Corteva Reports Second Quarter and First Half 2023 Results, Updates Full-Year Net Sales and Earnings Guidance
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
2Q 2023 Results Overview
|
Income from Cont. |
EPS |
|
GAAP |
|
|
|
vs. 2Q 2022 |
(3) % |
(12) % |
(10) % |
Organic1 Sales |
Operating EBITDA1 |
Operating EPS1 |
|
NON-GAAP |
|
|
|
vs. 2Q 2022 |
(4) % |
+2 % |
(2) % |
1H 2023 Results Overview
|
Income from Cont. |
EPS |
|
GAAP |
|
|
|
vs. 1H 2022 |
+1 % |
(6) % |
(4) % |
Organic1 Sales |
Operating EBITDA1 |
Operating EPS1 |
|
NON-GAAP |
|
|
|
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 America 2 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 inLatin America , partially offset by increased corn acres inNorth America 2. - 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 America 2. - 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.
"
"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
"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
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 proprietaryCorteva germplasm is expected to exceed 80%.
- The Company expects 2023 Enlist E3TM4 U.S. market penetration of at least 55%, representing ~75% of
- 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. andCanada . 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 inNorth America in 2028 and inEurope in 2030, pending regulatory reviews.
- The Company announced that PowerCore® Enlist® Refuge Advanced® (RA) corn will be available for planting in the 2024 growing season in the
- 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 grantsCorteva 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 theUSDA validated quality management systems and specific process pointsCorteva established to indicate the quality of UtrishaTM N.
- The Company entered into an exclusive agreement with
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.
The Company is not able to reconcile its forward-looking non-GAAP financial measures to its most comparable
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
Follow
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
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
Additionally, there may be other risks and uncertainties that
Regulation G (Non-GAAP Financial Measures)
This earnings release includes information that does not conform to
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
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.
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
Media Contact, Dave Sousa, +317-418-4672, david.sousa@corteva.com; Investor Contact, Kim Booth, +1-302-485-3190, kimberly.a.booth@corteva.com