WILMINGTON, Del., Feb. 3, 2021 /PRNewswire/ -- Corteva, Inc.
(NYSE: CTVA) ("Corteva" or the "Company") today reported financial
results for the fourth quarter and 12 months ended December 31, 2020.
4Q 2020 Results Overview
|
Net
Sales
|
EPS
|
Loss from Cont.
Ops. (After Tax)
|
GAAP
|
$3.21 B
|
$0.13
|
$99 M
|
vs. 4Q
2019
|
+8%
|
+317%
|
+336%
|
|
|
|
|
|
Organic1 Sales
|
Operating
EPS1
|
Operating
EBITDA1
|
NON-GAAP
|
$3.46 B
|
$0.04
|
$236 M
|
vs. 4Q
2019
|
+16%
|
(43)%
|
+5%
|
FY 2020 Results Overview
|
Net
Sales
|
EPS4
|
Income from
Cont.
Ops (After Tax)4
|
GAAP
|
$14.2 B
|
$0.98
|
$756 M
|
vs. Full Year
20192
|
+3%
|
+4,800%
|
+2,808%
|
|
|
|
|
|
Organic1 Sales
|
Operating
EPS1
|
Operating
EBITDA1
|
NON-GAAP
|
$15.0 B
|
$1.50
|
$2.1 B
|
vs. Full Year
20192
|
+8%
|
+5%
|
+5%
|
1. Organic Sales, Operating EPS, Pro Forma Operating EPS,
Operating EBITDA and Pro Forma Operating EBITDA are non-GAAP
measures. See page A-6 for further discussion. 2. Full Year 2019
GAAP information is on a pro forma basis and was determined in
accordance with Article 11 of Regulation S-X that was in effect
prior to recent amendments. Non-GAAP measures for these periods are
reconciled to the GAAP pro forma measure. 3. North America is defined as U.S. and
Canada. EMEA is defined as
Europe, Middle East and Africa. 4. Full year 2020 improvement over
prior-year Income from Continuing Operations After Income Taxes and
GAAP EPS is primarily due to the absence of integration and
separation charges in 2020. 5. Enlist E3™ soybeans are jointly
developed by Dow AgroSciences and MS Technologies™. 6. Represents
coverage of total North America
market, including branded, competitors and licensees. 7. Launches
pending all applicable regulatory approvals. 8. The Company does
not provide the most comparable GAAP measure on a forward-looking
basis. See page 6 for further discussion.
Full Year 2020 Highlights
- Full year 2020 net sales grew 3% versus prior year.
Organic1 sales rose 8% during the same period. Continued
penetration of new products drove volume and price gains.
Organic1 sales increased in every region, with
double-digit growth in Latin
America and Asia
Pacific.
- Crop Protection net sales grew 3% and organic1 sales
increased 11% for the year. Volume and price increases were led by
sales of new and differentiated products. Sales of new Crop
Protection products contributed $1.0
billion to full year net sales – a 35% increase versus prior
year. Collectively, gains in volume and price more than offset
currency headwinds primarily attributed to the Brazilian Real and
portfolio impacts.
- Seed net sales increased 2% and organic1 sales grew
6% compared to prior year. Volume and local price gains were
primarily driven by continued penetration of new products – more
than offsetting the unfavorable impact of currency.
- GAAP income and earnings per share (EPS) from continuing
operations were $756 million and
$0.98 per share for the full year
2020, respectively.
- Operating EBITDA1 rose 5% versus 2019 to
$2.1 billion, driven by volume and
price gains in both Seed and Crop Protection, as well as ongoing
execution on cost and productivity actions. Currency net of pricing
was a $180 million headwind,
inclusive of $150 million in pricing
actions.
- Corteva delivered cash flow from operations of $2.1 billion for the period, reflecting
operational performance both in profitability and from improvements
in working capital.
- Management provided full year 2021 guidance8; and
expects net sales in the range of $14.4
billion to $14.6 billion.
Operating EBITDA is expected to be in the range of $2.4 billion to $2.5
billion, an increase of 15-20% compared to prior year.
"In 2020, Corteva delivered on our strategy, resulting in strong
sales and earnings growth in the quarter and for the year. We
delivered these results against the backdrop of historic market
volatility and uncertainty related to the ongoing COVID-19 pandemic
– a solid proof point of the strength and resilience of our global
team.
"Our new and differentiated products contributed to solid
top-line growth. We delivered progress in 2020 on key innovations
and investments, such as the accelerated ramp-up of our Enlist™
system, which exceeded our initial expectations on U.S. soybean
acres in 2020. At the same time, we grew our position in key
markets and regions during the year, and further strengthened our
multi-channel, multi-brand strategy, including the launch of
Brevant™ in the U.S. retail channel.
"We view 2021 as an acceleration point on our path. We are
confident that continued penetration of our high-margin technology,
coupled with our cost and productivity initiatives, will result in
margin expansion in the near term, with more upside further
ahead.
"Above all, we are committed to delivering significant value to
shareholders. In 2020, we advanced our returns to shareholders
through our dividends and the continued execution of our share
repurchase program, which we now expect to complete by the end of
2021 – with the majority expected by mid-year. Bottom line: Our
strategy is solid. Our team continues to execute. We are confident
we will deliver." said James C. Collins,
Jr., Corteva Chief Executive Officer.
Company Update
- Building Momentum behind Accelerated Enlist™ Ramp-Up –
Delivering Progress on Conkesta E3®
Soybeans: Corteva continues to make solid progress on the
accelerated ramp-up of its Enlist E3™5 soybeans and its
Enlist One® and Enlist Duo® herbicides.
Strong early demand for Enlist™ herbicides in the U.S. was evident
in fourth quarter sales, which more than doubled versus prior year
to $140 million. Building on this
accelerated progress, the Company delivered $440 million in sales for the full Enlist™ system
in 2020 – further solidifying expectations of rapid adoption for
this technology. Incremental Enlist™ herbicides progress was
underpinned by strong Seed sales, with Enlist E3™5
soybeans representing approximately 17% of Corteva units in
North America in
20206.
The Company achieved a significant regulatory milestone in Seed
with its Conkesta E3® soybean technology during the quarter, with
the recent positive opinion from the European Food Safety Authority
(EFSA) – an important step in the continued path to
commercialization7 for this technology.
- Generating Substantial Cash Flow through Disciplined
Execution: Corteva drove continued, strong execution on cash
generation with total cash flows from operations of approximately
$2.1 billion for the year. The
Company continues to deliver progress on working capital
productivity, with an 11% improvement in net working capital turns
versus prior year.
- Delivering Value to Shareholders through Consistent, Focused
Actions: In 2020, the Company repurchased $275 million in common stock – and, including
dividends, returned more than $660
million in total to shareholders through the end of the
year. Since spin, Corteva has returned more than $875 million to shareholders – and expects to
return at least $1.1 billion through
dividends and share repurchases by the end of 2021, with the
completion of the majority of its share repurchase program
anticipated by mid-year 2021.
Outlook
The Company provided guidance8 for the full year
2021. Corteva expects net sales in the range of $14.4 billion to $14.6
billion, which at the mid-point represents expected net
sales growth of 2% for the year and organic sales growth of 3% for
the year. Operating EBITDA is expected to be in the range of
$2.4 billion to $2.5 billion and operating EPS range is expected
to be between $1.85 and $1.95 per share. In addition, the Company
affirmed its mid-term targets as previously guided in 2019,
including targeted compounded annual growth for Operating EBITDA of
12-16% from 2019 through 2022. Corteva is not able to reconcile its
forward-looking non-GAAP financial measures to its most comparable
U.S. GAAP financial measures, as it is unable to predict with
reasonable certainty items outside of its control, such as
significant items, without unreasonable effort. This outlook does
not contemplate any extreme weather events, operational
disruptions, significant changes in customers' demand or ability to
pay, or further acceleration of currency impacts resulting from the
COVID-19 pandemic.
Click here to download the full press release,
including CEO commentary, segment detail, and reconciliations of
non-GAAP and GAAP measures, or visit the Corteva Investor Relations
website.
About Corteva Agriscience
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.
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 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 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
obtain or maintain the necessary regulatory approvals for some
Corteva's products; (ii) failure to successfully develop and
commercialize Corteva's pipeline; (iii) effect of the degree of
public understanding and acceptance or perceived public acceptance
of Corteva's biotechnology and other agricultural products; (iv)
effect of changes in agricultural and related policies of
governments and international organizations; (v) effect of
competition and consolidation in Corteva's industry; (vi) effect of
competition from manufacturers of generic products; (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 climate change and
unpredictable seasonal and weather factors; (ix) risks related to
oil and commodity markets; (x) competitor's establishment of an
intermediary platform for distribution of Corteva's products; (xi)
impact of Corteva's dependence on third parties with respect to
certain of its raw materials or licenses and commercialization;
(xii) effect of industrial espionage and other disruptions to
Corteva's supply chain, information technology or network systems;
(xiii) effect of volatility in Corteva's input costs; (xiv) failure
to realize the anticipated benefits of the internal reorganizations
taken by DowDuPont in connection with the spin-off of Corteva and
other cost savings initiatives; (xv) failure to raise capital
through the capital markets or short-term borrowings on terms
acceptable to Corteva; (xvi) failure of Corteva's customers to pay
their debts to Corteva, including customer financing programs;
(xvii) increases in pension and other post-employment benefit plan
funding obligations; (xviii) risks related to the indemnification
obligations of legacy EID liabilities in connection with the
separation of Corteva; (xix) effect of compliance with laws and
requirements and adverse judgments on litigation; (xx) risks
related to Corteva's global operations; (xxi) failure to
effectively manage acquisitions, divestitures, alliances and other
portfolio actions; failure to enforce; (xxii) risks related to
COVID-19; (xxiii) risks related to activist stockholders;
(xxiv) Corteva's intellectual property rights or defend against
intellectual property claims asserted by others; (xxv) effect of
counterfeit products; (xxvi) Corteva's dependence on intellectual
property cross-license agreements; and (xxvii) 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.
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 full year 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 earnings release 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 best reflect the
ongoing performance of the Company during the periods presented and
provide additional, useful information to investors as they provide
insight with respect to ongoing operating results of the Company
and a 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 in the Selected Financial Information and Non-GAAP
Measures starting on page A-6 of the Financial Statement Schedules.
For the full year 2019, 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 that was
in effect prior to recent amendments. See Article 11 Pro Forma
Combined Statements of Operations starting on page A-17 of 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 page A-6 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 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. Additionally, on February 1, 2021, Corteva approved restructuring
actions designed to right-size and optimize footprint and
organizational structure according to the business needs in each
region with the focus on driving continued cost improvement and
productivity. Corteva expects to record total pre-tax restructuring
and asset-related charges of approximately $130 million to $170
million. The restructuring actions associated with this
charge are expected to be substantially complete in 2021. 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. 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) net, non-operating benefits, net, amortization of
intangibles as of the Separation from DowDuPont, and significant
items (including goodwill impairment charges). The full year 2019
is on a pro forma basis as discussed above in the paragraph
'Corteva Unaudited Pro Forma Financial Information'.
®™ Corteva Agriscience and its affiliated companies.
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SOURCE Corteva, Inc.