Corteva, Inc. · NYSE:CTVA
Corteva — Corteva Agriscience — Investor Day (November 2018)
23 slides from Corteva's investor day presentation, Nov 8, 2018
Slide 1: Positioned for Above-Market Growth
Positioned for Above-Market Growth Greg Friedman, EVP & CFO November 8, 2018 Insert Risk Classification Agriculture Division of DowDuPont
Slide 2: Measuring Progress Against our Five Priorities
Measuring Progress Against our Five Priorities Five Priorities Key Indicators Retention, penetration and 01 Instill a strong culture concentration 02 Disciplined capital allocation Improved ROIC 0 03 Develop innovative solutions New product sales Cost vs. peers 04 Attain best-in-class cost structure
Slide 3: Growing EBITDA Amid a Challenging Industry Environment
Growing EBITDA Amid a Challenging Industry Environment Pro Forma Net Sales Pro Forma Operating EBITDA(1) 1.5% Growth Up mid single Steady digits $14.1B $13.9B 14% Growth $2.0B $1.8B 2016 2017 2018E 2016 2017 2018E Note: Sales and operating EBITDA are on a pro forma basis prepared in accordance with
Slide 4: Multiple Levers to Drive Above-Market Sales Growth
Multiple Levers to Drive Above-Market Sales Growth ROBUST PIPELINE STRONG FOUNDATION • Keep customers at the center • Deliver and accelerate peak • Provide a complete solution sales opportunity from pipeline launches • Execute Multi-Channel, Multi-Brand Strategy • Margin expansion via enhanced value
Slide 5: Pipeline of New Products to Drive Industry-Leading Sales Growth
Pipeline of New Products to Drive Industry-Leading Sales Growth New products launching in 2017-2021 expected to generate ~$6 billion in sales $2.2B $1.0B $3.7B $0.4B $1.9B $1.1B 2018E 2020E 2022E Seed Crop Protection Agriculture Division of DowDuPont 5
Slide 6: New Seed Products Expect to Drive Sales Growth
New Seed Products Expect to Drive Sales Growth Seed product launches poised to accelerate ✓ Expect new Seed products to contribute 1-2% of incremental sales growth annually $3.7B ✓ The majority of new product sales replace existing, lower yielding technologies ✓ Value-added innovation leads to price
Slide 7: New Crop Protection Products Expected to Drive Volume Gains & Margins
New Crop Protection Products Expected to Drive Volume Gains & Margins Crop Protection New Product Sales ✓ Expect new Crop Protection products to contribute 1.5-2.5% of incremental sales growth annually ✓ New products drove 17% organic $2.2B growth in 3Q 2018 ✓ Crop protection products are largely in
Slide 8: Translating New Products & Cost Synergies Into Expected EBITDA Growth
Translating New Products & Cost Synergies Into Expected EBITDA Growth 2018-2019 2020-2022 2023+ ADVANCE ACCELERATE SHAPE THE THE CORE GROWTH FUTURE ✓ Top line growth exceeding ✓ Top line growth exceeding ✓ Top line growth exceeding industry industry industry ✓ Multi-Channel / Multi-Brand roll- ✓ Mul
Slide 9: A Steady Flow of Merger-Related Cost Synergy Delivery
A Steady Flow of Merger-Related Cost Synergy Delivery Composition: ~1/3 2017 2018E 2019E 2020E 2021E Headcount $50 million $450 million $750 million $950 million ~$1.2 billion fixed cost synergies Cumulative realized cost synergies ~1/3 Non-headcount › Increased target from $1.1 Billion to ~$1.2 Bil
Slide 10: Implementing a Best-in-Class Cost Structure
Implementing a Best-in-Class Cost Structure Continuous Improvement to Lead to Additional Productivity Gains › Achieve a best-in-class cost structure › Consolidate ERP systems in 2019-2021 › Increase function, manufacturing and supply chain productivity › Drive additional procurement savings › Furthe
Slide 11: Our Three-Part Plan to Improve ROIC
Our Three-Part Plan to Improve ROIC Grow Expand Disciplined Sales EBITDA Investment ROIC = NOPAT divided by debt plus equity excluding goodwill and intangibles Note: NOPAT is net operating profit after tax and excludes significant items and non-operating costs. Agriculture Division of DowDuPont 11
Slide 12: Achieving the Intended Capital Structure for Corteva
Achieving the Intended Capital Structure for Corteva Liquidity and short- Targeting A- Expected term debt supporting credit profile(1) debt profile seasonality ▪ A- credit profile to ▪ Adjusted Debt* ~$4B, ▪ ~$2B cash balance support our primarily pension and ▪ Commercial paper as differentiated OPE
Slide 13: Illustration of Agriculture Seasonality
Northern Hemisphere Illustration of Agriculture Southern Hemisphere Seasonality 65% of sales in 1H H2 H1 Cash collection focused on Q4 Crop protection sales early in 35% of 65% of season to retail/distributors, and sales sales throughout growing season to farmers Peak debt at the end of Q3,
Slide 14: Aligning our Financial Policy to Deliver Strong Returns
Aligning our Financial Policy to Deliver Strong Returns Committed to Maintain › Maintain financial flexibility to support industry leading an A- Credit Profile(1) business model Investment in Growth › Committed to growing cash flow in a disciplined, consistent way while investing in innovation for c
Slide 15: Creating Value for Shareholders in Three Ways
Creating Value for Shareholders in Three Ways Above-Market New product launches to drive sales growth, outpacing Growth the industry Margin Expansion Operating EBITDA expected to grow faster than sales Disciplined Capex limited to depreciation and cost to achieve savings capital Highly disciplin
Slide 16: Greg Friedman
Greg will be executive vice president, chief financial officer, of Corteva Agriscience™, Agriculture Division of DowDuPont. Corteva is expected to separate from DowDuPont by June 1, 2019. Prior to this appointment, Greg served as the vice president, Investor Relations for DuPont and currently leads
Slide 17: Safe Harbor and Non-GAAP Statements
Safe Harbor and Non-GAAP Statements Forward-Looking Statements This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amend
Slide 18: Safe Harbor and Non-GAAP Statements (cont'd)
Safe Harbor and Non-GAAP Statements (cont’d) These risks are and will be more fully discussed in the current, quarterly and annual reports and preliminary registration statement on Form 10 filed with the U. S. Securities and Exchange Commission by DowDuPont or the Company, as applicable. While the l
Slide 19: Safe Harbor and Non-GAAP Statements (cont'd)
Safe Harbor and Non-GAAP Statements (cont’d) Regulation G This presentation includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures includes Corteva pro forma operating EBITDA. DowDuPont and Corteva's management believes that these non-GAAP measur
Slide 20: Selected Non-GAAP Calculation of Corteva Pro Forma Operating EBITDA
Corteva Selected Non-GAAP Calculation of Corteva Pro Forma Operating EBITDA In millions 2017 2016 Pro Forma Pro Forma 1 Pro forma income from continuing operations, net of tax (GAAP) $ 2,230 $ 334 (Benefit from) provision for income taxes (3,125) (375) Pro forma (loss) income from continuing operati
Slide 21: Corteva Pro forma significant items (Pretax)
Corteva Pro forma significant items (Pretax) In millions 2017 2016 Seed Bayer CropScience arbitration $ 469 $ - Restructuring and asset-related (benefits) charges - net 133 27 Gain on sale of assets - - Total Seed 602 27 Crop Protection Customer claim adjustment/recovery - (53) Environmental charges
Slide 22: Important Notices
Important Notices Spinetoram Aminopyralid HL & XT DO NOT APPLY DICAMBA HERBICIDE IN-CROP TO SOYBEANS WITH Roundup Ready 2 Xtend® technology unless you use a dicamba herbicide Herculex® Insect Protection technology by Dow AgroSciences and Pioneer Hi-Bred. Herculex® and the HX logo are registered trad
Slide 23: Agriculture Division of DowDuPont
Agriculture Division of DowDuPont 23