Corteva (CTVA) 2 Feb 232022 Q4 Earnings call transcript

Good day and welcome to the Corteva 4Q 2022 Earnings Call. Today's call is being recorded.

At this time, I'd like to turn the conference over to Kim Booth, Vice President of Investor Relations. Please, go ahead.

Good morning and welcome to Corteva's fourth quarter and full year 2022 earnings conference call.

will Dave by and Anderson, Officer. today Executive Magro, Chief remarks and Officer; Executive prepared be Chuck led Chief Financial Our Vice President

Tim will join Unit; Q&A session. Seed Vice Additionally, Crop the Vice King, President, Unit, Robert Executive Business Business Protection Executive Glenn, and President,

We presentation link Corteva the website supplement through the slides our call, during this of have are Relations posted section our prepared to webcast. which on to remarks the Investor and

are are our will statements uncertainties. we this various which future. current forward-looking During risks about make These expectations statements are expectations call, the and subject and on based assumptions that to

Our actual undertake in any Factors SEC. forward-looking section but to including, not not due results limited filed any statements. We of to, do our the statements Risk reports on could with and differ these those the duty risks call uncertainties, from these update and discussed to materially this

presentation, the note, can we'll supplemental of website. with financial Reconciliations be today's to our in summary financial related measures. references making our schedules, release earnings non-GAAP deck Investor on along Please Relations our and in press available certain measures slide found be non-GAAP

over It's to pleasure turn the Chuck. now call my to

market joining us our strong for is XXXX Thanks, Kim. at morning There and with what's XXXX. today closer plan, look including I messages update share fundamentals you with the and an value thanks creation ahead to I'd hope performance, everyone's key Good overview year a several today. for on off are a start. great like our of to an

market in and in expansion. EBITDA growth, about reached delivering environment, XXX Enlist Corteva operating EX new as and basis full dynamic increase full soybeans for executed dividends over to well market deployment, On year. a sales US reached than penetration an sales amidst well Crop the more billion share product margin as points double-digit returned over XX% repurchases year. the we and $X.X billion shareholders year, of via capital than prior for the more in Protection over XX% $X.X

plan creation by at achieve we with to $X.X a Our and outlined XXXX of to EBITDA a framework margin Day, just XX% where do presented on track Investor that. XXXX, we're the results value to range of XX% support billion

simple portfolio straightforward progress to royalty and the that on announced neutrality, framework and hinges on improvements. actions to We to key we show operational accelerating making in upon be since performance of The going mix XXXX. strategic are achieve committed four and our and and that XXXX year able we is remain is a simplification, largely even already elements: product The plan implemented plan, creation value we value and focused were some our execution. operational

increasing farmers reminder, and differentiated involves As solutions food in of a more security global and delivering in our leveraging greater R&D. on through critical a focused our advantaged change. We're value investment part to to sustainably and pipeline strategy refined advancements climate drive

to to changing half market front, On two providing them intent first These the complement farmers commitment reinforce acquisitions acquisitions Stoller, announced M&A evolving with we in proven which to environmentally help and the tools and XXXX. acquire set effectiveness are both of Symborg farming sustainable expectations. our with friendly practices meet that our close biological

segment As will in that communicated the industry decade. next biologicals be over previously, we fastest-growing Crop expect the the Protection

million. of royalty continue platform. our offerings. expecting to and the change we differentiated our Enlist XXXX reduction our portfolio customers, for We mid-XXs year outlook. entered tilt the well penetration is with a our to value $XXX deliver over to US as soybean We're market market-leading EX for positioned big in Turning best-in-class technologies benefit This a step towards

sales track to with products by our sales And in Organic annual an additional XX%. are we're $X new Protection our to expected franchise. grow including Spinosyns of on Crop billion herbicide Enlist cross

broadly, favorable headwinds associated benefits will cost and More addition continue productivity inflation. restructuring in mix and with to outpace expect we that pricing to

monitor to currency, believe continue of also will year. the which a effects We we headwind will this be

deliver expect translating EBITDA into billion in and in $X.X sales result growth X% year a $X.X impressive billion to XXXX, between As yet for of expansion. we operating another margin

Hemisphere let's few on tight, year's stocks minutes market Ukraine. grain Now spend war fundamentals by weather Market were on slide below and outlook dry to remain impacted Global and which we enter in oilseed the last yields the constructive, as in trend a are X. XXXX. Northern the due

which are by continue demand inflationary strong tight to and prices will with above are market pressures. to supply-demand healthy they prioritize globally. remained yield offset Crop supported averages liquidity financially meet well fundamentals historic Farmers and

income in low-carbon XXXX. one and achieved XXXX grow below is and albeit corn expected record by be expected the to of And strong on energy ever, to the in prices oil, is focusing Farm policy for supported soybean energy adjustments demand largest sources.

USDA Crop increases a is area planted soybeans, corn be gave up estimated area XXXX. million indicating for update forecasted most versus is to major XX in XX acres in for January showing The both regions and crop-producing XXXX. acres U.S. to million be

new monitor to growth. in including translating XXXX-XXXX Argentina. weather to season drought for projecting is continue effects record, mid-single-digit the of to Brazil conditions crop that output, national the We the around low- globe will be grain the a

with be grains market year on positive to dynamics well years. past XXXX at and two these supply-demand need messaging, continue oilseed previous depending rebuilt and conditions consistent is over which the that least inventories expect could our throughout to We extend global

over outlook. with let our me the Dave turn to it on financial And as details well provide performance, XXXX as that on to updates

the to Thanks Chuck and everyone call. welcome

X Let's which start and slide quarter provides full the year. for results the financial on

XXXX we finished strong in can You another performance. the with quarter table, see of

the prior than earnings improvement. strong for points organic sales year, the were XX% quarter of led and Latin into North million on basis versus quarter, more by America fourth $XXX organic touching up of Quickly translated XXX The sales America. margin

volume pricing full in gains. the Global notable seed broad-based pricing grew to both protection. sales prior and XX% crop gains over and XX% with Turning was versus year, up year with organic XXXX

in were volumes due EMEA. to area the supply in mostly Russia of the lower Canola planted U.S. flat exit our constraints and impact Seed

year, was over volume driven increase X% the million for These than demand new products. for Protection products of strong an $XXX year-over-year up more Crop growth of XX%. delivered sales new by

for currency year productivity $X.X operating billion over of offset Pricing an increase and higher delivered the in than the EBITDA and more mix XX% We prior input year. costs headwinds. product

year-over-year margin shared that with our is This on points than And by an earnings improvement you expansion basis execution XXXX translated installment at Investor the in XXX strength into Chuck we performance more as said, organization. goals early of multiyear our reflecting Day.

slide to let's So now go X.

with organic sales in new In XXXX. up including driven every broad-based herbicide. America were growth on You the full for technology region gains XX%, North for crop the demand strong can protection see sales year Enlist organic by

down canola volumes constraints Seed prior year, in were in corn primarily to due for a versus Canada. reduction and supply acres U.S.

Both X% penetration of Enlist. delivered and gains XX%, driven up up were Protection volumes by pricing Soybean pricing seed with and Crop respectively. X%

fourth growth for quarter new related war for of from Russia. XX% in and Protection mitigate Africa, growth the products differentiated In East year, in high gains In to million Middle year. volume prior previously currency and XX% $XX delivered to driven helped volume XX% Seed driving by price the Europe, Crop announced compared impacts. organic Ukraine demand in volumes our approximately and and remains were to by we muted pricing exit segments. In increased the both

volumes corn, XX% Seed organic sales rising compared with by offset In and to price Latin strategy increased gains products. to with pressure in volumes to Pricing America, prior supply while increases volume. driven notable of costs. input for increased driven some increased price value due Protection by with new increased both tight demand XX% for year, XX% our Crop coupled X%

due gains. volume organic strong on sales recovery over price increased Asia by Crop XX% pressure and Protection prior demand of price in volume areas, low corn-planted down Pacific pest up organic Seed new was and wet partially for products. to were sales and execution certain X% weather offset area. the year both X% on

slide EBITDA So summary operating performance. a XXXX X of with to go that for let's

the regions favorable from billion. including demand slide, spend. functional I For approximately million strong we prior drove year-over-year and operating benefited year finish the in $X.X volume all and customer to price strong the performance broad-based growth year, increased full in to our as covered EBITDA with And the on particularly gains $XXX organic

driven We which costs $X.X and Protection market costs, commodity and seed material over higher billion partially by $XXX these driven incurred savings, freight headwinds. approximately of offset other Crop We costs headwinds in XXXX delivered the approximately helped to productivity logistics. course raw of and million

execution by meet demand a than organization, managing pricing, currencies. primarily in European other of costs and percent down execution XXXX a a our is versus Currency prior result by as sales on strong effectively actions. headwind, performance ability more disciplined back as $XXX increased certain spending we euro to basis XXX million and maintain mix year of was cost SG&A product demonstrating accelerated driven Standing the customer was and productivity. while through to the points

to to The the driven now approximately for balances, and an year cash million, want was performance. free higher provide slide billion by I inventory. capital Turning $X primarily accounts on our XXXX. working Free flow is update receivable to in over X. cash flow $XXX year-over-year full-year compared decrease

both increases higher largely pricing. were Receivables volume sales, and reflecting due to

the in XXXX shipping supply had collections. Importantly, to XXXX recall and DSO industry. significant particularly demand challenges face farmer obviously inventory, strength we case customer customer the metrics and incomes significant availability unique remain logistics the not by Crop and driven chain in was of This and of In Protection. from in also was drawdown healthy, and product issues. This benefiting of affected you'll set broader of drawdowns inventory challenges, Corteva

In as from higher of XXXX, rebuild commodity input well the inventory stocks costs, increases support volatility. and market reflect impact to a growth, safety as

believe the time. rebuild our about we at this levels. been able inventory now have We We have right balances to

at In recent cash supply to over the conversion returned flow to share Free for period XXXX. our working isolation. chain and than to rather cash years $X free value capital either dynamics $X.X clear years, we in a EBITDA on XXXX, in over shareholders XXXX including, averaged impact look billion two-year from two to the commitment deliver to most a billion last the to it's year their Due XX% shareholders. meaningful conversion repurchases, few flow in

continues and volatility in managed bond equity liability both be markets. pension Our to well despite

either of US year-end, status was funded in US XXXX anticipate to the not contributions or cash do the plan XXXX. and of plan we the As XX%,

the Now a guidance XXXX Slide on for on to discussion XX. transition

net product million Keep be representing and sales $XX.X by for driven is geographic differentiated expect the mind, $XX.X in that increased billion planted in strong US demand customer at and X% area. $XXX approximately midpoint pricing and to growth of of growth by the muted and this billion, technology exits. range We best-in-class

also expected $X.X the is translating inflation in of points the than to over midpoint. improvement billion XXXX $X.X productivity offsetting midpoint. improvement headwinds, improve be the currency roughly range cost are pricing, to to prior X% XX expected operating at further more EBITDA a and basis at actions with Margins year and of mix billion, and

to EPS of be interest count, share Operating earnings per in effective the expense. partially growth, expected X% which and by higher $X.XX range increase average is midpoint, at tax the offset an a rate and of lower reflects share, $X.XX

We rate interest range XXXX expenses. and the expect expense largely the to higher of higher in our driven US Higher from by costs XX% the borrowing be XX%, R&D debt by XXXX and rate of foreign law tax driven tax of changes to credits impacting balances. XX.X% tax is an treatment increase

cash significant know, needs. fund throughout As carry commercial balances most paper we to the of you year

average as growth including interest Our acquisitions. higher higher XXXX balances, to finance borrowing the Biologicals guidance include, assumptions as the on commercial rate well a paper

over cash three-year expect flow earnings $X.X rate EBITDA into interest higher this expense. with the of and offset free free midpoint, cash taxes translates to to flow At by last partially conversion be approximately XX% will period. or XX% higher in $X.X We of billion range higher cash billion, roughly that the a the the

a growth On I framework remind we accelerate to performance to included, you and value want shareholders. to Day, of in XXXX XX% creation we performance XXXX midpoint. presented Slide targets $X.X operating deliver the our The our out September performance value laid XX, from guidance of slide Investor the billion XXXX. actual and in or our targets XXXX it at This also reflects a for EBITDA margin today's includes greater

R&D a Coupled core Execution in crops for on guidance the on XXXX those on while Again, enabling to being performance value confident increased we're expansion we're track our is investment. margin targets. also including was driving disciplined for XXXX installment in our on our focusing pricing markets, our financial path major strategic and cost, XXXX, to deliver targets. decisions with

EBITDA So let's Slide now discuss for to XXXX. to the go XX, operating bridge

US drive will which our in costs soybeans the area America. Increased of than continued planted from technology more will demand including, pricing to mid-single-digit higher for in expected the and see best-in-class increases in material XXXX volume can in the be You penetration offset range, raw and EX the commodity are inflation. North Enlist impact

Latin increase America weather. full from be to and year, EMEA, supply constraints be weighted last in expected with and by second in approximate America the volumes up dry to our for Volume exit an are from area early season's seed the Latin to year the due driven half $XXX growth will North corn-planted partially expected in offset million Russia. America lower decision to impact the

$XXX for which in add will protection products volume Sales increased Crop organic strong technology, of of drive revenue. Demand new will differentiated remains approximately Protection. crop million incremental

will $X growth capacity billion be million including impact discussed as offset the glyphosate. sales ongoing the Spinosyns from by commodity $XXX more XXXX. approximately product our exits from the expansion partially in to we expect Volume We'll in than franchise benefit previously generate

we're supply well of operating dynamic. is improvements some in the seeing inflation overall while still environment as And rate the slowing chain as

the to headwinds XXXX, commodity impact logistics. should including weighted half approximately This largely the first For cost of seed higher freight sell-through the expect full of inventory. cost market-driven input and cost year year reflecting impact X% costs, and prices, increase of in be the and higher commodity we

inflation This in dropping half the down the first of single translates half. year into to the single-digit in second high rate low digit of

to In expect on headwinds other we costs, of these cost sales. addition market-driven additional

reduction and in benefits. $XXX an expense includes approximately restructuring and additional productivity Importantly, the of outlook million million $XXX royalty

element our investment cost multiyear structure our are key and with consistent increasing in R&D plan, our in Another of XXXX. we

expect we currency, headwinds. continued Regarding

double-digit the euro, and is to real, headwind currency Canadian exchange assumption Our low rate revenues on for for Brazilian the relative a EBITDA. including We dollar key on estimate weaker the and to the currencies dollar. X% several headwind X%

year. include important update the to an to the of not which they the include first in of XXXX for in the close. which acquisitions impact We'll note the are half Now, to it's the in guidance expected does biologicals close acquisitions these provide quarter

of dynamic go key XX% basis XXXX performance now in to We more environment. growth in XXX let's organic points So, margin than and slide the had with improvement, sales, a summarize operating takeaways. great XX amidst

our have and We financial favorable year strong targets. that XXXX expect of momentum into growth, XXXX another carry and we'll in supporting performance

strategy innovation in disciplined growth a future of for And balance returning Corteva. to remain that of We to a is finally, shareholders. we're cash or investing investing the in committed capital allocation

we Since repurchases returning share weighted XXXX, our than returned capital deployment through was heavily more billion towards dividends. cash to and shareholders as $X.X

M&A, In backdrop of in on first XXXX, the will distribution close previously growth the as for biologicals be the we half investing the acquisitions against of this tilted announced towards year.

it with over turn Kim. to And let me that,

Thank you, Dave.

and apply our like let's to remarks following the statements your provide Now, I the prepared to Operator, move would Q&A that forward-looking on you non-GAAP Q&A. remind cautions and measures questions. instructions. both on please our to

come will Stanley. Vincent first Instructions] Andrews [Operator Our question Thank from Morgan you. with

quarter what's do, how came a more weak finding it getting done normally strong the there given from and quarter creation it everyone. or I looks faster? you the some upside in and Wondering Are very probably Just you're quarter. was the you on program? morning just could fourth to if both? Are you ask stuff that like stuff is value expectations versus good just finding Thank in that

Vincent. morning Good That's right.

XXXX, potentially focused start going framework, the actions, a took So, with market be and the see look – some with believe the after when really and Obviously, strong we'd we've than year now, little that at on could conditions that. by of decisions demand. comes that's say fundamentals performance portfolio plan board actually you little of we're across what creation the said it supply we for that, line. hit And bottom is execution. look year to management constructive pleased And are the we and value are the into a the we XXXX, thought. through the right depending XXXX of sooner the on when we some cost We ahead very to driven a we and very I'd we're and robust had got really

September, If you per to XXX XXXX, we between that somewhere value indicated creation in and basis XXX year. In framework we the back points XXX look we points. basis proposed hit

So there's some acceleration there.

new We day. opportunities are every finding

with little a of we give an from margins the thought a billion after. So what took XXXX. by reflection an we we to XX% is right acceleration update market of we'll that of some And than at a time. the could the But we're with right now sort very of the faster XX% bit actions I'd get $X.X in comfortable say the XXXX

question Bank. And from come next Deutsche will with David our Begleiter

guidance you. FX conservative so low $X.X given morning. guidance is Good I low Thank how we're the of question range your is billion. that headwinds, low Chuck the why I on strong view? guess, in tailwinds the end is this XXXX seeing? end cost the but understand

Yeah. Good morning.

then that, you have about because a guidance low top give the there's well. the of I'll Dave top as ask end the also to the me high-level view end but and to range pathway Let I talk the end

what the XXXX little is fits obviously ahead of on So already, a range schedule. we're the first value of nicely And I track creation as and all, mentioned within we'd guidance framework. say

some I'd say of that, the reflects changes. guidance the the headwinds portfolio range also from

country finalizing alone, a I is aggressive exits over of this similar lot We up a XXXX. rationalization. exits of the lined So amount and did for pretty year, were have year Last year as the country and we AI dozen a a big we mentioned. last

bit from it finally, in a Dave year. be there'll a guidance the of perspective, portfolio then lot detail. in a So, explain and a there's disconnect, made of decisions this will And

of did we finance but around from contribution the the the Stoller particularly Symborg, higher of interest and not acquisitions. earnings obviously We rates growth included include any some those to

So from mix there's guidance a of a a there bit perspective.

the I'll the about talk guidance Now, when specifics. Dave Go have think ahead you about range, Dave.

Sure. Yeah.

So – on bottom in of the a if you point And but also versus Brazil. potential your looking of our cost part still somewhat realization positive terms on impacts of a dynamic. be price about be currency of And upside more we're very, would good just rate favorable much the in also positive then in by clearly focus something, would positive. the corn We're the at the acres the midpoint some indications end To to of the be that, it the of to guidance morning, is inflation, way. think which continues on. and terms on on high be US guidance a early the end, really dynamics seeing that focused continues very we're very

and So always Stoller. business Dave think course and then impacts this know, of as of can consider. would you that we in there's mentioned, weather Symborg Chuck that you

is XXXX range run businesses the collectively expectation rate $XXX million. in EBITDA those Our terms for is on of in of

of comment and year. actually something that be that think So end know towards little being Chuck close coming a depending focused want of us. upon the about of time that America with Stoller you benefiting two-thirds bit through to you you would that fact the Latin reflects the the and of the may like as could And

EBITDA will additive businesses, margin talk the revenue additive do little contribution which you performance we of EBITDA added won't to attractive some Symborg in very bit for of both very run XXXX we're rate, timing? really company. be see Europe want both of from going terms in really to Chuck, capture some and But XXXX. in a earnings those in about that obviously

of mentioned remarks, half. Yes. David, the come first filings seen bit an regulatory the the some a recall the deal you We've in of got update, in. we've prepared in so if we more closing

we've say So, what now received pre-closing for all that, that we approvals the regulatory can are required is right Symborg.

and Stoller good that soon. to So that's a news we very be very position with the in expect similar transaction

these we'll acquisitions thinking both to we're now in able QX. So, that close of be

even going than course So, EBITDA biologicals at of continue to that accretive to will be and And and we'll thought. we contributions a a to these this look to grow. earlier excited Dave And is are margins. it, as we're to as we platform certainly good good that little news pretty earnings now be accretive be indicated, able

for our QX. both we've it of high we'll portfolio part like this aspirations of able looks So close in be these got to transactions and

McCarthy And come with next Research you. Thank our question Partners. will Vertical Kevin from

working morning. up are with And Good Kevin. range is XXXX? to free $X.X for the what flow Cory of cash for in billion, on capital This $X.X XXXX coming billion your assumptions

what to in importantly, particularly sales Essentially revenue inventory Yes. be very assumed to inventory of is a question or inventory basically terms constant. around levels good our inventory we've

other on So contribution -- that in contribution. would be a the words be a cash being up change in would The would end than change inventory to XXXX.

key important but the capital somewhat remarks and both 'XX. expense. XXXX. was the expectation higher as rate will earlier. 'XX interest for to That of items the my in also in flow of through embedded very Two prepared a Obviously, debt, beyond compared amount incrementally One working debt cash they're use for that on

higher because is predominantly will amortization if receiving. one the punitive. tax other opposed challenge phenomena We're continue that benefit and be the think highly in then to been credit very going related to as the much we not that's R&D it's cash we've of terms legislative lobbying unique that expense capitalization to really of course, focus taxes. something that's you And to the That's of

on it's working interest So both of up then source increase usage a of higher in the and tax cash receivables, net capital the and really ending being cash actually on of side.

more to working bit maybe little it's a Dave, the capital instructive inventory. Yes, specifically and about bit a talk

raw down what and that especially unhealthy, unsustainable saw Corteva. shortages, of to XXXX around products the result entire as obviously, our and for would our go service a Corteva customers, to challenges the be supply material we levels draw inventories very to our chain you industry forced were some we had and to are levels to unique the consider included board. XXXX, right If significant challenges across logistics back We

service the unacceptable. seed also our became about platform, these portfolio, think about but Enlist levels think So

now we've market our year last feel global to opportunity And those customers. the year. is an that place digits mid-single service right We levels to saw to inventories. this CP expected support the we got in rebuild forget grow So, don't

So another important. of we to now for good in year the feel we're got growth our good support preparing for preparing very agriculture. levels customers, and another year we've We're service

And come our question BMO Jackson will Joel Markets. from next with Capital

Hi, good morning.

want to on flow Just ask free a cash question conversion.

think you've XX%. targeting I So, been about

You to flow talked about share what then, the year? some about of Can free conversion a you bit capacity this XXXX your getting that year, cross XX% average 'XX. a of have little about why is cash And and thinking talk do kind thinking about lower question in this acquisitions buyback you 'XX?

cash of Joel. those biggest free Sure, components -- made sort basis, and with that. XXXX in but factors of do There's are flow the have for the answer to relates which question to higher points there, some higher really interest. the I short the previous on conversion the a in other the year-over-year The on taxes cash higher

will know we've much -- of In think our you smartly cash that terms overall if that capital shareholders. through And during of allocation, weighted demonstrated of XXXX capital that you very, was really to towards with history allocation and course as very of very terms I up returning executed time. in balance period

significance going be given reduced to likely and significantly Stoller just be anticipate a more We our -- specifically at a but towards to going the that's level is growth of M&A those acquisitions. and share be the Symborg at XXXX tilted continuing buyback, acquisitions. with will much on

Christopher And Mizuho. our Parkinson will next from question come with

you've best One in CPC of Corteva made stories the progress just think the in success XXXX margins. I was

the just laid some ahead growth longer-term new but all It on the seems of it lines. are some as of color pertains exit business You product to obviously of margin price/cost in your schedule things out first guidance. if PowerPoint, could helpful environment you further certain the framework just offer like probably

So on so would helpful? be just framework you Thank you that additional very any much. could offer

Let his very quickly comments. it introduce over for to turn I'll and Robert me then

terms those businesses market-driven cost crop. headwinds but or the not combination differentiated way been cost Chris. terms of a do products inflation with in costs, include I been material on by focus right associated it's for exactly It's new things. You're big managing able only the headwind in what mean, to both products we've currency. also of to The of

So just of that's I and mentioned it the geographic the XXXX. talk right is a do The in thing remarks the to want is course you bit my exits setup the to some product Chuck volume with the mentioned particularly headwind now keep prepared mind -- headwind the associated exits crop XXXX in positive. think Robert., about product formula? I and for in of for little that

strategy on Sure. Yes recap really and value you hit it there. when what how with drivers around do and few a just Chris productivity. of look key for we XXXX on of Dave our them, do price at a some quick were the but it starts out

up inflation able the able for and about technology go the up that the -- with up ground XX% growers. year new be continues -- year to to as put of continue yet you inflation offset to grow to to and to demand were in on continue roll We continues was it the we

And pull technology that really product that new is to as about story continues XX% around this into seen. finished good up growth you've Our the be a a market.

these get year. supply how we delivered what's continued and we the more the types through We look volume story that XXXX, nearly into manage look will we how things becoming more like be year. This So resilient. chain to last do of begin margins at with will XX% our as

continue for to first and the productivity and price going do year inflation half we'll strategy. follow We to to we'll our of to work expect continue for have in the We're value with offset that. that a headwinds little

XX% is about really have will changes that exits then you with the with what look be in finish It our in AI up. we're will started structural exits done making and of XXXX XXXX. we all And that at

XXXX becomes forward to year as into move us a position future. better transformation really the begin So and accretion even for that margin we portfolio we change our

our comes next Thank with you. today Citi. from question And Juvekar P.J.

for on were America Cunningham P.J. us In and Crop Patrick fungicides walk big weak chem Protection took the it volumes Crop so in hit. like North were is quarter you This outside in volumes morning. seems Good Hi. the of a why pretty you. Thank through quarter? Can down the crop

and is South America. really America out for played QX one us Sure. that Latin in

fungicide As a over volumes, to lot Southern the through we see to drought in wasn't Latin see to Hemisphere and strong we the we in tanks tanks go you growth big with When would didn't continuing thought is America But we at fill would bad. Argentina the had Brazil of just took this there and look QX. so really Enlist it and demand. comes that typically Northern a come

And difference really in look the so what when you at QX was that's volumes.

I as QX mention roll look had Brazil other to would The had versus to mountain at QX mid-XXs thing, you growth and a alone to XXXX huge so that well against quarter compare QX. back begin in is when

have we America. question Byrne And a of with Bank Steve from

you Yes. very much. This filling in Thank is [indiscernible] for Steve.

to wanted about you're the charges on Just ask taking Lorsban. settlement

-- Have what is these How think that? impacted? about this charges? should $X commentary about as this charge. million settlements? took we can that was paid for future think for you what cash on you And that what impact expect from flow year year flow year providing I is that already a settlement? third they given you think the any And the Are I this quarter we mostly think cash start you next the

Dave. is This Yes.

what any allow that as to occur XXXX. There's -- of In for of progress. view. $XX -- that. not XXXX I mean, know an the way as obviously prepared available would just that's to visibility that's cash We no the think just year -- this we provided update just of actuals side, terms and very, translate at have really and as TBD. as do on not forecast kind us forward There's we've charge you We'll estimate the comment would a we provide in on cannot really have limited that. we'll full much do same to that to I million very time actuals So

Frank will come question next Mitsch our Fermium And Research. from with

in for million guidance and saw Growth that at million The products, a came new the Good was again $XXX in Chemical. nice Crop original and Yes. story XXXX. follow for in I wanted on increase in morning. for guiding XXXX obviously, you you're million $XXX Protection you to up was XXXX. that success $XXX

or And right could in in wondering in XXXX? what go I'm what went XXXX, could what right wrong So go XXXX?

XXXX. the more there thanks. increase. Frank, year wrong in a of those great goes the yes, billion stated right for products. million had new at than as sales to year about $X.X in And begin Hopefully you finishing products, you But up we as $XXX look

in big this. XX-plus three led The it with we're that last seed. really estimate Latin spray our as primarily And strengths in the was herbicide this well. around following Enlist strong excuse with also. percent the that centered America molecules over-the-top demand growing Enlist. Tim me that now around And we're know you acres -- Arylex is in one Europe with a at of demand as performer a has

When will and lot there the and standout from downside a products there one it's of three forward this. that that new to was over $XXX to will then we our to the continue finally that us of our begin roll helping going say high-teens whole products the growth. new farm don't you are million that is demand see our have upside healthy. to And to those third depend on It's expect I total more technology. -- from XXXX now It's because primarily a products would was Inatreq that insecticide going revenue we grow fundamentals each in be well see strong

maximize Growers area. you new turn sitting profits. technologies come we this that to on then value And they're good to play that in where do to do to to and and that's trying that are with

proof is are good helps us story this a guess really out I piece of a play to of a more that that. strategy differentiated new products point portfolio and these So our key build

XXXX. It's I'll the come Frank, Spinosyns market but in maybe will necessarily new a capacity not other that into add one product, Yes. we've new the got point. franchise

Spinosyns around Robert a one that franchises go the this got will year. we've what new the most capacity expansion got existing into start to market, we've of beyond and and portfolio, So said with the that capacity profitable

things from looking we're well. good that as to So forward franchise

RBC Viswanathan Capital Markets. on moving And Arun to with

question. for Thanks taking Great. my

pricing place wondering pricing to have upside? And your lower guidance, downside surprise XXXX. like enact sufficient or offset noted looking XH the drives is offset any you've so be that? to are range at I'm you in at or that? the weighted just looks of potential that what there to Is kind the the able largely is cost end How So that just headwinds would you the any cost of some if it to costs maybe there. higher possible to you there would to look increase, for if

Tim your just you could and guys on respectively I and comment Maybe could Robert introduce then business.

it said, and driven market that call we stated correctly headwinds. As of our the you majority

to freight of terms as majority on at year-over-year Still that the will we'll the basis year. commodity and see more modest XX% costs going occur The second a much as those think the we've of occur of first a logistics. -- and costs is half as input in forecast but in got about improvement/relief. going that that of well So in and our of half up rate

see picture into earlier. big shared also as approaches ability than you Crop guide did cover in the the built the seed Protection pricing cost way as we'll And offset we expect by with those that increases. on offset to currency EBITDA costs. more the In pricing I impacts we've we we'll those it see the on the And the commodity XXXX that

comment Tim, you about seed? want little to more bit a

produced have side, we seed good of have would last Yeah. that for we say what seed year. the half Dave costs very seed are a the on I'd our first understanding

of at the in and great the given And performance, as in since technology. well-understood North have the got in accepted pricing well And live consider America. barn cost been I pricing there our marketplace. we're marketplace our and And we demand being the so market, where with in terms that August describe would the very good we've for really in in we for

value our ability our by that's proposition customers. out to go largely driven And good again there to and value demonstrate

Europe So months in again great pricing and great in what our and the pricing for North position live holding our was been is a marketplace in spot. well last And was. America implementation. Europe three understood and week in cost I again We've about

still think year You in Brazil the rest our seed. America Argentina. about especially also we're in the the for but of exposure seed field, on producing Latin

we have and so more to but of we're our costs, little hard that I those guide obviously in we far. a And bit factor exposure if will you think so in working terms

marketplace flexibility in not per We're of have terms in pricing, se. there. live we And the still

going we're very value and we're proposition. able excellent Latin for well that to there. evaluate is. -- so of at value strong America being we've where record we're got track pressure an great to capturing so terms a And we're to that continue We to got in track and offset value more value we than be believe to able of inflation record confident in capture Again going what positioned

half offset but will add help strategy And I in productivity will that to see inflation in to our just than second that the digits be mid-single us. continue little is heavier first said for Crop will that. It a Protection, value that continue before and bit continue to to we as with price half, the

all we're of doing good far with. seeing in with we're our market what markets to what we're and going So progress

and the stable first indicators And from say said pricing the leading is that what's out what generic a the one half holding of on for thing of other I'd all have And the key us and the is are they there. comment the so prices year producers far. is see for can in come going that how just generic market

as so indicator always on going that's us what's good price a as And well there. for

expect for used the Crop past can that using cost we in So the the offset strategy we same we've Protection.

from with come UBS. And Spector Joshua our next question will

This is XXXX targets. path the wanted to for back go to I Josh. for on the Good Lucas just morning.

So, looking be pretty ratably. I seems for to mean at your year, progressing this EBITDA that

You the of flow your year. highlighted in next to sort going is cash why depressed free be

So to you're a target. kind of mid-XXs XX looking versus the XX conversion at like

of going EBITDA. happening converge free risk versus now how the any with could what's just help there more So range? kind cash it's the see there sort towards target bridge to you weighted And of you flow back if us given is

that that I I we've think comment a mentioned would I year-over-year basis, to on just those additional got headwinds you. obviously,

The to that that we would the growth not it will thing but to mention contribution over to the overall time acquisitions. cash important EBITDA other the period occur get other I from It's just is significant, be be But going over going is thing in of will the that's that equation. time.

inflation look issues in improvement industry the normal some issues in been chain call the supply dealing we've we also terms that it of patterns we have see dealing and to cost been some as general. and So, and more of with the with

And the XXXX contributors going of All the XXXX to way we're of guide able just those very XXXX-XXXX be that those are to talked towards the making to the the a about be attainment think we've with we reinforce about. targets numbers. important statement again performance by combined again, is

and for I maybe we, obviously a the is look a topic. Dave Yes. Dave it more minutes company. Look, cash when just focus this at on conversion, couple the flow free

about as months XX the in organization, you with lot progress think model a we've the we for portfolio And and we've and what Corteva. done then if an think made So strategy started areas. I those of operating in the

priority some I of also It's make the changes obviously, next And cash us. as portfolio, always the So at is structural generation. focus, was that exits. going AI of looked focus now to team. cash exits, country have the lens the the but be the of we mentioned through plan. some earnings It we complete still of looking is management the conversion. for That's at margin a And high to level a for

halfway say we of that perspective, well And margin we're there's as EBITDA will conversion primary of through on believe the be planning sort that by we're a through the journey. is portfolio of changes path I'd to the rest pathway this where flow to the the north and be focus make. that from XXXX today look a cash what get a that as it free is we're very and time we're get comfortable to So we with and of going we end to

with Samuelson Adam to on Sachs. Goldman moving And

level exits, regions? me think Yes. XXXX in organically I of at Crop into of know maybe morning, Corteva any at and differentiation lines related the kind the the maybe I have by some the Help going assumptions where key maybe you Thanks. in operating both kind there's side. those inventories for some for context? to kind level Corteva the everyone. that growth. Good volumes of and come portfolio And about noise but that wanted of market you of industry kind mid-single-digit And into And Protection on XXXX market the along just channel CPC your Corteva see region? to

going outstripping for it market going in question the X% market. be what's call But at as X% be the that. the will in with – on mid-single year. to it's biologicals a fastest-moving we dynamic look the growth expecting segment. it of It's the digits thanks organic to be It to Adam, we're

is sweet and Overall, guess again, would I that's we spot that's the the have. it's where And regions. are demand continues very across all we strong our yield say growers chasing – products what I – with

a extent asked normal across itself pest couple inventory standpoint some insecticide areas a channels that out. to well from talked is have a together, very the few work as roll see the seasons. Europe all You is But there lesser as see watch. elevated but inventory it's all from not those around it vet have the been the a pressures. in issues not Europe. pockets about we in going just to bit. will America in to now a because we right you of levels Asia hotspots across year, what about And across of manageable being, in we're much in be Latin is and regions near then No One if channel fungicide To earlier about we with elevated inventory, that

as for comparison. like – we But weighted pace a We to towards half. do see mid-single-digit for year compared flattening year-over-year we're protection. said first that inflation before, the expecting crop the we more still the price Again of

the thing the is supply think global to chain. watch I

in are things So the trending direction. all right

is to stable. worse that watch but optimistic chain to look at that's that the indicators as how into as market see the drive say while. key I the well guess, for would year. we market. move that But continues And I'm cautiously first supply to global improve for I the It's this does in any one what you it's all time If getting a not

So really overall as good of position pretty to in poised from seed. there a standpoint, have good all and we think year levels on across a couple Maybe it's sitting a market comments we're well. a

Tim. ahead, Go Yes.

Yes.

going believe this still North their that's Clearly year, one for I Adam, an in very there's have technology the farmer the both best demand help of a you always and and think productive. income a and corn as to environment when good big us, obviously America. but what beans, corn is in that operating is be we'll here for seed latest of corn tilt increased were towards We we them think healthy very in certainly shift in the movers is back important. well. most area towards terms as generally are Customers

current between America. XX up corn final world, we corn. different Around dynamics dynamics tilt reasonable that time and soy, and decision-making the in through XX, it certainly towards And all we with I'm here comfortable to assumption. that The as what see continues watch North the are than

be for next couple corn, of fast, seasons to a we'll there. be see the Ukraine America probably we're growth a that's still of In all and that as and on then in Latin particular. Brazil this marketplace that. as soybeans corn safrinha. selling That few and that up, momentum by hectares Certainly, just season as but Europe, America, to and still out the we're but planting including very safrinha to across well more tremendous expecting months won't coming comes no in season, say here I'd not Latin in be this also well reason midst the strong summer in flat-ish impacting driven markets in

with Roberts go we’ll Suisse. to John And Credit

the how also, seed is I that Edlain the forward? is follow-up in quick talk that time this morning. the what's with is A in a about positive first seed time fourth trend you you. Rodriguez. Tim. has mean, Thank EBITDA Good driving change? this sustainable minus, Actually, And Can where for on business a quarter. going long

mean, we quarter quarter. I fourth us, our Yes. second it's smallest -- I'd say, for

the half we that heavily, we and market be how had that. to not this timely in first of quarter, Latin quarter the the safrinha America, Latin season product -- between somewhat And We're timely fourth I'd a for forget and that starts. towards Let's fourth upon weighted season strong in the the tends year, have certainly year. driver big and start very say, it to is live heavily change first the can America. demand And depending that

business here seeing, We our North rep a also is the direct-to-farmer. you're lot through move of think America, model, don't that business. I because in Pioneer

And that place time in taken at very we on. the of so, increase business year, the but multi-channel an we seeing of has importance our this to are in would of little Brevant continue that and expect

certainly of So part part There's of but, pricing, it volume how factors. in was depending some stone. obviously, going, elements set year those healthy it's of upon are was the and seasonality never kind still is it

business and there And over continue to continue we to business our be -- we Latin to expect going grow grow. that time, America of business is late see end the so multi-channel Brevant year to on expect to

demand. it here quarter, that and little driven a fourth luck a it's customer certainly that's because of So factor but good the was supported execution obviously by bit

Booth. call over you. question-and-answer now the session. hand Thank to conclude does back That I'll Kim the

that wonderful and interest you. hope a for concludes thank you We have today's call. day. safe Corteva. joining for you your We in And and Thank

today's participation conference. your you Well, thank Thank have and you. for That does day. conclude excellent an