Corteva, Inc. · NYSE:CTVA
Corteva — Q1 2020 Earnings Presentation
24 slides from Corteva's earnings presentation, May 6, 2020
Slide 1: 1Q 2020 Earnings Conference Call
1Q 2020 Earnings Conference Call May 7, 2020
Slide 2: Safe Harbor Regarding Forward-Looking Statements
Safe Harbor Regarding Forward-Looking Statements Forward-Looking Statements This presentation contains certain estimates and 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, whi
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 has bee
Slide 4: Our COVID-19 Response
Our COVID-19 Response Employee Safety & Security Customer Support & Supply Resilience Government & Community Outreach Mobilized global crisis management teams Leveraging multi-source supply chain strategy to Partnering with Global Giving for international grant ensure reliable product supply
Slide 5: 1Q 2020 Performance Highlights
1Q 2020 Performance Highlights Net Sales Operating EBITDA(1), (2) Highlights $ in millions Reported net sales up 16% with double $4.0B Op. (2) $794 digit organic growth in both reporting Reported EBITDA(2) $3.4B segments and across all regions 16% $518 Growth 53% Earnings improved on strong early Or
Slide 6: Progress on Five Priorities for Shareholder Value Creation
Progress on Five Priorities for Shareholder Value Creation 1Q 2020 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 Organization highly Strong balance sheet Stro
Slide 7: 1Q 2020 Regional Net Sales Highlights
1Q 2020 Regional Net Sales Highlights North America Europe, Middle Latin America Asia Pacific East, Africa Net Sales $1.77B $1.47B Reported $1.36B Reported Reported Reported $1.39B 27% 8% $0.43B 19% 5% $0.37B $0.28B $0.29B Organic(1) Organic (1) Organic (1) Organic (1) 28% 11% 30% 10% 1Q'19 1Q'20 1Q
Slide 8: Delivering Above-Market Growth Against an Uncertain Backdrop
Delivering Above-Market Growth Against an Uncertain Backdrop Seed Delivery Pace(1) First Half Momentum Second Half Uncertainties Impact of softening global commodity U.S. Pioneer Brand Corn Deliveries North America planted acreage up year- prices on row crop acreage level and 2018 over-year consiste
Slide 9: 1Q 2020 Segment Performance Highlights
1Q 2020 Segment Performance Highlights Crop Protection Seed ($ in millions) 1Q 2020 vPY ($ in millions) 1Q 2020 vPY Net Sales – Reported $1,501 +5% Net Sales - Reported $2,455 +25% Net Sales – Organic(1) +10% Net Sales - Organic(1) +27% Operating EBITDA $238 +8% Operating EBITDA $581 +79% Operating
Slide 10: Keeping Our Supply Chains Open Through Crisis
Keeping Our Supply Chains Open Through Crisis Ingredient & Raw Material Sourcing Logistics Plant Operations Disruptions occurred in many supply Increasing logistical complexities due to Manufacturing plants are continuing priority chains, especially China and India state and national restricti
Slide 11: Liquidity Underpinned by Strong Balance Sheet
Liquidity Underpinned by Strong Balance Sheet Prudent Management of Robust Liquidity Position at 1 3 4 Cash Preservation Actions Capital Structure March 31, 2020 (1) Maintain A- credit profile to $0.3B Accelerating working support differentiated Uncommitted capital productivity actions Credit Li
Slide 12: Suspending Full Year 2020 Guidance Due to COVID-19 Uncertainty
Suspending Full Year 2020 Guidance Due to COVID-19 Uncertainty 1H 2020 Growth Managing Costs 2H Uncertainties Organic Sales(1) Growth +6% Productivity/Synergies Currency Exposure . U.S. planted area: +13 million acres . Committed to delivering $230 million . ~30% of 2H net sales are (~40% corn) in f
Slide 13: Slide 13
Slide 14: 1Q 2020 Regional Net Sales Highlights – Crop Protection
1Q 2020 Regional Net Sales Highlights – Crop Protection North Reported Organic(1) Latin Reported Organic(1) (2) America 1% 1% America 17% 30% Global Net Sales Q1 2019 Q1 2020 Q1 2019 Q1 2020 $1.5B Net Sales ($MM) $479 $475 Net Sales ($MM) $187 $218 Volume Price Currency Portfolio Volume Price Curren
Slide 15: 1Q 2020 Regional Net Sales Highlights – Seed
1Q 2020 Regional Net Sales Highlights – Seed North Reported Organic(1) Latin Reported Organic(1) (2) America 41% 41% America 21% 30% Global Net Sales Q1 2019 Q1 2020 Q1 2019 Q1 2020 Net Sales ($MM) $913 $1,290 Net Sales ($MM) $178 $216 $2.5B Volume Price Currency Portfolio Volume Price Currency Port
Slide 16: 1Q 2020 Highlights
1Q 2020 Highlights ($’s in millions, except EPS) 1Q 2019(1) 1Q 2020 Change Net Sales $3,396 $3,956 16% GAAP Income from Continuing Operations After Income Taxes $112 $281 151% Operating EBITDA(2) $518 $794 53% Operating EBITDA Margin(2) 15.3% 20.1% ~480 bps GAAP EPS from Continuing Operations $0.14
Slide 17: 1Q 2020 Operating EPS Variance
1Q 2020 Operating EPS(1) Variance Operating EPS(1) Bridge ($) $0.05 ($0.01 ) ($0.06 ) $0.31 $0.02 $0.59 $0.33 ($0.05 ) 1 2 3 4 5 6 Q1'19(2) Currency Volume/Price Costs Change in Base Tax EGL(3) Other/Portfolio Q1'20 Rate (1) Currency 1 Volume/Price 2 Costs 3 . Currency headwinds predominately from B
Slide 18: 2020 Key Assumptions Update
2020 Key Assumptions Update Factor January 30 Guidance Q1 2020 Trend 1H 2020 Indication . Assumed 4.25 BRL/USD . Operating EBITDA(1) impacted negatively . Expect currency headwinds of ~$150 million in Currency . Will use financial hedging and pricing by currency devaluation earnings, led by BRL, CAD
Slide 19: Corteva Non-GAAP Calculation of Operating EBITDA
Corteva Non-GAAP Calculation of Corteva Operating EBITDA Three Months Ended March 31, 2020 2019 In millions As Reported Pro Forma Income from continuing operations, net of tax (GAAP) 1 $ 281 $ 112 Provision for (benefit from) income taxes 127 (20) Income from continuing operations before income taxe
Slide 20: Corteva Segment Information
Corteva Segment Information Net sales by segment In millions Three Months Ended March 31, 2020 2019 Seed $ 2,455 $ 1,967 Crop Protection 1,501 1,429 Total net sales $ 3,956 $ 3,396 Corteva Operating EBITDA Three Months Ended March 31, 2020 2019 In millions As Reported Pro Forma Seed $ 581 $ 325 Crop
Slide 21: Corteva Significant Items (Pretax)
Corteva significant items (Pretax) Three Months Ended March 31, 2020 2019 In millions As Reported Pro Forma Seed Loss on divestiture - (24) Restructuring and asset-related charges - net (10) (27) Total Seed (10) (51) Crop Protection Loss on divestiture (53) - Restructuring and asset-related charges
Slide 22: Segment Information - Price, Volume, Currency Analysis
Corteva Segment Information - Price, Volume Currency Analysis Region Q1 2020 vs. Q1 2019 Percent Change Due To: Net Sales Change (GAAP) Organic Change (Non-GAAP) Local Price & Portfolio / $ (millions) % $ (millions) % Product Mix Volume Currency Other North America1 $ 373 27% $ 380 28% 2% 26% 0% -1%
Slide 23: Corteva Non-GAAP Calculation of Operating EPS
Corteva Non-GAAP Calculation of Corteva Operating EPS Three Months Ended March 31, 2020 2019 2020 2019 $ (millions) $ (millions) EPS (diluted) EPS (diluted) As Reported Pro Forma As Reported Pro Forma Net income from continuing operations attributable to Corteva (GAAP) $ 271 $ 104 $ 0.36 $ 0.14 2 Le
Slide 24: Corteva Non-GAAP Calculation of Base Tax Rate
Corteva Non-GAAP Calculation of Corteva Base Tax Rate Three Months Ended March 31, 2020 2019 As Reported Pro Forma Income from continuing operations before income taxes (GAAP) $ 408 $ 92 Add: Significant items - charge 123 185 Non-operating benefits - net (73) (42) Amortization of intangibles (exist