CTVA - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to Corteva Agriscience's First Quarter 2024 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Kim Booth, Vice President of Investor Relations. ahead. go Please

Kimberly Booth

welcome and First XXXX Quarter Good to Conference. Earnings morning, Corteva's

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

Executive session. Executive Vice unit, Business Robert Protection Additionally, Tim Vice the President, Crop Q&A Glenn, President, join Unit; Seed and King, will business

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

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

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

Charles Magro

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

also rest actions. see into increased the progress in Today's with cost insights on making as plan pleased we continue unfold. our and our the Enlist items of we're year how the performance, first the quarter be and will productivity first strategic to investment very be half and our biologicals, We such some including focus executing innovation and technology, strategic

with me line. bottom Let start the

expected. not yet North mostly playing is out is America, as While in planted XXXX fully we crop the

XXXX financial are in remain track framework. announced our reaffirming early year guidance, our on And to so and February meet we full which we

from have relatively constructive Globally, we an fundamentals. perspective, industry

meet see demand, protect feed for are crop in continue to investing yield. grain, growing this and record-setting order to and In We farmers oilseeds, enhance technologies seed to demand protection and biofuels. premium

Our price up X%, very value to a up to reflecting sales and technology having X% business good farmers. the year. is are consistently the Organic Seed is delivers start

Our demand Seed reflects order strong our for book lineup. product

year soybean are the is bring from area seed soybeans, year resulting corn We in technology and If new to our planning with in current XXX years XXX increase we into area impressive to soybean feat with acres projected XXXX, will farmers that planted quite Enlist new this market the of selling U.S. products the to to planted be technology soybean XX% continue about fact than shift #X the varieties. Factored trends approximately for U.S. all about a in in guidance in projected to where an are hybrids the be X.X%. in U.S. less about hold, X of the our

much time On half, in significant million exited added lower-margin end basis second more growth about channel remaining as in high have will our coupled $XXX and closer anticipate that farmers making a imbalance in that of delay By performance volume biological XXX level, destocking business is we in improvement a to margin Crop billion But expected of environment. Protection XXXX, in At Protection frame. particularly the and competitive since improved ample of EBITDA the signs stabilize. residual Latin sales, products purchases to made new by regions XXXX. $X X-year has of side, application This point points to is in effects a products in we their the are Crop America, the resulting with all window the supply volumes. creating inventory

continue to to this will portfolio business. value been creation biological by differentiated create Protection has our Our and new industry-leading strengthened pathways Crop

and As XXXX. result portfolio differentiation segments, growth fast about in mix our in of has an market actions strategic XX% investments targeted XX% to portfolio estimated a grown from

continue global rate on crop our by the to footprint, where annual estimating $XXX we of of are asset execute savings also XXXX. protection optimization run million We

self-help continue the million Protection company controlling our I to throughout as the the enrichment crop expecting mentioned we In the the will we're value and cycle. XXXX. A see providing and protection I by and XXXX second benefits actions our ag These cost business million As new half. as in driven controllables. said, on still drive of growth improvement drive industry final our $XXX actions expect are margin the well products margin to again in in XXXX, return to point $XXX volume Mix Crop in and levers. from to for between creation enhancement biologicals

on we call let our time world turns and Finally, been I'd future X,XXX of for rolled million one to of more celebrating competitively optimistic in the proud impact a had XX,XXX we over a the future be that We'll most X. which turn has advantaged large. employees, portfolios remarkable for like for about farms created in world that of that month, the out to products agriculture our technology technology say the value It's and new that me customers. and that, the together industry, around farmers, than our note about and Dave. and next-generation XX remain impact at and fifth over we've the anniversary Corteva we've but the Corteva. And in also to with global only to I'm agricultural with shareholders built the the not journey,

David Anderson

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

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

in Crop the first with see quarter operating other operating gains expected, volume down with digits growth and offset all expense improved quarter as first can Protection. pleased benefits volume due year of year. the the net numbers, a the were prior last double in part in with you were and for North from more were another and quarter results said from X% were down Chuck report EBITDA Crop Organic from than XXXX compared sales obviously As down with declines Protection expectations first sales royalty We're largely by line to by Seed both Seed billion offset EBITDA, to $X of against comparison. to strong volumes quarter Seed productivity regions. in And savings. in America

versus to or expansion EBITDA operating Protection compared with XX% down Crop However, in year basis XX% quarter margin Seed prior was was offset margin for approximately EBITDA year, the prior points down XXX by headwinds. and

up in region pricing across continue gains were other just-in-time which Organic EMEA largely by sales largely net to by Seed is portfolio. Seed in gains in versus volumes versus Let's driven second down in impact was pricing for Crop volumes and in by regions. to go XX% response strategic compared value. prior a and including as was on were to closer purchasing Seed to and segment. in Protection pushing X% quarter. was year. sales the Notably, down exits. were XXXX. down product And nearly up with sales tight in X% to of in up impacts X%, X% declines price year, North to the volumes by by delays were broad-based in demand Pricing to we in the mild were Slide the XX% decline sales and sales weather. shift to the was review quarter were execution destocking down Gains of America with Latin residual quarter America, North $X.X application down Crop strong due The competitive up every in X prior Protection America window, out the channel inventory and in EMEA weather net pricing global quarter, X% offset impacts. were sales driven EMEA management. driven and first X% strong in pressures unfavorable billion. the currency Crop associated Protection

the quarter the translated would the a putting to Seed normal Slide above the points last last year's seed basis during pioneer of week operating the March of year, United of deliveries deliveries for tracked XXXX, first pattern U.S. States the last weather prior approximately favorable much quarter, March, for XXXX coupled margin product EBITDA seed which delivery mix, consider in we to year. significance of line closer delays. The in XXX mild X of ahead strong in with With increases price XXXX and a versus illustrates seasonal

that, X With Slide performance. for quarter go let's to a of operating summary first

quarter, Pricing gains, of sell-through by operating to line modest $X on the Crop volume and improvement headwinds was The quarter the in with million input cost $XX currency actions just and net coupled and higher million costs Seed was cost cost commodity offset of declines inflation $XXX Protection productivity and billion, expectations. For reflecting royalties in costs largely inventory. EBITDA again, over related the to were higher with down in headwinds. approximately

still million acquisitions. SG&A the deliver G&A full to Importantly, based cost approximately full the quarter Crop for quarter purchases, deflation. on we raw expect up from $XXX input of a of was XXXX X%, for year Protection from primarily approximately from savings biologicals material

SG&A versus prior more spending. Excluding as down year was acquisitions, than we X% maintain disciplined

setup year. let's remainder and X of second first With for assumptions I transition to to the the half and the to for the key of the that, go XXXX. want Slide half share

'XX from versus Seed flat Crop prior and net for to be These Protection year. half of is offset to higher with investment will first strong half of through on just-in-time year. related the the cost lineup. first the related Seed demand EBITDA in expected experience actions. compared to year. likely first will deliver product impacts Crop costs. down year input momentum Crop be expected increase low residual in R&D benefits be in shift growth half experience Both North 'XX Protection expense the led Protection by to quarter productivity headwinds are Seed of the a the first and year, also solid and half reduced the the expect and first expected compared destocking the sales royalty down will last commodity continue cost costs to and from We modestly and and single to half to to the down of both digits to headwinds America by slightly to to SG&A last market-driven partially first continue are

year. half the Slide turning X Now the of to second side the regarding of right

driven were as XXXX mostly EBITDA the In partly to 'XX XXXX. in Crop safrinha expect down weather. XXXX, where and area volume after result reduction sales season due a a and Protection, price growth, XX% double-digit Brazil second expect a comparison half primarily Seed, of in we We to the from rebound by corn combined

results in the loss historical with be half Seed the expect to a pattern, EBITDA second in in small likely line We half. second meaning

remain to volume Protection challenged. Crop expected gains much second growth the in with of half drive will the pricing

Protection Crop growth expect half by in Latin market some be the second We enabled stabilization volume America. in to

Our for biologicals. case base in spinosyns down in is Brazil, And new are inventories data assumption uptick channel year-over-year available and led trending a suggests Brazil. products, by volume

While higher levels historical they're still inventory versus have come XXXX down than year-end. average,

at So demand normalized remains in the in channel inventory level. expected a the area towards and the progress Crop farm And the applications. increase gate making Protection planted supports more is additional healthy, Brazil

driven half the So biologicals Brazil. strong market largely which by Stoller, has second for in position outlook a growth is

in actions We a deflation in bad protection. And of see Protection crop and expect project, Coupled optimization half cost as driven accruals. the spend compensation during benefits the for input increase anticipate footprint from reminder, including and an a tailwind normalized cost debt to SG&A we the we by with expect second Crop in XXXX, cost productivity year.

increase investment the in to R&D. continue also We

path half a balance second and we roughly flat the remain operating execution Together continued the year guidance the in on half growth. for and growth, on $X.X first drive second be will EBITDA billion our but $X.X full little assumptions. the than billion, improved half double-digit range with different original of conditions So market to XXXX EBITDA of track controllables will

input year, the cost to low on more assumption, Protection our remain in increase price addition for track deliver million $XXX $XXX And the company actions. single-digit deflation to our total in while Specifically, be net expect on be year pricing higher than royalty more expecting and Seed. Crop and with controllables, million $XXX down we cost reduction expense, from now Protection we an in we're gains million to from original slightly productivity cost the savings to in growth, total volume marginally offsetting Crop pricing for

let's the go XX and So to summarize takeaways. now Slide key

And to the for line prior strength Seed were growth. deliver expectations, performance first XXXX, momentum royalty including half for year of with track operating the by first reduction of First, our driven quarter our guidance, was we And in the net business. the sales the in pricing earnings continued EBITDA by year, full XXXX, business of XXXX on XXXX quarter while after Seed down standout technology led and and first expense. remain performance in results versus continues

forward finally, free the of our or the Protection Crop our cash actions Looking of flow half second And $X.XX market deliver the to quarter of supports year, improvement conversion. cost growth. billion ability cash guidance to the much midpoint result drive approximately will and strong flow the some XX% at of first

with And over me event. upcoming an about that, with let it announcement significant Kim turn to Kim? a

Kimberly Booth

of We Investor targets, will to We're at on Thanks, York on November. provide innovation forward updates with along November you management in Day and New to company's excited City. many held XXXX will XX Dave. showcasing highlights and event be seeing that pipeline. team announce our strategy our look financial this the The in

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

Operator

Instructions] of Vincent first from [Operator the line question Morgan Andrews Your from comes Stanley.

Vincent Andrews

to Seed maybe line a of got Dave, quarter. you first understand your the side. Could the the sort the more and second thanks you sight the have make updates order to your on Crop bridging you've line of the half. confidence Protection in all just and us confidence book, of good sight Clearly, but quarter on first Chuck the talk bit on, little for a about help quarter that

Charles Magro

start. the backdrop me then you I'll and the help with give bridging. you can let Dave So

off me speaking, still healthy We're and about the record and broad are healthy say got So we're in. money. But pretty is first a economy. let statement, ag and them macroeconomic be is operating making course. of demand this On-farm that they're feeling peaks, all, very of still good farmers We've a -- for demand. steady environment generally to this their looks

that thing the I'd for controlling about say feeling the we're us good quite other is call well is what we trending controllables.

recall, removed improvements. productivity if you So about year, of last self-help XXXX, this improvements, from reduction, terms royalty million notion, we in cost $XXX

bring So of if coming a million together say business I'd look a the important course, especially quite of then I of grow is And we're and being North nicely. this million. had out to in that to $XXX on that's what technology high new Seed lot it's just having organically, very $XXX quite and -- that quite is at technology, and America continues think uptake you as year, year, we business, a targeting farm. the the And strong

all, So I we is year full was as felt it, we first to important of we think at expected. given at it that the pretty we backdrop, look and the unfolding year, look much think when

now want and would a we talk the laid do the that. hold. bridging? So out, X, billion XXXX, X $X.X we XXXX $X.X billion even And the about to the Dave, quarter very looking to quarter you about then bit comfortable creation still past framework into feel value little

David Anderson

Sure.

prepared we're but terms I Protection the There's expecting a the themes be we basis. in down some for and North on But anticipated remarks, the including So about the year-over-year that obviously, in revenue half in EBITDA of to that acres. results. the think, of of it's America strong continuation to anticipation, reduced still, some business, continue that's seed improvement the to flow-through very the to that's of mentioned, I a benefit quarter, both going be see talked going We're Crop first first positive. despite corn and of crop as really the

Crop not that line finish going improvement an second quarter, variance be in will -- the a of year-over-year the we're on be trend offset to basis. have segment year, in terms half to on that quarter prior down first will the from enough going in to but Protection is So -- so first

going business, significant to know, the you half. that's As biologicals more in only really the for and expected modest improvement we've got second be much included

thing well. second of the Crop to the The is of particularly Protection know, really as deflation terms weighted half and you as that's benefit in on side, cost the other

So part, themes the you of half for it the Seed of in really becomes the bridge, the and continuation second a Crop more benefit productivity that that if much much a first most for the deflation half, the more will, will, Protection. of volume you the both first of and story experienced quarter. in anticipate we live-through, of Crop the And then to really, is we the if

So hopefully, that's helpful.

we the again, of context reminder, we're the for in the terms of the by if just that this guide way, or we split our as in And earlier, that at XX-XX, just overall is half. of affirm EBITDA kind restatement anticipating, comments beginning stated will, you terms is of an and a in a around which conversation first and for year, our

So slightly Thank you. half. first think of down that to as flat for the

Operator

Your David next question the from Begleiter comes from Deutsche Bank. of line

Unknown Analyst

This this is for in it pressure? about and the any how year Can you seeing [indiscernible] is U.S. talk soybeans and dynamic you're being just Dave. here competitive if

David Anderson

I'll turn that Tim. to over

Timothy Glenn

always my Yes. markets always mean, first I the is are competitive. answer

So selling operate top no end performance. that. the question premium high about And the business branded at of market. product, especially We're a our we

recent so in the soybeans it what years, so and more typically competitive But if always it's competitive, I than are say know there's is. marketplace. than And lower-cost I'd any more corn don't in options

order. have So good I demand done a that job think of creating teams very our filling and

a competitive, always interested alternatives, in it's products. is, always But farmers paid who the And are we value, I with on deliver to that obviously, high-performing it's that for fortunate value to are we we're be we're, going work customers on appreciate planting customers. but continuing answer There focused we're getting of think group our very and to lower-cost continue focus to very, it. my competitive.

Operator

Your next from Markets. Capital comes Joel BMO of Jackson the question from line

Joel Jackson

to of Maybe on a seeds. ask bit question strategy a

-- different in affect year? a and strategically all you seeds, the and the What now contracting aware you strategy tenant Flex. seed to What and variations your the different is So view the happen XXXX to going you going the or you in dicamba are dicamba does Xtend with obviously hear? maybe player that of increase for set what's growth you're trades, you who will own, How U.S. we're with for seed-growing your on seed uncertainty. do variations Enlist on produces of -- your about what Seed going when have of usual do across your out rest own talk this Or list? year. to Are variations are this you what so

Charles Magro

give we're you the then an context finding of book what me current and order Seed question Tim strategy dynamics overall the from perspective. answer and on can sort a Let the from

we times today. So already couple a of it said

I expansion. down, very growth think the are pleased us. again it's performance in think, margin 'XX And we're and with for Seed really in expecting we coming I

it's strategy, farmers players shifted that disease of time. insect price a for new all varieties But hybrid and resistance, are We seed investment and to have productivity almost and for our think and long every resistance, value when some that's seeing able that we're best here. the terms XXX you're been the year, and worlds all launching I of over yield in

that. that be put, is it franchise terms our communicated is corn strategy. we're like away decade. benefits would that ramping now. haven't that of we've still net are wouldn't happen really still we to out-licensing turn from business Seed nicely, on royalties, our plan the sort partners revenue, the year, it one Seed terms even $XXX and Enlist through comment. that this likely are seen overall ramping So journey technology purchaser for in and towards costs simply and we're we of momentum lower getting over is And seller. And we've of moved up we said of small that now. million another a of expecting got in of being the flow buying up. to that, on that the XXXX. Canola just until neutrality really in that there, net first would sort Tim of and last yet. a lower We net we And technology net this And most said that lots but be we've technology end But to We're I'll strategy,

in So works see lower you've selling some of you're we 'XX. our is in kind as we COGS cost business manage but got hedges that as to the of and to and that 'XX this technology, wonderful well through product eventually, how going have

and maybe talk at some sensing the and Tim, September. marketplace. exciting current will Day the in that Investor you're and we'll that So But order the our book there's more new things about come dynamics in

Timothy Glenn

closely the of the last dicamba like. the around future Yes. I been looking for of at that things it's as several mean, we've one certainly the label what looks months questions

year, this So again, that impact I'd had on this very reiterate say minimal year. a planted decision just what the to was

terms dicamba I So there the the by dicamba an was supply the And commercial for. that made who for channel of on market to the of in the when crop was it in are that and was adequate those was like want paid planting, probably farmers felt spray. purchased, think label decision large, seed

year, clearly, answer it's next into big questions there. some to Going

plays of too soybeans. it whether if how is terms like the dicamba the out has market applications do still on of uncertainty on thing say in they to speculate fully I'd the over-the-top First label looks it or given early is what a

their we've there. are close impacted to their what what or to our So thoughts customers stayed -- and tried gauge

products will to will stay stick in with into are future to the anticipation in opportunity and to of who with For There And be -- market were would kind they're who those some they want the were some as next and saying, say into to soybeans of there. done. dicamba we go I'm to are Xtend and switch." of there "I'm planting technology, fell customers anticipate that that places. are year. I'd X who is camp it the Enlist that use shift still satisfied to I part in ready that There going going

the the having and majority at and seed away are make to on say situation months wait and back see. looking of I'd probably purchases. from a farmers playing They're stepping decision And a

to going that forward. wait they're field like looks looks -- and what see like so And that what going

our with some In on and the never as for decisions our on what how to we your of seed we is seed it right terms play upside opportunity crop meant supply. planting, now, impact quite demand, plant for the always weather going out plant certain

So A-Series our I would approach upside say products will and is an taken we B-Series where the we've demand if have on there going forward.

some So to for And doubt, you licensees that. we're there's to we've over access well I very positioned a be technology, And taken have those all that seed upside things and demand kind should got where will who collectively, remember of that back, got switch. sit all see. wait say But XXX no one would to expect that the of as would we supply supportive. producers, it's that position I there

our obviously are customers. staying close to We

get the and there like. for year, looks with help our understand the continue critical selling to decision using what the And I September, as going into, next we season into season out go farmer is of value and say, based October, off that of we of November technology. go will seed them think to We dicamba be opportunity faced as

Operator

the Research. Your next Kevin of question Vertical McCarthy comes line from of

Kevin McCarthy

about weeks recent in proliferation reading We've Argentina. disease been in of stunt corn the

either Crop is, product Corteva wondering quarter. ask indirectly the part talk trends by I when of market And we wide could divergence if was quite you line, volume Protection through was on about directly that insecticides reason or I through impact a any look dynamics. might there's corn at So or the whether your in have

XX% insecticides, versus for at X% herbicide. down Looking

to kind you those numbers. just breadth of speak maybe could the So of

Timothy Glenn

Tim. is this Kevin,

from me escalated Let growing the it's emerging harvest. let clearly season. And what's and farmers' speculate it first. it's so gotten into reported today. is think the an issue say Obviously, standpoint grain the go impacted to middle of the the can't me seed is impacted yields. address impact talk on I as we've what this later in -- -- I'd that's won't it's being on even I I there. And still we're And harvest, try rapidly

corn Brazil commercial been we of that the there's materialized never issue several leafhoppers I'd -- where just Argentina, for in issue. the it became do stunt. presence experience same -- Our know say last dealt in It's have with a with always years. we've so we it's I

standpoint, good from say And a standpoint. production seed this so we're from year's I would

impacted was by stunt, Our seed farmers crop but clearly, some were. corn not

to to And with going so continue our we're work customers.

are in closely farmers The now, them to the their next they working we're We to continue as the Obviously, go field with right crop. is work wide. in season's to planting to make and harvest decisions. have going as window Argentina pretty

can early way the have September, through year. all the of planted say, in You calendar corn, end the

X the million they closer very of that means third they farmers that And they say, I and would evaluate year. Roughly standpoint I Argentina what sit think do risk quarter. the this speaking, hectors late how hectares for do and of so and of into as And and is their they those are the -- quarter of as as seed anticipate goes market, to export less to back so fourth are environment into It's what the they wait and get see corn. more to is farmers have the decisions. operations and evaluate that of what kind leafhoppers from making corn corn plant many window, the get that whether important. going will into plant same is XX% last yes, of or a level populations

Robert the to it the going to insecticide talk I'm impact so about And pass on to portfolio.

Robert King

this exit Thanks, of Tim. several one has The molecules, herbicide stores, shifted of those. you time, over got with, to the glyphosate portfolio our start being

is QX timing. in is around that added two be last for year. its year. something quarter acres It to with Couple the XXXX that mind, grow trusted The there QX for technology will in Keep high will our a the line. we we growers, full in soybeans. thing demand. But season continue herbicide things. be a continues Enlist by that in that is and in will really of it's North had a volume load good Overall, to company. America a second see in year. was this pretty mind, record really Keep the very also it's up for be

when So need with you to where in a we're line of track it the season for crop, be. we

one [indiscernible] So on up that timing.

In going weather specifically on that's Europe, the in Europe. about what been think Northern there,

there applications that that wheat on behind herbicides. serial of year. will a this we're something planted few So think out acres But through for that's some work well. there's the was also And year we short as

begins story together for that the line year, full we're good the place we it the really in roll we that look herbicides it tell in expect year. to everything a to crop on for and be You and at as

you farm. about advantage then gives strength And it insecticides really -- something keep to are asked a is the the that better talked than it's And mind, in that the that, comparison continues to on a the in franchise. it's one perform Spinosyns as testament to our brings, This market. the them technology And you growers that. that as pulling about technology

hopefully, helps. So that

Operator

Fermium comes Your of from the next question line Research. Mitsch from Frank

Frank Mitsch

in in benefits recall FX, $XX be about Dave, $XXX being your impacting do greater we which million a XQ. Should are for you that fairly for potential comments negative to the with that And royalties don't as XXXX. then I was regarding $XXX think floor XXXX? indicated million also, any are million XQ. the expected benefit for graphic we We're love over I Investor Day.

If for offer profitability that be some impact thoughts beyond, would helpful. you could and XQ FX on

David Anderson

Sure. Yes.

are to of question, terms first of really the North first the due your weighted in regarding part to those royalties, America. half the So

I by which Frank, So the target, think remarks we the $XXX as benefit. million in -- and track, is, on we're royalty And way, our a to said. you stated

income expense basis. year-over-year an as income royalty on it's as a So reduction -- increase well

part regarding second the Regarding question exchange, first we due Turkish of really the lira quarter offset your that foreign was the pricing that and mostly had impact. to

to Hopefully, actually So the going that's terms the the a offsetting currency. what's look part and benefit for we what part that really helpful. of second PVC was have pricing in half, currency in into on that's of our forward We're of guide. built at small anticipated

Operator

Steve of of America Byrne Bank line Your Securities. next of question comes from the

Unknown Analyst

Yes. in This is [indiscernible] Steve. for

much especially pricing you varieties? And So well, worse And this, is, U.S. part think. second economics farmer the since about good bit ask we the question the -- and are currently? you part what price pricing of the in a FX a than to And example, of outside of just discuss bit I bit increases marketing to is mix. hybrids And offset price little farmers us here, how the your how as products? driving is, the you pricing wanted U.S. price first to know was And outside mentioned, you European pretty U.S. seed a upgrading the you to can increase, this like-for-like new to can compared had start price little let once Turkey is view, what for or little versus do upside genetic in seed of is

Charles Magro

Okay.

the of look, in seeing first So ahead. price talk we have value. little each regions, how what Go we about talk we're I'll for about then And on Tim bit maybe Tim. can a strategy our

Timothy Glenn

Yes.

value, I of the year. range value that be the for price the anticipate going time pricing -- the every in low based we're we mean we products single-digit new off of market over that to that -- that on to that's bring So

and XX% of and have little for us share to that lineup a but North I So genetics with asked we following pricing question, And our XX%, bit power. open Europe about new had in relative door think difficulty think of you the pricing I the value the I America. gives our customers plan between that

say devaluation. I in countries increase offset we've inflationary one to where we excluding still to low those in currency. Europe, price single-digit where currency had was And had Turkish currencies we as of price had mentioned, price the would offset have So would those that a Europe, lira Dave

So there's positive still momentum there.

And in different North products in and our majority some really pricing America none X products of terms differences of it absolute associated packages. between the Europe they're completely The not technology would comparable virtually with would. biotechnology and have in because regions,

are comparison, marketplace. fairly and value apples-to-apples but for an both really, not priced for their So it's

very do of a the So share It's about the the more customers have we value when and regions, operate to the back world. our opportunity I'd philosophy is around that, to geographies. we we through consistent that's that then say how And earn the all pricing. value between bringing

Operator

Parkinson of of next Chris question the Wolfe comes line from Your Research.

Christopher Parkinson

both well on just about Obviously, year. for CPC few on Great. Seed. Can you're the hedges you thinking have a speak as as the how on latest this latter, COGS update you

on basis, number that the annum be XXXX. on inventory on And turns onwards? of thinking side think just into preliminary half a given that as we second we have just basis, think of could CPC a the you about So about how should should we how we per throughout then and progress about XXXX

David Anderson

just Dave, give give -- I on So perspective some you some that. you could, maybe this Chris, is

costs that's through terms historic cost goods costs, of but going of for some well newer which which do of our increase first associated part we recovery got year-over-year the it's higher cost sold. the for I set going in inventory think, to will cost that's the the basis, business to that there technology some technology volume. very to have 'XX-'XX guide for some very, assumptions XXXX older and that that's from transition -- to in that the terms really higher And season. you safrinha we're a Seed flow look market of half all, second and it, around that the in business And see, prior in and up improved call production with in Seed particularly this when guide, on at in we've a carrying just market, volume, recovery market also anticipation of is

and full $XXX year When million. back for of you productivity we're look about stand of absolutely the in overall, track on terms

other raw I in have terms half. Protection ingredient words of and deflation, in Crop cost the $XXX or -- we benefit the the earlier, million second mentioned in terms may side, cost material anticipate of in deflation, On this

So that will the tie to deflation our year. expectation for benefit million of $XXX full of

safrinha. we've the a element the Seed again I mentioned what uptick absolutely controlling or you of to market that, also call well some actions with the in cost fairly that Crop other as helps. businesses, as we'll what as speak about XXXX well of favorability does it associated exception business. what got I market, cost significant for business up for both of it, recovery benefit under in now see in we're additional that and now for with for call as because on improvement a of, where we for improvement Seed additional Protection have the if where the will, assumption And terms track is And in the commodity it we that the hope volume for some of Again, second very key kind cost of improvement half, of deflation sets XXXX. is banner controllables So

Operator

of the line question Samuelson from Adam comes Goldman of Your next Sachs.

Adam Samuelson

of Crop deflation the place? the to ago acreage some ingredients Enlist of from Enlist of is the own as value some think -- now on competitive your any kind the And was hoping realization And you kind you're meeting Enlist what has to have generic in much the the on couple a and years for share of reflects on Enlist change herbicides, seeing can that is in kind there. higher Protection rate expectations much is dynamics that pricing more the the garnered maybe branded of herbicide lines? just of a market? the of the product of Crop some in Protection in little the kind in in maybe of that at versus an dig a of I that side just soybean you do specifically, to actual in how And landscape of tracking active U.S., talk attach your side you key

Charles Magro

lot And let competitive right one and you I thing. now, that think give Robert not is sort the Adam, you questions. overall of specifics backdrop. me tension say give What we'd your a the of then can it's to there is

industry global is that back the destocking still called market sort there think are And to We've through good U.S. the going though application some just-in-time be green the out I is seems the the The seen. of to shoots. working closer to news window. we've it. it's behind that

that through and some there. difficult going we've weather terms talked I So the -- first the is there's the some But and in been trending missed Europe it's applications. had destocking in And right this think through about now, some timing they're seasonality even quarter. morning direction. already the they've and then of

in. the has been not not less amount, we They impactful. some participate the and in bit a products APAC but had at a least significant that little portfolios

seen still trending It So inventories reduce the bottom channel then imbalanced. seeing numbers quarter the is We're now Brazil. December that comes for first early little And without down are the Brazil right from very will the with it right the a to we And in in is Protection we've statement. think in needs still line certainly still numbers the that goes but it that stable a is, and to Crop important Brazil destock globally is saying, And and bit on-farm happen. heading healthy. positive direction. is more. that But demand direction. It

over question now Enlist on it to I'll turn So answer with rates. to attach the and Robert your that,

Robert King

is first and to products pretty stiff. on Chuck think Thanks, performance there, creates Spinosyns better Price very to then cetera. These rate new our this farm. be industry was to But continue you of demand. strong to as pulled the and perform quarter portfolio When our the immune different. environment of than the the the impacts by through to about, a industry. things et combined -- competition, than talked pull, the continues and Chuck. Enlist, the aren't value marketing value But market on specific And price it have they for about continues better and strong no environment,

over continued the still this in growth this rates in volume we'll XX% technology. past. We Thank year last do be And seen year we range expect to with as we've that see you. expect that spray

Operator

line Yefremov of question KeyBanc next from comes the Capital Markets. Aleksey Your of

Ryan Weis

You've got Ryan on Aleksey for here.

an I imports, the little of saw you in Brazil. Just of a in little in slowdown kind a wanted XQ. you of know to on bit bit influx out XQ, a generics called dig which in then

seeing Just trying throughout and today? to that kind what how you're understand of progressed XQ

Charles Magro

Yes.

stabilized what import normal So look, fourth even more rates. think generic that in we sort into it I in imports call quarter our I'd called the Brazil out to of February have

coming and overall company they've certainly, a -- are part service. for online off APAC our market, of differentiation, the to been is is and sell part And there's And always some larger that new That's in there. coming Brazil. been agronomic as There patent. new AIs so some a nothing strategy capacity they've value

And the generic not is of the simply on. where focused so Corteva market lot there's parts of a just

So I'd we when fundamentals applies comment CP the this the as think well. today market, that I market Brazil global say and to look at

that a we here is can change nothing is that structural There see.

as of level CP little volumes XXXX, would should But specifically Brazil of we Brazil? see we're question then are because what markets, we see some think is that to half we from come the has that couple we key we a of look get that this through of to think is in that's XXXX receding, of and normalization. second these now global 'XX of But early second to and out industry have kind the are sort expect half half what will start when big we specifically been of inventories now It's return into improve. as second we 'XX. And to return we to direction seeing in out played clear these that The that I after the forward the are out the to expect, talk we've XXXX. as I would points of that a data the called do about and some got get growth. assuming that

Operator

comes from question line Ben the Theurer from next Barclays. Your of

Rahi Parikh

This is Rahi filling in for Ben.

space. So more within I down the look to wanted just trade into

So color see into seeds when they you wallets buying from need. GMCs any down plays like also a trade there's away CP tighter mainly geographic choose have Just that regions and believe on quicker any farmers others? that farmers there's that just difference, farmers this that. biologicals if do on today, Maybe fundamentally shying I have data fewer when those GM traits. but than

Charles Magro

would Tim then perspective, think hear to helpful Robert be from my it and one. I me give Let you on this and

will prioritizing their this farmers So are many in we and have we've conditions conditions acre because, today, the be but than last production crop also even per in generally, per weaker profit. always environment, of cases, acre few stronger bushels seen what sort

for of types And have seed not trend so significant of from in down a seen an overall a crop selection example. we of different perspective, inputs technology, sort

products half see or second real especially And proof to sort very biologicals pressures. XXXX considered or sell nice business America. think, difficult we solid. are certainly, South the in applications, we conditions But our for was of not don't the have. when weed actually, skipping is biologicals, when And that I of disease or be And very the farmers because, to comes pester that's point, have they to them it fringe

grow to they're think and their health, to will they plant physiology, I yield. how core to

terms And see packages thoughts. so if things and in down. tighter will But little a the really don't their we get of farmers Tim, trading acquisitions. them likely purchases most core land make fertility capital other your core input and decisions their crop packages,

Timothy Glenn

No, Chuck, agree. I

bushel a that it's lot they farmers, that produce, going yield have season, they thing traits. the in some the technologies the system, not see first in the they're you manage traits no that of value last they in I when talk for utilization is not how the also over you fall that what's whole line. margins and just remind to think always tight we you evidence field, bottom especially when I the of production and but down. And about benefit biotechnology it's to not the pursuing only out that seed there, changes to course it's the is or provide trade it thing remember have of but that Those get -- the bushel that the determines

yields. makes continue to or in it's the money money things over protect and invest to them to are And what they help the of high-yielding case and that make think protect the going understand customers them in trade seed, so time. genetics technology the And those I

Charles Magro

how about Robert, And biologicals?

Robert King

serve. Yes. Biologicals we plan part of is the core -- and the a they're crop customers

is the under sales And just while immune we'll to the very, and and this and held when portfolio a made to year, well. this the mid-XXs benefit as we've of going business. season. the think expect are 'XX, year double testament we everything in on, into get grow those the to the and in that's so that we last And they've this people to this And up, you were this to acquisitions about we seen showing farmers the the we contribution very Chuck value said, all the as the not $XXX million strength

Operator

from of Your next question comes Capital from Markets. Arun the line RBC Viswanathan

Arun Viswanathan

guess, slide. 'XX I you include didn't guys the

there So if anything on if wanted has your maybe I -- thoughts changed. get just to there's

you've $XXX $XXX million from or well contribution, I think maybe actions. -- as your million biologicals from productivity as improvement sorry, highlighted royalty

low maybe Crop pricing leave seed $XXX dynamics some million that other the the and the midpoint on to So would Protection single-digit of for side.

thoughts still you of drivers just if intact? are So would your offer those all maybe on

David Anderson

good Very Arun. Thanks, question.

framework So for we've a billion we're it's And for said, line EBITDA performance still elements. the that $X.X you the financial a expecting components, here consistent to reminder, $X.X range. through And going just those maybe of provided bottom quick billion as XXXX. you some spend the as key with just minute

First the for half, quite Robert our that pointed gains is important. and the to to total second margin in our attractive. by of gains, very through Crop going terms that's Spinosyns, be all, contribution have and particularly there, going performance Seed spoke Biologicals new and outlook for to into carry business, the XXXX XXXX you of products, to but company. That's be important. That's Protection going to as net pricing out, led going

and earlier that very On and increase cost some XXXX. other that. we're net for going footprint investment raw that the guide translate, we're sales very, of we'll XXXX see deflation when benefit were will to finally, midpoint we've modest higher the much some R&D making then And formula the provided in on But is off optimization. of you that SG&A building have the Crop higher will offset XXXX. We'll the commodities, intact, controllables, to progress including deflation about the Protection in that in have cost royalty talking materials, mentioned that a I compared of we benefit, the ingredients and improvements

the So thanks for lot a question.

Operator

closing That ahead. now concludes remarks. I back turn our to over conference Please go session. Anderson David Q&A for will the

David Anderson

for participation also, City your me questions. on appreciate York the XX forward the And obviously, an We in a quality look very you of to today's November New Investor Day. to the look Corteva. call. and speaking of seeing tell interest, We forward Well, number in for you, again thanks we to to today let you in much follow-up first,

Have great thanks a So day. it. Appreciate again.

Operator

Ladies concludes and all today's call. that joining. gentlemen, Thank for you

now may You disconnect.

Corteva (CTVA) 2 May 242024 Q1 Earnings call transcript