CTVA - Earnings call transcript Q1 2021

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Operator

Good morning and welcome to Corteva’s First Quarter 2021 Earnings Conference Call. Today’s conference is being recorded.

Jeff Rudolph

Good morning and welcome to Corteva’s first quarter 2021 earnings conference call.

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

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

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

During the statements, our current statements for uncertainties. expectations various expectations These make and about future. are based which risks subject the to are or are we call, will forward-looking on assumptions that and

but measures summary reports with release could results update reported These Commission. the We any and risks differ considered related with supplement for find prepared from turn performance It as limited Relations financial due our the remarks supplemental along reconciliation on of do to with On Securities measures statements statement. discussed schedules, can these duty accordance including Investor our of Risk our any to in materially these filed differences and in prepared forward-looking now and deck, a be to website, should this the uncertainties, over financial to intended financial which our Jim. call my and pleasure Our non-GAAP press not is section provide not and earnings not the Exchange of those substitute call. to, is today’s actual you to undertake our call for and GAAP. slide items GAAP between Factors

Jim Collins

impressive execution dynamic strong strategy a to teams with welcome strong execution, focused earnings our X, in with organization I sustained with reflect momentum these in results. of the very and the sales quarter. Jeff participants on of the environment Slide margin COVID the and with increases the it and delivered executed complex fourth the to really delivering as segments. the out a quarter, growth you, That in Thank back on start through the we through and pleased heads XXXX and pandemic. is the closed today. It step and market down was how joining value. call to commitment I both Starting our the first focus overlay displays And year, am how

strong, differentiated for ongoing leadership demand evidenced products. by new and remains our technology Our

launch to to technologies, our expansion Collectively, cost actions continue margin and is looking rapidly We taking drive commitments this focused meaningful helping these forward. productivity while on scale and our today on focus and priorities.

directors our the colleagues, is will background prove Importantly, to stakeholders and our that diverse an strong the Board our creation experience we value team And face deliver and am results our around these catalyst the our on agility and welcomed the already to turn. X safety and quarter. also share prioritizing pandemic during ongoing for of of serve their directors advancement our to priorities. addition commitment on and board strategy, to reinforcing including will The lastly, I intent their new a world the of the resilient. continue every of complement as customers pleased in these delivering remain volatility, at and market They serving ongoing while

So, protection, crop financial company seed both growth a for leading across to which quarter. organic let’s strong at the results sales growth delivered X our whole. the Slide We and is look X% organic for as

for uncertainties on value by backdrop of to XXXX. while we across the we remainder in a we quarter is returned program XXXX cost basis to Dave to is market we on approximately of strong income the will including execution critical XX% dividends. capital inflation, ag growth billion and industries, than majority the allocation, reinforcing half and dynamics the we ag market the capital XXX quarter as margins of and other us points, by buybacks meet global we farm first ag common quarter the The share realized world. our to strong a SG&A complete remain market-driven cost improved quarter. rising working, strengthening The around our drivers XXXX. $X fundamentals, materials the on record performance the This this logistics. demand Shifting with expanded Importantly, Today, track that outlook and in remain offset market-driven sales seeing elevated commodity confidence global XXXX. more headwinds a of of going are prices shareholders and the result commitments on as the critical EBITDA we constructive commodities. a phenomena through million Returning farm more balanced for another key operating China. than be And out targets, fourth macroeconomic proof continues see coupled to encouraged the growth positive also quarter is point operating priority to of to $XXX allocation. faced the we raw incomes on our approach shareholders leverage theme part better is a first X, the for demand in Corteva under creation and On repurchases of cash Slide navigating our strategy that continue levels remain take remaining our for via high to turned important of our and grew our

As X an that we the In for corn government USDA increase year. be in results, are easing highs stocks with this even the acre drawn grower all-time expectations issued ending at indicated U.S. and prospective the survey soybeans income a approximate million March, flattish payments the acres, will result, seeing planting levels which down

estimates our production acres and additional for soybeans. X into were mostly recall, X original coming million million corn bean into you between and As going XXXX,

concerns how as of strong with evolve. good customers, or as position dry conditions of Given market upside in potential weather we expectations any in yields. Commodity products a safrinha Brazil take continue position our we to our lowering in advantage are acres prices to remain on

with see mid to to Brazil, season. early planted area in the We for expansion XXXX low for late increases potential also the single-digit corn planted in XXXX area expect

we trended the further remains market monitor continue recently and volatile any Although exchange for favorably, have fluctuations. rates to

More challenges believe productivity demand seeing markets maximize these we importantly, into least best-in-class growers are strong momentum grain as keep technology continue supply Corteva value. at for and on how ending stocks fundamentals will the backdrop futures based as This further value shape we creation to and turn XXXX provides up, to low. constructive

sales and strength quarter across sales detail diversity the a X the on down against for X% So, capitalizing momentum will let’s provide we our XXXX organic In North comparison. where difficult Slide turn on global of are globe. to some I more the seed and were America,

quarter this conditions, While XXXX demand seed more first a delivery early pattern amidst volumes favorable experienced normalized year. benefited weather from we

seed corn as the negatively expect in On our of to the today. up brand prior We the impacted first due U.S. quarter caught quarter second deliveries volumes as have was year seed mostly Pioneer to increase pricing, in brand mix. to

rising cost market herbicide quarter milestone represent and season. on to-date America demand commodity pricing grew supply Enlist deliveries solid demand competitiveness. seed North are and still in about in as and corn an and market and Crop of Our important sales logistics aggressive material towards improvement to soybean excited the soybean Protection Europe, organic concerns the We sales In corn growth for to Middle East market expect despite the and a XX% about organic the U.S. penetration. and Enlist to pressures spring technologies, Enlist XX% launch remain in including with Africa, reflect goal had on volumes start strong second record to strong new we response of pricing execution an freight seeing early raw our costs. XX% X% XXXX, the sunflower start in drove year, traction

crop of price portfolio which protection. us new Arylex and and high remain herbicides, such Rinskor volume in as and Our drive differentiated enabled to products, demand, in

approvals, product organic and demand and In During serial organic of technologies other Brazil for of real. sustainable seed Brazilian strategy. we currency demand on partially the registration strong key herbicides. their XX% Isoclast we offset needing growth Protection, safrinha active for and sales in actions Pricing prior improvements. for growers impacts year Latin demand execution reflect chemistry innovative solutions as the use price X% XX% our In differentiated also the in the volume quarter, in protect realized price volumes milestone delivered growth and value strong unfavorable sales on volume such Asia-Pacific, significant and the regulatory new major to a to with XX% strong we and on both crops. Crop sales compared Inatreq grew on volumes countries. America, and grew for In and Enlist obtained sale early fungicide UK, Jemvelva insecticides and Univoq including And

of by corn some of insecticides. growth shift the second and Jemvelva on down crop led to were penetration half, was protection volumes seed While sales the Pyraxal further

for our Dave the the provide Now, to Dave he to bolstering the more expectations let are me momentum Corteva ahead. the and have make will our contributions rest looking and will detail of and year. in excited team on our say, look join forward very we first I But results execution

Dave, So, you. over to

Dave Anderson

Thanks, Jim, very much morning’s call. to this and welcome everybody

quarter detailed operating more strong our Let’s for first X to Slide EBITDA of review performance. go a

of testament of were and sales $XXX Brazil, price representing $XX $XXX across we offset million pipeline. over progress in can from million benefits safrinha and EBITDA to on $XXX strong strength Crop America. and timing mentioned. which all of million of commercial volume of to represents improvement. targets we in reflects year deliveries in a regions. important North first see time, products, XXXX, Jim increase momentum penetration You delivered million corn million sales in that volumes portfolio Europe and $XXX and quarter million. that from seed last On our and same and our clear benefits Driving the execution sunflower strong of a of grew operating seasonal growth $XXX the really the It differentiated new to products helped new this record the It’s the our recognized At Protection

for our corn, to up we advantage yield value global extract quarter. technology in Finally, with pricing corn continue for X% the

million a EBITDA input Now, which $XX by quarter. cost than headwind were other productivity which to were more approximately offset freight are costs, the market-driven. and higher $XX in in for actions operating primarily This reflects million costs net positively,

you Let me on some that. give color

markets trade pandemic-related demand global leading start are to As to economies freight experiencing the across the from costs. higher shipping emerge higher a shutdowns, globe

certain ingredients last of same prices compared to and year. active risen intermediates the period have Additionally,

quarter As $XXX and seed in logistics, the freight Europe. headwinds costs material we of to increased cost raw unfavorable approximately million and yields result, a in incurred due higher

are on protection crop and and products. mitigate these delivering certain taking action we Now, through our our possible including productivity passing seed for initiatives inflationary impacts, where to costs

Crop Protection the single-digit For price mid on in first U.S. late our average products. initiated example, in quarter, on increases the we

points a we basis together, in result the the discipline cost the of that encountered. delivered and Taken quarter over despite XXX as margin of we increases execution expansion focused

to now protection highlights. on few go and Slide quarter a crop the for cover Let’s X focused

As organic volume in you can see, Crop increase X% sales by the quarter, a price. XX% driven and X% a increase in in Protection grew

growth our with X% certain mind, Chlorpyrifos as including products, in well including to portfolio, in decision headwind keep this insecticides Now phase-out strategic volume, is the Telone. from a primarily as

primarily our technology for $XXX increase led XX% demand in penetration the up by and Spinosyns X% our XX% quarter same and continued Inatreq, driven for by also year. East Enlist. of And as compared grew to grew technology, Middle were XXXX the These quarter, well global new insecticides and of million Arylex strong Europe, when first to in more the were largely Jemvelva sales than period the compared Fungicides new an last to of led XX% Herbicides product Now, notably as strong differentiated Qalcova. driven in up by quarter. Africa. in demand lastly, Zorvec

America. and for growth driven our price products improvement Favorable phase-out demand drove in was new product including increases an XX% pricing price Operating improved quarter, by Latin execution. XX% for X% in the a mentioned pricing again and Protection in in strategic decision EBITDA Protection and improvement America Crop robust for as this North the by muted quarter, Crop select insecticides, gains to mix price Now, earlier.

as $XX we Now, costs, and million headwinds increased for segment. this freight as such of these cost metals approximately increased well raw used precious again, included as logistics. as experienced material And catalysts

more Taken whole, these on productivity offset the actions. headwinds our than

in wherever delivering controllable same for through at programs, passing are As impressively, proactively forward, products despite this through mentioned, possible. points drove aggressively time, I we challenges and productivity certain cost of segment managing we quarter. factors go mitigating improvement the against margin operating the Very our the costs over EBITDA basis XXX our in of we these

Slide on segment now Let’s the to go XX. seed

driven can deliveries and Brazil seed on and the quarter spring. the partially volumes strong in see in up to X%, an early were of value reflecting gains timing the America, These corn sales were North You organic had these per down extracting for pricing, sunflower for track advantage prior in seed by corn sales start we Europe early technology, we corn very driven were record Overall, by the global U.S. by X% start year. with the record were seasonal yield volumes a quarter. offset maintained where On safrinha the X%, flat, prices our seasonal our where in shifts. up in volumes

also the X%. down quarter, volumes for Soybean flat price were with

on for occur first seeds is EX, volumes soybeans the basis equity Other price Operating reflecting the in of versus large meaningful segment Now These gain higher again second delivered other seed the is freight were the increases by to per keep of a The productivity of impact and of in costs, on market track. in and in improvement on investment, seed Jim included of this our Enlist related. since volumes costs, unfavorable record as and R&D expectations higher is first quarter XX% cost corn. EBITDA and coupled canola cost Canada. quarter. were column. on for ongoing operating the continue improved These sunflower over quarter strong which for partially actions EBITDA execution ramp XXXX And through higher were Europe and globally, the an quarter XXX primarily remeasurement logistics currency European a mind, up the points the improvements the the quarter. and input these with there the headwinds margin impact unfavorable deliveries technology-based oil included majority mentioned, X% for still of manage which teams yields in offset

XXXX talk Slide first to about So, go now our guidance. expectations let’s full XX, XXXX and half updated year

new see backdrop line includes million the certain we from approximately for segments, the our about continued half, phase-out can Protection globally. demand growth products products. Crop you of strong strategic Crop an growth the headwind X% decisions With sales to expect led This Protection by of $XXX for top

gets flat On volumes year. levels. planted seed in commodity the we are the side, in we half prior America seed ultimately to season monitoring be price first this strengthening recent Globally, what about with given North expect

technology continue our will to We for our maintain corn are confident that we in momentum extract globally. value and advantage yield we

anticipated Turning our freight believe to for in realization of Europe, million a yields unfavorable remain raw the we resulting committed to and more seed costs, higher and be and offset execution $XX will of we increasing from net by productivity in half. headwind programs, logistics, than the headwinds materials which

to an the translates this increase increase operating at to together, to point half, margins. X% operating over EBITDA an of billion EBITDA $X.XX for midpoint of XXXX the and Taken billion XXX $X.XX basis approximate

and in $X.X an focused basis operating margin remain than coupled costs the for on to on key XXX are in segments, market higher regions sales the logistics expect EBITDA Reflecting the over expect for organization for in and we a billion our reflects a headwind the midpoint the Turning to where crop of billion are increase $XX On at the as here track and deliver billion, levels offsetting flat we of to XXXX X% between and be year, $X.X savings. guidance. be net inflation post-COVID with to for X% execution, billion strength up raising driving now for over zero key seed the strong cost, we XXXX. pricing to points quarter. freight productivity input revenue demand our are year, improvement continued Standing takeaways This more net back, globally with year anticipation for execution G&A higher $XX.X possible. with to million reported essentially the full are improvement. XX% of and price Specific new of are net what the seeing we products G&A. G&A spend, spending our the and costs, that We technology year, the protection will approximately maintaining we both $XX.X between for impacts and

to delivered driven on remain penetration of track technology year by start for we the bottom both second, double-digit year. the despite products we top line, an First, in And impressive some strong and to deliver advantaged improvement earnings headwinds.

strong to potential. Corteva with observations the of before month. high-value to Leveraging in believe initial capable the we a I since tremendous referred It’s opportunity the a great back provide take Jim, on over delivering early growth what combination have turn and a second leverage the as I significant I which business. with turning operating future executing are to franchise working more assets, backed I have skill forward thoughts. the want been So, are call to impressed sharing joining that a with team set, with to Corteva’s by back will Jim. into last provides Coming you the the culture help Corteva deliver it company, few CFO represents. for to on in look and I I it the And the to strategy. see Those just that,

Jim Collins

a to comments. And we questions, Great. offer me get your let before few Thanks, Dave. final

organization is you see executing. As results, can in our this

expectations. and initiatives We maintaining driving approach against our pipeline, we and the to from of strategy, some track cost our allocation. leading productivity on those remain Enlist capital system, And fundamental including year. ramp-up our industry headwinds proprietary we ahead, our delivering of savings start to as progress innovation on are unplanned off our of advancing and strong to elements our disciplined a the on focused factors, are we market-related look despite the And with

in shareholders. and momentum to will continue considerable our clearly enable dynamics expect plan macro uncertainties, now, to we have execution our continue our market we to And and strengthening. despite value focused The we backdrop mid-term. deliver on is expect us generate through right to the commitments market favorable Now

way, mid-term current And durable technology and this create our strong significant just focused which, targets, have demonstrates which sense the This are value past all accountability of culture solid. and is at the of to legacy the purpose team Our have left with a and aligned XXXX to our commitments at pace of a the events us. year by for traced leadership, that fully anniversary. XXth is foundation the this founding Pioneer celebrated all shareholders of we its earnings beyond. legacy of well finally, shared is brand, the positioned Corteva impact built of be and on back our a in undeniable can for way and we an The

to focus pandemic Our and just our of India. do going our this that teams XXXX intensifies health crisis our remains global including as world ongoing the in challenge, an Corteva the to and the prioritizing rose safety colleagues, customers teams today. proven the uneven that continue has recovery our values, this our parts and to communities as such world, are remain on of critical safety, around

global scale As operations power to Harnessing remain we our stakeholders. we the a as value provides countries, to committed our locally ever the communities in taking XXX in of of which actions citizen, all deliver in for with as operate.

back now the Jeff. me call hand let to So,

Jeff Rudolph

Jim. you, Thank

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

Operator

Bank. ahead. [Operator question Begleiter from Instructions] our now David go will first from take Please Deutsche We

David Begleiter

Good Thank Jim. you. morning

Jim Collins

Good morning Dave.

David Begleiter

$XX on were what productivity, versus like right initially what million remind can now? for costs the year looks you net just headwind and us you a Jim, expecting

Jim Collins

some a we of bit that coming are of first market than demand, be of the will it’s things, the few And those we raw and great for in many pretty kind freight kind And just as commodity the of we I prices. are greater executing a Thanks us, we that of is question. of Yes. those and a our that of lot the are say I there. going And season. The And up trends of things production had transportation get seeing materials, think, loaded seed would of a that it driven here those. of saying started more some and we related. that call the high to the little back-end a some some also some are for creating ready areas and costs and costs. by over would well. of Great, but bit really at little costs recovery and Brazil continue headwinds. I still other globally watch global with affect harvest that COVID tough are, are lot moving we a that related, by I are shortages may key detail to that little But start commercial and some had share are full uneven. There There start quarter little on affecting to Dave kind are second starts related, like areas hand it’s Those for watching year, cost really some kind us, that are seed Dave. are level, at is COVID some to maybe a split. And year. team, always But to quarter, production on

affecting We customers and are also supply. and, Brazil of seeing the affecting routes, world, and like parts our demand logistics flare-ups some cases, in but India in transportation that some are and

we of I that as some and outlook. back is and well, essentially really opportunities costs – covering this So, covering executing we step team driving, with those are the are I our think about

are earlier, said guidance have that with essentially track We our we year you. – gave are we full on we as

want have and But have got to is you approach and we Dave new on have share that? to with here outlook I continue these. this balanced though are more some detail those mentioned, I watch even So, think for And Dave, covered. a there done any headwinds monitor taken do what that we really

Dave Anderson

you. Dave, by meet nice way, good to morning the and Thanks Sure.

couple is think as mean, I of and So, a to kind question. one, the of just a obviously, team. a and And this attention back spent been something subject. a would not item, industry said it’s of Jim are for suspect, team, your little what lot really that has to headline that time seeing just things, add you Corteva, of management on of the Number this focus number a this a leadership I wide bit phenomena you in with we to releases. its

Some of you the things That’s what that guide we I gave for on $XXX think a stand out, are Number track at bit our we year, that. The of annual are little one, the just in said. we beginning on message. of the to track to terms million add that productivity. the Jim key

is talking relative incremental we what really to is what are the that. So, impact about

commodity So, item. the seed costs, and yields that’s biggest

and total, terms talking For And previously, in of be about logistics catalyst the delta we the Sea processes. million $XXX glysophate, – protection would year, freight productivity impact had in are the for by positive protection the supply up that the in we the core we followed freight. for so make whereas These year. net are about precious full and impacted of quarter, estimate for use the about crop terms then in second, $XX and of year. of metals, our about million

this. negative are for all impact what at of Now $XX we as the million a of looking is year result

positive, impact guide that million, you of been previous big million if about previously, again, us. looked have would for our $XXX delta, $XXX we at, would The net. productivity a have that’s So, had

looking net Now million we at negative. are $XX

also now that the And judgments said, we this are reinforce that EBITDA a So, margin EBITDA to Jim step that’s full $XXX the track swing and we about talked then, year. refine improvement. just the that growth year we that on best million in for helps. will to to right taking and what just of have terms for we Hopefully, that back reinforce continue the

David Begleiter

consensus, little the is that And just consensus. of is the lot Great. No, guide below bit very implied first a but last was guide Jim, helpful. half QX thing, a one

So, really QX? issue this again, just versus is QX a timing

Jim Collins

hard Yes. Absolutely, And behind is say first to the last Dave. to Europe, to really always a pace strong I It we year, opening that that Latin strong the second in mark. had and the finish would talked about while season is quarter America a start North America quarter, comments little up X business might pace and had weather, just top call bit few or in around good where America we were X days more how right that move those of If end. you that have will see XQ. they year. pretty we North days much been much North in tick of can last on America right That’s quarter

going same exactly So Dave. North about feel to you I this last of we on America to right, sit called where caught day here it today, all And we up year. in is were have as finish. our shipments America I really good where North

for on the expect at this plan right plan to year on for and be our are full half, we We point.

David Begleiter

much. you Thank very

Operator

will Please take ahead. our go Capital Markets. from from question next BMO Joel now We Jackson

Joel Jackson

Hi, good morning everyone.

Jim Collins

Good morning Joel.

Joel Jackson

Corteva? you seeds. for it’s pull? be their talk you should things about the paying how as like environment have inflationary price now, been more you you positive cost an imagine with pressures Like able granularity that had And the talk couple little continues, more positive led and pressures mitigate you cost for mitigate about can how about dollars the you this Brazilian pressures environment, Obviously, I we are can million prices, in of some and talk it on right Can levers of of a to hundred buckets those glufosinate can inflationary that bit and volume. to commodity and a farmers And and you? can here? for

Jim Collins

Sure, Joel.

Let me mention a few comments.

a want Dave we that I we about have programs talk more those And made really levers at can point in will these costs, on productivity our launched productivity I maybe $XXX of back We the earlier, year. mentioned, that and we the as is And reinforce for to seen little still headwinds. year-over-year flight. have track. one million details the about that. beginning and let of on come you cover that year feel of that additional then Dave we good of some are the

So want Dave, to few about a of those do you talk again?

Dave Anderson

Sure.

because I the categories Joel. major earlier, named – me Let

Let you a about give year me full talk just little numbers am detail. more going I now. to

teams estimated for the quarter. are more second Rajan palladium still a the $XX that, the can it rhodium, modeling seed million. that’s at terms and will Headwinds, now we – in around was $XXX now by supply of million and And year. obviously, first it saw, be affect way, freight corn us a terms little of then about are to think XX. impact about a And full that, products, but – freight, XX about we of about But finally, impact going costs, occurred And that’s on we estimated in that and rhodium, in Rajan, lyphosate where $XX first pricing, increased have now logistics, the looking that’s through, but actually to pass So price. and talk done, seed where for for quarter. and Xx, then That’s spot that’s what deals substituting million. in I that most

previous built looking million as million about what $XX should the quarter what $XXX of just $XXX I should a way, net productivity, now hit previously, our to significantly gave million. it first are guide positive. $XXX number, had compares sum – And previous was – versus at by we million That negatively we some The to mentioned – those forecast. I into

to more or So, cost improved words, guys you add insights? other increases. anything offsetting in Rajan, than cost, Jim those terms of productivity would want in

Jim Collins

other just as close levers that it as forward, we we out, about, I will asked Joel, have. we look

American to going this ground the to second market ahead have seed some the through explore. about us. hemisphere We to first get got in then second here, in the are America. still half setup of the might Latin feel I We have still season America. we But volume. really North a put kind us of of North lot pricing And we in finish half in we that behind are some have We obviously there, opportunities going but have good still that

we keys think of are one expanded to Safrinha but could that the productivity well going underway. acreage I before, see initiatives. big as we some watch acres They then We really last season, found in we as already, expansion. And are are the hearing We year, us for of a that that carefully. are mentioned those little

there, have keep pressing and those forward. are going to got good momentum We we

as said I before, it’s early. So,

taking Thanks, a going to We are as with are this year that unfolds. right updating real now Joel. keep the given, we it balanced we view have and outlook

Operator

Vincent [Operator go take next will ahead. Andrews Morgan Please question now our from from Stanley. Instructions] We

Vincent Andrews

seed, it And gave one-time nature, in what could investment? and Thank million first quarter original higher that guidance morning the gain equity that good start out I on If re-measurement you to in year, guess, revalue the is Was a such million investment. and $XXX you the in the again everyone. EBITDA the it of from XQ? ‘XX is next $XXX at in actually headwind you I if in of don’t ask ‘XX. that equity the it’s bridge

with start could we maybe that? Thank you. So,

Dave Anderson

you. Yes. Good This is Dave. meet to morning Vincent. Nice

a actually So, $XX the million equity R&D quarter. a of we gain investment strategic re-measurement in the technology recognized on about

in scheme minimis things. the de relatively of it’s So,

that’s the think important I for thing you So, understand. to

of Now the just very the would terms a obviously, just the accrual is, some also we think subject we are include thing while farmer or that, that to if the EBITDA of in reversal of and walk at I also when one EBITDA strength other if at total collections does will, you benefit the bridge, good look debt that basically bad a of activity on income. bit a you little the I add look reflects column,

a for as are the flag our profitability I I environment of, again, scheme you take performance of and it’s of included million point overall think out. the good the balanced But year, and the for that company, things. where our quarter. we to in for the it’s $XX now is am glad about we million that of Jim we just bridge that neighborhood to in the outlook, it’s the context small part were when of are that together, our in positive. In EBITDA that. represents is do where In said, and total – relatively if the $XX in those But So, market size of able question. from we overall to walk terms

Jim Collins

basis that at look reinforce you dollars. just not message, gain impact XXX as Vince, that points, And chart, was the from Yes. to margin the

as the dollars. not point chart, look So, are at the numbers, of you those bottom basis

Dave Anderson

amount Yes, all other the will, perspective. that And in it to it’s dollar overall, $XX the hopefully, million hopefully, a EBITDA, very puts good contribution if both that point, Jim. that one mentioned you, to I for that you item,

Vincent Andrews

Thanks guys.

Operator

next P.J. our will ahead. from question from Please now Citi. Juvekar take We go

P.J. Juvekar

pricing Dave. prices the Yes. $X North raise time the of you farmers almost this or welcome, Why best Day, and with I And per farmers molecular your your price mode payments, stacks talked be would corn your seed with buying seed government about Jim, Good at bushel and quarter With traits? flush the seeds. to and Analyst morning, Jim, America. know, germplasm and approaching action in better why down your aren’t would dual in

Jim Collins

– talked the mechanism that if fourth And looking there. and you Yes, question. we place in for pricing that a of led call, we in continue in maintain quarter there to we of number that forward is the still all And back. out a X% lot have for we years. coming And corn expected to stated you had fourth past. looking that that great. recall, P.J., to had the for out about strategies obviously, of a quarter thanks We we And value are on pricing pricing right. our

pricing, were at look so X% and up is just if global we And our up quarter first I corn seed X%. also

is that you mentioning lift out that So, technology there. are

the was year, that in essentially delivering now America, last of to North see. the all that have starting run-up that September priced we big back and that of we are right we of also ahead commodity seeds Now in remember are

Tim, So, out you it’s seeing to are maybe we to we always strategy going going that paid a are a and what really and from customers do corn. what’s pricing mention to competitive technologies that you of want kind market the for in soybean get advantage to around yield our perspective value in bring notably corn price? for most But both there out there. in on says market, the our

Tim Glenn

grain has I execution corn with morning farmers And Jim. pest the and through purchases our very pricing based say, that of necessarily they The that and seed the the And I deal see portfolio. absolutely, advantaged and of been and purchase are vary strong times much. Yes, we course consistent getting of would expectations that through said, thing our their really technology with, good you are their as bad, with doesn’t off switching off corn. they good price for paid good pressure think consistent package based the P.J., And of is they season we don’t purchases.

a market be into the first I value we have So, consistent the that of Pioneer what we got slight had the the We brand of are. that’s did to look that we And looking so of have going Jim all cost the arbitrarily that. be less clearly, are phenomenon conditions XXXX, product where kind little to mile with where at pricing different U.S., offer, around are. we mix and last a our have part in considerations we bit quarter revenue we as there. in are think of said, recognition the that farmer, there. as a the lever, with But And obviously, hands here little factors clearly a to impacted

a soybeans on touch little to bit. Just

are EX transition of in soybeans, adopted. are rapidly is, for the today we very with transition marketplace. we earlier, of got situation where we said marketplace have But are now well U.S. As widely in the in we a right available the acceptance EX, accepted in happy and where we in period technology that a the market and of being positioned we very terms are Enlist Enlist in

soybeans and significant corn to that with, in advance And of in we penetration farmers prices that thing in have gaining the around is to those there that there [indiscernible] both that were marketplace. for ensure transition set technologies an say this growers’ would kind [indiscernible] and is Clearly, had commodity run-up quickly. other adoption. of I is we when released battle on We and around of dealt the And year, a attention rapid is attempt there had prices.

of I think first quarter So we as when clearly, into we that period run-up from the where well. the in in But were set sat point in this here time dramatic prices fairly we had and quarter released prices. fourth terms

market we’re we’re factor going aggressively as of those it. our we’re made value and And think our foundation re-pricing that is and of So cost the our pricing basis, in considerations, clearly, conditions, second you some to looking where global situation on that a year, currently points half at more product the in products. around the I of at

commodity pricing. I little of been, expectations, our it’s with think, from a but but prices, we when the obviously, that’s – different had near-term it’s So confusing release run-up because consistent we’ve in

Jim Collins

Thanks, America. pricing, Tim. quarter, But on up were in quarter, pricing if And the at Latin X%. I XX%. look were crop was North protection you we America focused And up P.J., know the also you in

now thinking said, continue installed So the keep focus and as organization, going methodology in that I there. that to to we’ve the we’re and

Operator

Silke JPMorgan. now take will go from Kueck We next question Please from Instructions] [Operator our ahead.

Jim Collins

morning. Good

Operator

is off. your mute function turned Please ensure

Silke Kueck

Hi. Good morning.

Sorry about that.

Jim Collins

okay. It’s

Silke Kueck

morning. to for I what the outlook year? – do you two those of market have in whether conservative. was the you have the the with behind flat the competition talk that like planting are Hi. first Europe behind and relatively half can I that think whether about seeing? is that Does seed the are And estimates was correct? Good questions. Is wondering What you

might higher by Some million that, estimates, versus of higher acres retailers ag initial have those should be acres soybean and like acres be X the probably million acres. already another thought corn X

second else’s function is negative your like technologies question can you Brevant germplasm, alluded my Thank the example to. that? a your if selling Pioneer somebody rather wondering And for a comment on was it negative you. Enlist mix you of is more of the mix for I seed that versus or own? in offered seeds on about So you’re Is being a than function

Jim Collins

great. Yes,

and seeing you’re Europe. what can by to Latin overall, see quarter, off was early in finish that half, the you first on strong to and America led So an start start the

some of, there is overall in we’re in happening really, supply and what’s corn. strong, on – we’re right, But a we’re corn. be America going you’re Europe return in to half where in North that in basis, on mostly soybeans constraints acres acres going down flattish put kind we seeing As grow to first

So on balance, flat. it’s about

Now, acres we’re watching our carefully. a kind and that. the that to capitalize real USDA feel really we of acre, that like some to ourselves very, And approach come we’re in route-to-market positioned mentioned on see very that market, volumes, we now on right well do outlook, the back good and spot, connection put you’ve if with this we’ve tight into

first the XQ. different products. the In ahead really it’s of is just in brand heavy of terms of and price In flow-through Pioneer the the quarter, us flow-through of mix,

some flowing So first quarter, of in as Latin you’re that brands and through. are kind both the of European of the through, to America flow that other seeing route well as effect channel other market,

know I Tim, else have So if, don’t to Dave, add? else anything you or anything

Tim Glenn

with customers. made, Jim mean think I clearly, the around acres, working I just a point question closely we’re

favorable right We’re planting in a, now. fairly a I’d environment say,

door area. more You plant corn corn. corn farmers for look the to roughly that at above average opens planet XX week, for the this progress percentage points the And X-year and report we’re

end it’s to the individual and make are on going an the field-by-field at that Now basis. farmers decision, a of day,

planted. so more think your And total it’s I soybean being acres to fair say point around and corn

be is was somewhere I corn we soybeans opportunity this our crop, million little for planning the to make decision. going But million on with agree as more to progress combined creates consistent on window a places. It’s And in is the such in corn XXX the bit what it and it’s call corn probably and much make clearly to for great planted go hard because XXX to an guide then an more it farmers with think the specifically would how or original that acres year, soybeans. individual to open.

with provide to there we’re sure customers to closely working make needed we’re products. So the our

Jim Collins

Right.

have. years it’s good we’re XXXX seeing that have is can I’d a just start don’t we about talked And believe backdrop overall, that acre just It’s as this set And Thanks. kind and So an grain just up thing. demand from market of there strong couple of we’re here We the say right acres out excited this constraints a opportunities. we you we problem think to for those accruing mentioned globally. pretty XXXX, to Tim really wise. and supply about

Operator

our will Please Instructions] question ahead. next Partners. take [Operator Kevin McCarthy from now go Research We from Vertical

Jim Collins

Hi, Kevin.

Unidentified Analyst

about completion of nearing the is first This Kevin. thoughts a on excess the of that half the in deployment, us Hi. now after regarding Dave, of year I Corey repurchase welcome. would the you share on you you’re or Can end put for Question completing capital ahead which, deployment about believe, M&A program? capital this of through update program, repurchases schedule. additional

Dave Anderson

$XXX our item we’re first of Sure. the good buyback approximately capital a outstanding point. majority think about And us probably when complete really through million obviously a quarters the Well, Jim the certainly it’s say, for know. of the Corey, to the we deployment, in year. to share That’s as you three foundational mentioned track the on quarter, returned through half, as first you shareholders.

company does the as value it dividend deliver the determined. of the to through of given point to timing the terms So as be share the back and also but buyback company, well only performance not to our of in there be up is will that the sort of But generation cash continue good to the opportunity ongoing shareholders, operational really open excellence program.

about be year. to talking going that We’re later in more the

we We’re going first complete half. visibility have as more to the

the for more working full the internally, for around will – too transparency around outlook of have other components the us We year. capital, for key some

you that talking helps. time. update very you about But the you’re the how Hopefully, we’re question and thinking So about terms to foundational a thinking good of employment. about things company, in we’re at because that come capital back and will it’s we are

Jim Collins

Corey. Thanks,

Dave Anderson

Corey. Thanks,

Operator

Byrne Steve We will now ahead. America. Please take our go next from question from Bank of

Steve Byrne

Yes.

in ag in seed seen has might meaningful share whether outlook the seeds, to last out of impacts have have last to months, sales seed bit it quarter. too these effectively the and some your your comment fall. orders has I some on find think priced benefiting So delayed. about outlook And that that I in the do next market little of affected them like whether led But XXXX. and in have either most were retailer the rally may issues have that chemical that more you been change? heard how not late, you than for we’ve can deliveries locked few few just is wanted crop logistical second months crop probably any you the bit a order the rallied that really highlighted really, And orders also, could a price/mix the little given of and in prevented or in seed from Where your sounds or were you gains? an the contacts any corn

Jim Collins

Clearly, And control, corn Steve, herbicide season a showing backdrop, really, where prices, leading Enlist. in in, And in here market Thanks, market, there we’re in soybean levels, we Protection in that strong to is commodity also with come are farm strong net good an question. And the in but make making are, growers into no charge it’s program. a maybe provides opportunities not they make investment really Yes. for to but high-performance doubt seed, income it’s grower their the for we’re this strong a Crop XXXX, much to feeling the that is continue purchase whether investment that really crop, really up. that herbicide. as investments just as the we

organically was year. in price growth-wise revenue in quarter business XX% America over volume first up North herbicides last Our the for

in around So that we’re you momentum. places feeling other And the that see really can world.

start factors be backdrop up we Tim opportunity will our lineup those crop give the through So for strategy And consider year. as market that of a think protection strong all pricing next to we’re said, XXXX, of to as for going overall shape products. as there we to, with us this

other not are kind take. position that just And into in to There really think parts real It’s weather-related that a we’ve our and There through the pressure. one going that’s and issue we that related small perspective, of in past the we’ve going that issues. And are some terms by this had just folks In large, been only supply ‘XX that supplies feeling ourselves it’s had to have constraints I it been globally, production a were to way felt thing. we in now, Europe. of similar of the industry Europe year. Corteva worked it’s and put some

on So for moment. off – pricing anyway, finishing a

answer over pretty markets look that, to is forward. think what going record going to And that and we’ve the Steve. start track years. done drive you we’re that improve, some I as we’ve the got tough we’ve to just markets. track our at to continue accomplished best back Thanks, accomplished record in to And –

Operator

We question go Markets. from from Viswanathan will Please Capital our take ahead. next Arun RBC now

Arun Viswanathan

the I Thanks just side. Hi. to strong on to for start a go question. here. I Congrats taking my guess, wanted cost

increased, costs at You a guys noted, unveiled now looking are productivity million headwind. year. And you as some strong programs last that the or have you $XX

year. costs temp You also last had some

come a back those there costs maybe potentially and of – much some make of forward? more how describe be walk EBITDA say, increase moving year just you the on Is could this potential productivity? those potential structural to So low or some so, to target of that the to areas would you if Thanks. And several XX what years? maybe the over opportunities next, margin

Jim Collins

and processes year driving year Clearly, of a out. discipline Arun. set built and we in a around Thanks, have productivity of kind

A focus we areas we’ve so this manufacturing to right, have our cost But of you’re of about continue of those organization. in business. million manufacturing talked lot other of and year in $XXX will productivity aimed productivity And programs. the

costs that our areas business down we’re efficient the cost trended this pandemic expect come the the nicely has little just being areas whole And a of investments making. year. have COVID, we we where the of One with that would related and to to where have really back that we’re this fact and been of

more and to normal, we that about a talked investments travel XXXX focused I’m people committed, stance start Dave and of return Our a of, I start of more have and in as programs. this, And productivity will a more from to about early, stance, little on and a we to we’re kind work little a focus little bit very maybe to a maintain trying America, North stance. terms it’s in tight about But pretty lot and there. think but finding additional much kind bit

creep back So we in. costs don’t let those

share? you would else what Dave, So

Dave Anderson

in nominal our also, strength surprising just to good a that’s the as at terms and behind the we’re key that basis expense that as look inflation first delivering, we question really we’re terms And productivity, obviously, a thing on of that leadership have. not that flow it’s is in we would in we’ve of too, I restructuring. lot delivering. periods. and future because of addition at topic to team, say, know, what net mentioned a of look SG&A performance for also the of particularly I both, And through invested positive is, you The the a it’s some going in benefit one we quarter,

active, a things got that – just that forward. that said, in the But are will, going this benefit static Jim us are we’ve process, very, this a as very to are dynamic isn’t if isn’t going process. So some also you stream,

of continue And to look at and part replenish big of we projects. terms We’re to going do forward portfolio programs how in our delivering of this plan. to continue a that’s

Jim Collins

By And end of the on year, our forward, second is XXXX half around trajectory question before, going to continue the to growth margin laid out. have talked continue EBITDA EBITDA we XXX good climb. EBITDA you’ll we’ve drive those EBITDA of will targets really installment points as we see improvement we’re on, the a there. basis about those margins margin. first And is added that to your And the midterm towards that to

Operator

take question now Sachs. Please Adam our from will We Goldman final from ahead. go Samuelson

Adam Samuelson

thanks. Yes, Hi. morning everyone. Good

Jim Collins

Adam. HI,

Adam Samuelson

kind thinking maybe with that. working just Dave the reflections Corteva manages capital and on very And a your the Maybe seasonality, question way Hi. about capital and the for balance the from anything cash significant career liability early do Anderson associated then significant structure, the opportunities just legacy to thoughts managing successful liabilities, of to given that that very at on Honeywell, with perspective? burden your pension – any a and prior relieve maybe

Dave Anderson

cash Again, good in outlook, from of question. backdrop cumulative we’ve multiyear the Yes. guidance given our strength terms flow really cash the XXXX. performance against of It’s that our it’s through of and operating that operations a

really provide as that does of flexibility, the forward. in foundation, us earlier, foundation us going I that So provides the mentioned terms

really I it’s think really, a about. and given one have timely And talked question I Jim that. it’s that

finance working and but with others with do later sharing coming organization, team, the deeper some more the investors. will We in only thoughts not with obviously, in the also the opportunity the analysis, year, have, to board, probably thoughts back sharing

shareholders, is just So cash I we execute much flow only not year. really for the we’re that’s deliver, And our through say very would operationally, would on to through dividend I the on thing minds. obviously, And right we I And now, continuing would margin us our that that continue of something a also performance, say expansion forward the operating right course focused a that you experience into is of that’s on then do and career. ongoing our but just the And something in to share optionality. deliver I our you reward updates fair as the and that. look program. had It’s to your forward. buyback pension amount put have gives that go giving plus category. I over you’re I And say would think

one of there. the have question. options for it’s with I’ll around in the working team we So that of that terms be the things to Thanks

Jim Collins

Adam. Thanks, Yes.

Jim Collins

all appreciate Excellent. we today great Corteva. in Well, call really for day. interest you and the a Have joining thank your

Operator

you This concludes your today’s participation. call. for Thank

disconnect. now may You

Corteva (CTVA) 5 May 212021 Q1 Earnings call transcript