Corteva, Inc. · NYSE:CTVA
Corteva — Q2 2019 Earnings Presentation
22 slides from Corteva's earnings presentation, Aug 1, 2019
Slide 1: 2Q 2019 Earnings Conference Call
2Q 2019 Earnings Conference Call August 1, 2019 Insert Risk Classification
Slide 2: Safe Harbor Regarding Forward-Looking Statements
Safe Harbor Regarding Forward-Looking Statements Forward-Looking Statements This presentation contains 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
Slide 3: A Reminder About Non-GAAP Financial Measures and Pro Forma Information
A Reminder About Non-GAAP Financial Measures and Pro Forma Financial Information Corteva Unaudited Pro Forma Financial Information In order to provide the most meaningful comparison of results of operations, supplemental unaudited pro forma financial information for the first quarter of 2019 and pri
Slide 4: Progress on Five Priorities for Shareholder Value Creation
Progress on Five Priorities for Shareholder Value Creation 2Q 2019 Highlights 01 02 03 04 05 Instill a strong Drive disciplined Develop innovative Attain best-in-class Deliver above- culture capital allocation solutions cost structure market growth Launched company- Announced $1 billion Launched new
Slide 5: 2Q 2019 Highlights
2Q 2019 Highlights Net Sales Pro Forma Op. EBITDA(1) 2Q Highlights North America market disruptions $1.54B $5.7B $5.6B negatively impacted net sales and Reported $1.45B Operating operating EBITDA for both segments 3% EBITDA (1) Margin Rest of World net sales increased 10% (1) Organic 80 bps on both
Slide 6: 2Q 2019 Regional Highlights
2Q 2019 Regional Highlights North America Latin America Asia Pacific Europe, Middle East, Africa Net Sales $0.7B $4.1B $0.7B $0.7B $3.8B $0.5B Reported Reported $0.4B $0.5B Reported Reported 8% 34% 5% 3% (1) Organic Organic (1) Organic (1) Organic (1) 8% 39% 10% 6% 2Q'18 2Q'19 2Q'18 2Q'19 2Q'18 2Q'1
Slide 7: Update on Full Year Operating EBITDA Guidance
Update on Full Year Operating EBITDA(1) Guidance 1H 2019 Pro Forma Operating EBITDA(1): down 13 percent Key Drivers: ($ in millions) . Estimated North America Market Impact: $120 ($350) $200 $50 › $250 million weather-related reduction New Other › $100 million reduction due to seasonal shifts $2,273
Slide 8: 2Q 2019 Highlights
2Q 2019 Highlights ($’s in millions, except EPS) 2Q 2019 2Q 2018(1) Change Net Sales $5,556 $5,731 (3)% GAAP Net Income from Continuing Operations $483 $968 (50)% Operating EBITDA(2) $1,452 $1,544 (6)% Operating EBITDA Margin(2) 26% 27% ~(80) bps GAAP EPS from Continuing Operations $0.63 $1.29 (51)%
Slide 9: 2Q 2019 Operating EPS Variance
2Q 2019 Operating EPS(1) Variance $0.06 ($0.25 ) $0.13 Other Vol./Price ($0.05 ) ($0.07) $0.04 NA $1.56 Market Impact Operating $1.42 EPS1 $1.42 Operating1 Operating EPS EPS1 (2) Q2'18 Synergies Volume & Price ~($0.19) Currency Change in Tax EGL Q2'19 Rate Key Drivers Delivered on cost savings from
Slide 10: 2Q/1H 2019 Segment Performance Highlights
2Q/1H 2019 Segment Performance Highlights Crop Protection Performance Highlights ($’s in millions) 2Q 2019 2Q 2018(1) 1H 2019(1) 1H 2018(1) . N. America - lost applications in nitrogen/corn and soybean herbicide from weather Net Sales $1,857 $1,867 $3,286 $3,360 . Solid growth from new products, inc
Slide 11: 1H 2019 Regional Net Sales Highlights – Crop Protection
1H 2019 Regional Net Sales Highlights – Crop Protection CP Global Net Sales North Reported Organic(1) Latin Reported Organic(1) America 18% 17% America 36% 43% $3.4B $3.3B Reported 1H 2019 1H 2018 1H 2019 1H 2018 2% Net Sales ($MM) $1,165 $1,419 Net Sales ($MM) $653 $481 Volume Price Currency Portfo
Slide 12: 1H 2019 Regional Net Sales Highlights – Seed
1H 2019 Regional Net Sales Highlights – Seed Seed Global Net Sales North Reported Organic(1) Latin Reported Organic(1) $6.2B America 10% 10% America 3% 2% $5.7B Reported 1H 2019 1H 2018 1H 2019 1H 2018 8% Net Sales ($MM) $4,012 $4,478 Net Sales ($MM) $365 $378 Volume Price Currency Portfolio Volume
Slide 13: Full Year 2019 Modeling Guidance Updates
Full Year 2019 Modeling Guidance Updates 2019 Modeling Updates (in millions) Prior Updated Comments Guidance Guidance Net Sales Flat Down 3% Currency headwinds; Flat organic growth(1) Pro Forma Operating EBITDA(1) $2,200 - $2,300 $1,900 - $2,050 ~$250 est. impact from N. America market/weather Inter
Slide 14: Appendix - Upcoming Investor Event
Appendix - Upcoming Investor Presentation . Investor Presentation with Greg Friedman, EVP and CFO . Date: August 15, 2019 – 8:00 a.m. . Updates on stand-alone company financials and modeling assumptions Footnotes 14
Slide 15: Calculation of Corteva Operating EBITDA
Corteva Selected Non-GAAP Calculation of Corteva Operating EBITDA Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 In millions As Reported Pro Forma Pro Forma Pro Forma Income from continuing operations, net of tax (GAAP) 1 $ 483 $ 968 $ 595 $ 1,145 Provision for income taxe
Slide 16: Selected Segment Information
Corteva Selected Segment Information Net sales by segment In millions Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Seed $ 3,699 $ 3,864 $ 5,666 $ 6,165 Crop Protection 1,857 1,867 3,286 3,360 Total net sales $ 5,556 $ 5,731 $ 8,952 $ 9,525 Corteva Operating EBITDA Three
Slide 17: Corteva Significant Items (Pretax)
Corteva significant items (Pretax) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 In millions As Reported Pro Forma Pro Forma Pro Forma Seed Loss on divestiture $ - $ - $ (24) $ - Restructuring and asset-related (benefits) charges - net (49) (37) (76) (83) Inventory amorti
Slide 18: Price, Volume Currency Analysis Q2 2019
Corteva Selected Segment Information - Price, Volume Currency Analysis Region Q2 2019 vs. Q2 2018 Percent Change Due To: 1 Net Sales Growth (GAAP) Organic Growth (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ (341) -8% $ (323) -8%
Slide 19: Price, Volume Currency Analysis First Half 2019
Corteva Selected Segment Information - Price, Volume Currency Analysis Region First Half 2019 vs. First Half 2018 Percent Change Due To: 1 Net Sales Growth (GAAP) Organic Growth (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ (720)
Slide 20: Calculation of Corteva Operating EPS
Corteva Selected Non-GAAP Calculation of Corteva Operating EPS Three Months Ended June 30, 2019 2018 2019 2018 $ (millions) $ (millions) EPS (diluted) EPS (diluted) As Reported Pro Forma Pro Forma Pro Forma Net income from continuing operations attributable to Corteva (GAAP) $ 470 $ 963 $ 0.63 $ 1.2
Slide 21: Calculation of Corteva Operating Tax Rate
Corteva Selected Non-GAAP Calculation of Corteva Operating Tax Rate Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 As Reported Pro Forma Pro Forma Pro Forma Net income from continuing operations before income taxes (GAAP) $ 753 $ 1,161 $ 845 $ 1,367 Add: Significant items
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