investor update · 2020. 8. 8. · investor update august 17, 2020 james c. collins, jr chief...
TRANSCRIPT
Investor Update
August 17, 2020
James C. Collins, Jr
Chief Executive Officer
Greg Friedman
EVP & Chief Financial Officer
2
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, 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” or other words of similar meaning. All statements that address expectations or
projections about the future, including statements about Corteva’s strategy for growth, product development, regulatory approval, market position, anticipated benefits of recent acquisitions, timing of
anticipated benefits from restructuring actions, outcome of contingencies, such as litigation and environmental matters, expenditures, and financial results, as well as expected benefits from, the
separation of Corteva from DuPont, are forward-looking statements.
Forward-looking statements are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements also involve risks and uncertainties,
many of which are beyond Corteva's control. While the list of factors presented below is considered representative, no such list should be considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those
anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could
have a material adverse effect on Corteva's business, results of operations and financial condition. Some of the important factors that could cause Corteva's actual results to differ materially from those
projected in any such forward-looking statements include: (i) failure to successfully develop and commercialize Corteva's pipeline; (ii) effect of competition and consolidation in Corteva's industry; (iii)
failure to obtain or maintain the necessary regulatory approvals for some Corteva's products; (iv) failure to enforce Corteva's intellectual property rights or defend against intellectual property claims
asserted by others; (v) effect of competition from manufacturers of generic products; (vi) impact of Corteva's dependence on third parties with respect to certain of its raw materials or licenses and
commercialization; (vii) costs of complying with evolving regulatory requirements and the effect of actual or alleged violations of environmental laws or permit requirements; (viii) effect of the degree of
public understanding and acceptance or perceived public acceptance of Corteva's biotechnology and other agricultural products; (ix) effect of changes in agricultural and related policies of governments
and international organizations; (x) effect of industrial espionage and other disruptions to Corteva's supply chain, information technology or network systems; (xi) competitor's establishment of an
intermediary platform for distribution of Corteva's products; (xii) effect of volatility in Corteva's input costs; (xiii) failure to raise capital through the capital markets or short-term borrowings on terms
acceptable to Corteva; (xiv) failure of Corteva's customers to pay their debts to Corteva, including customer financing programs; (xv) failure to realize the anticipated benefits of the internal
reorganizations taken by DowDuPont in connection with the spin-off of Corteva, including failure to benefit from significant cost synergies; (xvi) risks related to the indemnification obligations of legacy
EID liabilities in connection with the separation of Corteva; (xvii) increases in pension and other post-employment benefit plan funding obligations; (xviii) effect of compliance with environmental laws and
requirements and adverse judgments on litigation; (xix) risks related to Corteva's global operations; (xx) effect of climate change and unpredictable seasonal and weather factors; (xxi) effect of counterfeit
products; (xxii) failure to effectively manage acquisitions, divestitures, alliances and other portfolio actions; (xxiii) risks related to non-cash charges from impairment of goodwill or intangibles assets; (xxiv)
risks related to COVID-19; (xxv) risks related to oil and commodity markets, and (xxvi) other risks related to Corteva’s Separation from DowDuPont.
Additionally, there may be other risks and uncertainties that Corteva is unable to currently identify or that Corteva does not currently expect to have a material impact on its business. Where, in any
forward-looking statement or other estimate, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of Corteva’s
management and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. Corteva
disclaims and does not undertake any obligation to update or revise any forward-looking statement or other estimate, except as required by applicable law. A detailed discussion of some of the significant
risks and uncertainties which may cause results and events to differ materially from such forward-looking statements or other estimates is included in the “Risk Factors” section of Corteva’s Annual
Report on Form 10-K, as modified by subsequent reports on Forms 10-Q and Current Reports on Form 8-K.
Safe Harbor Regarding Forward-Looking Statements
3
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 been included in this presentation. This presentation presents the pro
forma results of Corteva, after giving effect to events that are (1) directly attributable to the merger of DuPont and Dow, debt retirement transactions related to paying off or retiring portions of Historical DuPont’s existing debt liabilities,
and the separation and distribution to DowDuPont stockholders of all the outstanding shares of Corteva common stock; (2) factually supportable and (3) with respect to the pro forma statements of income, expected to have a
continuing impact on the consolidated results. Refer to Corteva’s Form 10 registration statement filed on May 6, 2019, which can be found on the investors section of the Corteva website, for further details on the above transactions.
The pro forma financial statements were prepared in accordance with Article 11 of Regulation S-X, and are presented for informational purposes only, and do not purport to represent what the results of operations would have been
had the above actually occurred on the dates indicated, nor do they purport to project the results of operations for any future period or as of any future date.
Regulation G (Non-GAAP Financial Measures)This presentation includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures may include organic sales, organic growth (including by segment and region), operating EBITDA,
pro forma operating EBITDA, operating EBITDA margin, pro forma operating EBITDA margin, operating earnings per share, pro forma operating earnings per share, base tax rate and pro forma base tax rate. Management uses these
measures internally for planning and forecasting, including allocating resources and evaluating incentive compensation. Management believes that these non-GAAP measures reflect the ongoing performance of the Company during
the periods presented and provide more relevant and meaningful information to investors as they provide insight with respect to ongoing operating results of the Company and a more useful comparison of year over year results.
These non-GAAP measures supplement the Company's U.S. GAAP disclosures and should not be viewed as an alternative to U.S. GAAP measures of performance. Furthermore, such non-GAAP measures may not be consistent
with similar measures provided or used by other companies For first quarter 2019 and prior, these non-GAAP measures are being reconciled to a pro forma GAAP financial measure prepared and presented in accordance with Article
11 of Regulation S-X. Reconciliations for these non-GAAP measures to their most directly attributable U.S. GAAP measure are provided on slides 21 - 23 of this presentation.
Corteva is not able to reconcile its forward-looking non-GAAP financial measures to their most comparable U.S. GAAP financial measures, as it is unable to predict with reasonable certainty items outside of the company’s control,
such as Significant Items, without unreasonable effort. For Significant Items reported in the periods presented, refer to page A-9 of the Financial Statement Schedules. Beginning January 1, 2020, the company presents accelerated
prepaid royalty amortization expense as a significant item. Accelerated prepaid royalty amortization represents the noncash charge associated with the recognition of upfront payments made to Monsanto in connection with the
Company’s non-exclusive license in the United States and Canada for Monsanto's Genuity® Roundup Ready 2 Yield® Roundup Ready 2 Xtend® herbicide tolerance traits. During the five-year ramp-up period of Enlist E3®, Corteva is
expected to significantly reduce the volume of products with the Roundup Ready 2 Yield® and Roundup Ready 2 Xtend® herbicide tolerance traits beginning in 2021, with expected minimal use of the trait platform after the completion
of the ramp-up.
Organic sales is defined as price and volume and excludes currency and portfolio impacts. Operating EBITDA is defined as earnings (i.e., income from continuing operations before income taxes) before interest, depreciation,
amortization, non-operating benefits, net and foreign exchange gains (losses), excluding the impact of significant items (including goodwill impairment charges). Non-operating benefits, net consists of non-operating pension and other
post-employment benefit (OPEB) credits, tax indemnification adjustments, environmental remediation and legal costs associated with legacy businesses and sites of Historical DuPont. 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 per share are defined as "Earnings per common share from continuing operations - diluted" excluding the after-tax impact of
significant items (including goodwill impairment charges), the after-tax impact of non-operating benefits, net, and the after-tax impact of amortization expense associated with intangible assets existing as of the Separation from
DowDuPont. 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. Base tax rate is defined as the effective tax rate excluding the impacts of foreign exchange gains (losses), non-operating benefits, net, amortization of intangibles as of the Separation from DowDuPont, and significant items
(including goodwill impairment charges). All periods for the first quarter of 2019 and prior are on a pro forma basis as discussed above in the paragraph ‘Corteva Unaudited Pro Forma Financial Information’.
A Reminder About Non-GAAP Financial Measures and Pro Forma Financial Information
4
Looking Beyond the Crisis to the Future
1 Operational momentum is clear
2 Strategy is durable
3 Growth expectations are achievable
Execution is disciplined and focused4
5
Keeping our Priorities for Shareholder Value Creation in Focus
5
› Accelerate Enlist E3®(2) soybean launch
› Continue corn technology penetration globally
› Scale Brevant™ seed brand in key markets
› Increase patented and differentiated Crop Protection sales
› Deliver ~$400 million in earnings improvement from new
Crop Protection products
› Drive ~$1 billion of additional cost savings and productivity
› Fund key product and pipeline growth
› Pursue opportunistic, bolt-on M&A
› Maintain competitive dividend policy
› Complete the $1 billion share repurchase program
› Optimize pension liability
✓ Launched key seed technologies in corn and soybeans
✓ Delivered seed price improvement in all regions
✓ Implemented multi-channel, multi-brand strategy
✓ Delivered insecticide growth
✓ Implemented best owner strategy in Crop Protection
✓ Delivered more than $300 million in earnings improvement from
new Crop Protection products
✓ Realized merger cost synergies and productivity of ~$930 million
since merger close
✓ Approved capacity expansion in Spinosyn insecticides
✓ Acquired PhytoGen Seed Company – cottonseed asset
✓ Returned approximately $400 million to shareholders since spin
through dividends
✓ Repurchased $75 million in shares
(1) Accomplishments represent the time period between the close of the DowDuPont merger and 1H 2020, unless otherwise stated.
(2) The transgenic soybean event in Enlist E3® soybeans is jointly developed and owned by Dow AgroSciences LLC and M.S. Technologies, L.L.C. Royalty income for Enlist E3® is shared with MS Technologies.
Accomplishments through 1H 2020(1) Mid-Term Focus
6
Market Opportunity
Corteva Opportunity
17%~35%
~90%
2020E 2021E Peak
% of volumes
>20%~30%
~50%
2020E 2021E Peak
% of Market
Peak% CTVA
Germplasm ~10% ~25% 100%
2020E 2021E
Earnings Expansion through Penetration of Enlist E3®(2) Soybean System
(1) Annualized improvement reflects earnings improvements from reduced in-licensed trait and germplasm costs, out-licensing income for Enlist E3® trait and benefit from Enlist™ herbicide. Estimate does not include any
assumption for changes in market share or pricing opportunity for Enlist E3® seed.
(2) The transgenic soybean event in Enlist E3® soybeans is jointly developed and owned by Dow AgroSciences LLC and M.S. Technologies, L.L.C. Royalty income for Enlist E3® is shared with MS Technologies.
~70%
Peak% Acres Treated
with Enlist™
Herbicide
2020E 2021E
~65% ~65%
Components of Earnings Improvement
Driving Earnings Improvement with Proprietary System
• Reduction of royalty costs for in-licensed traits and germplasm
• Royalty income on out-licensing of trait(2)
• Herbicide margins for Corteva branded acres
• Market share expansion opportunity
• Value capture on best-in-class performance
Incremental upside
excluded from
~$400 million in
annualized improvement
Targeted Annualized Earnings
Improvement at Peak>$400 million1
7
Driving Corn Seed Price Improvement with New Technology
• Proprietary molecular-stack technology with proven insect
protection and dual modes of action defend against above- and
below-ground pests
• Maximum corn rootworm control – balancing insect protection
and agronomics for industry-leading performance
• Compatible with a wide range of Corteva germplasm
Branded Offering
Qrome® Sales
~ $0.7 ~ $0.8
~ $1.1
2020E 2021E Peak
$ billions
~20%~25%
> 35%
2020E 2021E Peak
% of volumes
Triple-stack market represents approximately
1/3 of total North America corn acres
Superior performance on best-in-class genetics
8.2 bu/A1
6.9 bu/A2
Corn on corn Allacres/rotations
Extracting Value on Yield-Advantaged Technology
2020 Pricing
Improvement
– North
America
Corn(2)
>$40
million
2019 Yield Advantage(1)
(1) 2019 comparison data is based on the average of 1,330+ comparisons1 and on the average of 3,500+ comparisons2 made in the U.S. through Nov. 1, 2019. Comparisons are against all competitors, technology segment matched,
unless otherwise stated, and within +/- 3 CRM of the competitive brand. Product responses are variable and subject to any number of environmental, disease and pest pressures. Individual results may vary. Multi-year and multi-
location data are a better predictor of future performance.
(2) Based on 2020 season.
8
Exclusive to Pioneer seed brand –
direct to farmer via independent
Pioneer sales representatives
Pioneer Agency Model
Connects customers to our regional
brand employees or farmer-dealer
networks
Regional Seed Brands
Some seed brands – including
Brevant™ Seeds – via wholesale,
independent and distribution-owned
retailers
Retail
Strategic distribution and licensing
opportunities with retailers and
independent seed companies
outside our brands
Licensing and Distribution
Four Differentiated Channels
Executing Strategy to Enhance Market Presence in the Retail Channel
Multi-Brand, Multi-Channel Approach Expands Market Presence
Po
Multiple Seed Brands
Premium
Global
Seed
Brands
Regional
and Retail
Seed
Brands
Unique customer value proposition defined by
differentiated product and service offerings
delivered through each brand
Recently announced introduction of Brevant™ seed brand in the U.S.
for sale exclusively through retail, focused in the Midwest and Eastern
Corn Belt starting in 2021 season
9
Scaling Brevant™ Seed Brand in Key Global Retail Markets
Po
North America
Po
Latin America
Launched in Key Countries Globally to Drive Penetration in the Retail Channel
• With an initial launch in 2018, Brevant™ seed brand
has now launched in 11 countries to date, including
the U.S., Canada, Brazil and Argentina
• As a global brand, Brevant™ provides farmers
greater choice with a high-performance retail solution
• Brand has received favorable customer response
and is a sales and earnings growth driver for the
Seed segment in the mid-term
• Greater than 6 million units sold globally
Recently announced
introduction of Brevant™
seed brand in the U.S.
for sale exclusively
through retail, focused in
the Midwest and Eastern
Corn Belt starting in 2021
season
Launched Brevant™
seed brand in Brazil in
2018 and increased
sales by 15% since that
date – expanded market
share by more than 100
basis points in Brazil
corn market
Portfolio
Rationalization
Cross
Licensing
Organic
Growth(1)
Source: Internal analysis.
(1) Organic sales growth is defined as price and volume, excluding currency and portfolio impact.
2019 CP Sales
Patented
34%
2023E CP Sales Vision(2)
Off-Patent
50%
Acquisitions
Differentiated
16%
Shaping the Crop Protection Portfolio of the Future
10(2) Estimated.
2020E CP Sales(2)
Patented
22%
Differentiated
14%Off-Patent
64%
Strategic partnerships strengthen
portfolio co-development and research
funding & risk share – >70 agreements
announced since separation
Recently announced multi-year global
agreement reflecting continued
commitment to growing biologicals
portfolio, while increasing technology
differentiation and competitive advantage
Completed 4 portfolio divestitures since
separation, and exited Chlorpyrifos –
reinforcing commitment to active
portfolio management focused on
margin expansion and value creation
Patented
19%
Differentiated
12%Off-Patent
69%
Ramping up new product sales and
driving sales of differentiated higher
margin technology while continuing to
invest in R&D and advancing pipeline
Driving a best-owner strategy and disciplined portfolio management focus
11
New Crop Protection Products Drive Sales and Margin Diversity
New Fungicide Product Sales
$150 MM
2020E
$10 MM
2020E
$100 MM
2020E
New Herbicide Product Sales
$200 MM $90 MM $150 MM
New Active Ingredients and Formulations Drive Incremental Sales and Margins
2023 Launch
New Crop Protection
Product Sales
$450
$750
~$1,000
2018 2019 2020E
Net Sales
~$2,600
2023E
$ millions160%
>$200 MM
2023E
>$275 MM
2023E
>$200 MM
2023E
2020E 2020E 2020E2023E 2023E 2023E>$600 MM >$200 MM >$300 MM
2020E 2020E2023E 2023E
$200 MM $80 MM>$300 MM
New Insecticide Product Sales
>33% >27x >100%
>200% >120% >100%
>$150 MM>50% >90%
Est. 2023 Launch(1)
Est. 2021 Launch(1)
(1) Estimated launches pending all applicable regulatory approvals.
12
Expanding Position in Growing Insecticide Market
Market Opportunity
Corteva Sales
2018 2019 2020E 2023E
$ in billions
$1.51$1.65 $1.76 $2.03
$13.3
$13.9
$14.5
2018 2019 2020E
$ in billions
Currency Impact
2020E
Currency ~$(25) MM ~$(65) MM ~$(120) MM
$ in millions
2018 2019
$200 MM >$300 MM
2023E New
Product Sales
2020E New
Product Sales
>50%
• Novel, technology with fast-
acting and long-lasting
control for hard-to-control
insect pests – targeted for
use in fruits and vegetables,
cereals, soybeans and rice
• U.S. EPA restored
registration in 2020 –
expanded critical uses
$80 MM >$150 MM
2023E New
Product Sales
2020E New
Product Sales
>90%
• Novel, insect control solution
targeted for Asian rice
growers
• Differentiated MOA and no
cross resistance
$770 MM >$1 B
2023E
Differentiated
Product Sales
2020E
Differentiated
Product Sales
>30%
• Naturally derived insecticide developed and
manufactured through proprietary process
• Provides organic farmers with highly
effective and needed insect control option
with broad spectrum offering for insect
control in key crops such as fruits,
vegetables, soybean and others
• Unique, world-class fermentation facilities
and processes enable us to innovate
natural products and increase productivity
and scalability
• Authorized Spinosyns capacity expansions
are expected to deliver 50% increase in
fermentation capacity by 2023
Spinosyns Insecticides
Spinosad Spinetoram
13
New Products Enabling Differentiation and Growth in Herbicides
Market Opportunity
Corteva Sales
2018 2019 2020E 2023E
$ in billions
NewProducts
BaseBusiness
$3.42$3.27 $3.19
>$3.89
$27.7 $28.0 $28.9
2018 2019 2020E
$ in billions
Currency Impact
2020E
Currency ~$(40) MM ~$(100) MM ~$(160) MM
$ in millions
2018 2019
$200 MM >$600 MM
2023E New
Product Sales
2020E New
Product Sales
>200%
• Novel, with new MOA for
fast, effective control of hard-
to-control broadleaf weeds
for the cereals, OSR and
sunflower markets
• Innovative resistance
management tool with low
use rates
$90 MM >$200 MM
2023E New
Product Sales
2020E New
Product Sales
>120%
• Novel, effective broad
spectrum post-emergence
weed-control solution for rice
markets, with new MOA
• Targeted site resistance with
low use rates
• Recipient of multiple “green
chemistry” awards
$150 MM >$300 MM
2023E New
Product Sales
2020E New
Product Sales
• Accelerated production of
Enlist™ herbicides, ahead of the
2021 selling season
• Ramp-up plan focuses on the
solid long-term fundamentals of
Enlist™ weed control system
• Enlist One® offers additional
tank-mix flexibility and
provides exceptional weed
control designed to land and
stay on target
• Enlist Duo® provides two sites
of action that work together to
deliver control and help
prevent resistance.
>100%
14
$10 MM >$275 MM
2023E New
Product Sales
2020E New
Product Sales
$100 MM >$200 MM
2023E New
Product Sales
2020E New
Product Sales
$150 MM >$200 MM
2023E New
Product Sales
2020E New
Product Sales
>100%
>33%
Targeted Actions to Build Strength in Fungicides
• Novel, naturally derived
fungicide for the
management of key diseases
in cereals and banana
• Favorable regulatory profile
• Novel fungicide for the
management of key diseases
in soybean, corn, wheat, rice,
sunflower, canola and OSR
• Onmira™ Active reflects
Corteva superior research,
development and testing
• New site and MOA fungicide
for the management of key
diseases in potatoes, grapes
and vegetables
• Favorable regulatory profile
• Expanding market presence in line
with rapid ramp-up of new products
• Product development rigor, coupled
with favorable regulatory profiles on
technologies, expected to accelerate
competitive advantages
Market Opportunity
Corteva Sales
2018 2019 2020E 2023E
$ in billions
$17.0 $17.1
$17.4
2018 2019 2020E
$ in billions
$1.14 $1.08 $1.06
Currency Impact
2018 2019 2020E
Currency ~$(65) MM ~$(45) MM ~$(130) MM
$ in millions
Emerging Fungicides Portfolio$1.38
>27x
15
Global Team Engaged in Driving and Sustaining Productivity Benefits
Merger-Related Synergies
Productivity Program
ERP Harmonization
2020 Spending Actions
Announced ~$100 million in spending actions to
increase cash and financial resiliency
Continued realization of $1.2 billion merger-related
synergies through 2021
~$930 million realized to date, ~$1.0 billion additional savings expected to be realized
Instilling “owner mindset” across the organization
to drive accretive return
~$200 million in “dis-synergies” as a result of
disparate ERP systems
Expect to begin achieving savings in 2023
~$300 million investment with approximately 50%
of the costs capitalized
Expect to maintain the majority of savings run-
rate based on new operating environment for
foreseeable future
~$900 million realized through 2Q 2020
Remaining programs focus on COGS
improvements via operational footprint and
procurement
Executing on ~$30 million in savings targeted for
2020
$500 million savings run-rate by 2024
Focused Emphasis on Productivity and Removing Inefficiencies
16
(1) “Software as a service”
ExternalInternal
Pipeline Innovation
EnterpriseCustomer Software
›Enterprise strategy & applications
›Process automation
›Data-driven decision-making
Improved customer experience
Cross-selling opportunities
Reduced costs
›Automation, data science and digital
tools in R&D
Reduced costs
Accuracy
Speed of new product introduction
›SaaS(1) through Granular
Customer experience
Farmer profitability
Standalone revenue
Cross-selling opportunities
Application of Digital Tools to Create Operating Leverage
Extracting Additional Benefit from Investments in Digital Tools
Delivering Continued Progress on Digital Transformation Strategy
Providing agronomic services remotely –
currently conducting drone flights to help
U.S. growers do seed counts and
scouting via Corteva Flight program
Expanding the use of digital marketing
tools to facilitate customer training and
product knowledge transfer
First ERP Module delivered
Secured first electronic Crop Protection
registrations
2020 Achievements Against Backdrop of COVID-19
✓ ✓
✓
✓
17
Prioritizing Capital Deployment Actions to Drive Stronger Returns
› Committed to
return excess
cash to
shareholders
Share Repurchase
(1) Target rating (expressed using S&P nomenclature).(2) Corteva’s dividend policy and associated actions are subject to the approval of the Corteva Board of Directors.
› Targeting 25-
35% of net
income with
earnings and
free cash flow
growth(2)
› Opportunistic to
accelerate
competitive
advantage and
expand reach in
key strategic
sectors and
adjacencies
› Investing in
innovation for
customers
including R&D
investment and
capital
expenditures
› Maintain
financial
flexibility to
support industry
leading
business model
Committed to Maintain
an A- Credit Profile(1) Strategic Investments Opportunistic M&ACompetitive Dividend
Policy
Growth InvestmentHealthy Balance Sheet Return Cash to Shareholders
18Insert Risk Classification
Appendix
19
Differentiated Crop Protection Products Enable Competitive Advantages
Differentiated Crop
Protection Product Sales
$680$760
$860
>$1,160
2018 2019 2020E 2023E
Net Sales
$ millions 35%
2020E 2023E
$770 MM >$1 B
Spinosyns Insecticides
>30%
2020E 2023E
$90 MM >$160 MM
Optinyte™ Technology
>80%
Spinosad Spinetoram
• Naturally derived insecticide developed and
manufactured through proprietary process
• Provides organic farmers with highly
effective and needed insect control option
with broad spectrum offering for insect
control in key crops such as fruits,
vegetables, soybean and others
• Enables Nitrogen to remain available in the
root zone longer for crop uptake
• Supports increases in yield in corn (maize),
cereals, and many other crops
• Improves crop quality and plant health
Creating Value for Customers and Driving Returns via Proprietary Technology
20
Product DisclosuresTM ® SM Trademarks and service marks of Dow AgroSciences, DuPont or Pioneer, and their affiliated companies or their respective owners. © 2020 Corteva
The transgenic soybean event in Enlist E3TM soybeans is jointly developed and owned by Dow AgroSciences LLC and M.S. Technologies, L.L.C. The Enlist weed control system is owned and developed by Dow
AgroSciences LLC. Enlist Duo® and Enlist One® herbicides are not registered for sale or use in all states or counties. Contact your state pesticide regulatory agency to determine if a product is registered for sale or
use in your area. Enlist Duo and Enlist One are the only 2,4-D products authorized for use with Enlist crops. Consult Enlist herbicide labels for weed species controlled. Always read and follow label directions.
Qrome® products are approved for cultivation in the U.S. and Canada. They have also received approval in a number of importing countries, most recently China. For additional information about the status of
regulatory authorizations, visit http://www.biotradestatus.com/
Pioneer® brand products are provided subject to the terms and conditions of purchase which are part of the labeling and purchase document.
21
Corteva
Non-GAAP Calculation of Corteva Operating EBITDA
2020 2019
As Reported Pro Forma
Income from continuing operations, net of tax (GAAP) 1,047$ 595$
Provision for income taxes on continuing operations 205 250
Income from continuing operations before income taxes 1,252$ 845$
+ Depreciation and Amortization 583 485
- Interest income (27) (33)
+ Interest expense 24 48
+ / - Exchange (gains) losses, net 60 59
+ / - Non-operating benefits, net (164) (74)
+ Significant items charge 302 640
Corteva Operating EBITDA (Non-GAAP) 1
2,030$ 1,970$
1. Corteva Operating EBITDA is defined as earnings (i.e., income from continuing operations before income taxes) before interest, depreciation,
amortization, non-operating benefits (costs) - net and foreign exchange gains (losses), excluding the impact of significant items. Non-operating
benefits (costs) - net consists of non-operating pension and other post-employment benefit (OPEB) credits (costs), tax indemnification adjustments,
environmental remediation and legal costs associated with Historical DuPont 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.
Six Months Ended June 30,
In millions
22
Corteva
Segment Information - Price, Volume Currency Analysis
Region
$ (millions) % $ (millions) %
North America1
154$ 3% 179$ 3% 0% 3% 0% 0%
EMEA1
79 4% 173 8% 2% 6% -4% 0%
Latin America (69) -7% 66 7% 7% 0% -14% 0%
Asia Pacific 31 4% 75 10% 2% 8% -5% -1%
Rest of World 41 1% 314 8% 3% 5% -7% 0%
Total 195$ 2% 493$ 5% 1% 4% -3% 0%
Seed
$ (millions) % $ (millions) %
North America1
181$ 5% 190$ 5% 1% 4% 0% 0%
EMEA1
67 6% 119 11% 4% 7% -5% 0%
Latin America 57 16% 105 29% 9% 20% -13% 0%
Asia Pacific 22 10% 36 17% 8% 9% -7% 0%
Rest of World 146 9% 260 16% 6% 10% -7% 0%
Total 327$ 6% 450$ 8% 2% 6% -2% 0%
Crop Protection
$ (millions) % $ (millions) %
North America1
(27)$ -2% (11)$ -1% -1% 0% 0% -1%
EMEA1
12 1% 54 6% 1% 5% -4% -1%
Latin America (126) -19% (39) -6% 5% -11% -13% 0%
Asia Pacific 9 2% 39 8% 0% 8% -4% -2%
Rest of World (105) -5% 54 3% 2% 1% -7% -1%
Total (132)$ -4% 43$ 1% 1% 0% -4% -1%
2. Organic sales is defined as price and volume and excludes currency and portfolio impacts.
Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019 Percent Change Due To:
Net Sales Change (GAAP) Organic Change (Non-GAAP)2
Local Price &
Product Mix Volume Currency Portfolio / Other
Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019 Percent Change Due To:
Net Sales Change (GAAP) Organic Change (Non-GAAP)2
Local Price &
Product Mix Volume Currency Portfolio / Other
1. North America is defined as U.S. and Canada. EMEA is defined as Europe, Middle East and Africa.
Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019 Percent Change Due To:
Net Sales Change (GAAP) Organic Change (Non-GAAP)2
Local Price &
Product Mix Volume Currency Portfolio / Other
23
Corteva
Non-GAAP Calculation of Adjusted Return on Invested Capital (ROIC)
March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Trailing Twelve Months
Pro Forma As Reported As Reported As Reported Pro Forma
Goodwill $ 10,203 $ 10,249 $ 10,168 $ 10,229 10,212$
Other intangible assets 11,961 11,832 11,667 11,424 11,721
Total goodwill and other intangible assets (existing as of Separation) 22,164 22,081 21,835 21,653 21,933
Short term borrowings and finance lease obligations 2,716$ 2,058$ 3,604$ 7$ 2,096$
Long-term debt 183 117 116 115 133
Total Debt 2,899 2,175 3,720 122 2,229
Total Equity1
25,145 26,067 25,261 24,555 25,257
Total Debt plus Equity 28,044 28,242 28,981 24,677 27,486
Total Debt plus Equity, less goodwill and other intangible assets
(existing as of Separation) ("Adjusted Invested Capital") 5,880$ 6,161$ 7,146$ 3,024$ 5,553$
Adjusted NOPAT 2
1,099$
Adjusted Invested Capital 5,553$
Adjusted Return on Invested Capital 3
19.8%
Adjusted Invested Capital (in millions)
1. The company has revised the balance of additional paid in capital as of 6/30/2019 in the amount of $76 million to reflect the removal of an asset related to the Separation.
3. Adjusted Return on Invested Capital ("ROIC") is defined as Adjusted NOPAT divided by debt plus equity excluding goodwill and intangibles (existing as of Separation).
2. Adjusted NOPAT is defined as net income from continuing operations attributable to Corteva excluding the after-tax impact of significant items (including goodwill impairment charges), the after-tax impact of non-operating benefits, net, the after-tax impact of
amortization expense associated with intangible assets existing as of Separation, the after-tax impact of interest income and the after-tax impact of interest expense divided by debt plus equity excluding goodwill and intangibles (existing as of Separation).