Corteva reports strong results for first quarter 2021 - increases net sales guidance

On May 4, Corteva, Inc. (NYSE: CTVA) reported financial results for the three months ended March 31, 2021.

First Quarter 2021 Highlights

• Ongoing penetration of new products, coupled with favorable overall market fundamentals, drove volume and price gains globally. First quarter 2021 net sales and organic¹ sales both increased 6% versus prior year. Gains were reported in most regions, led by double-digit growth in Latin America.
   

• Sales of new and differentiated products drove volume and price gains in Crop Protection. Net sales and organic¹ sales both grew 12%, with double digit net sales increases in every region. New product sales in Crop Protection increased more than $120 million compared to prior year.
   

• Seed net sales rose 2% and organic¹ sales grew 3% year over year, driven by continued new product penetration and local price gains which more than offset the impact of seasonal timing of seed deliveries in North America².
   

• GAAP income and earnings per share (EPS) from continuing operations were $613 million and $0.81 per share for the first quarter 2021, respectively.
   

• Strong price execution and volume gains, which collectively more than offset cost headwinds, drove an Operating EBITDA¹ increase of 14% to $904 million versus the same quarter last year.
   

• The Company experienced market-driven cost headwinds in the quarter, including cost increases in freight and logistics, as well as raw materials. These headwinds were partially offset by the Company's ongoing execution on its productivity programs.
   

• SG&A expense as a percentage of sales improved approximately 160 basis points.
   

• Management increased full year 2021 net sales guidance³ to a range of $14.6 to $14.8 billion – and affirmed full year 2021 Operating EBITDA1 guidance in the range of $2.4 billion to $2.5 billion.
  

"Building on the momentum from the finish in 2020, the first quarter 2021 results reflect continued strong execution from our global teams. Corteva delivered increased sales across both Seed and Crop Protection, substantial Operating EBITDA¹ growth and margin expansion. This performance demonstrates demand for the innovative and differentiated technology that we bring to the market and the ongoing cost and productivity performance, while also managing externally driven cost headwinds.

The first quarter results further demonstrate our commitment to delivering value for our shareholders, which is reflected in the return of approximately $450 million in the first quarter via share repurchases and dividends. We expect to complete the majority of our $1 billion authorized share repurchase program by the end of the first half of 2021.

We are encouraged by a strengthening agriculture outlook, while maintaining agility given market volatility from the variations in the pace and path of recovery across global economies, including rising input costs. We are closely monitoring these factors and remain focused on driving revenue growth while continuing to deliver on our productivity and margin expansion commitments through the remainder of the year," said Jim Collins, Corteva Chief Executive Officer.

Company Update

• Accelerating Capital Return to Shareholders: The Company returned approximately $450 million to shareholders in the form of dividends and repurchases during the first quarter. Corteva remains on an accelerated pace to complete its authorized share repurchase program in 2021, with the majority expected to be completed in the first half.
   

• Strengthening Position in High-Value Biologicals Market Sector: The Company took actions in the first quarter to strengthen its access and position in the high-margin biologicals market sector – and announced three new collaboration agreements during the period. Through this expanded technology access, the Company aims to further accelerate Corteva's pace of innovation and existing leadership position in this high-value sector to meet the increasing market demand for naturally derived products. Taken together with its diverse and balanced portfolio of new and differentiated Crop Protection technologies – such as supply-constrained naturally derived Qalcova™ and Jemvelva™ insecticides, as well as Inatreq™ fungicide – these agreements are expected to provide a complementary portfolio of sustainable solutions to help farmers address pressing crop protection challenges.
   

• Driving Sustainability Commitments: In connection with its 10-year sustainability targets introduced in 2020, recently, the Company introduced a Carbon and Ecosystem Services portfolio, focused on improving the carbon sequestration process and creating additional solutions to help farmers increase profitability while enabling climate resilience.

Outlook

The Company increased its previously provided net sales guidance³ for the full year 2021 and now expects net sales in the range of $14.6 to $14.8 billion, which at the mid-point represents expected net sales growth of 3-4% for the year and organic sales growth of 3% for the year. Corteva affirmed its previously provided earnings guidance. Operating EBITDA is expected to be in the range of $2.4 billion to $2.5 billion and operating EPS range is expected to be between $1.85 and $1.95 per share. 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 its control, such as Significant Items, without unreasonable effort.

Click here to download the full press release, including CEO commentary, segment detail, and reconciliations of non-GAAP and GAAP measures, or visit the Corteva Investor Relations website.

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. 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 its control, such as Significant Items, without unreasonable effort.