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MarketScreener Homepage  >  Equities  >  Nyse  >  Corteva, Inc.    CTVA

CORTEVA, INC.

(CTVA)
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Corteva : Reports Third Quarter 2020 Results

11/04/2020 | 05:06pm EST

News Release 3Q & YTD2020

Corteva Reports Third Quarter and Year-to-Date 2020 Results - Affirms 2020 Guidance

Company Delivers Year-to-Date Sales and Earnings Increases over Prior Year

WILMINGTON, Del., November 4, 2020 - Corteva, Inc. (NYSE: CTVA) ("Corteva" or the "Company") today reported financial results for the third quarter and nine months ended September 30, 2020.

3Q 2020 Results Overview

Net Sales

EPS

Loss from Cont. Ops.

(After Tax)

GAAP

$1.86 B

$(0.52)

$(390)M

vs. 3Q 2019

(3)%

+25%

+26%

Organic Sales1

Operating EPS1

Operating EBITDA1

NON-GAAP

$2.07 B

$(0.39)

$(179) M

vs. 3Q 2019

+9%

Flat

+14%

  • Net sales for third quarter 2020 were down 3% versus prior year. Organic sales1 grew 9%. Volume and price improvement on continued penetration of new products were more than offset by the impact of currency and seasonal shifts in Seed.
  • Crop Protection net sales grew 9% and organic1 sales increased 21% with sales gains in every region except North America3. Volume and price improvement were primarily driven by the continued adoption of new Crop Protection products in Latin America, Asia Pacific, and EMEA3.
  • A return to a normalized North America3 season drove lower Seed volumes in third quarter 2020, resulting in lower year-over-year sales in Seed, with net sales decreases of 23%, down 14% on an organic1 basis.
  • GAAP loss and earnings per share (EPS) from continuing operations were $(390) million and $(0.52) for the third quarter 2020, respectively.
  • Operating EBITDA1 was a loss of $(179) million, improved 14% versus prior year. Operating EBITDA margin1 improved 120 basis points. Volume gains and favorable mix in Crop Protection, coupled with execution on synergies and productivity, more than offset timing shifts in Seed and currency headwinds to drive margin expansion.
  • Merger cost synergies and productivity were approximately $40 million for the third quarter and remain on track to be $230 million for the full year. SG&A expense as a percentage of sales improved 175 bps on currency, ongoing productivity, cost controls, and lower commissions.
  • The Company continues to maintain a strong liquidity position - and took further action during the quarter to strengthen its cash flow focus, improving net working capital turns 7% versus prior year.

YTD 2020 Results Overview

Net Sales

EPS

Income from Cont.

Ops. (After Tax)

GAAP

$11.0 B

$0.85

$657 M

vs. YTD 20192

+1%

+963%

+866%

Organic Sales1

Operating EPS1

Operating EBITDA1

NON-GAAP

$11.52 B

$1.46

$1.85 B

vs. YTD 20192

+6%

+7%

+5%

1. Organic sales, Operating EPS, Pro Forma Operating EPS, Operating EBITDA and Pro Forma Operating EBITDA, Operating EBITDA Margin and Pro Forma Operating EBITDA Margin are non-GAAP measures. See page A-6 for further discussion. 2. Year-to-date 2019 GAAP information is on a pro forma basis and was determined in accordance with Article 11 of Regulation S-X.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. Enlist E3™ soybeans are jointly developed by Dow AgroSciences and MS Technologies™

News Release 3Q & YTD2020

"Corteva's performance year to date in 2020 reflects the strong and consistent execution from our global team. We delivered sales and earnings growth during the first three quarters of the year despite continued market volatility and uncertainty. Our portfolio of new technology was a critical driver in this progress, as we delivered volume and price improvements in almost all regions through the launch and ramp-up of our new Seed and Crop Protection products, including Enlist E3™4, Qrome®, Inatreq™, Arylex™ and Rinskor™, as well as continued demand for key differentiated technologies such as our supply- constrained Spinosyns. In Seed, our price for value strategy resulted in margin expansion, even in the face of ongoing challenges and competitive pressures. Additionally, we continued to fortify our already strong balance sheet and liquidity position by preserving cash and implementing further actions to reduce costs and optimize productivity. Reflecting our commitments on disciplined capital allocation and strong cash generation, we are accelerating our continued actions to return cash to shareholders - as evidenced by our decision to pull forward our previously announced share buyback.

We affirmed our full year guidance for 2020 - and remain confident in the path we have outlined. Our teams around the world are tightly managing all levers as we focus on finishing 2020 strong - and, as we look ahead to 2021, ensuring we are best positioned to maximize the potential of our industry-leading innovation pipeline and global distribution system while continuing to drive margin enhancement, accelerate productivity improvement and deliver increased value for our shareholders."

  • James C. Collins, Jr., Corteva Chief Executive Officer

Company Updates

Price for Value Strategy Strengthens Competitive Position Globally

Corteva is strengthening its position in key Seed markets through its superior product performance and price for value strategy. Building on the ongoing ramp-up of Qrome® in North America, Corteva has driven year-to-date Seed price increases in Asia Pacific, Latin America and EMEA3 on the strength of its product portfolio.

Driving Additional Progress on Accelerated Enlist E3™4 Launch

The Company continues to rapidly ramp-up its Enlist E3™4 technology - and has implemented changes to its Seed production plan to meet expected demand in 2021. With strong early orders as an indicator of adoption increases, Corteva remains confident in its market penetration expectations.

Previously Approved Capacity Expansion on Track to Accelerate Growth

Corteva continues to drive sales growth on its supply- constrained, high-margin Spinosyns insecticides. Year-to- date overall insecticide sales increased 5%, driven by continued capacity expansion progress. These actions are expected to enable $1 billion in sales of Spinosyns insecticides by 2023, an expected 30% increase over 2020 estimates.

Crop Protection Manufacturing Actions Target Cost Improvements

The Company continues to further streamline its global manufacturing footprint through the shutdown of non- competitive facilities and strategic changes to product supply arrangements. These actions, which are included in its ongoing productivity program, are expected to deliver $150 million in incremental savings by the end of 2022.

Sustaining Operational Efficiencies Gained Through COVID-19 Response

In response to the COVID-19 pandemic, Corteva implemented targeted spending actions to address near- term market volatility. These actions have delivered $50 million in cost savings through third quarter 2020, which helped to offset strategic investments during this period. Corteva expects to keep most of these structural cost controls in place into 2021.

Driving Ongoing Progress on Cost and Productivity Commitments

Continued progress on cost and productivity commitments, resulted in $170 million in cost synergies and productivity savings delivered year to date in 2020. The Company remains on track to achieve its cost and productivity targets for the full year 2020.

Accelerated Remuneration Actions Demonstrate Strong Focus on Shareholders

Corteva has returned more than $370 million to shareholders through the end of September in the form of quarterly dividends and share repurchases. Based upon underlying operational performance, the Company expects to make solid progress on the authorized share repurchase program by the end of the year. With the additional focus, the Company now expects to complete the repurchase program by the end of 2021, six months ahead of the initial timeline.

2

News Release 3Q & YTD2020

Summary of Third Quarter 2020

For the third quarter ended September 30, 2020, net sales declined 3% versus the same period last year, as organic sales1 increased 9%.

Volume increased 7% versus the prior-year period. Gains were driven primarily by continued adoption of new Crop Protection products, and were partially offset by the impact of seasonally lower Seed volumes due to a more normalized planting season in North America as compared to the prior-year period.

Local price increased 2% versus third quarter 2019. Higher prices in Latin America were more than offset by the impact of currency, which represented a headwind of 11% globally. Currency mitigation and new products drove price gains in Latin America, EMEA3, and Asia Pacific.

GAAP loss from continuing operations after income taxes was $(390) million in third quarter 2020. Operating EBITDA1 for the third quarter was a loss of $(179) million, a 14% improvement compared to the same period last year. Volume gains and favorable mix in Crop Protection, coupled with ongoing cost synergies and productivity efforts, more than offset currency and the impact of timing shifts in Seed.

The Company continues to drive working capital and productivity improvements, with a focus on cash flow. As a result, Corteva delivered a 7% improvement in Net Working Capital turns.

($ in millions,

3Q

3Q

%

%

except where noted)

2020

2019

Change

Organic Change1

Net Sales

$1,863

$1,911

(3)%

9%

North America

$487

$623

(22)%

(22)%

EMEA

$315

$305

3%

7%

Latin America

$805

$762

6%

30%

Asia Pacific

$256

$221

16%

20%

Summary of Year to Date 2020

For the year-to-date period ended September 30, 2020, net sales increased 1% versus prior year, with an organic sales1 increase of 6%.

Volume increased 4% versus the year-ago period. Year-to- date volume gains reflect increased demand for new products globally and volume growth attributable to the recovery of planted area in North America.

Local price increased 2% versus the prior-year period, with price increases in most regions. Currency

represented a headwind of 4%, driven primarily by the impact of the Brazilian Real.

GAAP income from continuing operations after income taxes was $657 million year to date in 2020. Operating EBITDA1 for the year-to-date period was $1.85 billion, an increase of 5% as compared to the same period last year on a pro forma basis. Favorable mix and volume gains, coupled with ongoing productivity actions, more than offset the unfavorable impact of currency.

($ in millions,

YTD

YTD

%

%

except where noted)

2020

2019

Change

Organic Change1

Net Sales

$11,010

$10,863

1%

6%

North America

$5,818

$5,800

--%

1%

EMEA

$2,425

$2,336

4%

8%

Latin America

$1,754

$1,780

(1)%

17%

Asia Pacific

$1,013

$947

7%

13%

3

News Release 3Q & YTD 2020

Crop Protection Summary

Crop Protection net sales were $1.3 billion in the third quarter of 2020, up from $1.2 billion in the year-ago period. Gains were driven by a 16% increase in volume and a 5% increase in local price, partially offset by an 11% decline in currency and a 1% impact from portfolio.

Volume gains were primarily driven by a strong start to the Latin America season. This impact was coupled with strong demand for new products globally, including EnlistTM and RinskorTM herbicides and IsoclastTM and PyraxaltTM insecticides.

Local price rose due to increases in Latin America to offset currency. Unfavorable currency impacts were led by the Brazilian Real. The portfolio impact was driven by the strategic divestiture of an off-patent product.

Segment operating EBITDA was $130 million in the third quarter of 2020, up from $119 million in the year-ago period. Volume gains, favorable mix, and ongoing cost synergies and productivity efforts more than offset the unfavorable impact of currency and increased investment in R&D.

($ in millions,

3Q

3Q

%

%

except where noted)

2020

2019

Change

Organic Change1

North America

$390

$397

(2)%

(2)%

EMEA

$198

$183

8%

8%

Latin America

$559

$491

14%

43%

Asia Pacific

$193

$159

21%

27%

Total 3Q Crop

$1,340

$1,230

9%

21%

Protection Net Sales

Crop Protection net sales were $4.5 billion for the first nine months of 2020, approximately flat compared to the first nine months of 2019. The change was driven by a 5% increase in volume and a 2% increase in local price, which was more than offset by a 6% decline in currency and a 1% impact from portfolio.

The increase in volume was driven by strong demand for new products globally, including RinskorTM, ArylexTM, and EnlistTM herbicides and IsoclastTM insecticide. The increase in local price was driven by increases in Latin America to offset currency. Unfavorable currency impacts were led by the Brazilian Real. Pricing gains from new

product launches were partially offset by increased grower incentive program discounts in North America. The portfolio impact was driven by divestitures of off- patent products in Asia Pacific and North America.

Segment operating EBITDA was $677 million for the first nine months of 2020, down from pro forma segment operating EBITDA of $789 million for the first nine months of 2019. Sales from new products and ongoing cost synergies and productivity efforts were more than offset by higher input costs, the unfavorable impact of currency and increased investment in R&D.

($ in millions,

YTD

YTD

%

%

except where noted)

2020

2019

Change

Organic Change1

North America

$1,528

$1,562

(2)%

(1)%

EMEA

$1,163

$1,136

2%

6%

Latin America

$1,086

$1,144

(5)%

15%

Asia Pacific

$717

$674

6%

12%

Total YTD Crop

$4,494

$4,516

0%

7%

Protection Net Sales

4

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Corteva Inc. published this content on 04 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2020 22:05:06 UTC


© Publicnow 2020
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Financials (USD)
Sales 2020 13 978 M - -
Net income 2020 585 M - -
Net cash 2020 1 733 M - -
P/E ratio 2020 50,1x
Yield 2020 1,21%
Capitalization 32 527 M 32 527 M -
EV / Sales 2020 2,20x
EV / Sales 2021 2,10x
Nbr of Employees 21 000
Free-Float 99,9%
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Technical analysis trends CORTEVA, INC.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 40,67 $
Last Close Price 43,66 $
Spread / Highest target 14,5%
Spread / Average Target -6,86%
Spread / Lowest Target -45,0%
EPS Revisions
Managers and Directors
NameTitle
James C. Collins Chief Executive Officer & Director
Gregory R. Page Non-Executive Chairman
Gregory R. Friedman Chief Financial Officer & Executive Vice President
Debra King Chief Information Officer & Senior Vice President
Sam Eathington Chief Technology Officer & Senior Vice President
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