Corteva's results for the first half of 2024 were solid, led by the Seed business and overall operational execution

• Solid first half results led by the strength of the Seed business and operational execution

• Crop Protection industry impacted by residual destocking and competitive pressures

• Updated 2024 revenue and operating EBITDA¹ guidance lowered to reflect market dynamics

• Share buyback program and dividend increase demonstrate strong balance sheet and cash flow

Corteva, Inc. (NYSE: CTVA) ("Corteva" or the "Company") reported financial results for the second quarter and six months ended June 30, 2024.

"Corteva's results for the first half of 2024 were solid, led by the Seed business and overall operational execution. Our Seed business segment had another standout performance, hitting a new record for first half operating EBITDA. This reflects the sustained strength of our product portfolio, as farmers continue to rely on our leading technology. We're very proud of our position as the North America seed market leader for both corn and soybeans. 

The Crop Protection market is showing signs of stabilization, however we continue to navigate competitive price pressures.  We are encouraged by the Crop Protection business volume improvement in the second quarter and expect that to continue in the second half of the year.

We have adjusted our full year 2024 outlook to reflect market realities and the continued focus on controlling the controllables.  We are committed to delivering a strong second half of the year and meeting our commitments to customers and shareholders." 

Chuck Magro

Chief Executive Officer

First Half 2024 Highlights

• First half 2024 net sales declined 3% versus prior year as Crop Protection declines more than offset Seed gains. Organic¹ sales decreased 2% in the same period.

• Seed net sales grew 2% and organic¹ sales increased 4%. Price was up 5% globally, led by North America² with the continued execution on the Company's price for value strategy. Volume declines were driven primarily by unfavorable weather and reduced planted area in EMEA².

• Crop Protection net sales and organic¹ sales both decreased 11%. Volume declines were driven by weather and destocking impacts in EMEA², as well as just-in-time purchasing behavior in North America². Price declined 4% reflecting a broad-based competitive price environment.

• GAAP income and earnings per share (EPS) from continuing operations were $1.43 billion and $2.03 per share for the first half of 2024, respectively.

• Operating EBITDA¹ and Operating EPS¹ were $2.95 billion, and $2.72 per share for the first half of 2024, respectively.

• The Company updated full-year 2024 guidance³ and expects net sales in the range of $17.2 billion to $17.5 billion. Operating EBITDA¹ is expected to be in the range of $3.4 billion to $3.6 billion. Operating EPS¹ is expected to be in the range of $2.60 to $2.80 per share. Cash provided by operating activities – continuing operations is expected to be in the range of $2.1 billion to $2.6 billion. Free Cash Flow¹ is expected to be in the range of $1.5 billion to $2.0 billion. The Company plans to repurchase approximately $1.0 billion shares in 2024.

Summary of Second Quarter 2024

For the second quarter ended June 30, 2024, net sales increased 1% versus the same period last year. Organic¹ sales increased 2%.

Volume was flat versus the prior-year period as Crop Protection growth offset lower Seed volumes. Crop Protection volume increased 6% over the prior-year driven primarily by Latin America and North America² on demand for new products and spinosyns, partially offset by residual destocking and unfavorable weather in EMEA².  Seed volume declined 2% versus prior year due to earlier seasonal deliveries in North America² partially offset by the delayed season in EMEA² into second quarter.

Price increased 2% versus prior year, reflecting continued execution on the Company's price for value strategy and improved product mix in Seed, partially offset by the competitive price environment in Crop Protection.

GAAP income from continuing operations after income taxes was $1.06 billion in second quarter 2024 compared to $880 million in second quarter 2023. Operating EBITDA¹ for the second quarter was $1.92 billion, up 10% compared to prior year, translating into approximately 250 basis points of margin improvement.

Seed Summary

Seed net sales were $4.33 billion in the second quarter of 2024, up from $4.26 billion in the second quarter of 2023. The sales increase was driven by a 5% increase in price, partially offset by a 2% decline in volume and a 1% unfavorable impact from portfolio.

The price increase was broad-based, led by North America², on improved product mix and the continued execution of the Company's price for value strategy. Lower volumes were driven by earlier seasonal deliveries in North America versus prior year, partially offset by the delayed season in EMEA² into the second quarter.

Segment operating EBITDA was $1.70 billion in the second quarter of 2024, up 16% from the second quarter of 2023. Price execution, reduction of net royalty expense, and ongoing cost and productivity actions more than offset investment in R&D, higher commodity costs, and lower volumes. Segment operating EBITDA margin improved by approximately 500 basis points versus the prior-year period.

Seed net sales were $7.1 billion in the first half of 2024, up from $7.0 billion in the first half of 2023. The sales increase was driven by a 5% increase in price, partially offset by a 1% decline in volume, a 1% unfavorable portfolio impact and a 1% unfavorable currency impact.

The increase in price was driven by strong demand for top technology offerings and operational execution globally, with global corn and soybean prices up 6% and 4%, respectively. Pricing actions more than offset currency impacts in EMEA². The decline in volume was driven primarily by unfavorable weather and reduced planted area in EMEA².  Unfavorable currency impacts were led by the Turkish Lira.

Segment operating EBITDA was $2.4 billion in the first half of 2024, up 16% from the first half of 2023. Price execution, reduction of net royalty expense, and ongoing cost and productivity actions more than offset higher commodity costs, investment in R&D, the unfavorable impact of currency, and lower volumes. Segment operating EBITDA margin improved by approximately 420 basis points versus the prior-year period.

Crop Protection Summary

Crop Protection net sales were approximately $1.8 billion in the second quarter of 2024, flat with the second quarter of 2023. The flat sales growth over the prior period was driven by a 6% increase in volume offset by a 5% decline in price and a 1% unfavorable impact from currency.

The increase in volume was driven primarily by Latin America and North America² on demand for new products and spinosyns, partially offset by residual destocking and unfavorable weather in EMEA². The price decline was broad-based, reflecting the competitive pricing environment for the Crop Protection industry globally.

Segment operating EBITDA was $255 million in the second quarter of 2024, down 20% from the second quarter of 2023. Competitive pricing and raw material cost inflation more than offset volume growth and productivity savings. Segment operating EBITDA margin declined by 365 basis points versus the prior-year period.

Crop Protection net sales were approximately $3.5 billion in the first half of 2024 compared to approximately $4.0 billion in the first half of 2023. The sales decrease was driven by a 7% decrease in volume, a 4% decline in price, and a 1% unfavorable impact from currency. These declines were partially offset by a 1% favorable portfolio impact.

The decrease in volume was primarily due to residual destocking and unfavorable weather impacts in EMEA², as well as just-in-time purchasing behavior in North America².

Pricing gains in EMEA² were more than offset by declines in North America² and Latin America, reflecting competitive price pressure. Unfavorable currency impacts were led by the Turkish Lira. The portfolio impact was driven by the Biologicals acquisitions.

Segment operating EBITDA was $565 million in the first half of 2024, down 39% from the first half of 2023. Pricing pressure, lower volumes, raw material cost inflation and the unfavorable impact of currency, more than offset productivity savings.  Segment operating EBITDA margin contracted by approximately 720 basis points versus the prior-year period.

2024 Guidance

On-farm demand for inputs remain steady and farmers continue to prioritize top-tier seed technology.  Against this backdrop, our Seed business has outperformed the market, likely gaining market share and improving operational efficiency. While the global Crop Protection industry volume has begun to stabilize, pricing pressures have become more pronounced due to the competitive environment and tighter farmer margins.

As a result, Corteva now expects net sales in the range of $17.2 billion to $17.5 billion, growth of 1% at the mid-point. Operating EBITDA¹ is expected to be in the range of $3.4 billion to $3.6 billion, growth of 4% at the mid-point. Operating EPS¹ is expected to be in the range of $2.60 to $2.80 per share, flat at the mid-point. Cash provided by operating activities – continuing operations is expected to be in the range of $2.1 billion to $2.6 billion. Free Cash Flow¹ is expected to be in the range of $1.5 billion to $2.0 billion. The Company plans to repurchase approximately $1.0 billion shares in 2024.

The Company is not able to reconcile its forward-looking non-GAAP financial measures, except for Free Cash Flow, 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.

Second Quarter Conference Call

The Company will host a live webcast of its second quarter and first half 2024 earnings conference call with investors to discuss its results and outlook tomorrow, August 1, 2024, at 10:00 a.m. ET. The slide presentation that accompanies the conference call is posted on the Company's Investor Events and Presentations page. A replay of the webcast will also be available on the Investor Events and Presentations page.

1. Organic Sales, Operating EPS, Operating EBITDA, and Free Cash Flow are non-GAAP measures. See page 6 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 5 for further discussion. 4. Enlist E3™ soybeans are jointly developed by Corteva Agriscience LLC and M.S. Technologies L.L.C.