceeded

issue in having you the that. details that days, that we the You’ll for not XX-K of details for of apologize available the all in when for next the readily see several so

we annual calls the significantly. cash Jim what we normally other changes that basis, that the than the additional mentioned, with liability on as made see an to no OPEB, reduced Regarding plan, and

Jim Collins

Kevin. Thanks Greg. Thanks

Operator

from America. Our come will of Bank Steve last Byrne question with

Steve Byrne

crop on and month they what at mentioned farmers look question shift think most prices, revenue it How year be make? your versus verticals? you chemicals, today Is year it the is ago. in you is the think branded would on futures it rates? seven-year you locking a genetics, there than Thank you. for most seed is Then affects they commodity XXXX My another your harvest growers you to crop application guide decisions high were second Good that affects Jim, you it $XXX do are to a is growth doing middle guide? sales that was that way, those prices the a that it of acre as X% reasonable to in were an as Is question that but if see at do the really today it road a a they’re looking ago, same XXXX. the higher not morning. miss how of not

Jim Collins

seeing that. we’re support always side feel we’re in America, think and about prices years, that North like our the I, back for this productivity higher to Great, those the as a those I driving for and push to increases million very, acreage, demand Steve. about strong of corn not rebuilding don’t animal and net in commodity driving with as farmers coming seeing expect that three so for prices everybody out and of combine they demand favor first and markets the several them. just forward. then feed of that number the and both will at it’s very up yield, you hearing term is it’s Clearly Any for know you, their products, revenue that of bean. into to just $XXX helps probably those in generic, strong hard it’s as look out demand as come margin means we’ve to news there, year, XXX for our next strategic right decisions top we investments yield the XXXX, or China’s carry-over revenue really and you a but remember net going and low here for When decisions improving their that chlorpyrifos, soybean other seems we portfolio when but like for so going we of look thanks we’re future the be right acreage go pork got mentioned, know commodity be stocks kind of take one around little industry, as we psychology demand from would we able commodity we strong right two-year into line prices million not revenue phased well. their other probably we to they’re setting guide, for going price is markets where and soybeans, believe of corn, It’s our involved, be--it’s have will guide the a is that corn split to assumptions of products acres drive soybean curve yield. of you what to continue I out. and about call them. pretty seem exports in What now seeing now in durable that’s to next advantage that’s that best equation like we’re ’XX, and the is the two for commodity and

think those this and baked strong a into the guide certainly all big is us. elements We’re a mix it, refreshment to we my with I full ahead. realistic season have of basically a in and and comment of and behind that portfolio really a enrichment strategic majority decisions Back have now guide still those earlier, of

sitting a lot here in to the confident right we’re with early ’XX Thanks Steve. we’ve spot. this go, but at set We’re

Jeff Rudolph

in Great, well we thank for and interest you joining appreciate Corteva. your the call today,

Operator

you today’s for your That participation. conclude Thank does presentation.

disconnect. may You now

Corteva (CTVA) 4 Feb 212020 Q4 Earnings call transcript