CTVA - Earnings call transcript Q1 2022

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Operator

Good day, and welcome to the Corteva First Quarter 2022 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.

Jeff Rudolph

Good morning, and welcome to Corteva’s first quarter 2022 earnings conference call.

will Dave by and Anderson, Officer. today Executive Magro, Chief remarks and Officer; Executive prepared be Chuck led Chief Financial Our Vice President

Tim will be Unit; of the Seed Vice Additionally, Crop part Vice session. King, President, Unit Robert Executive Business Business Protection Q&A Executive Glenn, and President,

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

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

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

Chuck Magro

least the region company delivered technologies. today. delivered Despite thank call demand team continued challenges, of the gain led quarter. like earnings in confidence. Thanks, for in XX% our new crop delivered the superior webcast penetration with Every in by and soybean the This advantage inflation double-digit over to of XX% leading creation. million, by traction joining pressure products with solid nearly performance to and prior on and the increase gains growth product which from Jeff. system, at ongoing the a And chain year value and start given sales strong sales grower the was double-digit you supply us approximately organic led for Further, acres a expect sales Enlist of impressive pipeline U.S. Corteva to the we $XXX on And to continues soybean year. protection market, XXXX. be drive

are yield. encouraged We farmer. current the backdrop in solid, top financial Market evident and of investing are market through by by book demand is the position strong the and their ag the our crop to maximize health order growers technology of overall

out advantage inflation. labor XXXX, Similar is manage commodity the logistical top trends. is these COVID-XX to challenges uncertainty. genetics products fact the the constraints availability through supply which global to to compounded prices, increasing prices. raw material due further inflationary Despite are current volatility and demand, seed in We and impact continue macroeconomic shortages, customer the robust the to rise This year, Corteva to prices of on global experience the chain energy of expect we given leading continue adding by to way best is from trends and productivity yield that tier farm to

we in are half that the first agricultural Northern Given of significance season in the the Hemisphere and in the the still industry. early growing

are maintaining guidance this at our point. We

remain macroeconomic will an strong ag global considerations, significant on this and fundamentals. provide year on of our is market of year the through addition, constructive against backdrop guidance In update as we the and geopolitical the progresses. all And

business simplicity to increasing business of the drive the operational model the year we In while a of performance on unit we and kicked we that earlier to moving accelerating a Turning to off from announced overall the organization company. accountability. the quarter, in are global work speed matrix

on in businesses Tim Robert our and two ag the leaders include on have Glenn, costs. company, global This the our is veteran these we portfolios, updates of also we with progress. markets provide who well we run our these capture the experience earnings see the This leaders to premium is to tremendous given allows we I'm experience value Corteva, future This now great the our serve to how a for it to as technologies. operational and growth support potential. will potential the protection work maximize potential. step franchise. the And operational to excited We market. extract seed underway crop customer welcome on and an prioritizing to go value the in effectiveness King product This bring include structure will focus business optimizing experience and market-leading optimizing to in business and was deliver maximize and to will to all critical growth he near the the will

I'd Now let's market ag X, the on outlook. go our to insights to Slide where like provide

As I volatility. strong said, in fundamentals market opening, my ag despite remain recent

on get grain production, prices oil the Russia's that the commodity world, to ending the motivated keep elevated where shifted to due decision already And in impacts, in seed in food in several the global production Brazil to at which This key we expect which to and second food increased impacts impacting countries which start food oil U.S., critical, a leading vital for led have and system. like the planting production region U.S. in operations including next Brazil as into and Corteva seed and the supply global U.S. trend crop countries is the seeds factor is in whether Despite surrounding to risk, continue Dry expect years seed on pressure to ground. conditions yield further Russian are impact to believe also to slow season tight another We recently factors from few availability keep will these is to seed an pressure. markets remain on ease grains including under we issues seeds to has war food Ukraine. security the in providing supply demand turn while XXXX, volatility to record exit by security the market at to farmers our donate announced this some least stocks deliveries and quarter, levels. tight. very committing commercial for help will Recent affected

Dave This third input and also more time recorded seeing acres. this customers for And acres are the details later. and prioritizing fuel it on provide turn is despite healthy provide to increased maximize with levels costs that, quarter to We soybean outlook. and technology on history, the position this And to the to a opportunity. details me sheets remain good will XXXX Corteva leading in outpaced on in Grower corn to let capitalize for balance for fertilizer. return. is Dave income over

Dave Anderson

call. the Thanks, Chuck, welcome and everyone to

X, provides for quarter. on which the start the Let's results financial Slide

Crop was as seed year-over-year. protection and as gains As in of increased volume can segments demand in delivered sales the growth in early both from by pricing North XX% more X% organic growth regions. said, Chuck was the delivered see million strength numbers, We and you protection. XXXX strong and of increases new up with with started Global America driven strong. approximately which we've sales same crop expected year all This $XXX the offset currency operating notable and in the $XXX products, Euro. an this XXX and than EBITDA productivity the Turkish period driven a headwind billion basis costs of million impressive This translated as by the impact well year. expansion into approximate points of as improvement margin Lira almost more year-over-year. quarter performance from last is XX% Pricing $X result on of increase the higher incurred than given inflation. the quarter in

early pricing strong price growth with America, for including for Going volumes due XX% to crop demand protection including versus of to which execution. to lira Slide based Local and corn Enlist. XX% year and currency Middle mitigate well East on war Turkish organic to due prior X, growth were region organic Ukraine Pioneer to costs. in fungicide volume year-over-year. double-digit prior deliveries, driven overall notable to testament both compared In was our increased broad crop started price for region and higher the in the our driven sales to herbicides, X% in Seed every the Africa, despite helped ability headwind February. The by again herbicide by U.S. gains, seasonal delivered the a remains were organic that down technology Arylex brand you driving euro. year, performed region. for high up late protection in Inatreq the in sales products, Demand differentiated In Europe, primarily and can the in new the quarter, see impacts, XX% sales input pricing a segments demand timing North

due country seeds. and areas of to both experience importing demand some of supply strong military challenges protection Ukraine, in Speaking free constraints the for was We did logistical product. in crop

supply support crops and to do planted. were digit were organic local plant double and teams growth They resilient. volume on spring of compared so. be In crops to local our increased able offset with customers delivered committed Our Ukraine’s products America, more despite year our including Isoclast and Seed crop price gains. to products, volumes Brazil driven for for with strategy, increased volumes prior costs. protection tight value insecticide. input driven XX% by Pricing rising XX% XX% to Farmers Latin when expect will XX% increased continue to deliver price we than we while new safrinha, demand by coupled XX% estimates, per increases

on year XX% volume impacts. organic and products, area Asia price last both of increased including volumes COVID-related the year’s gains. were protection demand continued over and by from and of prior was organic growth on XX% XX% fungicide. Rinskor differentiated sales led herbicide Seed new for recovery Zorvec corn planted Pacific up Crop

of Let’s X for performance. now move detailed review Slide EBITDA a to operating

customer operating savings lira billion, company previously EBITDA headwind regions. price $XXX the again, helped the organic costs, organization Setting and approximately in well as of and partially crop gains of quarter customer execution and raw for in higher quarter, all to million focused commodity million broad-based demand freight and margin the increased Currency that $X The in $XX demand points in by productivity incurred almost material basis increased volume by drove primarily productivity as headwinds impact. $XXX covered managing to quarter costs costs, through which cost headwinds by XXX protection improvement On quarter. meet the resulted with effectively the we and the over pricing this growth back, to driven market realized strong euro. million as Turkish in logistics. by $XXX seed was driven offset First million cost driven

acreage. the go estimates reduction like for in Let’s with Starting to a a in corn, we assumptions, in now on more aligned expand USDA with are area to X, and we’re marketplace. or observing acre planted corresponding decline X% increase current approximately our soybean million bit current what Slide I’d X a little a

important in an and approximate levers, plans segment. assumptions, remains energy area of as mentioned, raw rising productivity you reminder, X% Seed X planted Russia. closely earnings the us in with represents pricing are shift Corteva the with U.S. And XX% on to from in costs. actions and Russia corn the of represents U.S. start million commodities, planting market as recently operational the to costs Chuck announced the approximately keep in Corteva. production higher total in revenue saw, approximately materials, million that as headwind annual Additionally, to pressure for soybeans monitoring key as pace to such stop these operations and given face Inflation pace acre company of the an challenge we we’re And a from slow in $XX the

For XXXX, from immaterial revenue. we lost an expect impact

volatile million in An significant strengthening Currency appreciation start be as item, been therefore, In Brazilian decision operating markets real. connection $XX U.S. the to with exception in addition, the treated we with of the is charges relatively will in the of $XX the range results. to our expect dollar. not this to as of saw the majority we that have broad year of recent included a be million

real and BRL. largely half Looking sensitivity rate the strengthen the hedged our the And partial to is we’ve at a the BRL movements do X.XX, would second with from a exposure. see some we largest benefit a year, while of Brazilian have around currency currency foreign

let’s this regarding discussion backdrop, to turn given Now, our outlook. the

last As billion. to Chuck year the year we’re quarter, range. net shared our sales of for as $XX full towards the and higher $XX.X covered XXXX. earnings the the affirming we range guidance revenue in earlier, And likely of expect we’re billion trending end for And

For the digit single expect growth. half, we first revenue high reported

between deliver over $X to track on remain prior increase We EBITDA. to at and Turning billion, XX% billion midpoint. year the $X.X a

our growth This first the the For first per cost share single prior arrange lower anticipated operating the we year first per we’re is at EPS XX% count growth in of start midpoint. the mid share we’ve digit disproportionate driven EBITDA half. half, given lastly, to to over expect by guidance quarter operating adjusting good increase $X.XX due recognized And waiting largely headwinds the share of had on the approximately $X.XX share, in represents repurchases. to

Let’s important takeaways leave XX. to I with from today’s of you call. go want Slide now to the some

market on solid impressive to of strong capital great expansion plan First remain course, our margin We including and a in to is with demand Corteva, execution, our maintain for led deployment. it’s XXXX. the ability to deliver combined track record We start confident in quarter.

repurchases. return We in shareholders $X.X and than to more form dividends XXXX to expect of the share billion in

opportunities. Additionally, for our balance sheet provides innovation targeted and growth capacity attractive

and important further come. come these this, years Slide operating And will drive has to the very taken strategic operational believe deliver on we expansion. company event. More to and differentiate steps to update roadmap its like performance and margin upcoming EBITDA position on continued value in Finally, Corteva a XX, to us provide about to strategies finally, we’d an significant in accelerate increased

to our special call many look Chuck, and event turn announce Robert, team I at our will And with at forward innovation a as all to Global in our let that Business as pipeline. Investor and that, XXXX updates on seeing along Iowa. strategy, showcase possible to September. September management held be excited in with Center in provide of on on Day Johnston, me Sam, the this our The XX will R&D you company’s back financial framework, the Jeff. We’re Tim,

Jeff Rudolph

Thank Dave. you,

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

Operator

Thank Morgan to go you. we’ll Stanley. with Vincent [Operator Instructions] Andrews first And

Vincent Andrews

good Thank you everyone. morning, and

of us XQ you season or the overall to if XQ about play bridge bit with going is seed kind can to understanding business how Just the help of first get half wondering to a more talk and an out. the

of quarter, corn for case and guidance was the the into seed then that should that is of X% bit I’m saw So pricing little over the that it’ll will volume negative. because is envision Thanks. what first this first we from pushout now. U.S. quarter in how the the half secondly, you’re And worse. if Is probably half look the how next maybe where better Or for at maybe the to the with first start But margins how And soy do soy that out? less looking up settling like? point, looked baked what you and And and it late XQ lastly, think happens little then corn to quarter? going more the and and impact bit was like assuming it XH in on we about in or that the first a season, impact second couple the to weeks. corn margins be depending in XQ a did what

Chuck Magro

the Thanks Vincent. morning, for question. Good

give couple then and specifics turn opening about between and a first I’ll me half, QX your to you talk over half. it Tim let second look, QX, to the around comments So split

weather to planting impacting by got to of when volatility North here today it’s make sitting We’ve seed that slower this farmers and start for surprise headquarters but being are been impacted it’s certainly that’s America, in because all certainly the significant in week. market last in been terms it of no We’re is pricing weather. our decisions the also need than the Indianapolis. weather. We’ve here our to in watching It’s the wet. That here But comes Europe. quarter, business, been Probably a cool year. to some delays in many and season results

We’ve acres of for platform. And year the So did that very you exceeding expectations. here very call nicely in platform will well. Enlist be Tim to remarks, look perform group XX% to that. we expectations our very that the catalyst continues on strong America strong expect selling up we North well. got Europe. in seed say can meaningful will you America, the the demand our then good that And We now Bravante performing very walk prepared order value channel did across mention technology, a the we if just a We well you is that to and book, really next got is the are as it the longer-term just it And XXXX. I royalty reductions have, U.S. us through the though, though, that remind Tim want – in that new in at set Latin out dynamics. beyond we’ve walk and through multi-channel

now bit of first – here second just expect we talk to Tim turn about in in the little Go the year. and remainder I’ll quarter saw So we the first it Tim. a ahead, seeing to quarter the we’re the the and dynamics over what in

Tim Glenn

Vincent. All Chuck and good right. morning, Thanks,

you So there. maybe points address I’ll three made

the just U.S. First season in the of is pace around the

and Second what we’re is on seeing margins seed touch there. I’ll and pricing the

last make when when you conditions seed not sales we’re So, some our local out pioneer it. North pace Remember, our mile first the really They and we and the of needs into wet, gate farmer have to Chuck distribute slower all as we how of we it’s America, the to a the revenue. seed that said, reflected business that is that’s driven sales in recognize that to the we recognize it that did farm representatives. marketplace. that revenue deliver And quarter we’d planting was where in mentioned That that. terms obviously, cool like saw across

that as end that had March. it we at was of the weather challenging conditions farm the issue last the So mile gate was to

time crop economics more this there seeing get that here So, And still what are adequate I emphasize planted. are than strong. would to that farmers is still is the very

to whether going seeing cotton, plant corn, to, switching ground. to soybeans, so a And point they they’re in switch to at in the this going we’re time, whether a plant. there’s strong plant to intend they’re get and to going not terms the corn crop of whether in farmers for And them that crop plant they’re between incentive soy

The other farmers have that tremendous thing to I’d capacity plant. emphasize a is

the when be matter a it’s for season days. farmers not of seven we in specific unusual get to so plant into of And state able to planting XX%

see I push so we’re planting up terms the And going to here, in of forward activity. to think huge starts open as weather

we’re from their staying to our so there And that to they’re the the needs. customers, standpoint, what decisions that we’re in make is for doing and we’re operations so meet the they choice best them help close helping that facing can navigate marketplace, their

a X% of in In up strong X%, the global within start year, we did the we corn X%. globally was around America. first North and both quarter and global terms pricing, around seed soy And saw actually have prices to around

the had solid that on to half. we And for start good So pricing. continue first anticipate through year the we

disciplined price field of to our in the a emphasize, have I looking clearly, got that mid farmers again, products. the digit in they of in been case to execute excellent have with the we’ve half an forward. managing single to I capture would value. think go long we’ll high a we’ve growth also And And And the plant lineup can, possibly solid hybrids And motivated customers. approach ability first seed. proven that at We’re see performing for best got products

on at we’re where that’s pricing. So

the and we very So expectations started with what consistent I were think our optimistic year. as

side. had some as I’d the those In came headwinds And seed the we’ve is of we into margin clearly terms compression most on say seed seen year. expected we margins, what of

a EBITDA out the as million those higher that Turkish terms Europe expected the $XX as primarily first, on than about In was headwinds primarily of the level from currency And at had seed. lira of we euro. well

little to equity a in side sold factor also have to corn finally, bit quarter. an And on did the really so first unrelated on we that I you a non-related impacts hold, equity adjustment that the And And and to less had the the is on over due We of pioneer impact in And margins little we Dave guess, the to investment the weather in XXX impact business. it again, North pass about basis especially discussed that want bit America. earlier terms the other an I’d to operations. holding. from of add that anything operations point completely I

Dave Anderson

all Yes. your way, really terms. the Tim. currency, and points, stated on Those you walk. it’s do good XXX for over really, everybody, by just points you are that And when dollar back Vincent basis the But benefit

for that, turned expected course in year. some Now incrementally, to But guide that our the out obviously the of be significant. of we

of basis $XX So to represented loss almost the a mark-to-market in where to XXX about the had we quarter regarding XXXX IPO-ed and or a that technology investment it – of The and of an said this years based seven quarter on compares quarter have six had that company million held equity points. of an for investment, third first impact as we’ve Tim XXXX. over the in

a on mark-to-market accounting now. we’re So

background on the Appreciate the So question. that’s really that.

Operator

We’ll next with Dave Deutsche Bank. to Begleiter go

Dave Begleiter

you. Thank below QX guided and I full bit Dave, referring you little consensus, the a think year. being Chuck

half a So maybe offset the guys. little in in coming than what’s for you expected we better the bit guys you back

Chuck Magro

on the the me our guidance sort and position on David, talk Yes. to you specifics. can let of Dave backdrop give

of So And year solid a has to start are and very think strong. this the and look, the XXXX. be continue I strong well said, ag through demand, fundamentals, are the had Corteva year to remainder expecting into as we to real we

management pricing challenges, – actions is we’re it thing But taking. the excellent the overall early. chain execution think cost that business we supply been we’ve And outlined. other and cost we’re pressures now our The progress despite has I productivity the like execution is in making of steady the is

later season’s than first have days to think the the about We’re here early last a in the in ag And year. sitting obviously of half. you May, little

guidance. So what reaffirming is we’re doing right the we’re now

may how we sort of and your may we that kind specific Dave range not season’s now like get We how on to to or of I’ll think think give let the specifics. what comfortable. question very the And happen. We’re about unfolding.

Dave Anderson

Yes.

provided probably what slope with way the on the of call, I what particularly XXXX. over given we think starting the which built is is point originally – call cost curve by the What XXXX the is quarter of see we shared we’re guide, which bit the the it our this way those of accelerating is consistent second by of and and year, the course guides. into into that seeing ramped that costs a that’s ramping, the we

we of the but consistent provided on period seen. year-over-year to to high single range mid the curve we’ve first So again, we’ve cost to that you growth, or – a basis, that see provided that’s half of particularly year-over-year guide revenue, like just digits is comps digits in terms we previously. And Again, change, more with single the growth. said, EBITDA period, related the in on over you relationship the the that

anticipate terms to in half in to I we at Now EBITDA. nicely. that guide those ongoing guided to revenue that pricing despite again, the say of of in year anticipate our that those that’s we’re impacts. would range. and be what full in full up included the inflation see and to of we our high inflation headwinds, year the of range reflective And to cost second the And expectation be And terms offset likely the range. that’s appears again, pretty be setting we in is end

planted And bit want talking when he to year. Brazil. on also that? Brazil may seed. referenced area bit is at clearly that comments Brazil would a improvement. we that second for seeing us you positive more want Tim, Tim, about you we’re any Tim But comment look about course was to is of a add thing area of little something little the the other planted that’s when The half

Tim Glenn

market but you’re the possibly crop now corn, No, we the strong to that expect Dave we important which right for of area in grow I go and think cycle. growth soy Brazil nicely we and most expect Brazil, right. expense largest corn, second the incentive first the market at in is that Clearly in as XXXX there’s into continued crop

is about there. positive So very what outlook the

Operator

next with go We’ll Chris Mizuho. Parkinson to

Chris Parkinson

you CP majority on growth so Rinskor, Great. much. you’re pricing Zorvec on forth. margin, higher When getting then back you of in bit just margin you still perspective more now. business? how you. geographies. on – can some inflationary a the thinking facing you’re you’re how of give step and Thank of Can your obviously about the more at – Thank the little little you’re a Arylex, newer look the And a But long-term perspective us to you that your vast so you and so of take give business profile also products, pressures on the some us intermediate bit

Chuck Magro

just Good the comments. that Chris. maybe few we’re on, specifics Yes, we’re on the I’ll have and Robert the high with so comment morning, very pleased trajectory level

technology, the productivity products from really asking around So latest the customer new basically CP business really it’s drive farm. to this quarter, we saw strength on the across the the And board. demand

And ways our new going help is quite with on the is they’re about pressure with rapidly that, we’ve can the technology. So farm to drive to best as inflationary talked And offset growing productivity. our pipeline, one farmers seeing the of that products. they’re need

our see early specifics. it’s to you’re talk so our days, Robert at is what’s you’re our we line. the look but see and business in the portfolio bottom think we to it, new on will when And happening product And impact starting starting to of

out that year thing up other will our call year. this we bring I’ll is just The capacity new Spinosyns late this later

capacity of course, that follow year that you’ll see of this XXXX. And with will it late margin into impact and incremental the to so start and

you’re what So see we like portfolio the in and setup to in I starting the the business, that’s results. think for the CP

but price, response how over manage we Now when that Robert. I’ll in and turn productivity it the you think about inflationary also I’d say to business.

Robert King

Yes. Thanks Chuck.

actually, this strength on overall, – for than our basis. well, very started high an volume held Supply do that’s held moving the we more getting unprecedented board of see headwind. technology. up quarter Just year-over-year across chain XX% demand up a And

year-over-year basis. value and growers The products board. able new you And see to across the mentioned were over we keep to want that do that a our that we’re see. good the that from that’s really there technologies new the create XX% So job up up

we first the really quarter, forward As offset look costs. into to and gains to regions we look as higher pricing across reflect and continue productivity for ability – to the use price our

rest see We’re good into year forward things confident as the we’ll to and a of of the we the start move with continue year. these

Operator

to Vertical next Kevin Partners. Research We’ll go McCarthy with

Kevin McCarthy

three be everyone. item XXXX annual provide can quarter then provided helpful in the Good your foresee bridge Yes. today, versus it’s may items But I protection for imagine to some as a exchange that you nevertheless, update and foreign single year. quarter. thoughts not crop And bridge morning, every cost in you Last seeding headwinds tracking every EBITDA you you goal, your to productivity on a both XXXX. the net your position

Dave Anderson

ask I a given in talk it’s bit update we’ve on bridge. let I you that. bridge Kevin, just of for that may embedded bit may of that assumed our guide. you little earlier, But list can had on through, just the a the little sort little went reminder mentioned Yes. there. I ask a what about and of the a me a bit in give little item I you the bit that you each

be felt and felt side. our most that important the think that crop costs. particularly going going is terms to fact to is we that continuing, the particularly on It’s inflation of see the thing be protection I impact in

that guide is our that end given expect at assumption is to the in higher we’ve the you range. revenue we the be So

the $XX.X inflation the year $XX that closer terms and then of outlook, to billion billion based pricing. it’s So really full on in

of fundamental. So, that’s sort really

guide bridge, EBITDA update if So first of increased you the a at end to that now really items at prior that here on it’s those the are two looked quarter.

we to impact to significant fairly regard we foreign currency. mentioned, currency, with as Second, had foreign

you potential as for If there. was know, total improvement going compared look our is just, side. bit prior as to things And some assumption. the have a about the the year. the we on little the quarter. Currency points period, as Corteva, the is two Brazilian real at in second you currency impact thing first get again, go the is on impact a it to an some the abate to comparables percent BRL, to that XXX easier compared we through And as which the of there’s basis degree One

second We’re hedge the half. in X.XX currently at

the is As to you know closer real X.X.

in it it’s X.X think is below of bit terms trading. little where I today a

we’re because potential some question this advantage things you technologies, of we to That’s and emphasized against course against – I about. costs against And very think year. And the very, important. price asked we’ve think upside component Robert say we’ve expect, two in headwinds Number what the a was the the again assumed. our are to costs what that then me let over I have one, what and of we we is his third continue on those So – there able important. seeing response cost And piece, we are to again, are that of that earlier very marketplace. the the it

in I wage the I mean, would cost on the inflation thing everywhere headlines the we’re is SG&A. mention on Second the that is seeing today. side productivity

kinds bad same on a the to period we’ve underlying XXXX. release, impressive. a is, set We’re The of we see our financial increases, the in period by SG&A, been hold to I in of you’ll which able way, basis, flat over normalize Despite over the that this debt earnings backup experiencing accrual very is reality quite the favorable think pressures. conditions

inflation doing should thing as pricing sold let’s aware It’s impacts. not of. just it call other well the that you offset the productivity that’s be – both goods management that of cost as to So we’re

And below you the is something as we way, for also we the XXXX. We’re up of think also managing the line over we set serve support as going to XXXX. costs look if us that well, course will, by the to

questions. the for thanks So

Operator

to Juvekar go Citi. with next PJ We’ll

Patrick Cunningham

Cunningham Patrick Good for PJ. everyone. on morning, is This Hi.

Thanks. run current much does next hedged seed So in corn with the pricing was is your pricing and that year, also your in up costs season’s next the for fall? year fixed how that And back production prices, next year? of corn what this given for mean

Chuck Magro

take want that? you do Tim, to

Tim Glenn

Yes, will. I

worried getting hard season’s in are obviously we’re on So the crop working ground. of last we about But XX% the XXXX. this

obviously impact the most factors one is seed of terms in So COGS, price of COGS. important that

and on going it. no There's we're at there year-over-year X of headwind that hedging as prices are and were a factors, we they're that the have that simple now basis. have not commodity right on question And and that. is saying approach be so a to including closely now a And extrapolating the it's number Y because an that there about looking as clearly impact

terms we're on well. that, how the as early And XXXX. we’re stages working what that sizing our would manage for we in increase we're process to putting in share the total in but So we're probably that together not plan that I up and of say be would of prepared

the be market commercial to products organization finalized are to going So mix we're the in that XXXX. of is what bringing the

seed XXXX. the And that in crop as that same We’re in farmers of into process of obviously, for around in be and in terms wanting developing and ground. price And situation there will too year that. in in very so planting the for to of the we're in offer to continue market way to the farmer market we're economics this our be specifics to finally, favorable our the our programs get expect terms customers. preliminary we get Underlying,

for is And to be high. products so demand premium continue going to

have of record We value strong capturing also technology. our a for do

that. a execution will to field commodity we're to will it commodity, working in for have on we or the levers but cover we terms levers sizing of working can, And escalating we we have that the And get of our the that have operations in prices, and we deal be that productivity most into up. so clearly also that to be We're to – growers And know pricing, pricing. want those the able XXXX, either and confident efficient seed. products our part headwinds accretive big cost margins constantly underlying we – that key our we're and is again, strong through go productivity that we as with

Operator

to We’ll Markets. Jackson Capital BMO go Joel with next

Alex Chen

crop Are there for stronger/weaker expect And you you respect when is farmers seeing for inflation, to for crop out Joel are and how you prices maybe Hi, Alex and Jackson. can chemicals? why? seeing protection. to on higher buckets crop question. if Thanks to trends of this on fund elaborate Thanks. is costs With particular taking my Chen demand any demand change respect products, maybe with

Chuck Magro

King Hi, Alex. Good morning. answer that We'll to for Robert ask question you.

Robert King

question. and we're the adding is When look marketplace. being again you And products the to Yes, in that what value doing, that's is the Alex, portfolio you're thanks starting new at beginning farm see for to technology the something our gate. to up show

our farmers helps much more productive. it be So

working we robust of to heavily the would terms forward, this in on to continue move moving what we're pipeline see So forward.

mentioned about our Chuck earlier, As there XX% increase capacity and under manufacturing is expansion Spinosyns finish we'll well. as

with this So may balance few to in to area. productivity protection price moving thing a add you seed. the the going overall, Tim, things for the year forward continue we're to crop of for rest want and

Tim Glenn

reinforced No, we make for off clearly mean, and are strong that and Robert, I premium on the a here. going that's to that I it's think build I mix, we just got the side them a to have preference customers, money think again, very products always strong

XXXX what ultimately go at continue produced planted will what's as that we're shift that world. mix we as that'll also what's parts as gets of we crops go and planted are that into And looking but is, to we of into upon in be element somewhat other XXXX well. the to anticipate The would other be dependent XXXX, in going the

is you you favoring than saw what as at the So a as corn we're that. sit came And that would mix into here today, going we bit XXXX. we to look little say maybe for heavily more XXXX

Chuck Magro

Alex backdrop. just on and this Yes

look, to us commodity we strong. food. you more is quite that what if world that the fundamentals to are said the it's Really, So look crop prices, telling at going be produce needs

is here, acreage yield mix we And then need into production. put need drive we of acre but we're – course, only not on we more technology be every have. So important, to we to talking about which productivity need a

And top CP shift to for of then per to technology we in traits so, there the acre, that be continue. technologies top terms seed. last underway seems course, think genetics bushel of every And this to a drive take will the in and

Farmers economics farmer at world are a look good the around are you robust. position. financial things If in quite

the year predictions farmers. at U.S. you the in farmers, would And look the In are most be this last year that I the for decade. if profitable U.S. second record a fact, revenue believe

an to catalyze company that So also integrated drive there's and the mentioned that then you're get to to crop to going I sustainably. and grow very farmers Tim help motivation well crop high in we're but that that, that as it to ground productivity protect trend, see and what as think on positioned

Dave Anderson

continued indicators, in the just one our Chuck, thing maybe our outlook, to are the over other of maybe sort then just inflation cost at leading look of when embedded of you with time and thing, had and pointing one part Robert, the those obviously expectation responses, do to other inflation. all question

terms any his is of So resiliency say metrics soon. things Robert anytime very is about supply we're on meaningful achieving as in some at delivery, not I counting focused at the on seeing particularly terms things the in the of when that are ranks the on other chain. we're of in well, to our that have pressure we're very ours in is all that and comparative of in obviously abatement any geopolitical And kind team the we've And And that one think going that strong. looked of data we've looked results you world.

So terms we're that's what on. underlying in focused also of

Operator

We’ll of go Byrne next to Bank with Steve America.

Steve Byrne

like bit into drill little would here. to a Yes, seeds more

reported X% ordering. and up you know your You soybean seed would Pioneer your are of your exactly X%. or And what price given corn business, X% customers

would like-for-like Would your the But can the for maybe past? do the planting them business in then genetics a a And were a much of just to say of six, you pretty of they're shift how they in than expect price is XXXX? that what be corny of customers have EMEA perhaps North change little that is significant, much when pricing transgenic? quick, more how one seed how gains much you comment on more even versus are zero you and or question mix that price my that increase of you eight your So you card, just America. up seeing on would

Tim Glenn

the for question. thanks Steve, Yes,

taken So our the came say price movement I in we to we would level of mix similar capturing of to the of the terms terms is in what price would year. is products, very have into as we're marketplace card

question better genetics, absolutely And North shifts would trait parts always major mix? in two America, in our modest I basis say of and terms farmers question of these on genetics. a of the guess trait new not, the to I in on you plant terms terms So have of is mix, year-to-year generally are a looking there shift

and XX% their And And think in new about so year farmers as operations, lineup said, improved our seed are of and for from Chuck XX% typically new our going said, that to have to as striving that in largely Dave our genetics. genetics. be we productivity turnover improved every would lineup, that's come those

year, that I'd So because but next we're every this that of that productivity. see something that clearly seeing pursuit level just we is it's say year, of

very there, very be really about in mix And expected. we was feel the the by wouldn't in sit So specifically transgenic. driven. small seed it on high the we I limited with side, to be performing were the say Spain a start very it what where we consistent terms able value to in is price EMEA transgenic, lineup good I And year, out very we was capture would would Europe fact of great products. of a think amount and strong came driven It that that

we're and as pricing out of faced bit is North we good little our America there, a And value there numbers roll the the the year. mid that Turkish move is that's a would little seed. the And and for impacted there. on and into new approach Europe is tell very capturing so continue aggressively Turkey good, Europe the the mid skewing rest genetics same single-digit you're more we that pricing dynamic to devaluation work throughout same severe so at performing you feel strong genetics that to we're bit non-transgenic bit we the but seed in and see of little Lira high of all good. XXXX, that growth because nearly because caught rest in for world getting that single-digit, some again, around the improved going to So to is extent, a I

Operator

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

Michael Piken

good Hey, morning.

to deeper want the soybean bit side. dig Just on little a

Thanks. You acres you be secondarily, genetics to percentage what be and toward year? I'm for about sprayed is actually those is transition going about are if could Enlist next of acres. might Pioneer target going XX% mentioned curious then how herbicides. Enlist bread and of what your Enlist with that this talk And the the for year

Chuck Magro

Yes. And question. will planted excited of the Great let be as take, me an Enlist guide small we're And say EX so we about acres soy amount a original that XX% still around with the I relatively system. to sit planted, at of U.S. really would adoption we're with variety. here the holding crop of today, least again, the

much and only ultimately so we the visibility what selling, what past have update have in now we a understanding the season. right the they're can't steady XXX to midyear and we'll of ultimately the much get what the better is ground are that in planting marketplace, holds that is after So and why when licensees we

seeing. Enlist of that adoption so system. value the utilization. I good We're feel again, the of of the And really and about the the full So the herbicide XX% high are think getting in really that that over with value to herbicide, terms Enlist treated customers goes

soybeans. slowing EX chemistry, And as option. can become see it seed a you the seasons don't of go-to very three it's look a utilization confidently when the see growers as for as it's So we growers at trusted really down. option well And that and say, into we adoption, Enlist

question be developed class mean, season XXXX. really we're I around important trials anticipate where we going headed that this us genetics a EX here, Corteva extensive new going of and to be up doing and Your ramping for to a is demonstration varieties we're of for

update in that once your planting at least start you're see but see to seed, season, XXXX of EX in we for at field significant when is level high be going a on the again, position – of that system. it, is to very that that, in planning move going question at are of the you terms be get we'll demonstration and through XXXX think feel or comfortable number we'll chemistry a XXXX. anticipation better I And in that the in to again, XX% So to point in the that utilization

Operator

next to Spector UBS. go Joshua with We’ll

Lucas Beaumont

Good morning. Josh. This is Lucas Beaumont for on

to I if we go could. bit to So crop just protection a back wanted pricing

the decelerate So, accelerate through So XXXX? of you now do very across lastly the where you're kind mean, certain like what how are mix Thank seeing Can range. the like, you. mid kind in discuss quarter think year, of portfolio, your and peak kind evolve double market pricing expecting it just kind this then the of elevated? significantly the be? has CPC guess, So I sort are you pricing sort products roughly sort of of in just you and generally, I single-digit I fourth rest more more the normal fragmentation up, others of I to mean, when accelerated mean, yours think exit given your quite it's seeing of into and and rate modestly we're will already you of digits. think will or overall you will pricing

Robert King

thanks margins. is for this QX the in Lucas, Yes, we Thanks question. Robert. have Yes, a and recognizing did for good start the

helping the We know, to products you're and the only do are begin Latin where talked we're it's as And shift we new America. to at crop are, with process, our business the this mix will When getting at but rest we're that expect up. have you farm just to protection, here, look value improvement about you a productivity, the pulled to we us year, our seeing starting and as forward look you As the forward. not headwinds. moving into the show and of in South in with some quite is bit

America. different, talked So to Spinosyns we've be new of into world the little and Latin got we are products about their things our a earlier. around coming specifically improve some on but mix that the think help And these would bit like going offerings we

continue price increases margin cost to across help of expect those. we And and to with overall, inflation going offset we're to balance – So the to productivity hold year. with

Operator

We’ll go Frank Fermium Research. next to Mitsch with

Frank Mitsch

Hey, good morning.

Indianapolis, Looking sure. guys spoken that last about – call, structure forth. you've since so support made in and forward in conference the organizational for you have to And one and the mentioned also new to headquarter move costs optimizing the September, single Iowa costs

if how we sort productivity so thinking pace year could of company, of of about be And over year? the for and should in size wondering you that the was how the I kind improvements next this layers

Chuck Magro

Yes. Hi, Frank.

your are. question directly So probably to let me I'm you going give today. where answer not we

You need get and of that come you'll the just Johnston, let in September, that kind on. we've me been frame to answer but to journey Iowa,

in that I strategic look, very company that capabilities I'm with it believe competencies before, with you have the innovation pleased at brand this Indianapolis. more Corteva. I pipeline, and do than then our and the innovation positioned of when we organization, I and So the here quite innovation science products but portfolio, said started of the when the but pipeline, course, uniquely Johnston mentioned today. direction overall our the and Tim is look And in

Our unprecedented. customer is reach and truly channel

next on We're on won't and product a the global is clarity that going it's and changes to we're focused to drive – to business will tweaking. really made we've our what move It's I'd on going culture, bit portfolio the We're we're the say little units. be really, simplifying work more right try So in we really provide the accountability the focus to organizational around direction, strategic to now focus on. streamlining with clarity September really two into what trying effort. to will we but

that the and global where we we're we trying we're we're well So looking operate make and now, enhance at of speed effort on the performance looking to decisions around world right business. portfolio, do at how is underway drive the

over on And And work nicely. that And we're planning, able the a decisions. part to course, it years. what point, the of and and so sort will our that be the be on. start will And the that been to you we we've proud company made And several be progressing reason build we we and think some last stakeholders. our that financial it's sharing believe demonstrate is very have get time, Investor session We're then we'll important September to by Johnston give we is view will some like at of that of we're with by other the very journey of having of the operational technology. least we'd September time of at able I the that to Innovation more

stay So tuned.

Operator

with Viswanathan Our RBC Capital last Arun question Markets. comes from

Chuck Magro

Arun to there next, operator, you hear the We go Arun. maybe another is – can can’t question.

Operator

Okay. We'll from go to our next Adam with Goldman Sachs. Samuelson caller

Adam Samuelson

morning, Good everyone. thanks. Yes,

pretty maybe for been So the Enlist move the end Germplasm me for Enlist we own Germplasm the of to back that longer coming there's no higher maybe where because so to the discussion on a has it just earlier and that share into little forward. that Pioneer, the and about shift where think – rebuilding it higher year. just of extend today? meaningful help prioritizing Has soy, market how is that think includes market And us sits it your share loss Pioneer going the and bit been Germplasm. moving a of you're Can the something in you market see trade that share end about next trait

Chuck Magro

Yes.

So Adam, good question.

are supportive that products selling been Pioneer's that say value So we're today and Enlist of very would I the highly EX.

a brand our in sudden the in would brands somewhere that our game it what be the of Pioneer our X, to So about be all is. Enlist share with in reach this – soy the the Pioneer's mid-XXs in of going call market is the side. overall majority in be isn't And with would the

brands So licensees and marketplace marketplace in clearly, EX. we've got XXX we've that seed over strong the Enlist a our got the with in are selling reach owned

our a material ramp So I up strong our in move have well. experience a and going our of it's impact think business. also customers and performance performance of financial underlying proprietary we as seed genetics, of our the and impact, not it's specifically going positive the but it's overall to receive our very just seed soybean to that products the financial a also business And as have on our terms health

move into forward strong move XXXX. a So as we

Chuck Magro

We Thank you. thank Corteva. you safe joining a call. today's for concludes your and and for that And We wonderful Okay. interest in hope have day. you

Operator

conclude We for This today's you does conference. thank participation. your

Corteva (CTVA) 5 May 222022 Q1 Earnings call transcript