CTVA - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Kayla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Corteva Agriscience 2Q 2024 Earnings. [Operator Instructions] I will now turn the call over to Kim Booth, Vice President of Investor Relations.

You may begin.

Kimberly Booth

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

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

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

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

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

not could these filed on differ statements. from discussed not results the these this update statements call actual duty and risks SEC. forward-looking Factors the materially undertake reports to, including, our limited any section of to in those to Our do but We Risk with due and uncertainties, any

presentation, my references press release in non-GAAP with found the Relations available earnings our note on Reconciliations slide to in summary over measures related turn now can our be schedules the Chuck. financial measures. financial today's website. It's our and along of Please pleasure deck non-GAAP to be certain we'll supplemental call Investor making to

Charles Magro

by also business in for half proprietary quarter delivered Seed second second XXX was Kim. EBITDA morning, in the expansion. half basis for demand nearly top second results. points Thanks, our quarter, and our you our line driven expectations operating everyone, bottom joining was margin our thanks for first us. and particularly growth which year. Corteva update performance, Good this on of This technology, evident We plan both In today to latest and of share strong the

grow, year XXX all first years trajectory of volumes of regions. basis that continued operating the EBITDA to after starting stabilize declines. and Crop industry sign with broad-based of half impressive in across almost We also the gains X margin the expansion is Protection Seed a saw its points pricing

America hold strength and are testament remains share the latest half, year-over-year, North across strong team corn market relatively flat first in managed corn Seed a products as Pioneer business are hybrids in the corn the our for and as America to demand both we model. While gained North well technologies, to down to soybeans. acres has Performance and of be both and the strong Seed and proud the for volumes #X

this trait. availability XXXX. Earlier by and pleased on We year, announced XX% is Enlist farmers, are Enlist Z-Series the U.S. industry-leading of soybeans technology see Canada, genetics which of particularly future. Pioneer EX we with soybean in continue It we the believe to of is valued be is the to the EX least acres U.S. commercial the generation next in brand and at

This know royalty the year our quickly led farmers with trials, corn. In A-Series And soybeans, this But income it's same extensive by you of period supported showed new delivers economic per how the potential by accelerating in noting of half soybean year, strength an aware to royalty acre XX% corn in class by our growers. which first yield also stream decade. to Enlist trait a the compared an technologies new X.X our PowerCore own lineup last of Z-Series we worth like neutral when impressive Enlist. transition the soybean any has most In grew bushels well a strong defensive becoming package income end substantial advantage the of has the our of aim of is royalty that and I XXXX agronomic average benefit of soybeans over are of over offers leap introduced. impact Pioneer performance ever yield generational

of strategy is our a traction margins. becoming seller reflected gaining as technology in Our

food Turning to by These them largely Overall, help that increase residual the can products we the driver imbalanced By an to new competitive of our quarter. too, to cutting-edge for the give the registrations had and volume Still, business destocking remains and yields June, solutions a here, new business. product access X% improvement we dynamics. continues can grow farmers. Protection Protection market, that and are more new end fuel. globally. navigate driven second in Crop Crop technology farmers by say market registered We CP over encouraged XXX the

and and and were be the top another for remained down improvement half, technology will and and sellout line demand at anticipating XXXX Corteva. Record-setting through sales for On-farm EBITDA prioritize a towards the yield, end market as grain, begin of to net operating Crop to to sell-in for and balance biofuels Protection Although stable channel. we oilseeds growth margin move farmers of bottom to continue between more that expect maximize of is year the we're demand still expected XXXX. the

We the competitive constructive and that anticipate guidance X% their guided also lowering versus on in impact get in top-tier that full see weather-driven comments us will the half we first technologies America of we given remain Recall back stabilization in for farmers improvement. contingent prioritize of Crop growth deflation indicated EBITDA in optimism last early, and delivering are in we was cost control, X% We and impact dynamics we November. applications the given volume to we year the XXXX royalty our on quarter Generally Protection XXXX environment EBITDA productivity assumptions, XXXX. Europe our few very and the and on missed midpoint we're XXXX some pricing path It's on benefits, more still basis. Protection, detailed second to XXXX, the that reflect views XXXX closely. market for we We'll but adjusted a market a the year the to and net XXXX. Investor about good in of would North can margin competitive meaningful at the continue framework operating plays it we and seed speaking, monitoring in framework full The the out. how are half a February, need event improvement sales our a feel return upon in of Day direct we us to about on year-over-year be into by update quarter. A providing operating To growth about Crop by second what our yields. in investments in when has on in

crop expected. the U.S. Now as turning we mix played to out shift corn outlook. soybeans The to from

U.S. been running well growing are far condition the XXXX, crop dialed have will corn strong feature main the thus that creating it season yields being Time ratings futures. soybean corn of but However, XXXX is and strong expectation above tell, clear into for been an has the yields.

experience best, to a Farmers decisions know their there with formula they with cheaper also years can for and confidence experience annual These know of extremely expertise As now have of which of global the like indicative And and pricing. incremental grains below us, investment drive them trust lot pressure, But productivity of farmers well mid-cycle settle can tighten be in make but you it under our the the most with rates as confidence yield that operating long oilseeds prices, operations. history major to peace marketplace. Brand once outcome Corteva how for higher for with stocks seed, stabilize, important. to of they order farmers, majority vast in their success as prices the And in it's and they they behind prudent to less. that we're they is improvement, gives the farmers still have interest in of trust find come combined to commodity started always anything mind. lower and competitive be is to and they of brands, approach. know the have led hard the

Dave on and With that, our it for results to me let financial insights over outlook. turn

David Anderson

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

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

a compared on up the Crop with year, partially latest up the was here, X%, little a offset Protection. driven Protection. Briefly EBITDA the slightly prior You for in Pricing can and from the from although quarter our X% Seed than sales by both better half strong were operating season. estimate, seed's gains America see prior seed touching in down numbers for in quarter, organic North Crop and gains sales year, to finish first with in continued were pressure competitive by

Protection, by Top seed Second to quarter second margin line XX% in XXX basis cost timing. prior of earnings translated productivity growth of actions by quarter and continued nearly in volumes quarter America compared North to expansion North in the the volume were gains year. with to points and offset quarter first growth Latin America, declines America in volume and due and flat Crop led

half. Now on focusing the

quarter, margin volume seed the Protection. first X% result to translated XXXX. Crop half first by nearly EMEA net expense sales Asia. tough growth top performance to tough half, benefits and a productivity both in As price drove billion gains royalty prior slightly expansion. which digit mid-single Seed for planted quarter pricing organic were pricing, into were line in declines, compared were the really operating seed were savings compared of of driven in offset from prior down competitive basis the of Seed year EBITDA the offset of points and lower by year. volume market area Crop dynamics $X.XX in The the down approximately comp XX the by of with and down improved Protection and and

and to up in the end Seed summary growth in with Protection see prior currency. year, we across EBITDA the gains second sales versus X%, we market and we by sales on Brazil. With second net XX% pressure X% broad-based drove Protection by that, was expect products in every portfolio. gains go in up prior quarter. go down to operating largely X% Slide new Slide up a in Demand organic Crop year. for Global were value. performance. the price for in to now of was growth half compared the both sales half. volumes the sales pricing the half seed pricing for to price Crop X first last over X volume sales importantly, as half largely segment. volume spinosyns were were gains driven Pricing by Protection, was year, pricing region review X% half, in continue were in although down up response in In dynamics. continue volume Crop Let's X% did and to and net EMEA of competitive Organic X%, down let's driven to the

on in declines under improvement Pricing gains productivity record Crop and royalties billion. sell-through headwinds. just $X.XX net input commodity costs, operating Protection million Biologicals were was from half our were half, reflecting to more royalty by offset by related with of for was For volume additional first SG&A and and the the coupled cost acquisitions. over year savings. net inventory expense inflation and EBITDA reduced cost than the of $XX just prior to costs compared X%, productivity an including to XXXX half in currency spend up benefits offset seed higher Higher actions

costs, and SG&A merit despite approximately have these would Excluding been flat inflation. year last versus

to U.S. EMEA lower to half and Crop second North half Protection is the Let's range billion, of by at first to and guidance updated key now the due variables now to in lower is now less to The updated Protection discretionary be of the to full and range for and We offset go spending. of line dollar million compared the the our to the of net the and markets by $XX.X year updated the year price the be X X% $XX.X the second guidance growth, Slide X% is at reflects year. assumptions. in the in EBITDA top transition sales partially guidance judgment for current primarily the Operating year revenues updated outlook BRL midpoint. or Seed billion in The volume billion midpoint. to in America The $X.X best to expect Crop up expected half. $X.X prior driven

guidance. R&D for also We deflation than for the a and be increases year by driven modest prior SG&A productivity more and cost the expense, expect And tailwind Protection will our increased raw while year, benefits. royalty Crop expect the we now material improved still

primarily operating With performance the roughly of midpoint and Crop in in 'XX. to during earnings complete first flat for from reaffirming EBITDA full of second the margin versus now billion the completed the and volume at per XX% range the our Protection guidance, to year is approximately points rate strength expect $X.X at prior in for we're $X.XX midpoint, the of year. flow year, or to in share of billion $X approximately billion be $XXX of Operating reflects improvement at including last expansion And guidance of guidance the EPS $X.XX basis expected conversion the to change of $X.XX cost at XX billion free the or of and to half We're flow our cash last half midpoint. The to Seed the approximately share, half. midpoint. year, the lower margin of finally, cash we EPS for the over on XX% track first million EBITDA repurchases year year XX% $X the

the dividend, in consistent also dividend announced strategy. growth the with X.XX% We a annual recently increase

outlook. strength the flow balance both Now and cash of are our of to the sheet testimony these

to Slide now XX. Going

headwinds Crop half at the the results first for Protection R&D, the of by rate North to to to net by costs first ahead benefits performance, year. stabilized. expense were the remainder delivered half. setup corn in slightly Those the industry year. first X% driven drivers look not Seed performance in first despite an were market business. half reduced the were modestly and Crop experienced the were expected, single-digit market-driven cost results Seed impressive of by compared acres. the our offset through actions. inflation related expectations, the Let's U.S. input half Protection SG&A last but Crop up impacted low Again, for reduction of on overall productivity key with competitive strength America year have fully and as growth to Overall royalty pressures. yet organic conditions compared Protection the improve, begun sales prior in X%

shared a year, rebound consistent of Now the XX, the largely if with after in you regarding In assumptions Brazil Seed, of corn are safrinha May. you the we in in season. the right reduction a turn second expect with early to half XXXX Slide side area our what XXXX, we

planted corn the risk additional gains with to is Argentina an pricing stock. area much However, due the growth remain in drive of will in volume second challenged. expected America Latin Crop half Protection to

for and is growth Our year, volume Brazil and prior new assumption for versus biologicals. by demand products led

during also for deflation Crop And Coupled R&D. and Crop as we tailwind a and increase with of investment by cost and we'll cost increase year. channel last expect more we we points in are that input see the order year book stabilization the the cost an half. ahead Crop in actions, full trending the And Protection. for Available is debt anticipate data for in inventories reminder, These Protection Protection productivity second are bad market Importantly, the spend volume the trending the year. half and down. in half continue the SG&A to 'XX signals second you of the normalized sales Brazil expect towards assumptions supports know, data growth accruals, suggests is to compensation second moving positive for in the driven as a

Crop So on important Protection and and earnings improved will the cost point the focus Brazil fourth out conditions growth. balance the in second between quarters. market of drive to allocation of It's controls third half continued

fourth expect EBITDA pattern and second half loss delivered quarter. an We the in in all normal the quarter therefore, operating third earnings half, the earnings which second the of for implies

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

the the first was the business. half led with operating by EBITDA First, for performance line strength in Seed largely expectations, of

driven the Crop our XXXX. growth market full by Protection, by first corn for on and Seed guidance, continuing Regarding and current continued technologies, Seed through impressive still but the sales latest year, the of Seed. driven captured the in America first particularly by an strong for in been soybean. updating dynamics our with North portfolio share it's demand business the full strength in half, mostly momentum in the earnings market both track and strong year trend a Overall, and for half we're

the to deflation will in volume improvement growth. the actions EBITDA And and Protection from year-over-year strong first second approximately gains $X.XX and flow let to billion material Crop us the flow much the of guidance Latin America cost of finally, Looking me of productivity drive year, keep forward raw the half free midpoint back or turn to over XX% rate. And conversion it our cash on of track Kim. that, with deliver cash results half range

Kimberly Booth

Dave. Thanks,

Now we you'd before get remarks. a like few into Chuck, believe I to Q&A, make closing

Charles Magro

an leadership have speak in and the made Atkore, critical and strategy a and that yesterday our considerable his best Dave record Chief time Officer industries, experience. assurance was board he this With this the CFO. that I've in financial his of Kim. wealth will, X discipline join was, throughout proven To perfect me years first adviser strategic large ago, quarter over operational transition, executive we his a XXXX. new will safety to Dave a to of announcement retirement has Thanks, serve Financial publicly-traded of is ensure its across Anderson. And electrical pivotal the this Corteva X on continue will ours. delivering results company, like of as until joined process, its in for hands, Corteva a themselves. gave a I financial to which leadership think Dave of both course, for many track remember, of Corteva. David expertise leader accomplished the efficiency Dave company's I'd nearly team where decades about as and to in words Johnson starting as history. believe infrastructure CFO succeed experience as also smooth will served with you and David know of XX. a market the organizations say the he company He and September is from and few results, David a like will choice global solutions, after strong to gotten I David

So to serve investors privilege and absolute to and to turn dedication I'd and our to him employees. you. service before I shareholders It's you. Dave, Corteva, to an our thank to been it his like customers over of his Dave, for alongside thank and

over to you. that, with And

David Anderson

over Chuck. what to with strengthening the a able Thanks, to opportunity alignment work supporting you of going accomplish, looking several to the kind organization really years. units. proud to to in I the be one. Seed to terrific I a been It's I'm and terrific with last really support forward Corteva, of transition. And words. know organization be Crop been work and with appreciate David know we've pleased this obviously and going And just I'm and the finance the team he's business [indiscernible] of Protection successful I'm a to our it's Corteva. CFO for I the

much. So thanks very

Kimberly Booth

Thanks, Dave.

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

Operator

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

Vincent Andrews

XXXX. down And And congratulations and of first on initial please on comments all, you correct me 'XX sort past you your over 'XX to hey, of on your by the you like help all were of of I $XXX X retirement, if where I'm the very million. took years. sort stance Dave, wrong. much not ask could I thank But saying, on Chuck, for it softening me sounded sort and your

by X.X% that $XXX X.X% down million. take to existing just range So

bridge be. in on your still those versus what's intact So to might see items incremental concerns check want and I what

royalty And been 'XX. at 'XX. about some cost received more million deflation for $XXX cost hadn't for $XXX for 'XX. had quantified then deflation talking had and of productivity least And for million and but know improvement we of another chemical crop expected 'XX. you I So I actions

where any it that and those if So could Maybe 'XX on you change you're worried being if is able update to pricing mix Or price the Protection indicate you there's the further? they items, are? then Crop concerned futures about seed in about? deteriorating curves get are stay also if us

Charles Magro

Vincent. Yes.

licensing, in start over $XXX describe number sort it's our control. the in things, conviction of working million we're things lot are I cost both to me out that the And north We're we guess you've and very years. about of whether how feed obviously $XXX of for improvement of the just productivity have controllable now is We let still that that good by So feel million we thinking saying said at great that, if question. all looked XXXX. each we a levers, XXXX. $XXX biologicals these certainly XXXX through, and million growth, the

around good the very So controllables.

comfortable and built, now very comments to we've CP. When the we is you both even assumptions in base industry. we think pipeline think, XXXX. now would as in as none the that's go into And 'XX about Seed second moving for I beyond technology very is nicely our can we rightly Seed, And prepared the with and remarks, called that our and we remain then up our in see out-licensing made ramping you P&L out, in deflation XXXX

You're right, yet. we have not given you full quantities

that. do a will that and beyond as at right time. through be that think But could even think that, We significant we we the XXXX tailwind

you very when we're can't we've when ignore that now XXXX and forward pricing. biggest a though, all is you the not to we what and 'XX then the some right, we framework, on if the range. for So we question look and call with you it, very that of value ranges about at look we're put comfortable CP for The comfortable provided guide together, we're path think at

see to few in needed we So things a this quarter.

when comes to that but And saw volume feeling environment been we pretty comes good pricing. QX a it so it it's we're when competitive in growth to CP, pretty

it's be we're now, what And organic And the we're we've connect in X, this return to X growth. would to but overly market we're declining needs is stabilization where growth to seen the watching. years before, We're quite And we've got but will been now happened CP on. then that it eventually, something eye it's industry. And because unprecedented. an quite rare. see It's keeping further And XXXX to the so to hoping see framework not that. thing then that's concerned,

put some that still base And of makes for when very comfortable XXXX so all be the think still feeling value growth in you And I our would sense. framework assumption together, that we're Corteva.

Operator

Joel question next line comes from BMO. our with And Jackson of the

Joel Jackson

Just on that. following up

So over in kind next year growth last competitors talking X% about one the chems. crop of your was hour, of seeing revenue

about, Speaking but to what a you're volume prices, talking competitive recovery, declines. price

it's prior on But in would the be that the is of or And you're that higher why higher, up question following lower So benchmark? here. say, ballpark seeing what you more know I than, lower?

Charles Magro

Yes.

me how Dave Let give perspective, I'll just have give built about can Dave we then and talk a you you Joel, the and forward guide, specifics. some

look So X%, second volume quarter, for up our the CP but X%, really our price were see needed approximately growth. we was when we at volumes down to and the

the speak Corteva I at be to think sustainable because, do from to happened, into we I is look recovery as going we Corteva about to the today, going I'm inventories think we that what learn wanted we want channel manage And perspective, to and the sure look, Corteva we we work when our make need quarters. through a only what's from right?

so And like We comfortable. very we're on. that we're the path

say really dynamic, about weather was when then right? impacted the the called the came of in think how first was to We had about we that Europe there we important midpoint But CP I out. the we've that half U.S. it's impact, pricing the some sprays, we business. already And lost both significant pretty some market, which and down guided that sort $XXX think million,

think think that. let kind I'll rest on Dave, to how about of of you XXXX, now you comment when the So about

David Anderson

about just assumptions that I Chuck. details to what just the may we little half, as there comment farm then our pricing talk seeing of early terms you any comment at just and think, we talk a bit, importantly, would market. And think and I continued time. we're demand. the And on But a into can Robert, It's little in regarding gate want a on just that the me Sure, to Sure. for steadiness to demand related at specifics XXXX, let and bit the too of to about that. any Joel, first really know, you get Chuck, later overall

greater business. X.X%, half, headwind But on round our specifically the is the around probably for the in call the full got a know, America low in the year, by expectation -- mix, business as as a to pricing of as to the you X% second mid-single much is And be first driven Latin We've little an to for for mix. larger, were it increase -- a the the going that's really half. total saw we I'm the in the going Protection percent numbers, digits, you half. Crop geographic for first

that's really influencing that So number. what's

the products that we're as technology in and volumes at what this look terms we we're if product, including I'll of signs differentiated comment that and volume farmer to normalcy of some are to When pointing stabilization, seeing Robert for are that Chuck of you mean, seeing of expectations and needs. what return terms all will. And the in demand, industry, possess I efficacy the we're the let in on more. said, in technology terms usage of seeing

of just on the about to outlook. comment overall the that and that health And Robert, you may little want the because bears think business I a bit

Robert King

had the we finished Joel, up in as Dave. Thanks, we expected about half. first

as of move into growth portfolio Protection, for products, that than than and as that we Crop These of so half, see total will X our growth new begin XX% to you the And from second about you're account for spinosyns rest -- areas going biologicals. areas really so historically And the are business done and as lines product these better well. the definitely in our are the the and -- have market performing better second product half. in

expectations, of it year. more We're where much so about seeing we're confidence very Brazil of ahead that last is than and order we and to were further last And our book healthy year. what was XX%

things biologicals, So moving. our then again, full year gives hand. are we -- in we already us our at confidence orders when that have you And of look XX% that think

again, roll And 'XX. that optimism we what of so do, able it once gives us saying we'll second we're can that to into lots half be for and do will the

Operator

Chris of with line your from Wolfe And the next Parkinson question Research. comes

Christopher Parkinson

Seed So out one its early. cards fairly U.S. competitors your preliminary put of price

years well [indiscernible] What it I ongoing soy, that performance. somebody early in terms ago, But have probably comment August, your and on helpful? certain have be would little your done in to in bit that you gains on current insight now July. of in of in share particularly think latter. a would row-crop, early the commentary any out think your why was been field presumptions are marketplace we just why go XX It's as the presumably was putting done and as

Timothy Glenn

I'll shot Tim. at take is a this this. Chris,

So out what know were gap a the for don't putting mix necessarily understand, decision be. it's card terms to of don't I'd is you of their hard now, that that. there's, early, going put to to a based going out price you a farmer what in comment sell, a products to what there's details is yet know you right gross say, not net early. When best And you the necessarily motivations of card price they're in what buy a who's made my guess, on off

timing little month of North generally of And a the weeks bit consistent in of A most I'd in we're out timing, say pretty more our stick plans. America, in Europe, we're we're process we'll X like terms but developing to that So later as and well. 'XX for Europe. away or from

bit in approach value in put is new North into it's as As say here. in we market. terms our to change market, as it's bringing customer our every this take is that doesn't you're we And environment different of of selling a the technology. together really the plans, as I'd America, innovation obviously, driven What 'XX, by especially the and well terms you're delivering about in what and to different, value pricing into we year little going think

as significant overall, soybeans, that to we understanding in our have mix we and Enlist corn, on share on a remarks, year. innovation So a bring as philosophy corn very think our and and hybrids this trust focused ramp-up in that farmers. so have take that It mentioned that we new that our of we're we with earlier favorable as the PowerCore, never making up and prepared something and about be new very customers we're And and have we'll to and with from going access which really new to will Z-Series important customers enhancement on also is introducing say, it's technologies Vorceed value. prop driven, going our changes. our was that value ramping them long, to I'd next X exciting with value the sure it's level technology. better have And technology-driven, be long-standing

focus really our approach competition what doesn't and in certainly environment, a really our But motivations on their are. So environment. change market speculate this our different can't and

Operator

of the question Kevin from comes And line next with McCarthy the Vertical.

Kevin McCarthy

in pricing Chuck, Crop called in some Protection chemical the impact including acreage the and adjusting the stunt there factors. and flooding perhaps on factors, other environment, corn guidance, a and Argentina, out different Southern of you number in are Brazil

if particular, And your so you of the would order as competitors importance question one rank or of of to dynamic, any onetime in would highlight And could earlier seem incentives pricing had with this I not wondering question embedded relative those? erosion of the was my be, whether price the in you on sort X% expand then regard morning. how to you

Charles Magro

comment. me and Kevin, let start Dave then -- certainly should so I'll

already, mentioned in we -- as guide CP we've by applications a right, -- the lowering the half, dynamic. driven really and first the missed So lot the so then weather was of the pricing the are where after

when dynamic that right some second the pricing the downside do The looking really that. And determining when the and thinking really, seeing though, to the Brazil, the we're about bit will very what normally range, seed. buy Argentine really not growth volume When that's good is have, to similar CP this second Dave guide year the And volume little be start cost focused just start uncertainty then we corn it's half and and reflect at kept of we it, looking we're it the than to the the stunt. year, thinking called the of and a we upside of that for on. now comes Brazil will a about for we and we're this in factor on And controllables time that we about it you range, the Argentina and farmers things. be are It time the controlling feel wider the on confidence and productivity in X out. half

lot and there's a uncertainty, an out is it of estimates different there. So

about X.X% acres would the feel planted evolving, X.X%, in nicely is think we're between and today, think, Argentina. from I if range So evolving we you we story this and the pretty that range, between captured the guide fall we into with is what know

certainly was planted weather. in driven of midpoint capture, season, capture to the the last And assumption that we've this really for some and before that by then and Brazil we lost said acreage the

would environment, to which things about that we will think to question this, is of that and on to of well. if are in out call the the So did you the little stabilize return it's but have victory still the put this Dave, we you think on as a time CP and in an upside And upside range, the weigh but the Brazil, range. guide guide better of and a growth, as looking market tell, then should market more starting global that for in early

miss Dave, did I anything?

David Anderson

think spoke of also, there. but we in And as then Brazil in that, of I Pricing, we've good dialed point base, by Chuck perspective billion, the expectations. to really assumptions terms by the very in just maybe said. Crop driven of Brazil. deflation but particularly second terms said, in materials. Latin our to terms the as cost just the some degree, given about in to you we've the driven the that America, of We significantly is that APAC well, you half, for we're differently, other America some in, No, seeing of slightly what what key feel reiterate North what that's and well obviously $X.X Chuck in remarks, to volume the Kevin, as state recovery we've CP degree, growth, prepared you got, area Robert spoke captured just talked the got and increased Protection raw

kind base, the overall monitoring, just good obviously, just later Tim, we're phenomenon. sort the So of that. we those of and monitoring, the on are of job Argentina that did you're Chuck And minus and is corn things the of one more then planted plus, of a area, the know outlining

would we So I the Kevin. would see say it, that's way

Operator

line from of David your Bank. with Begleiter comes And next question Deutsche the

David Begleiter

on or Chuck, think than CP, was more said in that? on ago? you a it China I just pricing or here. threat generic specifically, in again back less you're view, not pressure concerned the Why is X And year is producers your from the overly

Charles Magro

Yes.

So it's David. pathway we'll lot look, industry, there's its think going to reference a market that in think overall. would we course improved be lot healthier of and I we on a on a an having the run And a in what that CP now this consider of will CP

industry is when to the what time what's first keep all X into in say sort we're the finding on-farm a but of overly it's prepared of of coming lot part is that concerned. are in the is remarks, healthy. now you I'd the state fundamentals, high-priced moving it's consider channel. that would about start first is and And this dynamic. But overall what thinking out reason channel and which you I to again, of the natural, and demand And So here, going say is players foremost, healing we've part we're that parts in through important not of the said years, have would inventory, the moving their they're as the now what the industry we process of the

a a in healthier haven't And of structure years. so is much overall couple that seen this we just

you've on what's this out the application going dynamic So it's got generally are channel, where of channel, farm the healthy. into going

is being is a But their seeing lot that, healthier. smart always and are investments farmers what course, their we're about they Of applications, are. that channel

us confidence. a first channel in growth volume needed the That into to was what see was to consider what then sign market. And be gives the of quarter. that So we the would I second the some stable

much bit the we pricing need a dynamic we that but through is because less this language now used that we've U.S. and this a the we're too so say that. with we And feeling from they're if Brazil, as destocking you I'd would little now destocked. perspective, work haven't or because we say industry it, journey notice, Europe, way to behind that and today the finally is finalize described more, the And more

the is quarter. last the fourth environment, And order to the have to said, farmers go than through was book year. We time but healthier like it now certainly, in are Robert our Brazil this planning apply product

this do it it. stabilization. year, we But of that's a have need is I you when how put feel see needed We the time journey to where way I we is actually guarded think at we the of half together, So to the like be unfolds. we but would on I optimism this all second think describe why are

Operator

And from line question UBS. of comes your the Josh next Spector with

Joshua Spector

can I if things, here. Two quickly

if you have you're through have but First, your peers I pricing, you're confidence experience about about CP the think talk when seen? industry, then more farmer? about X I XQ, can as missed And but term, way? thinking in apologize XQ about if given the concerned and same secondly, I not but just in year particularly what longer I prior a XQ, talked versus you XQ talked wonder trade cycles, seed on second expectations half you healthier You pinched about down, this, go you your of seeing volume Chuck, for the talked I in typically seen guess, you guys particularly a you have what more that

Charles Magro

do -- on could so about I'll seed. Josh, And volumes, to you and well Robert? Tim talk Yes. we come from hear want then back as

Robert King

we is on in Dave the standpoint half it. when have gives Dave a are think balanced. would more is more let how Protection, things the large swing. half see I inventories Thanks. in a Well, volume of way splits, half. normal stabilized. And volume, us Brazil Latin to we QX a second don't half. second about some us ranges. of But but large some Things Crop mid-teens are in as part that QX, again, basis. talked the optimism think on second And business there. of numbers, relatively I'll second the about be talk needed about specifically we're up up you to shaping on can going Specific our and for if reference for Yes. It's about, approaching Chuck America normal moving, on

to add? Dave, something

David Anderson

Robert. well, No, covered it

we of XXXX. at, it's comparing example, you we've say look half interesting talk just and really for second of XXXX in fourth you're me to but and that Let particularly Latin when this quarter American about previously, when normalization, numbers, because the weak the a -- mentioned

if -- terms just that of XXXX more into you you [indiscernible] XQ. to sort cumulative or get and 'XX looking if you're Robert, 'XX cumulative when at -- a back there's think some and look your 'XX, So of the look nothing, of to of to expectation pattern. in And out -- I compared at will, really 'XX that and and normal, go a that's at, stands 'XX between compared XQ you point, volumes,

do on comment you want Tim, Seed? to

Timothy Glenn

Yes.

technology is want it On the of you trading in is certain it couple in be about technologies to to ways. the for down, able to the think Seed move I'll down side, ladder, we that. get a seed the if a farmer question maybe once had One of about very lot think ladder, a and terms they've of difficult

and if bit kind triples, trade below multiple they're labor, resistance, above used And any we've kind that. of with the herbicide-resistant is control whole that. are aboveground around used built down certain with there that. seen to modes planning of they herbicide insect they time. of their over Equipment, being operation traits, around built meaningful So If ground not to

the X And a and trade were at time. ago, very as didn't recently years point certainly, in as or in difficult see we down that environment X

thing brand, can about, a it plus or can it's think you you to support genetics our And expectations, able that's from if you be just about consistent point to the is interchangeable, you get for understand time and is, certain to or from is with seed the handle of going diversity, from also very think packages But a deliver that decision. -- the the packages that down comparable farmer, not I have their genetic get is but on they emotional sale. and yield side one and different ability say to confidence different consistency what a of it's over trading trade are level seed perform On service companies. trade

so we're sense we're -- a like profit situation confident proposition quite is make will those in to And at make other is sense. And what are their to delivering And customers when be be last level, has that margins like our value the to times them, this, point bushel that then will this, operation. the additive at especially that make. the to farm operation all maybe compressed they

want a situation. it you think way, to If of that cash flow positive in them or put

see seed operations. they the differently other they decisions And seed so over of make and their that course

well. that So always has never value take our in to help it holds for proposition, granted, but stay history them seed and understand close shown customer the

Charles Magro

Tim Yes. Josh, what just very quickly. said I'll echo

about that just that Corteva, you profit X more that rolled the just if And experience best that's versus of could be between bushels a breeding. think acre Corteva Z-series stuff a we got than our the because retailer and we've out, whether And reason see decades in per don't it. my especially That XXX being don't gambling. it's germplasm, it think we years in because So approaching against comparative our germplasm, side, And was just now. now the it on if or we see the all akin years, to it's is about seed difference you not.

we for never we're -- take So Tim like granted. it not said,

to with lot money that to next happens. credibility our is plant the to some in that And comes and ensure we in a are than of marketplace, invest this breeding ensure farmer better customers that hybrids R&D But year's. year's I think. obligation Our

Operator

question line the Frank of next Fermium Research. from your comes with Mitsch And

Frank Mitsch

perhaps lower CPC Congrats, we pleasure discussion, is working of get even lot on It theme pricing When common where volumes you Dave, positive The has think to environment CPC? with price. volumes, back on a your or but do There's been flat you. been on pending retirement. price. might a an higher is obviously, and

Charles Magro

Yes, Frank.

unprecedented. you at quarter with I'll definitely whole the very I'm wrong. that we're faced approaching want we've lines, a I a I and is trend -- all don't And be sure we're give we're to quarter, the So, dynamic almost at. provide encouraged I we're think destocking because, where this looking look, But if at

couple on-farm that. today, growth, the has see demand about that the and see already and foremost, thank did been said volumes like we saw to volume and First healthy. the rate and at a needed in times leaving we of to And the we channel need we same channel goodness entering

the have our marketplace, they many than is high-priced couple little inventory I the a over higher than of and Dave, P&L a inventories, like, years. through step of now they're into which us the are last think still important moving another lot the been they and but we'd better are

path to industry, a X more is stabilization. So healthy for years me probably except but it's that. together, decline will to we happen, when X this unusual. in probably call to forecast it all leave the years And you I I or there need say because not of Again, we're even happened put conversation recovery what of what organic the unusual. is has on think

Operator

question of Byrne next Our of from America. comes Bank Steve with the line

Steve Byrne

and soy, in your independent would by brand, How from benefits fair increased more benefit at Chuck. early own XXXX? there gaining amount out your you companies rank whether to from which There's like germplasm to about that those? business mentioned Enlist you risk shift a bigger corn seed license least that. your own and Dicamba view rank corn proprietary soy? that you of such will your the outlook your like about Enlist, in to Sorry be or to Pioneer how for Dicamba profitability-wise and uncertain driving XXXX to Is a versus I'd you hear momentum, on is an brand some would available And uncertainty

Timothy Glenn

is a shot there. wrap and Tim. up this Maybe let Chuck first Steve, I'll take

amount like is how going to kind we're, out. the than when year. in you open to is of tremendous think -- we which the of market, continue today, of obviously, last growth we this said EX greater soybeans. about XX% a we above believe earlier have see So on turn And being adoption side everyone already waiting strong else, to Enlist it we eyes XX% just And have did as very was

do label what is there's -- outstanding That's to the uncertainty like room think, I product around believe grow. do that based size particularly that in So the grow? really the season. ability of I that It's off the I use to believe there. room look there's really hard to still going and to question the up to

in how a in of from terms soybeans from because over up currently there? companies that selling -- to there's EX expand expect licensed it companies and lot a in that shapes market XXXX? So Enlist Are are Probably to XXX I are would going XXXX. there be well today. not new adoption

adoption upon and how who more across will much continue I'd the pretty products Depending So distributing at outcome, will the the is certainly, say about some market. to Certainly, wide It's benefit can penetrate. brands are just trade others our benefit. licensees level.

varieties. uncertainty, companies the with there's just between marketplace today growth currently to it XXX-plus basis level all I adequate What that that up And than likely substantial in of EX year-over-year producing seed of lot be so make to doesn't to with sense. can the are a probably able it a is and more of say size Enlist support on

Charles Magro

Yes. I won't say that issue. much more Dicamba than the on

E-Series then Vorceed already Enlist a the and mix some Tim think and seed. has royalty basis if start covered out, about to how happen that to over more technology corn adding with that seller be as to technology expansion soybeans is latest see if buyer, the doesn't XXX long This of look just and few performing, the have very But called important. And Tim And points ago like years our been well. varieties at bottom in the we're we implemented XXX just becoming we've marketplace. hit you pleased in it right, year, you in can and to technology instead and now of over a do with a new cycle. But our path This strategy our I in and pipeline, that this neutrality line, you think PowerCore the margin that. a investment of overnight. the we're next-gen hybrids

a will we'll the similar cost year, of lower our you Next It I path We it business flowing think think is the P&L, was then this at just momentum. year the number. like -- about seed this And of as is first some But I that continue be this the getting to on. through when and Seed is started. the we called business gain just we think that think deflation a strength that the record. half

performance the of So right our we're with business Seed extremely now. pleased

Operator

The of comes the question with from Jeff line next Zekauskas JPMorgan.

Jeffrey Zekauskas

In in product corn line Is that? size said benefit that U.S., triple? your you up the million $XX or And or $XX faster that corn than grow $XX Can million your were you XX%. a million? doubles royalties did

Timothy Glenn

stable I'll from in start years. is in and financial terms pretty our our So of off, up let terms size -- mix, of standpoint. maybe a mix between But Dave

past. And a the so offer been we've -- we've in strong really had

up we're the of really had is Vorceed, this now, we've So just yes, a and but strong transitioning competitive transitioning we're building offer PowerCore, that. off till

lot, really from sometimes whole think change margin. about So when a that standpoint, the on year mix a between it you doesn't

growing, generally, replacing we level in would years, stable. that it's more see And licensing is But all and as of rather and the been to starting couple of and where a last side, that altering specifically, licensing we've genetics of mix. trade on say, lift upgrading next and we're it's And PowerCore marketplace about the our I with sudden corn we're that technology, for really build. the the introduce than the

I'll let financial about standpoint. Dave, so a you And talk it from

David Anderson

Yes.

income the total -- so XX%. royalty total the So referencing

helps. So equates total, Tim that that us a said. as to increase. about corn. Hope And just million that's our not for is that That's $XX what

Operator

from question Owen comes Kristen with line next our of the And Oppenheimer.

Kristen Owen

net guidance was to but moving wanted income cash held you lower the stable, pieces flow free outlook. the I about since on did that ask the

that the just us you working versus understand benefit too just being puts how the capital. capital operations to And takes on I just defined probably on given update working early help if understand that thoughts XXXX? is captured So your you've while already, XXXX, could of much with say XXXX us it's and

David Anderson

Sure.

So question. just for the quickly, thanks

receivables As to offset you we benefits in saw, both accounts had prior in capital payable provided our cash from and by year. some working inventory of probably terms the with relative

will, change. you the the if So change on

deferred $XXX receivable just was under million of million in offset get $XXX and accounts inventory million accounts So about benefit, then some revenue. and and $XXX payable

see we benefit start goods as to inventory in cost going for going through to forecast are the procurement to half continued the payables We're with trends terms -- the of continue. sold second of to and same those think in tends sell is that normalize. of I we the the terms year. In way volume now of

encouraged volume get we'll headwind, the a a benefit. particularly you fourth that revenues and look bit are in particularly of like about a be now flow that possible year by continue to going and that, precision. little when want quarter talk to We're into free So of going XXXX. of with XXXX year, obviously second conversion increase those in we've It's the improve early looks half with to to be to degree we -- and and mix in at the if the Receivables got what a this cash revenues. of sustain the any geographic EBITDA that for XX%

you that's up. something update now We're is that's we'll which in encouraged early, again, way So quite on. a right cash shaping little but the

Operator

Rodriguez Mizuho. with line from The the Edlain next question of comes

Edlain Rodriguez

at on or regardless a of there I insight see the Like Protection, relationship going pricing the doesn't mean, your apply products relationship? get into pricing, Or if is there's so we that Chuck, the pricing farmers pressure and between volume with what's any volume dictate Crop wanted to in? will relationship, all? recovering

Charles Magro

Yes.

this agricultural to time we're can about are we've seed. Margins a I've So the dynamic and already been talked I reps right farm, were macro ones the the least and than we're summer look, the seeing on at spent I've the of now I see through farmers, finding think of well to some you are they that the week. and farmers tighter couple have Tim dynamic host economy. the that as this talking years. -- last still with Pioneer is, talking of traveling Midwest lots What But

purely I economics. on on based broad seeing think not decisions making farmers with any CP, basis, we're

oftentimes crop. that a What more now the sometimes newer to of often they more dollar product, though protected it doesn't the needs the is to on have have given right that -- let's CP, sure use return if in -- that right, technologies. a a investing because that will So they're farm, But crop look, use there And investment. on finding be going we are protecting as if clear, when return some on some the in efficacy is a product fashion, have of be or margins seed the they're commodity-type make every the a we're to is they that they spend has farmer investment. same

take to that expect the yield investments. to So parts in But are certainly returns. They speaking, farmers they going would and we are think maximize we've market. them do marketplace the to some ensuring in this going what a They're generally marketplace. yield what that, buy going more sell they're the that lower the and what doing I make might to going of price, but they're it is think into be for is use their seen prioritizing because they're volume. And I to

where we is a we're definitely those that do still we can look we with be I ensure that need our there on providing farmers we certainly to a technology to lot important. return we're So proper is in think support market And think that investment. a farmers portfolio, decisions. when But CP going in at that to

Operator

the And call I back over Kim to will turn now Booth.

Kimberly Booth

Okay.

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

Operator

And call. today's conference this concludes

You now may disconnect.

Corteva (CTVA) 1 Aug 242024 Q2 Earnings call transcript