CTVA - Earnings call transcript Q4 2021

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Operator

Good day and welcome to the Corteva Fourth Quarter 2021 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jeff Rudolph, Vice President of Investor Relations. Please go ahead, sir.

Jeff Rudolph

[Technical Difficulty] expectations and assumptions that are subject to various risks and uncertainties.

in materially uncertainties, these to, with including on call could these due those the results section this and Factors risks but and SEC. actual differ reports statements from to discussed of Our our Risk filed the not limited We not duty any forward-looking to do update any statement. undertake today's presentation, in references note be making to certain Please we'll non-GAAP financial measures. schedules on summary measures can earnings Investor and related our slide website. be press financial supplemental available in non-GAAP along found the our of our Reconciliations Relations deck with release now my Chuck. is pleasure It call to over turn to the

Chuck Magro

you Thanks, webcast Jeff. Good for in drove morning, joining executed Corteva demand. on everyone, XXXX and and call customer ag fundamentals thank strong the well as us today.

meaningful impressive gains. and This organic margin cash flow. For delivered out the volume performance free and expansion price double-digit the full year, growth, company improved included the Latin on double-digit XX% delivered team America, of growth where earnings sales and

our addition, EX advance In in where XX% more billion product reached new U.S. crop continue the reached in penetration sales protection Enlist over increase year. over prior soybeans we in than of an and $X.X the to technology total, pipeline, XX% market

than levels. that inflation. outpaced Again, and income very the demand agricultural shortages share Our raw time, without prices This cost industries grain experienced At manifested returned to we that environment. in for most this more dividends environment including impacted executed crop teams and a and supply, challenges, as chain billion material global its easily and capital year labor and well via oilseeds was repurchases deployment, shareholders disruptions, year. significant the not supply for industry $X.X our same past certainly dynamic operating supporting farmer and the

drive growers solid carry outlook. the and from against Corteva. position where look We ag deliver a from market will with is and will demand disruptions technologies to strength supply to and our to persist. customer challenges execution backdrop best-in-class enter value fundamentals chain and a forward This for Turning of overlaid XXXX inflation

X% billion expect and we the billion result, $X.X year. growth sales in to between a $X As deliver operating EBITDA for and

are Our priorities straightforward. for XXXX

on pace, value We we and achieve and continuing plan expansion. can this of at a delivering created have reduction on to these we to including performance what and is balanced deliver execute more with margin of a that faster begun aligned customers focus and of growth I our capturing new value work. look the cost potential, globally, look expected products reviews This global as at the to are going fresh a product control our unlock sharing progress both forward order differentiated to penetration ways to on and for initiatives. our our price includes we footprint. portfolio In products full various operational

I've with As cash many and I flow very potential. you Corteva's of sheet am shared already, balance pleased with

We have capital the on growth to focus a we'll returning allocation and strategy on and opportunities disciplined strength high-margin to capital financial funding shareholders. execute

the which levels we to This from elevated and for seeing the market outlook where slide detail will record demand market XXXX. and expected to agricultural to shutdowns. at continue we prices assumptions drive Similar I five as in XXXX, bit will solid oilseeds to a today. on of around commodity COVID-related some recover go more grains let's provide the globe economies our demand the keep Now for XXXX, remained are is in believe

and be to to fuels vital diesel price demand supply to in we balance support constructive as levels. Over demand. see support bio-based new as Production continuing the XXXX will likely possible commodity such renewable healthy medium long-term, fundamentals agricultural will

area for corn both acres to and million For soybeans. is expected the XX US, planted be

as single-digits XX% labor Current in remain both remain is to seed this assumption high and something mid like soybean yields XXXX. Enlist, fertilizer reflects relative anticipate be systems be for healthy and in Planted market an farmer weather best-in-class decisions. operations. Growers total provides acres profit to at in market. protection Given and to of that and cost given current position for we to growers maximize inclined balance input support Latin growers it continues to We the and in strong Brazil the into material America do to portfolio look risks attractive market and where some increasing believe levels XXXX. prices, production even income in of customers has and our relationships. least demand we expected and conditions This we on expect into soybeans prices rotate given season are lastly inflation. will increase crop further very to economics across their continue said shift focused And beans. US remain corn monitor maximize our customer sheets and for XXXX growth technology around commodity That Corteva with for XXXX-XXXX the and prioritize increase to to a industry-wide raw area grower in will and some planting grow Brazil potential and costs will on return technology drive may higher remains continue from penetration to for

keep our this pace However, for confident provide details inflation will to execution with than And and me XXXX pricing full year. offset on for more XXXX. our year are over our it turn we and Dave performance guidance to that that global let

Dave Anderson

welcome Thanks, and call. the Chuck to everyone

Compared with We in the increase We led up with gains the same than from on price America. in the fourth quarter double-digit Let's XX% an X% year Latin Global period start pricing million strategy EBITDA and last was more slide pricing of full by continued operating X% focus the which gains in segments. organic fourth the our sales both X, quarter, on to seed quarter of increased another for summary provides year by delivered financial prior growth. value $XXX solid continued by year. the year. in with ended the for quarter

growth supply the demand Latin by X% focused and the saw full X% for basis almost than For inflation. headwinds led XXXX, Crop strong of improvement year improved Full sales pricing an continued coupled with Seed were EBITDA This cost cost million increase points $X.XX in billion. US team, operating globally which continued on Pricing over XXX corn was the Protection in for by was challenging which and of dynamics $XX.X offset planted execution and sales products, also up demand year $XXX managing while XXXX. was margin up corn driving strong more organic up result execution new more in particularly year-over-year. XX% to increased than America. of billion productivity improvement. a is chain of area through

Let's and million seed price Enlist which of driven slide up see with we sales both US corn about Seed execution share organic XX% quarter we input the sunflower grew sales had of and market soybeans X% for volumes new for in fourth the soybean select as region. from and in the sales delivered were volume We strong can X XX% from America penetration Europe, XXXX. finished such price increases and $XX market well to EX up us on for planted top XX% as low-margin where to price go strong America, corn growth and and led line results Middle industry-wide including impact year. value North X% Protection high soybeans year of to fungicide, the X% sales represented of the organic continued North now prices In across Execution approximate for East gains. pressure region. area organic enabled price rising America compared growth increased the Protection in you Crop benefited every on demand products X% an X% with offset products up to constraints. costs. region the in in rising and to by drive herbicides on organic volume. products new Protection In part and with growth America finished gains fungicides In our record compared insecticides. and Zorvec were market crop costs in Isoclast continued supply due sales of Crop technologies double-digit herbicide. including gain flat sales demand price Both prior to and year In X% new for year. driven volumes Jemvelva strong response while while year-over-year in differentiated Crop differentiated safrinha, to XX% as the the were which increased the and phaseout driven growth year. in Protection North in competitive soybean delivered for strategy, Arylex strong the remains price by of herbicide volume was Enlist and down Crop Brazil to market. demand Seed input the price Latin coupled prior on protection volumes gains XX% by price share Africa,

Asia Pacific down the organic than primarily volumes demand impacts new the of of gains. and growth Protection Southeast gains in led Asia. differentiated both X% and largely Seed COVID-related XXXX. up by including were Pyraxalt herbicide in for due competitive compared price volume more Crop Rinskor prior year, had XX% organic to and of with were which dynamics was both region X% continued products, sales versus to and demand volume insecticide,

guidance. a our to now XXXX X Let's slide for move summary of

of improvement effective productivity over XX further in Operating the operating at rate the best-in-class $X.XX $X.XX the XX% EPS billion midpoint in to midpoint leading range expected to $XX sales also by increase improvement $X be actions but pricing share more to billion, year and lower driven net reflects customer the of to are is for offsetting midpoint, basis count, an over and expect range EBITDA point inflation range to at is billion, representing expected demand share, compared to $X.X an at a higher XXXX. improve be We pricing which XX% prior to also and new to assumption be expected tax growth cost the at approximate our a to $XX.X of average the midpoint. year. Margins technology. XXXX the than strong prior with products per X% in billion of

Lastly, EBITDA of cash range XXXX. it and cash we receivables At $X.X billion the in an approximately of replenishment expect midpoint, inventory conversion the more billion, be normalized flow free of assumptions to in to $X.X free to XX%. translates flow which reflects to

phasing expect the Let X% with about half. and operating in of strong half XXXX. recorded first second EBITDA XX% mid-single-digit first On revenue, growth, revenue would for revenue versus half imply for the to the the talk growth now second me growth half we which

expecting the in in pace through than flow driven our the of Crop given and seasonal the we're However, cost pace the the seed which largely XXXX, early slower we half. prices, where inflation headwinds in associated costs, second XXXX first was of of XXXX year. in are weighted is will with cost the versus XX% of approximately inflation today, more by timing of to estimated commodity higher Protection half This

As the is XX% to we mid-single-digit result, full EBITDA in a prior EBITDA year the operating guide growth expect compared first for our year, whereas half growth for operating at midpoint.

where in offset seeds will on go to now further guidance. Let's higher the in key prior from included EBITDA X, more we'll the than detail impact provide pricing Consistent drivers the with commodity some costs. slide views

majority offsetting revenue in drive of full the half based our in we in in largely approximately of Enlist the currency. of penetration Brazil. this new seed America our including price the costs million Latin the from recognized the $XXX expect demand remained and be the strong lift segment. Partially local best-in-class technology, Crop again, is creation year, are increases and to EX US digits for And to will on the of in seed expect mid-single and a cost demand products, volume drive demonstrated million headwind additional For first Protection, value commodity year. global of in $XXX planted soybeans expected we is continued expected area year. of an for products Increased In global this for

through least the of portfolio half recognized $XXX expect of as mitigate million first dynamics to we increase Price implemented in the mid-single-digit majority first the these are supply end majority January. approximately we prior year. will our to cost addition, complex increases half inflation chain cost will cost continue help cost across be and lap Protection including the the year. the the Crop seed, at was in of US price expected to Similar another In costs headwinds of as a lower that early in basis these headwinds the be

debt relates accruals also it million we're As $XXX bad from SG&A, support costs in compared to investments XXXX. expecting higher normalized to growth more to and

to continue improvement. will productivity to to addition In we use pricing, initiatives drive margin

we For on with dollar, from approximately $XXX And to a XXXX, of US other expect translation costs. currencies, savings relative hedging a a across year-over-year stronger basis, we and impact key million segments. program productivity headwind $XXX both million estimate

our to continue to pricing addition to In we'll mitigate implemented this possible where currency local hedging pursue impact. programs,

to slide be commitments, with today's flow to XX. impressive and operating what view call. very I now XXXX takeaways with including want to while dynamic from we and growth Turning very, cash delivered environment. our the leave Obviously margin we navigating you a pleased key

As we enter position a Chuck mentioned, from strength. of XXXX

expect growth We for a execution We a expansion solid which productivity, supported fundamentals. of ag including turn remain the pricing margin customer the of in and drive confident demand year. year our will attractive strong by global backdrop across disciplined in

clear while in improved XXXX, by $X plan of track capital returning $X.X growth expect shareholders and our to as this end that, the further to back XXXX record deployment Our differentiates we're improved continuing is hand going Corteva dividends positioned to of which This deliver of better status I'm to billion come. on a to billion us our balance is bolstered $X.X build provides and cash return XX% the than value indication sheet which And shareholders. believe via than cash of to our deliver XXXX. to US at flexibility we call with pension our to And returned to to XXXX. more and repurchases. we allows Combined, funded also commitment is years billion the This fund cash well in of value in opportunities. with Jeff. over strategy of strong, top the us our share to In it's to

Jeff Rudolph

Thanks, Dave.

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

Operator

first We [Operator Jackson ask now Capital Joel please Markets. Instructions] yourself BMO at take We you question Instructions] you. will to one our Thank that limit question. [Operator from

Your line is open. Go ahead.

Joel Jackson

the currency? able target Can Hi. that have currency outlook placeholder. buckets you less leaseholder midpoint are guiding was Chuck, with know than stakeholder what I the about Good Dave. that you morning, billion you all about $X.XX parts, -- $XX a now you're million the to talked all for about a thought And three moving And the also what to to what you is delta? can elaborate maybe that $XX versus maybe bit that, And little months it million now talk XXXX of may on was the most really you is ago? said.

Chuck Magro

Yes. Joel. morning, Good

The So, what's yes, right. look the difference short be you're it we -- the answer at is way currency. would would absolutely new

you in we're Let I'll me turn the Dave to then market guidance backdrop currency of situation. though the what to seeing down and drill over the the give and on it

we board And for very is their expect strong order of We a really across now first And markets saw prices XXXX. balance in XXXX higher So, all, statements. right in the the strong full. in strong our was year ag demand very ag. book behavior in and income are products our sheets farmers' similar

crop supply or is And those that I of So it's succeed about execution. in $X.X to areas. out time think we of still all have the forget is the previous yet billion of ground been laid not of it guidance the and Don't is in both the reflects though, EBITDA, provided. really United in -- growth. think that that in It this billion set the Corteva around up seeing, with market line the today The so price year. billion appropriately new in market that of assumption $X our currency of Europe some the which we that does To well cost midpoint have But as namely $X.X double-digit targets and is a that is headwinds. your inflation. States it around the we're uncertainties as question midpoint to

our up is The really chain the while guidance to same think high the here cost quarter. the I question about what good early the right things, range we we're Corteva drill so over we'll downside But can execution resiliency, now. is in taking to is the of And but the Now, our cost, our at in this best And this now it our every terms pretty and -- as thinking. range really risk on would chain down reach team -- season as narrow off that would is And reinforcing expect time thinking to happening today. feeling price supply we best and it is current like usual here. in focused both this currency mitigation, that go through we'll table, as supply on around our up reflect driving quarters I'll specific I over we is turn Dave time.

Dave Anderson

exactly very just quickly. Joel right. And you're Sure.

when is said terms is currency here. planning of the and As lens the look Chuck the in through you really really -- it our our fee thinking

a Just things on of couple currency.

of inputs assumptions this use point in for these First at third-party are obviously this. We time. our all, best

back the have just that that really it When assumption. in also example, some of provide We hedging just take We it's or were know had that translation and just higher you do limited the looking at perspective that which math will million that time. most in just up call cash positions. the up Instead hedged come a this, much we we October, positions. of say as and than at simple be being also are XX% included you up XXXX a comparative, or will in at the did on be you minute you it translation year but pretty provided but $XXX for And what focused then of -- does that hedged range little adjusted we guidance And looked bit and the if is to at look the you with to positions difference. cash the we if is for the revenue, we those you'd into provided variance hedging reinforcement equivalency. do you represent if currency provided And around mid-term of compared that also you'd guide and is that.

the you'd And -- being up $XX.X at of XX% terms of EBITDA, than $X rather of at point terms in in you'd for instead be us put up guide, to XX% midpoint to around the translate around would which X%, basis almost XX%, guide would billion to of be double billion. midpoint XXX% up margin roughly our the even around which improvement You'd up of be XXX%.

again, simple the math just you're hopefully So, provides but address to point it insights making. help

Joel Jackson

Thank you.

Operator

question Vincent our We'll with from next Stanley. Morgan move Andrews to

is line Your go open, please ahead.

Vincent Andrews

ways a Good speak months out seed you., which versus price for go inflation laid you to you're of $XXX this inflation now are I significant what of in increases than couple amount you in commodity about in to first XXXX XXXX. ago gross could greater you clearly is anticipating Thank bit higher? I And million morning little than far XXXX guess XXXX. a the cost is everyone. And three a Maybe the incremental more think about estimated

in versus for? you're Enlist geography this looking uptick acres I or related And balance maybe to bridge with that. it's soybeans the penetration could us to if the your how that much coming corn if versus XX% any particular associated of can So, help you just that and inflation also you understand portfolio of just seed in is wonder if

Dave Anderson

don't I take as color is take -- a little Why you this then well? bit And that. of add could first at I maybe Rajan, shot Dave. Why Sure. don't the

Rajan Gajaria

Dave. Absolutely,

Dave Anderson

Yes.

it's again, It's of million now We're would terms $XXX $XXX primarily you So reference $XXX primarily -- some but it $XXX components increase. commodity $XXX was call you significantly inflation coming EU. of when think where million at in There impact, others, as the let's from. the are really seed it's million so in that's three range, million cost million. to in the suspect October in our

those is additional commodity Rajan, three. and essentially some distributed -- this any We commentary warehouse refrain, costs? across from common also a headwind freight evenly and have really then the yield. other And on headwind is finally and

Rajan Gajaria

just that from build answer a I are to Vincent So be your on and crop gone to question. that think. would Europe The talking about in we commodity specific standpoint

into ability mitigate. advanced at cost to what do we with pricing very The costs is the are our said, perspective, in the there impact actions the has our increasing from we expected actions some point margins. canola America are we changed. like And Canada. across XXXX. has especially in. fact, quarter America. versus last but have the tough time good in that's time where seed we we saw a feel continue a all had numbers of board. nothing we In freight Brazil We've and standpoint, planned goes planned productivity only drive analytics the cost should And in versus to From and up North were third We've try yield and North this increases warehousing business, the and had But the but the have et with the so industry the time last margin got thing here we in yield got the cetera had a the coming in this not baked we see increases actions this. expand big to really to can also what said That expansion whole that about increases

will that we think I XXXX. in reinforce

Chuck Magro

Yes.

Just broadly for company a I Vincent. of couple speaking, guess the comments

seeing are strong on press our for board exactly have of just supply think court chain for At the world. cost the as will can. situation. across a that mitigating as very I same full chain the job XXXX. Any around supply really like of And the products same the we've So operator opening challenges Corteva, done are the nice much real. remarks, doing in a time, mentioned we've global we my We demand as got we

of the the you do guided a to and we out I pricing and look how a set do that higher cost offsetting we've important there's able that. to and at from what to that is margin. So industries really been perspective is think if lot then XXXX XXXX, stage. I there And not the that were you for driving we've increasing know pricing able at look are

think think certainly I perspective, attractive cover now a pricing And the growers the technology. a very in I and execution And that think things to the need the that, from industry of we've is move grow products, we market. costs need about prices agricultural one good right we're I demonstrated can margins. they

Operator

next take McCarthy question We'll our Kevin Research from Partners. Vertical of

Kevin McCarthy

morning. I your look XX% in running pricing you of Good in flowing effective with through? chemical insecticides that, that negative for and very for a crop quarter protection outlook the to deck, at XX And talk protection the Slide I chemicals? if versus How herbicides Can price mid-single-digit about on different, is X. think seems you had increase insecticides. crop proposed related X% pricing herbicides price/mix October the

layering So could in? to and that perhaps some incremental you're that and you pricing glyphosate swing us, speak such unpack the as for factors of the there

Chuck Magro

Hi, Kevin. Sure.

our set I'll portfolio the and There it just should right. portfolio. of puts takes. are our that are new differences There differentiated commodity depends you hopefully obviously But product about a kind there. of few these, and context. we're And walk have you're Tim through or So if talking some and

Tim Glenn

side, you about Kevin, when right. Protection Crop you're Yes. think the

of -- done. Protection price kind October. And in been that's the we for You traditionally, our seasonal a or implemented Crop increase in the we January has most a say And excuse products. used basis in way I'd the where price me example of US on

I'd season. the of beginning of at pricing. the obviously, looked the managing course we're You the Today you're through And the and protection but say, crop this. season you managing actively price managed actively

But monitor off an increase continue we're in the to going sales marketplace was said and implemented we're reiterated, October example that you for our working in across December in Dave there offset when US And priced right that board is and to and all costs that's the We started we will have. January season. season early we that the Rajan hard we upcoming the with US and we and As announced the in now. that. kick price the

active products than and work deal how able side. happened of to this cost different we've very our even a We're seen are than we where season. That's behavior through different. monitor board regularly. and portfolio, go managing There the with typically that we to frequently those But that's continue tremendous the as that. the do even volatility. more team pricing across even And we're is across more And commodity to whole the actively that. do happening It's And how forward is and year. It's going US action. a it price around not world. commodity continue a to committed are that's And certainly from so work products that's we're what's just through to that. be we going heavy the to this accordingly we're be amount as offset to to we'll able act And

Operator

at Parkinson our next from take Chris Mizuho. question We'll

open. ahead. line go Please Your is

Chris Parkinson

much you Thank very taking questions. for Great. my

some just a the framework. some you So the in were had. just of cost initial response assumptions There of in CPC corollary versus increases

and some you Obviously, herbicides, generic of but Can how think you subs us But current the prior perhaps expectations? trends logistics it's for these intermediate going formulation just your comment pricing. inputs much. Thank I transportation on that. XXXX versus you understand of to very are are can broadly the the on think you just evolve actually dollar dynamics? of delta throughout most given the some just presumably comment

Chuck Magro

Hi Chris, yes.

higher how down we up did drill and there. questions the And then of wrap can got expectations maybe overall level Dave a few for you've sort can Rajan of with maybe XXXX that XXXX? So in the on

Rajan Gajaria

Hi Chris.

to we in increase. part did I that now, That single mentioned that said think be are glyphosate. like, think do biggest like we We you and cost cover rightly the cost glyphosate is pointed the price. the continues out of time between with were where last change And I increases a we big Tim where XXXX.

about become we chains tight, can the 'XX. etcetera. would the in of I the so, very an specifically the we in as plan that sure are freight that do air seeing cost products On high-margin freight type point we element logistics for there there, based things time. confident to get supply make is feel just one tightness and And increase to we freight the But that to inflationary have in out that, supply of customers is upon

And material so other productivity we for planned strong what the some perspective, increases have to time or had offset that, do less said the had with We think that The our inflationary From continues evolve. in I that continues try to team before. mentioned line last have to be procurement continue. more and something but that also are with trends what is we raw actions this. we

So those increases Protection the specific Crop the on Chris. would some be driving are that things of side the cost

Dave Anderson

And your correctly. the answering element it sure, Chris I'm question to was other make of

gain. net Margins X% performance. X% had And then XX%. organic this, so discontinued but Let in these you. sure got correct me up is just we of full volume points. than We XXXX improved And nearly share significant I had talked had just EBITDA Crop impact that gains with for pretty Protection region. we've growth. make more by was gain way X% products operating XX% XXX every you volume year, And XXXX. the price a think from about basis We

number new products we So, revenue think we new planned sets I as our contribution think in of was XXXX. of, of and talked planned guidance the again what our the And really million for number product number in about contribution that about reinforced of Rajan stage XXXX. $XXX terms

Rajan Gajaria

us continues creates to cost only also to increases, pricing opportunity us another grow. portfolio but put that And for to not extract value and Absolutely. The will bottom it the from the a offset product new help line. opportunity

there. agree So completely

Chris Parkinson

thank you. Yes,

Operator

Juvekar P.J. We'll take our next Citi. from with question

Your ahead. line Please go is open.

P.J. Juvekar

there, I Despite insecticide stopped you Hi, new And volumes a for insecticides. question back Was on big then specific selling low-margin have a And good products in and products. were know the year. some full that morning. in XQ that on taking down a insecticides? insecticides. I step impact

And chemistries much Can I biodegradable older of chemistries? negative you. that portfolio becoming carbonates taking away what's in chemistries think much Chlorpyrifos. the your new are that share they're the chemistries? there and insecticides. And like popular you how talk impact insecticides older like is old volume are chemistries versus Thank from is how the the in and new from about

Rajan Gajaria

with that? Yeah. let's First why big take the I Hi. and foremost, picture. P.J. don't, start

I one like think them the you pointed low-margin discontinued have you that the Chlorpyrifos is products out take of if we products.

business insecticide year-over-year. XX% grew Our actually

franchise on of billion Not that are And to we seeing $X to built is which franchise. And capacity right. we double-digit price about this to largest well Spinosyns. the on Spinosyns selling that how growth. us. world's to are year perspective. that grow me exactly do actions and to as be that taking track only have volume Related we the productivity from from margins increases, increase even the let we have us the profile a market get a is we some the continues product we are of helping increased the increases see to changing And And continues continue you're is actually So insecticide for this in, top continues to naturally derived. on double-click that insecticide are seen the line

business doing. of is getting a Asia close Spinosyns to So, talk what Isoclast, Pyraxalt new we continues about big comes be which a $XXX this we are in this portfolio. product again been our part is And million. product another which to Pacific. Isoclast products mind. to about it's of Talking big is part a the

So patented pretty portfolio insecticide our the products that, the and of diverse And large. which go through is you crops. differentiated high-margin through reason this is are part walking these I'm actually all

continue see We grow. natural to that that have the products we from and balance products

that expansion the feel XXXX insecticide underlines a the And more from despite momentum the that. see really in about same out that So, margin portfolio had just good that continue phase to growth we but top And have. line we importantly XX% to standpoint. product expect underline we we to that

Operator

We'll move Deutsche to our at next question David Begleiter Bank.

Your line open. go is Please ahead.

David Begleiter

Thank a What's months more what highlighted? you. perspective you. color Corteva. mentioned little you on on what going Chuck, growth been unlock And now do well? You Thank give for Good how Corteva you hope value it three your could CEO the morning. better? forward. you've of you faster-paced to some Can also does

Chuck Magro

Yeah. Thanks David. Sure.

in right. internationally of but I've three months. COVID, I lot operations haven't been now primarily to job the obviously seen yet So, been integrating the on of the team. because I've you're went North for a America. with It's global great.

that for just year. And of that be than quite There the talking would the ended is, with on. think what I the give lot But is a and that say It's area. supply today We're this optimistic company in need probably company I'm some I into a throughout and joined. certainly in pleased like doing has early work every we're what and First and doing the of of is how financial to first more we to I areas environment work there's think all, I XXXX focus we company in area. I'm invested I'd And resiliency. me say But now. that the that we this numbers. chain performance more operating when should significant value be to little that Obviously, price execution need about force you delivered.

our is pipeline. and technology other The innovation

great for a asset it's think I the organization.

the I coming of drive going what far. future of remarks with some so some pleased Then the long-term that's I'm to I've we've value. think made. have products really pipeline wonderful seen we And already out

So we look footprint. global operational would the at I and are call good a the portfolio really what having

to issues. but this probably And actively like working of it's little little get quite money you. these far we on make looking and we clock I of where at that's a we're with areas. it. work, money, we're too So, be got we -- to a said the spend And about ahead we've there's And team just these where in unlocking early lot around a we're think opportunity excited candid a

or new do we the like Day we to summer some pipeline. financial we the plan world the to targets, late new showcase summer, is We So, in an also to targets. to technology would what some have like share some would operating plan likely where with new Investor targets,

thing what value going putting creation think perspective. And from all this on we're be great a is together what to see I world Corteva. it for doing technology the to long-term a it for means for

So work being is now. -- done hard the work the

of I think there's a lot excitement.

this that and summertime by team I is be think change. we'll for probably the up to challenge the Investor for our you, the back management Day. And

Operator

to Zekauskas with We'll JPMorgan. next Jeff move

open. ahead. go is Please line Your

Jeff Zekauskas

XXXX? been so much. because your much of of than about XXXX? payables that and historically, operating A flow factors very was two-part payments for how what with expect your to your Thanks flow Can part were run than Can And remain higher And cash high that pretty level higher EBITDA elevate what million talk you doing cash relative able you your payables question. you in behind decreased in a secondly, to were you $XXX the maybe royalty year-over-year. your by much you've levels EBITDA? level operating

Chuck Magro

Why operating Okay. Dave question? the you the royalty And flow. Rajan handle cash doesn't take can

Dave Anderson

Sure.

Chuck Magro

Rajan. Go ahead,

Rajan Gajaria

morning, Good Yes. Jeff.

On reduction the in our a did see we improvement part XXXX. step royalties royalty in

continued on had But Some portfolio. non-assert of that some of is side we've that done Enlist ramp-up work the negotiations we also the the done. corn had with

we step million see a reductions XXXX. in on did $XX to So improvement million about $XX royalty

marginal by We the on improvements are track driving our long-term primarily period. royalty in for XXXX some Enlist by We making portfolio. see neutral XXXX, XXXX, continued royalty the to

track But But further we step be some for net commitment that positive. in some we XXXX. in have There for a are in come America, delivering of are traits use to from beginning see and a XXXX are for changes we of the a royalties in royalties all some in Latin in had to all, cetera. the will with launch we'll XXXX also big do our in own We molecule step Corteva increased germplasm, big going XXXX. improvement et on improvements offsets, are We where reduction against XXXX-odd. being changes Enlist the soybeans in which

Dave Anderson

around part operations cash cash flow. take the free our as I Jeff from could and the two payables flow well maybe – And as Yes. of that, which

as as that lot lot had a We around payables you specifically, resulted had payment said, So we XXXX. lot of payables. said, of daily And of a – focus we outstanding capital had from and had average our a there days that terms focus working in you weighted term. as positive well in of we as focus initiatives of our the benefit our

here important are about that's think to think I XXXX just So receivables. that to going really we The really when numbers guide continue. our relates

a benefit and terms had of performance in So collections significant our cash in receivables XXXX. we our

fourth continue or to the US year-over-year level some quarter. XXXX. not as in terms expect attractive in revenue, We the nearly particularly from well performance as that in deferred of That's contribution prepaid change big variable to but the the in

from operations. then essentially you flow, are And of Other when our the the year-over-year taxes are up in look Cash when essentially the terms $XX million on from uptick operations basis. are walk cash we of elements cash to at same. same. you forecasting free really year-over-year the slight in CapEx on difference cash that's So terms our a the

Chuck Magro

these And couple maybe questions comments. put It's a Yes. of Jeff interesting together. just how you two

CP as opportunity generate and driving team at a that we the then if are think for really that's cash that this I into operational And an the his with of So, there's focused just trying cash tremendous management more enhanced can. get much as here to flow. on cash, to margins. new work we're operating to look I from just trying margin some royalties cash it and our of company drive going Dave you And described, perspective, to products, what do

Jeff Zekauskas

you. Thank Yes.

Operator

to We'll of Steve America. Byrne move with next Bank

is line go Your open. ahead. Please

Steve Byrne

this there any commentary more Yes, Dicamba less that thank have in that old platform settlement XXXX? might If you. calendar suggests penetration use that in over-the-top drive any in XXXX? soybean Bayer will ban you -- about legal year, in you do think were your that There's in be on Will been those with in year? after they sometime payments where left extend seed EPA would some that And this announced recent XXXX.

Rajan Gajaria

And be a this we'll big it. $X So, Nice is hear from system to billion continues of I grow. crossing the as year, think, a herbicide in part Enlist to Rajan. the is there. Well, this Steve, Enlist franchise Enlist you. And actually

XX% estimate a chain. supply when that this acres of strong year, herbicide. Our Enlist have more and crosses We the strong is it Enlist XX% actually the than the system use do system very asset a have Enlist that

seven-year have we growing Also I done. herbicide registration Enlist Enlist, opportunities and we come to expand think, capability business. did get flexibility to the say as the that, up of So, the happy

Our that. of regulatory job fantastic getting a team and did R&D

So system. the the the confidence customer demand in gets

system flexibilities to the where to and see we so need Enlist But dicamba, franchise. we've go. I do as the continue the system flexibility we supply the grow And market to grow About see wait would have Enlist to got and think chain be we'll arises. And growth continued able how the Enlist confidence herbicide the the the of reacts.

Operator

with John to next Roberts move UBS. We'll

line is Your open. Please ahead. go

John Roberts

Thank Chuck, back you. impressions. to first your

retail a programs of of and Brevant. the like Corteva seeds experience or Corteva pesticides retail the some retail strategy? lot in Pioneer You surprising in uses brand's in Anything bundling in how for or and for channel the bring uses the direct

Chuck Magro

Yes. Hi, John.

They So far the of it and insight. very major last what I'd me. retail lots I've with talked conversations all our seen got and were of to two over I've candid And customers I've was -- months. say great

network think asset. is still a Pioneer I the So look strategic

lot is and drives what But retail it on think clear be can So value to I obviously we like unique. I want companies to do It's with there It untapped deeper Corteva have channel. a there's relationship for improve things that think of I've to seen. to for opportunity I that. And I'm an really overall, a But the Corteva. engage. with pleased

them, Tim can more differentiated for Brevant. Brevant, had we good with is from year for have really a but retailers some sense. that we're days, XXXX. can I'll on early bring far they their But for technology seen It's makes customers because choice. XXXX if it very want good bring having So -- maybe I've in and it specifics so technology. what comment them differentiate companies And to real that are asking the And example, helps choice with they

the a think more very, what see different And that protection relationship Absolutely. to retailers? technology. then demand energy I beyond there's engage have And out an I channel. the There's a lot ones think that opportunity strategic strong is relationship our the good with crop of there a products differentiated that we with demand wanting of to with there. is Corteva terms retail can very the from in

to be every transaction. means, to a take some needs In what really a retail Corteva almost that opportunity think I deeper the not welcome. there's relationships the here you're we and time conversation that we figure need with it And just out. for can be ended channel, in with just commercial I Maybe with fact -- cover this much that good how more But This it that's seeing should would what to be you retail strategic. on to have think Tim, channel Brevant?

Tim Glenn

the volume completion in And the little great here, business a while of the price beat talking that that Yes. was our met Absolutely or goals for we US. we Chuck. John but Brevant about been really our a US season We've good remember we XXXX question. got with is, And Brevant first and to had. news the

the it groups good feedback goes opportunity needed And The we're building and the is doing couple them business. be out I also happy a Feedback good with out out about your XXXX our talked us. how on very had important how coming Northern this that earlier from very satisfy our we Belt for it Brevant week performance and Corn And to is with an for got of obviously product retail question we're good news but turned also to with business. outstanding. channel partners customers. that business exceptional. meet we're One was really and only channel And for getting from farmer of to good not of their is to us, for finally, needed things of this we we our And our partners. is credibility

very for with farmers are how satisfied So them. Brevant performed the business

has really it into point translated of in business retail. greater our much for a So growth

XXXX partners And year what as things and I we across how of there Brevant, XXXX in retail time, similar is good relationships out like into to and we to to what's and go seed expecting had crop volumes. both two of with protection growth business on not deep and do important. objective go we're go out build together we terms that's these and in over think our can do It's cross-sells that. our

at. partners position And order that we're And for that So good we've we're our that's supports strong certainly feedback, where right from there. supports what gotten the doing channel our enthusiasm very now. their

story as partners. strategic a is with it a our great distributor for Corteva relationship very for action our And our So build also it we retail business. is and

Operator

Piken We'll Cleveland go next to Michael with Research.

is open. ahead. line Your Please go

Michael Piken

-- outlook of, on, more years what I hoping the the good of the in incremental year couple Conkesta get in your sales Yeah, herbicides little for and this there was of West mean America next of and as kind a the over South acreage the then it back and bit for year, for in well. to might over half update morning. an

Chuck Magro

you why don't Tim, that Michael? take for

Tim Glenn

we're not here important marketplace. get big Conkesta experience a strategic business terms we pilot good obviously the our up will there and of that's allow go and forward get second Latin do in working of America necessarily impact And how that mean, excited really idea was gone. wrapping season Yeah. a season to way in Michael, but a in our step and as out from in through or still terms financial of XXXX-XXXX about a to was the and this the looking XXXX-XXXX technology at a initiative. on in I how the our half. results Conkesta an year part customers really And the this work positioned the

fit would half the We're technology. selection a from -- are it reason get think XXXX-XXXX, want very introducing as the control still crop in just varieties also positive experience want technology will a insect farmers that still standpoint be portfolio is the we And into go of still products not to And also of the that in season, said. the an management so we with have that have we that we're sure filling scale. of but of As you the good make so of planted I that terms out customers second available to needs. their weed

us it. in committed and meaningful and phase. So we're important I'd It's still to very we're say work that for ramp-up slow

obviously, continue we'll up. out to the fills as road, down As go ramp the portfolio that we

new America and position herbicide an I in that on Enlist There's system, tremendous think insect especially strong I value insect and going that the marketplace. Conkesta focus important in Latin control to within herbicide bring to is ability differentiate help soybeans. part. our alongside Brazil it's protection the But think

as go next that of really But like. I'm we expansion it trajectory of sort about So through that Technology think in do we'll technology growth look and an the Day might is marketplace. our sure and we year, well-established of get that really half the this pilot understood what update that so can

Operator

It next Markets. question. Capital our from We’ll comes move Viswanathan at Arun RBC to

Your go Please line is ahead. open.

Arun Viswanathan

taking questions. I to wanted clarify. just Thanks Great. my for

potentially So you expressed have it concerned XXXX into I about? $XX currency that. you could headwind that for pricing like million Where, the you've guess, guidance. I sounds are most would some offset know incorporated actions a also you that

currency if would specifically, and offset that could be So And Thanks. well maybe comment great? maybe gaining could I of guess could where in if successful the would price? as you inventories you those certain think you that in you regions be on -- to actually channel

Dave Anderson

very piece? Why to you currency don't inventory? much. Tim you the channel talk the I Thank about want take And then

walk range Again, $XXX it, a we're as significantly, exposed we to. on it's EBITDA it's across midpoint. of So built currencies that currency And in when the to said we side XXXX Brazilian have every of do million of a includes at -- also you impact the wherever XXXX terms we'll in look forecast. I hedged in so. would that opportunity today, of our real. to specifically, pricing, some in positions market on say we It the the

as is out out year. will play year play a over just going of course that to that's of and currency So the the the over forecast the today the just course

So the it's mix. in

us are local map. That also natural that we'll factor some currency We the in involved that with expense. that year the have help will over hedges course of into

do best manageable. So fronts. We'll to inventory the you all about our overall, do Tim, we point? channel it's want talk on feel

Tim Glenn

the the great our on our sales. Yeah, -- it able out-the-door ultimately record is those organization in product sure the very sales XXXX, the our gets of at had to to customers. and go we in obviously, it's to that business make absolutely. strong of channel sales. field And When have the to focus look be hands focus through the distributor, ground. get But Sell it that you

especially Overall, we we season And to this the we we really terms about the inventories I'd wrap tail in in Clearly, sit strong and in entire in end we're say, the the feel so as gets markets. the we've crop Brazil, across seasons track growth protection where standpoint. understand where America very towards always a Brazil with up of across and Latin interest throughout the -- that and seen sit lot the we of the season major from good in portfolio. here, closely very of board a

believe Brazil. within today, level healthy But and that at geography and of that we in that sit I lower terms going to industry some the of for within think is right the in different still market increases statement. our a overall we where we Brazil. a general segment business we're than belief we our and are now sort as very Brazil overall we by market seeing be inventory are probably at look in It's levels that's

of in a and we to still like go the as spot we're season, to the in terms as ramp this there. as through completed feel business good track next the gets we continue we go up So that impact things part season, but on we'll

inventory other that being there's or normal of markets, kind of In comfortable, regular the I'd even channel is to meaning levels it from the say it in of way terms inventory tight. amount I'd a describe

of lot going hand business kind here. of that's a have to mouth We

also cost. timely hands customers of our a not on tremendously teams just So supply. our It's on It's we talked in product And are just getting about challenges that. the focused around basis.

markets very the there's out with. little that there, little we're where have also working of we So inventory segments inventory uncomfortably

see as a basis. XXXX watching a factor as sit we business. our it we're now, here this limiting do right on So we But not daily for

Operator

We'll move Research. from next Fermium Mitsch Frank question our to at

go is open. Please line Your ahead.

Frank Mitsch

Thank you.

things. there's a years of seems it listen positives commentary, to profit of I As the improvement the next lot the like over on few moving side

pristine -- So I debt any guiding buybacks a wondering, you plus maybe buybacks in thought minus are million to all that balance sheet Was and this hundred you profit the a to was $XXX using there that just of balance have couple or sheet. of thought guys million the roughly on taking you ahead growth and year. talking Any a and pristine about? little adding of are

Dave Anderson

I'll little commentary. give his just it for and a me to really Chuck then perspective let good turn So a question. It's over

I about $X.XXX just just adds think looking of the the When to in we used billion that to math. two years at a of this at little give you some you $X.X flow perspective cash year, and billion. over last terms midpoint the Frank, our the today the this guide for bit chatted earlier look you've

the So of in words, midpoint XXXX guidance. other with our the XX.XX from current combined

when dividends. total If X.XX use with midpoint buyback billion billion combined $XXX of of guide, you a our the again $X.XX of referenced two million you million share sum over of years, $XXX that the would to

you million XX% dividend of $XXX gives which billion is $X.XX $X.X the about in buyback, So, share in $X.XX the billion, billion.

reinforces what then terms stated cash shareholders. it really lens of give let against strategic So backdrop. our a in Chuck return that obviously I'll to commitment we've to

Chuck Magro

a It it's question. long-term the good to shareholder so Frank, sheet, value. certainly to It We're we're when mentioned. could of like -- I can plus put shareholders where course, you the cash has through capital and position, have certainly, from think to asset. expansion work can a when financial about opportunity is about both, We're but a really it's a strategic I this with buybacks. to disciplined a and balance we going And we Yes. generate think right? of balance to for the we horsepower free to lot dividends significant we what it's return drive positive and it -- company in do margin EBITDA flow going clean perspective, be invest that sheet

on So that. with Board figure There'll more what be looks we're that working come to the like. out to exactly formula

that, that quite be I'm The a carefully. It Corteva. Again, something looking I inside I'll is at capability will good that we we disciplined. believe need introduce other of thing just is M&A

our or We If portfolio and build ROIC. will finished do either it our at M&A when look earnings, asset -- our to we global it. buy But drive drive to for look we'll some and footprint how margin is to that with world. the there's something went to gaps, around looks

just comes operational an got have we've it but we balance to in So, exciting future capability, the when company. the using, that not only the sheet

Operator

back And additional turn Jeff call. for now that to or conference I'll today's the final our comments. any Mr. was closing Rudolph for question

Jeff Rudolph

you team wish questions, is to That forward for so and Thank for call. Thank in day. look Corteva you. your thank very today's Investor concludes your We those. much. The Relations a great you we interest follow-up here you

Operator

again does conclude gentlemen, today's and that And call. ladies you. Thank

time a and You may have disconnect at great day. this

Corteva (CTVA) 3 Feb 222021 Q4 Earnings call transcript