Strong Seed segment performance more than offset Crop
Protection headwinds in 1H
Full Year
forecast3 reflects
continued growth in Revenue, Operating
EBITDA1 and
Margin1
Executing well, on-track to deliver 2025 financial growth
targets
Increased dividend 7% on an annualized basis, effective in
the third quarter
INDIANAPOLIS, Aug. 3, 2023
/PRNewswire/ -- Corteva, Inc. (NYSE: CTVA) ("Corteva" or the
"Company") today reported financial results for the second quarter
and six months ended June 30,
2023.
2Q 2023 Results Overview
|
Net
Sales
|
Income from
Cont.
Ops (After Tax)
|
EPS
|
GAAP
|
$6.05B
|
$880M
|
$1.23
|
vs. 2Q
2022
|
(3) %
|
(12) %
|
(10) %
|
|
|
Organic1
Sales
|
Operating
EBITDA1
|
Operating
EPS1
|
NON-GAAP
|
$6.01B
|
$1.75B
|
$1.60
|
vs. 2Q
2022
|
(4) %
|
+2 %
|
(2) %
|
1H 2023 Results Overview
|
Net
Sales
|
Income from
Cont.
Ops (After Tax)
|
EPS
|
GAAP
|
$10.93B
|
$1.49B
|
$2.07
|
vs. 1H
2022
|
+1 %
|
(6) %
|
(4) %
|
|
|
Organic1
Sales
|
Operating
EBITDA1
|
Operating
EPS1
|
NON-GAAP
|
$11.07B
|
$2.98B
|
$2.76
|
vs. 1H
2022
|
+2 %
|
+8 %
|
+6 %
|
First Half 2023 Highlights
- First half 2023 net sales rose 1% versus prior year led by the
Seed segment. Organic1 sales increased 2% in the same
period with gains in North
America2 and EMEA2.
- Seed net sales grew 8% and organic1 sales increased
9%. Price was up 14% globally, led by continued execution on the
Company's price for value strategy and recovery of higher input
costs. Volume declines were driven by the exit from Russia, lower corn planted area in
EMEA2, and lower Safrinha volumes in Latin America, partially offset by increased
corn acres in North
America2.
- Crop Protection net sales and organic1 sales both
decreased 9%. Volume declines were driven by strategic product
exits, inventory destocking, and timing of seasonal demand due to
weather and delayed farmer purchases. Price gains reflected pricing
for value and strong execution in response to cost inflation led by
EMEA2 and North
America2.
- GAAP income and earnings per share (EPS) from continuing
operations were $1.49 billion and
$2.07 per share for the first half of
2023, respectively, with declines versus prior year driven by lower
volumes, unfavorable currency and non-cash charges associated with
legacy retirement plans. Operating EBITDA1 was
$2.98 billion, an 8% improvement over
prior year on price execution and productivity actions, partially
offset by lower volumes coupled with cost and currency headwinds.
Operating EPS1 was $2.76
per share, up 6% compared to prior year.
- Management revised full year 2023 net sales and earnings
guidance3. Net sales is expected to be in the range of
$17.9 billion to $18.2 billion and Operating EBITDA1 is
expected to be in the range of $3.50
billion to $3.65 billion.
Operating EPS1 is expected to be in the range of
$2.75 to $2.90 per share.
"Corteva once again delivered growth in the first half of 2023,
driven by its diversified and unique technology portfolio providing
further evidence that our strategy is creating significant
value.
"The Seed business had another terrific quarter which reflects
the strong demand for our superior technology: today, Enlist
E3TM is the number one selling soybean technology in the
U.S. The Crop Protection business demonstrated resilience and
margin expansion, despite headwinds from industry-wide inventory
destocking, as the team continued to better position the portfolio
and reduce cost.
"As we look to the second half, demand fundamentals remain
positive: farmer net incomes remain above historical averages and
they continue to focus on technology for both yield enhancement and
preservation. At Corteva, we will continue to focus on our key
controllables: delivering best in class solutions and technologies
to farmers, proactively managing our cost structure, while
increasing investments in innovation for the future," said
Chuck Magro, Corteva Chief Executive
Officer.
Company Updates
- Enlist E3TM4 Becomes Number One Selling Soybean
Technology in the U.S.
-
- The Company expects 2023 Enlist E3TM4 U.S. market
penetration of at least 55%, representing ~75% of Corteva's lineup
– a notable accomplishment considering this technology has only
been in the market for 4 seasons. The percentage of Enlist
E3TM4 with proprietary Corteva germplasm is expected to
exceed 80%.
- Recent Product Announcements Illustrate Value of
Differentiated Innovation Pipeline
-
- The Company announced that PowerCore®
Enlist® Refuge Advanced® (RA) corn will be
available for planting in the 2024 growing season in the U.S. and
Canada. Farmers will have the
added flexibility of integrated refuge, along with an advanced
combination of above-ground pest control, herbicide tolerance and
industry-leading genetics with PowerCore®
Enlist® RA corn.
- The Company also announced BexoveldTM active as the
brand name for the newest herbicide from its robust innovation
pipeline. The active ingredient will offer cereal farmers another
tool for controlling broadleaf weeds. BexoveldTM active
is a new proprietary molecule discovered by Corteva and is a
third-generation 6-Arylpicolinate (6-AP) herbicide built upon the
Company's deep knowledge of ArylexTM active and
RinskorTM active herbicides. Corteva expects to launch
BexoveldTM active in North
America in 2028 and in Europe in 2030, pending regulatory
reviews.
- Recent Biologicals Announcements Reinforce Leading Market
Position in Growing Segment
-
- The Company entered into an exclusive agreement with BioCeres
to accelerate the regulatory processes required to bring a
cutting-edge bioinsecticide to the European market. The product is
an extremely viable biological insecticide that can be as effective
as conventional insecticides, with target crops including corn and
other cereals, as well as sunflower and rape seeds.
- The Company entered into a licensing agreement with
Lavie Bio, which grants Corteva
exclusive rights to further develop and commercialize
bio-fungicides targeting fruit rots and powdery mildew. This
collaboration demonstrates both companies' commitment to providing
farmers with environmentally friendly, sustainable tools with
proven effectiveness.
- The Company announced that UtrishaTM N, a
microbe-based nitrogen fixation product, has been verified as a
United States Department of Agriculture (USDA) Process Verified
Program – the first biostimulant to be included in the Program. The
USDA Process Verified shield assures farmers that the USDA
validated quality management systems and specific process points
Corteva established to indicate the quality of UtrishaTM
N.
2023 Guidance
The outlook for agriculture remains overall positive in 2023,
with high demand for grain and oilseeds. Commodity prices are above
historical averages, and farm balance sheets and income levels
remain healthy, leading growers to prioritize technology to
maximize return. Crop Protection order patterns are being
influenced by product availability, higher interest rates, and a
deferral of purchases until closer to usage, leading to an update
to full-year 2023 net sales and earnings expectations.
The Company updated its previously provided guidance3
for the full-year 2023 – lowering sales and earnings expectations
for this period. Corteva expects net sales in the range of
$17.9 billion to $18.2 billion, growth of 3% at the mid-point.
Operating EBITDA1 is expected to be in the range of
$3.50 billion to $3.65 billion, growth of 11% at the mid-point.
Operating EPS1 is expected to be in the range of
$2.75 to $2.90 per share, growth of 6% at the
mid-point.
The Company is not able to reconcile its forward-looking
non-GAAP financial measures to its most comparable U.S. GAAP
financial measures, as it is unable to predict with reasonable
certainty items outside of its control, such as Significant Items,
without unreasonable effort.
Click here to download the full press release,
including segment detail and reconciliations of non-GAAP and GAAP
measures, or visit the Corteva Investor Relations website.
About Corteva
Corteva, Inc. (NYSE: CTVA) is a publicly traded, global
pure-play agriculture company that combines industry-leading
innovation, high-touch customer engagement and operational
execution to profitably deliver solutions for the world's most
pressing agriculture challenges. Corteva generates advantaged
market preference through its unique distribution strategy,
together with its balanced and globally diverse mix of seed, crop
protection, and digital products and services. With some of the
most recognized brands in agriculture and a technology pipeline
well positioned to drive growth, the Company is committed to
maximizing productivity for farmers, while working with
stakeholders throughout the food system as it fulfills its promise
to enrich the lives of those who produce and those who consume,
ensuring progress for generations to come. More information can be
found at www.corteva.com.
Follow Corteva on Facebook, Instagram, LinkedIn, Twitter and
YouTube.
Cautionary Statement About Forward-Looking Statements
This report contains certain estimates and forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended, which are intended to be covered by the
safe harbor provisions for forward-looking statements contained in
the Private Securities Litigation Reform Act of 1995, and may be
identified by their use of words like "plans," "expects," "will,"
"anticipates," "believes," "intends," "projects," "estimates,"
"outlook," or other words of similar meaning. All statements that
address expectations or projections about the future, including
statements about Corteva's financial results or outlook; strategy
for growth; product development; regulatory approvals; market
position; capital allocation strategy; liquidity; environmental,
social and governance ("ESG") targets and initiatives; the
anticipated benefits of acquisitions, restructuring actions, or
cost savings initiatives; and the outcome of contingencies, such as
litigation and environmental matters, are forward-looking
statements.
Forward-looking statements and other estimates are based on
certain assumptions and expectations of future events which may not
be accurate or realized. Forward-looking statements and other
estimates also involve risks and uncertainties, many of which are
beyond Corteva's control. While the list of factors presented below
is considered representative, no such list should be considered to
be a complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to
the realization of forward-looking statements. Consequences of
material differences in results as compared with those anticipated
in the forward-looking statements could include, among other
things, business disruption, operational problems, financial loss,
legal liability to third parties and similar risks, any of which
could have a material adverse effect on Corteva's business, results
of operations and financial condition. Some of the important
factors that could cause Corteva's actual results to differ
materially from those projected in any such forward-looking
statements include: (i) failure to successfully develop and
commercialize Corteva's pipeline; (ii) failure to obtain or
maintain the necessary regulatory approvals for some of Corteva's
products; (iii) effect of the degree of public understanding and
acceptance or perceived public acceptance of Corteva's
biotechnology and other agricultural products; (iv) effect of
changes in agricultural and related policies of governments and
international organizations; (v) costs of complying with evolving
regulatory requirements and the effect of actual or
alleged violations of environmental laws or permit
requirements; (vi) effect of climate change and unpredictable
seasonal and weather factors; (vii) failure to comply with
competition and antitrust laws; (viii) effect of competition in
Corteva's industry; (ix) competitor's establishment of an
intermediary platform for distribution of Corteva's products; (x)
impact of Corteva's dependence on third parties with respect to
certain of its raw materials or licenses and commercialization;
(xi) effect of volatility in Corteva's input costs; (xii) risk
related to geopolitical and military conflict; (xiii) effect of
industrial espionage and other disruptions to Corteva's supply
chain, information technology or network systems; (xiv) risks
related to environmental litigation and the indemnification
obligations of legacy EIDP liabilities in connection with the
separation of Corteva; (xv) risks related to Corteva's global
operations; (xvi) failure to effectively manage acquisitions,
divestitures, alliances, restructurings, cost savings initiatives,
and other portfolio actions; (xvii) failure to raise capital
through the capital markets or short-term borrowings on terms
acceptable to Corteva; (xviii) failure of Corteva's customers to
pay their debts to Corteva, including customer financing programs;
(xix) increases in pension and other post-employment benefit plan
funding obligations; (xx) capital markets sentiment towards ESG
matters; (xxi) risks related to pandemics or epidemics; (xxii)
Corteva's intellectual property rights or defend against
intellectual property claims asserted by others; (xxiii) effect of
counterfeit products; (xxiv) Corteva's dependence on intellectual
property cross-license agreements; and (xxv) other risks related to
the Separation from DowDuPont.
Additionally, there may be other risks and uncertainties that
Corteva is unable to currently identify or that Corteva does not
currently expect to have a material impact on its business. Where,
in any forward-looking statement or other estimate, an expectation
or belief as to future results or events is expressed, such
expectation or belief is based on the current plans and
expectations of Corteva's management and expressed in good faith
and believed to have a reasonable basis, but there can be no
assurance that the expectation or belief will result or be achieved
or accomplished. Corteva disclaims and does not undertake any
obligation to update or revise any forward-looking statement,
except as required by applicable law. A detailed discussion of some
of the significant risks and uncertainties which may cause results
and events to differ materially from such forward-looking
statements is included in the "Risk Factors" section of Corteva's
Annual Report on Form 10-K, as modified by subsequent Quarterly
Reports on Forms 10-Q and Current Reports on Form 8-K.
Regulation G (Non-GAAP Financial Measures)
This earnings release includes information that does not conform
to U.S. GAAP and are considered non-GAAP measures. These measures
may include organic sales, organic growth (including by segment and
region), operating EBITDA, operating EBITDA margin, operating
earnings (loss) per share, and base income tax rate. Management
uses these measures internally for planning and forecasting,
including allocating resources and evaluating incentive
compensation. Management believes that these non-GAAP measures best
reflect the ongoing performance of the Company during the periods
presented and provide more relevant and meaningful information to
investors as they provide insight with respect to ongoing operating
results of the Company and a more useful comparison of year over
year results. These non-GAAP measures supplement the Company's U.S.
GAAP disclosures and should not be viewed as an alternative to U.S.
GAAP measures of performance. Furthermore, such non-GAAP measures
may not be consistent with similar measures provided or used by
other companies. Reconciliations for these non-GAAP measures to
U.S. GAAP are provided in the Selected Financial Information and
Non-GAAP Measures starting on page A-5 of the Financial Statement
Schedules.
Corteva is not able to reconcile its forward-looking non-GAAP
financial measures to its most comparable U.S. GAAP financial
measures, as it is unable to predict with reasonable certainty
items outside of the Company's control, such as Significant Items,
without unreasonable effort. For Significant items reported in the
periods presented, refer to page A-10 of the Financial Statement
Schedules. Beginning January 1, 2020,
the Company presents accelerated prepaid royalty amortization
expense as a significant item. Accelerated prepaid royalty
amortization represents the non-cash charge associated with the
recognition of upfront payments made to Monsanto in connection with
the Company's non-exclusive license in the United States and Canada for Monsanto's Genuity® Roundup Ready 2
Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits.
During the ramp-up period of Enlist E3TM, Corteva has begun to
significantly reduce the volume of products with the Roundup Ready
2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits
beginning in 2021, with expected minimal use of the trait platform
thereafter.
Organic sales is defined as price and volume and excludes
currency and portfolio and other impacts, including significant
items. Operating EBITDA is defined as earnings (loss) (i.e., income
(loss) from continuing operations before income taxes) before
interest, depreciation, amortization, non-operating benefits
(costs), foreign exchange gains (losses), and net unrealized gain
or loss from mark-to-market activity for certain foreign currency
derivative instruments that do not qualify for hedge accounting,
excluding the impact of significant items. Non-operating benefits
(costs) consists of non-operating pension and other post-
employment benefit (OPEB) credits (costs), tax indemnification
adjustments, and environmental remediation and legal costs
associated with legacy businesses and sites. Tax indemnification
adjustments relate to changes in indemnification balances, as a
result of the application of the terms of the Tax Matters
Agreement, between Corteva and Dow and/or DuPont that are recorded
by the Company as pre-tax income or expense. Operating EBITDA
margin is defined as Operating EBITDA as a percentage of net
sales.
Operating earnings (loss) per share is defined as "earnings
(loss) per common share from continuing operations - diluted"
excluding the after-tax impact of significant items, the after-tax
impact of non-operating benefits (costs), the after-tax impact of
amortization expense associated with intangible assets existing as
of the Separation from DowDuPont, and the after-tax impact of net
unrealized gain or loss from mark-to-market activity for certain
foreign currency derivative instruments that do not qualify for
hedge accounting. Although amortization of the Company's intangible
assets is excluded from these non-GAAP measures, management
believes it is important for investors to understand that such
intangible assets contribute to revenue generation. Amortization of
intangible assets that relate to past acquisitions will recur in
future periods until such intangible assets have been fully
amortized. Any future acquisitions may result in amortization of
additional intangible assets. Net unrealized gain or loss from
mark-to-market activity for certain foreign currency derivative
instruments that do not qualify for hedge accounting represents the
non-cash net gain (loss) from changes in fair value of certain
undesignated foreign currency derivative contracts. Upon
settlement, which is within the same calendar year of execution of
the contract, the realized gain (loss) from the changes in fair
value of the non-qualified foreign currency derivative contracts
will be reported in the relevant non-GAAP financial measures,
allowing quarterly results to reflect the economic effects of the
foreign currency derivative contracts without the resulting
unrealized mark to fair value volatility. Base income tax rate is
defined as the effective tax rate excluding the impacts of foreign
exchange gains (losses), non-operating benefits (costs),
amortization of intangibles (existing as of the Separation),
mark-to- market gains (losses) on certain foreign currency
contracts not designated as hedges, and significant items.
® TM Corteva Agriscience and its affiliated companies.
1. Organic Sales, Operating EPS and Operating EBITDA are
non-GAAP measures. See page A-5 for further discussion. 2.
North America is defined as U.S.
and Canada. EMEA is defined as
Europe, Middle East and Africa. 3. The Company does not provide the
most comparable GAAP measure on a forward-looking basis. See page 6
for further discussion. 4. Enlist E3TM soybeans are jointly
developed by Corteva Agriscience LLC and M.S. Technologies
L.L.C.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/corteva-reports-second-quarter-and-first-half-2023-results-updates-full-year-net-sales-and-earnings-guidance-301893186.html
SOURCE Corteva, Inc.