WILMINGTON, Del., Jan. 21, 2021 /PRNewswire/ -- Corteva, Inc.
(NYSE: CTVA) today confirmed receipt of notice from Starboard Value
of its intent to nominate individuals to stand for election to
Corteva's Board of Directors (the "Board") at the Company's
upcoming 2021 Annual Meeting of Stockholders. The Company issued
the following statement:
Greg Page, Independent Chairman
of Corteva, said, "Corteva's Board and management value the input
of all our shareholders and we have met several times with
Starboard. We understand their views, are in agreement on many
points, and we look forward to continuing our dialogue. However,
thus far, Starboard has not discussed with us specific operational
recommendations for how to improve performance and the Board is
unanimous in its view that Jim
Collins' proven track record and industry expertise make him
exactly the right leader to assure the Company delivers on its
potential during this critical period."
"Leveraging our attractive assets and strong strategic
positioning, Corteva has made significant progress in a short
period of time as an independent company. We recognize that we have
more work to do, and we intend to deliver on our commitments," Page
continued. "Looking ahead, we believe we are at an important
inflection point in our Company's trajectory as the extensive
investments we have made to enhance productivity over the last 18+
months will begin to accelerate their impact on earnings. We
believe we are just beginning to realize the value creation
opportunity we have been targeting."
James C. ("Jim") Collins, Jr., Chief Executive Officer, said,
"Corteva has delivered total shareholder returns of approximately
80%1 since the spinoff and we believe we are
well-positioned to accelerate the realization of our value creation
opportunity in 2021 and beyond. With an industry-leading pipeline
and an unmatched global multi-channel, multi-brand distribution
system, which allows us to give our customers what they need, when
they need it, we are confident in our ability to continue to
capitalize on our advantages to deliver above-market growth. At the
same time, we are laser-focused on continuing to reduce costs and
enhance productivity through both in-flight and new initiatives.
Together with our top-line growth opportunities enabled by our new
product portfolio, we are confident that these initiatives will
drive meaningful margin expansion in the near-term and significant
value for shareholders."
An overview of Corteva's strategy and performance
highlights:
- Successfully Executing Strategic Plan: Corteva's
strategic plan is focused on successfully delivering its pipeline
of high value added, high margin differentiated products; providing
multiple points of grower access through its multi-channel,
multi-brand distribution; disciplined cost management through
synergy realization and productivity improvement; and balanced
capital allocation.
- Generating Strong Results: The plan is already yielding
benefits for shareholders, and Corteva expects this momentum to
continue. Corteva delivered 6%2 organic net sales growth
in Seed and 7%2 in Crop Protection through the first
nine months of 2020. Operating EBITDA is up 5%3 in the
same period.
- Delivering on Superior Product Pipeline: Since
closing the merger of Dow and DuPont, the Company has enhanced its
product portfolio, launching 16 new products, including key seed
technologies such as Qrome®, and PowerCore™ Ultra corn, and Enlist
E3® soybeans4, as well as Rinskor™ and Arylex™
herbicides and Inatreq™ fungicide in Crop Protection; and has been
successfully executing on the multi-channel, multi-brand approach
through the launch of Brevant in Latin
America and the U.S.
- Actions Taken to Generate Productivity and Optimize the
Enterprise for Growth: Since 2017, the Company has reduced
Seed production sites by 24%, Crop Protection manufacturing sites
by 31%, R&D sites by 32%, commercial offices by 55%, and
headcount by 16%. A portion of these savings have been reinvested
to accelerate future growth, including investments in its
route-to-market and multi-channel, multi-brand strategy; new
product launches and ramp-up globally; capacity expansion of
Spinosyns insecticide; and ERP harmonization investment to align
disparate IT systems.
- Substantial and Ongoing Return of Capital to
Shareholders: The Company's disciplined approach to capital
allocation balances capital returns to shareholders in the form of
dividends and share repurchases, targeted investments in internal
and external innovation to support profitable growth, and balance
sheet strength to ensure efficient access to capital throughout the
business cycle. Corteva has returned approximately $882 million to investors since becoming a public
company in June 2019 through
December 2020 and recently announced
that it expects to complete the Company's existing $1 billion share repurchase program by the end of
2021, subject to market conditions, six months ahead of the
Company's original expected timeline.
Corteva's fourth quarter and full-year 2020 earnings call will
be held on February 4, 2021, and the
Company looks forward to updating shareholders on its progress and
2021 outlook at that time.
The Company's 2021 Annual Meeting of Stockholders has not yet
been scheduled, and Corteva shareholders are not required to take
any action at this time. The Board's Nomination and Governance
Committee will review Starboard's proposed candidates in accordance
with its corporate governance principles. The Board is committed to
ongoing refreshment and enhancing its mix of skills and
capabilities and will present its recommended slate of director
nominees in the Company's definitive proxy statement to be filed
with the Securities and Exchange Commission and provided to all
shareholders eligible to vote at the Company's 2021 Annual Meeting
of Stockholders.
About Corteva
Corteva, Inc. (NYSE: CTVA) is a
publicly traded, global pure-play agriculture company that provides
farmers around the world with the most complete portfolio in the
industry – including a balanced and diverse mix of seed, crop
protection and digital solutions focused on maximizing productivity
to enhance yield and profitability. With some of the most
recognized brands in agriculture and an industry-leading product
and technology pipeline well positioned to drive growth, the
Company is committed to working with stakeholders throughout the
food system as it fulfills its promise to enrich the lives of those
who produce and those who consume, ensuring progress for
generations to come. Corteva became an independent public company
on June 1, 2019, and was previously
the Agriculture Division of DowDuPont. More information can be
found at www.corteva.com.
Follow Corteva on Facebook, Instagram, LinkedIn, Twitter and
YouTube.
Additional Information and Where to Find It
In
connection with the forthcoming solicitation of proxies from
stockholders in respect of Corteva's 2021 Annual Meeting of
Stockholders, Corteva will file with the Securities and Exchange
Commission (the "SEC") a proxy statement on Schedule 14A (the
"proxy statement"), containing a form of blue proxy card. Corteva,
its directors and certain of its executive officers will be
participants in the solicitation of proxies from stockholders in
respect of Corteva's 2021 Annual Meeting of Stockholders.
Information regarding the names of Corteva's directors and
executive officers and their respective interests in Corteva by
security holdings or otherwise will be set forth in the proxy
statement. Details concerning the nominees of Corteva's Board of
Directors for election at Corteva's 2021 Annual Meeting of
Stockholders will be included in the proxy statement. BEFORE MAKING
ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ ALL RELEVANT DOCUMENTS, INCLUDING CORTEVA'S PROXY STATEMENT
AND ANY AMENDMENTS THERETO AND ACCOMPANYING BLUE PROXY CARD, FILED
WITH OR FURNISHED TO THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY CONTAIN, OR WILL CONTAIN, IMPORTANT INFORMATION ABOUT CORTEVA.
Stockholders may obtain free copies of the proxy statement and
other relevant documents that Corteva files with the SEC on
Corteva's website at http://investors.corteva.com or from the SEC's
website at www.sec.gov.
Cautionary Statement About Forward-Looking
Statements
This communication contains forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended, which are intended to be 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 "guidance", "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 strategy for
growth, product development, regulatory approvals, 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 DowDuPont, 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 E.I. du Pont de Nemours and
Company 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 the 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 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, 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 Quarterly
Reports on Forms 10-Q and Current Reports on Form 8-K.
Regulation G (Non-GAAP Measures)
This communication
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,
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 best 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. Reconciliations for these non-GAAP measures to U.S. GAAP
are provided below. For first quarter 2019 and prior year, 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. See Article 11 Pro Forma Combined Statements
of Operations starting on page [X] of the Financial Statement
Schedules, filed as Exhibit 99.2 to the Company's Current Report on
Form 8-K, filed with the SEC on November 4,
2020 (the "Financial Statement Schedules").
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 the following pages. 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® and Roundup Ready 2 Xtend® herbicide
tolerance traits. During the five-year ramp-up period of Enlist
E3TM, 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) net, 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. 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) net, non-operating benefits, net,
amortization of intangibles as of the Separation from DowDuPont,
and significant items (including goodwill impairment
charges).
Corteva
|
|
|
Non-GAAP
Calculation of Corteva Operating EBITDA
|
|
|
|
|
|
In
millions
|
Nine Months Ended
September 30,
|
2020
|
2019
|
As
Reported
|
Pro
Forma
|
Income from
continuing operations, after income taxes
(GAAP)
|
$
657
|
$
68
|
Provision for income
taxes on continuing operations
|
88
|
146
|
Income from
continuing operations before income taxes (GAAP)
|
$
745
|
$
214
|
+ Depreciation
and Amortization
|
868
|
711
|
- Interest
income
|
(38)
|
(46)
|
+ Interest
expense
|
35
|
67
|
+ / - Exchange
losses, net2
|
127
|
37
|
+ / -
Non-operating benefits, net
|
(237)
|
(106)
|
+ Significant
items charge
|
351
|
886
|
Corteva Operating
EBITDA (Non-GAAP)1
|
$
1,851
|
$
1,763
|
|
|
|
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 a
ssociated 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.
2. The nine months ended September 30, 2019, on an operating basis
(Non-GAAP), exclude a $(33) million exchange loss associated with
the devaluation of
the Argentine peso, as it is included within significant
items.
|
Corteva
|
|
|
Segment
Information
|
|
|
|
|
|
Corteva
significant items (Pretax)
|
|
|
|
|
|
In
millions
|
Nine Months Ended
September 30,
|
2020
|
2019
|
As
Reported
|
Pro
Forma
|
Seed
|
|
|
Loss on
divestiture
|
-
|
(24)
|
Restructuring and
asset-related charges - net
|
(154)
|
(123)
|
Amortization of inventory
step up
|
-
|
(67)
|
Total
Seed
|
(154)
|
(214)
|
|
|
|
Crop
Protection
|
|
|
Loss on
divestiture
|
(53)
|
-
|
Restructuring and
asset-related charges - net
|
(98)
|
(24)
|
Total Crop
Protection
|
(151)
|
(24)
|
|
|
|
Corporate
|
|
|
Integration and separation
costs
|
-
|
(582)
|
Loss on early extinguishment
of debt
|
-
|
(13)
|
Restructuring and
asset-related charges - net
|
(46)
|
(20)
|
Argentina currency
devaluation
|
-
|
(33)
|
Total
Corporate
|
(46)
|
(648)
|
|
|
|
Total
significant items by segment (Pretax)
|
(351)
|
(886)
|
|
|
|
1. Refer to page A-11
of the Financial Statement Schedules for further information on
significant items, including tax only items.
|
Corteva
|
|
|
|
|
|
|
|
|
Segment
Information - Price, Volume Currency Analysis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2020 vs. Nine Months Ended September 30,
2019
|
Percent Change Due
To:
|
Net Sales Change
(GAAP)
|
Organic Change
(Non-GAAP)2
|
Local Price
&
Product Mix
|
Volume
|
Currency
|
Portfolio /
Other
|
$
(millions)
|
%
|
$
(millions)
|
%
|
North
America1
|
$
18
|
0%
|
$
45
|
1%
|
0%
|
1%
|
-1%
|
0%
|
EMEA1
|
89
|
4%
|
195
|
8%
|
2%
|
6%
|
-4%
|
0%
|
Latin
America
|
(26)
|
-1%
|
296
|
17%
|
6%
|
11%
|
-18%
|
0%
|
Asia
Pacific
|
66
|
7%
|
119
|
13%
|
2%
|
11%
|
-4%
|
-2%
|
Rest of
World
|
129
|
3%
|
610
|
12%
|
4%
|
8%
|
-9%
|
0%
|
Total
|
$
147
|
1%
|
$
655
|
6%
|
2%
|
4%
|
-4%
|
-1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Seed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2020 vs. Nine Months Ended September 30,
2019
|
Percent Change Due
To:
|
Net Sales Change
(GAAP)
|
Organic Change
(Non-GAAP)2
|
Local Price
&
Product Mix
|
Volume
|
Currency
|
Portfolio /
Other
|
$
(millions)
|
%
|
$
(millions)
|
%
|
North
America1
|
$
52
|
1%
|
$
65
|
2%
|
1%
|
1%
|
-1%
|
0%
|
EMEA1
|
62
|
5%
|
126
|
11%
|
4%
|
7%
|
-6%
|
0%
|
Latin
America
|
32
|
5%
|
124
|
20%
|
5%
|
15%
|
-15%
|
0%
|
Asia
Pacific
|
23
|
8%
|
37
|
14%
|
6%
|
8%
|
-6%
|
0%
|
Rest of
World
|
117
|
6%
|
287
|
14%
|
5%
|
9%
|
-8%
|
0%
|
Total
|
$
169
|
3%
|
$
352
|
6%
|
2%
|
4%
|
-3%
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crop
Protection
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2020 vs. Nine Months Ended September 30,
2019
|
Percent Change Due
To:
|
Net Sales Change
(GAAP)
|
Organic Change
(Non-GAAP)2
|
Local Price
&
Product Mix
|
Volume
|
Currency
|
Portfolio /
Other
|
$
(millions)
|
%
|
$
(millions)
|
%
|
North
America1
|
$
(34)
|
-2%
|
$
(20)
|
-1%
|
-1%
|
0%
|
0%
|
-1%
|
EMEA1
|
27
|
2%
|
69
|
6%
|
1%
|
5%
|
-3%
|
-1%
|
Latin
America
|
(58)
|
-5%
|
172
|
15%
|
7%
|
8%
|
-20%
|
0%
|
Asia
Pacific
|
43
|
6%
|
82
|
12%
|
0%
|
12%
|
-3%
|
-3%
|
Rest of
World
|
12
|
0%
|
323
|
11%
|
3%
|
8%
|
-10%
|
-1%
|
Total
|
$
(22)
|
0%
|
$
303
|
7%
|
2%
|
5%
|
-6%
|
-1%
|
|
|
|
|
|
|
|
|
|
1. North America is
defined as U.S. and Canada. EMEA is defined as Europe, Middle East
and Africa.
|
2. Organic sales is
defined as price and volume and excludes currency and portfolio
impacts.
|
1
|
Total Shareholder
Return is calculated using the volume weighted average price at
June 3, 2019 through January 20, 2021 with dividends
reinvested.
|
2
|
Organic Sales is a
non-GAAP measure (see following pages for further discussion). Net
sales growth for the first nine months of 2020 for Seed and Crop
Protection were 3% and flat, respectively.
|
3
|
Operating EBITDA is a
non-GAAP measure (see following pages for further discussion).
Income from continuing operations after income taxes for the first
nine months of 2020 is up 866%.
|
4
|
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.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/corteva-confirms-receipt-of-starboard-values-intent-to-nominate-directors-at-annual-meeting-301212750.html
SOURCE Corteva, Inc.