Corteva Eyes Further Expansion with Cutting-Edge Technologies - A letter to its stockholders

Date:04-01-2024

Corteva recently released its annual report for fiscal year 2023. In a challenging year for the industry, Corteva's executives, in the letter to their shareholders in its annual report, shared its 2023 performance highlights and a brief analysis of the core strengths the company will rely on for further growth in the future.

The following is the original letter to shareholders, from Gregory R. Page, Non-Executive Chair of the Board at Corteva and Chuck Magro, the company's CEO.

To our Stockholders

We write this letter at a pivotal time, as the world faces the intertwined challenges of a growing population, climate change and in some regions, the tragic disruption of armed conflict. Food—availability, accessibility, quality—is an inextricable link between each of these. 

More than any other time in our history, we need to produce more high-quality, affordable, nutritious food. But today, crops are becoming harder to grow, and that food is harder to get to the people who need it most. The world should be giving farmers more tools and means to meet these challenges, rather than, as in many regions around the world, taking them away.

In fact, technology has the power today to help farmers grow more crops — without adding land to production, and while helping mitigate the impacts of climate change. For example, this year, despite severe drought conditions in many parts of the country, American farmers set a corn production record of 15.3 billion bushels — at record yields of about 177 bu/acre. Corteva played a role: our innovative technology is used widely across the American corn belt.

Corteva technology has other, wide-ranging benefits that help drive yield — seeds designed to be more drought tolerant, herbicides that meet stringent regulatory standards on soil biodiversity while effectively managing pests, and insecticides that target damaging nematodes without affecting soil health.

Farmers around the world appreciate the critical role technology plays in modern agriculture. We are optimistic that, as its benefits begin to be more widely understood, others will join them, and us. 

A Strong Foundation, A Bright Future

This year, 2024, Corteva turns five. Over this relatively short period of time, together with our nearly 23,000 employees around the world, we have built one of the most competitively advantaged agricultural technology portfolios in the industry. Our three-year performance speaks for itself: since the start of 2021, we have grown Operating EBITDA a total of $1.3 billion; overall, Operating EBITDA margins are also up approximately 500 basis points. We saw this trajectory continue in 2023, which, despite some industry-wide crop protection challenges, proved to be another year of Operating EBITDA growth and margin expansion. We ended the year with no net debt and an extremely strong cash position, with $1.2 billion in free cash flow. This strength gives us flexibility and optionality as we evaluate options to continue to create and grow shareholder value. 

As a technology company, we also measure performance through our advancements: in 2023, we launched more than 400 new products. In Seed alone, we introduced 300 new hybrids or varieties—next generation technology like Optimum^® Gly canola, Vorceed^® Enlist^® corn and 41 new trait or stack registration approvals. In Crop Protection, we launched about 140 new products and two new active ingredients: Adavelt™ and Reklemel™, the latter being a first of its kind, selective nematicide that also is compatible with beneficial soil organisms. 

As we look to 2024 and beyond, we are optimistic: the industry outlook for 2024 is stable, with constructive fundamentals. The seed market, in particular, is healthy, with strong demand for the leading-edge technology Corteva is known for. Our technology plans for this year include more than 300 new seed hybrids and varieties, ensuring that our seed pipeline will remain the best in the industry. In crop protection, our differentiated portfolio, strengthened by our industry-leading biologicals expertise, will continue to create new pathways to value creation.

And so, as we commemorate our fifth year as a standalone public company, we will continue our focus on controlling the controllables, delivering groundbreaking technology to our customers and generating consistent, incremental value for our stockholders.

On behalf of our employees, Board and management team, we thank you for your continued support of our company. 

 - Gregory R. Page, Non-Executive Chair of the Board & Chuck Magro, Chief Executive Officer