Corteva, Inc. · NYSE:CTVA
Corteva — Q3 2019 Earnings Presentation
22 slides from Corteva's earnings presentation, Oct 31, 2019
Slide 1: 3Q 2019 Earnings Conference Call
3Q 2019 Earnings Conference Call October 31, 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 Financial 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: Perspective on Market Backdrop
Perspective on Market Backdrop 3Q 2019 Highlights Weather impacts Global economy African Swine Fever Trade and tariffs 4
Slide 5: Progress on Five Priorities for Shareholder Value Creation
Progress on Five Priorities for Shareholder Value Creation 3Q 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 Expanded employee Declared second Delivered greater
Slide 6: 3Q Highlights
3Q 2019 Highlights(1) Net Sales Pro Forma Operating EBITDA(2) 3Q Highlights Reported net sales down 2%; organic(2) $1.95B sales flat for the quarter with shifts in Reported $1.91B Operating both segments 2% (2) EBITDA Operating EBITDA(2) improvement Organic(2) 18% driven by shift of Seed volumes fro
Slide 7: Regional Highlights
3Q 2019 Regional Highlights North America Latin America Asia Pacific Europe, Middle East, Africa Net Sales $0.9B $0.6B Reported Reported Reported Reported 16% 13% 8% $0.3B 3% $0.5B $0.8B $0.3B (1) $0.2B $0.2B Organic Organic (1) Organic (1) Organic (1) 16% 11% 6% 8% 3Q'18 3Q'19 3Q'18 3Q'19 3Q'18 3Q'
Slide 8: Update on 2H and Full Year Operating EBITDA Guidance
Update on 2H and Full Year Operating EBITDA(1) Guidance Estimated 2H 2019 Pro Forma Operating EBITDA(1): ~ ($70) Key Drivers: ($ in millions) . Volume shift to 3Q in NA from delayed planting offsetting shift to 2Q from early CP demand in LA ~($80) ~($70) ($201) . Continued growth and price realizati
Slide 9: Highlights: 3Q 2019 vs 3Q 2018
3Q 2019 Highlights ($’s in millions, except EPS) 3Q 2019 3Q 2018(1) Change Net Sales $1,911 $1,947 (2)% GAAP Net Loss from Continuing Operations After Income Taxes $(527) $(5,336) 90%(3) Operating EBITDA(2) $(207) $(251) 18% Operating EBITDA Margin(2) (10.8)% (12.9)% ~210 bps GAAP EPS from Continuin
Slide 10: Operating EPS Variance
3Q 2019 Operating EPS(1) Variance $(0.39) Operating $(0.60) EPS(1) Operating EPS(1) $0.08 $0.13 $0.14 $0.04 $(0.12) $(0.06) Q3'18 (2) Synergies Volume Price/Cost/Selling Currency Change in Tax EGL/Other Q3'19 Rate Key Drivers Delivered on cost savings from synergies which contributed 14 cents to ope
Slide 11: Segment Performance Highlights
3Q 2019 Segment Performance Highlights Crop Protection Performance Highlights ($’s in millions) 3Q 2019 3Q 2018(1) . Strong early demand in the second quarter and delayed soybean planting in Brazil shifted sales to Net Sales $1,230 $1,396 the fourth quarter Operating EBITDA $119 $159 . Operating EBI
Slide 12: FY19 Guidance - Operating Earnings Per Share
FY19 Guidance - Operating Earnings Per Share(1) ($ in millions, except per share information) Guidance Sensitivities and Comments Net Sales ~ (3)% No change from prior guidance; organic sales(1) flat Corteva Pro Forma ~1,900 Low end of prior range due to continued headwinds from currency Operating E
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Slide 14: Regional Net Sales Highlights – Crop Protection
3Q 2019 Regional Net Sales Highlights – Crop Protection North Reported Organic(1) Latin Reported Organic(1) America 7% 7% America 21% 20% CP Global Net Sales 3Q 2019 3Q 2018 3Q 2019 3Q 2018 Net Sales ($MM) $397 $425 Net Sales ($MM) $491 $621 $1.4B $1.2B Volume Price Currency Portfolio Volume Price C
Slide 15: Regional Net Sales Highlights – Seed
3Q 2019 Regional Net Sales Highlights – Seed North Reported Organic(1) Latin Reported Organic(1) America 102% 102% America 7% 9% Seed Global Net Sales 3Q 2019 3Q 2018 3Q 2019 3Q 2018 Net Sales ($MM) $226 $112 Net Sales ($MM) $271 $254 $0.7B Volume Price Currency Portfolio Volume Price Currency Portf
Slide 16: Calculation of Corteva Operating EBITDA
Corteva Selected Non-GAAP Calculation of Corteva Operating EBITDA Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 In millions As Reported Pro Forma Pro Forma Pro Forma (Loss) income from continuing operations, net of tax (GAAP) 1 $ (527) $ (5,336) $ 68 $ (4,191)
Slide 17: Selected Segment Information
Corteva Selected Segment Information Net sales by segment In millions Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Seed $ 681 $ 551 $ 6,347 $ 6,716 Crop Protection 1,230 1,396 4,516 4,756 Total net sales $ 1,911 $ 1,947 $ 10,863 $ 11,472 Corteva Operating EBIT
Slide 18: Corteva Significant Items (Pretax)
Corteva significant items (Pretax) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 In millions As Reported Pro Forma Pro Forma Pro Forma Seed Loss on divestiture - - (24) - Gain on sale of assets - - - 24 Restructuring and asset-related charges - net (47) (190) (
Slide 19: Price, Volume, Currency Analysis by Region (Q3)
Corteva Selected Segment Information - Price, Volume Currency Analysis Region Q3 2019 vs. Q3 2018 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America $ 86 16% $ 86 16% -15% 31
Slide 20: Price, Volume, Currency Analysis by Region (Nine Months)
Corteva Selected Segment Information - Price, Volume Currency Analysis Region Nine Months Ended September 30, 2019 vs. Nine Months Ended September 30, 2018 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Vol
Slide 21: Calculation of Corteva Operating EPS
Corteva Selected Non-GAAP Calculation of Corteva Operating EPS Three Months Ended September 30, 2019 2018 2019 2018 $ (millions) $ (millions) EPS (diluted) EPS (diluted) As Reported Pro Forma As Reported Pro Forma Net loss from continuing operations attributable to Corteva (GAAP) $ (516) $ (5,341) $
Slide 22: Calculation of Corteva Base Tax Rate
Corteva Selected Non-GAAP Calculation of Corteva Base Tax Rate Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 As Reported Pro Forma Pro Forma Pro Forma Net (loss) income from continuing operations before income taxes (GAAP) $ (631) $ (5,364) $ 214 $ (3,997) Add: