CTVA - Earnings call 3 2023

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Operator

Good day, and welcome to the Corteva Third Quarter 2023 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Kim Booth, Vice President of Investor Relations. Please go ahead, ma'am.

Kimberly Booth

Good morning, and welcome to Corteva's Third Quarter 2023 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 join unit; Q&A session. Seed Vice Additionally, Crop the Vice King, President, Unit, Robert Executive Business Business Protection Executive Glenn, and President,

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

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

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

Charles Magro

thanks us today. and joining for everyone, morning, Good Kim. Thanks,

XXXX, our of towards plan with Global position in of and Corteva's was months What points of first execution ag-specific despite Seed a geopolitical, year continued a achieving over factors. expansion. would Crop Protection that challenges. Through portfolio apart year we enhance time is at framework competitive and growth expansion and the controllables. these while know making macroeconomic margin margin balance delivering the how focus What our the shortage and strength the our over and Just targets the ago, be efficient XXX us in of year, earnings X controlling unveiled value basis didn't a we margin progress of margin complicating generated sets no to continued important long-term our creation. XXXX we and good on earnings and We're strategic

and exceptional business with of Seed is in delivering in for XXXX growth performance New set technology our continued up is pipeline Our Hybrids.

platform, rate the XXXX enhance but steps levels. as alone. our we in Destocking increase Global be remain XXXX, appears uptick in and reflected largely behind million, and XXX the this running America with benefits of estimated $XXX current base our XXXX XXX with Latin $XXX decade And farmer Pittsburgh, a of our our significant and have of activities plan businesses. plan another protection increasing a Europe. Underlying the in cumulative out will us of to view both performance. out-licensing, on channel, over by #X around at soon. to in approximately XXXX we're of will productivity which will positive terms world that around roll where well run in last we deliver improving the production deliver plan remain is of of XXXX The in that including other last we across now constructive technology million now XXXX. and market significantly California our approximately This exit should ahead season our quarter, globally. Overall, the our farmers customer to corn $XXX Protection royalty is to in in Global expected September, we're mixed. yield For greater trade we applications to will expect become ag announced creation. We're ag network. above for the neutrality. about In after plan announced EX in in of with combined. continued a continue strategy. Thanks income includes market translate savings crop million in robust actions to America million that fundamentals technology, opportunity, Enlist which And which competitiveness in value destocking highlight position production the is of our represents next to Enlist all industry-leading year soybeans we North also builds over America, Crop to achieve historical XXXX Last and in $XXX varieties More but demand markets farmer set to and site still This we of our next in the to delighted series cost week, is the run competitive Dave as production $XXX ahead track and optimize million value announcing but historical of at by just off and the Series are in on supply in U.S., our These agility. than upcoming we're season world A savings Corn, today, having an success ceasing rate North cost trends. selling in I'll that reduction describe service soybean we our say estimating our come strengthen new annual to helping select and the the expecting detail the more hybrids locations. price the we're from orders with royalty through

XXXX. will likely patterns, However, into in just-in-time order which pronounced are most Brazil persist

for results EBITDA points year what over and growth current XXXX all our is still will the that Our of XXX So of mean full this expansion. basis expectation the year? deliver operating margin does remainder

we're we creation, including million While responding share shareholders experiencing in year. repurchases by evidenced pressures returning committed the as the to local long-term to value cash remain Brazil, this to in $XXX

continued Global record production for demand is and in growth agricultural a crop XXXX-XXXX the Soybeans. Global to key solid global crops XXXX expect We're XXXX. Turning Corn many be up to biofuels production. at market seeing in we year, of the is including and estimated outlook. for versus demand level,

the most current due recent U.S., would fourth of years U.S. below-trend stock driven USDA corn the consecutive increase an starting rebound challenges. in levels comes stocks weather estimates the year Although ending year show to of planted of be it several we're after see corn crop yields to for a in area. This tight by

Europe dependent However, in production, are stocks, southern more and total pre-pandemic soybeans Brazil back tale is is region, not hemisphere down corn China, crops. of soybean production XX%. really markedly remains are corn which Ukraine a Meanwhile, is critical is exporter. in levels, and levels two apparent pre-conflict even to Brazil production a below Black particularly Sea in critical on where where excluding the

up El be XXXX relative economics XXXX, Nino based Soybean between in area and the production crop driven soybean and transition corn. by is region on by to year varying the Extreme expected weather level summer our additional estimates. will USDA latest adding and that Safrinha and be to operating crop Ag assumptions an are down. complexity area all factoring both Corn of current area into This is

in EBITDA. of in other billion Since this which the part we for of of points. call our to combination even factors we over of delivering play the turn XXXX. To the our past while is is of speaks has there's is performance wrap shift now of over more to markets about the increase $X.X are basis one a XXXX, competitively We and that of in be complex, balancing agricultural itself. years up, XXX of from the up have over expected quite also to even to our expected come this margin corn demand, U.S. beginning industry. believe even impressive X let perhaps season the Although improvement result soybeans more But technology most global space EBITDA to an in company are revenues Dave. supply billion, ongoing advantaged is performance. the the approaching No modest $X Brazil at And in in come. level And believe portfolios me to what ag close

David Anderson

welcome, and call. to everyone, Chuck, Thanks, the

which the the on start results Let's financial #X, Slide quarter and year-to-date. the for provides

volumes Briefly to offset by impacted numbers our gains and pricing the You compared XX% driven sales by delayed an with and seed $XX to earlier expected the and Crop down approximately Organic can product deliver year, earnings prior market by despite exits. were declines growth operating with volumes Sales lower were farmer planted outlined. were continue volume area expansion and expectations. in Lower operational on to Protection. quarter. America. Crop million the seed we season in Brazil Protection EBITDA Chuck that both were touching largely Seed see mixed conditions line and in North that in finish from margin in purchases the

particularly in destocking and inventory In Latin and America America delayed purchases, both in addition, North farmer saw we Brazil.

offset sales year-to-date, down Russia. Global X% driven a increases versus million down Crop pricing represent which volume Seed year-to-date impact X% prior from by by was X% perspective, was the Protection total decision year, in exits. Put volume. Protection. exit a with versus product and includes Crop and to impact gains to exits largely prior down XX%, volume regions $XXX with to pricing up broad-based was in Feed volume. X%, Turning lower both in year, were all gains

favorable growth, for and an than EBITDA Now higher operating the product X% margin expansion more headwinds, currency over driving performance increase nearly despite in year-to-date, offset points the volume productivity strong and reduction XXX of $X line than operational of pricing, billion year-to-date. And top in into basis costs of translated mix more XXXX.

go now Slide X. let's So to

in shift half to segment. than as headwind Crop demand timing Protection on business offset European pressures. Protection third the total to a sales $XXX were year Russia gains the versus year-to-date offset portfolio and sales pricing gains as Seed in year. from the America competitive to compared more of company up And down a to with were seasonal for finally, as every strong the corn a America expected in down to a execution quarter, with or XX% America, delaying the Seed than pricing XX% lower region, the the volume up planted Global down by currencies. by declines Latin Organic X% acres the the in XX% headwind from see exits. due Crop revenue, headwind planted which other. With to driven Organic driven higher year-to-date Currency up were through can that, lower by protection more exit X% delayed from X North headwind increased You Corn of by in impact sales well for by single-digit net America, exit as EMEA the total exits. to purchases represented volume. Global up year, of gains X% X% to seed Crop price as volumes North million which crop where by acquisitions Latin market for in planning, declined the by net by Biologicals from prior high of price area offset approximately again the well $X.X was was in increased gains, EBITDA the Slide continue summary value reflected year-to-date billion. more Protection corn headwinds organic driven through includes for area. In input first pricing and $XXX down performance. and channel from than moderate as and prior X% X% sales quarter $X.X added X% Russia costs. largely was year-to-date were due go were prior is X%, impacted were company year operating offset billion. destocking, XX% Seed EMEA. versus volumes million than third farmer were Seed were Gains price we more X% sales let's the led

higher seed spend headwind royalties, costs volume impact, to $XXX mix offset commodity and inflation raw as were were and Protection savings. on just million product productivity prior Biologicals cost $XXX cost first was than pricing with yield delivered $XXX other up the During year-to-date in gains, million year currency including year, in improvement. costs. Crop and improvement net increased X% $XXX net billion. unfavorable approximately and operating X Year-to-date, costs more million versus than coupled EBITDA Pricing through approximately net under of Crop input $X improvement actions $X as SG&A million expense and is million productivity Roughly declines cost costs we in from in more Market-driven X% Protection by quarters, $XX related billion up than nearly prior SG&A of in of and we to and versus the headwinds. acquisitions. well as mitigated inventory. sold higher material cost less royalty

million Excluding X% inflation. Currency was is $XXX by year-over-year currencies. despite headwind versus down by acquisitions, maintain prior driven European a largely we spending year SG&A as disciplined

we're as manufacturing footprint. to steps taking Chuck Protection Crop noted, Now optimize large several the

X. You more can see on Slide details

the analysis this backdrop crop industry, in has macroeconomic some we're for to accelerate process protection been opportunity the actions. the in current taking Although time, given these global

than million and pretax to asset related contract to the We XXXX, anticipated restructuring $XXX $XXX million actions improvement years. end to noncash including related payments $XX run to record more a to million, X rate which annual payment terminations. $XXX related payback and translates estimating of these asset-related charges EBITDA related to expect $XXX of $XXX of impairment charges. Cash and to are And severance primarily we're through million of little approximately benefits a by of XXXX, of $XXX million and million to be the million

plan posted cost network. and we supply Of course, you keep of the a deliver progress competitive reliable we'll this as on flexible

to now at sales now to to in the take year year guidance. billion range and want I net you the $XX be Slide expect billion Brazil $XX.X the Seed midpoint, guide August full our is a X% driven Turning through XX. for We of Crop pricing Protection. down change in portfolio exits. the volume This lower and or impact and from expectations including from by X%

to growth, by now translate margin by continue guidance We be expected of interest down at acquisitions. midpoint the Operating and $X.XX Seed rate basis from count. of be $X.XX lower flow per this guidance, is strength line margin guidance growth partially year lower operating change in X% over midpoint. to range to and forecasted share, top lower the expense range guidance $X.XX we million of to the driven partially into by range XX.X% over expected operating net is tax and million of in roughly Chuck through led of EBITDA and expected lower forecast sales at versus actions. is cash performance. earnings be XXX lower to billion, $X year $XXX at expect $X.XX share XXXX, the of prior now offset lower EBITDA, for $XXX now that billion forecast billion, the Free cost midpoint. The updated Operating in the The X% with updates the third lower These the expect a is Biologicals year, to approximately million EBITDA year the range the our and quarter. of payables. in prior completed change higher $XXX effective the million an the productivity for mentioned, reflecting in by versus approximately share inventory $XXX be EPS business and as includes points of expansion And repurchases full reflects offset to we for which

now and for for XXXX. Let's initial setup framework XX process begin Slide the our transition the internal planning to our presents view provides XXXX. assumptions as we of key planning high-level

point, X% XXXX, shift starting a Corn expect U.S. growth and as XXXX. margin After XXXX. framework increase in we in earnings acres in Soybeans to again in a we to this expect using Importantly, to back deliver

Safrinha. While lower also income U.S. planted remain and average. expecting commodity farmer the fundamentals Brazil, prices above healthy area relatively But historical for Ag with

we due farmer interest prices. to in However, to macro and expect higher rates corn including generally factors, Brazil tight, remain commodity lower margins particularly

driving lever, organic be per key growth. value continues a price strategy to Our

low I differentiated the technology pricing company think XXXX. and for for total to our solutions single-digit expected yield drive is advantage in gains

on We to continue portfolio simplification. progress make our

by of differentiated we despite gains volumes We volume the the new U.S. margins. expected double million the to in led due are products. Crop volume market expect ongoing the product a Brazil will grow of and to headwinds as But muted gains. Cost digits product expect another to expected exits. and both exits, related $XXX impact expected are for with Biologicals dynamics. improved price and to we organization productivity volume be Protection remain focus drive

within Protection in and Seed Seed, the While continue inventory XXXX versus range multiyear of seeing core in and for by our the timing will inflation. less materials fall, to we ability commodity turns. will earnings cost another the stock expect prices improvements expenses this, the to expect lower increase price margin we level lag we're expect million trends, we and $XXX to technology, Crop term. To implied our the SG&A SG&A increasing In than we're EBITDA of with highlight, of manage XXXX Seed we in $XXX driven as combine Protection. revenue continue to in and tightly financial invest We'll our XXXX in R&D as Crop continue shift long costs our growth productivity in targets. as confident summarize we of of Despite the million royalties and to to proprietary innovation more well improved deliver in revenue framework. raw as

summarize now and key just So with takeaways. let's that, Slide XX to go the

expectations, third our quarter performance operating strength in year-to-date is Importantly, of our led EBITDA with line Seed the business. by

growth 'XX actions with me today turn drive the and royalty to to planning XXX year. be margin Continued discipline making of updated we for cost outlook continued planning and analysis as results bottom assumptions expect in that guidance year-to-date. The it and earnings fourth followed importantly, than forecast productivity for significant market with the quarter in XXXX we Kim. would you expenses release reflects February. With will detailed operating shared margin and The current early to EBITDA over full growth year that, is framework difference more a and helping and line when range supports expansion let basis points improvement still coupled

Kimberly Booth

Dave. you, Thank

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

Operator

Vincent Morgan take our first from Stanley. question Andrews from We'll Instructions] [Operator first

Vincent Andrews

in the for the pricing see just because pricing we you're driven it's there seems was the ask quarter. trying but in the expecting that get single-digit I'm just the It you, low company down, by like I I can chem X% you slide Dave, in in XXXX. comment third think, Seed, mostly made bridge to crop

get next algorithm four Is of company. positive? Or chem the be pressures Seed two you that to of slightly? to And going be is giving flat? on your the of low then equation down competitive the the to the order to you're of going U.S. the singles citing book for price for side to year total in crop Seed getting regions, going confidence it achieve You're to company kind is what's terms major mid-single-digit-ish in total in the us

David Anderson

Let me highlights. just Vincent's then, you Vincent, maybe could Share point about bit you're little with couple And of Seed. you right. a on comment Tim, a

So the indication of is call now. as and framework is preliminary digit low it, an early this company part our overall expectation XXXX. right view for again, single for the And I

for For Seed, continued but know. Tim will positive, as value, looking comment more at we're call you we price specifically, it obviously,

So year-over-year going to terms we in our pricing think the that's of lead performance. way

For XXXX. Protection the up to we pricing pressures. potentially down generally to [ to we be business continue ] neutral In be where is we to Robert's see think with for Protection to favorable compared exception to think Crop going will the business, slightly LatAm our business, Crop significantly the price pricing the aggregate, slightly

to the Again, the digits taking gets early, So all together on us you Seed. to low comment for company. want Tim, that single

Timothy Glenn

testament pricing. technology very and organization. year, and by and I'll to pricing, This how an board geography, executed our Yes, XX% on absolutely. reemphasize the roughly exceptional said we've Dave across had as broad just we year-to-date what a And crop

since from it, pricing including to what setup X% advanced position And in our like. We product. Corn are type at Next time going a farmers XX to for say a really a we're a global That how of more satisfied of terms current good the for puts year, in next America, to for is to corn Soybeans, we very marketplace. shift business do beans. secure X% our of there area to out standpoint. shifting call year, good, us And to are our critical looks days of I'd on August and expect holding the the expect on spot customers standpoint. from at a in of lock 'XX as single-digit of front touch order from and maybe with farmer that, up are well that do standpoint order putting in growth return harvest place, in a And a the price said, But rotation the this typical We're North and position things from that North strong. book payment. the the looking and We've order our allowing in back. America where low position proposals call in it, for it's been there we

in America. we continue there. So what very good North opportunity our momentum to about the feel excellent And we have in marketplace

team. So proposition, strong by strong value execution the

we're And so up America the beans. how shift in North feel we about 'XX corn for good from setting despite to

Operator

our take from David Begleiter question from next We'll Deutsche Bank.

David Begleiter

Chuck, confidence you've have in changes Crop impacted seen billion? guidance midpoint any the achieving 'XX Protection of your the of of in $X.X EBITDA the

Charles Magro

market that right a So it's dynamic pretty now. we're operating obviously, in

able right what I'd last XXXX seeing together, level XX% we Let of get a that thinking. a and now today. think, just just specifics And year we'll of really the since put not key, to think you lot the for can't all comes 'XX And to we're very at about of to we've look weakness say within highly just about just Brazil global remaining couple now, range. the question. over in when a seen it's to that final it's which give think of EBITDA, with very into clear margins. I'm good to we on full results invasion happened, with a XX% the obviously, that then February, $X.X you And give Corteva of be for that is and to a minute, years, entire numbers specifics about of Brazil, talk weakness ago, had for hitting very we're organization, focused have that we haven't we'll degree as I sort it talk billion say the me terms in X EBITDA more Ukraine. feeling what's of that good But of billion we're going Russia $X.X the chemical exact in you it's that controllables. destocking, we've the a overachieved XXXX. But of still us We've years also pretty because that in right, I and when had the some if we're

last X mix that So were very if the largely and you that what portfolio had control, in and recall buckets, we we've good year, it laid these framework we out excellence. simplification, product And royalty neutrality, operational made our called progress.

commented, fact, a elements, on sometimes prepared and of of running year program Dave a and In his lot there. ahead we're a in these dimensions little remarks

ways offset an as market some put we're in a that to management front we've organization been the and -- So finding have us. team been of headwinds as of

assumes that within still another at significant growth So XXXX we we're down And we modest range. targets, Brazil framework step right of see we're don't that when years. over very couple is of I look for because planning as are course, of the in well next 'XX guess example, what comfortable that in we part now there's Brazil, I'd the that that that, say

we've been that offsetting to then the So And was would we good weakness. ways weakness. to if unfold, to that at offset have not pretty obviously find

operational -- our organization, in on actually work time. about quite with that this than management announced management to and just yesterday, the of the long hasn't moved add in and I've cost This there. organization. productivity been acceleration just basis. and next the an barely pleased will progress, program. of SG&A we is of think is a the Enlist that now we're excellence been those for better issues very progress you that's of we making neutrality And sort the royalty very efficiency that The acres, apples-to-apples thought We're impressed If our something level on cost with, that operational

on we're very when together, feeling to and good comes when still you framework. put we're So takes always delivering it that track there's the that but right all it puts

Operator

BMO And we'll Joel Capital from next to go Jackson Markets.

Joel Jackson

moving did on your major chem's at about level last the You about to externally? you some that's plan, Which slide want make just you're some really low-hanging internally. fruit, driving are talk a changes? some i can thought high maybe the you of anecdotes of did talk you plan. really good, sure crop the which molecules underlying, Maybe highlight you this Maybe one looking few rationalization I'm could maybe a keeping manufacturing highlight night.

Charles Magro

start sort genesis Joel, then give program to the over let to framework turn me the specifics. bit more the a of and the you I'll with and objectives, Robert and it of

well Robert know, almost run So started as hired chemical program you years I X.X business. about immediately ago to the And global the thereafter.

went charge at to this from around literally best chemical And So the organization year we've comes CP over looked we led out sort on at we well been operation we for the it a practices journey the when is, looking here and for ops. really what of world. did, Robert and

the laid been until through, take bite run we programs won't And the So a and couple a program rate a the long it's for time. of of a we CP that XXXX see, there's of bring of It's to basis are out our that you really, been XXXX. And million. our very review. going very It's think very ops and underway the here. next the for benefits that to kind say, one our XXXX it some implement benefits we're you're and the going will years benefit values. core very between to I'd be But about we're objectives on vision operating into significant of comprehensive list thinking benefits thinking our kind the really of modern That the real that it's about of the us that the the comes that world of top want about We're XXXX. to if -- for was Safety of kind to $XXX accelerated. some multi-program that first and post is, of at the would trying objectives chemicals. company, is be when important to we work

handled also reliability. We our pretty well. We we to improve think supply want COVID

always I industry but improvement to good, very think cost performance we then, but room there. And competitiveness. was competitiveness. global we quite -- there's dynamic, our shifting. want maintain cost It's is and This for course, of our

cases, going And that and to area, advanced or molecules this know, invest technologies the use be going ourselves this own, and of to our key in the from generation driving some is light assets what of technology because. In in really IP the These you really CP, see modernization, -- which asset sort moving redundancies. today's footprint and then of require volumes plants massive those modular supply we're of you're critical. to that flexible of and we're we going important, the as we're to know is is technology drive some next shift but is and manufacturing, CP in So big and don't are control more is some the be really type third-party generation manufacture of to That's manufacturing, sort portfolio model accelerating. next in we world, anymore. then, going course, going that you increasing to to

us relatively manufacturing we CP, nimble what's you that can need we the needed sort and products smaller, produce more when plants think move cheap facilities relatively modular of of about these cheaply, will generation So that next in that mode. into

the maybe yesterday. in just bit little that announcement you So that's vision we of a And we had terms the kind that can then, give CP. for of specific Robert, made

Robert King

this with journey where yesterday we pieces It's Yes. big step environment to shifting strategy on allowed we're capital. for network has been change a be The Day, is we've for our this underscores competitiveness when do ever-changing focusing able one but become we respond we -- I It on forward some us is control. started you operations, balance going that this on look -- that will about as with announcement working there, and And the us. That's really time. something our year the about at that laid to Chuck be some been to can don't one asset-light the to a what out The to is approach laid that do take some out a an flexibility to external of the lightly. and in. acceleration, we've ago, is said. excellent that The really Investor this improve in supply Chuck part think, our acceleration. at we big that more But of cost is and that to markets thing able

So standpoint, drive us profitability. execution further only But road. competitive puts actions going a market the from in of not these to to we're much us much more allow be and cost going to down the the it is

Operator

with Vertical McCarthy And go next Partners. to Research we'll Kevin

Kevin McCarthy

flow you year on and leverage. net It A I seems more updated guidance zero consider less like commitment the well as If your could flow remainder on question free as repurchase end for XXXX. your cash cash or share on deployment. the with

that more is be, are would not? broadly, fair deployment questions two So And about and beyond? or you thinking for Chuck, what XXXX

Charles Magro

you Dave, don't, and about the I'll Why then numbers question. the talk answer deployment

David Anderson

thank Yes. you, Kevin, so Chuck. yes,

Kevin, exactly. So

right. I think you're

higher inventory demand in just which Robert of also terms in really reduced current as what production overall do our of with well capacity market $X a free billion some the goes levels as remarks cash the payables, of as to has updated stated to for in outlook prepared as pointed managing full result $XXX today out light with the we've million or volume to the guide as Really, refresh, that flow we of difference volume. the year. lower to Just

I where to estimate about about comment it 'XX? about being of want share flow. million think a we for net forecast your are stage at $XXX mentioned, the cash in you bit buyback little think Chuck, do So And essentially you year. this a translating that's as we include, this reasonable when zero debt, does that

Charles Magro

Yes, sure.

midpoint thinking lot Kevin, $XXX it, flexibility as Dave way of at then the that the So million this the we're of about the organization. a have balance an sheet, we and strength provided financial

have an credit A- also We rating.

destocking put very significant capital. been Dave, that capital. all think, industry. of we the will the through together, think So It's when a working that managing we've global in and on progress, made But I went don't require, investment you year next challenging that our good because working

In fact, cash. a it could be of source

David Anderson

definitely. Yes,

Charles Magro

flow When incremental together, think be that you that free there XXXX. in put will all we cash

the look that way record we're And is R&D. thinking And formula also right doing decisions think, I right We decisions, now XXXX. question, testament year, And are that is returning about we're So well, to will that. a expect think is very it? served we've investment good thinking Board of how obviously that. And we prioritize I $XXX to a would which it we something have committed term. your thing million has that about I increasing good would certainly going in this we question are the been absolutely do a got a we the organization. good that these you expect is think But shareholders, a that. have the know, capital significant longer formula as We're but that we in track to it's us at growth very We organic now to works. into are

The will be growth. other though, organic in area,

we're year, and are pleased businesses last two digits. backdrop, today. very some the these next double even gave grow numbers So in expected And year, those Dave performing Biologicals I'd very we businesses performance. this Biologicals, say Even made in of the to acquisitions well, market are about and

for would long-term the looking or think biological shareholder mergers sure. or we acquisitions value. be in would we relationships that commercial And So drive other any of other space course, then, opportunities for

inorganic going And return perhaps growth, some of approach so capital. to allocation what a is think to really of I growth capital. to you're see balanced and Organic expect the

Operator

with Mitsch And Frank go next we'll Fermium Research. to

Frank Mitsch

if years guys the now back you Just know rejected the news courts the just decision -- a allowing updated I it. of in that what curious recent that is ago I of had and it might chlorpyrifos couple a stopped believe curious you ago. now and strategy chlorpyrifos EPA's thoughts couple of is have future you rulings your years and regarding any have I'm and the there. producing be

David Anderson

a in well that with it at well -- fits Frank, in business change This time. Strategically, fits decision made point as today. our exit. no this we thinking, criteria as decision to is Really our portfolio overall

appreciate terms real So update our in no of change, question, the but no thinking.

Operator

Byrne with go next, to And of Bank America. we'll Steve

Steve Byrne

your have to and and you the that for that the a crops specify for have then Don't you're countries shutter issue chemicals that registrations they're is thus, -- to an because is in registrations less targeting. you'd of revised? respective where have is Or challenge crop plants manufactured, facilities that

competitor Pittsburgh, California. registrations? lessons mentioned that that on you others? this that the broader fundamental wouldn't is nitrogen any crop which some we seen is seem to to more right? this some maybe destocking that on stabilizer, have chem issue. have learned make a yesterday Is why any had challenging year same and doesn't Are You right that that. there That's you've Is you that where reason than one question, And relevance your for

Charles Magro

you and come registration the lessons with Robert, can questions, maybe the learned. can back Steve, answer I

Robert King

of Yes, right. of does Sure. And where tie we have that to it's where leading it's is is those stabilizer. Pittsburgh one nitrogen and course, then, name industry-leading you're does is Optinyte applied. of products main registrations. us. Instinct N-Serve the It Frank, It Anything made. that both that produce for brand what of is are made that out a business stabilizers And good into our goes nitrogen NXTGEN.

move location. to to have another we And plans production that so

and a serve our to We this to market. serve the this will future for in to through the in seamlessly we'll position continue be customers better continue time, product

of So into times, many have are we built always -- when are the the registrations and things our process any time planning we products part system. we move redundancy

registered is into of move have transition that's other the plans And overall and registration all so the timing we'll times. one plants here. in that This and many be we

good when have to to do, our network. yes, absolutely always it's rearrange So question, something and go planning we in the we

Charles Magro

been some the has degree. or every And destocking, Steve, industry global look, in in involved on dimension CP think the I player in this

-- is. channel? when of look was. there we there are of Obviously, watch sort We on it signs carefully. Yes. buildup were data back in this There learned? very lessons there a So the And

We terms of you to ground going what's that back years, have of the the still channel. And look out the the last observation. channel. going channel than farm on the pretty today. a consistent. but lot was into going and of clear of was insights over that and more remains when a And it in good the in It was product couple what's going was nice demand that there way

were And so in that manage and coming these But we've from were players inventory the discussed that quite orders long-established was These major clear. internally orders. their these that are real were partners channel. well, like

missed that. this, And so when think to started we sure about we I'm not

increase. view demand that the a to that there perhaps was continue I think on-farm would

we products I'd is is but there the seeing slowing news. in inventories. the generic demand that the But that The where destocking, amount happen, is there's which into or I'd U.S. less back significant quite we're different. in we're see which didn't Brazil, a elevated and still channel that the say if supply pockets, look, is impacting say, coming and is is look down there overall has us, behind area that more is influence finding the And that there country, Brazil, happening what of we that that the are dynamic And been in but more one was is destocking. Brazil, available now obviously, less, and good when are what's or steady. there because

visible, some put of visible of inventories is that that that -- from you could see less we data is only data offshore was and something And seeing difficult it and that. got that together. unique sort clear coming mostly I situation from it it, that clearly some is started pressure don't in once to that now into That for we're But this marketplace. of And of to sort is we a Brazil. area whether the to all we've in very where But it -- pretty we generic company was from where is us this missed China. coming it there's an -- are now elevated it, look know about the

Operator

we'll Zekauskas go from Jeff next, And to JPMorgan.

Jeffrey Zekauskas

There are questions. X

year million flow. flow, In you terms were cash in you're behind operating last cash operating generated roughly million $XXX your when of you $XXX where

and receivables versus the you higher are gyrates and year, So to get and positively bottom last are much what your your higher the to are you've general really to your flow payables get EBITDA? $X $X.X a range be that of cash on range? the $X.X your to do quarter basis, should to operating of the of fourth then cash in It negatively. flow got relative inventories billion and operating roughly billion billion, so lower. to And Can secondly, or normal in bottom

David Anderson

questions. are those Those Jeff, good Yes, this Dave. are is --

volumes. will, in When to So a right, very ticked up to or declines. parameters in averages. And we if of reduction, and then while have receivables change procurement healthy result is a compared year-over-year light still reduction by though, you're you look on mentioned of of which you it's flow the operations the there's as quarter. bringing down I be the generated free because understandable from slowdown thing cash And are very a fourth within result the a a change, of inventories volume at DSOs revenue they're other historic the bit, cash it, as purchasing And way, the to earlier, Robert or is outlook. related inventory as the the basis, referenced those in lower lot on significantly a also the

to year-over-year sources prior inventory a in be other an on fourth on compared quarter. cash headwind. important change deliverable the a will hand the Payables Deferred represent of basis, and So much will of is revenue both receivables year. not a

working that's doesn't play capital it. story. It significant. So really a It's really into really not

to need cash kind terms where In to want where flow of free we operations. to be, be, as going we rate, of from I'm to use run cash opposed

as CapEx, increase very, positive we when a XXXX, from have just we we free in think, XX% so is believe. of reasonable In again, result cash again of to forth what to XX% the capital, after little and we'll So then company. We'll of range we look forward, have bit a building working flow, mentioned. for very the

are year outflow and puts other a the On Protection in on company. there for year restructuring, Crop some year-over-year, the be cash But the should next of good for cash takes. for a terms flow business

Operator

We'll Samuelson Sachs. Goldman next Adam go from to

Adam Samuelson

And in more just Crop on to to would inventories Brazil especially quarter a be for high XXXX thinking little what fourth expectations planted closely. volume the And volume more that how what still little broadly area, maybe be more back Protection come at bit through America are growing? this you volume potentially the could be if channel for a and and juncture, maybe isn't volumes? carryover wanted given on of destocking can are clear and Brazil the I corn shape outlook inventory about you Latin the actually

Charles Magro

Dave, to I you do want So cover comment... and that some provide can

David Anderson

Yes, yes.

part a some of earlier had accelerated. and growth last It So very a preliminary protection think volume muted Brazil. much kind the the We and significant of crop and -- sales our the compares this mentioned look recall, is side. the see year-over-year quarterly we basically a fourth year, we're or on of looking is growth And XXXX, increase remarks, in in the was which, flattish terms basically on quarter pattern. When pattern as this will we in I in it to to year to orders for reason last this an basis. compares in at more I significantly order pattern thinking, you for compared Brazil. prepared saw year

continue that conditions to macro this are characterized in We half second the expect the year. of of some

Charles Magro

our and that way the still this channel just continued CP has both the about influence guidance weakness I volumes described. Yes. And business is QX, think the the Dave price the Adam, go the destocking. and see think Brazil, to of guide range CP about we're or midpoint if through of some because you in going to in

continued weakness we that some least quarters because is at rate and destocking, though, in couple QX of the into destocking volumes the first price way stress than just is continue of is on will XXXX expect terms we the because the of of about of destocking, expected. think So channel to the lower had

the that of a to this, so to say volumes a Brazil. because look I overall can't you from for when. at going the quarters I that of see destocking. some exactly it going But X to to And assume comes we're tell we're XXXX least get perspective, first going when planning I'd at destock to weakness when

David Anderson

I it, Latin actually the quarter another data Crop correct me in let Protection, referenced to Crop And declines see looking when fourth point was volume America in because we're the going Protection. at I

So that. correct

Operator

And next, Markets. we'll Capital Alexa KeyBanc go Yefremov from to

Aleksey Yefremov

follow I to on up dynamics just competitive in wanted Brazil.

supply? generic do of going more in to think shift terms evolve market And and you that this competitive to the long-term next is also how year? Specifically pricing of status

Charles Magro

Yes.

the certainly, of It's is at highest is I a grow we the And So think committed the markets will one still continue only absolutely the world production. Brazil market. to Corteva in level, to that market. guess fantastic

you we Corn pause are of fact, -- the XXXX, something up XX%. had about hectors In hectares over in market, the a time like think up last if sort in XX%. Brazil last that like something soybean

business a market. And lot an never Brazil I have So going do But to been in. back. or of that to will that. it's great companies believe pause straight But market. to be a enjoyed up a committed a step line market going still easy see there's And just we're where this be been a periods think growth nor I it even will we're to has ever highly

is generics the define it we organizations always I These thing. been new you. important. up be bulk I have part distributors when it have off-patent very and service, here it's companies. farmers. That's to the that a think global generics, produce that no there's talk direct the don't of a define me guess, ship organizations These generics. into of are country local will not and picked or molecules about times anything country then molecule let potentially they assume except CP They it market. the representation goes that lot are large one how for which -- in And I no Now

So Where been or the costs. in months say a not we've say, the there's slightly cover that that it been think would aggressiveness market. these would I fact, comes to when we of they're molecules, level part of a that I'd It's generics new for is Brazilian pricing. full their have And prices lot observing in the a part larger always always X of global last, been market. so of CP the selling

does not important. the reasons AIs many are sustainable, older have the We of So of it's of is. But and a think is there's lot issues. matter. or these And to most this a especially this I'd and in want your go Brazil, think so there where for chemistry question? lot the resistance why a is performance I farmers, that Many that they'll AIs that trade-off farmers, technology does of say really these service. And

term, that insect disease that, can pressure service. the to growing you especially I for differentiated backed and But be high period generics when country the it's going there's of cost has, for get Given by perhaps technology, think short place away performance with trade-off. time, and longer a that make a

And today is it but this with. structural a so is we have think deal we don't in to change a that reality the that country,

Operator

Ben to go next from we'll Barclays. And Theurer

Benjamin Theurer

America But South other and share on in a now. into Just some in and lot Asia you've wanted some bit to dynamics Pacific, also looking you spent think We EMEA a you're for XXXX? time framework in like maybe of early America and right similar elaborate you little a -- if can and two commentary. you do North can In way, North on what looking seeing stage, of the markets. of into us about the regions APAC? these and Brazil Anything how a EMEA America provided the

Charles Magro

Yes.

and and then demand given demand Brazil the give prepared said they're Robert, can seeing. in And over to we been we're as fundamentals quite robust. the still you Tim, I'll in are weakness cover it you The in North high the maybe biofuels. feed record me remarks, mixed, still CP. backdrop, is you has They're But the for America. backdrop there turn let cover So Seed can fact,

that But prioritizing many production. the They're of So still move behavior, we're times. dynamics, just and bit. times, exactly And a sort don't talked little kind very global the use the to in farmer for what this up seeing. overall, are a see their very, still stocks of very in buying managing are in that's yield well. expecting is what that's we're about thing significant investments and we've except there'll we ticking shift be healthy Farmers

And thing So and you the can market talk we'll in same around go Seed then are about fundamentals do Tim, healthy. the the maybe, overall regions Ag in -- CP.

Timothy Glenn

Chuck. Yes,

pricing. you lot really as EMEA, see EMEA, a strong our So of this results from volume can year, in pressure

in big a as results down, volume the saw decrease in but was chunk table rush excellent how So a price, our as take year lot I'd into and this We of, say, less pressure was of considering corn farmers planted the that Europe. Europe commodity was corn area lot a of Ukraine corn. put general stranded planted volume reduction what the for migrating off in local on the a

we situation, stabilizing. we that into I next see would describe As as go year, it

past about So this not America, necessarily a dealing was influenced step. sort stabilization say And although by We And still positive summer standpoint, America, 'XX, I'd as and won't this the obviously, which think that's recovery is a a Seed issues. positive we European we the, reducing I with it -- recovery, 'XX, get so I but go touch area. on a of heavily about of in in it, the I'll into Argentina, very year, from step. That that. season. Brazil, talked corn they're a is call [indiscernible] way little bit North weather Latin a safrinha

heavy upon in conditions, what weather-dependent. assumption corn low local do there. be to business strong, assume flat of like in sort putting flat. a El they'll countries, I'd to more that been absorb are does, very countries commodity in we pressure generally and area for Nino in single-digit it, say more the small year. And weather dependence recovery effect up that back of stranded We on Seed. specific terms Our ASEAN call next that's We'll of Pacific, typical, that us Brazil, is slightly corn the kind on will of a Asia and just that a the markets

say, us. -- we demand through, and good as a or fundamentally is or weather South for corn businesses healthy and oilseeds for a me, excuse are market, of bit mustard. India again, but Pacific good which there go And hybrid little Asia in dependence Asia there, I'd strong spot

Charles Magro

CP? Robert,

Robert King

I'll walk around CP.

that good this forward, challenge we're molecules our seeing and regulatory year that a And will that cereals everywhere don't And challenges the the the sugar guess, We in the there. is products well. that. products that EMEA is that I There well are in Arylex a is environmental herbicide of products think technology the and there. regulations to like one from is the covers low environment, one high-technology you on about very pull something see think moving with a yet. in over there. new that This pack, is a use have the X and is that's hectares have the area. start very they some else plays you rate doing Europe, doing pressures over into that's you about of CP, a it that And social special we going our When

Europe the the as Europe, It The we growth and is these plays that a other especially the as acquisitions over begin see next Biologicals there. thing in move for Europe big progress few that to us and the is there around products going is in new fruits to we be new the years into growers. we'll with an opportunity the of need technology of in and for there, registrations need vegetables right for market forward

Europe. And so we're seeing good in progress

some we forward. Shifting that as Nino over this about this year leading Tim from El you look that last inventory there, we we're gained weather a the year, than have. be has weather -- some in we being things some next market. controlled have herbicide Asia, good will share technology much of Asia others got at The shift shifting will products that a acres then La we've a products India rebound a that the put this really hopper position slowness Asia, market We This the this year. pretty will acres a that to rice has new there year the pretty in challenge in year in say in planted have Asia as Plant going good product that been we that channel. to move we're from we going rice seen is expect in thing and positioning really rice good good and that next Despite When the and Nina. And we've forward. as said, that launched that some this for as of And hot has rice grow a Pyraxalt. into see And better in mix is weather, those that Brown one expect Rinskor we're places down, would the I the there soon recover. we're into shift planted despite inventory but a we our been in with in position spot. market moving

use it new don't And for of you vegetable leave huge we low I'll Biologicals think about us. But speak area, fruit about as market, lot not plays rate products. with market, and it's plus some you Finally, because well our again, that a large Japan. into that

expect so we in Asia, continued growth. And a overall,

technology going we're continue a part, both. and to play that expect positioned for to is big well We

Operator

final Spector our Joshua from UBS. take from We'll question

Unknown Analyst

for on Lucas is This Josh.

next and Seed I us you if expand comments Chem your was year. of costs the wondering could just flow-through So Crop on please regarding the for

mentioned into through flowing inventory and the of a higher So sort of P&L. sort lag more of of you costs

if Seed sort maybe us us costs year mean some next to or expect of you and down for lag and whether second be great. Chems the first kind could between that between you impact, would if disaggregate need overall, help I into So Crop half you half, of highlight to of like like to it sort up be of that split

David Anderson

Okay.

So this thanks the Yes, question. is Dave. for

influenced the our seeing And cost and favorability to the but result that's cost that in Seed cost very early, by we're timing goods translate to know, in it's be a on of we I inventory of the to price as you ingredient little or costs of indicated translating spot, we But commodity and remarks just if in the in in in that. actually you because seed. bit year-over-year bit -- the quarter. slower Crop, of be then anticipate We will overall, more Protection which as going heading just while. that XXXX feel raw It first input just a again, seeing half in come the to or and both of going materials basis. In a the a a the of to Crop phenomenon. starting benefit also will, year That's we're inflation into to terms costs takes for right direction. fourth be anticipate, down a It continued inventory XXXX. of sold see, little turns, but of we are to the in come either buffer, third prepared we're business, So of spot in now against good fall. case start quarter going

another lift, another as out XXXX. see we'll we So improvement to look

Operator

now back to like call Booth I'd Ms. the final turn any to Kim for remarks.

Kimberly Booth

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

Operator

does that gentlemen, conclude today's and Ladies you. Thank conference.

You may now disconnect.

Corteva (CTVA) 9 Nov 232023 Q3 Earnings call transcript