Corteva Reports Second Quarter and First Half 2024 Results, Updates Full-Year Guidance
- Solid first half results led by the strength of the Seed business and operational execution
- Crop Protection industry impacted by residual destocking and competitive pressures
- Updated 2024 revenue and operating EBITDA1 guidance lowered to reflect market dynamics
- Share buyback program and dividend increase demonstrate strong balance sheet and cash flow
2Q 2024 Results Overview |
|||
|
|||
|
Net Sales |
Income from Cont. Ops (After Tax) |
EPS |
GAAP |
|
|
|
vs. 2Q 2023 |
+1 % |
+20 % |
+23 % |
|
Organic1 Sales |
Operating EBITDA1 |
Operating EPS1 |
NON-GAAP |
|
|
|
vs. 2Q 2023 |
+2 % |
+10 % |
+14 % |
1H 2024 Results Overview |
|||
|
Net Sales |
Income from Cont. Ops (After Tax) |
EPS |
GAAP |
|
|
|
vs. 1H 2023 |
(3) % |
(4) % |
(2) % |
|
Organic1 Sales |
Operating EBITDA1 |
Operating EPS1 |
NON-GAAP |
|
|
|
vs. 1H 2023 |
(2) % |
(1) % |
(1) % |
"
The Crop Protection market is showing signs of stabilization, however we continue to navigate competitive price pressures. We are encouraged by the Crop Protection business volume improvement in the second quarter and expect that to continue in the second half of the year.
We have adjusted our full year 2024 outlook to reflect market realities and the continued focus on controlling the controllables. We are committed to delivering a strong second half of the year and meeting our commitments to customers and shareholders."
Chief Executive Officer
First Half 2024 Highlights
- First half 2024 net sales declined 3% versus prior year as Crop Protection declines more than offset Seed gains. Organic1 sales decreased 2% in the same period.
- Seed net sales grew 2% and organic1 sales increased 4%. Price was up 5% globally, led by
North America 2 with the continued execution on the Company's price for value strategy. Volume declines were driven primarily by unfavorable weather and reduced planted area in EMEA2. - Crop Protection net sales and organic1 sales both decreased 11%. Volume declines were driven by weather and destocking impacts in EMEA2, as well as just-in-time purchasing behavior in
North America 2. Price declined 4% reflecting a broad-based competitive price environment. - GAAP income and earnings per share (EPS) from continuing operations were
$1.43 billion and$2.03 per share for the first half of 2024, respectively. - Operating EBITDA1 and Operating EPS1 were
$2.95 billion , and$2.72 per share for the first half of 2024, respectively. - The Company updated full-year 2024 guidance3 and expects net sales in the range of
$17.2 billion to$17.5 billion . Operating EBITDA1 is expected to be in the range of$3.4 billion to$3.6 billion . Operating EPS1 is expected to be in the range of$2.60 to$2.80 per share. Cash provided by operating activities – continuing operations is expected to be in the range of$2.1 billion to$2.6 billion . Free Cash Flow1 is expected to be in the range of$1.5 billion to$2.0 billion . The Company plans to repurchase approximately$1.0 billion shares in 2024.
1. Organic Sales, Operating EPS, Operating EBITDA, and Free Cash Flow are non-GAAP measures. See page 6 for further discussion. 2. North America is defined as U.S. and Canada. EMEA is defined as Europe, Middle East and |
Summary of Second Quarter 2024
For the second quarter ended
Volume was flat versus the prior-year period as Crop Protection growth offset lower Seed volumes. Crop Protection volume increased 6% over the prior-year driven primarily by
Price increased 2% versus prior year, reflecting continued execution on the Company's price for value strategy and improved product mix in Seed, partially offset by the competitive price environment in Crop Protection.
GAAP income from continuing operations after income taxes was $1.06 billion in second quarter 2024 compared to
|
2Q |
2Q |
% |
% |
($ in millions, except where noted) |
2024 |
2023 |
Change |
Organic 1 Change |
Net Sales |
|
|
1 % |
2 % |
North America |
|
|
2 % |
2 % |
EMEA |
|
|
(6) % |
1 % |
Latin America |
|
|
7 % |
7 % |
Asia Pacific |
|
|
(4) % |
(1) % |
|
1H |
1H |
% |
% |
($ in millions, except where noted) |
2024 |
2023 |
Change |
Organic 1 Change |
Net Sales |
|
|
(3) % |
(2) % |
North America |
|
|
(1) % |
(1) % |
EMEA |
|
|
(11) % |
(4) % |
Latin America |
|
|
- |
(3) % |
Asia Pacific |
|
|
(4) % |
(1) % |
Seed Summary
Seed net sales were
The price increase was broad-based, led by
Segment operating EBITDA was
|
2Q |
2Q |
% |
% |
($ in millions, except where noted) |
2024 |
2023 |
Change |
Organic 1 Change |
North America |
|
|
2 % |
2 % |
EMEA |
|
|
9 % |
27 % |
Latin America |
|
|
- |
(1) % |
Asia Pacific |
|
|
(7) % |
(5) % |
Total 2Q Seed Net Sales |
|
|
2 % |
3 % |
2Q Seed |
|
|
16 % |
N/A |
Seed net sales were
The increase in price was driven by strong demand for top technology offerings and operational execution globally, with global corn and soybean prices up 6% and 4%, respectively. Pricing actions more than offset currency impacts in EMEA2. The decline in volume was driven primarily by unfavorable weather and reduced planted area in EMEA2. Unfavorable currency impacts were led by the Turkish Lira.
Segment operating EBITDA was
|
1H |
1H |
% |
% |
($ in millions, except where noted) |
2024 |
2023 |
Change |
Organic 1 Change |
North America |
|
|
4 % |
4 % |
EMEA |
|
|
(6) % |
5 % |
Latin America |
|
|
2 % |
(1) % |
Asia Pacific |
|
|
(8) % |
(5) % |
Total 1H Seed Net Sales |
|
|
2 % |
4 % |
1H Seed |
|
|
16 % |
N/A |
Crop Protection Summary
Crop Protection net sales were approximately
The increase in volume was driven primarily by
Segment operating EBITDA was
|
2Q |
2Q |
% |
% |
($ in millions, except where noted) |
2024 |
2023 |
Change |
Organic 1 Change |
North America |
|
|
4 % |
4 % |
EMEA |
|
|
(13) % |
(12) % |
Latin America |
|
|
11 % |
11 % |
Asia Pacific |
|
|
(2) % |
1 % |
Total 2Q Crop Protection |
|
|
- |
1 % |
2Q Crop Protection |
|
|
(20) % |
N/A |
Crop Protection net sales were approximately $3.5 billion in the first half of 2024 compared to approximately $4.0 billion in the first half of 2023. The sales decrease was driven by a 7% decrease in volume, a 4% decline in price, and a 1% unfavorable impact from currency. These declines were partially offset by a 1% favorable portfolio impact.
The decrease in volume was primarily due to residual destocking and unfavorable weather impacts in EMEA2, as well as just-in-time purchasing behavior in
Pricing gains in EMEA2 were more than offset by declines in
Segment operating EBITDA was
|
1H |
1H |
% |
% |
($ in millions, except where noted) |
2024 |
2023 |
Change |
Organic 1 Change |
North America |
|
|
(16) % |
(16) % |
EMEA |
|
|
(15) % |
(13) % |
Latin America |
|
|
(1) % |
(5) % |
Asia Pacific |
|
|
(2) % |
1 % |
Total 1H Crop Protection |
|
|
(11) % |
(11) % |
1H Crop Protection |
|
|
(39) % |
N/A |
2024 Guidance
On-farm demand for inputs remain steady and farmers continue to prioritize top-tier seed technology. Against this backdrop, our Seed business has outperformed the market, likely gaining market share and improving operational efficiency. While the global Crop Protection industry volume has begun to stabilize, pricing pressures have become more pronounced due to the competitive environment and tighter farmer margins.
As a result,
The Company is not able to reconcile its forward-looking non-GAAP financial measures, except for Free Cash Flow, to its most comparable
Second Quarter Conference Call
The Company will host a live webcast of its second quarter and first half 2024 earnings conference call with investors to discuss its results and outlook tomorrow,
About
Cautionary Statement About Forward-Looking Statements
This report 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, which are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and may be identified by their use of words like "plans," "expects," "will," "anticipates," "believes," "intends," "projects," "estimates," "outlook," or other words of similar meaning. All statements that address expectations or projections about the future, including statements about Corteva's financial results or outlook; strategy for growth; product development; regulatory approvals; market position; capital allocation strategy; liquidity; environmental, social and governance ("ESG") targets and initiatives; the anticipated benefits of acquisitions, restructuring actions, or cost savings initiatives; and the outcome of contingencies, such as litigation and environmental matters, are forward-looking statements.
Forward-looking statements and other estimates are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements and other estimates also involve risks and uncertainties, many of which are beyond
Additionally, there may be other risks and uncertainties that
Regulation G (Non-GAAP Financial Measures)
This earnings release includes information that does not conform to
Organic sales is defined as price and volume and excludes currency and portfolio and other impacts, including significant items. Operating EBITDA is defined as earnings (loss) (i.e., income (loss) from continuing operations before income taxes) before interest, depreciation, amortization, non-operating benefits (costs), foreign exchange gains (losses), and net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting, excluding the impact of significant items. Non-operating benefits (costs) consists of non-operating pension and other post- employment benefit (OPEB) credits (costs), tax indemnification adjustments, and environmental remediation and legal costs associated with legacy businesses and sites. Tax indemnification adjustments relate to changes in indemnification balances, as a result of the application of the terms of the Tax Matters Agreement, between Corteva and Dow and/or DuPont that are recorded by the Company as pre-tax income or expense. Operating EBITDA margin is defined as Operating EBITDA as a percentage of net sales.
Operating earnings (loss) per share is defined as "earnings (loss) per common share from continuing operations - diluted" excluding the after-tax impact of significant items, the after-tax impact of non-operating benefits (costs), the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from DowDuPont, and the after-tax impact of net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting. Although amortization of the Company's intangible assets is excluded from these non-GAAP measures, management believes it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in amortization of additional intangible assets. Net unrealized gain or loss from mark-to-market activity for certain foreign currency derivative instruments that do not qualify for hedge accounting represents the non-cash net gain (loss) from changes in fair value of certain undesignated foreign currency derivative contracts. Upon settlement, which is within the same calendar year of execution of the contract, the realized gain (loss) from the changes in fair value of the non-qualified foreign currency derivative contracts will be reported in the relevant non-GAAP financial measures, allowing quarterly results to reflect the economic effects of the foreign currency derivative contracts without the resulting unrealized mark to fair value volatility. Base income tax rate is defined as the effective tax rate excluding the impacts of foreign exchange gains (losses), non-operating benefits (costs), amortization of intangibles (existing as of the Separation), mark- to- market gains (losses) on certain foreign currency contracts not designated as hedges, and significant items.
The Company also uses Free Cash Flow as a non-GAAP measure to evaluate and discuss its liquidity position and ability to generate cash. Free Cash Flow is defined as cash provided by (used for) operating activities – continuing operations, less capital expenditures. We believe that Free Cash Flow provides investors with meaningful information regarding the Company's ongoing ability to generate cash through core operations, and our ability to service our indebtedness, pay dividends (when declared), make share repurchases, and meet our ongoing cash needs for our operations.
® ™ Corteva Agriscience and its affiliated companies.
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